Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
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About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Contents
Chapter 10—Transitional provisions 1
Part 10.1—Transition from the old corporations legislation 1
Division 1—Preliminary 1
1370 Object of Part ....................................................................1
1371 Definitions.........................................................................2
1372 Relationship of Part with State validation Acts .................6
1373 References to things taken or deemed to be the
case etc. .............................................................................8
1374 Existence of several versions of old corporations
legislation does not result in this Part operating to
take same thing to be done several times under
new corporations legislation etc. .......................................9
1375 Penalty units in respect of pre-commencement
conduct remain at $100 ...................................................10
1376 Ceasing to be a referring State does not affect
previous operation of this Part.........................................10
Division 2—Carrying over registration of companies 11
1377 Division has effect subject to Division 7
regulations .......................................................................11
1378 Existing registered companies continue to be
registered .........................................................................11
Division 3—Carrying over the old Corporations Regulations 13
1379 Division has effect subject to Division 7
regulations .......................................................................13
1380 Old Corporations Regulations continue to have
effect................................................................................13
Division 4—Court proceedings and orders 14
1381 Division has effect subject to Division 7
regulations .......................................................................14
1382 Definitions.......................................................................14
1383 Treatment of court proceedings under or related to
the old corporations legislation—proceedings
other than federal corporations proceedings ....................16
1384 Treatment of court proceedings under or related to
the old corporations legislation—federal
corporations proceedings.................................................19
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1384A Appeals etc. in relation to some former federal
corporations proceedings.................................................20
1384B Effect of decisions and orders made in federal
corporations proceedings before commencement............21
1385 References to proceedings and orders in the new
corporations legislation ...................................................21
Division 5—Other specific transitional provisions 23
1386 Division has effect subject to Division 7
regulations .......................................................................23
1387 Certain applications lapse on the commencement ...........23
1388 Carrying over the Partnerships and Associations
Application Order............................................................23
1389 Evidentiary certificates....................................................23
1390 Preservation of nomination of body corporate as
SEGC ..............................................................................24
1391 Preservation of identification of satisfactory
records.............................................................................24
1392 Retention of information obtained under old
corporations legislation of non-referring State ................25
1393 Transitional provisions relating to section 1351
fees ..................................................................................25
1394 Transitional provisions relating to securities
exchange fidelity fund levies...........................................26
1395 Transitional provisions relating to National
Guarantee Fund levies .....................................................27
1396 Transitional provisions relating to futures
organisation fidelity fund levies ......................................28
Division 6—General transitional provisions relating to other
things done etc. under the old corporations
legislation 30
1397 Limitations on scope of this Division..............................30
1398 Provisions of this Division may have an
overlapping effect............................................................31
1399 Things done by etc. carried over provisions
continue to have effect ....................................................31
1400 Creation of equivalent rights and liabilities to
those that existed before the commencement under
carried over provisions of the old corporations
legislation ........................................................................34
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1401 Creation of equivalent rights and liabilities to
those that existed before the commencement under
repealed provisions of the old corporations
legislation ........................................................................36
1402 Old corporations legislation time limits etc. ....................38
1403 Preservation of significance etc. of events or
circumstances ..................................................................39
1404 References in the new corporations legislation
generally include references to events,
circumstances or things that happened or arose
before the commencement...............................................40
1405 References in the new corporations legislation to
that legislation or the new ASIC legislation
generally include references to corresponding
provisions of the old corporations legislation or
old ASIC legislation ........................................................41
1406 Carrying over references to corresponding
previous laws...................................................................42
1407 References to old corporations legislation in
instruments ......................................................................42
1408 Old transitional provisions continue to have their
effect................................................................................43
Division 7—Regulations dealing with transitional matters 47
1409 Regulations may deal with transitional matters ...............47
Part 10.2—Transitional provisions relating to the Financial
Services Reform Act 2001 49
Division 1—Transitional provisions relating to the phasing-in of
the new financial services regime 49
Subdivision A—Preliminary 49
1410 Definitions.......................................................................49
Subdivision B—Treatment of existing markets 51
1411 When is a market being operated immediately
before the FSR commencement? .....................................51
1412 Treatment of proposed markets that have not
started to operate by the FSR commencement.................51
1413 Obligation of Minister to grant licences covering
main existing markets......................................................53
1414 Section 1413 markets—effect of licences and
conditions ........................................................................56
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1415 Section 1413 markets—preservation of old
Corporations Act provisions during transition
period ..............................................................................58
1416 Section 1413 markets—powers for regulations to
change how the old and new Corporations Act
apply during the transition period....................................59
1417 Section 1413 markets—additional provisions
relating to previously unregulated services .....................60
1418 Treatment of exempt stock markets and exempt
futures markets (other than markets with no
identifiable single operator).............................................61
1419 Treatment of exempt stock markets and exempt
futures markets that do not have a single
identifiable operator ........................................................63
1420 Treatment of stock markets of approved securities
organisations ...................................................................65
1421 Treatment of special stock markets for unquoted
interests in a registered scheme .......................................66
1422 Treatment of other markets that were not
unauthorised ....................................................................67
Subdivision C—Treatment of existing clearing and settlement
facilities 68
1423 When is a clearing and settlement facility being
operated immediately before the FSR
commencement?..............................................................68
1424 Treatment of proposed clearing and settlement
facilities that have not started to operate by the
FSR commencement........................................................69
1424A Treatment of unregulated clearing and settlement
facilities operated by holders of old Corporations
Act approvals ..................................................................71
1425 Obligation of Minister to grant licences covering
main existing facilities.....................................................72
1426 Section 1425 facilities—effect of licences and
conditions ........................................................................74
1427 Section 1425 facilities—powers for regulations to
change how the old and new Corporations Act
apply during the transition period....................................76
1428 Section 1425 facilities—additional provisions
relating to previously unregulated services .....................76
1429 Treatment of other clearing and settlement
facilities ...........................................................................77
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Subdivision D—Treatment of people who carry on financial
services businesses and their representatives 78
1430 Meaning of regulated principal, regulated
activities and relevant old legislation ..............................78
1431 Parts 7.6, 7.7 and 7.8 of the amended Corporations
Act generally do not apply to a regulated principal
during the transition period .............................................82
1432 Continued application of relevant old legislation ............84
1433 Streamlined licensing procedure for certain
regulated principals .........................................................85
1434 Special licences for insurance multi-agents during
first 2 years after FSR commencement............................86
1435 Licensing decisions made within the first 2 years
of the FSR commencement—regard may be had to
conduct and experience of applicant or related
body corporate that currently provides same or
similar services................................................................88
1436 Treatment of representatives—general............................89
1436A Treatment of representatives—insurance agents .............90
1437 Exemptions and modifications by ASIC .........................93
Subdivision E—Product disclosure requirements 94
1438 New product disclosure provisions do not apply to
existing products during transition period .......................94
1439 Offences against new product disclosure
provisions—additional element for prosecution to
prove if conduct occurs after opting-in and before
the end of the first 2 years ...............................................97
1440 Continued application of certain provisions of old
disclosure regimes during transition period.....................98
1441 Certain persons who are not yet covered by
Parts 7.6, 7.7 and 7.8 of the amended Corporations
Act are required to comply with Part 7.9
obligations as if they were regulated persons ..................99
1442 Exemptions and modifications by ASIC .........................99
Subdivision F—Certain other product-related requirements 101
1442A Deferred application of hawking prohibition.................101
1442B Deferred application of confirmation of transaction
and cooling-off provisions etc. ......................................101
Division 2—Other transitional provisions 104
1443 Definitions.....................................................................104
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1444 Regulations may deal with transitional, saving or
application matters ........................................................105
1445 ASIC determinations may deal with transitional,
saving or application matters.........................................107
Part 10.3—Transitional provisions relating to the Corporations
Legislation Amendment Act 2003 111 1447 Application of sections 601AB and 601PB ...................111
1448 Application of amendments made by Schedule 4 to
the Corporations Legislation Amendment Act 2003 ......111
Part 10.4—Transitional provisions relating to the Financial
Services Reform Amendment Act 2003 112 1449 Definition ......................................................................112
1450 Application of Part 10.2 to Chapter 7 as amended
by Schedule 2 to the amending Act ...............................112
1451 Provisions relating to the scope of the amendments
of Chapter 7 made by Schedule 2..................................113
1452 Amendments of section 1274 ........................................115
Part 10.5—Transitional provisions relating to the Corporate
Law Economic Reform Program (Audit Reform and
Corporate Disclosure) Act 2004 116 1453 Definitions.....................................................................116
1454 Audit reforms in Schedule 1 to the amending Act
(auditing standards and audit working papers
retention rules)...............................................................116
1455 Audit reforms in Schedule 1 to the amending Act
(adoption of auditing standards made by
accounting profession before commencement) .............117
1456 Audit reforms in Schedule 1 to the amending Act
(new competency standard provisions) .........................118
1457 Audit reforms in Schedule 1 to the amending Act
(new annual statement requirements for auditors).........118
1458 Audit reforms in Schedule 1 to the amending Act
(imposition of conditions on existing registration
as company auditor) ......................................................119
1459 Audit reforms in Schedule 1 to the amending Act
(application of items 62 and 63) ....................................119
1460 Audit reforms in Schedule 1 to the amending Act
(non-audit services disclosure) ......................................119
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1461 Audit reforms in Schedule 1 to the amending Act
(auditor appointment) ....................................................119
1462 Audit reforms in Schedule 1 to the amending Act
(auditor independence) ..................................................120
1463 Audit reforms in Schedule 1 to the amending Act
(auditor rotation) ...........................................................122
1464 Audit reforms in Schedule 1 to the amending Act
(listed company AGMs) ................................................122
1465 Schedule 2 to the amending Act (financial
reporting).......................................................................122
1466A Schedule 2A to the amending Act (true and fair
view)..............................................................................122
1466 Schedule 3 to the amending Act (proportionate
liability) .........................................................................123
1467 Schedule 4 to the amending Act (enforcement).............123
1468 Schedule 5 to the amending Act (remuneration of
directors and executives) ...............................................123
1469 Schedule 6 to the amending Act (continuous
disclosure) .....................................................................124
1470 Schedule 7 to the amending Act (disclosure rules)........124
1471 Schedule 8 to the amending Act (shareholder
participation and information) .......................................125
Part 10.8—Transitional provisions relating to the Corporations
Amendment (Takeovers) Act 2007 126 1478 Application of amendments of the takeovers
provisions ......................................................................126
Part 10.9—Transitional provisions relating to the Corporations
Amendment (Insolvency) Act 2007 127 1479 Definition ......................................................................127
1480 Schedule 1 to the amending Act (improving
outcomes for creditors)..................................................127
1481 Schedule 2 to the amending Act (deterring
corporate misconduct) ...................................................130
1482 Schedule 3 to the amending Act (improving
regulation of insolvency practitioners) ..........................131
1483 Schedule 4 to the amending Act (fine-tuning
voluntary administration) ..............................................132
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Part 10.10 Transitional provisions relating to the Corporations
Amendment (Short Selling) Act 2008 135 1484 Declarations under paragraph 1020F(1)(c) relating
to short selling ...............................................................135
Part 10.11—Transitional provisions relating to the
Corporations Amendment (No. 1) Act 2009 137 1485 Application of new subsection 206B(6) ........................137
1486 Application of new section 206EAA.............................137
Part 10.12—Transitional provisions relating to the
Corporations Legislation Amendment (Financial
Services Modernisation) Act 2009 138
Division 1—Transitional provisions relating to Schedule 1 to the
Corporations Legislation Amendment (Financial
Services Modernisation) Act 2009 138
1487 Definitions.....................................................................138
1488 Application of amendments—general ...........................138
1489 Applications of amendments—application for and
grant of licences etc. authorising margin lending
financial services ...........................................................139
1490 Application of amendments—between 6 and 12
months after commencement.........................................140
1491 Acquisition of property .................................................141
1492 Regulations....................................................................141
Division 2—Transitional provisions relating to Schedule 2 to the
Corporations Legislation Amendment (Financial
Services Modernisation) Act 2009 142
1493 Definitions.....................................................................142
1494 Transitional provisions relating to limit on control
of trustee companies......................................................142
1495 Transitional provisions relating to the amendments
of Chapter 7...................................................................143
1496 General power for regulations to deal with
transitional matters ........................................................144
Division 3—Transitional provisions relating to Schedule 3 to the
Corporations Legislation Amendment (Financial
Services Modernisation) Act 2009 145
1497 Definitions.....................................................................145
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1498 Application of amendments...........................................145
Part 10.13—Transitional provisions relating to the Personal
Property Securities (Corporations and Other
Amendments) Act 2009 146 1499 Definitions.....................................................................146
1500 Charges, liens and pledges—continuation of
restriction of references .................................................146
1501 Charges, liens, pledges and third party property—
application .....................................................................147
1501A References to the whole or substantially the whole
of a company’s property ................................................147
1501B Constructive notice of registrable charges.....................147
1502 Repeal of Chapter 2K (charges)—general.....................148
1503 Repeal of Chapter 2K (charges)—cessation of
requirements in relation to documents or notices ..........148
1504 Repeal of Chapter 2K (charges)—application of
section 266 ....................................................................149
1505 Repeal of Chapter 2K (charges)—cessation of
company registration requirements................................149
1506 Repeal of Chapter 2K (charges)—priority between
registrable charges.........................................................150
1507 New section 440B (restrictions on third party
property rights) ..............................................................150
1508 New subsection 442CB(1) (administrator’s duty of
care)...............................................................................150
1509 New section 588FP (security interests in favour of
an officer of a company etc. void) .................................150
1510 Winding up applied for before the commencement
time................................................................................151
Part 10.14—Transitional provisions relating to the
Corporations Amendment (Corporate Reporting
Reform) Act 2010 152 1510A Definition ......................................................................152
1510B Application of Part 1 of Schedule 1 to the
amending Act ................................................................152
Part 10.15—Transitional provisions relating to the
Corporations Amendment (Financial Market
Supervision) Act 2010 154 1511 Definition ......................................................................154
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1512 Application of amendments...........................................154
1513 Regulations may deal with transitional matters .............154
Part 10.16—Transitional provisions relating to the
Corporations Amendment (No. 1) Act 2010 155 1516 Application of amendments...........................................155
Part 10.17—Transitional provisions relating to the
Corporations Amendment (Improving Accountability
on Director and Executive Remuneration) Act 2011 156 1517 Application of Subdivision B of Division 1 of
Part 2D.3 .......................................................................156
1518 Application of sections 206J, 206K, 206L and
206M .............................................................................156
1519 Application of subsection 249L(2) ................................156
1520 Application of section 250BB .......................................156
1521 Application of section 250BC .......................................157
1522 Application of section 250BD.......................................157
1523 Application of subsections 250R(4) to (10)...................157
1524 Application of Division 9 of Part 2G.2..........................157
1525 Application of amendments of section 300A ................157
Part 10.18—Transitional and application provisions relating to
the Future of Financial Advice Measures 159
Division 1—Provisions relating to the Corporations Amendment
(Further Future of Financial Advice Measures) Act
2012 159
1526 Definitions.....................................................................159
1527 Application of best interests obligations........................160
1528 Application of ban on conflicted remuneration .............160
1529 Application of ban on other remuneration—
volume-based shelf-space fees ......................................161
1530 Regulations do not apply where an acquisition of
property otherwise than on just terms would result .......162
1531 Application of ban on other remuneration—
asset-based fees on borrowed amounts..........................163
Division 2—Provisions relating to the Corporations Amendment
(Financial Advice Measures) Act 2016 164
1531A Definitions.....................................................................164
1531B Best interests obligation ................................................164
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1531C Renewal notices (opt-in requirement) ...........................164
1531D Disclosure statements ....................................................165
1531E Conflicted remuneration................................................165
Part 10.19—Transitional provisions relating to the
Corporations Amendment (Phoenixing and Other
Measures) Act 2012 166 1532 Definition ......................................................................166
1533 Part 1 of Schedule 1 to the amending Act (winding
up by ASIC) ..................................................................166
1534 Part 2 of Schedule 1 to the amending Act
(publication requirements).............................................166
1535 Part 3 of Schedule 1 to the amending Act
(miscellaneous amendments).........................................168
Part 10.20—Transitional provisions relating to the
Corporations Legislation Amendment (Audit
Enhancement) Act 2012 169 1536 Definitions.....................................................................169
1537 Application of amendments relating to annual
transparency reports ......................................................169
Part 10.21—Transitional provision relating to the Corporations
Legislation Amendment (Financial Reporting Panel)
Act 2012 170 1538 Courts etc. may have regard to Financial
Reporting Panel report...................................................170
Part 10.21A—Transitional provisions relating to the
Superannuation Legislation Amendment (Service
Providers and Other Governance Measures) Act 2013 171 1538A Application of amendments relating to
contributions to a fund or scheme..................................171
1538B Application of amendments relating to Statements
of Advice.......................................................................171
Part 10.22—Transitional provisions relating to the
Superannuation Legislation Amendment (Further
MySuper and Transparency Measures) Act 2012 172 1539 Application of section 1017BA (Obligation to
make product dashboard publicly available) .................172
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1540 Application of subsection 1017BB(1) (Obligation
to make information relating to investment of
assets of superannuation entities publicly
available) .......................................................................172
1541 Application of section 1017BC (Obligation to
provide information relating to investment of
assets of superannuation entities) ..................................172
Part 10.23—Transitional provisions relating to the Clean
Energy Legislation (Carbon Tax Repeal) Act 2014 174 1542 Definition ......................................................................174
1543 Transitional—carbon units issued before the
designated carbon unit day ............................................174
1544 Transitional—variation of conditions on
Australian financial services licences ............................174
1545 Transitional—immediate cancellation of
Australian financial services licences ............................175
1546 Transitional—statements of reasons for
cancellation of Australian financial services
licences..........................................................................175
Part 10.23A—Transitional provisions relating to the
Corporations Amendment (Professional Standards of
Financial Advisers) Act 2017 176
Division 1—Definitions 176
1546A Definitions.....................................................................176
Division 2—Application and transitional provisions 178
1546B Existing providers to meet certain education and
training standards ..........................................................178
1546C Application of limitation on authorisation to
provide personal advice and offence .............................179
1546D Application of requirements relating to provisional
relevant providers ..........................................................180
1546E Application of continuing professional
development standard for relevant providers.................180
1546F Application of Code of Ethics to relevant
providers........................................................................182
1546G Application of obligations in relation to
compliance schemes ......................................................182
1546H Application of obligation for standards body to
publish annual report .....................................................183
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1546J Application of obligation to notify ASIC about a
person who becomes a relevant provider.......................184
1546K Application of requirements relating to
information about relevant provider’s principal
place of business............................................................184
1546L Application of requirements relating to
information about membership of professional
associations where relevant provider is licensee ...........184
1546M Application of requirements relating to
information about membership of professional
associations where relevant provider is not
licensee..........................................................................185
1546N Application of requirements relating to
information about provisional relevant provider’s
work and training ..........................................................185
1546P Application of ongoing obligation to notify ASIC
when there is a change in a matter for a relevant
provider .........................................................................186
1546Q Application of obligation to notify ASIC about a
person who starts to have control of a body
corporate licensee..........................................................186
1546R Application of obligation to notify ASIC about a
person who ceases to have control of a body
corporate licensee..........................................................187
1546S Application of obligation for relevant providers to
provide information to financial services licensees .......187
1546T Application of requirements relating to Register of
Relevant Providers ........................................................188
1546U Relevant provider numbers given before
commencement..............................................................188
1546V Continuation of Register of Relevant Providers ............188
Division 3—Transitional notices 189
1546W Obligation to notify ASIC of certain information..........189
1546X Obligation to notify ASIC of CDP year ........................189
1546Y Obligation to notify ASIC when exams passed .............190
1546Z Obligation to notify ASIC of certain information
after banning order ........................................................190
1546ZA Offence for failing to lodge transitional notices ............191
Division 4—Review 192
1546ZB Review ..........................................................................192
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Part 10.24—Transitional provisions relating to the
Corporations Legislation Amendment (Deregulatory
and Other Measures) Act 2014 193 1547 Definitions.....................................................................193
1548 Application of amendments relating to calling of
general meetings............................................................193
1549 Application of amendments relating to directors’
reports for listed companies...........................................193
Part 10.25—Transitional provisions relating to the Insolvency
Practice Schedule (Corporations) 194
Division 1—Introduction 194
1550 Simplified outline of this Part........................................194
1551 Definitions.....................................................................195
Division 2—Application of Part 2 of the Insolvency Practice
Schedule (Corporations) and related consequential
amendments 197
Subdivision A—Registering liquidators 197
1552 Applications for registration under the old Act .............197
1553 Persons registered under the old Act continue to be
registered under the Insolvency Practice Schedule
(Corporations) ...............................................................198
1554 Old Act registrant’s details ............................................199
1555 Period of old Act registrant’s registration under the
Insolvency Practice Schedule (Corporations)................199
1556 Conditions for old Act registrants—conditions
under the Insolvency Practice Schedule
(Corporations) ...............................................................200
1557 Current conditions for old Act registrants—
undertakings under the old Act......................................200
1558 Current conditions for old Act registrants—
undertakings under the ASIC Act..................................201
1559 Old Act registrant registered as liquidator of a
specified body corporate................................................201
1560 Old Act registrant chooses not to renew........................202
Subdivision B—Annual returns and statements 203
1561 Application of obligation to lodge annual
liquidator returns ...........................................................203
Subdivision C—Notice requirements 204
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1562 Notice of significant events ...........................................204
Subdivision D—Cancellation by ASIC under the old Act 205
1563 Request for cancellation made before the
commencement day.......................................................205
1564 Decision to cancel registration made before the
commencement day.......................................................205
Subdivision E—Disciplinary proceedings before the Board 206
1565 Matters not dealt with by the Board before the
commencement day.......................................................206
1566 Matters dealt with by the Board before the
commencement day.......................................................207
1567 Matters which the Board refuses to deal with
before the commencement day ......................................208
1568 Board considering terminating suspension before
the commencement day .................................................209
1569 Sharing information between the Board and
committees ....................................................................209
Subdivision F—Suspension, cancellation and disciplinary action
under the Insolvency Practice Schedule
(Corporations) 210
1570 Direction to comply with requirement to lodge
documents etc. ...............................................................210
1571 Suspension by ASIC under the Insolvency Practice
Schedule (Corporations)................................................210
1572 Cancellation by ASIC under the Insolvency
Practice Schedule (Corporations) ..................................210
1573 Show-cause notice under the Insolvency Practice
Schedule (Corporations)................................................211
1574 Lifting or shortening suspension under the
Insolvency Practice Schedule (Corporations)................211
1575 Action initiated by industry bodies................................211
Subdivision G—Powers of the Court and other bodies 211
1576 Application of court powers under section 45-1 of
the Insolvency Practice Schedule (Corporations) ..........211
1577 Powers to deal with registration under the old Act
on or after the commencement day................................212
Division 3—Application of Part 3 of the Insolvency Practice
Schedule (Corporations) and related consequential
amendments 213
Subdivision A—Introduction 213
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1578 Simplified outline of this Division ................................213
Subdivision B—General rules for Part 3 214
1579 Application of Part 3 of the Insolvency Practice
Schedule (Corporations)—general rules........................214
Subdivision C—Remuneration and other benefits received by
external administrators 214
1580 Application of Division 60 of the Insolvency
Practice Schedule (Corporations)—general rule ...........214
1581 Old Act continues to apply in relation to
remuneration for administrators already appointed .......214
1582 Duties of administrators relating to remuneration
and other benefits ..........................................................215
1583 Old Act continues to apply in relation to any right
of indemnity ..................................................................215
1584 Application of new provisions about vacancies of
court-appointed liquidator .............................................216
1585 Application of new provisions about exercise of
powers while company under external
administration................................................................216
Subdivision D—Funds handling 216
1586 Application of Division 65 of the Insolvency
Practice Schedule (Corporations)—general rule ...........216
1587 Administration account .................................................217
1588 Paying money into administration account....................217
1589 Paying money out of administration account ................217
1590 Handling securities ........................................................218
Subdivision E—Information 218
1591 Application of Division 70 of the Insolvency
Practice Schedule (Corporations)—general rule ...........218
1592 Accounts and administration returns .............................218
1593 Administration books ....................................................219
1594 Audit of administration books .......................................220
1595 Transfer of administration books...................................220
1596 Retention and destruction of administration books .......220
1597 Giving information to creditors etc................................221
1598 Commonwealth may request information......................222
1599 Reporting to ASIC.........................................................222
1600 Old Act continues to apply in relation to notices to
remedy default...............................................................222
Subdivision F—Meetings 222
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1601 Application of Division 75 of the Insolvency
Practice Schedule (Corporations)—general rule ...........222
1602 External administrator must convene meetings in
certain circumstances ....................................................223
1603 Old Act continues to apply in relation to reporting
for first year of administration.......................................223
1604 Old Act continues to apply to the deregistration of
companies......................................................................224
1605 Old Act continues to apply for certain meetings
convened etc. before commencement day .....................224
1606 Outcome of voting at creditors’ meeting
determined by related entity or on casting vote—
Court powers .................................................................225
Subdivision G—Committees of inspection 225
1607 Application of Division 80 of the Insolvency
Practice Schedule (Corporations)—general rules..........225
1608 Appointing committees of inspection............................226
1609 Old Act continues to apply to certain reports by
administrator .................................................................227
1610 Membership of continued committees...........................227
1611 Validity of appointment under section 548 of the
old Act not affected by lack of separate meeting of
contributories.................................................................228
1612 Continued application of directions by creditors or
committees under the old Act........................................229
1613 Committee of inspection may request information........229
1614 Duties of members of committee of inspection and
creditors relating to profits and advantages etc..............229
Subdivision H—Review of the external administration of a
company 230
1615 Application of Division 90 of the Insolvency
Practice Schedule (Corporations)—general rule ...........230
1616 Application of the Insolvency Practice Schedule
(Corporations) provisions that conflict with old
Act Court orders—general rule .....................................230
1617 Old Act continues to apply in relation to ongoing
proceedings before a court—general rule......................230
1618 Court powers to inquire into and make orders...............231
1619 Review by another registered liquidator........................232
1620 Removal by creditors.....................................................233
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Division 4—Administrative review 234
1621 Administrative Appeals Tribunal proceedings ..............234
Division 5—Application of other consequential amendments 235
1622 Outcome of voting at creditors’ meeting
determined by related entity or on casting vote—
Court powers .................................................................235
1623 Returns and accounts by controllers ..............................235
1624 Transfer of books by a controller to a new
controller or ASIC.........................................................236
1625 Officers reporting to controller about corporation’s
affairs ............................................................................236
1626 Lodging notice of execution of a deed of company
arrangement...................................................................236
1627 Office of liquidator appointed by the Court...................236
1628 Report as to company’s affairs to be submitted to
liquidator .......................................................................237
1629 Orders for release or deregistration ...............................237
1630 Meeting relating to the voluntary winding up of a
company ........................................................................237
1631 Pooling determinations..................................................237
1632 Electronic methods of giving or sending certain
notices ...........................................................................238
1633 Deregistration following winding up.............................238
Division 6—Regulations 239
1634 Regulations....................................................................239
Part 10.26—Transitional provisions relating to Schedule 3 to
the Insolvency Law Reform Act 2016 240 1635 Application of amendments made by Schedule 3 to
the Insolvency Law Reform Act 2016 ............................240
Part 10.28—Transitional provisions relating to the Treasury
Laws Amendment (2016 Measures No. 1) Act 2017 242 1637 Application of subparagraph 1274(2)(a)(iva) and
subsections 1274(2AA) and (2AB) ...............................242
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Schedule 2—Insolvency Practice Schedule
(Corporations) 243
Part 1—Introduction 243
Division 1—Introduction 243
1-1 Object of this Schedule..................................................243
1-5 Simplified outline of this Schedule ...............................243
Division 5—Definitions 245
Subdivision A—Introduction 245
5-1 Simplified outline of this Division ................................245
Subdivision B—The Dictionary 245
5-5 The Dictionary...............................................................245
Subdivision C—Other definitions 248
5-10 Meaning of current conditions ......................................248
5-15 Meaning of external administration of a company........249
5-20 Meaning of external administrator of a company .........249
5-25 References to the external administrator of a
company ........................................................................250
5-26 Property of a company ..................................................250
5-27 Meaning of pooled group ..............................................250
5-30 Persons with a financial interest in the external
administration of a company .........................................251
Part 2—Registering and disciplining practitioners 252
Division 10—Introduction 252
10-1 Simplified outline of this Part........................................252
10-5 Working cooperatively with the Inspector-General
in Bankruptcy ................................................................253
Division 15—Register of liquidators 254
15-1 Register of Liquidators..................................................254
Division 20—Registering liquidators 255
Subdivision A—Introduction 255
20-1 Simplified outline of this Division ................................255
Subdivision B—Registration 255
20-5 Application for registration ...........................................255
20-10 ASIC may convene a committee to consider.................256
20-15 ASIC must refer applications to a committee ................256
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20-20 Committee to consider applications ..............................256
20-25 Committee to report.......................................................258
20-30 Registration ...................................................................258
20-35 Conditions imposed on all registered liquidators or
a class of registered liquidators .....................................259
Subdivision C—Varying etc. conditions of registration 260
20-40 Application to vary etc. conditions of registration.........260
20-45 ASIC may convene a committee to consider
applications ...................................................................260
20-50 ASIC must refer applications to a committee ................261
20-55 Committee to consider applications ..............................261
20-60 Committee to report.......................................................261
20-65 Committee’s decision given effect ................................261
Subdivision D—Renewal 262
20-70 Application for renewal.................................................262
20-75 Renewal.........................................................................262
Subdivision E—Offences relating to registration 263
20-80 False representation that a person is a registered
liquidator .......................................................................263
Division 25—Insurance 264
25-1 Registered liquidators to maintain insurance.................264
Division 30—Annual liquidator returns 265
30-1 Annual liquidator returns...............................................265
Division 35—Notice requirements 267
35-1 Notice of significant events ...........................................267
35-5 Notice of other events....................................................268
Division 40—Disciplinary and other action 269
Subdivision A—Introduction 269
40-1 Simplified outline of this Division ................................269
Subdivision B—Direction to comply 270
40-5 Registered liquidator to remedy failure to lodge
documents or give information or documents ...............270
40-10 Registered liquidator to correct inaccuracies etc. ..........271
40-15 Direction not to accept further appointments ................273
Subdivision C—Automatic cancellation 274
40-20 Automatic cancellation..................................................274
Subdivision D—ASIC may suspend or cancel registration 274
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40-25 ASIC may suspend registration .....................................274
40-30 ASIC may cancel registration........................................276
40-35 Notice of suspension or cancellation .............................277
Subdivision E—Disciplinary action by committee 277
40-40 ASIC may give a show-cause notice .............................277
40-45 ASIC may convene a committee ...................................279
40-50 ASIC may refer matters to the committee .....................279
40-55 Decision of the committee.............................................280
40-60 Committee to report.......................................................281
40-65 ASIC must give effect to the committee’s decision.......282
Subdivision F—Lifting or shortening suspension 282
40-70 Application to lift or shorten suspension .......................282
40-75 ASIC may convene a committee to consider
applications ...................................................................282
40-80 ASIC must refer applications to a committee ................283
40-85 Committee to consider applications ..............................283
40-90 Committee to report.......................................................283
40-95 Committee’s decision given effect ................................284
Subdivision G—Action initiated by industry body 284
40-100 Notice by industry bodies of possible grounds for
disciplinary action .........................................................284
40-105 No liability for notice given in good faith etc................286
40-110 Meaning of industry bodies ...........................................286
Subdivision H—Consequences of certain disciplinary and other
action 286
40-111 Appointment of another liquidator if liquidator’s
registration is suspended or cancelled ...........................286
Division 45—Court oversight of registered liquidators 288
45-1 Court may make orders in relation to registered
liquidators......................................................................288
45-5 Court may make orders about costs...............................289
Division 50—Committees under this Part 290
50-1 Simplified outline of this Division ................................290
50-5 Prescribed body appointing a person to a
committee......................................................................290
50-10 Minister appointing a person to a committee.................291
50-15 Single committee may consider more than one
matter ............................................................................292
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50-20 Ongoing consideration of matters by committee ...........293
50-25 Procedure and other rules relating to committees ..........293
50-30 Remuneration of committee members...........................293
50-35 Committee must only use information etc. for
purposes for which disclosed.........................................294
Part 3—General rules relating to external administrations 296
Division 55—Introduction 296
55-1 Simplified outline of this Part........................................296
Division 60—Remuneration and other benefits received by
external administrators 298
Subdivision A—Introduction 298
60-1 Simplified outline of this Division ................................298
Subdivision B—Remuneration of external administrators—
general rules 299
60-2 Application of this Subdivision .....................................299
60-5 External administrator’s remuneration ..........................299
60-10 Remuneration determinations........................................300
60-11 Review of remuneration determinations........................301
60-12 Matters to which the Court must have regard ................302
60-15 Maximum default amount .............................................303
Subdivision C—Remuneration of provisional liquidators 305
60-16 Remuneration of provisional liquidators .......................305
Subdivision D—Remuneration of liquidators in winding up by
ASIC 305
60-17 Remuneration of liquidators in winding up by
ASIC..............................................................................305
Subdivision E—Duties of external administrators relating to
remuneration and benefits etc. 306
60-20 External administrator must not derive profit or
advantage from the administration of the company.......306
Division 65—Funds handling 309
65-1 Simplified outline of this Division ................................309
65-5 External administrator must pay all money into an
administration account ..................................................309
65-10 Administration accounts................................................310
65-15 External administrator must not pay other money
into the administration account......................................311
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65-20 Consequences for failure to pay money into
administration account ..................................................311
65-25 Paying money out of administration account ................312
65-40 Handling securities ........................................................313
65-45 Handling of money and securities—Court
directions.......................................................................314
65-50 Rules in relation to consequences for failure to
comply with this Division .............................................315
Division 70—Information 316
Subdivision A—Introduction 316
70-1 Simplified outline of this Division ................................316
Subdivision B—Administration returns 317
70-5 Annual administration return.........................................317
70-6 End of administration return..........................................318
Subdivision C—Record-keeping 320
70-10 Administration books ....................................................320
70-15 Audit of administration books—ASIC ..........................321
70-20 Audit of administration books—on order of the
Court..............................................................................322
70-25 External administrator to comply with auditor
requirements ..................................................................322
70-30 Transfer of books to new administrator.........................323
70-31 Transfer of books to ASIC etc. ......................................325
70-35 Retention and destruction of books ...............................327
70-36 Books of company in external administration—
evidence ........................................................................328
Subdivision D—Giving information etc. to creditors and others 329
70-40 Right of creditors to request information etc. from
external administrator....................................................329
70-45 Right of individual creditor to request information
etc. from external administrator.....................................329
70-46 Right of members to request information etc. from
external administrator in a members’ voluntary
winding up.....................................................................330
70-47 Right of individual member to request information
etc. from external administrator in a members’
voluntary winding up.....................................................331
70-50 Reporting to creditors and members..............................331
Subdivision E—Other requests for information etc. 332
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70-55 Commonwealth may request information etc. ...............332
Subdivision F—Reporting to ASIC 333
70-60 Insolvency Practice Rules may provide for
reporting to ASIC ..........................................................333
Subdivision G—External administrator may be compelled to
comply with requests for information etc. 334
70-65 Application of this Subdivision .....................................334
70-70 ASIC may direct external administrator to comply
with the request for relevant material ............................334
70-75 ASIC must notify external administrator before
giving a direction under section 70-70 ..........................335
70-80 ASIC must not direct external administrator to
give the relevant material if external administrator
entitled not to comply with the request..........................335
70-85 ASIC may impose conditions on use of the
relevant material ............................................................336
70-90 Court may order relevant material to be given ..............336
Division 75—Meetings 338
75-1 Simplified outline of this Division ................................338
75-5 Other obligations to convene meetings not affected ......338
75-10 External administrator may convene meetings ..............338
75-15 External administrator must convene meeting in
certain circumstances ....................................................339
75-20 External administrator must convene meeting if
required by ASIC ..........................................................340
75-25 External administrator’s representative at meetings ......340
75-30 ASIC may attend meetings ............................................341
75-35 Commonwealth may attend certain meetings etc. .........341
75-40 Proposals to creditors or contributories without
meeting..........................................................................341
75-41 Outcome of voting at creditors’ meeting
determined by related entity—Court powers.................343
75-42 Creditors’ resolution passed because of casting
vote—Court review .......................................................344
75-43 Proposed creditors’ resolution not passed because
of casting vote—Court’s powers ...................................345
75-44 Interim order on application under section 75-41,
75-42 or 75-43...............................................................346
75-45 Order under section 75-41 or 75-42 does not affect
act already done pursuant to resolution .........................347
75-50 Rules relating to meetings .............................................347
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Division 80—Committees of inspection 349
80-1 Simplified outline of this Division ................................349
80-5 Application of sections 80-10 to 80-25 .........................350
80-10 Committee of inspection—company not a member
of a pooled group...........................................................350
80-15 Appointment and removal of members of
committee of inspection by creditors generally .............350
80-20 Appointment of committee member by large
creditor ..........................................................................351
80-25 Appointment of committee member by employees .......352
80-26 Committee of inspection—pooled groups .....................353
80-27 External administrator must convene meeting in
certain circumstances ....................................................354
80-30 Committees of inspection—procedures etc. ..................356
80-35 Functions of committee of inspection............................356
80-40 Committee of inspection may request information
etc. .................................................................................357
80-45 Reporting to committee of inspection............................357
80-50 Committee of inspection may obtain specialist
advice or assistance .......................................................358
80-55 Obligations of members of committee of
inspection ......................................................................359
80-60 Obligations of creditor appointing a member of
committee of inspection ................................................361
80-65 ASIC may attend committee meetings ..........................362
80-70 The Court may inquire into conduct of the
committee......................................................................362
Division 85—Directions by creditors 363
85-1 Simplified outline of this Division ................................363
85-5 External administrator to have regard to directions
given by creditors ..........................................................363
Division 90—Review of the external administration of a
company 364
Subdivision A—Introduction 364
90-1 Simplified outline of this Division ................................364
Subdivision B—Court powers to inquire and make orders 365
90-5 Court may inquire on own initiative ..............................365
90-10 Court may inquire on application of creditors etc. ........365
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90-15 Court may make orders in relation to external
administration................................................................366
90-20 Application for Court order ...........................................368
90-21 Meetings to ascertain wishes of creditors or
contributories.................................................................369
Subdivision C—Review by another registered liquidator 370
90-22 Application of this Subdivision .....................................370
90-23 Appointment of reviewing liquidator by ASIC or
the Court........................................................................370
90-24 Appointment of reviewing liquidator by creditors
etc. .................................................................................371
90-25 Reviewing liquidator must consent to appointment.......373
90-26 Review ..........................................................................373
90-27 Who pays for a review?.................................................374
90-28 Court orders in relation to review..................................374
90-29 Rules about reviews.......................................................376
Subdivision D—Removal by creditors 376
90-30 Application of this Subdivision .....................................376
90-35 Removal by creditors.....................................................377
Part 4—Other matters 379
Division 95—Introduction 379
95-1 Simplified outline of this Part........................................379
Division 100—Other matters 380
100-5 External administrator may assign right to sue
under this Act ................................................................380
100-6 Approved forms.............................................................380
Division 105—The Insolvency Practice Rules 382
105-1 The Insolvency Practice Rules ......................................382
Schedule 3—Penalties 383
Schedule 4—Transfer of financial institutions and
friendly societies 419
Part 1—Preliminary 419 1 Definitions.....................................................................419
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Part 2—Financial institutions that became companies 423
Division 1—Registration and its consequences 423
3 Background (registration of transferring financial
institution as company) .................................................423
4 Rules applied to transferring institution that was
registered as a company under the transfer
provisions ......................................................................423
11 Transferring financial institution under external
administration................................................................424
Division 2—Membership 427
12 Institution that became a company limited by
shares.............................................................................427
13 Institution that became a company limited by
guarantee .......................................................................428
14 Institution becoming a company limited by shares
and guarantee ................................................................429
15 Redeemable preference shares that were
withdrawable shares ......................................................430
16 Liability of members on winding up .............................430
Division 3—Share capital 432
17 Share capital ..................................................................432
18 Application of no par value rule ....................................433
19 Calls on partly-paid shares ............................................433
20 References in contracts and other documents to par
value ..............................................................................433
Part 4—The transition period 435 25 ASIC may direct directors of a company to modify
its constitution ...............................................................435
27 When certain modifications of a company’s
constitution under an exemption or declaration
take effect ......................................................................436
Part 5—Demutualisations 438 29 Disclosure for proposed demutualisation ......................438
30 ASIC’s exemption power ..............................................440
31 Coverage of disclosure statement ..................................441
32 Registration of disclosure statement..............................441
33 Expert’s report...............................................................443
34 Unconscionable conduct in relation to
demutualisations............................................................444
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35 Orders the Court may make...........................................445
Part 6—Continued application of fundraising provisions of the
Friendly Societies Code 447 36 Friendly Societies Code to apply to offers of
interests in benefit funds................................................447
Part 7—Transitional provisions 449 37 Unclaimed money .........................................................449
38 Modification by regulations ..........................................450
39 Regulations may deal with transitional, saving or
application matters ........................................................451
Endnotes 453
Endnote 1—About the endnotes 453
Endnote 2—Abbreviation key 455
Endnote 3—Legislation history 456
Endnote 4—Amendment history 473
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Transitional provisions Chapter 10
Transition from the old corporations legislation Part 10.1
Preliminary Division 1
Section 1370
Corporations Act 2001 1
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Chapter 10—Transitional provisions
Part 10.1—Transition from the old corporations
legislation
Division 1—Preliminary
1370 Object of Part
(1) Subject to subsection (3), the object of this Part is to provide for a
smooth transition from the regime provided for in the old
corporations legislation of the States and Territories in this
jurisdiction to the regime provided for in the new corporations
legislation, so that individuals, bodies corporate and other bodies
are, to the greatest extent possible, put in the same position
immediately after the commencement as they would have been if:
(a) that old corporations legislation had, from time to time when
it was in force, been valid Commonwealth legislation
applying throughout those States and Territories; and
(b) the new corporations legislation (to the extent it contains
provisions that correspond to provisions of the old
corporations legislation as in force immediately before the
commencement) were a continuation of that old corporations
legislation as so applying.
Note: The new corporations legislation contains provisions that correspond
to most of the provisions of the old corporations legislation.
Generally, the only exceptions to this are provisions of the old
corporations legislation that related to the fact that the Corporations
Law operated separately in each of the States and Territories (rather
than as a single national law).
(2) In resolving any ambiguity as to the meaning of any of the other
provisions of this Part, an interpretation that is consistent with the
object of this Part is to be preferred to an interpretation that is not
consistent with that object.
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Part 10.1 Transition from the old corporations legislation
Division 1 Preliminary
Section 1371
2 Corporations Act 2001
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(3) This Part does contain some provisions (for example,
subsection 1400(4)) which apply or extend to matters under the old
corporations legislation of any non-referring State.
1371 Definitions
(1) In this Part:
carried over provision of the old corporations legislation of a State
or Territory in this jurisdiction means a provision of the old
corporations legislation of that State or Territory that:
(a) was in force immediately before the commencement; and
(b) corresponds to a provision of the new corporations
legislation.
commencement means the commencement of this Act.
corresponds has a meaning affected by subsections (2), (3) and (4).
instrument means:
(a) any instrument of a legislative character (including an Act or
regulations) or of an administrative character; or
(b) any other document.
liability includes a duty or obligation.
made includes issued, given or published.
new corporations legislation means:
(a) this Act; and
(b) the new Corporations Regulations (as amended and in force
from time to time) and any other regulations made under this
Act; and
(c) the laws of the Commonwealth referred to in paragraph (c) of
the definition of old corporations legislation, being those
laws as they apply after the commencement; and
(d) the preserved instruments.
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Transition from the old corporations legislation Part 10.1
Preliminary Division 1
Section 1371
Corporations Act 2001 3
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new Corporations Regulations means the regulations that, because
of section 1380, have effect as if they were made under
section 1364.
old application Act for a State or Territory means:
(a) in the case of New South Wales—the Corporations (New
South Wales) Act 1990 of New South Wales as in force from
time to time before the commencement; or
(b) in the case of Victoria—the Corporations (Victoria) Act 1990
of Victoria as in force from time to time before the
commencement; or
(c) in the case of Queensland—the Corporations (Queensland)
Act 1990 of Queensland as in force from time to time before
the commencement; or
(d) in the case of Western Australia—the Corporations (Western
Australia) Act 1990 of Western Australia as in force from
time to time before the commencement; or
(e) in the case of South Australia—the Corporations (South
Australia) Act 1990 of South Australia as in force from time
to time before the commencement; or
(f) in the case of Tasmania—the Corporations (Tasmania) Act
1990 of Tasmania as in force from time to time before the
commencement; or
(g) in the case of the Australian Capital Territory—the old
Corporations Act; or
(h) in the case of the Northern Territory—the Corporations
(Northern Territory) Act 1990 of the Northern Territory as in
force from time to time before the commencement.
old Corporations Act means the Corporations Act 1989 as in force
from time to time before the commencement.
old Corporations Law means:
(a) when used in relation to a particular State or Territory—the
Corporations Law of that State or Territory, within the
meaning of the old application Act for that State or Territory,
as in force from time to time before the commencement; or
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Division 1 Preliminary
Section 1371
4 Corporations Act 2001
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(b) when used in general terms—the Corporations Law set out in
section 82 of the old Corporations Act as in force from time
to time before the commencement.
old corporations legislation of a particular State or Territory
means:
(a) the old Corporations Law and old Corporations Regulations
of that State or Territory, and any instruments made under
that Law or those Regulations; and
(b) the old application Act for that State or Territory, and any
instruments made under that Act; and
(c) either:
(i) when used in relation to a State or the Northern
Territory—the laws of the Commonwealth as applying
in relation to the old Corporations Law and the old
Corporations Regulations of the State or Territory from
time to time before the commencement as laws of, or
for the government of, that State or Territory because of
Part 8 of the old Application Act for that State or
Territory, and any instruments made under those laws as
so applying; or
(ii) when used in relation to the Australian Capital
Territory—the laws of the Commonwealth referred to in
subparagraph (i), but as applying of their own force in
relation to the old Corporations Law and old
Corporations Regulations of the Territory, and any
instruments made under those laws as so applying.
old Corporations Regulations means:
(a) when used in relation to a particular State or Territory—the
Corporations Regulations of that State or Territory, within
the meaning of the old application Act for that State or
Territory, as in force from time to time before the
commencement; or
(b) when used in general terms—the regulations made under
section 22 of the old Corporations Act as in force from time
to time before the commencement.
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order, in relation to a court, includes any judgment, conviction or
sentence of the court.
pre-commencement right or liability has the meaning given by
subsection 1400(1) or 1401(1).
preserved instrument means an instrument that, because of
section 1399, has effect after the commencement as if it were made
under a provision of the new corporations legislation.
right includes an interest or status.
substituted right or liability has the meaning given by
subsection 1400(2) or 1401(3).
this Part includes regulations made for the purposes of any of the
provisions of this Part.
(2) Subject to subsection (4), for the purposes of this Part, a provision
or part (the old provision or part) of the old corporations
legislation of a State or Territory corresponds to a provision or part
(the new provision or part) of the new corporations legislation
(and vice versa) if:
(a) the old provision or part and the new provision or part are
substantially the same, unless the regulations specify that the
2 provisions or parts do not correspond; or
(b) the regulations specify that the 2 provisions or parts
correspond.
Note: The range of provisions of the new corporations legislation that may
be corresponding provisions for the purposes of this Part is affected by
sections 1401 and 1408, which take certain provisions of the old
corporations legislation to be included in the new corporations
legislation.
(3) For the purposes of paragraph (2)(a), differences of all or any of
the following kinds are not sufficient to mean that 2 provisions or
parts are not substantially the same:
(a) differences in the numbering of the provisions or parts;
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(b) differences of a minor technical nature (for example,
differences in punctuation, or differences that are attributable
to the correction of incorrect cross references);
(c) the fact that one of the provisions refers to a corresponding
previous law and the other does not;
(d) that fact that:
(i) the old provision or part allowed a court to exercise
powers on its own motion but the new provision or part
does not; or
(ii) the old provision or part required a court to apply a
criterion of public interest but the new provision or part
requires a court to apply a criterion of justice and
equity; or
(iii) the new provision or part requires ASIC to take account
of public interest but the old provision or part did not;
(e) other differences that are attributable to the fact that the new
corporations legislation applies as a Commonwealth law
throughout this jurisdiction;
(f) other differences of a kind prescribed by the regulations for
the purposes of this paragraph.
This subsection is not intended to otherwise limit the
circumstances in which 2 provisions or parts are, for the purposes
of paragraph (2)(a), substantially the same.
(4) The regulations may provide that a specified provision of the old
corporations legislation of a State or Territory does, or does not,
correspond to a specified provision of the new corporations
legislation.
1372 Relationship of Part with State validation Acts
(1) This Part applies to an invalid administrative action of a
Commonwealth authority or an officer of the Commonwealth
(within the meaning of a State validation Act) as if the
circumstances that made the authority’s or officer’s action an
invalid administrative action had not made the action invalid.
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Note 1: So, for example, in determining whether the purported registration of
a company is an action to which this Part (in particular Division 2)
applies, the circumstances that made the action an invalid
administrative action for the purposes of a State validation Act are to
be disregarded.
Note 2: For the status and effect of invalid administrative actions in relation to
times before the commencement, see the State validation Acts.
(2) However, if there are other circumstances that affect or may affect
the validity of the action, neither this section, nor anything else in
this Part, is taken to negate the effect of those other circumstances.
(3) If:
(a) a person would have had a right or liability under a provision
(the old provision) of the old corporations legislation of a
State if the circumstances that made the authority’s or
officer’s action an invalid administrative action (within the
meaning of the State validation Act of that State) had not
made the action invalid; and
(b) the effect of that State validation Act in relation to that action
is to declare that the person has, and is taken always to have
had, the same rights and liabilities as they would have had
under the old provision if the invalid administrative action
had been taken, or purportedly taken, at the relevant time by
a duly authorised State authority or officer of the State
(within the meaning of that Act);
this Part applies as if:
(c) a reference to a right or liability arising under the old
corporations legislation included a reference to the right or
liability that the person is declared to have by the State
validation Act; and
(d) that right or liability arose under the old provision.
(4) In this section:
State validation Act means an Act of a State in this jurisdiction
under which certain administrative actions (within the meaning of
that Act) taken, or purportedly taken, at or before the
commencement by Commonwealth authorities or officers of the
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Commonwealth (within the meaning of that Act) pursuant to
functions or powers (the relevant functions or powers) conferred,
or purportedly conferred, by or under laws that include the old
application Act for that State have, and are deemed always to have
had, the same force and effect for all purposes as they would have
had if:
(a) they had been taken, or purportedly taken by a State authority
or officer of the State (within the meaning of that Act); and
(b) the relevant functions or powers had been duly conferred on
those authorities or officers.
1373 References to things taken or deemed to be the case etc.
If:
(a) a law of a State or Territory in this jurisdiction had effect
before the commencement:
(i) to take or deem something to have happened or to be the
case, or to have a particular effect, under or for the
purposes of the old corporations legislation of that State
or Territory (or a provision of that legislation); or
(ii) to give something an effect for the purposes of the old
corporations legislation of that State or Territory (or a
provision of that legislation) that it would not otherwise
have had; and
(b) that effect was continuing immediately before the
commencement;
this Part applies as if that thing had actually happened or were
actually the case, or as if that thing actually had that other effect.
Note: So, for example, if a provision of the old corporations legislation, or
another law, of a State or Territory in this jurisdiction took a company
to be registered under Part 2A.2 of the old Corporations Law of the
State or Territory, this Part applies as if the company were actually
registered under that Part.
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1374 Existence of several versions of old corporations legislation
does not result in this Part operating to take same thing to
be done several times under new corporations legislation
etc.
If, apart from this section, a provision of this Part (the transitional
provision) would, because each State or Territory in this
jurisdiction had its own old corporations legislation (containing
parallel provisions) before the commencement, operate so that:
(a) a particular thing done before the commencement would be
taken to be done, or have effect, 2 or more times by, under or
for the purposes of, a provision of this Act; or
(b) a right or liability would be created 2 or more times in
respect of a particular event, circumstance or thing that
happened before the commencement; or
(c) a particular result or effect would be produced 2 or more
times for the purposes of the new corporations legislation in
relation to the same matter;
the transitional provision is taken to operate so that:
(d) if paragraph (a) applies—the thing is taken to be done or
have effect only once by, under, or for the purposes of, the
provision of the new corporations legislation; or
(e) if paragraph (b) applies—the right or liability is created only
once in respect of the event, circumstance or thing; or
(f) if paragraph (c) applies—the result or effect is produced only
once in relation to the matter.
Note: So, for example, if a body (because of the operation of section 102A
of the old Corporations Law) was registered under section 601CB of
the old Corporations Law of several States and Territories and those
registrations were still in force immediately before the
commencement, section 1399 does not apply separately to each of
those registrations.
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1375 Penalty units in respect of pre-commencement conduct remain
at $100
(1) If, because of this Part, an offence can be prosecuted after the
commencement in respect of conduct that occurred solely before
the commencement, the amount of a penalty unit in respect of that
offence is $100.
(2) If, because of this Part, section 1314 of this Act applies to conduct
that started before the commencement and that continued after the
commencement, then, for the purposes of the application of that
section to that conduct (including the post-commencement
conduct), the amount of a penalty unit is $100.
(3) This section has effect despite section 4AA of the Crimes Act
1914.
1376 Ceasing to be a referring State does not affect previous
operation of this Part
If, after the commencement, a State ceases to be a referring State,
that does not undo or affect:
(a) the effects that this Part has already had in relation to matters
connected with that State; or
(b) the ongoing effect of this Act as it operates because of the
effects referred to in paragraph (a).
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Division 2—Carrying over registration of companies
1377 Division has effect subject to Division 7 regulations
This Division has effect subject to regulations made for the
purposes of Division 7.
1378 Existing registered companies continue to be registered
(1) If:
(a) before the commencement, a company was registered under
Part 2A.2 of the old Corporations Law of a State or Territory
in this jurisdiction; and
(b) that registration was still in force immediately before the
commencement;
the registration of the company has effect (and may be dealt with)
after the commencement as if it were a registration of the company
under Part 2A.2 of this Act as a company of whichever of the
company types listed in subsection (2) corresponds to its previous
class and type.
Note: The carrying over of other matters (for example, the registration of
registered managed investment schemes and of registered bodies) is
covered by the more general transitional provisions in Division 6.
(2) The company types are as follows:
(a) a proprietary company limited by shares;
(b) an unlimited proprietary company;
(c) a proprietary company limited both by shares and by
guarantee;
(d) a public company limited by shares;
(e) an unlimited public company;
(f) a company limited by guarantee;
(g) a public company limited both by shares and by guarantee;
(h) a no liability company.
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(3) The application of subsection (1) in relation to the registration of a
company does not have the effect of creating that company as a
new legal entity. Rather, it has the effect of continuing the
existence of the legal entity that is that company with the same
characteristics and attributes as it had immediately before the
commencement. The date of the company’s first registration
remains the same (see subsection 1402(2)), and a new certificate of
registration does not need to be issued.
Note: The company will, for example, retain the same name, ACN,
constitution and registered office as it had immediately before the
commencement. Its certificate of registration will (because of
section 1399) have effect as if it were issued under section 118 of this
Act.
(4) The State or Territory in which the company is taken to be
registered is the State or Territory under whose old Corporations
Law the company was registered immediately before
commencement. This subsection has effect subject to
subsection 119A(3).
Note: For the general provisions about jurisdiction of incorporation and
jurisdiction of registration, see section 119A.
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Division 3—Carrying over the old Corporations
Regulations
1379 Division has effect subject to Division 7 regulations
This Division has effect subject to regulations made for the
purposes of Division 7.
1380 Old Corporations Regulations continue to have effect
The old Corporations Regulations that were made for the purposes
of provisions of the old Corporations Law that correspond to
provisions of this Act and that were in force immediately before
the commencement continue to have effect (and may be dealt with)
after the commencement as if:
(a) they were regulations in force under section 1364 of this Act;
and
(b) they were made for the purposes of the corresponding
provisions of this Act.
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Division 4—Court proceedings and orders
1381 Division has effect subject to Division 7 regulations
This Division has effect subject to regulations made for the
purposes of Division 7.
1382 Definitions
(1) In this Division:
appeal or review proceeding, in relation to an order of a court,
means a proceeding by way of appeal, or otherwise seeking review,
of the order.
enforcement proceeding, in relation to an order made by a court,
means:
(a) a proceeding to enforce the order; or
(b) any other proceeding in respect of a breach of the order.
federal corporations proceeding means a proceeding of any of the
following kinds that, immediately before the commencement, was
before a court:
(a) a proceeding in respect of a matter arising under the
Administrative Decisions (Judicial Review) Act 1977
involving or related to a decision made under a provision of
the old corporations legislation of a State or Territory in this
jurisdiction;
(b) a proceeding for a writ of mandamus or prohibition, or an
injunction, against an officer or officers of the
Commonwealth (within the meaning of section 75 of the
Constitution) in relation to a matter to which a provision of
the old corporations legislation of a State or Territory in this
jurisdiction applied;
(ba) a proceeding that relates to a matter to which a provision of
the Corporations Act 1989 applied (other than a proceeding
that relates to a matter to which a provision of the
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Corporations Law of the Australian Capital Territory
applied);
(bb) a proceeding in relation to a matter to which a provision of
the old corporations legislation of a State or Territory in this
jurisdiction applied:
(i) in which the Commonwealth was seeking an injunction
or a declaration; or
(ii) to which the Commonwealth, or a person suing or being
sued on behalf of the Commonwealth, was a party;
(bc) any other proceeding in relation to a matter to which a
provision of the old corporations legislation of a State in this
jurisdiction applied that was in the exercise of federal
jurisdiction;
(bd) any other proceeding in relation to a matter to which a
provision of the old corporations legislation of a Territory in
this jurisdiction applied that would be covered by
paragraph (bc) if the Territory had been a State;
(c) a proceeding in the court’s accrued federal jurisdiction in
relation to a matter to which a provision of the old
corporations legislation of a State or Territory in this
jurisdiction applied.
interlocutory application means an application that:
(a) is made during the course of a proceeding; and
(b) is for an order that is incidental to the principal object of that
proceeding, including, for example:
(i) an order about the conduct of that proceeding; or
(ii) an order assisting a party to that proceeding to present
their case in that proceeding; or
(iii) an order protecting or otherwise dealing with property
that is the subject matter of that proceeding;
but not including an order making a final determination of
existing rights or liabilities.
interlocutory order means:
(a) an order made in relation to an interlocutory application; or
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(b) an order or direction about the conduct of a proceeding.
interlocutory proceeding means a proceeding:
(a) dealing only with; or
(b) to the extent it deals with;
an interlocutory application.
primary proceeding means a proceeding other than an
interlocutory proceeding.
proceeding means a proceeding, whether criminal or civil, before a
court.
(2) For the purposes of this Part, if an interlocutory proceeding relates
to a proceeding that is itself an interlocutory proceeding, the
first-mentioned proceeding is taken to relate also to the primary
proceeding to which the second-mentioned proceeding relates.
1383 Treatment of court proceedings under or related to the old
corporations legislation—proceedings other than federal
corporations proceedings
(1) This section applies to a proceeding, other than a federal
corporations proceeding, in relation to which the following
paragraphs are satisfied:
(a) the proceeding was started in a court before the
commencement; and
(b) the proceeding was:
(i) under a provision of the old corporations legislation of a
State or Territory in this jurisdiction; or
(ii) brought as, or connected with, a prosecution for an
offence against a provision of the old corporations
legislation of a State or Territory in this jurisdiction; and
(c) the proceeding was not an enforcement proceeding, or an
appeal or review proceeding, in relation to an order of a
court; and
(d) the proceeding had not been concluded or terminated before
the commencement; and
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(e) either:
(i) if the proceeding is a primary proceeding—no final
determination of any of the existing rights or liabilities
at issue in the proceeding had been made before the
commencement; or
(ii) if the proceeding is an interlocutory proceeding—this
section applies to the primary proceeding to which the
interlocutory proceeding relates.
(2) In this section:
(a) the proceeding to which this section applies is called the old
proceeding; and
(b) the provision of the old corporations legislation referred to in
whichever of subparagraphs (1)(b)(i) and (ii) applies is called
the relevant old provision.
(3) A proceeding (the new proceeding) equivalent to the old
proceeding is, on the commencement, taken to have been brought
in the same court, exercising federal jurisdiction:
(a) if subparagraph (1)(b)(i) applies—under the provision of the
new corporations legislation that corresponds to the relevant
old provision; or
(b) if subparagraph (1)(b)(ii) applies—as, or connected with, a
prosecution for an offence against the provision of the new
corporations legislation that corresponds to the relevant old
provision.
To the extent that the old proceeding, before the commencement,
related to pre-commencement rights or liabilities, the new
proceeding relates to the substituted rights and liabilities in relation
to those pre-commencement rights or liabilities
Note 1: See sections 1400 and 1401 for the creation of substituted rights and
liabilities.
Note 2: In all cases, there will be a provision of the new corporations
legislation that corresponds to the relevant old provision, either
because:
(a) the new corporations legislation actually contains a provision that corresponds to the relevant old provision; or
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(b) the new corporations legislation, because of section 1401 or 1408, is taken to include the relevant old provision (whether with or without modifications), in which case the provision so taken to be included will be the corresponding provision.
(4) The following provisions apply in relation to the new proceeding:
(a) the parties to the new proceeding are the same as the parties
to the old proceeding;
(b) subject to subsections (5) and (6), and to any order to the
contrary made by the court, the court must deal with the new
proceeding as if the steps that had been taken for the
purposes of the old proceeding before the commencement
had been taken for the purposes of the new proceeding.
(5) If:
(a) an interlocutory order was made before the commencement
for the purpose of, or in relation to, the old proceeding; and
(b) that interlocutory order was in force immediately before the
commencement;
the rights and liabilities of all persons (including rights and
liabilities arising wholly or partly because of conduct occurring
before the commencement) are declared to be, for all purposes, the
same as if the interlocutory order had instead been made by the
same court, in the exercise of federal jurisdiction, for the purpose
of, or in relation to, the new proceeding.
(6) The court may make orders doing all or any of the following:
(a) cancelling or varying rights or liabilities that a person has
because of subsection (5);
(b) substituting other rights or liabilities for rights or liabilities a
person has because of subsection (5);
(c) adding rights or liabilities to the rights or liabilities a person
has because of subsection (5);
(d) enforcing, or otherwise dealing with conduct contrary to, a
right or liability a person has because of subsection (5) in the
same way as it could enforce, or deal with, the right, liability
or conduct if the right or liability had arisen under or because
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of an order made by the court in the exercise of federal
jurisdiction under the new corporations legislation.
1384 Treatment of court proceedings under or related to the old
corporations legislation—federal corporations
proceedings
(1) This section applies to a proceeding in relation to which the
following paragraphs are satisfied:
(a) the proceeding was started in a court before the
commencement; and
(b) the proceeding was a federal corporations proceeding that
related to a matter to which a provision of the old
corporations legislation of a State or Territory in this
jurisdiction applied; and
(c) the proceeding had not been concluded or terminated before
the commencement.
(2) In this section:
(a) the proceeding to which this section applies is called the
continued proceeding; and
(b) the provision of the old corporations legislation referred to in
paragraph (1)(b) is called the relevant old provision.
(3) Subject to subsection (4):
(a) the continued proceeding continues after the commencement
in the same court as if it were, and always had been, a
proceeding in relation to a matter to which the provision of
the new corporations legislation that corresponds to the
relevant old provision applies; and
(b) to the extent that the proceeding, before the commencement,
related to pre-commencement rights or liabilities, the
proceeding, as continued, relates, and as so continuing is
taken always to have related, to the substituted rights and
liabilities in relation to those pre-commencement rights or
liabilities
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Note 1: See sections 1400 and 1401 for the creation of substituted rights and
liabilities.
Note 2: In all cases, there will be a provision of the new corporations
legislation that corresponds to the relevant old provision, either
because:
(a) the new corporations legislation actually contains a provision that corresponds to the relevant old provision; or
(b) the new corporations legislation, because of section 1401 or 1408, is taken to include the relevant old provision (whether with or without modifications), in which case the provision so taken to be included will be the corresponding provision.
(4) Subject to any order to the contrary made by the court, the court
must deal with the continued proceeding as if:
(a) the steps that had been taken for the purposes of the
proceeding before the commencement had been taken for the
purpose of the proceeding as continued by this section; and
(b) any orders made in relation to the proceeding before the
commencement had been made in relation to the proceeding
as continued by this section.
1384A Appeals etc. in relation to some former federal corporations
proceedings
(1) This section applies to a proceeding in relation to which all of the
following paragraphs are satisfied:
(a) the proceeding was started in a court before the
commencement;
(b) the proceeding was a federal corporations proceeding that
related to a matter to which a provision of the old
corporations legislation of a State or Territory in this
jurisdiction applied; and
(c) the proceeding had been concluded or terminated before the
commencement.
(2) A decision or order made in the proceeding may be appealed
against, or otherwise reviewed, as if it had been made in a
proceeding that related to a matter to which a provision of this Act
applied.
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(3) An order made in the proceeding may be enforced as if it had been
made in a proceeding that related to a matter to which a provision
of this Act applied.
1384B Effect of decisions and orders made in federal corporations
proceedings before commencement
(1) For the avoidance of doubt, if:
(a) a proceeding was started in a court before the
commencement; and
(b) the proceeding was a federal corporations proceeding that
related to a matter to which a provision of the old
corporations legislation of a State or Territory in this
jurisdiction applied; and
(c) a decision was made or an order given in the proceeding
before the commencement;
the decision or order continues to have effect after the
commencement despite the provision of the old corporations
legislation ceasing to have effect.
(2) This section does not limit the operation of section 1384 in relation
to the decision or order.
1385 References to proceedings and orders in the new corporations
legislation
(1) Subject to subsection (5), a reference in the new corporations
legislation to the taking of a proceeding, or a step in a proceeding,
in a court under or in relation to a part or provision of the new
corporations legislation includes a reference to the taking of a
proceeding, or the equivalent step in a proceeding:
(a) before the commencement under or in relation to the
corresponding part or provision of the old corporations
legislation of a State or Territory; or
(b) after the commencement under or in relation to the
corresponding part or provision of the old corporations
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legislation of a State or Territory in this jurisdiction, as that
legislation continues to have effect after the commencement.
(2) Subject to subsections (3), (4) and (5), a reference in the new
corporations legislation to an order made by a court under or in
relation to a part or provision of the new corporations legislation
includes a reference to an order made:
(a) before the commencement under or in relation to the
corresponding part or provision of the old corporations
legislation of a State or Territory; or
(b) after the commencement under or in relation to the
corresponding part or provision of the old corporations
legislation of a State or Territory in this jurisdiction, as that
legislation continues to have effect after the commencement.
(3) Nothing in subsection (2) is taken to produce a result that would:
(a) make a person liable, under the new corporations legislation,
to any penalty (whether civil or criminal) provided for in an
order referred to in paragraph (2)(a) or (b); or
(b) enable an enforcement proceeding, or an appeal or review
proceeding, in relation to such an order to be taken in a court
under the new corporations legislation; or
(c) enable proceedings by way of appeal, or other review, of
such an order to be taken in a court under the new
corporations legislation.
(4) If, after the commencement, an order referred to in
paragraph (2)(a) or (b) is varied or set aside on appeal or review,
subsection (2) applies, or is taken to have applied, from the time
from which the variation or setting aside takes or took effect, as if:
(a) if the order is varied—the order had been made as so varied;
or
(b) if the order is set aside—the order had not been made.
(5) The regulations may provide that subsection (1) or (2) does not
apply in relation to a particular reference or class of references in
the new corporations legislation.
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Division 5—Other specific transitional provisions
1386 Division has effect subject to Division 7 regulations
This Division has effect subject to regulations made for the
purposes of Division 7.
1387 Certain applications lapse on the commencement
(1) An application:
(a) under section 117 for the registration of a company; or
(b) under section 601BC for the registration of a body as a
company;
that was made by a person before the commencement, but that had
not been dealt with by the commencement, lapses on the
commencement.
(2) Any fee that was paid in respect of the application must be returned
to the person, unless it is, with the person’s permission, credited
against the fee payable in respect of another application the person
makes under this Act after the commencement.
1388 Carrying over the Partnerships and Associations Application
Order
The application order in force immediately before the
commencement for paragraph 115(b) of the old Corporations Law
of each State and Territory in this jurisdiction continues to have
effect (and may be dealt with) after the commencement as if it
were a regulation in force under section 1364 of this Act made for
the purposes of subsection 115(2) of this Act.
1389 Evidentiary certificates
(1) A certificate by ASIC (whether issued before or after the
commencement) stating that a company was registered under the
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Section 1390
24 Corporations Act 2001
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old Corporations Law of a State or Territory in this jurisdiction is
conclusive evidence that:
(a) all requirements of that Law for the company’s registration
were complied with; and
(b) the company was duly registered as a company under that
Law on the date (if any) specified in the certificate.
(2) A certificate issued before the commencement under
pre-Corporations Law legislation (see subsection (3)) by the
authority responsible for administering that legislation stating that
a body was registered as a company under that legislation or other
pre-Corporations Law legislation is conclusive evidence that:
(a) all requirements of that legislation for the company’s
registration were complied with; and
(b) the company was duly registered as a company under that
legislation on the date (if any) specified in the certificate.
(3) In subsection (2):
pre-Corporations Law legislation means legislation that was, for
the purposes of the old Corporations Law of a State or Territory in
this jurisdiction, a corresponding previous law in relation to that
old Corporations Law.
1390 Preservation of nomination of body corporate as SEGC
The nomination in force immediately before the commencement
under section 67 of the old Corporations Act continues to have
effect (and may be dealt with) after the commencement as if it
were a nomination under section 890A of this Act.
1391 Preservation of identification of satisfactory records
A notice in force immediately before the commencement under
section 70 of the old Corporations Act continues to have effect
(and may be dealt with) after the commencement as if it were a
notice under subsection 147(5) of this Act.
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1392 Retention of information obtained under old corporations
legislation of non-referring State
If a particular State is not a referring State on the commencement,
that does not mean that ASIC must then remove from, or cease to
retain in, a database or register it maintains information that ASIC
obtained before the commencement under or because of (whether
in whole or in part) the operation of the old corporations legislation
of that State.
1393 Transitional provisions relating to section 1351 fees
(1) If:
(a) either:
(i) before the commencement, a person paid an amount as
required by section 1351 of the old Corporations Law of
a State or Territory in respect of a particular matter; or
(ii) after the commencement, a person pays an amount as
required by subsection 9(2) of the Corporations (Fees)
Act 2001 in respect of a particular matter; and
(b) a fee is also payable under section 1351 of this Act in respect
of the same matter;
the payment they made or make as mentioned in
subparagraph (a)(i) or (ii) is taken to satisfy their liability to pay
the fee referred to in paragraph (b).
(2) If:
(a) before the commencement, a person paid a deposit as
required by section 1357 of the old Corporations Law of a
State or Territory in respect of a particular matter; and
(b) a fee is payable under section 1351 of this Act in respect of
the same matter;
the deposit must be applied against the liability to pay the fee.
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Section 1394
26 Corporations Act 2001
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1394 Transitional provisions relating to securities exchange fidelity
fund levies
(1) If:
(a) before the commencement, a person paid an amount as
required by subsection 902(1) of the old Corporations Law of
a State or Territory in order to be admitted to:
(i) membership of a securities exchange; or
(ii) membership of a partnership in a member firm
recognised by a securities exchange; and
(b) that person had not been so admitted by the commencement
of this Act;
the payment they made before the commencement is taken to
satisfy their liability to pay the levy referred to in
subsection 902(1) of this Act in respect of their admission after the
commencement to that securities exchange or firm.
(2) If:
(a) either:
(i) before the commencement, a person paid an amount as
required by subsection 902(2) of the old Corporations
Law of a State or Territory to a securities exchange in
respect of a year some or all of which occurs after the
commencement of this Act; or
(ii) after the commencement, a person pays an amount as
required by subsection 8(3) of the Corporations
(Securities Exchanges Levies) Act 2001 in respect of a
year some or all of which occurs after the
commencement of this Act; and
(b) a levy is also payable under subsection 902(2) of this Act in
respect of the securities exchange and the year;
the payment they made or make as mentioned in
subparagraph (a)(i) or (ii) is taken to satisfy their liability to pay
the levy referred to in paragraph (b).
(3) If, before the commencement, a person paid an amount to a
securities exchange as required by subsection 902(2) of the old
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Corporations Law of a State or Territory, that payment is to be
counted, for the purposes of:
(a) the reference in paragraph (a) of the definition of relevant
person in subsection 903(1) of this Act; and
(b) subsection 903(5) of this Act;
as if it were a payment of a kind referred to in that paragraph or
that subsection, as the case requires.
1395 Transitional provisions relating to National Guarantee Fund
levies
(1) If:
(a) either:
(i) before the commencement, a person paid an amount as
required by section 938 of the old Corporations Law of
a State or Territory in respect of a particular transaction;
or
(ii) after the commencement, a person pays an amount of
levy imposed by subsection 6(1) of the Corporations
(National Guarantee Fund Levies) Act 2001 in respect
of a particular transaction; and
(b) a levy is also payable under section 938 of this Act in respect
of the same transaction;
the payment they made or make as mentioned in
subparagraph (a)(i) or (ii) is taken to satisfy their liability to pay
the levy referred to in paragraph (b).
(2) Subject to subsection (3), a determination of a matter (other than a
rate or rates, or an amount) in force immediately before the
commencement for the purposes of section 938, 940 or 941 of the
old Corporations Law of a State or Territory in this jurisdiction
continues to have effect (and may be dealt with) after the
commencement of this Act as if it were:
(a) in the case of a determination for the purposes of
section 938—a determination for the purposes of section 938
of this Act; or
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(b) in the case of a determination for the purposes of
section 940—a determination for the purposes of section 940
of this Act; or
(c) in the case of a determination for the purposes of
section 941—a determination for the purposes of section 941
of this Act.
(3) Nothing in subsection (2) is taken to produce a result that a levy is
payable by a person in respect of the same matter in respect of
which levy is imposed on the person by subsection 6(1), (2) or (3)
of the Corporations (National Guarantee Fund Levies) Act 2001.
1396 Transitional provisions relating to futures organisation fidelity
fund levies
(1) If:
(a) before the commencement, a person paid an amount as
required by subsection 1234(1) of the old Corporations Law
of a State or Territory in order to be admitted to membership
of a futures organisation; and
(b) that person had not been so admitted by the commencement
of this Act;
the payment they made before the commencement is taken to
satisfy their liability to pay the levy referred to in
subsection 1234(1) of this Act in respect of their admission after
the commencement to that futures organisation.
(2) If:
(a) either:
(i) before the commencement, a contributing member of a
futures organisation paid an amount as required by
subsection 1234(2) of the old Corporations Law of a
State or Territory to a futures organisation in respect of
a year some or all of which occurs after the
commencement of this Act; or
(ii) after the commencement, a person pays an amount as
required by subsection 6(1) of the Corporations
(Futures Organisations Levies) Act 2001 in respect of a
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year some or all of which occurs after the
commencement of this Act; and
(b) a levy is also payable under subsection 1234(2) of this Act in
respect of the futures organisation and the year;
the payment they made or make as mentioned in
subparagraph (a)(i) or (ii) is taken to satisfy their liability to pay
the levy referred to in paragraph (b).
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Part 10.1 Transition from the old corporations legislation
Division 6 General transitional provisions relating to other things done etc. under the
old corporations legislation
Section 1397
30 Corporations Act 2001
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Division 6—General transitional provisions relating to
other things done etc. under the old corporations
legislation
1397 Limitations on scope of this Division
(1) This Division has effect subject to:
(a) the provisions of Divisions 2, 3, 4 and 5 (which deal with
matters in more specific terms); and
(b) regulations made for the purposes of Division 7.
(2) Nothing in this Division applies to:
(a) an order made by a court before the commencement; or
(b) a right or liability under an order made by a court before the
commencement; or
(c) a right to:
(i) appeal to a court against an order made by a court
before the commencement;
(ii) apply to a court for review of such an order; or
(iii) bring an appeal or review proceeding, or an
enforcement proceeding, within the meaning of
section 1382, in respect of such an order; or
(d) subject to subsection (3)—a proceeding taken (including an
appeal, review or enforcement proceeding) in a court before
the commencement, or a step in such a proceeding.
Note: Division 4 deals with court orders and proceedings made or begun
before the commencement, and with related matters.
(3) Despite paragraph (2)(d), sections 1400 and 1401 apply to any
right or liability to which a proceeding to which section 1383 or
1384 applies relates.
(4) Nothing in this Division applies to a liability under section 902,
904, 938, 940, 941, 1234, 1235 or 1351 of the old Corporations
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Law of a State or Territory in this jurisdiction to pay a
contribution, levy or fee.
Note: These liabilities are preserved as taxes by provisions of the following
Acts:
(a) the Corporations (Securities Exchanges Levies) Act 2001;
(b) the Corporations (National Guarantee Fund Levies) Act 2001;
(c) the Corporations (Futures Organisations Levies) Act 2001;
(d) the Corporations (Fees) Act 2001.
(5) Except as mentioned in subsections (1) to (4), nothing in
Division 2, 3, 4 or 5, or in regulations made for the purposes of
Division 7, is intended to limit the generality of the provisions in
this Division.
1398 Provisions of this Division may have an overlapping effect
The provisions of this Division deal at a broad level with concepts
and matters in a way that is intended to achieve the object of this
Part as set out in section 1370. Some of the provisions of this
Division will (depending on the situation) have an effect that
overlaps or interacts to some extent with the effect of other
provisions of this Division. This is intended, and the provisions of
this Division should be not be regarded as dealing with mutually
exclusive situations.
1399 Things done by etc. carried over provisions continue to have
effect
(1) Subject to this section, a thing that:
(a) was done before the commencement by, under, or for the
purposes of, a carried over provision of the old corporations
legislation of a State or Territory in this jurisdiction; and
(b) had an ongoing significance (see subsections (4) and (5))
immediately before the commencement for the purposes of
that legislation;
has effect (and may be dealt with) after the commencement, for the
purposes of the new corporations legislation, as if it were done by,
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Section 1399
32 Corporations Act 2001
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under, or for the purposes of, the corresponding provision of the
new corporations legislation.
Note: This section covers all kinds of things done, including things of a
coercive nature or done for coercive purposes.
(2) Examples of things done include:
(a) the making of an instrument or order (but not including the
making of an order by a court); and
(b) the making of an application or claim (but not including the
making of an application or claim to a court); and
(c) the granting of an application or claim (but not including the
granting of an application or claim by a court); and
(d) the making of an appointment or delegation; and
(e) the commencement of a procedure or the taking of a step in a
procedure (but not including the commencement of a
proceeding in a court); and
(f) the establishment of a register or fund; and
(g) requiring a person to do, or not to do, something (but not
including a requirement contained in an order made by a
court); and
(h) the giving of a notice or document.
(3) The examples in subsection (2) are not intended to limit the
generality of the language of subsection (1).
(4) Subject to subsection (5), for the purposes of this section, a thing
done by, under, or for the purposes of, a carried over provision of
the old corporations legislation of a State or Territory had an
ongoing significance immediately before the commencement for
the purposes of that legislation if:
(a) if the thing done was the making of an instrument or order—
the instrument or order was still in force immediately before
the commencement; or
(b) if the thing done was the making of an application or claim—
the application or claim had not been decided, and had not
otherwise ceased to have effect, before the commencement;
or
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(c) if the thing done was the granting of an application or
claim—the thing granted had not been revoked, and had not
otherwise ceased to have effect, before the commencement;
or
(d) if the thing done was the making of an appointment or
delegation—the appointment or delegation had not been
revoked, and had not otherwise ceased to have effect, before
the commencement; or
(e) if the thing done was the commencement of a procedure or
the taking of a step in a procedure—the procedure was still in
progress immediately before the commencement or was
otherwise still having an effect; or
(f) if the thing done was the establishment of a register or
fund—the register or fund was still in existence immediately
before the commencement; or
(g) if the thing done was requiring a person to do, or not to do
something—the requirement was still in force immediately
before the commencement; or
(h) if the thing done was the giving of a notice or document, or
the doing of some other thing—the notice or document (or
the giving of the notice or document), or the thing (or the
doing of the thing), had an ongoing effect or significance
immediately before the commencement for the purposes of
the old corporations legislation of the State or Territory.
(5) The regulations may provide that a specified thing done under, or
for the purposes of, a carried over provision of the old corporations
legislation of a State or Territory did, or did not, have an ongoing
significance immediately before the commencement for the
purposes of that legislation.
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Division 6 General transitional provisions relating to other things done etc. under the
old corporations legislation
Section 1400
34 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1400 Creation of equivalent rights and liabilities to those that existed
before the commencement under carried over provisions
of the old corporations legislation
(1) Subject to subsection (4), this section applies in relation to a right
or liability (the pre-commencement right or liability), whether
civil or criminal, that:
(a) was:
(i) acquired, accrued or incurred under a carried over
provision of the old corporations legislation of a State or
Territory in this jurisdiction; and
(ii) in existence immediately before the commencement; or
(b) would have been:
(i) acquired, accrued or incurred under such a provision;
and
(ii) in existence immediately before the commencement;
if every agreement that was valid only because of section 249
of the ASIC Act had been a valid agreement without the
application of that section.
However, this section does not apply to a right or liability under an
order made by a court before the commencement.
(2) On the commencement, the person acquires, accrues or incurs a
right or liability (the substituted right or liability), equivalent to
the pre-commencement right or liability, under the corresponding
provision of the new corporations legislation (as if that provision
applied to the conduct or circumstances that gave rise to the
pre-commencement right or liability).
Note: If a time limit applied in relation to the pre-commencement right or
liability under the old corporations legislation, that same time limit
(calculated from the same starting point) will apply under the new
corporations legislation to the substituted right or liability—see
subsection 1402(3).
(3) A procedure, proceeding or remedy in respect of the substituted
right or liability may be instituted after the commencement under
the new corporations legislation (as if that provision applied to the
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conduct or circumstances that gave rise to the pre-commencement
right or liability).
Note: For pre-commencement proceedings in respect of substituted rights
and liabilities, see sections 1383 and 1384.
(4) If, immediately before the commencement, a person had an
accrued right to make a claim under a provision of Part 7.10 of the
old Corporations Law of a State that is not a referring State (and so
is not in this jurisdiction), this section applies in relation to that
right in the same way as it would have applied if the State had been
a referring State.
Note: Except to the extent provided in this subsection, this Part does not
create rights and liabilities that are equivalent to those that existed
under the old corporations legislation of a non-referring State.
(5) This section does not apply to a pre-commencement right or
liability that:
(a) existed under a law of the Commonwealth or of a State or
Territory; and
(b) would not have existed if any agreement that is valid only
because of section 249 of the ASIC Act had been a valid
agreement without the application of that section.
(6) Paragraph (1)(b) and subsection (5) have effect in relation to:
(a) proceedings (whether original or appellate) that begin on or
after the day the Treasury Laws Amendment (2017 Measures
No. 3) Act 2017 receives the Royal Assent; and
(b) proceedings that began before that day, if the proceedings
(including any appeals) had not been finally determined as at
that day.
(7) Nothing in paragraph (1)(b) or subsection (5) or (6) limits the
operation of section 249 of the ASIC Act.
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Division 6 General transitional provisions relating to other things done etc. under the
old corporations legislation
Section 1401
36 Corporations Act 2001
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1401 Creation of equivalent rights and liabilities to those that existed
before the commencement under repealed provisions of
the old corporations legislation
(1) This section applies in relation to a right or liability (the
pre-commencement right or liability), whether civil or criminal,
that:
(a) was:
(i) acquired, accrued or incurred under a provision of the
old corporations legislation of a State or Territory in this
jurisdiction that was no longer in force immediately
before the commencement; and
(ii) in existence immediately before the commencement; or
(b) would have been:
(i) acquired, accrued or incurred under such a provision;
and
(ii) in existence immediately before the commencement;
if every agreement that was valid only because of section 249
of the ASIC Act had been a valid agreement without the
application of that section.
However, this section does not apply to a right or liability under an
order made by a court before the commencement.
(2) For the purposes of subsections (3) and (4), the new corporations
legislation is taken to include:
(a) the provision of the old corporations legislation (with such
modifications (if any) as are necessary) under which the
pre-commencement right or liability was acquired, accrued or
incurred; and
(b) the other provisions of the old corporations legislation (with
such modifications (if any) as are necessary) that applied in
relation to the pre-commencement right or liability.
(3) On the commencement, the person acquires, accrues or incurs a
right or liability (the substituted right or liability), equivalent to
the pre-commencement right or liability, under the provision taken
to be included in the new corporations legislation by
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paragraph (2)(a) (as if that provision applied to the conduct or
circumstances that gave rise to the pre-commencement right or
liability).
Note: If a time limit applied in relation to the pre-commencement right or
liability under the old corporations legislation, that same time limit
(calculated from the same starting point) will apply under the new
corporations legislation to the substituted right or liability—see
subsection 1402(3).
(4) A procedure, proceeding or remedy in respect of the substituted
right or liability may be instituted after the commencement under
the provisions taken to be included in the new corporations
legislation by subsection (2) (as if those provisions applied to the
conduct or circumstances that gave rise to the pre-commencement
right or liability).
Note: For pre-commencement proceedings in respect of substituted rights
and liabilities, see sections 1383 and 1384.
(5) This section does not apply to a pre-commencement right or
liability that:
(a) existed under a law of the Commonwealth or of a State or
Territory; and
(b) would not have existed if any agreement that is valid only
because of section 249 of the ASIC Act had been a valid
agreement without the application of that section.
(6) Paragraph (1)(b) and subsection (5) have effect in relation to:
(a) proceedings (whether original or appellate) that begin on or
after the day the Treasury Laws Amendment (2017 Measures
No. 3) Act 2017 receives the Royal Assent; and
(b) proceedings that began before that day, if the proceedings
(including any appeals) had not been finally determined as at
that day.
(7) Nothing in paragraph (1)(b) or subsection (5) or (6) limits the
operation of section 249 of the ASIC Act.
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Part 10.1 Transition from the old corporations legislation
Division 6 General transitional provisions relating to other things done etc. under the
old corporations legislation
Section 1402
38 Corporations Act 2001
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1402 Old corporations legislation time limits etc.
(1) An old corporations legislation time limit (see subsection (4)):
(a) the starting point of which:
(i) was known or had been determined before the
commencement (whether that starting point occurred or
would occur before, on or after the commencement); or
(ii) would have become known, or have been determined,
after the commencement if the old corporations
legislation of the relevant State or Territory had
continued to apply (whether that starting point would
have occurred before, on or after the commencement);
and
(b) that had not ended at or before the commencement;
continues to run, or starts or started to run, as if that same time
limit (starting from the same starting point) were applicable under
the new corporations legislation.
(2) If:
(a) under the old corporations legislation, a process (for
example, the winding up of a company), a status of a person
or body (for example, a body’s registration as a company or a
person’s status as a registered liquidator), or an instrument,
commenced from a particular time before the
commencement; and
(b) that process, status or instrument is continued after the
commencement for the purposes of the new corporations
legislation by a provision of this Part;
that process, status or instrument as so continued is still taken to
have commenced from the time referred to in paragraph (a).
(3) If an old corporations legislation time limit related to a
pre-commencement right or liability, the same time limit applies in
relation to the substituted right or liability.
(4) In this section:
old corporations legislation time limit includes:
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(a) a period for the doing of a thing specified or determined
under a provision of the old corporations legislation of a
State or Territory; or
(b) a period specified or determined under a provision of the old
corporations legislation of a State or Territory as the duration
of a particular instrument or status.
1403 Preservation of significance etc. of events or circumstances
(1) An event, circumstance or other thing:
(a) that occurred or arose before the commencement under or as
mentioned in a provision of the old corporations legislation
of a State or Territory in this jurisdiction; and
(b) that had a particular significance, status or effect for the
purposes of a carried over provision of that legislation
(including because of an interpretive provision);
has that same significance, status and effect after the
commencement for the purposes of the provision of the new
corporations legislation that corresponds to that carried over
provision.
Note: So, for example:
(a) if a company took action before the commencement that had the result for the purposes of section 200B of the old Corporations Law of making a superannuation fund a prescribed superannuation fund in relation to the company, that action has that same effect for the purposes of section 200B of this Act; and
(b) a delay that could have been taken into account for the purposes of subsection 874(1) of the old Corporations Law also counts for the purposes of subsection 874(1) of this Act.
(2) Without limiting subsection (1), an event, circumstance or other
thing had a particular significance for the purposes of a carried
over provision of the old corporations legislation of a State or
Territory in this jurisdiction if:
(a) the carried over provision created an obligation in respect of
the event, circumstance or thing (whenever it arose); or
(b) the carried over provision provided for the event,
circumstance or thing to be dealt with in a particular way; or
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(c) the carried over provision stated that the event, circumstance
or thing (whenever it arose) was to be disregarded for the
purposes of that provision or was not covered by that
provision.
1404 References in the new corporations legislation generally
include references to events, circumstances or things that
happened or arose before the commencement
(1) Subject to this section, a reference in the new corporations
legislation to an event, circumstance or thing of a particular kind
that happens or arises, or that has happened or arisen, is taken to
include a reference to an event, circumstance or thing of that kind
that happened or arose at a time before the commencement, unless
a contrary intention is expressed. The fact that the provision uses
only the present tense in referring to an event, circumstance or
thing is not, of itself, to be regarded as an expression of a contrary
intention.
Note: So, for example, if a provision of the new corporations legislation
refers to a person who consents to a course of action, that reference (in
the absence of an express provision to the contrary) will not be limited
to consents given after the commencement and will cover a consent
given before the commencement.
(2) Nothing in subsection (1) is taken to produce a result that a right or
liability exists under a provision of the new corporations legislation
that relates solely to events, circumstances or things that occurred
before the commencement.
Note: Instead, an equivalent right or liability will be created by section 1400
or 1401.
(3) The regulations may provide that subsection (1) does not apply in
relation to a particular reference or class of references in the new
corporations legislation.
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1405 References in the new corporations legislation to that
legislation or the new ASIC legislation generally include
references to corresponding provisions of the old
corporations legislation or old ASIC legislation
(1) Subject to subsection (4), a reference in the new corporations
legislation to:
(a) an Act, or regulations or another instrument that is part of the
new corporations legislation; or
(b) a provision or group of provisions of such an Act, regulations
or other instrument;
is taken, in relation to events, circumstances or things that
happened or arose at a time before the commencement when the
old corporations legislation was in force, to include (in the absence
of an express provision to the contrary) a reference to the
corresponding part, provision or provisions of the old corporations
legislation of the States and Territories in this jurisdiction.
(2) Subject to subsection (4), a reference in the new corporations
legislation to:
(a) an Act, or regulations or some other instrument that is part of
the new ASIC legislation; or
(b) a provision or group of provisions of such an Act, regulations
or other instrument;
is taken, in relation to events, circumstances or things that
happened or arose at a time before the commencement when the
old corporations legislation was in force, to include (in the absence
of an express provision to the contrary) a reference to the
corresponding part, provision or provisions of the old ASIC
legislation of the Commonwealth, of the States in this jurisdiction
and of the Northern Territory.
(3) In subsection (2):
(a) new ASIC legislation and old ASIC legislation have the
same meanings as they have in Part 16 of the Australian
Securities and Investments Commission Act 2001; and
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(b) the question whether a provision or part of the old ASIC
legislation corresponds to a provision of part of the new
ASIC legislation is to be determined in the same way as it is
determined for the purposes of Part 16 of the Australian
Securities and Investments Commission Act 2001.
(4) The regulations may provide that subsection (1) or (2) does not
apply in relation to a particular reference or class of references in
the new corporations legislation.
1406 Carrying over references to corresponding previous laws
(1) If a carried over provision of the old corporations legislation of a
State or Territory in this jurisdiction contained a reference
(whether in its own terms or by operation of another provision) to:
(a) a corresponding previous law (as defined for the purposes of
that provision or provisions including that provision); or
(b) a thing done by, under, or for the purposes of, such a law;
the corresponding provision of the new corporations legislation is
taken to contain an equivalent reference to that previous law, or to
such a thing done by, under, or for the purposes of, that previous
law.
(2) The following references in the old corporations legislation of the
States and Territories in this jurisdiction are covered by
subsection (1) in the same way as they would be if they used the
“corresponding previous law” form of words:
(a) the reference in subsection 1274AA(1) to a “previous Law”;
(b) the reference in subparagraph 1274AA(2)(b)(ii) to a
“previous law of this jurisdiction before the commencement
of this Part that corresponds”;
(c) any other references prescribed by the regulations for the
purposes of this subsection.
1407 References to old corporations legislation in instruments
(1) Subject to subsection (2), a reference in, or taken immediately
before the commencement to be in, an instrument, other than:
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(a) an Act of a State, the Australian Capital Territory, the
Northern Territory or Norfolk Island; or
(b) an instrument made under such an Act;
to:
(c) an Act, or to regulations or some other instrument, that is part
of the old corporations legislation (whether the reference is in
general terms or in relation to a particular State or Territory
in this jurisdiction); or
(d) to a provision or group of provisions of such an Act,
regulations or other instrument;
is taken, after the commencement, to include a reference to the
corresponding part, provision or provisions of the new corporations
legislation (unless there is no such corresponding part, provision or
provisions).
Note: This section will, for example, apply to:
(a) a reference in another Commonwealth Act to the Corporations Law; or
(b) a reference in the Corporations Regulations to the Corporations Law; or
(c) a reference in a company’s constitution to a particular provision of the Corporations Law.
(2) The regulations may do either or both of the following:
(a) provide that subsection (1) does not apply in relation to
prescribed references in prescribed instruments;
(b) provide that subsection (1) has effect in relation to prescribed
references in prescribed instruments as if, in that subsection,
the words “to be” were substituted for the words “to
include”.
1408 Old transitional provisions continue to have their effect
(1) Subject to subsection (3), this Act has the same effect, after the
commencement, as it would have if:
(a) the transitional provisions (see subsections (6) and (7)) of the
old Corporations Laws of the States and Territories in this
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jurisdiction (as in force from time to time before the
commencement) had been part of this Act; and
(b) those transitional provisions produced the same results or
effects (to the greatest extent possible) for the purposes of
this Act as they produced for the purposes of those old
Corporations Laws.
(2) Without limiting subsection (1) (but subject to subsection (3)), if a
transitional provision of the old Corporations Law of a State or
Territory in this jurisdiction could, if it had continued in force after
the commencement, have operated to give rise to rights and
liabilities (including civil or criminal liabilities) in relation to acts
or omissions occurring after the commencement, this Act is taken
to include that transitional provision (with such modifications (if
any) as are necessary.
Note: In relation to acts or omissions that occurred before the
commencement, equivalent rights and liabilities are created by
sections 1400 and 1401.
(3) The regulations may determine how a matter dealt with in a
transitional provision of the old Corporations Law of a State or
Territory in this jurisdiction is to be dealt with under or in relation
to the new corporations legislation (including by creating
offences). The regulations have effect despite subsections (1) and
(2), but subject to subsection (5).
Note: In creating offences, the regulations are subject to the limitation
imposed by section 1375.
(4) For the purpose of determining whether the new corporations
legislation includes a provision that corresponds to a provision of
the old corporations legislation of a State or Territory, and for the
purpose of any reference in this part to a corresponding provision
of the new corporations legislation, this Act is taken to include the
transitional provisions of the old corporations legislation of the
States and Territories, as they have effect because of
subsections (1) and (2).
(5) Nothing in subsection (1) or (2), or in regulations made for the
purposes of subsection (3), is taken to produce a result that a right
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or liability exists under a transitional provision as it has effect
because of subsection (1) or (2), or exists under regulations made
for the purposes of subsection (3), that relates solely to events,
circumstances or things that occurred before the commencement.
Note: Instead, an equivalent right or liability will be created by section 1400
or 1401.
(6) Subject to subsection (7), for the purposes of this section, a
transitional provision is any of the provisions of the old
Corporations Laws of the States and Territories in this jurisdiction
listed in the following table.
Transitional provisions of old Corporations Law
Item Provisions
1 subsection 87(1A)
2 subsection 88(1A)
3 sections 109E to 109G and section 109T
4 section 268A
5 section 275
6 section 275A
7 Subsections 319(4), (5) and (6)
8 section 601
9 subsection 774(7)
10 subsection 895(3)
11 subsection 977(4)
12 subsection 990(2)
13 section 993
14 subsection 1228(3)
15 subsections 1274(17) and (18)
16 subsections 1288(1), (2) and (6)
17 paragraph 1311(1A)(f) and subsection 1311(3A)
18 section 1336A
19 Chapter 11, other than section 1416
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Transitional provisions of old Corporations Law
Item Provisions
20 Schedule 4, other than the following provisions:
(a) subclauses 7(3), 8(2) and 9(4);
(b) clauses 11 to 16;
(c) subclause 17(2);
(d) clauses 18 and 19;
(e) clauses 20, 25 and 27;
(f) Parts 5, 6 and 7.
(7) The regulations may provide that certain provisions are to be taken
to be included in, or omitted from, the table in subsection (6). The
table then has effect as if the provisions were so included in it or
omitted from it.
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Division 7—Regulations dealing with transitional matters
1409 Regulations may deal with transitional matters
(1) The regulations may deal with matters of a transitional nature
relating to the transition from the application of provisions of the
old corporations legislation of the States and Territories in this
jurisdiction to the application of provisions of the new corporations
legislation. The regulations have effect despite anything else in this
Part, other than section 1375.
(2) Without limiting subsection (1), the regulations may provide for a
matter to be dealt with, wholly or partly, in any of the following
ways:
(a) by applying (with or without modifications) to the matter:
(i) provisions of the old corporations legislation of the
States and Territories in this jurisdiction, as in force
immediately before the commencement or at some
earlier time; or
(ii) provisions of the new corporations legislation; or
(iii) a combination of provisions referred to in
subparagraphs (i) and (ii);
(b) by otherwise specifying rules for dealing with the matter;
(c) by specifying a particular consequence of the matter, or of an
outcome of the matter, for the purposes of the new
corporations legislation.
(3) The regulations may provide that certain provisions of this Part are
taken to be modified as set out in the regulations. Those provisions
then have effect as if they were so modified.
(4) Despite subsection 12(2) of the Legislative Instruments Act 2003,
regulations for the purposes of this section may be expressed to
take effect from a date before the regulations are registered under
that Act.
(5) In this section:
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matters of a transitional nature also includes matters of an
application or saving nature.
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Part 10.2—Transitional provisions relating to the
Financial Services Reform Act 2001
Division 1—Transitional provisions relating to the
phasing-in of the new financial services regime
Subdivision A—Preliminary
1410 Definitions
(1) In this Division, unless the contrary intention appears:
amended Corporations Act means this Act as in force after the
FSR commencement.
associated provisions, in relation to provisions (the core
provisions) of a particular Act as in force at a particular time,
include (but are not limited to):
(a) any regulations or other instruments that are or were in force
for the purposes of any of the core provisions at that time;
and
(b) any interpretation provisions that apply or applied in relation
to any of the core provisions at that time (whether or not they
also apply or applied for other purposes); and
(c) any provisions relating to liability (civil or criminal) that
apply or applied in relation to any of the core provisions at
that time (whether or not they also apply or applied for other
purposes); and
(d) any provisions that limit or limited, or that otherwise affect
or affected, the operation of any of the core provisions at that
time (whether or not they also limit or limited, or affect or
affected, the operation of other provisions).
class, in relation to financial products, has a meaning affected by
regulations made for the purposes of subsection (2).
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FSR commencement means the commencement of item 1 of
Schedule 1 to the Financial Services Reform Act 2001.
old Corporations Act means this Act as in force immediately
before the FSR commencement.
regulated activities, in relation to a regulated principal, has the
meaning given by section 1430.
regulated principal has the meaning given by section 1430.
relevant old legislation, in relation to a regulated principal, has the
meaning given by section 1430.
transition period:
(a) in relation to a market to which section 1414, 1418, 1420,
1421 or 1422 applies—has the meaning given by
subsection (2) of that section; and
(b) in relation to a market to which section 1417 applies and the
additional products referred to in that section—has the
meaning given by subsection 1417(2); and
(c) in relation to a clearing and settlement facility to which
section 1426 or 1429 applies—has the meaning given by
subsection (2) of that section; and
(d) in relation to a clearing and settlement facility to which
section 1428 applies and the additional products referred to
in that section—has the meaning given by
subsection 1428(2); and
(e) in relation to a regulated principal—has the meaning given
by subsection 1431(1); and
(f) in relation to a financial product to which section 1438
applies—has the meaning given by subsection (3) of that
section.
(1A) Other expressions used in this Part that are defined in Division 2 of
Part 7.1 have the same meanings as they are given by that Division.
This has effect subject to:
(a) any contrary intention in a provision of this Part; or
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(b) regulations made for the purposes of this paragraph.
(2) The regulations may include provisions identifying, or providing
for the identification of, what constitutes a class of financial
products for the purposes of a provision or provisions of this
Division.
(3) If a provision of this Division (the transitional provision) provides
for a provision of this or another Act (the preserved provision), as
in force immediately before the FSR commencement, to continue
to apply to or in relation to a person, thing or matter:
(a) the preserved provision so continues to apply only to the
extent (if any) to which it is expressed in terms that cover the
person, thing or matter; and
(b) the transitional provision is not taken to extend the scope of
the preserved provision (otherwise than by giving it a
continued operation).
Subdivision B—Treatment of existing markets
1411 When is a market being operated immediately before the FSR
commencement?
Subject to section 1412, in this Subdivision, a reference to a market
being operated immediately before the FSR commencement is a
reference to a market that had not permanently ceased to operate
before the FSR commencement, even if trading on the market was
not actually occurring immediately before the FSR commencement
(for example, because of a routine temporary closure of the
market).
1412 Treatment of proposed markets that have not started to
operate by the FSR commencement
(1) This section applies in relation to the following proposed markets,
other than any such market that starts to operate before the FSR
commencement:
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(a) a market proposed to be operated by Bendigo Stock
Exchange Ltd, or by ASX Futures Exchange Pty Limited,
that is identified in writing by the Minister as being a
proposed market to which this section applies;
(b) any other proposed market identified in, or in accordance
with, regulations made for the purposes of this paragraph.
For this purpose, a proposed market is a market that a person has,
before the FSR commencement, indicated an intention that they
propose to operate.
(2) This Subdivision applies in relation to a proposed market to which
this section applies subject to the following paragraphs:
(a) subject to paragraphs (b), (c) and (d), this Subdivision applies
in relation to the proposed market as if the market, as
proposed to be operated, were in fact being operated
immediately before the FSR commencement;
(b) if, taking account of the effect of paragraph (a), section 1413
applies in relation to the proposed market, that section
applies in relation to the proposed market:
(i) as if the Minister’s obligation to grant a licence, and
impose conditions, under subsection 1413(2) in relation
to the market does not arise unless and until the market
operator lodges with ASIC a notice in relation to the
market under subsection (3) of this section, and does not
arise at all if no such notice is given to ASIC by the end
of 6 months after the FSR commencement; and
(ii) as if subsection 1413(3) provided for a licence so
granted under subsection 1413(2) in relation to the
market, and the conditions subject to which it is granted,
to be taken to have had effect from the day (the start
day) specified in the subsection (3) notice as the day on
which the market started to operate; and
(iii) as if subsection 1413(6) were omitted; and
(iv) as if the references in subsection 1413(8) to the FSR
commencement were instead references to the start day;
(c) if:
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(i) taking account of the effect of paragraph (a),
section 1418, 1420, 1421 or 1422 applies to the
proposed market; and
(ii) the market operator does not lodge with ASIC a notice
in relation to the market under subsection (3) of this
section by the end of 6 months after the FSR
commencement;
that section ceases to apply in relation to the proposed market
at the end of that period;
(d) if a provision of this Subdivision provides for a provision of
the old Corporations Act to continue to apply in relation to
the proposed market, then (without limiting the generality of
subsection 1410(3)), while the proposed market remains
non-operational, the provision of the old Corporations Act
only applies in relation to the proposed market to the extent
(if any) to which it would, disregarding the effect of
paragraph (a), apply in relation to the proposed market.
(3) If a proposed market to which this section applies starts to operate
on a day during the period of 6 months starting on the FSR
commencement, the operator must, as soon as practicable, and in
any event within 7 days, lodge with ASIC written notice of the fact
that the market started to operate on that day.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) ASIC must, within a reasonable time, give the Minister a notice it
receives under subsection (3).
1413 Obligation of Minister to grant licences covering main existing
markets
(1) This section applies to each market being operated immediately
before the FSR commencement in relation to which any of the
following paragraphs applies:
(a) the market was a stock market operated by the Australian
Stock Exchange Limited;
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(b) the market was a stock market operated by a body corporate
covered by an approval in force under subsection 769(2) of
the old Corporations Act;
(c) the market was a futures market operated by a body corporate
covered by an approval in force under subsection 1126(2) of
the old Corporations Act.
(2) Subject to subsections (3) and (4), the Minister must, in relation to
each market to which this section applies, grant the operator of the
market a licence, and impose conditions on that licence, in
accordance with the following requirements:
(a) the licence must be described as an Australian market
licence;
(b) the licence must be granted subject to the following
conditions:
(i) a condition specifying the market as the market that the
licence authorises the licensee to operate;
(ii) a condition specifying, as the classes of financial
products that can be dealt with on the market, the
classes that are appropriate for the market under
subsection (5);
(iii) if the Minister considers that the licensee should have
clearing and settlement arrangements for transactions
effected through the market—a condition specifying the
type of clearing and settlement arrangements that are
adequate.
(3) Subject to subsection (6), a licence that subsection (2) requires to
be granted must be granted on, or as soon as practicable after, the
FSR commencement. If it is granted after the FSR commencement,
it, and the conditions subject to which it is granted, are taken to
have had effect from that commencement.
(4) Sections 795D (more than one licence in the same document) and
795E (more than one market covered by the same licence) of the
amended Corporations Act apply in relation to the granting of
licences, and licences granted, under this section as if the licences
were, or were being, granted under section 795B of that Act. If,
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pursuant to section 795E, a single licence is granted under this
section in respect of several separate markets, paragraph (2)(b) of
this section must be complied with separately in the licence
document in relation to each of those markets.
(5) For the purposes of subparagraph (2)(b)(ii), the classes of financial
products that are appropriate for a market to which this section
applies are as follows:
(a) for a market described in paragraph (1)(a) or (b)—securities,
within the meaning of section 92 of the old Corporations Act
as applying for the purposes of Part 7.2 of the old
Corporations Act, and agreements of a kind to which
section 92A of the old Corporations Act applied immediately
before the FSR commencement (or would have applied after
the FSR commencement if that section, and any associated
provisions, had continued to have effect);
(b) for a market described in paragraph (1)(c)—futures contracts,
within the meaning of section 72 of the old Corporations Act,
and agreements of a kind to which section 72A of the old
Corporations Act applied immediately before the FSR
commencement (or would have applied after the FSR
commencement if that section, and any associated provisions,
had continued to have effect).
(6) Despite anything in subsection (3), the Minister may, under this
section, grant a licence, and impose conditions on the licence, at
any time during the period starting on the commencement of this
section and ending on the FSR commencement on the basis that
matters known to the Minister in relation to the market concerned
will continue to be the case up to the FSR commencement. If the
Minister does so:
(a) the licence and conditions come into effect on the FSR
commencement, and not before; and
(b) the Minister may vary or revoke the licence, or any of the
conditions, before the FSR commencement if the Minister
considers it appropriate to do so having regard to the
provisions of this section concerning the granting of licences
and the imposition of conditions; and
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(c) the licence and conditions do not come into effect on the FSR
commencement if, immediately before the FSR
commencement, the market is not a market to which this
section applies.
(7) If the Minister grants a licence under this section, the Minister
must give the operator of the market written notice of:
(a) the grant of the licence, and the conditions imposed on the
licence; and
(b) any subsequent revocation or variation under subsection (6)
of the licence or conditions.
(8) A notice advising of the grant of a licence under this section must
contain a statement to the effect that the licence and conditions will
not take effect until the FSR commencement, or will be taken to
have had effect from the FSR commencement, as the case requires.
1414 Section 1413 markets—effect of licences and conditions
(1) Subject to subsections (2) to (4):
(a) a licence granted under section 1413 that authorises the
operation of a market is, for the purposes of the amended
Corporations Act (other than this section), taken to have been
granted (and to have been properly granted) under
section 795B of the amended Corporations Act; and
(b) conditions imposed under section 1413 on the licence are, for
the purposes of the amended Corporations Act (other than
this section), taken to have been imposed (and to have been
properly imposed) under section 796A of the amended
Corporations Act.
Note 1: Section 795C of the amended Corporations Act (publication of notice
of licence grant) applies to the grant of the licence.
Note 2: The conditions may be varied or revoked, and additional conditions
may be imposed, under section 796A of the amended Corporations
Act.
(2) Subject to subsection (4), the relevant new legislation (see
subsection (6)) does not apply in relation to the market during the
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Corporations Act 2001 57
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period (the transition period) starting on the FSR commencement
and ending on whichever of the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) conditions on the licence are varied or revoked, or additional
conditions are imposed on the licence, pursuant to an
application by the licensee under subsection 796A(2) of the
amended Corporations Act;
(c) the licensee has lodged with ASIC notice in writing that it
wants to take advantage of the compensation arrangements
under Division 3 of Part 7.5 of the amended Corporations
Act:
(i) from a specified date, being a date that is after the notice
is given to ASIC and that is after compensation
arrangements for the market have been approved under
Division 3 of Part 7.5 of the amended Corporations Act
(see also subsection (4)); or
(ii) from the end of a specified period, being a period that is
described as starting when compensation arrangements
for the market are approved under Division 3 of Part 7.5
of the amended Corporations Act (see also
subsection (4)) and that ends after the notice is given to
ASIC;
and that date arrives or period ends.
(3) A notice (the original notice) given for the purposes of
paragraph (2)(c) may, before the date, or the end of the period,
specified in the original notice as mentioned in that paragraph:
(a) be varied to specify another date or period, being a date or
period that would satisfy the requirements of
subparagraph (2)(c)(i) or (ii) if the reference in that
subparagraph to when the notice (being the original notice) is
given to ASIC were instead a reference to when the notice of
variation is given to ASIC under this subsection; or
(b) be revoked.
The variation or revocation must be made by notice in writing
lodged with ASIC.
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Section 1415
58 Corporations Act 2001
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(4) If the relevant new legislation in relation to a market includes
Part 7.5 of the amended Corporations Act, then, despite
subsection (2), Division 3 of that Part applies to the market during
the transition period to the extent necessary for the operator to
apply to have compensation arrangements for the market approved
before the end of the transition period, and for that application to
be determined. However, any approval of the arrangements under
that Division does not take effect until immediately after the end of
the transition period.
(5) The annual report of the licensee (see section 792F of the amended
Corporations Act) for a financial year in which part of the
transition period occurs, other than a financial year in which the
transition period ends, must include information about:
(a) the steps taken in the year; and
(b) the steps proposed to be taken in the next year;
to ensure that the relevant new legislation will be complied with by
the time the transition period ends.
(6) In this section:
relevant new legislation, in relation to a market, means:
(a) section 793A of the amended Corporations Act; and
(b) unless the market is a market to which Division 4 of Part 7.5
of the amended Corporations Act applies—Part 7.5 of the
amended Corporations Act.
1415 Section 1413 markets—preservation of old Corporations Act
provisions during transition period
Preservation of compensation regimes
(1) If, during the transition period in relation to a market the operation
of which is authorised by a licence granted under section 1413,
Part 7.5 of the amended Corporations Act does not apply in
relation to the market (except as provided in subsection 1414(4))
because of subsection 1414(2), Part 7.9, or Part 8.6, as the case
requires, of the old Corporations Act, and any associated
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Section 1416
Corporations Act 2001 59
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provisions, continue to apply in relation to the market during the
transition period.
Preservation of certain ongoing requirements
(2) During the transition period in relation to a market:
(a) the operation of which is authorised by a licence granted
under section 1413; and
(b) that, immediately before the FSR commencement, was a
securities exchange to which section 769A of the old
Corporations Act applied;
the following provisions continue to apply in relation to the
market:
(c) paragraphs 769A(1)(c) and (e) of the old Corporations Act,
and any associated provisions;
(d) section 769B of the old Corporations Act (but only as
applying in relation to paragraphs 769A(1)(c) and (e) of the
old Corporations Act), and any associated provisions.
1416 Section 1413 markets—powers for regulations to change how
the old and new Corporations Act apply during the
transition period
(1) The regulations may do all or any of the following in relation to a
market the operation of which is authorised by a licence granted
under section 1413:
(a) provide that some or all of the provisions (the relevant old
legislation) that would otherwise continue to apply in
relation to the market because of section 1415 do not apply in
relation to the market;
(b) provide that some or all of the relevant old legislation applies
in relation to the market with specified modifications during
some or all of the transition period for the market;
(c) provide that some or all of the relevant new legislation
(within the meaning of section 1414) in relation to the market
applies in relation to the market during some or all of the
transition period for the market;
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Section 1417
60 Corporations Act 2001
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(d) provide that specified provisions of the amended
Corporations Act (including relevant new legislation), and
any associated provisions, apply in relation to the market
during some or all of the transition period for the market with
specified modifications.
(2) Regulations made for the purposes of subsection (1) have effect
despite anything in sections 1414 and 1415.
(3) Subsection (1) gives a full power to disapply, apply and modify
provisions as mentioned in that subsection, including for reasons
that do not have an express or implied connection with the
transition to the relevant new legislation.
Note: So (for example), a change to the day-to-day operation of the relevant
old legislation as continuing to apply may be achieved by a
modification under paragraph (1)(b) (whether that change is to an
existing rule, or is the addition of a new rule).
1417 Section 1413 markets—additional provisions relating to
previously unregulated services
(1) This section applies to a financial market in relation to which the
following paragraphs are satisfied:
(a) a licence is granted under section 1413 to the operator of the
market; and
(b) the conditions on the licence specify, as the classes of
financial products that can be dealt with on the market, the
classes of financial products specified in whichever of
paragraphs 1413(5)(a) and (b) is applicable; and
(c) immediately before the commencement, other financial
products (the additional products) were also dealt with on
the market, and the fact that the market dealt with those
products did not constitute a contravention of a provision of
the old Corporations Act.
(2) Subject to subsection (3), section 791A of the amended
Corporations Act does not apply in relation to the market in so far
as all or any of the additional products are dealt with on the market
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Section 1418
Corporations Act 2001 61
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during the period (the transition period) starting on the FSR
commencement and ending on whichever of the following first
occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the licensee applies, under subsection 796A(2) of the
amended Corporations Act, to have the conditions on the
licence varied or revoked, or to have additional conditions
imposed on the licence.
(3) The regulations may, in relation to a market to which this section
applies and the additional products, provide that specified
provisions (including section 791A) of the amended Corporations
Act, and any associated provisions, apply in relation to a market to
which this section applies and the additional products during some
or all of the transition period for the market and the products with
specified modifications.
1418 Treatment of exempt stock markets and exempt futures
markets (other than markets with no identifiable single
operator)
(1) This section applies to the following markets:
(a) stock markets being operated immediately before the FSR
commencement that were, at that time, covered by a
declaration (the declaration of exemption) in force
immediately before the FSR commencement under
subsection 771(1) of the old Corporations Act;
(b) futures markets being operated immediately before the FSR
commencement that were, at that time, covered by a
declaration (the declaration of exemption) in force
immediately before the FSR commencement under
subsection 1127(1) of the old Corporations Act.
However it does not apply to any market to which section 1419
applies.
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62 Corporations Act 2001
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(2) Subject to subsection (5), section 791A of the amended
Corporations Act does not apply in relation to a stock market or
futures market to which this section applies during the period (the
transition period) starting on the FSR commencement and ending
on whichever of the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the operator of the market is granted a licence under
section 795B of the amended Corporations Act covering the
operation of the market;
(c) the Minister makes an exemption under section 791C of the
amended Corporations Act covering the market;
(d) the declaration of exemption is revoked.
(3) Subject to subsections (4) and (5), Part 7.2 (in the case of a stock
market), or Part 8.2 (in the case of a futures market), and any
associated provisions, (the relevant old legislation) of the old
Corporations Act continue to apply in relation to a stock market or
futures market to which this section applies during the transition
period for the market.
(4) The declaration of exemption (including any conditions specified
in the declaration) for a stock market or futures market to which
this section applies cannot be varied during the transition period for
the market so as to cover the market providing services that were
not covered by the declaration as in force immediately before the
FSR commencement. However, it may be varied in other ways, or
revoked, by the Minister in writing.
(5) The regulations may do all or any of the following:
(a) provide that some or all of the relevant old legislation does
not apply in relation to a stock market or futures market to
which this section applies during some or all of the transition
period for the market;
(b) provide that some or all of the relevant old legislation applies
in relation to a stock market or futures market to which this
section applies with specified modifications during some or
all of the transition period for the market;
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Section 1419
Corporations Act 2001 63
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(c) provide that specified provisions of the amended
Corporations Act (including section 791A), and any
associated provisions, apply in relation to a stock market or
futures market to which this section applies during some or
all of the transition period for the market with specified
modifications.
1419 Treatment of exempt stock markets and exempt futures
markets that do not have a single identifiable operator
(1) This section applies to the following markets:
(a) stock markets being operated immediately before the FSR
commencement:
(i) that were, at that time, covered by a declaration (the
declaration of exemption) in force immediately before
the FSR commencement under subsection 771(1) of the
old Corporations Act; but
(ii) that did not have a single person who could be identified
as the operator of the market;
(b) futures markets being operated immediately before the FSR
commencement:
(i) that were, at that time, covered by a declaration (the
declaration of exemption) in force immediately before
the FSR commencement under subsection 1127(1) of
the old Corporations Act; but
(ii) that did not have a single person who could be identified
as the operator of the market.
(2) In this section:
exempted participant, in relation to a market to which this section
applies, means a person:
(a) who is covered by the declaration of exemption (otherwise
than in their capacity as a representative of another person
who is covered by the declaration); and
(b) whose activities connected with the market after the FSR
commencement are activities that, but for this section, would
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Section 1419
64 Corporations Act 2001
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be required by section 911A of the amended Corporations
Act to be covered by an Australian financial services licence.
(3) Subject to subsections (4) and (5), Part 7.2 (in the case of a stock
market), or Part 8.2 (in the case of a futures market), and any
associated provisions, (the relevant old legislation) of the old
Corporations Act continue to apply in relation to an exempted
participant and a stock market or futures market to which this
section applies during any period during which section 1431
provides that the relevant new legislation (within the meaning of
subsection 1431(1)) does not apply in relation to the exempted
participant’s activities connected with the market.
(4) The declaration of exemption (including any conditions specified
in the declaration) for a stock market or futures market to which
this section applies cannot:
(a) be varied during the transition period for an exempted
participant and the market so as to cover the market
providing services that were not covered by the declaration as
in force immediately before the FSR commencement; or
(b) be varied after the FSR commencement so as to cover a
person or persons it did not cover immediately before the
commencement.
However, it may be varied in other ways, or revoked, by the
Minister in writing.
(5) The regulations may do either or both of the following:
(a) provide that some or all of the relevant old legislation does
not apply in relation to an exempted participant and a market
to which this section applies during some or all of the
transition period for the exempted participant and the market;
(b) provide that some or all of the relevant old legislation applies
in relation to an exempted participant and a market to which
this section applies with specified modifications during some
or all of the transition period for the exempted participant and
the market.
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Section 1420
Corporations Act 2001 65
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1420 Treatment of stock markets of approved securities
organisations
(1) This section applies to each stock market being operated
immediately before the FSR commencement by a body corporate
covered by an approval (the instrument of approval) in force
immediately before the FSR commencement under
subsection 770(2) of the old Corporations Act, other than a stock
market to which section 1413 applies.
(2) Subject to subsections (3) and (5), section 791A of the amended
Corporations Act does not apply in relation to a stock market to
which this section applies during the period (the transition period)
starting on the FSR commencement and ending on whichever of
the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the operator of the market is granted a licence under
section 795B of the amended Corporations Act covering the
operation of the market;
(c) the Minister makes an exemption under section 791C of the
amended Corporations Act covering the market;
(d) the instrument of approval is revoked.
(3) Subject to subsections (4) and (5), Parts 7.2 and 7.9, and any
associated provisions, (the relevant old legislation) of the old
Corporations Act continue to apply in relation to a stock market to
which this section applies during the transition period for the
market.
(4) The instrument of approval (including any conditions specified in
the instrument) for a stock market to which this section applies
cannot be varied during the transition period for the market so as to
cover the market providing services that were not covered by the
instrument as in force immediately before the FSR
commencement. However it may be varied in other ways, or
revoked, by the Minister in writing.
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Section 1421
66 Corporations Act 2001
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(5) The regulations may do all or any of the following:
(a) provide that some or all of the relevant old legislation does
not apply in relation to a stock market to which this section
applies during some or all of the transition period for the
market;
(b) provide that some or all of the relevant old legislation applies
in relation to a stock market to which this section applies
with specified modifications during some or all of the
transition period for the market;
(c) provide that specified provisions of the amended
Corporations Act (including section 791A), and any
associated provisions, apply in relation to a stock market to
which this section applies during some or all of the transition
period for the market with specified modifications.
1421 Treatment of special stock markets for unquoted interests in a
registered scheme
(1) This section applies to each stock market being operated before the
FSR commencement by a body corporate covered by an approval
(the instrument of approval) in force immediately before the FSR
commencement under subsection 770A(2) of the old Corporations
Act.
(2) Subject to subsection (5), section 791A of the amended
Corporations Act does not apply in relation to a stock market to
which this section applies during the period (the transition period)
starting on the FSR commencement and ending on whichever of
the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the operator of the market is granted a licence under
section 795B of the amended Corporations Act covering the
operation of the market;
(c) the Minister makes an exemption under section 791C of the
amended Corporations Act covering the market;
(d) the instrument of approval is revoked.
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Section 1422
Corporations Act 2001 67
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(3) Subject to subsections (4) and (5), Part 7.2, and any associated
provisions, (the relevant old legislation) of the old Corporations
Act continue to apply in relation to a stock market to which this
section applies during the transition period for the market.
(4) The instrument of approval (including any conditions specified in
the instrument) for a stock market to which this section applies
cannot be varied during the transition period for the market so as to
cover the market providing services that were not covered by the
instrument as in force immediately before the FSR
commencement. However it may be varied in other ways, or
revoked, by the Minister in writing.
(5) The regulations may do all or any of the following:
(a) provide that some or all of the relevant old legislation does
not apply in relation to a stock market to which this section
applies during some or all of the transition period for the
market;
(b) provide that some or all of the relevant old legislation applies
in relation to a stock market to which this section applies
during some or all of the transition period for the market with
specified modifications;
(c) provide that specified provisions (including section 791A) of
the amended Corporations Act, and any associated
provisions, apply in relation to a stock market to which this
section applies during some or all of the transition period for
the market with specified modifications.
1422 Treatment of other markets that were not unauthorised
(1) This section applies to each market in relation to which the
following paragraphs are satisfied:
(a) the market is a financial market within the meaning of the
amended Corporations Act;
(b) the market was being operated immediately before the FSR
commencement;
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(c) the market is not a market to which section 1413, 1418, 1419,
1420 or 1421 applies;
(d) the market was not an unauthorised stock market or an
unauthorised futures market (as defined in section 9 of the
old Corporations Act) immediately before the FSR
commencement.
(2) Subject to subsection (3), section 791A of the amended
Corporations Act does not apply in relation to a market to which
this section applies during the period (the transition period)
starting on the FSR commencement and ending on whichever of
the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the operator of the market is granted a licence under
section 795B of the amended Corporations Act covering the
operation of the market;
(c) the Minister makes an exemption under section 791C of the
amended Corporations Act covering the market;
(d) the market starts to provide services in respect of a class or
classes of financial products in respect of which it did not
provide services immediately before the commencement.
(3) The regulations may, in relation to a market to which this section
applies, provide that specified provisions (including section 791A)
of the amended Corporations Act, and any associated provisions,
apply in relation to the market during some or all of the transition
period for the market with specified modifications.
Subdivision C—Treatment of existing clearing and settlement
facilities
1423 When is a clearing and settlement facility being operated
immediately before the FSR commencement?
Subject to section 1424, in this Subdivision, a reference to a
clearing and settlement facility being operated immediately before
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Section 1424
Corporations Act 2001 69
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the FSR commencement is a reference to a clearing and settlement
facility that had not permanently ceased to operate before the FSR
commencement, even if the clearing and settlement of transactions
by means of the facility was not actually occurring immediately
before the FSR commencement (for example, because of a routine
temporary closure of the facility).
1424 Treatment of proposed clearing and settlement facilities that
have not started to operate by the FSR commencement
(1) This section applies in relation to any proposed clearing and
settlement facilities identified in, or in accordance with, regulations
made for the purposes of this subsection. For this purpose, a
proposed clearing and settlement facility is a clearing and
settlement facility that a person has, before the FSR
commencement, indicated an intention that they propose to
operate.
(2) This Subdivision applies in relation to a proposed clearing and
settlement facility to which this section applies subject to the
following paragraphs:
(a) subject to paragraphs (b), (c) and (d), this Subdivision applies
in relation to the proposed facility as if the facility, as
proposed to be operated, were in fact being operated
immediately before the FSR commencement;
(b) if, taking account of the effect of paragraph (a), section 1425
applies in relation to the proposed facility, that section
applies in relation to the proposed facility:
(i) as if the Minister’s obligation to grant a licence, and
impose conditions, under subsection 1425(2) in relation
to the proposed facility does not arise unless and until
the facility operator lodges with ASIC a notice in
relation to the facility under subsection (3) of this
section, and does not arise at all if no such notice is
given to ASIC by the end of 6 months after the FSR
commencement; and
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(ii) as if subsection 1425(3) provided for a licence so
granted under subsection 1425(2) in relation to the
facility, and the conditions subject to which it is
granted, to be taken to have had effect from the day (the
start day) specified in the subsection (3) notice as the
day on which the facility started to operate; and
(iii) as if subsection 1425(6) were omitted; and
(iv) as if the references in subsection 1425(8) to the FSR
commencement were instead references to the start day;
(c) if:
(i) taking account of the effect of paragraph (a),
section 1429 applies to the proposed facility; and
(ii) the facility operator does not lodge with ASIC a notice
in relation to the facility under subsection (3) of this
section by the end of 6 months after the FSR
commencement;
that section ceases to apply in relation to the proposed facility
at the end of that period;
(d) if a provision of this Subdivision provides for a provision of
the old Corporations Act to continue to apply in relation to
the proposed facility, then (without limiting the generality of
subsection 1410(3)), while the proposed facility remains
non-operational, the provision of the old Corporations Act
only applies in relation to the proposed facility to the extent
(if any) to which it would, disregarding the effect of
paragraph (a), apply in relation to the proposed facility.
(3) If a proposed clearing and settlement facility to which this section
applies starts to operate on a day during the period of 6 months
starting on the FSR commencement, the operator must, as soon as
practicable, and in any event within 7 days, lodge with ASIC
written notice of the fact that the facility started to operate on that
day.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1424A
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(4) ASIC must, within a reasonable time, give the Minister a notice it
receives under subsection (3).
1424A Treatment of unregulated clearing and settlement facilities
operated by holders of old Corporations Act approvals
(1) This section applies in relation to a clearing and settlement facility
if:
(a) the facility was being operated immediately before the FSR
commencement by a body corporate in relation to which an
approval under section 1131 of the old Corporations Act was
in force at that time; but
(b) the services provided by the facility as so operated were not
such that section 1128 of the old Corporations Act required
the operator to be so approved.
(2) In this section:
(a) a reference to the unregulated services is a reference to the
services referred to in paragraph (1)(b); and
(b) a reference to regulated services is a reference to services
that, if they had been provided by the facility immediately
before the commencement, would have been services to
which section 1128 of the old Corporations Act applied.
(3) For the purposes of section 1425 (as it operates of its own force,
rather than because of section 1424), the facility is not to be
regarded as a facility that was being operated immediately before
the FSR commencement.
(4) If the operator has, before the FSR commencement, indicated an
intention that they propose to extend the services provided by the
facility so that they also cover regulated services:
(a) regulations made for the purposes of subsection 1424(1) may
identify the facility as a proposed clearing and settlement
facility, but only in relation to those regulated services; and
(b) if they do so, section 1424, and section 1425 as it applies
because of section 1424, apply in relation to the facility and
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Section 1425
72 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
those regulated services as if the facility did not already
provide the unregulated services.
1425 Obligation of Minister to grant licences covering main existing
facilities
(1) This section applies to each clearing and settlement facility being
operated immediately before the FSR commencement in relation to
which either of the following paragraphs applies:
(a) the facility was being operated by the body corporate that
was, for the purposes of the old Corporations Act, the
securities clearing house;
(b) the facility was being operated by a body corporate in
relation to which an approval (the section 1131 approval)
under section 1131 of the old Corporations Act was in force
at that time.
(2) Subject to subsections (3) and (4), the Minister must, in relation to
each clearing and settlement facility to which this section applies,
grant the operator of the facility a licence, and impose conditions
on that licence, in accordance with the following requirements:
(a) the licence must be described as an Australian CS facility
licence;
(b) the licence must be granted subject to the following
conditions:
(i) a condition specifying the facility as the facility that the
licence authorises the licensee to operate;
(ii) a condition specifying, as the classes of financial
products in respect of which the facility can provide
services, the classes that are appropriate for the facility
under subsection (5);
(iii) in the case of a facility to which paragraph (1)(b)
applies—a condition to the effect that the licence only
covers the facility providing services for the market or
markets that were covered by the section 1131 approval.
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Corporations Act 2001 73
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(3) Subject to subsection (6), a licence that subsection (2) requires to
be granted must be granted on, or as soon as practicable after, the
FSR commencement. If it is granted after the FSR commencement,
it, and the conditions subject to which it is granted, are taken to
have had effect from that commencement.
(4) Sections 824D (more than one licence in the same document) and
824E (more than one CS facility covered by the same licence) of
the amended Corporations Act apply in relation to the granting of
licences, and licences granted, under this section as if the licences
were, or were being, granted under section 824B of that Act. If,
pursuant to section 824E, a single licence is granted under this
section in respect of several separate facilities, paragraph (2)(b) of
this section must be complied with separately in the licence
document in relation to each of those facilities.
(5) For the purposes of subparagraph (2)(b)(ii), the classes of financial
products that are appropriate for a facility to which this section
applies are as follows:
(a) for a facility described in paragraph (1)(a)—securities, within
the meaning of section 92 of the old Corporations Act as
applying for the purposes of Part 7.2 of the old Corporations
Act, and agreements of a kind to which section 92A of the
old Corporations Act applied immediately before the FSR
commencement (or would have applied after the FSR
commencement if that section, and any associated provisions,
had continued to have effect);
(b) for a facility described in paragraph (1)(b)—futures
contracts, within the meaning of section 72 of the old
Corporations Act, and agreements of a kind to which
section 72A of the old Corporations Act applied immediately
before the FSR commencement (or would have applied after
the FSR commencement if that section, and any associated
provisions, had continued to have effect).
(6) Despite anything in subsection (3), the Minister may, under this
section, grant a licence, and impose conditions on the licence, at
any time during the period starting on the commencement of this
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Section 1426
74 Corporations Act 2001
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section and ending on the FSR commencement on the basis that
matters known to the Minister in relation to the clearing and
settlement facility concerned will continue to be the case up to the
FSR commencement. If the Minister does so:
(a) the licence and conditions come into effect on the FSR
commencement, and not before; and
(b) the Minister may vary or revoke the licence, or any of the
conditions, before the FSR commencement if the Minister
considers it appropriate to do so having regard to the
provisions of this section concerning the granting of licences
and the imposition of conditions; and
(c) the licence and conditions do not come into effect on the FSR
commencement if, immediately before the FSR
commencement, the facility is not a clearing and settlement
facility to which this section applies.
(7) If the Minister grants a licence under this section, the Minister
must give the operator of the clearing and settlement facility
written notice of:
(a) the grant of the licence, and the conditions imposed on the
licence; and
(b) any subsequent revocation or variation under subsection (6)
of the licence or conditions.
(8) A notice advising of the grant of a licence under this section must
contain a statement to the effect that the licence and conditions will
not take effect until the FSR commencement, or will be taken to
have had effect from the FSR commencement, as the case requires.
1426 Section 1425 facilities—effect of licences and conditions
(1) Subject to subsections (2) to (4):
(a) a licence granted under section 1425 that authorises the
operation of a facility is, for the purposes of the amended
Corporations Act (other than this section), taken to have been
granted (and to have been properly granted) under
section 824B of the amended Corporations Act; and
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Corporations Act 2001 75
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(b) conditions imposed under section 1425 on the licence are, for
the purposes of the amended Corporations Act (other than
this section), taken to have been imposed (and to have been
properly imposed) under section 825A of the amended
Corporations Act.
Note 1: Section 824C of the amended Corporations Act (publication of notice
of licence grant) applies to the grant of the licence.
Note 2: The conditions may be varied or revoked, and additional conditions
may be imposed, under section 825A of the amended Corporations
Act.
(2) Section 822A of the amended Corporations Act does not apply in
relation to the facility during the period (the transition period)
starting on the FSR commencement and ending on whichever of
the following first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) conditions on the licence are varied or revoked, or additional
conditions are imposed on the licence, pursuant to an
application by the licensee under subsection 825A(2) of the
amended Corporations Act.
(3) The annual report of the licensee (see section 821E of the amended
Corporations Act) for a financial year in which part of the
transition period occurs, other than a financial year in which the
transition period ends, must include information about:
(a) the steps taken in the year; and
(b) the steps proposed to be taken in the next year;
to ensure that section 822A of the amended Corporations Act will
be complied with by the time the transition period ends.
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Section 1427
76 Corporations Act 2001
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1427 Section 1425 facilities—powers for regulations to change how
the old and new Corporations Act apply during the
transition period
(1) The regulations may do either or both of the following in relation
to a clearing and settlement facility the operation of which is
authorised by a licence granted under section 1425:
(a) provide that section 822A of the amended Corporations Act,
and any associated provisions, apply in relation to the facility
during some or all the transition period for the facility;
(b) provide that specified provisions of the amended
Corporations Act (including section 822A), and any
associated provisions, apply in relation to the facility during
some or all of the transition period for the facility with
specified modifications.
(2) Regulations made for the purposes of subsection (1) have effect
despite anything in section 1426.
1428 Section 1425 facilities—additional provisions relating to
previously unregulated services
(1) This section applies to a clearing and settlement facility in relation
to which the following paragraphs are satisfied:
(a) a licence is granted under section 1425 to the operator of the
facility; and
(b) the conditions on the licence specify, as the classes of
financial products in respect of which the facility can provide
services, the classes of financial products specified in
whichever of paragraphs 1425(5)(a) and (b) is applicable;
and
(c) the facility also, immediately before the commencement,
provided services in respect of one or more other classes of
financial products (the additional products) and the fact that
it did so did not constitute a contravention of a provision of
the old Corporations Act.
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Section 1429
Corporations Act 2001 77
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(2) Subject to subsection (3), section 820A of the amended
Corporations Act does not apply in relation to the facility in so far
as it provides services in respect of all or any of the additional
products during the period (the transition period) starting on the
FSR commencement and ending on whichever of the following
first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) conditions on the licence are varied or revoked, or additional
conditions are imposed on the licence, pursuant to an
application by the licensee under subsection 825A(2) of the
amended Corporations Act.
(3) The regulations may provide that specified provisions of the
amended Corporations Act (including section 820A), and any
associated provisions, apply in relation to a clearing and settlement
facility to which this section applies, and its provision of services
in respect of all or any of the additional products, during some or
all of the transition period for the facility and the products with
specified modifications.
1429 Treatment of other clearing and settlement facilities
(1) This section applies to each clearing and settlement facility being
operated immediately before the FSR commencement in relation to
which both of the following paragraphs are satisfied:
(a) the clearing and settlement facility is not a facility to which
section 1425 applies;
(b) section 1128 of the old Corporations Act did not,
immediately before the FSR commencement, require the
operator of the facility to be a person approved under
section 1131.
(2) Subject to subsection (3), section 820A of the amended
Corporations Act does not apply in relation to the facility during
the period (the transition period) starting on the FSR
commencement and ending on whichever of the following first
occurs:
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Section 1430
78 Corporations Act 2001
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(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the operator of the facility is granted a licence under
section 824B of the amended Corporations Act covering the
facility;
(c) the Minister makes an exemption under section 820C of the
amended Corporations Act covering the facility;
(d) the facility starts to provide services in respect of a class or
classes of financial products in respect of which it did not
provide services immediately before the FSR
commencement.
(3) The regulations may provide that specified provisions of the
amended Corporations Act (including section 820A), and any
associated provisions, apply in relation to a clearing and settlement
facility to which this section applies during some or all of the
transition period for the facility with specified modifications.
Subdivision D—Treatment of people who carry on financial
services businesses and their representatives
1430 Meaning of regulated principal, regulated activities and relevant
old legislation
(1) For the purposes of this Subdivision, a person is a regulated
principal if, immediately before the FSR commencement, the
person is a person described in column 2 of one of the items in the
following table. The regulated activities of that person are as
specified in column 3 of that item, and the relevant old legislation
are as specified in column 4 of that item.
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Section 1430
Corporations Act 2001 79
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Regulated principals and regulated activities
Item These persons are
regulated principals
These are the
regulated principal’s
regulated activities
This is the relevant old
legislation (if any)
1 A holder of a dealers
licence within the
meaning of the old
Corporations Act.
The activities that the
licence (as in force
immediately before the
FSR commencement)
authorised the person
to carry on.
Parts 7.3, 7.4 (other than
Division 2), 7.5, 7.6 and
7.7 of the old Corporations
Act, and any associated
provisions.
2 A holder of an
investment advisers
licence within the
meaning of the old
Corporations Act.
The activities that the
licence (as in force
immediately before the
FSR commencement)
authorised the person
to carry on.
Parts 7.3, 7.4 (other than
Division 2) and 7.7 of the
old Corporations Act, and
any associated provisions.
3 A holder of a futures
brokers licence within
the meaning of the old
Corporations Act.
The activities that the
licence (as in force
immediately before the
FSR commencement)
authorised the person
to carry on.
Parts 8.3, 8.4 (other than
section 1210) and 8.5 of
the old Corporations Act,
and any associated
provisions.
4 A holder of a futures
advisers licence within
the meaning of the old
Corporations Act.
The activities that the
licence (as in force
immediately before the
FSR commencement)
authorised the person
to carry on.
Parts 8.3 and 8.4 (other
than section 1210) of the
old Corporations Act, and
any associated provisions.
5 A registered insurance
broker within the
meaning of the
Insurance (Agents and
Brokers) Act 1984 as in
force immediately
before the FSR
commencement.
The person’s business
as an insurance broker
within the meaning of
the Insurance (Agents
and Brokers) Act 1984
as in force immediately
before the FSR
commencement.
All the provisions of the
Insurance (Agents and
Brokers) Act 1984 as in
force immediately before
the FSR commencement,
and any associated
provisions.
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Section 1430
80 Corporations Act 2001
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Regulated principals and regulated activities
Item These persons are
regulated principals
These are the
regulated principal’s
regulated activities
This is the relevant old
legislation (if any)
6 A body regulated by
APRA carrying on
activities that, if carried
on after the FSR
commencement, would
(apart from this
Subdivision) be
required by the
amended Corporations
Act to be covered by an
Australian financial
services licence.
The class of activities
carried on by the
person immediately
before the FSR
commencement that, if
carried on after the
FSR commencement,
would (apart from this
Subdivision) be
required by the
amended Corporations
Act to be covered by an
Australian financial
services licence.
For a body regulated by
APRA that was an insurer
within the meaning of the
Insurance (Agents and
Brokers) Act 1984 as in
force immediately before
the FSR commencement—
all the provisions of that
Act as then in force, and
any associated provisions.
In any other case—subject
to any regulations made
for the purposes of this
item, there is no relevant
old legislation.
7 A person who is a
registered foreign
insurance agent of an
unauthorised foreign
insurer within the
meaning of the
Insurance (Agents and
Brokers) Act 1984 as in
force immediately
before the FSR
commencement.
The person’s business
as a foreign insurance
agent.
All the provisions of the
Insurance (Agents and
Brokers) Act 1984 as in
force immediately before
the FSR commencement,
and any associated
provisions.
8 A holder of a general
authority under
regulation 38A of the
Banking (Foreign
Exchange) Regulations
as in force immediately
before the FSR
commencement.
The activities the
authority authorises its
holder to carry on.
Regulations 38A and 39 of
the Banking (Foreign
Exchange) Regulations as
in force immediately
before the FSR
commencement.
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Section 1430
Corporations Act 2001 81
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Regulated principals and regulated activities
Item These persons are
regulated principals
These are the
regulated principal’s
regulated activities
This is the relevant old
legislation (if any)
9 A person included in a
class of persons
specified in regulations
made for the purposes
of this item.
For a person in a class
so specified, the
activities identified in,
or in accordance with,
the regulations as being
the regulated activities
of a person in that
class.
The provisions (if any)
identified in, or in
accordance with, the
regulations as being the
relevant old legislation for
a person in that class, and
any associated provisions.
10 A person who carries
on any other activities
(that is, activities that
are not regulated
activities for the
purposes of any of
items 1 to 9) that, if
carried on after the
FSR commencement,
would (apart from this
Subdivision) be
required by the
amended Corporations
Act to be covered by an
Australian financial
services licence, except
to the extent that
subsection (2) excludes
this item from
applying.
The class of activities
so carried on by the
person immediately
before the FSR
commencement that, if
carried on after the
FSR commencement,
would (apart from this
Subdivision) be
required by the
amended Corporations
Act to be covered by an
Australian financial
services licence.
There is no relevant old
legislation.
(2) Item 10 of the table in subsection (1) does not apply to a person
and activities they carry on to the extent that the person’s carrying
on of any of those activities is in contravention of any of the
provisions of the relevant old legislation for any of the other
categories of regulated principals.
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Section 1431
82 Corporations Act 2001
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(3) If a person is a regulated principal of 2 or more different kinds, this
Subdivision applies separately in relation to the person in their
capacity as a regulated principal of each of those kinds.
Note: This may result (depending on what action the regulated principal
takes) in a regulated principal having to comply with the relevant new
legislation (within the meaning of subsection 1431(1)) in respect of
their activities as a regulated principal of one kind, but, at the same
time, having to comply with the relevant old legislation in respect of
their activities as a regulated principal of another kind.
1431 Parts 7.6, 7.7 and 7.8 of the amended Corporations Act
generally do not apply to a regulated principal during the
transition period
(1) Subject to subsections (2) and (3), Parts 7.6 (other than
Subdivisions A and B of Division 4, and Division 5), 7.7 and 7.8
(other than section 992A) of the amended Corporations Act (the
relevant new legislation) do not apply to a regulated principal and
their regulated activities during the period (the transition period)
starting on the FSR commencement and ending when the first of
the following events occurs:
(a) the period of 2 years starting on the FSR commencement
ends;
(b) the regulated principal is granted a licence under
section 913B of the amended Corporations Act that covers
their regulated activities;
(c) the regulated principal starts to be covered by an exemption
under subsection 911A(2) of the amended Corporations Act
(or would start to be so covered if that subsection applied) in
respect of their regulated activities;
(d) the regulated principal ceases (for whatever reason) to have
the status that made them a regulated principal.
For the purposes of paragraph (d), having a status includes holding
a licence, registration, approval or other similar thing, or carrying
on particular activities.
Note 1: Because of section 1441, a regulated principal whose transition period
has not ended (and so who is not required to comply with the relevant
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Corporations Act 2001 83
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new legislation) may nonetheless be required to comply with
obligations under Part 7.9 of the amended Corporations Act.
Note 2: For the treatment of representatives, see section 1436.
(2) Division 5 of Part 7.6 of the amended Corporations Act has effect
in relation to a regulated principal during the transition period
subject to the following paragraphs:
(a) the regulated principal may give and revoke authorisations
under section 916A or consents under subsection 916B(3) as
if the regulated principal were a financial services licensee,
however, for the purposes of the provisions of the amended
Corporations Act outside that Division, such an authorisation
or consent is taken not to have effect unless and until the
regulated principal is granted a licence under section 913B of
the amended Corporations Act that covers the activities to
which the authorisation or consent relates (whether or not it
also covers other activities);
(b) a person authorised by a section 916A authorisation so made
by the regulated principal may give and revoke authorisations
under subsection 916B(3) as if they were an authorised
representative and the regulated principal were the
authorising financial services licensee, however, for the
purposes of the provisions of the amended Corporations Act
outside that Division, such an authorisation is taken not to
have effect unless and until the regulated principal is granted
a licence under section 913B of the amended Corporations
Act that covers the activities to which the authorisation
relates (whether or not it also covers other activities);
(c) the regulated principal may give and revoke consents under
section 916C as if they were a financial service licensee,
however, any such consent does not take effect unless and
until the regulated principal is granted a licence under
section 913B of the amended Corporations Act;
(d) section 916F applies in relation to an authorisation so made
by the regulated principal during the transition period as if
the period of 15 business days referred to in
subsections 916F(1) and (1A) did not start unless and until
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Section 1432
84 Corporations Act 2001
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the regulated principal is granted a licence under
section 913B of the amended Corporations Act that covers
the activities to which the authorisation relates (whether or
not it also covers other activities), and section 916F does not
apply at all in relation to revocations so made during the
transition period.
(3) If, before paragraph (1)(a) or (d) occurs:
(a) the regulated principal is granted a licence under
section 913B of the amended Corporations Act that covers
some only (the relevant part) of their regulated activities; or
(b) the regulated principal starts to be covered by an exemption
under subsection 911A(2) of the amended Corporations Act
in respect of some only (the relevant part) of their regulated
activities;
the relevant new legislation starts applying, from that time, to the
relevant part of the regulated principal’s regulated activities, and
subsection (1) continues to apply to the person as if the regulated
principal’s regulated activities did not include the relevant part.
(4) Subsection (3) has effect subject to subsection 1430(3).
1432 Continued application of relevant old legislation
(1) Subject to subsection (2), during the transition period for a
regulated principal, the relevant old legislation (if any) continues to
apply, despite its repeal:
(a) to, and in relation to, the regulated principal and their
regulated activities; and
(b) to any other person to whom it is expressed to apply, but only
in relation to matters related to the regulated principal and
their regulated activities.
Note: So, for example, people may continue to be appointed as agents or
representatives of the regulated principal (or to have those
appointments varied or revoked) during the transition period under
provisions of the relevant old legislation that deal with such matters.
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Section 1433
Corporations Act 2001 85
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(2) If, because of subsection 1431(2), the relevant new legislation
(within the meaning of subsection 1431(1)) starts to apply to part
of a person’s regulated activities from a particular time, the
relevant old legislation (if any) stops applying, from that time, in
relation to that part of those activities.
1433 Streamlined licensing procedure for certain regulated
principals
(1) This section applies to the following regulated principals:
(a) a regulated principal of a kind referred to in any of items 1 to
5 of the table in subsection 1430(1), but not including anyone
who is:
(i) an exempted participant for the purposes of
section 1419; or
(ii) in a class of persons specified in, or identified in
accordance with, regulations made for the purposes of
subsection (3);
(b) a regulated principal of a kind referred to in item 9 of that
table who:
(i) is in a class of persons specified in regulations made for
the purposes of this subparagraph; and
(ii) is not in a class of persons specified in, or identified in
accordance with, regulations made for the purposes of
subsection (3).
(2) If:
(a) a regulated principal to whom this section applies, before the
end of their transition period, applies (in accordance with
section 913A of the amended Corporations Act) for a licence
covering some or all of their regulated activities (but no other
activities); and
(b) their application includes a statement (in accordance with the
requirements of the application form) to the effect that they
will, if granted the licence, comply with their obligations as a
financial services licensee;
the following provisions apply:
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Section 1434
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(c) section 913B of the amended Corporations Act applies to
their application as if paragraphs 913B(1)(b), (c), (ca) and
(d), and subsections 913B(2) to (5), were omitted; and
(d) the licence condition required by subsection 914A(6) of the
amended Corporations Act in relation to a licence granted
pursuant to their application must specify, as the financial
services that the licensee is authorised to provide, financial
services that equate (as closely as possible) to the regulated
activities in respect of which the application was made.
Note 1: Paragraph (c) does not limit the matters that can be taken into account
under section 915C (suspension or cancellation after offering a
hearing) in relation to a licence that has been granted under
section 913B as it applies because of this section.
Note 2: The condition referred to in paragraph (d), as with any other
conditions imposed on the licence under section 914A of the amended
Corporations Act, is subject to variation or revocation in accordance
with that section.
(3) The regulations may identify classes of persons, or provide for the
identification of classes of persons, who are not to be covered by
this section.
1434 Special licences for insurance multi-agents during first 2 years
after FSR commencement
(1) For the purposes of this section, a person is an insurance
multi-agent at a particular time if, at that time:
(a) the person is an insurance intermediary (but not an insurance
broker), within the meaning of the Insurance (Agents and
Brokers) Act 1984 as then in force; and
(b) the person has agreements with 2 or more different insurers
under section 10 of that Act.
(2) If:
(a) a person who, immediately before the FSR commencement,
is an insurance multi-agent applies in accordance with
section 913A of the amended Corporations Act for a licence,
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during the period of 2 years starting on the FSR
commencement; and
(b) the application is lodged at a time:
(i) when the person is still carrying on activities as agent
for one or more of the insurers with whom, immediately
before the FSR commencement, they had agreements as
mentioned in paragraph (1)(b); or
(ii) that is not more than 6 months after the person ceased to
so carry on activities as agent for any of those insurers;
and
(c) their application includes a statement (in accordance with the
requirements of the application form) to the effect that they
want this section to apply to their application;
the following provisions apply:
(d) section 913B of the amended Corporations Act applies to
their application as if the reference in paragraph 913B(1)(b)
to section 912A did not include the obligations under
paragraphs 912A(e) and (f);
(e) the licence condition required by subsection 914A(6) of the
amended Corporations Act in relation to a licence granted
pursuant to their application must specify, as the financial
services that the licensee is authorised to provide:
(i) providing financial product advice in relation to risk
insurance products and investment life insurance
products; and
(ii) dealing in risk insurance products and investment life
insurance products.
(3) If the application is granted, then:
(a) while the licence remains in force:
(i) paragraphs 912A(e) and (f) of the amended
Corporations Act do not apply to the licensee and the
financial services covered by the licence; and
(ii) sections 942B and 942C apply in relation to any
Financial Services Guide provided by the licensee or an
authorised representative of the licensee as if they
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included a requirement to include in the Guide a
statement that the licensee is not bound by the
obligations in paragraphs 912A(e) and (f) and that sets
out what those obligations are; and
(b) the licence conditions cannot be varied so that the licence
covers the licensee providing financial services other than
those referred to in paragraph (2)(e); and
(c) the licence ceases to be in force (unless earlier revoked) at
the end of the period of 2 years starting on the FSR
commencement.
1435 Licensing decisions made within the first 2 years of the FSR
commencement—regard may be had to conduct and
experience of applicant or related body corporate that
currently provides same or similar services
(1) This section applies:
(a) if a person applies, during the period of 2 years starting on
the FSR commencement, under section 913A of the amended
Corporations Act for the grant of a licence covering the
provision of particular financial services (the relevant
financial services); and
(b) ASIC is aware that:
(i) the applicant; or
(ii) if the applicant is a body corporate—a related body
corporate of the applicant;
is currently (as at the time the application is being considered
by ASIC) providing services that are the same as, or similar
to, all or any of the relevant financial services.
(2) In considering the matters it is required by section 913B of the
amended Corporations Act to consider in deciding whether to grant
the licence, ASIC may (but is not required to) have regard to the
conduct and experience (including conduct and experience before
the FSR commencement) of the applicant, or the related body
corporate, in providing services that are the same as, or similar to,
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all or any of the relevant financial services (so far as ASIC is aware
of such conduct and experience).
(3) Subsection (2) is not intended to limit, by implication, the matters
that ASIC can take into account under section 913B of the
amended Corporations Act when considering whether to grant a
licence under that section (whether pursuant to an application to
which this section applies or otherwise).
1436 Treatment of representatives—general
(1) This section applies to a person who is a representative of a
regulated principal. For this purpose, a representative includes, but
is not limited to:
(a) an agent (however described) of the regulated principal; and
(b) an employee or director of the regulated principal; and
(c) any other person who, in accordance with the regulated
principal’s relevant old legislation as it continues to have
effect in relation to the regulated principal, is authorised to
carry on activities for or on behalf of the regulated principal.
(1A) However, if a person who, under subsection (1), would be the
representative of another person is a financial services licensee in
their own right, the licensee, when engaged in activities covered by
their licence, is taken not to be acting as representative of that other
person.
(2) The following provisions apply in relation to a person who is a
representative of a regulated principal:
(a) during any period when, because of section 1431, the
relevant new legislation (within the meaning of
subsection 1431(1)) does not apply to the regulated principal
and particular regulated activities, the relevant new
legislation also does not apply to the representative when
they are acting as a representative of the regulated principal
in relation to any of those activities;
(b) during any period when, because of section 1432, relevant
old legislation continues to apply to the regulated principal
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and particular regulated activities, that legislation also
continues to apply to the representative when they are acting
as a representative of the regulated principal in relation to
any of those activities.
Note 1: If a person is a representative of 2 persons, this may result in the
person having to comply with the relevant new legislation in respect
of what they do as a representative of one of those persons but, at the
same time, having to comply with relevant old legislation in respect of
what they do as a representative of the other of those persons.
Note 2: If a person is a representative of another person who carries on 2
different sets of activities, being sets of activities in relation to which
there are separate applications of this Subdivision because of
subsection 1430(3), this may result in the person having to comply
with the relevant new legislation in respect of what they do in relation
to one of those sets of activities but, at the same time, having to
comply with relevant old legislation in respect of what they do in
relation to the other set of activities.
Note 3: Because of section 1441, a representative who is not required to
comply with the relevant new legislation may nonetheless be required
to comply with obligations under Part 7.9 of the amended
Corporations Act.
1436A Treatment of representatives—insurance agents
(1) This section has effect despite anything else in this Subdivision,
including sections 1436 and 1437.
(2) This section applies if, immediately before the FSR
commencement, a person is an insurance intermediary (but not an
insurance broker) within the meaning of the Insurance (Agents and
Brokers) Act 1984 as then in force because of an agreement they
have with an insurer under section 10 of that Act. For the purposes
of this section:
(a) the person is the insurance agent; and
(b) the agreement is the authorising agreement; and
(c) the matters dealt with in the provisions included in the
agreement in compliance with section 10 of that Act, and any
other matters included in the agreement that are related to
those matters, are the relevant matters; and
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(d) the insurer is the principal.
If, immediately before the FSR commencement, the person has
more than one such agreement, this section applies separately in
relation to each of those agreements.
(3) For the purposes of this section, the transition period is the period
starting on the FSR commencement and ending when the first of
the following events occurs:
(a) the period of 2 years starting on the FSR commencement
ends;
(b) the authorising agreement ceases to be in force;
(c) the insurance agent has lodged with ASIC notice in writing
that the agent no longer wants to be covered by the Insurance
(Agents and Brokers) Act 1984:
(i) from a specified date, being a date that is after the notice
is given to ASIC; or
(ii) from the end of a specified period, being a period that
ends after the notice is given to ASIC;
and that date arrives or period ends;
(d) the insurance agent is granted a licence under section 913B
(including as it has effect because of section 1434) of the
amended Corporations Act that covers the insurance agent
engaging in (as licensee) the range of activities that they
previously engaged in as agent under the authorising
agreement.
(4) A notice (the original notice) given for the purposes of
paragraph (3)(c) may before the date, or the end of the period,
specified in the original notice as mentioned in that paragraph:
(a) be varied to specify another date or period, being a date or
period that would satisfy the requirements of
subparagraph (3)(c)(i) or (ii) if the reference in that
subparagraph to when the notice (being the original notice) is
given to ASIC were instead a reference to when the notice of
variation is given to ASIC under this subsection; or
(b) be revoked.
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The variation or revocation must be made by notice in writing
lodged with ASIC.
(5) Subject to subsection (7), during the transition period, the
Insurance (Agents and Brokers) Act 1984 as in force immediately
before the FSR commencement, and any associated provisions,
(the relevant old legislation) continue to apply (despite the repeal
of that Act) to, and in relation to, the insurance agent, the principal
and the relevant matters.
(6) Subject to subsection (7), during the transition period, the relevant
new legislation (within the meaning of section 1431) does not
apply to, or in relation to, the insurance agent, the principal and the
relevant matters.
(7) Regulations made for the purposes of this subsection may do either
or both of the following:
(a) provide that specified provisions of the relevant old
legislation apply (with or without specified modifications), or
do not apply, to the insurance agent, the principal and some
or all of the relevant matters;
(b) provide that specified provisions of the relevant new
legislation apply (with or without specified modifications), or
do not apply, to the insurance agent, the principal and some
or all of the relevant matters.
The regulations may provide as mentioned in paragraph (a) or (b)
even after the end of the transition period.
(8) If:
(a) before the end of the transition period, or such longer period
during which regulations made for the purposes of
subsection (7) provide for the application of some or all of
the relevant old legislation, the insurance agent engages in
conduct that, under the authorising agreement as then in
force, creates a right to brokerage, commission or other
remuneration (which may be a present right, or a future right
that is dependent on matters specified in the authorising
agreement); and
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(b) that right is still in existence immediately before the end of
that period;
the right is not taken to be brought to an end merely because of the
repeal of the relevant old legislation or the enactment of the
relevant new legislation, or because under this section the relevant
old legislation ceases to apply and the relevant new legislation
starts to apply.
(9) Subsection (8) is not intended to affect, in any way, the
determination of the question whether any other right (whether or
not it is under an agreement under section 10 of the Insurance
(Agents and Brokers) Act 1984) is in any way affected by the
provisions of the Financial Services Reform Act 2001 or the
Financial Services Reform (Consequential Provisions) Act 2001
(including the amendments made by those Acts).
1437 Exemptions and modifications by ASIC
(1) This section applies to the following provisions:
(a) the provisions of this Subdivision (other than section 1436A)
and any associated provisions;
(b) the provisions of legislation that continues to apply because
of subsection 1432(1) or 1436(3).
(2) ASIC may:
(a) exempt a person or a class of persons from some or all of the
provisions to which this section applies; or
(b) declare that some or all of the provisions to which this
section applies apply in relation to a person or a class of
persons as if the provisions were modified or varied as
specified in the declaration.
(3) A declaration under paragraph (2)(b) may provide for the
continued application (with or without modifications, and to the
exclusion of provisions of the amended Corporations Act) of
provisions referred to in paragraph (1)(b), even after the end of the
period of 2 years starting on the FSR commencement.
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(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not constitute
an offence if a particular declaration under paragraph (2)(b) had
not been made, that conduct does not constitute an offence unless,
before the conduct occurred (in addition to complying with the
gazettal requirement of subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
Subdivision E—Product disclosure requirements
1438 New product disclosure provisions do not apply to existing
products during transition period
(1) This section applies to all financial products issued by a person,
other than financial products in a class of products that are first
issued by the person after the FSR commencement.
(2) For the purposes of this section, the new product disclosure
provisions in relation to a financial product to which this section
applies are the provisions of Part 7.9 of the amended Corporations
Act that, apart from this section, would apply in relation to the
financial product (whether those provisions apply to the issuer of
the product or to another person or persons), other than the
following provisions:
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(a) section 1017C (information for existing holders of
superannuation products and RSA products);
(b) section 1017DA (trustees of superannuation entities—
regulations may specify additional obligations to provide
information), and regulations made for the purposes of that
section;
(c) section 1017E (dealing with money received for financial
product before the product is issued);
(d) section 1017F (confirming transactions);
(e) sections 1019A and 1019B (cooling-off period for return of
financial product);
(ea) Division 5A (unsolicited offers to purchase financial
products off-market);
(f) sections 1020B and 1020C (short selling of securities,
managed investment products and certain other financial
products);
(g) section 1020D (Part cannot be contracted out of).
(3) Subject to subsection (4), the new product disclosure provisions do
not apply in relation to a financial product to which this section
applies during the period (the transition period) starting on the
FSR commencement and ending on whichever of the following
first occurs:
(a) the end of the period of 2 years starting on the FSR
commencement;
(b) the date specified in a notice lodged with ASIC by the issuer
of the product that relates to the product, or a class of
financial products that includes the product, and that satisfies
the following requirements:
(i) the notice must indicate that the issuer of the product
wants the new product disclosure provisions to apply in
relation to the product from a date specified in the
notice;
(ii) the date specified in the notice is the FSR
commencement or a later date;
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(iii) the date specified in the notice is at least 28 days after
the notice is lodged with ASIC.
Note 1: A notice under paragraph (b) may be lodged during the period
between the commencement of this section and the FSR
commencement, or it may be lodged after the FSR commencement.
Note 2: Subject to Division 2, the provisions covered by paragraphs (2)(a) to
(f) apply from the FSR commencement in relation to all financial
products to which they purport to apply.
(4) If the date specified in a notice lodged with ASIC in accordance
with paragraph (3)(b) is the FSR commencement, there is no
transition period in relation to the financial product or products to
which the notice relates.
(5) A notice (the first notice) lodged with ASIC in accordance with
paragraph (3)(b):
(a) may, by a further notice lodged with ASIC, be varied to
specify a different date (the new date), but only if:
(i) that further notice is lodged with ASIC at least 28 days
before the date specified in the first notice; and
(ii) the new date is at least 28 days after that further notice
is lodged with ASIC; and
(b) may, by a further notice lodged with ASIC, be revoked, but
only if that further notice is lodged with ASIC at least 28
days before the date specified in the first notice.
A date that was specified in a notice before its variation or
revocation in accordance with this subsection is to be disregarded
for the purposes of the other provisions of this section.
(6) If the issuer of a financial product lodges a notice with ASIC in
accordance with paragraph (3)(b) that covers the product, the issuer
must comply with any applicable requirements determined, by
legislative instrument, by ASIC for the purposes of this subsection
in relation to the following matters:
(a) informing people about the notice and its significance; and
(b) informing people about any subsequent variation or
revocation of the notice.
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) A determination by ASIC for the purposes of subsection (6):
(b) may cover all financial products or one or more classes of
financial products; and
(c) may make different provision in relation to different classes
of financial products.
(8) Subject to the regulations, ASIC must take reasonable steps to
ensure that, during the period of 2 years starting on the FSR
commencement, information is available:
(a) on the internet; and
(b) at offices of ASIC;
about notices that have been lodged in accordance with
paragraph (3)(b). The information must be updated to take account
of variations and revocations of such notices.
1439 Offences against new product disclosure provisions—
additional element for prosecution to prove if conduct
occurs after opting-in and before the end of the first 2
years
(1) If:
(a) conduct in relation to a financial product that would (apart
from this section) constitute an offence against, or based on,
any of the new product disclosure provisions occurred at a
time:
(i) during the period of 2 years starting on the FSR
commencement; and
(ii) after the date specified in a notice lodged in relation to
the product in accordance with paragraph 1438(3)(b);
and
(b) the new product disclosure provisions started to apply in
relation to the product from the date specified in the notice;
the conduct constitutes an offence against that provision only if (in
addition to the other elements of the offence), either:
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(c) the person knew that, or was reckless as to whether, the
product issuer had lodged a notice under that paragraph that
specified that date; or
(d) the person did not know that, and was not reckless as to
whether, the product issuer had lodged a notice under that
paragraph that specified that date, but the conduct would
have contravened the provisions referred to in section 1440
that would have applied to and in relation to the product if
those provisions had still applied when the conduct occurred.
(2) In this section:
conduct means an act, an omission to perform an act or a state of
affairs.
1440 Continued application of certain provisions of old disclosure
regimes during transition period
During the transition period (if any) for a financial product, the
following provisions continue to apply, despite their repeal or
amendment, to and in relation to the financial product:
(a) if the product is a managed investment product—all the
provisions of Chapter 6D of the old Corporations Act, other
than section 722 of that Act, and any associated provisions;
(b) if the product is a derivative—section 1210 of the old
Corporations Act, and any associated provisions;
(c) if the product is a superannuation product—the following
provisions, and any associated provisions:
(i) section 153, and all the provisions of Divisions 3 and 4
of Part 19, of the Superannuation Industry (Supervision)
Act 1993 as in force immediately before the FSR
commencement;
(ii) the section 153A of that Act that was provided for in
Modification Declaration no. 15 as in force immediately
before the FSR commencement, being a declaration of
modification made under section 332 of that Act;
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(d) if the product is an RSA product—section 51, and all the
provisions of Divisions 4 and 5 of Part 5, of the Retirement
Savings Accounts Act 1997 as in force immediately before
the FSR commencement, and any associated provisions;
(e) if the product is an insurance product—sections 71A and 73
of the Insurance Contracts Act 1984 as in force immediately
before the FSR commencement, and any associated
provisions.
1441 Certain persons who are not yet covered by Parts 7.6, 7.7 and
7.8 of the amended Corporations Act are required to
comply with Part 7.9 obligations as if they were regulated
persons
From the time from which the new product disclosure provisions
start to apply in relation to a particular financial product, the
following persons must comply with those provisions in relation to
that product, as if they were regulated persons as defined in
section 1011B of the amended Corporations Act, even though they
are not yet subject, or fully subject, to Parts 7.6, 7.7 and 7.8 of that
Act:
(a) a regulated principal;
(b) a representative (as defined in section 1436) of a regulated
principal; or
(c) an insurance agent (as defined in section 1436A).
1442 Exemptions and modifications by ASIC
(1) This section applies to the following provisions:
(a) the provisions of this Subdivision and any associated
provisions;
(b) the provisions that continue to apply because of section 1440.
(2) ASIC may:
(a) exempt a person or a class of persons, or a financial product
or class of financial products, from some or all of the
provisions to which this section applies; or
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(b) declare that some or all of the provisions to which this
section applies apply in relation to a person or a class of
persons, or a financial product or class of financial products,
as if the provisions were modified or varied as specified in
the declaration.
(3) A declaration under paragraph (2)(b) may provide for the
continued application (with or without modifications, and to the
exclusion of provisions of the amended Corporations Act) of
provisions referred to in paragraph (1)(b), even after the end of the
period of 2 years starting on the FSR commencement.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not constitute
an offence if a particular declaration under paragraph (2)(b) had
not been made, that conduct does not constitute an offence unless,
before the conduct occurred (in addition to complying with the
gazettal requirement of subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
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Subdivision F—Certain other product-related requirements
1442A Deferred application of hawking prohibition
(1) For the purposes of this section, the transition period is the period
starting on the FSR commencement and ending on whichever of
the following first occurs:
(a) the day fixed by Proclamation for the purposes of this
paragraph;
(b) the end of the period of 6 months starting on the FSR
commencement.
(2) Regulations made for the purposes of this section may provide for
specified provisions of legislation that is repealed by the Financial
Services Reform Act 2001 or the Financial Services Reform
(Consequential Provisions) Act 2001, being provisions that deal
with the same or a similar matter as that dealt with in section 992A
of the amended Corporations Act, to continue to apply (whether
with or without specified modifications) during the transition
period.
(3) During the transition period, section 992A of the amended
Corporations Act does not apply to any person, except to the extent
(if any) provided for in regulations made for the purposes of this
section.
1442B Deferred application of confirmation of transaction and
cooling-off provisions etc.
(1) This section applies to all financial products issued by a person,
other than financial products in a class of products that are first
issued by the person after the FSR commencement.
(2) For the purposes of this section, the transition period, in relation to
a financial product to which this section applies, is the period
starting on the FSR commencement and ending on whichever of
the following first occurs:
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(a) the day fixed by Proclamation for the purposes of this
paragraph;
(b) the end of the period of 6 months starting on the FSR
commencement;
(c) the new product disclosure provisions (within the meaning of
section 1438) start to apply in relation to the product.
(3) Subject to subsection (5), the following provisions (the preserved
provisions), to the extent they are relevant to a financial product to
which this section applies, continue to apply, despite their repeal,
in relation to the financial product during the transition period:
(a) Division 6 of Part 19 of the Superannuation Industry
(Supervision) Act 1993, and any associated provisions;
(b) Division 7 of Part 5 of the Retirement Savings Accounts Act
1997, and any associated provisions;
(c) sections 64 and 64A of the Insurance Contracts Act 1984,
and any associated provisions;
(d) any other provisions specified in regulations made for the
purposes of this paragraph, and any associated provisions in
relation to provisions so specified.
(4) Subject to subsection (5), during the transition period, the
following provisions (the deferred provisions) of the amended
Corporations Act do not apply in relation to a financial product to
which this section applies:
(a) section 1017F;
(b) sections 1019A and 1019B;
(c) any other provisions of Part 7.9 of the amended Corporations
Act that are not part of the new product disclosure provisions
(within the meaning of section 1438) and that are specified in
regulations made for the purposes of this paragraph.
(5) Regulations made for the purposes of this subsection may do either
or both of the following:
(a) provide that specified provisions of the preserved provisions
apply (with or without specified modifications), or do not
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apply, in relation to a financial product to which this section
applies;
(b) provide that specified provisions of the deferred provisions
apply (with or without specified modifications), or do not
apply, in relation to a financial product to which this section
applies.
The regulations may provide as mentioned in paragraph (a) or (b)
even after the end of the transition period.
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Division 2—Other transitional provisions
1443 Definitions
(1) In this Division:
amended Corporations Act has the same meaning as in Division 1.
class, in relation to financial products, has a meaning affected by
regulations made for the purposes of subsection (2).
FSR commencement has the same meaning as in Division 1.
law of the Commonwealth includes a reference to an instrument
made under such a law.
new legislation means relevant legislation as in force after the FSR
commencement.
old legislation means relevant legislation as in force immediately
before the FSR commencement.
relevant amendments means the amendments made by:
(a) the Financial Services Reform Act 2001; and
(b) the Financial Services Reform (Consequential Provisions)
Act 2001.
relevant legislation means the following legislation:
(a) this Act;
(b) the Acts that are amended by the relevant amendments;
(c) regulations or other instruments made under Acts covered by
paragraph (a) or (b);
(d) any other law of the Commonwealth, or instrument made
under a law of the Commonwealth, identified in regulations
made for the purposes of this paragraph.
(2) The regulations may include provisions identifying, or providing
for the identification of, what constitutes a class of financial
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products for the purposes of a provision or provisions of this
Division.
1444 Regulations may deal with transitional, saving or application
matters
(1) The regulations may deal with matters of a transitional, saving or
application nature relating to the relevant amendments and the
transition from the application of the old legislation to the
application of the new legislation. Regulations made for this
purpose may make such provision as is necessary to take account
of the fact that, because of Division 1, different provisions of the
amended Corporations Act start applying (and different provisions
of the old legislation stop applying) in relation to different people,
things and matters at different times.
(2) Regulations made for the purposes of this section are of no effect
to the extent that they are inconsistent with:
(a) a provision of Division 1; or
(b) a regulation or determination made under a provision of
Division 1, other than any such regulation or determination
(the other instrument) that is expressed to have effect subject
to anything in regulations made for the purposes of this
section (in which case, the other instrument is of no effect, to
the extent of the inconsistency).
(3) Without limiting subsection (1), the regulations may provide for a
matter to be dealt with, wholly or partly, in any of the following
ways:
(a) by applying (with or without modifications) to the matter:
(i) provisions of a law of the Commonwealth; or
(ii) provisions of a repealed or amended law of the
Commonwealth, in the form that those provisions took
before the repeal or amendment; or
(iii) a combination of provisions referred to in
subparagraphs (i) and (ii);
(b) by otherwise specifying rules for dealing with the matter;
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(c) by specifying a particular consequence of the matter, or of an
outcome of the matter, for the purposes of a law of the
Commonwealth.
(4) Without limiting subsections (1) and (3), the regulations may
provide for the continued effect after the FSR commencement, for
the purposes of the new legislation, of a thing done or instrument
made, or a class of things done or instruments made, before the
FSR commencement, under or for the purposes of the old
legislation. In the case of an instrument, or class of instruments, the
regulations may (either when providing for the continued effect of
the instrument or instruments or at a later time) provide for the
instrument or instruments, as continuing to have effect, to have
effect subject to modifications.
(5) Without limiting subsection (4), regulations made for the purposes
of that subsection may permit all or any of the following matters to
be determined in writing by a specified person, or by a person
included in a specified class of persons:
(a) the identification of a thing done or instrument made, or a
class of things done or instruments made, that is to continue
to have effect;
(b) the purpose for which a thing done or instrument made, or a
class of things done or instruments made, is to continue to
have effect;
(c) any modifications subject to which an instrument made, or a
class of instruments made, is to continue to have effect.
(6) Despite subsections 12(2) and (3) of the Legislative Instruments
Act 2003, regulations made for the purposes of this section:
(a) may be expressed to take effect from a date before the
regulations are registered under that Act; and
(b) may provide for a determination of a kind referred to in
subsection (5) to take effect from a date before the
determination is made (including a date before the
regulations are registered under that Act).
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(7) If a relevant amendment does not commence on the FSR
commencement, this section applies in relation to that amendment
as if references in the other provisions of this section, and in the
definitions in section 1443, to “the FSR commencement” were
instead references to the commencement of the relevant
amendment.
(8) In this section:
matters of a transitional, saving or application nature includes,
but is not limited to, matters related to any of the following:
(a) how a matter that arose or existed under the old legislation is
to be dealt with under the new legislation;
(b) the significance for the purposes of the new legislation of a
matter that arose or existed under the old legislation;
(c) how a process started but not completed under the old
legislation is to be dealt with;
(d) the preservation of concessions or exemptions (however
described) that existed under the old legislation;
(e) interpreting references to matters in terms of the new
legislation so as to include references to matters in terms of
the old legislation (including that legislation as it continues to
have effect because of provisions of Division 1), and vice
versa;
(f) any other matters that are prescribed by regulations made for
the purposes of this paragraph.
1445 ASIC determinations may deal with transitional, saving or
application matters
(1) ASIC may, by legislative instrument, make a determination dealing
with matters of a transitional, saving or application nature relating
to the relevant amendments and the transition from the application
of the old legislation to the application of the new legislation.
Determinations for this purpose may make such provision as is
necessary to take account of the fact that, because of Division 1,
different provisions of the amended Corporations Act start
applying (and different provisions of the old legislation stop
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applying) in relation to different people, things and matters at
different times.
(2) A determination overrides any inconsistent regulations made for
the purposes of section 1444, other than any such regulations that
are expressed to have effect despite anything in a determination
under this section (in which case, the determination is of no effect,
to the extent of the inconsistency).
(3) A determination is of no effect to the extent that it is inconsistent
with:
(a) a provision of Division 1; or
(b) a regulation or determination made under a provision of
Division 1, other than any such regulation or determination
(the other instrument) that is expressed to have effect subject
to anything in a determination under this section (in which
case, the other instrument is of no effect, to the extent of the
inconsistency).
(4) Without limiting subsection (1), a determination may provide for a
matter to be dealt with, wholly or partly, in any of the following
ways:
(a) by applying (with or without modifications) to the matter:
(i) provisions of a law of the Commonwealth; or
(ii) provisions of a repealed or amended law of the
Commonwealth, in the form that those provisions took
before the repeal or amendment; or
(iii) a combination of provisions referred to in
subparagraphs (i) and (ii);
(b) by otherwise specifying rules for dealing with the matter;
(c) by specifying a particular consequence of the matter, or of an
outcome of the matter, for the purposes of a law of the
Commonwealth.
(5) Without limiting subsections (1) and (4), a determination may
provide for the continued effect after the FSR commencement, for
the purposes of the new legislation, of a thing done or instrument
made, or a class of things done or instruments made, before the
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FSR commencement, under or for the purposes of the old
legislation. In the case of an instrument, or class of instruments, a
determination may (either when providing for the continued effect
of the instrument or instruments or at a later time) provide for the
instrument or instruments, as continuing to have effect, to have
effect subject to modifications.
(6) Without limiting subsection (5), a determination for the purposes
of that subsection may permit all or any of the following matters to
be determined in writing by a specified person, or by a person
included in a specified class of persons:
(a) the identification of a thing done or instrument made, or a
class of things done or instruments made, that is to continue
to have effect;
(b) the purpose for which a thing done or instrument made, or a
class of things done or instruments made, is to continue to
have effect;
(c) any modifications subject to which an instrument made, or a
class of instruments made, is to continue to have effect.
(7) If a relevant amendment does not commence on the FSR
commencement, this section applies in relation to that amendment
as if references in the other provisions of this section, and in the
definitions in section 1443, to “the FSR commencement” were
instead references to the commencement of the relevant
amendment.
(8) In this section:
matters of a transitional, saving or application nature includes,
but is not limited to, matters related to any of the following:
(a) how a matter that arose or existed under the old legislation is
to be dealt with under the new legislation;
(b) the significance for the purposes of the new legislation of a
matter that arose or existed under the old legislation;
(c) how a process started but not completed under the old
legislation is to be dealt with;
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(d) the preservation of concessions or exemptions (however
described) that existed under the old legislation;
(e) interpreting references to matters in terms of the new
legislation so as to include references to matters in terms of
the old legislation (including that legislation as it continues to
have effect because of provisions of Division 1), and vice
versa;
(f) any other matters that are prescribed by regulations made for
the purposes of this paragraph.
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2003
1447 Application of sections 601AB and 601PB
If a company or responsible entity had an obligation to lodge an
annual return before the commencement of items 31 and 36 of
Schedule 1 to the Corporations Legislation Amendment Act 2003,
sections 601AB and 601PB continue to apply to the annual return,
as if the amendments made by those items had not been made.
1448 Application of amendments made by Schedule 4 to the
Corporations Legislation Amendment Act 2003
If, at the time the amendments made by Schedule 4 to the
Corporations Legislation Amendment Act 2003 commence:
(a) a company is required to lodge a notice under a provision
amended by Schedule 4; and
(b) the time within which the company must lodge the notice has
not expired;
the amendments made by Schedule 4 apply to the company’s
requirement to lodge the notice.
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Section 1449
112 Corporations Act 2001
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Part 10.4—Transitional provisions relating to the
Financial Services Reform Amendment Act
2003
1449 Definition
In this Part:
amending Act means the Financial Services Reform Amendment
Act 2003.
1450 Application of Part 10.2 to Chapter 7 as amended by
Schedule 2 to the amending Act
(1) Subject to subsection (2), the provisions of Division 1 of Part 10.2
(including regulations and determinations made for the purposes of
that Division, and the powers given by that Division to deal with
matters in regulations and determinations) also apply to the
provisions of Chapter 7 as amended by Schedule 2 to the amending
Act.
Note: Division 1 of Part 10.2 deals with the phasing-in of the new financial
services regime.
(2) However, subsection (1) does not produce the result that a
provision of Chapter 7 as amended, added or inserted by an
amendment in Schedule 2 to the amending Act applies in relation
to a person, matter or circumstance:
(a) at a time that is before the commencement of the amendment;
or
(b) contrary to section 1451.
(3) The powers given by Division 2 of Part 10.2 to deal with matters in
regulations and determinations apply in relation to the provisions
of Chapter 7 as amended by Schedule 2 to the amending Act as if
the amendments in Schedule 2 to the amending Act were relevant
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amendments for the purposes of that Division. However (in
addition to subsections 1444(2) and 1445(3)) such regulations and
determinations are of no effect to the extent that they are
inconsistent with section 1451.
1451 Provisions relating to the scope of the amendments of
Chapter 7 made by Schedule 2
Application of amendments of section 916F
(1) The amendments made by items 37, 38 and 39 of Schedule 2 to the
amending Act do not apply to authorisations made before the
commencement of the amendment, unless the relevant 10 day
period for notification has not ended by the commencement of the
items.
(2) The amendment made by item 40 of Schedule 2 to the amending
Act applies to revocations made after the commencement of the
item.
Application of certain amendments of sections 952B and 953A
(2A) The amendments made by items 53A and 58A of Schedule 2 to the
amending Act apply in relation to the giving of Financial Services
Guides after the commencement of the items.
Application of amendments of section 981H
(3) The amendments made by items 62 and 63 of Schedule 2 to the
amending Act apply, after the commencement of those items, to
money paid to a person before that commencement as mentioned in
subsection 981H(1), even if an agreement referred to in
subsection 981H(2) was in force in relation to the money
immediately before that commencement.
Application of certain amendments of section 1016A
(3A) The amendments made by items 77A, 77B and 78C of Schedule 2
to the amending Act apply in relation to applications for financial
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products, and applications to become a standard employer-sponsor,
whether made before or after the commencement of the items.
Application of amendments of sections 1016B to 1016E
(3B) The amendments made by items 78D to 78T of Schedule 2 to the
amending Act apply in relation to Product Disclosure Statements
whether prepared or given before or after the commencement of
the items.
Application of amendment of section 1017D
(4) The amendment made by item 88 of Schedule 2 to the amending
Act does not apply to statements prepared before the
commencement of the item.
Application of amendments of section 1017E
(5) The amendments made by items 89 and 90 of Schedule 2 to the
amending Act apply, after the commencement of those items, to
money paid to a person before that commencement as mentioned in
subsection 1017E(1), even if an agreement referred to in
subsection 1017E(2B) was in force in relation to the money
immediately before that commencement.
Application of amendments of section 1020E
(6) The amendment made by item 91 of Schedule 2 to the amending
Act does not apply to disclosure documents or statements prepared
before the commencement of the item.
(7) The amendments made by items 91A, 91B and 91C of Schedule 2
to the amending Act apply to disclosure documents or statements,
and to advertisements or statements of a kind referred to in
subsection 1018A(1) or (2), whether prepared, given or published
before or after the commencement of the items.
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Application of certain amendments of sections 1021B and 1022A
(8) The amendments made by items 95F and 96K of Schedule 2 to the
amending Act apply in relation to the giving of Product Disclosure
Statements after the commencement of the items.
1452 Amendments of section 1274
(1) The amendment made by item 101 of Schedule 2 to the amending
Act applies to documents even if they were lodged before the
commencement of the item.
(2) The amendment made by item 102 of Schedule 2 to the amending
Act removes a reference to a repealed provision. However, the
amendment does not produce the result that a document that was
lodged under that provision when it was in force now becomes
available for inspection under section 1274.
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Section 1453
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Part 10.5—Transitional provisions relating to the
Corporate Law Economic Reform
Program (Audit Reform and Corporate
Disclosure) Act 2004
1453 Definitions
In this Part:
amending Act means the Corporate Law Economic Reform
Program (Audit Reform and Corporate Disclosure) Act 2004.
old Act means this Act as in force immediately before the
commencement day.
Schedule 1 commencement means the day on which Schedule 1 to
the Corporate Law Economic Reform Program (Audit Reform and
Corporate Disclosure) Act 2004 commences.
Schedule 4 commencement means the day on which Schedule 4 to
the Corporate Law Economic Reform Program (Audit Reform and
Corporate Disclosure) Act 2004 commences.
Schedule 5 commencement means the day on which Schedule 5 to
the Corporate Law Economic Reform Program (Audit Reform and
Corporate Disclosure) Act 2004 commences.
Schedule 8 commencement means the day on which Schedule 8 to
the Corporate Law Economic Reform Program (Audit Reform and
Corporate Disclosure) Act 2004 commences.
1454 Audit reforms in Schedule 1 to the amending Act (auditing
standards and audit working papers retention rules)
Sections 307A, 307B and 989CA apply to:
(a) an audit of the financial report for a financial year; or
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(b) an audit or review of the financial report for a half-year in a
financial year;
if the financial year begins on or after 1 July 2004.
1455 Audit reforms in Schedule 1 to the amending Act (adoption of
auditing standards made by accounting profession before
commencement)
(1) The regulations may provide that a standard specified in the
regulations (as in force from time to time) is to have effect, for the
purposes of this Act, as if it had been made by the AUASB under
section 336 on the day specified in the regulations.
(2) The standard must be one made or issued by the Australian
Accounting Research Foundation before the Schedule 1
commencement on behalf of CPA Australia and The Institute of
Chartered Accountants in Australia.
(3) The regulations may provide that the standard is to have effect as if
it specified that it applies to periods ending, or starting, on or after
a date specified in the standard.
(4) Standards prescribed under subsection (1) do not have effect as
auditing standards:
(a) in relation to financial reports for periods ending after
30 June 2006; or
(b) in relation to financial reports for periods ending after a later
date specified by regulations made for the purposes of
subsection (1) before 30 June 2006.
(5) A person does not commit an offence based on a contravention of
section 307A, subsection 308(3A) or 309(5A) or section 989CA
because an audit or review is not conducted in accordance with, or
does not include a statement or disclosure required by, an auditing
standard prescribed under subsection (1) if the audit or review is
conducted in relation to a financial report for a period ending
before that standard ceases to have effect as an auditing standard.
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Note: This subsection does not prevent, however, other action being taken
on the basis of the failure to comply with the auditing standard (for
example, the person’s failure to comply with the standard being
referred to the Companies Auditors and Liquidators Disciplinary
Board).
1456 Audit reforms in Schedule 1 to the amending Act (new
competency standard provisions)
If an application by a person for registration as a registered
company auditor:
(a) is lodged with ASIC before the Schedule 1 commencement;
and
(b) has not been determined before that day;
section 1280 of the old Act continues to apply to the application
despite the amendments made by the amending Act.
1457 Audit reforms in Schedule 1 to the amending Act (new annual
statement requirements for auditors)
(1) The requirement under section 1287A for a registered company
auditor to lodge an annual statement applies from the first
anniversary of the auditor’s registration that occurs on or after
1 January 2005.
(2) The first annual statement lodged under section 1287A should
cover the period commencing either:
(a) immediately after the period covered by the last triennial
statement; or
(b) the day on which the auditor was registered;
whichever is later, and ending on the first anniversary of
registration occurring on or after 1 January 2005.
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1458 Audit reforms in Schedule 1 to the amending Act (imposition
of conditions on existing registration as company auditor)
ASIC may impose conditions on a person’s registration as a
company auditor under section 1289A even if the registration took
effect before the Schedule 1 commencement.
1459 Audit reforms in Schedule 1 to the amending Act (application
of items 62 and 63)
The amendments made by items 62 and 63 of Schedule 1 to the
amending Act apply to periods that start on or after 1 January
2005.
1460 Audit reforms in Schedule 1 to the amending Act (non-audit
services disclosure)
Subsections 300(11B) to (11E) apply to an audit of the financial
report for a financial year if the financial year begins on or after
1 July 2004.
1461 Audit reforms in Schedule 1 to the amending Act (auditor
appointment)
(1) Section 324AC applies to all appointments of firms as auditor
(including an appointment that was made before the Schedule 1
commencement).
(2) The appointment of a person as auditor of a company or registered
scheme made before the Schedule 1 commencement under
section 327 or 331AB of the old Act remains valid and effective
despite the repeal of that section.
(3) An approval by ASIC that is in force under subsection 324(12) of
the old Act immediately before the Schedule 1 commencement has
effect on and after the Schedule 1 commencement as if it had been
given under section 324B.
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Section 1462
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1462 Audit reforms in Schedule 1 to the amending Act (auditor
independence)
(1) Section 307C applies to a financial report for financial years that
start on or after 1 July 2004.
(2) Division 3 of Part 2M.4 applies to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a
financial year;
if the financial year begins on or after 1 July 2004.
(2A) The following provisions of the old Act continue to apply to an
audit of the financial report for a financial year, or an audit or
review of the financial report for a half-year in a financial year, if
the financial year begins before 1 July 2004:
(a) subsections 324(1) to (6) (inclusive) (other than paragraphs
324(1)(d) and (2)(d) and (e));
(b) subsection 324(11);
(c) subsection 327(4);
(d) section 331AA (other than paragraphs 331AA(1)(d) and
(2)(d) and (e)).
Subsection 331AA(4) of the old Act continues to apply as if the
references in that subsection to subsections 324(7), (8), (9), (10)
and (16) were omitted.
(3) Division 3 of Part 2M.4 applies to all relationships that exist on or
after the Schedule 1 commencement between an auditor and an
audited body (including a relationship that exists because of
circumstances that came into existence before the Schedule 1
commencement).
(4) Without limiting subsection (3), the items in the table in
subsection 324CH(1) apply to circumstances that exist on or after
the Schedule 1 commencement (including circumstances that exist
because of events that occurred before the Schedule 1
commencement).
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(5) Item 9 of the table in subsection 324CE(5) applies to a person who
ceases to be a professional employee of the individual auditor
concerned on or after the Schedule 1 commencement.
(6) Item 10 of the table in subsection 324CE(5) applies to a person
who ceases to own the business of the individual auditor concerned
on or after the Schedule 1 commencement.
(7) Item 11 of the table in subsection 324CF(5) applies to a person
who ceases to be a member of the audit firm concerned on or after
the Schedule 1 commencement.
(8) Item 12 of the table in subsection 324CF(5) applies to a person
who ceases to be a professional employee of the auditor firm
concerned on or after the Schedule 1 commencement.
(9) Item 11 of the table in subsection 324CG(9) applies to a person
who ceases to be an officer of the audit company concerned on or
after the Schedule 1 commencement.
(10) Item 12 of the table in subsection 324CG(9) applies to a person
who ceases to be a professional employee of the audit company
concerned on or after the Schedule 1 commencement.
(11) Section 324CI applies only if the relevant departure time for the
purposes of that section occurs on or after the Schedule 1
commencement.
(12) Section 324CJ applies only if the relevant departure time for the
purposes of that section occurs on or after the Schedule 1
commencement.
(13) Section 324CK applies to a person only if:
(a) the person is on the Schedule 1 commencement, or becomes
after the Schedule 1 commencement, a member of the audit
firm concerned or a director of the audit company concerned;
and
(b) becomes an officer of the audited body concerned on or after
the Schedule 1 commencement.
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Part 10.5 Transitional provisions relating to the Corporate Law Economic Reform
Program (Audit Reform and Corporate Disclosure) Act 2004
Section 1463
122 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1463 Audit reforms in Schedule 1 to the amending Act (auditor
rotation)
Division 5 of Part 2M.4 applies to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a
financial year;
if the financial year begins on or after 1 July 2006.
1464 Audit reforms in Schedule 1 to the amending Act (listed
company AGMs)
The amendments made by Part 5 of Schedule 1 to the amending
Act apply to AGMs at which financial reports for financial years
that commence on or after 1 July 2004 are considered.
1465 Schedule 2 to the amending Act (financial reporting)
(1) The amendments made by Part 1 of Schedule 2 to the amending
Act apply to directors’ declarations in relation to financial reports
for financial years that start on or after 1 July 2004.
(2) The amendments made by Part 2 of Schedule 2 to the amending
Act apply to directors’ reports for financial years that start on or
after 1 July 2004.
(3) The amendments made by Part 3 of Schedule 2 apply to financial
reports lodged with ASIC on or after 1 January 2004.
1466A Schedule 2A to the amending Act (true and fair view)
The amendments made by Schedule 2A to the amending Act apply
to directors’ reports for periods that start on or after 1 July 2004.
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Transitional provisions relating to the Corporate Law Economic Reform Program
(Audit Reform and Corporate Disclosure) Act 2004 Part 10.5
Section 1466
Corporations Act 2001 123
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1466 Schedule 3 to the amending Act (proportionate liability)
The amendments made to this Act and the Trade Practices Act
1974 by Schedule 3 to the amending Act apply to causes of action
that arise on or after the day on which that Schedule commences.
1467 Schedule 4 to the amending Act (enforcement)
(1) The amendments made by Part 2 of Schedule 4 apply to all
disclosures made on or after the day on which this Act receives the
Royal Assent (including a disclosure of information about
circumstances that arose before that day).
(2) Section 206BA applies to disqualifications from managing
corporations that occur because of convictions on or after the
Schedule 4 commencement.
(3) The amendments made by Part 4 of Schedule 4 to the amending
Act apply in relation to a contravention of a financial services civil
penalty provision that occurs on or after the day on which this Act
receives the Royal Assent.
1468 Schedule 5 to the amending Act (remuneration of directors and
executives)
(1) Subject to subsections (2) and (3), the amendments made by
Schedule 5 to the amending Act apply to financial years
commencing on or after 1 July 2004.
(2) The amendments made by items 4, 4A and 5 of Schedule 5 to the
amending Act apply to an agreement only if the agreement is
entered into on or after the Schedule 5 commencement.
(3) The amendments made by items 6, 7 and 8 of Schedule 5 to the
amending Act apply to remuneration reports for financial years that
start on or after 1 July 2004.
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Part 10.5 Transitional provisions relating to the Corporate Law Economic Reform
Program (Audit Reform and Corporate Disclosure) Act 2004
Section 1469
124 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1469 Schedule 6 to the amending Act (continuous disclosure)
(1) The amendments made by Part 1 of Schedule 6 to the amending
Act apply in relation to a contravention of subsection 674(2) or
675(2) that occurs on or after the day on which this Act receives
the Royal Assent.
(2) The amendments made by Part 2 of Schedule 6 to the amending
Act apply in relation to a failure by a disclosing entity to comply
with subsection 674(2) or 675(2) that occurs on or after the day on
which this Act receives the Royal Assent.
1470 Schedule 7 to the amending Act (disclosure rules)
(1) The amendments made by Part 1 of Schedule 7 to the amending
Act apply to a disclosure document for an offer of securities if the
disclosure document is lodged with ASIC on or after the day on
which this Act receives the Royal Assent.
(2) The amendments made by Part 2 of Schedule 7 to the amending
Act apply to a Product Disclosure Statement that is required to be
given on or after the day on which this Act receives the Royal
Assent.
(3) The amendment made by items 10 and 11 of Schedule 7 to the
amending Act applies to an offer of debentures that is made on or
after the day on which this Act receives the Royal Assent.
(4) Section 708A applies to an offer of securities for sale that is made
on or after the day on which this Act receives the Royal Assent.
(5) Section 1012DA applies to:
(a) a recommendation situation if the relevant conduct (within
the meaning of subsection 1012A(2)); and
(b) a sale situation if the relevant conduct (within the meaning of
subsection 1012C(2));
occurs on or after the day on which this Act receives the Royal
Assent.
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(Audit Reform and Corporate Disclosure) Act 2004 Part 10.5
Section 1471
Corporations Act 2001 125
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1471 Schedule 8 to the amending Act (shareholder participation and
information)
(1) The amendments made by items 1 to 6, 13 and 17 of Schedule 8 to
the amending Act apply to a notice of a meeting of a company’s
members that is given after 30 September 2004.
(2) The amendments made by items 7 to 12 and 14 of Schedule 8 to
the amending Act apply to an appointment of a proxy that is made
on or after the Schedule 8 commencement.
(2A) The amendment made by item 14A of Schedule 8 to the amending
Act applies to reports for financial years that start on or after 1 July
2004.
(3) The amendment made by item 15 of Schedule 8 to the amending
Act applies to a directors’ report for a financial year that starts on
or after 1 July 2004.
(4) The amendment made by item 16 of Schedule 8 to the amending
Act applies to a report referred to in subsection 314(1) for a
financial year that starts on or after 1 July 2004.
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Chapter 10 Transitional provisions
Part 10.8 Transitional provisions relating to the Corporations Amendment (Takeovers)
Act 2007
Section 1478
126 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.8—Transitional provisions relating to the
Corporations Amendment (Takeovers) Act
2007
1478 Application of amendments of the takeovers provisions
(1) The amendments made by Schedule 1 to the Corporations
Amendment (Takeovers) Act 2007 apply in relation to an
application under section 657C (including any review under
section 657EA of the decision made on the application) if:
(a) the application under section 657C is made on or after the
commencement of that Schedule; or
(b) the application under section 657C was made before the
commencement of that Schedule but the Panel has not finally
disposed of the application before the commencement of that
Schedule.
For the purposes of paragraph (b), the Panel does not finally
dispose of an application under section 657C until the Panel has
disposed of any review under section 657EA of the decision made
on the application.
(2) To avoid doubt, the amendments apply in relation to the
application even if the circumstances to which the application
relates arose before the commencement of Schedule 1 to the
Corporations Amendment (Takeovers) Act 2007.
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Transitional provisions relating to the Corporations Amendment (Insolvency) Act 2007
Part 10.9
Section 1479
Corporations Act 2001 127
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Part 10.9—Transitional provisions relating to the
Corporations Amendment (Insolvency) Act
2007
1479 Definition
In this Part:
amending Act means the Corporations Amendment (Insolvency)
Act 2007.
1480 Schedule 1 to the amending Act (improving outcomes for
creditors)
(1) The amendment made by item 4 of Schedule 1 to the amending
Act, in so far as it relates to a company subject to a deed of
company arrangement, applies if the administration that ended on
the execution of the deed began on or after the day on which that
item commences.
(2) The amendments made by items 5 to 9 of Schedule 1 to the
amending Act, in so far as they relate to the winding up of a
company, apply if the relevant date is on or after the day on which
those items commence.
(3) The amendments made by items 6 to 9 of Schedule 1 to the
amending Act, in so far as they relate to a company subject to a
deed of company arrangement, apply if the administration that
ended on the execution of the deed began on or after the day on
which those items commence.
(4) The amendments made by items 6 to 9 of Schedule 1 to the
amending Act, in so far as they relate to a company to which
section 433 applies, apply if the relevant date (within the meaning
of that section) is on or after the day on which those items
commence.
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Part 10.9 Transitional provisions relating to the Corporations Amendment (Insolvency)
Act 2007
Section 1480
128 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) The amendment made by item 20 of Schedule 1 to the amending
Act applies in relation to a receiver appointed on or after the day
on which that item commences.
(6) The amendments made by items 21, 24, 25, 26 and 28 of
Schedule 1 to the amending Act apply to the administrator of a
company if the administrator is appointed on or after the day on
which those items commence.
(7) The amendments made by items 30, 31, 32, 33, 35, 36, 37, 38, 39
and 40 of Schedule 1 to the amending Act apply in relation to the
liquidator of a company if the winding up of the company begins
on or after the day on which those items commence.
(8) The amendment made by item 52 of Schedule 1 to the amending
Act applies in relation to a compromise or arrangement if an
application relating to the compromise or arrangement was made
under subsection 411(1) on or after the day on which that item
commences.
(9) The amendments made by items 53, 54, 55, 56 and 57 of
Schedule 1 to the amending Act do not apply in relation to an
account opened before the day on which that item commences.
(10) The amendments made by items 59, 60, 61, 62 and 64 of
Schedule 1 to the amending Act apply in relation to a managing
controller of property of a corporation if:
(a) the managing controller is appointed on or after the day on
which those items commence; or
(b) the managing controller enters into possession, or takes
control, of property of the corporation on or after the day on
which those items commence.
(11) Despite the amendments made by items 65 and 66 of Schedule 1 to
the amending Act:
(a) subsection 427(1) continues to apply, in relation to an order
obtained, or an appointment made, before the day on which
those items commence, as if those amendments had not been
made; and
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(b) subsection 427(1A) continues to apply, in relation to an
appointment made before the day on which those items
commence, as if those amendments had not been made; and
(c) subsection 427(1B) continues to apply, in relation to an entry
into possession, or a taking of control, before the day on
which those items commence, as if those amendments had
not been made; and
(d) subsection 427(4) continues to apply, in relation to a
cessation before the day on which those items commence, as
if those amendments had not been made.
(12) The amendments made by items 70, 71 and 72 of Schedule 1 to the
amending Act, in so far as they relate to a company under
administration, apply if the administration begins on or after the
day on which those items commence.
(13) The amendment made by item 75 of Schedule 1 to the amending
Act applies to a meeting if the meeting is convened on or after the
day on which that item commences.
(14) The amendments made by items 87, 88, 92, 93 and 94 of
Schedule 1 to the amending Act apply to a transfer or alteration
that occurs on or after the day on which those items commence.
(15) The amendments made by items 91, 96, 97, 98, 99, 100, 102, 103,
104, 105, 106, 107, 108, 109, 110, 111 and 112 of Schedule 1 to
the amending Act apply in relation to a winding up of a company if
the winding up begins on or after the day on which those items
commence.
(16) Despite the repeal of subsection 506(4) by item 113 of Schedule 1
to the amending Act, that subsection continues to apply, in relation
to the liquidators of a company where the winding up of the
company began before the day on which that item commences, as
if that repeal had not happened.
(17) Sections 434D, 434E, 434F and 434G apply in relation to persons
appointed on or after the day on which those sections commence.
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Part 10.9 Transitional provisions relating to the Corporations Amendment (Insolvency)
Act 2007
Section 1481
130 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(18) Section 530 applies in relation to the liquidators of a company if
the winding up of the company begins on or after the day on which
that section commences.
(19) Section 530AA applies to persons appointed on or after the day on
which that section commences.
(20) Subsections 571(1) and 579E(1) of the amended Act apply in
relation to a group of 2 or more companies if the winding up of
each company in the group begins on or after the day on which
those subsections commence.
1481 Schedule 2 to the amending Act (deterring corporate
misconduct)
(1) The amendment made by item 2 of Schedule 2 to the amending Act
applies in relation to a compromise or arrangement if an
application relating to the compromise or arrangement was made
under subsection 411(1) on or after the day on which that item
commences.
(2) The amendment made by item 11 of Schedule 2 to the amending
Act applies in relation to a matter that appears to a person:
(a) during the 6-month period ending when that item
commences; or
(b) on or after the day on which that item commences;
where the relevant date is on or after the day on which that item
commences.
(3) Section 489A applies in relation to a section 486B warrant if the
warrant is issued on or after the day on which that section
commences.
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Part 10.9
Section 1482
Corporations Act 2001 131
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1482 Schedule 3 to the amending Act (improving regulation of
insolvency practitioners)
(1) The amendment made by item 7 of Schedule 3 to the amending Act
applies to an application for registration if the application was
made on or after the day on which that item commences.
(2) Despite the amendment made by item 9 of Schedule 3 to the
amending Act, subsection 1288(3) continues to apply, in relation to
a 3-year period ending before the day on which that item
commences, as if that amendment had not been made.
(3) Subsection 1288(3) as amended by item 9 of Schedule 3 to the
amending Act applies as follows:
(a) in the case of a person whose first 12 months of registration
ends on or after the day on which that item commences—that
subsection applies in relation to:
(i) the person’s first 12 months of registration; and
(ii) each subsequent period of 12 months;
(b) in the case of a person whose first 12 months of registration
ended before the day on which that item commences—that
subsection applies as if the reference in paragraph 1288(3)(a)
to the day on which the person’s registration begins (the
initial registration day) were a reference to the last
anniversary of the initial registration day that occurred before
the day on which that item commences.
For this purpose, a person’s first 12 months of registration is the
period of 12 months beginning on the day on which the person’s
registration begins.
(4) The amendment made by item 12 of Schedule 3 to the amending
Act applies in relation to a decision made on or after the day on
which that item commences.
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Part 10.9 Transitional provisions relating to the Corporations Amendment (Insolvency)
Act 2007
Section 1483
132 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1483 Schedule 4 to the amending Act (fine-tuning voluntary
administration)
(1) The amendments made by items 1, 5, 6, 7, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 20, 21, 22, 39, 40, 45, 49, 51, 52, 53, 54, 55, 56, 57,
59, 60, 61 and 62 of Schedule 4 to the amending Act, in so far as
they relate to a company under administration, apply if the
administration begins on or after the day on which those items
commence.
(2) The amendments made by items 2, 3 and 4 of Schedule 4 to the
amending Act apply to an appointment of an administrator if the
appointment is made on or after the day on which those items
commence.
(3) The amendment made by item 8 of Schedule 4 to the amending Act
applies to a transfer or alteration that occurs on or after the day on
which that item commences.
(4) The amendments made by items 23, 24, 25, 26 and 28 of
Schedule 4 to the amending Act, in so far as they apply to a
company that is, or is proposed to be, subject to a deed of company
arrangement, apply if the administration that ends, or is to end, on
the execution of the deed, began on or after the day on which those
items commence.
(5) The amendments made by items 27, 29, 30, 31, 32, 33, 34, 35, 36,
39, 40, 43, 44, 46, 55, 56 and 57 of Schedule 4 to the amending
Act, in so far as they relate to a company subject to a deed of
company arrangement, apply if the administration that ended on
the execution of the deed began on or after the day on which those
items commence.
(6) Items 37 and 38 of Schedule 4 to the amending Act apply in
relation to a company if the winding up of the company begins on
or after the day on which those items commence.
(7) The amendments made by items 41 and 42 of Schedule 4 to the
amending Act apply in relation to a company subject to a deed
arrangement if the administration that ended on the execution of
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Part 10.9
Section 1483
Corporations Act 2001 133
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the deed began on or after the day on which those items
commence.
(8) The amendments made by items 63, 65, 66, 67, 69 and 70 of
Schedule 4 to the amending Act, in so far as they relate to the
winding up of a company, apply if the relevant date is on or after
the day on which those items commence.
(9) Section 440BA, in so far as it relates to a company under
administration, applies if the administration begins on or after the
day on which that section commences.
Note: Section 440BA was repealed by the Personal Property Securities
(Corporations and Other Amendments) Act 2010, and was replaced
with a new section 440B incorporating the same substantive rules.
Section 1507 preserves the operation of this subsection.
(10) Section 440BB does not apply to distress for rent that began to be
carried out before the day on which that section commences.
Note: Section 440BB was repealed by the Personal Property Securities
(Corporations and Other Amendments) Act 2010, and was replaced
with a new section 440B incorporating the same substantive rules.
Section 1507 preserves the operation of this subsection.
(11) Subsections 442C(7) and (8), in so far as they relate to a company
under administration, apply if the administration begins on or after
the day on which those subsections commence.
(12) Subsections 442C(7) and (8), in so far as they relate to a company
subject to a deed of company arrangement, apply if the
administration that ended on the execution of the deed began on or
after the day on which those subsections commence.
(13) Section 446C applies in relation to a company as follows:
(a) if the company was under administration immediately before
the liquidation time referred to in that section—the
administration begins on or after the day on which that
section commences;
(b) if the company was subject to a deed of company
arrangement immediately before the liquidation time referred
to in that section—the administration that ended on the
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Part 10.9 Transitional provisions relating to the Corporations Amendment (Insolvency)
Act 2007
Section 1483
134 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
execution of the deed began on or after the day on which that
section commences.
(14) Subsection 588FE(2A) applies in relation to a company if the
administration referred to paragraph 588FE(2A)(b) begins on or
after the day on which that subsection commences.
(15) Subsection 588FE(2B) applies in relation to a company if the
administration that ended on the execution of the deed of company
arrangement referred to in paragraph 588FE(2B)(b) began on or
after the day on which that subsection commences.
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Transitional provisions relating to the Corporations Amendment (Short Selling) Act
2008 Part 10.10
Section 1484
Corporations Act 2001 135
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.10 Transitional provisions relating to the
Corporations Amendment (Short Selling)
Act 2008
1484 Declarations under paragraph 1020F(1)(c) relating to short
selling
(1) To avoid doubt, an instrument mentioned in subsection (2) that was
made at a particular time was validly made under
paragraph 1020F(1)(c) at that time.
(2) The instruments are as follows:
(a) ASIC Class Order [CO 08/751], registered on the Federal
Register of Legislative Instruments on 22 September 2008;
(b) ASIC Class Order [CO 08/752], registered on the Federal
Register of Legislative Instruments on 22 September 2008;
(c) ASIC Class Order [CO 08/753], registered on the Federal
Register of Legislative Instruments on 22 September 2008;
(d) ASIC Class Order [CO 08/763], registered on the Federal
Register of Legislative Instruments on 23 September 2008;
(e) ASIC Class Order [CO 08/801], registered on the Federal
Register of Legislative Instruments on 24 October 2008.
(3) To avoid doubt, an instrument (if any) that:
(a) was made at a time:
(i) after 24 October 2008; and
(ii) before the commencement of this section; and
(b) is of substantially the same nature as the instruments
mentioned in subsection (2); and
(c) was registered on the Federal Register of Legislative
Instruments:
(i) after 24 October 2008; and
(ii) before the commencement of this section;
was validly made under paragraph 1020F(1)(c) at that time.
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Chapter 10 Transitional provisions
Part 10.10 Transitional provisions relating to the Corporations Amendment (Short
Selling) Act 2008
Section 1484
136 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) This section applies on and after 19 September 2008.
(5) In this section:
Federal Register of Legislative Instruments means the Federal
Register of Legislative Instruments established under the
Legislative Instruments Act 2003.
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10.11
Section 1485
Corporations Act 2001 137
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.11—Transitional provisions relating to the
Corporations Amendment (No. 1) Act 2009
1485 Application of new subsection 206B(6)
The amendments made by item 2 of Schedule 1 to the
Corporations Amendment (No. 1) Act 2009 apply to an order made
by a court of a foreign jurisdiction on or after the commencement
of that item.
1486 Application of new section 206EAA
The amendments made by item 3 of Schedule 1 to the
Corporations Amendment (No. 1) Act 2009 apply to a
disqualification under a law of a foreign jurisdiction that arises on
or after the commencement of that item.
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Chapter 10 Transitional provisions
Part 10.12 Transitional provisions relating to the Corporations Legislation Amendment
(Financial Services Modernisation) Act 2009
Division 1 Transitional provisions relating to Schedule 1 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act 2009
Section 1487
138 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.12—Transitional provisions relating to the
Corporations Legislation Amendment
(Financial Services Modernisation) Act
2009
Division 1—Transitional provisions relating to Schedule 1
to the Corporations Legislation Amendment
(Financial Services Modernisation) Act 2009
1487 Definitions
(1) In this Division:
amended Corporations Act means this Act as in force after
commencement.
amending Schedule means Schedule 1 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act
2009.
commencement means the day on which the amending Schedule
commences.
margin lending financial service has the meaning given by
subsection 1488(2).
(2) Terms that are used in this Division and that are defined in
Division 2 of Part 7.1 have the same meanings as they are given by
that Division.
1488 Application of amendments—general
(1) The amendments made by the amending Schedule apply in relation
to a margin lending financial service that is provided on or after the
day that is 12 months after commencement.
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(2) A margin lending financial service is:
(a) a dealing in a margin lending facility that was issued after
commencement; or
(b) the provision of financial product advice in relation to a
margin lending facility that was issued after commencement.
1489 Applications of amendments—application for and grant of
licences etc. authorising margin lending financial services
(1) Despite section 1488, during the period that:
(a) starts at the start of the day that is one month after
commencement; and
(b) ends at the end of the day before the day that is 12 months
after commencement;
subsections (2) and (3) apply.
(2) A person may:
(a) apply under section 913A of the amended Corporations Act
for an Australian financial services licence that authorises the
person to provide a margin lending financial service; and
(b) apply under section 914A of the amended Corporations Act
for a variation of a condition of an Australian financial
services licence to authorise the person to provide a margin
lending financial service.
(3) ASIC may:
(a) grant an Australian financial services licence to a person
under section 913B of the amended Corporations Act that
authorises the person to provide a margin lending financial
service, and otherwise deal with that licence (for example, by
suspending or cancelling it) under Chapter 7; and
(b) impose or vary conditions on an Australian financial services
licence under section 914A of the amended Corporations Act
to authorise a person to provide a margin lending financial
service, and otherwise deal with those conditions (for
example, by revoking or varying them) under Chapter 7;
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Section 1490
140 Corporations Act 2001
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but the Australian financial services licence, condition, or variation
of a condition, does not take effect until the day that is 12 months
after commencement.
1490 Application of amendments—between 6 and 12 months after
commencement
(1) Despite section 1488, the amendments made by the amending
Schedule apply in relation to a margin lending financial service
that is provided during the period that:
(a) starts at the start of the day that is 6 months after
commencement; and
(b) ends at the end of the day before the day that is 12 months
after commencement;
but only if, at the time the margin lending financial service is
provided, subsection (2) or (3) applies to:
(c) the person who provides the margin lending financial service;
and
(d) if the margin lending financial service is provided on behalf
of another person—the person on whose behalf the margin
lending financial service is provided.
(2) This subsection applies to a person if the person is an Australian
financial services licensee and either:
(a) has not applied for a condition of the licence to be varied to
authorise the person to provide the margin lending financial
service; or
(b) has applied for a condition of the licence to be varied to
authorise the person to provide the margin lending financial
service, but has been notified by ASIC that the application
has been refused.
(3) This subsection applies to a person if the person is not an
Australian financial services licensee and either:
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Section 1491
Corporations Act 2001 141
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(a) has not applied for an Australian financial services licence
that authorises the person to provide the margin lending
financial service; or
(b) has applied for an Australian financial services licence that
authorises the person to provide the margin lending financial
service, but has been notified by ASIC that the application
has been refused.
1491 Acquisition of property
(1) Despite section 1350, a provision of this Division does not apply,
and is taken never to have applied, to the extent that the operation
of the provision would result in an acquisition of property from a
person otherwise than on just terms.
(2) In subsection (1), acquisition of property and just terms have the
same meanings as in paragraph 51(xxxi) of the Constitution.
1492 Regulations
(1) The regulations may make provisions of a transitional, application
or saving nature relating to this Division and the amendments and
repeals made by the amending Schedule.
(2) Without limiting subsection (1), regulations made for the purpose
of that subsection may modify provisions of this Act.
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Division 2 Transitional provisions relating to Schedule 2 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act 2009
Section 1493
142 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Transitional provisions relating to Schedule 2
to the Corporations Legislation Amendment
(Financial Services Modernisation) Act 2009
1493 Definitions
In this Division:
amending Schedule means Schedule 2 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act
2009.
commencement means the commencement of the amending
Schedule.
modify includes make additions, omissions and substitutions.
1494 Transitional provisions relating to limit on control of trustee
companies
(1) This section applies in relation to a person and a trustee company
if, immediately before the commencement of Part 5D.5, the
percentage (the pre-commencement percentage) of the person’s
voting power in the trustee company exceeded 15%.
(2) Subject to subsection (3), Part 5D.5 applies in relation to the
person and the trustee company as if paragraph 601VAA(a)
specified the pre-commencement percentage (rather than 15%).
(3) If, after the commencement of Part 5D.5, the percentage of the
person’s voting power in the trustee company is reduced, the
following provisions have effect from the time of the reduction:
(a) if the reduced percentage exceeds 15%—Part 5D.5 applies in
relation to the person and the trustee company as if
paragraph 601VAA(a) specified the reduced percentage
(rather than 15%);
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Section 1495
Corporations Act 2001 143
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(b) if the reduced percentage is 15% or less—this section ceases
to apply, and never again applies, in relation to the person
and the trustee company.
1495 Transitional provisions relating to the amendments of
Chapter 7
(1) This section applies to each company:
(a) that is a trustee company immediately after the
commencement of the first regulations made for the purpose
of paragraph 601RAB(1)(b); and
(b) that, at that time, holds an Australian financial services
licence.
(2) During the period of 6 months starting on the commencement of
those regulations:
(a) the company’s Australian financial services licence is taken
to cover the provision by the company of traditional trustee
company services; and
(b) section 601TAB does not apply in relation to the company;
and
(c) Part 7.7 does not apply in relation to traditional trustee
company services provided by the company.
Note: If the company wants to continue to provide traditional trustee
company services after the end of the 6 month period, it will (before
the end of that period) need to apply to ASIC to have the conditions of
its licence varied to cover those services.
(3) To avoid doubt, subsection (2) does not limit ASIC’s powers under
Part 7.6 (whether during or after the period of 6 months) in relation
to the company’s Australian financial services licence.
Note: For example, ASIC may (under Subdivision B of Division 4 of
Part 7.6) impose or vary licence conditions, or may (under
Subdivision C of Division 4 of Part 7.6) vary, cancel or suspend the
licence.
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Division 2 Transitional provisions relating to Schedule 2 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act 2009
Section 1496
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1496 General power for regulations to deal with transitional matters
(1) The regulations may make provisions of a transitional, application
or saving nature in relation to any of the following:
(a) the transition from the regime provided for by laws of the
States and Territories (as in force before commencement)
relating to trustee companies to the regime provided for by
this Act as amended by the amending Schedule;
(b) the amendments and repeals made to this Act by the
amending Schedule.
(2) Without limiting subsection (1), regulations made for the purpose
of that subsection may modify provisions of this Act.
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Transitional provisions relating to Schedule 3 to the Corporations Legislation
Amendment (Financial Services Modernisation) Act 2009 Division 3
Section 1497
Corporations Act 2001 145
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Transitional provisions relating to Schedule 3
to the Corporations Legislation Amendment
(Financial Services Modernisation) Act 2009
1497 Definitions
In this Division:
amending Schedule means Schedule 3 to the Corporations
Legislation Amendment (Financial Services Modernisation) Act
2009.
1498 Application of amendments
(1) The amendment made by item 1 of the amending Schedule applies
to promissory notes made after the commencement of that item.
(2) The amendment made by item 2 of the amending Schedule applies
to trustees appointed on or after the commencement of that item.
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Part 10.13 Transitional provisions relating to the Personal Property Securities
(Corporations and Other Amendments) Act 2009
Section 1499
146 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.13—Transitional provisions relating to the
Personal Property Securities (Corporations
and Other Amendments) Act 2009
1499 Definitions
In this Part:
amending Act means the Personal Property Securities
(Corporations and Other Amendments) Act 2010.
commencement time means the time item 187 of Schedule 1 to the
amending Act commences.
Note: Item 187 of Schedule 1 to the amending Act inserts sections 1499 to
1510. The item commences at the registration commencement time
within the meaning of section 306 of the Personal Property Securities
Act 2009 (as provided by section 2 of the amending Act).
registrable charge means a charge created before the
commencement time that was a registrable charge within the
meaning of section 261 when it was created.
1500 Charges, liens and pledges—continuation of restriction of
references
(1) This section applies despite the amendment of this Act made by
item 10 of Schedule 1 to the amending Act if a reference to a
charge in a provision of this Act, as in force immediately before
the commencement time, did not include a reference to a lien or a
pledge, or any other particular form of security over the property.
Note: Item 10 of Schedule 1 to the amending Act inserts the definition of
security interest in section 51A.
(2) In its application in relation to an interest in property created or
arising before the commencement time, or under an agreement or
instrument made before that time, the reference in that provision
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Section 1501
Corporations Act 2001 147
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(as amended by the amending Act) to a security interest does not
include a reference to a lien or a pledge, or that particular form of
security over the property, as the case may be.
1501 Charges, liens, pledges and third party property—application
The amendments made by Part 1 (new concepts) of Schedule 1 to
the amending Act apply:
(a) in relation to charges, liens and pledges, whether created or
arising before, at or after the commencement time; and
(b) in relation to property owned, occupied or used by, or in the
possession of, a corporation, whether the ownership,
occupation, use or possession started before, at or after the
commencement time.
1501A References to the whole or substantially the whole of a
company’s property
(1) This section applies to a transitional security interest within the
meaning of the Personal Property Securities Act 2009.
Note: For the meaning of transitional security interest, see section 308 of
the Personal Property Securities Act 2009.
(2) In working out for the purposes of this Act whether the security
interest covers the whole, or substantially the whole, of the
company’s property at a time (the later time) that is at or after the
commencement time, disregard any of the company’s property that
is PPSA retention of title property of the company at the later time.
Note: This Act gives certain powers to secured parties who hold security
interests over the whole, or substantially the whole, of a company’s
property (for example, the power to appoint an administrator under
section 436C).
1501B Constructive notice of registrable charges
Section 130 does not apply in relation to a document that has been
lodged with ASIC to the extent that the document relates to a
registrable charge.
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Section 1502
148 Corporations Act 2001
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Note: Section 130 provides that a person is not taken to have information
about a company merely because the information is available to the
public from ASIC.
1502 Repeal of Chapter 2K (charges)—general
(1) For the period of 7 years after the commencement time, the
amendments made by Part 2 of Schedule 1 to the amending Act do
not apply in relation to registrable charges.
Note: The amendments made by Part 2 of Schedule 1 to the amending Act
repeal Chapter 2K and make consequential amendments to other
provisions.
(2) This section applies subject to sections 1503 to 1506.
1503 Repeal of Chapter 2K (charges)—cessation of requirements in
relation to documents or notices
Scope
(1) This section applies if, immediately before the commencement
time, a document (however described) or notice is required to be
lodged or given by a company or other person under one of the
following provisions:
(a) paragraph 263(1)(a), (b) or (c);
(b) paragraph 263(2)(b);
(c) subsection 263(3);
(d) paragraph 264(1)(a) or (b);
(e) paragraph 265(6)(b);
(f) paragraph 268(1)(a) or (b);
(g) subsection 268(2);
(h) subsection 269(1) or (2);
(i) subsection 270(4).
Requirements that stop applying
(2) Whichever of the following requirements would otherwise apply
stops applying at the commencement time:
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(a) the requirement to lodge or give the document or notice;
(b) the requirement for ASIC to enter or delete particulars in the
Register in relation to the document or notice.
1504 Repeal of Chapter 2K (charges)—application of section 266
(1) Subject to this section, section 266 stops applying at the
commencement time in relation to registrable charges.
(2) However, if a registrable charge is void under section 266
immediately before the commencement time, that section continues
to apply in relation to the charge, subject to subsection (3) of this
section.
(3) The Court may, on such terms and conditions as seem to the Court
just and expedient, by order, declare a registrable charge not to be,
and never to have been, void under subsection 266(1) or (3), if:
(a) before the commencement time, the charge is void under
subsection 266(1) or (3) (as the case requires); and
(b) either:
(i) an application is made to the Court under
subsection 266(4) before the commencement time for an
extension of the relevant period, and as at the
commencement time, the Court had not made a decision
in relation to the application; or
(ii) an application is made to the Court at or after the
commencement time for an order under this subsection;
and
(c) the Court is satisfied of the matters set out in
subsection 266(4).
1505 Repeal of Chapter 2K (charges)—cessation of company
registration requirements
The requirements in section 271 (company documentation and
registration of charges) stop applying in relation to registrable
charges at the commencement time.
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Section 1506
150 Corporations Act 2001
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1506 Repeal of Chapter 2K (charges)—priority between registrable
charges
At and after the commencement time, registrable charges have the
priority between themselves that they would have had under this
Act as in force immediately before the commencement time,
subject to Chapter 9 (Transitional provisions) of the Personal
Property Securities Act 2009.
1507 New section 440B (restrictions on third party property rights)
The repeal of sections 440B, 440BA, 440BB and 440C by
item 156 of Schedule 1 to the amending Act does not affect the
operation of subsections 1483(9) and (10) in relation to:
(a) the administration of a company that began at or after the
start of the day section 440BA commenced, and before the
commencement time within the meaning of section 1499; or
(b) distress for rent that began to be carried out before the day
section 440BB commenced.
Note: Sections 440BA and 440BB commenced on 31 December 2007.
1508 New subsection 442CB(1) (administrator’s duty of care)
The amendment of this Act by item 135 of Schedule 1 to the
amending Act does not apply in relation to the exercise of a power
of sale if the power began to be exercised before the
commencement time.
Note: Item 135 of Schedule 1 to the amending Act repealed
subsection 442CB(1) and substituted a new subsection.
1509 New section 588FP (security interests in favour of an officer of
a company etc. void)
Section 588FP does not apply in relation to a registrable charge.
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Section 1510
Corporations Act 2001 151
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1510 Winding up applied for before the commencement time
Subject to this Part, the amendments made by the amending Act do
not apply in relation to the winding up of a company under
Part 5.4, Part 5.4A or Part 5.4B, or the subsequent liquidation of
the company, if the application for winding up for the purposes of
those Parts is made before the commencement time.
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Part 10.14 Transitional provisions relating to the Corporations Amendment (Corporate
Reporting Reform) Act 2010
Section 1510A
152 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.14—Transitional provisions relating to the
Corporations Amendment (Corporate
Reporting Reform) Act 2010
1510A Definition
In this Part:
amending Act means the Corporations Amendment (Corporate
Reporting Reform) Act 2010.
1510B Application of Part 1 of Schedule 1 to the amending Act
(1) The amendments made by items 1 to 4, items 11 to 16, items 18 to
23, items 29 and 30, items 32 to 42, items 45 to 47 and items 49 to
51 of Schedule 1 to the amending Act apply in relation to a
company, registered scheme or disclosing entity for financial years
of the company, registered scheme or disclosing entity ending on
or after 30 June 2010.
(1A) The amendment made by item 6 of Schedule 1 to the amending Act
applies in relation to a company limited by guarantee incorporated
on or after the commencement of that item.
(2) The amendments made by items 7 and 48 of Schedule 1 to the
amending Act apply in relation to dividends declared on or after
the commencement of those items.
(3) The amendments made by items 8, 9 and 10 of Schedule 1 to the
amending Act apply in relation to cancellations of paid-up share
capital that occur on or after the commencement of those items.
(4) Despite the amendment made by item 17 of Schedule 1 to the
amending Act, accounting standards made for the purposes of
subsection 295(2) of this Act that were in force immediately before
the commencement of that item continue in force, after that
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Section 1510B
Corporations Act 2001 153
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commencement, as if they were made for the purposes of
subsection 295(2) of this Act as amended by that item.
(5) The amendment made by item 17 of Schedule 1 to the amending
Act applies to a report of a company, registered scheme or
disclosing entity for financial years of the company, registered
scheme or disclosing entity ending on or after 30 June 2010.
(6) The amendments made by items 24 to 28 of Schedule 1 to the
amending Act apply in relation to a company, registered scheme or
disclosing entity for financial years of the company, registered
scheme or disclosing entity ending on or after 30 June 2011.
(7) Despite the amendment made by item 31 of Schedule 1 to the
amending Act, accounting standards made for the purposes of
subsection 303(2) of this Act that were in force immediately before
the commencement of that item continue in force, after that
commencement, as if they were made for the purposes of
subsection 303(2) of this Act as amended by that item.
(8) The amendment made by item 31 of Schedule 1 to the amending
Act applies to a report of a disclosing entity for half-years of the
disclosing entity ending on or after 30 June 2010.
(9) The amendments made by items 43 and 44 of Schedule 1 to the
amending Act apply where the previous financial year of the
company, registered scheme or disclosing entity ends on or after
30 June 2010.
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Part 10.15 Transitional provisions relating to the Corporations Amendment (Financial
Market Supervision) Act 2010
Section 1511
154 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.15—Transitional provisions relating to the
Corporations Amendment (Financial
Market Supervision) Act 2010
1511 Definition
In this Part:
amending Schedule means Schedule 1 to the Corporations
Amendment (Financial Market Supervision) Act 2010.
1512 Application of amendments
(1) The amendments made by items 2, 5 to 11, 14, 17 and 18 of the
amending Schedule apply in relation to Australian market licences
granted before, on or after the commencement of the amending
Schedule.
(2) The amendments made by items 12 and 13 of the amending
Schedule apply in relation to applications for an Australian market
licence:
(a) that were made but had not yet been decided before the day
on which the amending Schedule commences; and
(b) that are made on or after the commencement of the amending
Schedule.
1513 Regulations may deal with transitional matters
(1) The regulations may make provisions of a transitional, application
or saving nature relating to the amendments and repeals made by
the amending Schedule.
(2) Without limiting subsection (1), regulations made for the purpose
of that subsection may modify provisions of this Act.
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10.16
Section 1516
Corporations Act 2001 155
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Part 10.16—Transitional provisions relating to the
Corporations Amendment (No. 1) Act 2010
1516 Application of amendments
(1) The amendments made by items 4 to 8 of Schedule 1 to the
Corporations Amendment (No. 1) Act 2010 apply in relation to
requests made after the commencement of that Schedule to inspect,
or receive a copy of, a register.
(2) The amendment made by item 9 of that Schedule applies in
relation to information obtained from a register before, at or after
the commencement of that Schedule.
(3) The amendments made by items 12 to 14 of that Schedule apply in
relation to offers made after the commencement of that Schedule.
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Part 10.17 Transitional provisions relating to the Corporations Amendment (Improving
Accountability on Director and Executive Remuneration) Act 2011
Section 1517
156 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.17—Transitional provisions relating to the
Corporations Amendment (Improving
Accountability on Director and Executive
Remuneration) Act 2011
1517 Application of Subdivision B of Division 1 of Part 2D.3
Subdivision B of Division 1 of Part 2D.3 applies in relation to the
setting of board limits on or after 1 July 2011.
1518 Application of sections 206J, 206K, 206L and 206M
(1) Section 206J applies to entry into arrangements on or after 1 July
2011, whether the remuneration was for services rendered before,
on or after that day.
(2) Section 206K applies to contracts entered into on or after 1 July
2011.
(3) Sections 206L and 206M apply to recommendations made under
contracts entered into on or after 1 July 2011.
1519 Application of subsection 249L(2)
Subsection 249L(2) as substituted by the Corporations Amendment
(Improving Accountability on Director and Executive
Remuneration) Act 2011 applies in relation to AGMs held on or
after 1 July 2011.
1520 Application of section 250BB
Section 250BB applies to voting on or after 1 August 2011,
whether the proxy was appointed before, on or after that day.
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Section 1521
Corporations Act 2001 157
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1521 Application of section 250BC
Section 250BC applies to appointments of proxies made on or after
1 August 2011.
1522 Application of section 250BD
Section 250BD applies in relation to voting on or after 1 August
2011, whether the matter that is the subject of the resolution relates
to a time before, on or after that day.
1523 Application of subsections 250R(4) to (10)
Subsections 250R(4), (5), (6), (7), (8), (9) and (10) apply in
relation to voting on or after 1 August 2011, whether the
remuneration report concerned relates to a financial year starting
before, on or after that day.
1524 Application of Division 9 of Part 2G.2
Division 9 of Part 2G.2 applies in relation to AGMs held on or
after 1 July 2011.
Note: This has the effect that the Division can apply in relation to a
company only if both of its 2 most recent AGMs have been held on or
after 1 July 2011.
1525 Application of amendments of section 300A
(1) The amendments of section 300A made by the Corporations
Amendment (Improving Accountability on Director and Executive
Remuneration) Act 2011 apply in relation to remuneration reports
for financial years starting on or after 1 July 2011.
(2) Subsection (1) does not apply to the repeal of
subsection 300A(1AAA).
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Part 10.17 Transitional provisions relating to the Corporations Amendment (Improving
Accountability on Director and Executive Remuneration) Act 2011
Section 1525
158 Corporations Act 2001
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Saving of regulations made for paragraph 300A(1)(f)
(3) The amendment of paragraph 300A(1)(f) made by the
Corporations Amendment (Improving Accountability on Director
and Executive Remuneration) Act 2011 does not affect the validity
of any regulations in force for the purposes of that paragraph
immediately before that amendment.
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Transitional and application provisions relating to the Future of Financial Advice
Measures Part 10.18
Provisions relating to the Corporations Amendment (Further Future of Financial Advice
Measures) Act 2012 Division 1
Section 1526
Corporations Act 2001 159
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Part 10.18—Transitional and application provisions
relating to the Future of Financial Advice
Measures
Division 1—Provisions relating to the Corporations
Amendment (Further Future of Financial Advice
Measures) Act 2012
1526 Definitions
(1) In this Part:
amending Act means the Corporations Amendment (Further
Future of Financial Advice Measures) Act 2012.
custodial arrangement has the same meaning as it has in
subsection 1012IA(1), subject to subsection (2).
platform operator means the provider of a custodial arrangement,
or custodial arrangements.
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
(2) The definition of custodial arrangement in subsection 1012IA(1)
is to be read as if the reference in that definition to an instruction
included a reference to:
(a) a direction of the kind mentioned in paragraph 58(2)(d) or
(da) of the Superannuation Industry (Supervision) Act 1993
that will involve the acquisition of a particular financial
product, or a financial product of a particular kind; and
(b) a direction of the kind mentioned in subsection 52B(4) of the
Superannuation Industry (Supervision) Act 1993 that will
involve the acquisition of a particular financial product, or a
financial product of a particular kind.
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Part 10.18 Transitional and application provisions relating to the Future of Financial
Advice Measures
Division 1 Provisions relating to the Corporations Amendment (Further Future of
Financial Advice Measures) Act 2012
Section 1527
160 Corporations Act 2001
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1527 Application of best interests obligations
(1) The following apply in relation to the provision of personal advice
to a person as a retail client on or after the application day (whether
or not the advice was sought before that day):
(a) Division 2 of Part 7.7A, as inserted by item 23 of Schedule 1
to the amending Act;
(b) the amendments made by items 6, 7, 8, 9 and 34 of
Schedule 1 to the amending Act.
(2) In this section:
application day, in relation to a financial services licensee or a
person acting as a representative of a financial services licensee,
means:
(a) if the financial services licensee has lodged notice with ASIC
in accordance with subsection 967(1) that the obligations and
prohibitions imposed under Part 7.7A are to apply to the
licensee and persons acting as representatives of the licensee
on and from the day specified in the notice—the day
specified in the notice; or
(b) if the person has not lodged such a notice—1 July 2013.
1528 Application of ban on conflicted remuneration
(1) Subject to subsections (2) and (3), Division 4 of Part 7.7A, as
inserted by item 24 of Schedule 1 to the amending Act, does not
apply to a benefit given to a financial services licensee, or a
representative of a financial services licensee, if:
(a) the benefit is given under an arrangement entered into before
the application day; and
(b) the benefit is not given by a platform operator.
(2) The regulations may prescribe circumstances in which that
Division applies, or does not apply, to a benefit given to a financial
services licensee or a representative of a financial services licensee.
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Measures) Act 2012 Division 1
Section 1529
Corporations Act 2001 161
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(3) Despite subsection (1), that Division does not apply to a benefit
given to a financial services licensee, or a representative of a
financial services licensee, to the extent that the operation of that
Division would result in an acquisition of property (within the
meaning of paragraph 51(xxxi) of the Constitution) from a person
otherwise than on just terms (within the meaning of that paragraph
of the Constitution).
(4) In this section:
application day:
(a) in relation to a financial services licensee or a person acting
as a representative of a financial services licensee, means:
(i) if the financial services licensee has lodged notice with
ASIC in accordance with subsection 967(1) that the
obligations and prohibitions imposed under Part 7.7A
are to apply to the licensee and persons acting as
representatives of the licensee on and from a day
specified in the notice—the day specified in the notice;
or
(ii) in any other case—1 July 2013; and
(b) in relation to any other person who would be subject to an
obligation or prohibition under Division 4 of Part 7.7A if it
applied, means:
(i) if a notice has been lodged with ASIC in accordance
with subsection 967(3) that the obligations and
prohibitions imposed under Part 7.7A are to apply to the
person on and from a day specified in the notice—the
day specified in the notice; or
(ii) in any other case—1 July 2013.
1529 Application of ban on other remuneration—volume-based
shelf-space fees
(1) Subject to subsection (2), Subdivision A of Division 5 of
Part 7.7A, as inserted by item 24 of Schedule 1 to the amending
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Part 10.18 Transitional and application provisions relating to the Future of Financial
Advice Measures
Division 1 Provisions relating to the Corporations Amendment (Further Future of
Financial Advice Measures) Act 2012
Section 1530
162 Corporations Act 2001
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Act, does not apply to a benefit given to a financial services
licensee, or an RSE licensee, under an arrangement entered into
before the application day.
(2) The regulations may prescribe circumstances in which that
Subdivision applies to a benefit given to a financial services
licensee, or an RSE licensee, under an arrangement entered into
before the application day.
(3) In this section:
application day:
(a) in relation to a financial services licensee or a person acting
as a representative of a financial services licensee, means:
(i) if the financial services licensee has lodged notice with
ASIC in accordance with subsection 967(1) that the
obligations and prohibitions imposed under Part 7.7A
are to apply to the licensee and persons acting as
representatives of the licensee on and from a day
specified in the notice—the day specified in the notice;
or
(ii) in any other case—1 July 2013; and
(b) in relation to any other person who would be subject to an
obligation or prohibition under Subdivision A of Division 5
of Part 7.7A if it applied, means:
(i) if a notice has been lodged with ASIC in accordance
with subsection 967(3) that the obligations and
prohibitions imposed under Part 7.7A are to apply to the
person on and from the day specified in the notice—the
day specified in the notice; or
(ii) in any other case—1 July 2013.
1530 Regulations do not apply where an acquisition of property
otherwise than on just terms would result
Regulations made for the purposes of subsection 1528(2) or
1529(2) do not apply to the extent that the operation of the
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Measures Part 10.18
Provisions relating to the Corporations Amendment (Further Future of Financial Advice
Measures) Act 2012 Division 1
Section 1531
Corporations Act 2001 163
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regulations would result in an acquisition of property (within the
meaning of paragraph 51(xxxi) of the Constitution) from a person
otherwise than on just terms (within the meaning of that
paragraph).
1531 Application of ban on other remuneration—asset-based fees on
borrowed amounts
(1) Subdivision B of Division 5 of Part 7.7A, as inserted by item 24 of
Schedule 1 to the amending Act, applies to asset-based fees
charged on or after the application day on borrowed amounts, but
only to the extent that those amounts are used or to be used to
acquire financial products on or after that day.
(2) Despite subsection (1), that Subdivision does not apply to an
asset-based fee charged on or after the application day, to the
extent that the operation of that Subdivision would result in an
acquisition of property (within the meaning of paragraph 51(xxxi)
of the Constitution) from a person otherwise than on just terms
(within the meaning of that paragraph of the Constitution).
(3) In this section:
application day, in relation to a financial services licensee or a
person acting as a representative of a financial services licensee,
means:
(a) if the financial services licensee has lodged notice with ASIC
in accordance with subsection 967(1) that the obligations and
prohibitions imposed under Part 7.7A are to apply to the
licensee and persons acting as representatives of the licensee
on and from the day specified in the notice—the day
specified in the notice; or
(b) if the person has not lodged such a notice—1 July 2013.
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Part 10.18 Transitional and application provisions relating to the Future of Financial
Advice Measures
Division 2 Provisions relating to the Corporations Amendment (Financial Advice
Measures) Act 2016
Section 1531A
164 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Provisions relating to the Corporations
Amendment (Financial Advice Measures) Act
2016
1531A Definitions
In this Division:
commencement day means the day on which Schedule 1 to the
Corporations Amendment (Financial Advice Measures) Act 2016
commences.
1531B Best interests obligation
The amendments made by items 12, 14A and 16 of Schedule 1 to
the Corporations Amendment (Financial Advice Measures) Act
2016 apply in relation to the provision of personal advice to a
person as a retail client on or after the commencement day.
1531C Renewal notices (opt-in requirement)
(1) The amendment made by item 21 of Schedule 1 to the
Corporations Amendment (Financial Advice Measures) Act 2016
applies in relation to an ongoing fee arrangement for those renewal
notice days for the arrangement that occur on or after the
commencement day.
(2) In this item:
renewal notice day for an ongoing fee arrangement has the same
meaning as it has in Part 7.7A, as in force immediately before the
commencement day.
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2016 Division 2
Section 1531D
Corporations Act 2001 165
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1531D Disclosure statements
The amendments made by items 20A, 20B and 22 of Schedule 1 to
the Corporations Amendment (Financial Advice Measures) Act
2016 apply in relation to an ongoing fee arrangement for those
disclosure days for the arrangement that occur on or after the
commencement day.
1531E Conflicted remuneration
The amendments made by items 23 to 35 of Schedule 1 to the
Corporations Amendment (Financial Advice Measures) Act 2016
apply in relation to a benefit if:
(a) the benefit is one to which Division 4 of Part 7.7A applies
under section 1528; and
(b) the benefit is given on or after the commencement day.
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Part 10.19 Transitional provisions relating to the Corporations Amendment
(Phoenixing and Other Measures) Act 2012
Section 1532
166 Corporations Act 2001
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Part 10.19—Transitional provisions relating to the
Corporations Amendment (Phoenixing and
Other Measures) Act 2012
1532 Definition
In this Part:
amending Act means the Corporations Amendment (Phoenixing
and Other Measures) Act 2012.
1533 Part 1 of Schedule 1 to the amending Act (winding up by
ASIC)
(1) Paragraph 489EA(1)(a) of the Corporations Act 2001 as amended
by the amending Act applies in relation to a return of particulars
given to a company before, at or after the commencement of
Schedule 1 to the amending Act.
(2) Subsection 489EA(2) of the Corporations Act 2001 as amended by
the amending Act applies in relation to a review fee, if the due date
for payment occurs before, on or after the day on which Schedule 1
to the amending Act commences.
(3) Subsection 489EA(3) of the Corporations Act 2001 as amended by
the amending Act applies in relation to a reinstatement that occurs
before, at or after the commencement of Schedule 1 to the
amending Act.
1534 Part 2 of Schedule 1 to the amending Act (publication
requirements)
(1) The amendment of subsection 412(1) of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
relation to a notice published after the commencement of
Schedule 1 to the amending Act.
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Section 1534
Corporations Act 2001 167
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(2) The amendment of subsection 436E(3) of the Corporations Act
2001 made by Part 3 of Schedule 1 to the amending Act applies in
relation to a meeting convened after the commencement of
Schedule 1 to the amending Act.
(3) The amendment of subsection 439A(3) of the Corporations Act
2001 made by Part 3 of Schedule 1 to the amending Act applies in
relation to a meeting convened after the commencement of
Schedule 1 to the amending Act.
(4) The amendment of subsection 446A(5) of the Corporations Act
2001 made by Part 3 of Schedule 1 to the amending Act applies in
relation to a resolution that is taken, because of section 446A of the
Corporations Act 2001, to have been passed by a company after
the commencement of Schedule 1 to the amending Act.
(5) The amendment of subsection 449C(5) of the Corporations Act
2001 made by Part 3 of Schedule 1 to the amending Act applies in
relation to a meeting convened after the commencement of
Schedule 1 to the amending Act.
(6) The amendment of subsection 450A(1) of the Corporations Act
2001 made by the amending Act applies in relation to an
appointment of an administrator that occurs after the
commencement of Schedule 1 to the amending Act.
(7) The amendment of section 465A of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
relation to an application made under section 459P, 462 or 464 of
that Act after the commencement of Schedule 1 to the amending
Act.
(8) The amendment of subsection 491(2) of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
relation to a resolution passed after the commencement of
Schedule 1 to the amending Act.
(9) The amendment of subsection 497(2) of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
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Part 10.19 Transitional provisions relating to the Corporations Amendment
(Phoenixing and Other Measures) Act 2012
Section 1535
168 Corporations Act 2001
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relation to a meeting convened after the commencement of
Schedule 1 to the amending Act.
(10) The amendment of subsection 498(3) of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
relation to an adjournment that occurs after the commencement of
Schedule 1 to the amending Act.
(11) The amendment of subsection 509(2) of the Corporations Act 2001
made by Part 3 of Schedule 1 to the amending Act applies in
relation to a meeting convened after the commencement of
Schedule 1 to the amending Act.
(12) The amendment of subsection 568A(2) of the Corporations Act
2001 made by Part 3 of Schedule 1 to the amending Act applies in
relation to a disclaimer of property, if the disclaimer occurs after
the commencement of Schedule 1 to the amending Act.
(13) Despite the amendments of sections 589, 601AA, 601AB and 1351
of the Corporations Act 2001 made by Part 3 of Schedule 1 to the
amending Act, if, before the commencement of Schedule 1 to the
amending Act, ASIC gave notice of the proposed deregistration of
a company in accordance with subsection 601AA(4) or 601AB(3)
of the Corporations Act 2001, that Act continues to apply, in
relation to the deregistration of the company, as if those
amendments had not been made.
1535 Part 3 of Schedule 1 to the amending Act (miscellaneous
amendments)
Section 600AA of the Corporations Act 2001 as amended by the
amending Act applies in relation to an appointment, if the
appointment occurs after the commencement of Schedule 1 to the
amending Act.
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Transitional provisions relating to the Corporations Legislation Amendment (Audit
Enhancement) Act 2012 Part 10.20
Section 1536
Corporations Act 2001 169
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Part 10.20—Transitional provisions relating to the
Corporations Legislation Amendment
(Audit Enhancement) Act 2012
1536 Definitions
In this Part:
amending Act means the Corporations Legislation Amendment
(Audit Enhancement) Act 2012.
commencement means the commencement of Schedule 1 to the
amending Act.
1537 Application of amendments relating to annual transparency
reports
The amendments made by Part 2 of Schedule 1 to the amending
Act apply in relation to annual transparency reports for:
(a) the first transparency reporting year that ends after
commencement (even if part of that year occurs before
commencement); and
(b) all later transparency reporting years.
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Part 10.21 Transitional provision relating to the Corporations Legislation Amendment
(Financial Reporting Panel) Act 2012
Section 1538
170 Corporations Act 2001
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Part 10.21—Transitional provision relating to the
Corporations Legislation Amendment
(Financial Reporting Panel) Act 2012
1538 Courts etc. may have regard to Financial Reporting Panel
report
Despite the repeal of section 323EM by the Corporations
Legislation Amendment (Financial Reporting Panel) Act 2012, that
section continues to apply, in relation to a report of the Financial
Reporting Panel, as if that repeal had not happened.
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Transitional provisions relating to the Superannuation Legislation Amendment (Service
Providers and Other Governance Measures) Act 2013 Part 10.21A
Section 1538A
Corporations Act 2001 171
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Part 10.21A—Transitional provisions relating to
the Superannuation Legislation
Amendment (Service Providers and Other
Governance Measures) Act 2013
1538A Application of amendments relating to contributions to a
fund or scheme
The amendments made by items 1, 2 and 3 of Schedule 1 to the
Superannuation Legislation Amendment (Service Providers and
Other Governance Measures) Act 2013 apply to contributions paid
or payable on or after 1 July 2013.
1538B Application of amendments relating to Statements of Advice
The amendments made by items 7 and 8 of Schedule 1 to the
Superannuation Legislation Amendment (Service Providers and
Other Governance Measures) Act 2013 apply in relation to
personal advice given on or after the commencement of those
items.
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Part 10.22 Transitional provisions relating to the Superannuation Legislation
Amendment (Further MySuper and Transparency Measures) Act 2012
Section 1539
172 Corporations Act 2001
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Part 10.22—Transitional provisions relating to the
Superannuation Legislation Amendment
(Further MySuper and Transparency
Measures) Act 2012
1539 Application of section 1017BA (Obligation to make product
dashboard publicly available)
Section 1017BA applies:
(a) to the extent that it relates to MySuper products—on and
after 1 July 2013; and
(b) to the extent that it relates to choice products—on and after
1 July 2014.
1540 Application of subsection 1017BB(1) (Obligation to make
information relating to investment of assets of
superannuation entities publicly available)
Subsection 1017BB(1) applies in relation to the reporting day that
is 30 June 2014 and to later reporting days.
1541 Application of section 1017BC (Obligation to provide
information relating to investment of assets of
superannuation entities)
(1) Section 1017BC applies in relation to arrangements entered into on
or after this Act receives the Royal Assent.
(2) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subsection 1021NB(1), it is a
defence if the information would have been made publicly
available but for the fact that the information was not provided to
the trustee because, under this section, section 1017BC did not
apply to a particular arrangement.
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MySuper and Transparency Measures) Act 2012 Part 10.22
Section 1541
Corporations Act 2001 173
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Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
(3) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subparagraph 1021NB(2)(d)(ii) or
(3)(d)(ii), it is a defence if there would not have been an omission
from the information made publicly available but for the fact that
the information omitted was not provided to the trustee because,
under this section, section 1017BC did not apply to a particular
arrangement.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (3). See subsection 13.3(3) of the Criminal Code.
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Chapter 10 Transitional provisions
Part 10.23 Transitional provisions relating to the Clean Energy Legislation (Carbon
Tax Repeal) Act 2014
Section 1542
174 Corporations Act 2001
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Part 10.23—Transitional provisions relating to the
Clean Energy Legislation (Carbon Tax
Repeal) Act 2014
1542 Definition
In this Part:
designated carbon unit day has the same meaning as in Part 3 of
Schedule 1 to the Clean Energy Legislation (Carbon Tax Repeal)
Act 2014.
1543 Transitional—carbon units issued before the designated
carbon unit day
Despite the amendments of this Act made by Schedule 1 to the
Clean Energy Legislation (Carbon Tax Repeal) Act 2014, this Act
continues to apply, in relation to carbon units issued before the
designated carbon unit day, as if those amendments had not been
made.
1544 Transitional—variation of conditions on Australian financial
services licences
Scope
(1) This section applies if, as at the end of the designated carbon unit
day, an Australian financial services licence is subject to a
condition that authorises the financial services licensee to provide
financial services in relation to financial products that are carbon
units.
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Act 2014 Part 10.23
Section 1545
Corporations Act 2001 175
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Variation
(2) After that day, subsections 914A(3), (4) and (5) do not apply in
relation to a variation of the condition, if the only effect of the
variation is to remove the authorisation to provide financial
services in relation to financial products that are carbon units.
1545 Transitional—immediate cancellation of Australian financial
services licences
Section 915B applies, on and after the designated carbon unit day,
as if the following subsection was added at the end of the section:
Licence relating to carbon units
(5) ASIC may cancel an Australian financial services licence held by a
person, by giving written notice to the person, if the licence only
authorises the person to provide financial services that relate to
financial products that are carbon units.
1546 Transitional—statements of reasons for cancellation of
Australian financial services licences
Section 915G does not apply to a cancellation under
subsection 915B(5) (as inserted by section 1545).
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Chapter 10 Transitional provisions
Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 1 Definitions
Section 1546A
176 Corporations Act 2001
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Part 10.23A—Transitional provisions relating to
the Corporations Amendment (Professional
Standards of Financial Advisers) Act 2017
Division 1—Definitions
1546A Definitions
In this Part:
amending Act means the Corporations Amendment (Professional
Standards of Financial Advisers) Act 2017.
commencement means the start of the day Part 1 of Schedule 1 to
the amending Act commences.
education and training standards has the meaning given by
section 921B.
existing provider means:
(a) a person who:
(i) is a relevant provider at any time between 1 January
2016 and 1 January 2019 (except a person who has
ceased to be a relevant provider under
subsection 1546B(4) or (5)); and
(ii) is not banned, disqualified or suspended under
Division 8 of Part 7.6 on 1 January 2019; or
(b) a person who:
(i) at any time between 1 January 2016 and 1 January
2019, provides personal advice in a foreign country to
retail clients in relation to relevant financial products;
and
(ii) is not prohibited under the law of the foreign country
from providing such advice on 1 January 2019.
foreign country includes a region, where:
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Definitions Division 1
Section 1546A
Corporations Act 2001 177
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(a) the region is a colony, territory or protectorate of a foreign
country; or
(b) the region is part of a foreign country; or
(c) the region is under the protection of a foreign country; or
(d) a foreign country exercises jurisdiction or control over the
region; or
(e) a foreign country is responsible for the region’s international
relations.
relevant financial products has the meaning given by
section 910A.
relevant provider has the meaning given by section 910A.
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Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 2 Application and transitional provisions
Section 1546B
178 Corporations Act 2001
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Division 2—Application and transitional provisions
1546B Existing providers to meet certain education and training
standards
Completion of qualifications
(1) An existing provider must have done either of the following by
1 January 2024:
(a) met the education and training standard in
subsection 921B(2);
(b) completed one or more courses determined by the standards
body to give the provider qualifications equivalent to that
standard.
Note: The standard in subsection 921B(2) is that a person has completed a
bachelor or higher degree, or equivalent qualification, approved by the
standards body, or a foreign qualification approved by the standards
body.
(2) To avoid doubt, an existing provider may meet the education and
training standard in subsection 921B(2), or complete one or more
courses in accordance with paragraph (1)(b) of this section, before
this section commences.
Exam
(3) An existing provider must have met the education and training
standard in subsection 921B(3) before 1 January 2021.
Note 1: The standard in subsection 921B(3) is that a person has passed an
exam approved by the standards body.
Note 2: ASIC must be notified when existing providers have passed the exam
(see section 1546Y).
Note 3: An existing provider is not required to meet the standard in
subsection 921B(4), which is that a person has undertaken at least a
year of work and training that meets the requirements set by the
standards body.
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Transitional provisions relating to the Corporations Amendment (Professional
Standards of Financial Advisers) Act 2017 Part 10.23A
Application and transitional provisions Division 2
Section 1546C
Corporations Act 2001 179
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Failing to meet the education and training standards
(4) If, at the start of 1 January 2024, a person who is an existing
provider, and a relevant provider at that time, fails to comply with
subsection (1), the person is taken for the purposes of this Act,
after that time, to have ceased to be a relevant provider.
(5) If, at the start of 1 January 2021, a person who is an existing
provider, and a relevant provider at that time, fails to comply with
subsection (3), the person is taken for the purposes of this Act,
after that time, to have ceased to be a relevant provider.
(6) Subsections (4) and (5) do not prevent the person again becoming a
relevant provider.
Standards body may determine courses
(7) The standards body may, by legislative instrument, determine
courses for the purposes of paragraph (1)(b).
1546C Application of limitation on authorisation to provide
personal advice and offence
Limitation on authorisation to provide personal advice
(1) Section 921C, as inserted by the amending Act, applies in relation
to:
(a) any Australian financial services licence granted on or after
1 January 2019 to a person who is not a relevant provider
before that day; and
(b) any authorisation given on or after that day to a person who
is not a relevant provider before that day.
Note: Section 921C provides that a person cannot be granted a licence, or be
authorised, to provide certain financial advice unless the person meets
certain conditions.
(2) Section 921C, as inserted by the amending Act, applies, on and
after 1 January 2024, in relation to a person who ceases to be a
relevant provider under subsection 1546B(4).
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Division 2 Application and transitional provisions
Section 1546D
180 Corporations Act 2001
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(3) Section 921C, as inserted by the amending Act, applies, on and
after 1 January 2021, in relation to a person who ceases to be a
relevant provider under subsection 1546B(5).
(4) Section 921C, as inserted by the amending Act, does not apply in
relation to a person who is an existing provider while the person
continues to be a relevant provider.
Restriction on use of terms “financial adviser” and “financial
planner”
(5) The following provisions, as inserted by the amending Act, apply
on and after 1 January 2019:
(a) section 923C;
(b) items 269AAA and 269AAB of the table in Schedule 3.
Note: Those provisions relate to offences for using the terms “financial
adviser” and “financial planner”.
1546D Application of requirements relating to provisional relevant
providers
Section 921F, as inserted by the amending Act, applies in relation
to any authorisation given on or after 1 January 2019 to a person
who is not a relevant provider before that day.
Note: Section 921F sets out the requirements in relation to a person who is a
provisional relevant provider.
1546E Application of continuing professional development standard
for relevant providers
(1) Sections 921D and 922HA, as inserted by the amending Act, apply
on and after 1 January 2019.
Note: Section 921D provides that certain relevant providers must meet the
continuing professional development standard. Section 922HA
requires ASIC to be notified of the day on which a financial services
licensee’s CPD year is to begin.
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Application and transitional provisions Division 2
Section 1546E
Corporations Act 2001 181
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(2) Sections 922HB and 922HC, as inserted by the amending Act,
apply in relation to any CPD year of a financial services licensee
that begins on or after 1 January 2019.
Note: Section 922HB requires ASIC to be notified if relevant providers do
not comply with the continuing professional development standard.
Section 922HC requires a financial services licensee to retain
evidence of the continuing professional development of relevant
providers.
(3) Section 922N, as inserted by the amending Act, applies in relation
to a request made of a person on or after 1 January 2019 for the
purposes of subparagraph 922N(1)(c)(iii).
Note: Among other things, section 922N allows a financial services licensee
to ask a person to provide information relating to whether the licensee
must lodge a notice under section 922HB.
(4) Subsection (5) applies if:
(a) the first CPD year of a financial services licensee commences
after 1 January 2019; and
(b) before the start of the licensee’s first CPD year:
(i) the licensee is a relevant provider; or
(ii) a relevant provider is authorised to provide personal
advice to retail clients, on behalf of the licensee, in
relation to relevant financial products.
(5) Sections 922HB, 922HC and 922Q, as inserted by the amending
Act, apply as if a reference in those sections to a financial services
licensee’s CPD year included a reference to the period:
(a) beginning on the later of 1 January 2019 and:
(i) if subparagraph (4)(b)(i) applies—the day the licensee is
granted an Australian financial services licence that
covers the provision of personal advice to retail clients
in relation to relevant financial products; and
(ii) if subparagraph (4)(b)(ii) applies—the first day the
relevant provider is authorised to provide personal
advice to retail clients, on behalf of the licensee, in
relation to relevant financial products; and
(b) ending on the day before the licensee’s first CPD year.
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Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 2 Application and transitional provisions
Section 1546F
182 Corporations Act 2001
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Note 1: Among other things, section 922Q requires failures of relevant
providers to comply with the continuing education standard to be
entered on the Register.
Note 2: The standards body may, under subparagraph 921U(2)(a)(iv), set
requirements for continuing professional development in relation to a
period mentioned in subsection (5) of this section, and, in one or more
determinations made under subsection 921U(3), modify the operation
of a provision in Part 7.6 in relation to such a period.
1546F Application of Code of Ethics to relevant providers
Sections 921E and 922HD, as inserted by the amending Act, apply
on and after 1 January 2020.
Note: Section 921E requires a relevant provider to comply with the Code of
Ethics. Section 922HD requires ASIC to be notified of failures to
comply with the Code of Ethics.
1546G Application of obligations in relation to compliance schemes
(1) Section 921H, as inserted by the amending Act, applies on and
after 15 November 2019:
(a) in relation to a person who becomes a financial services
licensee on or after that day; and
(b) for a person who becomes a financial services licensee before
that day:
(i) in relation to a person who becomes a relevant provider
on or after that day; and
(ii) in relation to a person who becomes a relevant provider
before that day as if subsection 921H(2) required the
scheme to cover the relevant provider by 1 January
2020.
Note: Section 921H requires a financial services licensee to ensure that a
compliance scheme covers each of its relevant providers.
(2) Section 921J, as inserted by the amending Act, applies on and after
15 November 2019.
Note: Section 921J sets out when a compliance scheme covers a relevant
provider.
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Application and transitional provisions Division 2
Section 1546H
Corporations Act 2001 183
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(3) Sections 921K, 921Q, 921R and 921T, as inserted by the amending
Act, apply on and after the day this section commences.
Note: Section 921K provides that a monitoring body for a compliance
scheme may apply to ASIC for approval of the scheme. Section 921Q
provides that ASIC may request information about a compliance
scheme from the monitoring body for the scheme. Section 921R
provides that a monitoring body may propose to modify a scheme in
certain circumstances. Section 921T requires a monitoring body to
notify ASIC of certain reductions in the body’s resources or expertise.
(4) Sections 921L, 921M, 921N, 921P and 921S, as inserted by the
amending Act, apply on and after 1 January 2020.
Note: Sections 921L to 921N include provisions about investigations by
monitoring bodies. Section 921P provides for compliance schemes to
be made publicly available. Section 921S provides for the review of
compliance schemes.
(5) Paragraphs 922E(1)(i) and 922F(1)(n), as inserted by the amending
Act, apply on and after 15 November 2019 in relation to notices
lodged under section 922D on or after that day.
Note: Paragraphs 922E(1)(i) and 922F(1)(n) require notices lodged under
section 922D in relation to a relevant provider to include the name of
the compliance scheme that is to cover the relevant provider.
1546H Application of obligation for standards body to publish
annual report
(1) Section 921ZC, as inserted by the amending Act, applies on and
after 1 July 2017.
(2) If the declaration of a body corporate to be the standards body
under section 921X takes effect at a time during a financial year,
the first annual report published by the standards body must cover
the period beginning at that time and ending at the end of the next
financial year as if that period were a financial year.
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Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 2 Application and transitional provisions
Section 1546J
184 Corporations Act 2001
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1546J Application of obligation to notify ASIC about a person who
becomes a relevant provider
Sections 922D, 922E and 922F, as inserted by the amending Act,
apply (subject to subsection 1546G(5) and sections 1546K to
1546N) in relation to a person who becomes a relevant provider if:
(a) the person becomes a relevant provider after commencement;
or
(b) both of the following apply:
(i) the person becomes a relevant provider before
commencement;
(ii) immediately before commencement, a notice has not
been lodged in accordance with section 922D, as
notionally inserted into this Act by Schedule 8D to the
Corporations Regulations 2001.
Note: Section 922D requires ASIC to be notified if a person becomes a
relevant provider.
1546K Application of requirements relating to information about
relevant provider’s principal place of business
Paragraphs 922E(1)(b) and 922F(1)(b), as inserted by the
amending Act, apply on and after 15 November 2019 in relation to
notices lodged under section 922D on or after that day.
Note: Paragraphs 922E(1)(b) and 922F(1)(b) require notices lodged under
section 922D in relation to a relevant provider to include the address
of the relevant provider’s principal place of business.
1546L Application of requirements relating to information about
membership of professional associations where relevant
provider is licensee
Section 922E, as inserted by the amending Act, applies until the
start of 15 November 2019 as if paragraph 922E(1)(h) were
replaced with the following:
(h) information about both of the following:
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Section 1546M
Corporations Act 2001 185
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(i) the educational qualifications of, and any training
courses completed by, the relevant provider;
(ii) the relevant provider’s membership (if any) of
professional bodies;
to the extent that the qualifications, training courses or
memberships are relevant to the provision of financial
services (and if the relevant provider has more than 5
memberships, the 5 memberships that the person lodging the
notice believes, on reasonable grounds, are most relevant to
the provision of financial services);
1546M Application of requirements relating to information about
membership of professional associations where relevant
provider is not licensee
Section 922F, as inserted by the amending Act, applies until the
start of 15 November 2019 as if paragraph 922F(1)(m) were
replaced with the following:
(m) information about both of the following:
(i) the educational qualifications of, and any training
courses completed by, the relevant provider;
(ii) the relevant provider’s membership (if any) of
professional bodies;
to the extent that the qualifications, training courses or
memberships are relevant to the provision of financial
services (and if the relevant provider has more than 5
memberships, the 5 memberships that the person lodging the
notice believes, on reasonable grounds, are most relevant to
the provision of financial services);
1546N Application of requirements relating to information about
provisional relevant provider’s work and training
Paragraphs 922F(1)(f) and (g), as inserted by the amending Act,
apply in relation to notices lodged under section 922D on or after
1 January 2019.
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Division 2 Application and transitional provisions
Section 1546P
186 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Paragraphs 922F(1)(f) and (g) require notices lodged under
section 922D to include information in relation to provisional relevant
providers and their work and training.
1546P Application of ongoing obligation to notify ASIC when there
is a change in a matter for a relevant provider
Paragraph 922H(1)(a), as inserted by the amending Act, applies in
relation to a change in a matter if:
(a) the change occurs after commencement; or
(b) both of the following apply:
(i) the change occurs before commencement;
(ii) immediately before commencement, a notice has not
been lodged in accordance with section 922H, as
notionally inserted into this Act by Schedule 8D to the
Corporations Regulations 2001.
1546Q Application of obligation to notify ASIC about a person who
starts to have control of a body corporate licensee
Section 922J, as inserted by the amending Act, applies in relation
to a person who starts to have control of a body corporate licensee
if:
(a) the person starts to have control of the licensee after
commencement; or
(b) both of the following apply:
(i) the person starts to have control of the licensee before
commencement;
(ii) immediately before commencement, a notice has not
been lodged in accordance with section 922J, as
notionally inserted into this Act by Schedule 8D to the
Corporations Regulations 2001.
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Application and transitional provisions Division 2
Section 1546R
Corporations Act 2001 187
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1546R Application of obligation to notify ASIC about a person who
ceases to have control of a body corporate licensee
Section 922K, as inserted by the amending Act, applies in relation
to a person who ceases to have control of a body corporate licensee
if:
(a) the person ceases to have control of the licensee after
commencement; or
(b) both of the following apply:
(i) the person ceases to have control of the licensee before
commencement;
(ii) immediately before commencement, a notice has not
been lodged in accordance with section 922K, as
notionally inserted into this Act by Schedule 8D to the
Corporations Regulations 2001.
1546S Application of obligation for relevant providers to provide
information to financial services licensees
Section 922N, as inserted by the amending Act, applies in relation
to a request made of a person if:
(a) both of the following apply:
(i) the request is made of the person for the purposes of
subparagraph 922N(1)(c)(i) or (ii);
(ii) the request is made after commencement (whether the
person becomes a relevant provider before or after
commencement); or
(b) both of the following apply:
(i) the request (as mentioned in paragraph 922N(1)(c), as
notionally inserted into this Act by Schedule 8D to the
Corporations Regulations 2001) is made before
commencement;
(ii) immediately before commencement, the person has not
provided the information requested.
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Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 2 Application and transitional provisions
Section 1546T
188 Corporations Act 2001
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1546T Application of requirements relating to Register of Relevant
Providers
(1) Paragraphs 922Q(2)(b), (r), and (v), as inserted by the amending
Act, apply on and after 1 January 2020.
(2) Subparagraph 922Q(2)(j)(ii) and paragraph 922Q(2)(m), as
inserted by the amending Act, apply on and after 1 January 2019.
(3) Section 922Q, as inserted by the amending Act, applies until the
start of 1 January 2020 as if subparagraph 922Q(2)(u)(ii) were
replaced with the following:
(ii) the relevant provider’s membership (if any) of
professional associations, to the extent that the
memberships are relevant to the provision of financial
services;
(4) Otherwise, sections 922Q and 922S, as inserted by the amending
Act, apply on and after commencement.
1546U Relevant provider numbers given before commencement
For the purposes of this Act, a number given by ASIC to a person
in accordance with regulation 7.6.06A of the Corporations
Regulations 2001 is taken to have been given in accordance with
section 922R of this Act, as inserted by the amending Act.
1546V Continuation of Register of Relevant Providers
The repeal of regulation 7.6.06B of the Corporations
Regulations 2001 by the Corporations Amendment (Professional
Standards of Financial Advisers) Regulations 2017 does not affect
the continuity of the register of relevant providers established
under that regulation.
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Transitional notices Division 3
Section 1546W
Corporations Act 2001 189
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Division 3—Transitional notices
1546W Obligation to notify ASIC of certain information
(1) A notice must be lodged under this section, in the prescribed form,
if, before 15 November 2019, a notice was lodged in relation to a
relevant provider under:
(a) section 922D, as inserted by the amending Act; or
(b) section 922D, as notionally inserted into this Act by
Schedule 8D to the Corporations Regulations 2001.
(2) The notice must include:
(a) the address of the relevant provider’s principal place of
business; and
(b) the name of the compliance scheme that is to cover the
relevant provider.
(3) The notice must be lodged before 1 January 2020 by:
(a) if the relevant provider is a financial services licensee—the
licensee; or
(b) otherwise—the financial services licensee on whose behalf
the relevant provider is authorised to provide personal advice
to retail clients in relation to relevant financial products.
(4) Subsection 921J(2) applies, subject to this section, as if the
reference in that subsection to section 922D included a reference to
this section.
1546X Obligation to notify ASIC of CDP year
(1) A notice must be lodged under this section, in the prescribed form,
if, before 1 January 2019, ASIC granted an applicant an Australian
financial services licence that covers the provision of personal
advice to retail clients in relation to relevant financial products.
(2) The notice must include the day of the year on which the relevant
financial services licensee’s CPD year begins.
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(Professional Standards of Financial Advisers) Act 2017
Division 3 Transitional notices
Section 1546Y
190 Corporations Act 2001
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(3) The notice must be lodged by the licensee before 1 January 2019.
(4) Subsection 922HA(3) applies as if a reference in that subsection to
subsection 922HA(1) or (3) included a reference to this section.
1546Y Obligation to notify ASIC when exams passed
(1) A notice must be lodged under this section, in the prescribed form,
if an existing provider passes an exam for the purposes of
complying with subsection 1546B(3).
(2) The notice must state that the existing provider has passed the
exam.
(3) The notice must be lodged by a financial services licensee within
30 business days of the financial services licensee becoming aware
that the existing provider has passed the exam.
1546Z Obligation to notify ASIC of certain information after
banning order
(1) A notice must be lodged under this section, in the prescribed form,
if:
(a) a person was banned, disqualified or suspended under
Division 8 of Part 7.6 on 1 January 2019; and
(b) the person becomes a provisional relevant provider after that
day.
(2) The notice must include the day the person begins undertaking
work and training in accordance with subsection 921B(4).
(3) The notice must be lodged within 30 business days of the day
mentioned in subsection (2) by the financial services licensee on
whose behalf the person is authorised to provide personal advice to
retail clients in relation to relevant financial products.
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Transitional notices Division 3
Section 1546ZA
Corporations Act 2001 191
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1546ZA Offence for failing to lodge transitional notices
Section 922M applies as if a reference in that section to a notice
provision included a reference to a notice given under this
Division.
Note: Section 922M provides that a person commits an offence if a person
does not lodge certain notices.
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Part 10.23A Transitional provisions relating to the Corporations Amendment
(Professional Standards of Financial Advisers) Act 2017
Division 4 Review
Section 1546ZB
192 Corporations Act 2001
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Division 4—Review
1546ZB Review
The Minister must cause a review of Divisions 8A, 8B and 8C of
Part 7.6, as inserted by the amending Act, to be commenced before
31 December 2026.
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Transitional provisions relating to the Corporations Legislation Amendment
(Deregulatory and Other Measures) Act 2014 Part 10.24
Section 1547
Corporations Act 2001 193
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Part 10.24—Transitional provisions relating to the
Corporations Legislation Amendment
(Deregulatory and Other Measures) Act
2014
1547 Definitions
In this Part:
amending Act means the Corporations Legislation Amendment
(Deregulatory and Other Measures) Act 2014.
1548 Application of amendments relating to calling of general
meetings
The amendments of section 249D made by Schedule 1 to the
amending Act do not apply in relation to a request made under that
section before the commencement of that Schedule.
1549 Application of amendments relating to directors’ reports for
listed companies
The amendments of section 300A made by Schedule 1 to the
amending Act apply in relation to directors’ reports for financial
years ending on or after the commencement of that Schedule.
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Chapter 10 Transitional provisions
Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 1 Introduction
Section 1550
194 Corporations Act 2001
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Part 10.25—Transitional provisions relating to the
Insolvency Practice Schedule
(Corporations)
Division 1—Introduction
1550 Simplified outline of this Part
This Part deals with the way this Act will apply when the
provisions of the Insolvency Law Reform Act 2016 begin to
operate.
Application of Part 2 of the Insolvency Practice Schedule
(Corporations)
A person registered as a liquidator before the commencement of
Part 1 of Schedule 2 to the Insolvency Law Reform Act 2016 will
continue to be registered and must comply with the requirements
and duties under Part 2 of the Insolvency Practice Schedule
(Corporations).
Application of Part 3 of the Insolvency Practice Schedule
(Corporations)
Part 3 of the Insolvency Practice Schedule (Corporations) will
apply to an external administration that starts on or after the
commencement of Part 1 of Schedule 2 to the Insolvency Law
Reform Act 2016 and to most ongoing administrations (but
generally only in relation to new events).
Proceedings before the Court or the Administrative Appeals
Tribunal
Proceedings already begun in the Court or the Administrative
Appeals Tribunal before the commencement of the amendments
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Part 10.25
Introduction Division 1
Section 1551
Corporations Act 2001 195
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made by Part 1 of Schedule 2 to the Insolvency Law Reform Act
2016 will continue under the old Act. Orders of the Court under the
old Act continue to have effect.
Regulations
Regulations may be made to deal with other transitional matters.
1551 Definitions
In this Part:
commencement day means the day on which Part 1 of Schedule 2
to the Insolvency Law Reform Act 2016 commences.
Insolvency Practice Schedule (Corporations) means Schedule 2 to
this Act, and includes rules made under section 105-1 of that
Schedule.
make, in relation to an order that is a direction, includes give.
new external administration of a company means an external
administration of a company that starts on or after the
commencement day.
old Act means the Corporations Act 2001, as in force immediately
before the commencement day and includes the old regulations.
old Act registrant has the meaning given by subsection 1553(4).
old Act registration day, in relation to a person, has the meaning
given by subsection 1555(2).
old regulations means the Corporations Regulations 2001, as in
force immediately before the commencement day.
ongoing external administration of a company means an external
administration of a company that started before the commencement
day and ends after that day.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 1 Introduction
Section 1551
196 Corporations Act 2001
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order includes a direction.
registered: a person is registered as a liquidator, or as a liquidator
of a specified body corporate, at a particular time in the
circumstances set out in subsection 1552(2).
Register of Liquidators means the Register of Liquidators
established and maintained under section 15-1 of the Insolvency
Practice Schedule (Corporations).
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Transitional provisions relating to the Insolvency Practice Schedule (Corporations)
Part 10.25
Application of Part 2 of the Insolvency Practice Schedule (Corporations) and related
consequential amendments Division 2
Section 1552
Corporations Act 2001 197
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Division 2—Application of Part 2 of the Insolvency
Practice Schedule (Corporations) and related
consequential amendments
Subdivision A—Registering liquidators
1552 Applications for registration under the old Act
(1) If, before the commencement day:
(a) a person has applied for registration as a liquidator, or as a
liquidator of a specified body corporate, under section 1279
of the old Act; and
(b) the person’s application has not been refused; and
(c) the person is not registered before the commencement day as
a liquidator, or as a liquidator of a specified body corporate;
the application is taken never to have been made and ASIC must
refund any fee paid in relation to the application.
(2) A person is registered as a liquidator, or as a liquidator of a
specified body corporate, at a particular time if:
(a) a certificate of registration as a liquidator or as a liquidator of
a specified body corporate has been issued to the person
under subsection 1282(6) of the old Act before that time; and
(b) the day specified in the certificate as the day on which the
registration would begin occurs before the day on which that
time occurs.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1553
198 Corporations Act 2001
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1553 Persons registered under the old Act continue to be registered
under the Insolvency Practice Schedule (Corporations)
Person registered under the old Act immediately before the
commencement day
(1) If a person is registered as a liquidator, or as a liquidator of a
specified body corporate, immediately before the commencement
day, on the commencement day the person is taken to be registered
as a liquidator under Subdivision B of Division 20 of the
Insolvency Practice Schedule (Corporations).
Person registered but suspended under the old Act before the
commencement day
(2) If:
(a) a person is registered as a liquidator, or as a liquidator of a
specified body corporate, before the commencement day; and
(b) that person’s registration is suspended before the
commencement day; and
(c) the period of the suspension does not expire before the
commencement day;
the person is taken to be registered as a liquidator under
Subdivision B of Division 20 of the Insolvency Practice Schedule
(Corporations) on the commencement day, but the person’s
registration is taken to be suspended under the Insolvency Practice
Schedule (Corporations) for a period that ends when the period of
the suspension under the old Act would have ended.
Note: The old Act registrant could apply under Subdivision F of Division 40
of the Insolvency Practice Schedule (Corporations) to have the
suspension lifted or shortened.
Circumstances in which person not taken to be registered
(3) Despite subsections (1) and (2), a person mentioned in one of those
subsections is not taken to be registered as a liquidator under
Subdivision B of Division 20 of the Insolvency Practice Schedule
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Section 1554
Corporations Act 2001 199
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(Corporations) on the commencement day if, at the beginning of
that day:
(a) the person is an insolvent under administration; or
(b) the person is dead.
Meaning of old Act registrant
(4) A person who is taken to be registered under Subdivision B of
Division 20 of the Insolvency Practice Schedule (Corporations)
because of this section is referred to as an old Act registrant.
1554 Old Act registrant’s details
(1) ASIC must enter on the Register of Liquidators, in relation to each
old Act registrant, the details prescribed under subsection 15-1(3)
of the Insolvency Practice Schedule (Corporations) that relate to
that old Act registrant.
(2) If ASIC holds information in relation to an old Act registrant
before the commencement day, ASIC may use and disclose the
information for the purposes of establishing and maintaining the
Register of Liquidators.
1555 Period of old Act registrant’s registration under the Insolvency
Practice Schedule (Corporations)
(1) The registration of an old Act registrant under the Insolvency
Practice Schedule (Corporations) is for a period ending on the first
anniversary of the old Act registration day for that person that
occurs on or after the commencement day.
(2) The old Act registration day in relation to a person who was
registered (or but for a suspension would have been registered) as a
liquidator, or as a liquidator of a specified body corporate,
immediately before the commencement day, is the day on which
that registration began.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1556
200 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) To avoid doubt, the registration of an old Act registrant under the
Insolvency Practice Schedule (Corporations) may be renewed in
accordance with that Schedule.
1556 Conditions for old Act registrants—conditions under the
Insolvency Practice Schedule (Corporations)
To avoid doubt, a condition may be imposed on an old Act
registrant (or on a class that includes an old Act registrant) under
the Insolvency Practice Schedule (Corporations) in accordance
with that Schedule.
1557 Current conditions for old Act registrants—undertakings
under the old Act
Undertakings under the old Act
(1) If:
(a) an old Act registrant was required to give an undertaking
under paragraph 1292(9)(b) or (c) of the old Act; and
(b) that requirement is still in force immediately before the
commencement day;
it is a condition of the old Act registrant’s registration under the
Insolvency Practice Schedule (Corporations) that he or she gives
and complies with the undertaking.
(2) A condition imposed under subsection (1) is a current condition
imposed on the old Act registrant.
Varying etc. conditions of registration
(3) Subdivision C of Division 20 of the Insolvency Practice Schedule
(Corporations) applies to a condition imposed under subsection (1)
in the same way as it applies to a condition imposed by a
committee under the Insolvency Practice Schedule (Corporations).
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Part 10.25
Application of Part 2 of the Insolvency Practice Schedule (Corporations) and related
consequential amendments Division 2
Section 1558
Corporations Act 2001 201
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1558 Current conditions for old Act registrants—undertakings
under the ASIC Act
Undertakings under the ASIC Act
(1) If:
(a) before the commencement day, an old Act registrant gives
ASIC an undertaking under section 93AA of the ASIC Act to
engage in, or refrain from engaging in, conduct as a
liquidator, or as a liquidator of a specified body corporate;
and
(b) that undertaking is in force immediately before the
commencement day;
it is a condition of the old Act registrant’s registration under the
Insolvency Practice Schedule (Corporations) that he or she comply
with the undertaking.
(2) A condition imposed under subsection (1) is a current condition
imposed on the old Act registrant.
Enforcement of undertaking under the ASIC Act not affected
(3) Nothing in this section affects the application of section 93AA of
the ASIC Act in relation to a breach of an undertaking accepted
under that section.
1559 Old Act registrant registered as liquidator of a specified body
corporate
Old Act registrant may not accept further appointments
(1) If an old Act registrant was registered as a liquidator of a specified
body corporate immediately before the commencement day, it is a
condition of the old Act registrant’s registration under the
Insolvency Practice Schedule (Corporations) that he or she must
not accept any further appointments as external administrator of a
company.
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(Corporations)
Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1560
202 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) That condition is a current condition imposed on the old Act
registrant.
Registration cancelled once current administrations completed
(3) On the day immediately after the external administration of the
body corporate in relation to which the old Act registrant was
registered ends:
(a) the old Act registrant is taken to have lodged a request in the
approved form in accordance with paragraph 40-30(1)(f) of
the Insolvency Practice Schedule (Corporations) to have his
or her registration as a liquidator cancelled; and
(b) ASIC is taken to have cancelled the registration under
subsection 40-30(1) of the Insolvency Practice Schedule
(Corporations).
Old Act registrant applies for registration under section 20-5 of the
Insolvency Practice Schedule (Corporations)
(4) To avoid doubt, if the old Act registrant applies under section 20-5
of the Insolvency Practice Schedule (Corporations) to be registered
as a liquidator, and is registered in response to that application, this
section does not affect that registration.
1560 Old Act registrant chooses not to renew
Application of this section
(1) This section applies if an old Act registrant does not apply for
renewal of his or her registration under the Insolvency Practice
Schedule (Corporations) before his or her period of registration
under subsection 1555(1) ends (the expiry day).
Old Act registrant may not accept further appointments after
registration expires
(2) The old Act registrant is taken to be registered as a liquidator under
Subdivision B of Division 20 of the Insolvency Practice Schedule
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Section 1561
Corporations Act 2001 203
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(Corporations) after the expiry day, subject to a condition that he or
she must not accept any further appointments as external
administrator of a company.
(3) That condition is a current condition imposed on the old Act
registrant.
Registration cancelled once current administrations completed
(4) On the day immediately after all of the external administrations of
companies that the old Act registrant is entitled to carry out in
accordance with his or her current conditions ends:
(a) the old Act registrant is taken to have lodged a request in the
approved form in accordance with paragraph 40-30(1)(f) of
the Insolvency Practice Schedule (Corporations) to have his
or her registration as a liquidator cancelled; and
(b) ASIC is taken to have cancelled the registration under
subsection 40-30(1) of the Insolvency Practice Schedule
(Corporations).
Subdivision B—Annual returns and statements
1561 Application of obligation to lodge annual liquidator returns
Application of the Insolvency Practice Schedule (Corporations)
(1) Section 30-1 of the Insolvency Practice Schedule (Corporations)
applies in relation to liquidator return years that begin on or after
the commencement day.
Meaning of liquidator return year
(2) In working out the liquidator return year for an old Act registrant
under subsection 30-1(2) of the Insolvency Practice Schedule
(Corporations), “the day on which that registration first began”,
means “the old Act registration day for that person (as defined for
the purpose of Part 10.25 of this Act)”.
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(Corporations)
Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1562
204 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Annual statements under the old Act
(3) The repeal of section 1288 by Schedule 2 to the Insolvency Law
Reform Act 2016 applies in relation to liquidator return years
beginning on or after the commencement day.
Subdivision C—Notice requirements
1562 Notice of significant events
(1) If:
(a) within 2 years before the commencement day, an event of a
kind mentioned in subsection 35-1(1) of the Insolvency
Practice Schedule (Corporations) occurs in relation to an old
Act registrant; and
(b) the old Act registrant has not already informed ASIC in
writing of the event before the commencement day;
the old Act registrant must lodge with ASIC a notice, in the
approved form, relating to the event.
(2) The notice must be lodged:
(a) if the old Act registrant is or could reasonably be expected to
be aware of the event on or before the commencement day—
within one month after the commencement day; or
(b) if paragraph (a) is not satisfied, but the old Act registrant is
or could reasonably be expected to be aware of the event
after the commencement day—within one month after the
first day on which the old Act registrant is or could
reasonably be expected to be aware of the event.
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1)
within the period specified in subsection (2); and
(b) the person intentionally or recklessly fails to comply with the
requirement within that period.
Penalty: 100 penalty units.
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consequential amendments Division 2
Section 1563
Corporations Act 2001 205
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision D—Cancellation by ASIC under the old Act
1563 Request for cancellation made before the commencement day
(1) This section applies if:
(a) before the commencement day, a person requests ASIC
under section 1290 of the old Act to cancel the person’s
registration as a liquidator or as a liquidator of a specified
body corporate; and
(b) no decision by ASIC to cancel that registration has come into
effect before the commencement day.
(2) ASIC may not cancel the registration under section 1290 of the old
Act.
(3) However, for the purposes of paragraph 40-30(1)(f) of the
Insolvency Practice Schedule (Corporations), the person is taken to
have lodged a request with ASIC in the approved form to have the
person’s registration as a liquidator under the Insolvency Practice
Schedule (Corporations) cancelled.
(4) The amendments of section 1290 made by Schedule 2 to the
Insolvency Law Reform Act 2016 apply in relation to requests made
to ASIC under section 1290 on or after the commencement day.
1564 Decision to cancel registration made before the commencement
day
(1) This section applies if:
(a) before the commencement day, a decision is made by ASIC
under section 1290A of the old Act to cancel the registration
of a person as a liquidator, or as a liquidator of a specified
body corporate; and
(b) the decision has not come into effect before the
commencement day.
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(Corporations)
Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1565
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On the commencement day, ASIC is taken to have made a decision
under section 40-30 of the Insolvency Practice Schedule
(Corporations) to cancel the registration of the person as a
liquidator.
(3) Section 40-35 of the Insolvency Practice Schedule (Corporations)
applies in relation to the decision as if the decision were made on
the commencement day.
Subdivision E—Disciplinary proceedings before the Board
1565 Matters not dealt with by the Board before the commencement
day
(1) If:
(a) an application has been made under section 1292 of the old
Act in relation to a person before the commencement day;
and
(b) the Board has not, before the commencement day:
(i) made an order in response to the application under
subsection 1292(2), (3), (4), (5), (6) or (7) of the old
Act; or
(ii) dealt with the person under subsection 1292(9) of the
old Act in response to the application; or
(iii) held a conference in relation to the application under
section 1294A;
the Board must cease its consideration of the matter on the
commencement day without making such an order, dealing with
the person under subsection 1292(9) of the old Act or convening
such a conference under section 1294A.
(2) If:
(a) the Board has ceased to consider a matter because of
subsection (1); and
(b) a conference has been convened in relation to the matter
under subsection 1294A(1), but not yet held;
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consequential amendments Division 2
Section 1566
Corporations Act 2001 207
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the Chairperson of the Board need not give notice of the
conference under subsection 1294A(3) and the conference need not
be held.
(3) The fact that the Board has ceased to consider the matter does not
preclude the matter, or any aspect of the matter, from being dealt
with under Division 40 of the Insolvency Practice Schedule
(Corporations).
(4) To avoid doubt, nothing in this section affects any right or
obligation that any person has before the commencement day,
including any right to review, in relation to the application or the
consideration of the matter by the Board.
1566 Matters dealt with by the Board before the commencement day
(1) This section applies if:
(a) an application has been made under section 1292 of the old
Act in relation to a person before the commencement day;
and
(b) before the commencement day, the Board has:
(i) made an order in response to the application under
subsection 1292(2), (3), (4), (5), (6) or (7); or
(ii) dealt with the person under subsection 1292(9) in
response to the application; or
(iii) held a conference in relation to the application under
section 1294A.
(2) The old Act continues to apply in relation to:
(a) the decision to:
(i) make the order under subsection 1292(2), (3), (4), (5),
(6) or (7); or
(ii) deal with the matter under subsection 1292(9) in
response to the application; or
(iii) convene the conference under section 1294A; and
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Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1567
208 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a decision made at the conference held under section 1294A;
and
(c) any process ordered under subsection 1294A(4) at the
conference held under that section; and
(d) the matter in relation to which the conference was held under
section 1294A before the commencement day.
(3) The same matter may not be dealt with under Division 40 of the
Insolvency Practice Schedule (Corporations).
1567 Matters which the Board refuses to deal with before the
commencement day
(1) This section applies if:
(a) an application has been made under section 1292 of the old
Act in relation to a person before the commencement day;
and
(b) before the commencement day, the Board has decided to
refuse to:
(i) make an order in response to the application under
subsection 1292(2), (3), (4), (5), (6) or (7); or
(ii) deal with the person under subsection 1292(9) in
response to the application; or
(iii) convene a conference in relation to the application
under section 1294A.
(2) The old Act continues to apply in relation to the decision to refuse
to make the order under subsection 1292(2), (3), (4), (5), (6) or (7),
deal with the matter under subsection 1292(9) in response to the
application or convene a conference under section 1294A.
(3) The same matter may not be dealt with under Division 40 of the
Insolvency Practice Schedule (Corporations).
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Part 10.25
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consequential amendments Division 2
Section 1568
Corporations Act 2001 209
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1568 Board considering terminating suspension before the
commencement day
(1) If:
(a) an application has been made under section 1295 of the old
Act to terminate the suspension of the registration of a person
as a liquidator, or as a liquidator of a specified body
corporate; and
(b) the Board has neither refused the application nor, by order,
terminated the suspension before the commencement day;
the Board must cease its consideration of the matter on the
commencement day without making such an order.
(2) If:
(a) the Board, under section 1295 of the old Act, is considering
of its own motion whether to terminate the suspension of the
registration of a person as a liquidator, or as a liquidator of a
specified body corporate; and
(b) the Board has not, by order, terminated the suspension before
the commencement day;
the Board must cease its consideration of the matter on the
commencement day without making such an order.
(3) The fact that the Board has ceased to consider the matter does not
preclude the matter from being dealt with under Division 40 of the
Insolvency Practice Schedule (Corporations).
1569 Sharing information between the Board and committees
(1) The Chair of a committee convened under Part 2 of the Insolvency
Practice Schedule (Corporations) may request the Chairperson of
the Board (the Board Chair) to give the committee any
information or document in the Board’s possession or control in
relation to a person who:
(a) is, or has at any time been, a registered liquidator under the
Insolvency Practice Schedule (Corporations); or
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Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1570
210 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) has at any time been registered as a liquidator, or as a
liquidator of a specified body corporate, under the old Act.
(2) The Board Chair must comply with the request within 10 business
days.
Subdivision F—Suspension, cancellation and disciplinary
action under the Insolvency Practice Schedule
(Corporations)
1570 Direction to comply with requirement to lodge documents etc.
Subdivision B of Division 40 of the Insolvency Practice Schedule
(Corporations) applies whether or not a requirement mentioned in
that Subdivision to lodge a document or give information or a
document arises before, on or after the commencement day.
1571 Suspension by ASIC under the Insolvency Practice Schedule
(Corporations)
(1) Section 40-25 of the Insolvency Practice Schedule (Corporations)
applies whether or not an event mentioned in subsection 40-25(1)
occurs before, on or after the commencement day.
(2) However, paragraph 40-25(1)(c) of the Insolvency Practice
Schedule (Corporations) does not apply in relation to the
cancellation of the registration of a person as a trustee under the
Bankruptcy Act 1966, as in force at any time before the
commencement day.
1572 Cancellation by ASIC under the Insolvency Practice Schedule
(Corporations)
(1) Section 40-30 of the Insolvency Practice Schedule (Corporations)
applies whether or not an event mentioned in subsection 40-30(1)
occurs before, on or after the commencement day.
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consequential amendments Division 2
Section 1573
Corporations Act 2001 211
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) However, paragraph 40-30(1)(c) of the Insolvency Practice
Schedule (Corporations) does not apply in relation to the
cancellation of the registration of a person as a trustee under the
Bankruptcy Act 1966, as in force at any time before the
commencement day.
1573 Show-cause notice under the Insolvency Practice Schedule
(Corporations)
Subdivision E of Division 40 of the Insolvency Practice Schedule
(Corporations) applies whether or not an event mentioned in
subsection 40-40(1) of the Schedule occurs before, on or after the
commencement day.
1574 Lifting or shortening suspension under the Insolvency Practice
Schedule (Corporations)
Subdivision F of Division 40 of the Insolvency Practice Schedule
(Corporations) applies whether or not a person’s registration as a
liquidator is suspended under a provision of the old Act or of the
Insolvency Practice Schedule (Corporations).
1575 Action initiated by industry bodies
Section 40-100 of the Insolvency Practice Schedule (Corporations)
applies, whether or not the grounds to which a notice under that
section relates arise because of an action, a failure to act or
circumstance that occurs before, on or after the commencement
day.
Subdivision G—Powers of the Court and other bodies
1576 Application of court powers under section 45-1 of the
Insolvency Practice Schedule (Corporations)
The Court may exercise its powers to make an order under
section 45-1 of the Insolvency Practice Schedule (Corporations),
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Division 2 Application of Part 2 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1577
212 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
whether or not the action or failure to act in relation to which, or
because of which, the order is made occurs before, on or after the
commencement day.
1577 Powers to deal with registration under the old Act on or after
the commencement day
(1) This section applies if, as a result of the continued application of
the old Act on or after the commencement day, a relevant body
may decide to register a person, or suspend or cancel the
registration of a person, as a liquidator or as a liquidator of a
specified body corporate under the old Act.
(2) A relevant body may instead:
(a) register the person, or suspend or cancel the registration of
the person, as a liquidator under the Insolvency Practice
Schedule (Corporations); and
(b) by order, modify the application of this Part or the
Insolvency Practice Schedule (Corporations) in relation to
the registration, or the suspension or cancellation of the
registration, of the person as a liquidator under the
Insolvency Practice Schedule (Corporations).
(3) In this section:
relevant body means ASIC, the Administrative Appeals Tribunal,
the Court or any other body.
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Part 10.25
Application of Part 3 of the Insolvency Practice Schedule (Corporations) and related
consequential amendments Division 3
Section 1578
Corporations Act 2001 213
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Application of Part 3 of the Insolvency
Practice Schedule (Corporations) and related
consequential amendments
Subdivision A—Introduction
1578 Simplified outline of this Division
This Division deals with the way this Act will apply to external
administrations when the provisions of the Insolvency Practice
Schedule (Corporations) begin to operate.
New external administrations
The Insolvency Practice Schedule (Corporations) applies to
external administrations that start on or after the commencement of
the Insolvency Law Reform Act 2016 (called new external
administrations).
Ongoing external administrations
For external administrations that start before that day but are still
ongoing (called ongoing external administrations), the Insolvency
Practice Schedule (Corporations) applies in accordance with this
Division but usually only in relation to new events. Generally, the
old Act continues to apply to old events and processes that are
incomplete. There are some exceptions.
Old external administrations
For old external administrations that have ended but that may have
ongoing obligations or processes, in most cases the old Act
continues to apply.
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1579
214 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—General rules for Part 3
1579 Application of Part 3 of the Insolvency Practice Schedule
(Corporations)—general rules
New external administrations
(1) Part 3 of the Insolvency Practice Schedule (Corporations) applies
in relation to a new external administration of a company.
Ongoing external administrations
(2) Part 3 of the Insolvency Practice Schedule (Corporations) applies
in relation to an ongoing external administration of a company in
accordance with this Division.
Subdivision C—Remuneration and other benefits received by
external administrators
1580 Application of Division 60 of the Insolvency Practice Schedule
(Corporations)—general rule
Subdivision B to D of Division 60 of the Insolvency Practice
Schedule (Corporations) applies in relation to an external
administrator of a company under ongoing external administration
who is appointed on or after the commencement day.
1581 Old Act continues to apply in relation to remuneration for
administrators already appointed
(1) Despite the repeal of sections 449E and 473 and the repeal and
substitution of subsections 499(3) to (7) of the old Act by
Schedule 2 to the Insolvency Law Reform Act 2016, the old Act
continues to apply in relation to the remuneration of an external
administrator of a company who is appointed before the
commencement day.
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consequential amendments Division 3
Section 1582
Corporations Act 2001 215
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Despite subsection (1), if, under Subdivision F of this Division,
Division 75 of the Insolvency Practice Schedule (Corporations)
rather than the old Act would apply to a meeting that deals with the
remuneration of an external administrator of a company who is
appointed before the commencement day, Division 75 of the
Insolvency Practice Schedule (Corporations) applies to that
meeting.
1582 Duties of administrators relating to remuneration and other
benefits
(1) Section 60-20 of the Insolvency Practice Schedule (Corporations)
applies in relation to an external administrator of an ongoing
external administration of a company whether or not the
administrator was appointed before, on or after the commencement
day.
(2) However, that section does not apply in relation to arrangements
made before the commencement day.
1583 Old Act continues to apply in relation to any right of indemnity
(1) This section applies if the remuneration of an external
administrator of a company is fixed under section 449E of the old
Act:
(a) before the commencement day; or
(b) on or after the commencement day (in accordance with a
provision of this Division).
(2) Despite the repeal of that section and the amendment of
paragraph 443D(b) of the old Act by Schedule 2 to the Insolvency
Law Reform Act 2016, the old Act continues to apply in relation to
any right of indemnity that the external administrator has as if that
repeal and amendment had not happened.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1584
216 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1584 Application of new provisions about vacancies of
court-appointed liquidator
Subsection 473A(1) (as inserted by Schedule 2 to the Insolvency
Law Reform Act 2016) applies whether or not the vacancy in the
office of liquidator occurred before, on or after the commencement
day.
1585 Application of new provisions about exercise of powers while
company under external administration
Application of new section 198G
(1) Section 198G (as inserted by Schedule 2 to the Insolvency Law
Reform Act 2016) applies in relation to an exercise of power or a
performance of a function that occurs on or after the
commencement day.
Approval under old Act continues to have effect
(2) If, under subsection 499(4) of the old Act, a committee of
inspection or the company’s creditors give approval for a director
of the company to continue to perform or exercise the director’s
powers or functions, subsections 198G(1) and (2) (as inserted by
Schedule 2 to the Insolvency Law Reform Act 2016) do not apply in
relation to the director.
Subdivision D—Funds handling
1586 Application of Division 65 of the Insolvency Practice Schedule
(Corporations)—general rule
Division 65 of the Insolvency Practice Schedule (Corporations)
applies in relation to an ongoing external administration of a
company.
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consequential amendments Division 3
Section 1587
Corporations Act 2001 217
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1587 Administration account
If, immediately before the commencement day, a person has a
liquidator’s general account in relation to the external
administration of:
(a) a company; or
(b) a company in a pooled group;
the account is taken on and after the commencement day to be an
administration account for the company for the purposes of
section 65-5 of the Insolvency Practice Schedule (Corporations).
1588 Paying money into administration account
Application of the Insolvency Practice Schedule (Corporations)
(1) Sections 65-5 and 65-15 of the Insolvency Practice Schedule
(Corporations) do not apply in relation to money received before
the commencement day.
Old regulations continue to apply to money received before
commencement
(2) Paragraph 5.6.06(1)(b) of the old regulations continues to apply in
relation to money received before the commencement day.
1589 Paying money out of administration account
Section 65-25 of the Insolvency Practice Schedule (Corporations)
does not apply in relation to money paid out of an administration
account before the commencement day.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1590
218 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1590 Handling securities
Application of the Insolvency Practice Schedule (Corporations)
(1) Section 65-40 of the Insolvency Practice Schedule (Corporations)
does not apply in relation to negotiable instruments and other
securities received before the commencement day.
Old regulations continue to apply to money received before
commencement
(2) Regulation 5.6.07 of the old regulations continues to apply in
relation to bills, notes and other securities received before the
commencement day.
Subdivision E—Information
1591 Application of Division 70 of the Insolvency Practice Schedule
(Corporations)—general rule
Division 70 of the Insolvency Practice Schedule (Corporations)
applies in relation to an ongoing external administration of a
company.
1592 Accounts and administration returns
Administration returns for 2017-18 and later years
(1) Sections 70-5 and 70-6 of the Insolvency Practice Schedule
(Corporations) apply in relation to the financial year starting on
1 July 2017 and later financial years.
Accounts under old Act
(2) Subsection (3) of this section applies in relation to the repeal of
each of the following sections of the old Act by Schedule 2 to the
Insolvency Law Reform Act 2016:
(a) 438E;
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Section 1593
Corporations Act 2001 219
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) 445J;
(c) 539.
(3) To the extent that a repealed section relates to a period for which
an account or statement must be lodged:
(a) the repeal of the section applies in relation to periods starting
on or after 1 July 2017; and
(b) the section applies in relation to periods starting before 1 July
2017 and ending after that day as if the period ends on
30 June 2017.
Continuation of audits under old Act
(4) For the avoidance of doubt, despite the repeal of a section
mentioned in subsection (2) by Schedule 2 to the Insolvency Law
Reform Act 2016, audits may be continued under that section in
relation to accounts lodged under that section as if the old Act
continued to apply.
1593 Administration books
Application of the Insolvency Practice Schedule (Corporations)
(1) Section 70-10 of the Insolvency Practice Schedule (Corporations)
does not apply in relation to events:
(a) that occur before the commencement day; and
(b) in respect of which, or because of which, entries or minutes
are to be made.
Old Act continues to apply to events etc. before commencement day
(2) Despite the repeal of section 531 of the old Act by Schedule 2 to
the Insolvency Law Reform Act 2016, that section continues to
apply in relation to events:
(a) that occur before the commencement day; and
(b) in respect of which, or because of which, entries or minutes
must be made.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1594
220 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1594 Audit of administration books
Sections 70-15 to 70-25 of the Insolvency Practice Schedule
(Corporations) apply to books relating to an ongoing external
administration whether or not the books are kept under a provision
of the old Act or of the Insolvency Practice Schedule
(Corporations).
1595 Transfer of administration books
Application of the Insolvency Practice Schedule (Corporations)
(1) Sections 70-30 and 70-31 of the Insolvency Practice Schedule
(Corporations) apply in relation to a person who ceases to be the
external administrator of a company on or after the commencement
day.
Application of repeal of old Act
(2) The repeal of section 1298A of the old Act by Schedule 2 to the
Insolvency Law Reform Act 2016 applies in relation to a person
whose registration as a liquidator is cancelled or suspended on or
after the commencement day.
1596 Retention and destruction of administration books
Application of the Insolvency Practice Schedule (Corporations)
(1) To avoid doubt, section 70-35 of the Insolvency Practice Schedule
(Corporations) applies to books relating to an ongoing external
administration whether or not the books were kept under a
provision of the old Act or of the Insolvency Practice Schedule
(Corporations).
Old Act continues to apply in relation to books for old external
administrations
(2) If:
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Section 1597
Corporations Act 2001 221
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) an external administration of a company ends before the
commencement day; and
(b) immediately before that day, a person was required under
section 542 of the old Act to retain books of the company for
a period; and
(c) but for the repeal of that section by Schedule 2 to the
Insolvency Law Reform Act 2016, that period would have
ended on or after the commencement day;
section 542 of the old Act continues to apply (despite its repeal by
Schedule 2 to the Insolvency Law Reform Act 2016) on and after
the commencement day in relation to the person for the remainder
of that period.
Continued effect of consent by ASIC under old Act
(3) If before the commencement day, a person is entitled under
subsections 542(3) and (4) of the old Act to destroy books of a
company (or of the person’s that are relevant to the affairs of the
company) then, despite section 70-35 of the Insolvency Practice
Schedule (Corporations), those books may be destroyed.
1597 Giving information to creditors etc.
Subdivision D of Division 70 of the Insolvency Practice Schedule
(Corporations) applies whether or not the information, report or
document referred to in subsection 70-40(1), 70-45(1), 70-46(2),
70-47(2) or 70-50(1) of the Insolvency Practice Schedule
(Corporations):
(a) was obtained or generated; or
(b) was made or prepared; or
(c) is in respect of actions or events that occurred;
before, on or after the commencement day.
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1598
222 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1598 Commonwealth may request information
Section 70-55 of the Insolvency Practice Schedule (Corporations)
applies whether or not the information, report or document referred
to in subsection 70-55(2):
(a) was obtained or generated; or
(b) was made or prepared; or
(c) is in respect of actions or events that occurred;
before, on or after the commencement day.
1599 Reporting to ASIC
Section 70-60 of the Insolvency Practice Schedule (Corporations)
applies whether or not the information, report or document referred
to in subsection 70-60(1):
(a) was obtained or generated; or
(b) was made or prepared; or
(c) is in respect of actions or events that occurred;
before, on or after the commencement day.
1600 Old Act continues to apply in relation to notices to remedy
default
Despite its repeal by Schedule 2 to the Insolvency Law Reform Act
2016, section 540 of the old Act continues to apply in relation to a
notice mentioned in that section that is served on a person before
the commencement day.
Subdivision F—Meetings
1601 Application of Division 75 of the Insolvency Practice Schedule
(Corporations)—general rule
(1) Division 75 of the Insolvency Practice Schedule (Corporations)
applies in relation to an ongoing external administration of a
company.
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consequential amendments Division 3
Section 1602
Corporations Act 2001 223
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) However, Division 75 of the Insolvency Practice Schedule
(Corporations) does not apply in relation to meetings convened or
held before the commencement day.
1602 External administrator must convene meetings in certain
circumstances
Application of the Insolvency Practice Schedule (Corporations)
(1) Section 75-15 of the Insolvency Practice Schedule (Corporations)
does not apply in relation to:
(a) directions given before the commencement day; or
(b) resolutions passed before the commencement day.
Old Act continues to apply in relation to resolutions for voluntary
winding up passed before commencement day
(2) Despite their repeal by Schedule 2 to the Insolvency Law Reform
Act 2016:
(a) sections 497 and 498 of the old Act continue to apply on and
after the commencement day in relation to a resolution for
voluntary winding up that is passed before the
commencement day; and
(b) subsection 477(4) of the old Act continues to apply on and
after the commencement day if a meeting of creditors has not
been held under section 497 of the old Act in relation to a
voluntary winding up a resolution for which is passed before
the commencement day.
1603 Old Act continues to apply in relation to reporting for first
year of administration
(1) This section applies if, in relation to a company, a year mentioned
in subsection 508(1) of the old Act starts before the
commencement day but ends after that day.
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(Corporations)
Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1604
224 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Despite its repeal by Schedule 2 to the Insolvency Law Reform Act
2016, section 508 of the old Act continues to apply on and after the
commencement day in relation to the company for that year.
1604 Old Act continues to apply to the deregistration of companies
The repeal and substitution of section 509 by Schedule 2 to the
Insolvency Law Reform Act 2016 applies where the external
administration of the company ends during a financial year starting
on or after 1 July 2017.
1605 Old Act continues to apply for certain meetings convened etc.
before commencement day
(1) If:
(a) the administrator of a company under external administration
is required to convene a meeting of the company’s creditors
under section 439A of the old Act; and
(b) the convening period for the meeting as fixed by
subsection 439A(5) of the old Act (or extended under
subsection (6) of that section) ends on or after the
commencement day; and
(c) as at the commencement day, the meeting has not been
convened;
then the old Act continues to apply on and after the
commencement day (despite the repeal of subsections 439A(3) and
(4) and section 439B by Schedule 2 to the Insolvency Law Reform
Act 2016) in relation to the meeting.
(2) Despite the repeal of section 445F of the old Act and the
amendment of section 445A of the old Act by Schedule 2 to the
Insolvency Law Reform Act 2016, those sections continue to apply
on and after the commencement day in relation to meetings for
which a notice under subsection 445F(2) is given before the
commencement day.
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consequential amendments Division 3
Section 1606
Corporations Act 2001 225
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Despite its repeal by Schedule 2 to the Insolvency Law Reform Act
2016, section 479 of the old Act continues to apply on and after the
commencement day in relation to meetings which have been
convened under subsection 479(2) or for which a direction or
request is given under that subsection before the commencement
day.
(4) Despite the amendment of subsection 496(8) of the old Act by
Schedule 2 to the Insolvency Law Reform Act 2016, that subsection
continues to apply on and after the commencement day in relation
to meetings convened before the commencement day as if the
amendment had not been made.
1606 Outcome of voting at creditors’ meeting determined by related
entity or on casting vote—Court powers
Sections 75-41 to 75-45 of the Insolvency Practice Schedule
(Corporations) apply whether a proposal has been voted on or a
resolution passed before, on or after the commencement day.
Subdivision G—Committees of inspection
1607 Application of Division 80 of the Insolvency Practice Schedule
(Corporations)—general rules
(1) Division 80 of the Insolvency Practice Schedule (Corporations)
applies in relation to a committee of inspection for an ongoing
external administration of a company:
(a) that is appointed under that Division on or after the
commencement day; or
(b) that is appointed under a provision of the old Act but is taken
to be a committee of inspection under subsection 1608(2) of
this Subdivision.
(2) However, Division 80 of the Insolvency Practice Schedule
(Corporations) does not apply in relation to meetings of, or related
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1608
226 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
to, the committee of inspection convened or held before the
commencement day.
1608 Appointing committees of inspection
Committees appointed under old Act taken to be committee of
inspection
(1) Subsection (2) applies if there is, in relation to the external
administration of a company:
(a) a committee of creditors validly appointed under
section 436E of the old Act; or
(b) a committee of inspection validly appointed under
section 548 of the old Act; or
(c) a committee of inspection validly appointed under
section 548A of the old Act.
(2) On and after the day specified in subsection (3), the committee (the
continued committee) is taken for the purposes of the Insolvency
Practice Schedule (Corporations) to be:
(a) in the case of a committee appointed under section 436E or
548 of the old Act—a committee of inspection established
under section 80-10 of the Insolvency Practice Schedule
(Corporations) in relation to the external administration of
the company; and
(b) in the case of a committee appointed under section 548A of
the old Act—a committee of inspection established under
section 80-26 of the Insolvency Practice Schedule
(Corporations) in relation to a pooled group of which the
company is a member.
(3) For the purposes of subsection (2), the day is:
(a) in the case of a committee appointed on or before the
commencement day—the commencement day; and
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Section 1609
Corporations Act 2001 227
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) in the case of a committee appointed on a day that is after the
commencement day in accordance with a provision of this
section—that later day.
Old Act continues to apply to certain meetings
(4) If:
(a) because of the operation of section 436E, 548 or 548A (the
repealed section) of the old Act before the commencement
day, the administrator or liquidator of a company is required
to convene a meeting; and
(b) as at the commencement day, the meeting has not been
convened;
then (despite their repeal by Schedule 2 to the Insolvency Law
Reform Act 2016) the repealed sections of the old Act continue to
apply on and after the commencement day in relation to the
meeting.
1609 Old Act continues to apply to certain reports by administrator
If, before the commencement day, the administrator of a company
under administration is directed under subsection 436F(3) of the
old Act to give a report, then despite the repeal of section 436F by
Schedule 2 to the Insolvency Law Reform Act 2016, that section
continues to apply on and after commencement day in relation to
the report.
1610 Membership of continued committees
Members of continued committees
(1) The members of a continued committee are the members appointed
to the committee under section 436E (in accordance with
section 436G), 548 or 548A of the old Act, as the case requires.
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
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Section 1611
228 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Old Act continues to apply to members of continued committees
(2) If a person is a member of a continued committee, then despite the
repeal of:
(a) section 436G, 548 or 548A (and any regulations made under
that section), as the case requires; and
(b) section 550;
by Schedule 2 to the Insolvency Law Reform Act 2016, those
provisions continue to apply in relation to the person.
Application of the Insolvency Practice Schedule (Corporations)
(3) The following provisions do not apply in relation to members of a
continued committee:
(a) sections 80-15 to 80-25 and paragraph 80-26(2)(b) of the
Insolvency Practice Schedule (Corporations);
(b) Insolvency Practice Rules made under section 80-30 of the
Insolvency Practice Schedule (Corporations) that relate to
membership of a committee of inspection.
Note: However, the committee could dissolve and the members could form a
new committee to which these provisions would then apply.
1611 Validity of appointment under section 548 of the old Act not
affected by lack of separate meeting of contributories
(1) The appointment of a committee of inspection under section 548 of
the old Act before the commencement day is not invalid merely
because a separate meeting of contributories was not convened for
the purposes of determining:
(a) whether a committee of inspection should be appointed; and
(b) where a committee of inspection is to be appointed:
(i) the numbers of members to represent the creditors and
the contributories, respectively; and
(ii) the persons who are to be members of the committee
representing creditors and contributories, respectively.
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consequential amendments Division 3
Section 1612
Corporations Act 2001 229
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) However, if:
(a) a debt or claim has been paid in the winding up of a company
before the commencement day; and
(b) the priority given to the debt or claim was determined under
section 556 of the Corporations Act 2001 on the basis that a
committee of inspection was not validly appointed because a
separate meeting of contributories was not convened for the
purposes mentioned in paragraphs (1)(a) and (b); and
(c) but for subsection (1), the committee of inspection would not
have been validly appointed;
the priority of the payment is not affected by subsection (1).
1612 Continued application of directions by creditors or committees
under the old Act
Sections 80-35 and 85-5 of the Insolvency Practice Schedule
(Corporations) apply whether or not the direction is given before,
on or after the commencement day.
1613 Committee of inspection may request information
Section 80-40 of the Insolvency Practice Schedule (Corporations)
applies whether or not the information, report or document referred
to in subsection 80-40(1):
(a) was obtained or generated; or
(b) was made or prepared; or
(c) is in respect of actions or events that occurred;
before, on or after the commencement day.
1614 Duties of members of committee of inspection and creditors
relating to profits and advantages etc.
Sections 80-55 and 80-60 of the Insolvency Practice Schedule
(Corporations) apply to arrangements made on or after the
commencement day.
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1615
230 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision H—Review of the external administration of a
company
1615 Application of Division 90 of the Insolvency Practice Schedule
(Corporations)—general rule
Division 90 of the Insolvency Practice Schedule (Corporations)
applies in relation to an ongoing external administration whether or
not the matter to be reviewed occurred before, on or after the
commencement day.
1616 Application of the Insolvency Practice Schedule (Corporations)
provisions that conflict with old Act Court orders—
general rule
(1) This section applies if a court makes an order in relation to a
person or the external administration of a company under the old
Act (the old Act order).
(2) The old Act order does not cease to have effect because a provision
of the old Act under which it was made has been amended or
repealed by Schedule 2 to the Insolvency Law Reform Act 2016.
(3) If the old Act order is inconsistent with a provision of this Act that
is amended or inserted by Schedule 2 to the Insolvency Law
Reform Act 2016, then, subject to this Part, the provision does not
apply to the extent that it is inconsistent with the old Act order.
1617 Old Act continues to apply in relation to ongoing proceedings
before a court—general rule
(1) This section applies if proceedings are brought under the old Act in
a court (on application or on the initiative of the court) in relation
to the external administration of a company either:
(a) before the commencement day; or
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Section 1618
Corporations Act 2001 231
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) on or after the commencement day (in accordance with a
provision of this Division).
(2) Subject to this Part, nothing in Schedule 2 to the Insolvency Law
Reform Act 2016 affects:
(a) the proceedings; or
(b) the power of the court to make orders in relation to the
proceedings; or
(c) any orders made by the court in relation to the proceedings;
or
(d) any enforcement in relation to, or as a result of, the
proceedings (including giving effect to any court orders); or
(e) any appeal or review in relation to the proceedings.
(3) Subject to this Part, the old Act continues to apply on and after the
commencement day in relation to the proceedings despite the
amendments and repeals made by Schedule 2 to the Insolvency
Law Reform Act 2016.
(4) In this section:
proceedings include civil and criminal proceedings, inquiries by
the court, enforcement processes and any other processes.
1618 Court powers to inquire into and make orders
Application of the Insolvency Practice Schedule (Corporations)
(1) Subsections (2) to (4) are for the avoidance of doubt.
(2) Sections 90-5 and 90-10 of the Insolvency Practice Schedule
(Corporations) apply whether or not the information, report or
document mentioned in subsections 90-5(2) and 90-10(4) was
prepared before, on or after the commencement day.
(3) Paragraph 90-15(3)(f) of the Insolvency Practice Schedule
(Corporations) applies whether or not the remuneration is paid or
payable before, on or after the commencement day.
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Division 3 Application of Part 3 of the Insolvency Practice Schedule (Corporations)
and related consequential amendments
Section 1619
232 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) Subsection 90-15(4) of the Insolvency Practice Schedule
(Corporations) applies whether or not the action or failure to act
occurred before, on or after the commencement day.
Old Act continues to apply for inquiries started under section 536
(5) Despite the repeal of section 536 of the old Act by Schedule 2 to
the Insolvency Law Reform Act 2016, that section continues to
apply in relation to inquiries commenced by ASIC before the
commencement day (including inquiries commenced because of
the extension of section 536 by subsection 411(9) to persons
appointed under the terms of a compromise or arrangement).
Application of new section 599
(6) Section 599 (as inserted by Schedule 2 to the Insolvency Law
Reform Act 2016) applies whether or not the act, omission or
decision occurred before, on or after the commencement day.
1619 Review by another registered liquidator
(1) The following subsections are for the avoidance of doubt.
(2) Sections 90-24 and 90-26 of the Insolvency Practice Schedule
(Corporations) apply whether or not:
(a) the remuneration is paid or payable; or
(b) the cost or expense is incurred or paid;
before, on or after the commencement day.
(3) A period determined by the Court under paragraph 90-26(4)(d) of
the Insolvency Practice Schedule (Corporations) or prescribed
under paragraph 90-26(4)(c) may include a period that:
(a) starts before the commencement day but ends after that day;
or
(b) starts and ends before the commencement day.
(4) Section 90-28 of the Insolvency Practice Schedule (Corporations)
applies whether or not the books or information mentioned in
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Application of Part 3 of the Insolvency Practice Schedule (Corporations) and related
consequential amendments Division 3
Section 1620
Corporations Act 2001 233
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paragraph 90-28(2)(a) were prepared before, on or after the
commencement day.
(5) Rules made for the purposes of section 90-29 of the Insolvency
Practice Schedule (Corporations) in relation to the meaning of
properly incurred may make provision for or in relation to costs
and expenses incurred before, on or after the commencement day.
1620 Removal by creditors
For the avoidance of doubt, section 90-35 of the Insolvency
Practice Schedule (Corporations) applies whether or not the
external administrator was appointed before, on or after the
commencement day.
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 4 Administrative review
Section 1621
234 Corporations Act 2001
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Division 4—Administrative review
1621 Administrative Appeals Tribunal proceedings
(1) This section applies if an application is made to the Administrative
Appeals Tribunal for review of a decision made under the old Act
either:
(a) before the commencement day; or
(b) on or after the commencement day (in accordance with a
provision of this Part).
(2) Subject to this Part, nothing in the Insolvency Law Reform Act
2016 affects:
(a) any proceedings before the Administrative Appeals Tribunal
in relation to the decision; or
(b) the powers of the Administrative Appeals Tribunal in relation
to the decision; or
(c) any enforcement in relation to, or as a result of, a decision of
the Administrative Appeals Tribunal in relation to the
decision; or
(d) any appeal or review in relation to a decision of the
Administrative Appeals Tribunal in relation to the decision.
(3) Subject to this Part, the old Act continues to apply on and after the
commencement day in relation to the proceedings despite the
amendments and repeals made by Schedule 2 to the Insolvency
Law Reform Act 2016.
Applications for review made after the commencement day
(4) Despite the repeals and amendments made by the Insolvency Law
Reform Act 2016, applications may be made to the Administrative
Appeals Tribunal for review of the decision.
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Application of other consequential amendments Division 5
Section 1622
Corporations Act 2001 235
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Division 5—Application of other consequential
amendments
1622 Outcome of voting at creditors’ meeting determined by related
entity or on casting vote—Court powers
Sections 415A to 415C, as inserted by the Insolvency Law Reform
Act 2016, apply whether a proposed resolution has been voted on
before, on or after the commencement day.
1623 Returns and accounts by controllers
Returns by controllers for 2017-18 and later years
(1) Sections 422A and 422B, as inserted by Schedule 2 to the
Insolvency Law Reform Act 2016, apply in relation to the financial
year starting on 1 July 2017 and later financial years.
Accounts under old Act
(2) Subsection (3) of this section applies in relation to the amendment
of section 432 of the old Act by Schedule 2 to the Insolvency Law
Reform Act 2016.
(3) To the extent that section 432 of the old Act relates to a period for
which an account must be lodged:
(a) the amendment of the section applies in relation to periods
starting on or after 1 July 2017; and
(b) the unamended section applies in relation to periods starting
before 1 July 2017 and ending after that day as if the period
ends on 30 June 2017.
Continuation of audits under old Act
(4) For the avoidance of doubt, despite the amendment of section 432
of the old Act by Schedule 2 to the Insolvency Law Reform Act
2016, audits may be continued under that section in relation to
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Part 10.25 Transitional provisions relating to the Insolvency Practice Schedule
(Corporations)
Division 5 Application of other consequential amendments
Section 1624
236 Corporations Act 2001
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accounts lodged under that section as if the old Act continued to
apply.
1624 Transfer of books by a controller to a new controller or ASIC
Sections 422C and 422D, as inserted by Schedule 2 to the
Insolvency Law Reform Act 2016, apply in relation to a person who
ceases to act as a controller of property of a corporation on or after
the commencement day.
1625 Officers reporting to controller about corporation’s affairs
The amendment of paragraph 429(2)(b) by Schedule 2 to the
Insolvency Law Reform Act 2016 applies in relation to notices
received on or after the commencement day.
1626 Lodging notice of execution of a deed of company arrangement
The amendment of paragraph 450B(c), and substitution with
paragraph 450B(b), by Schedule 2 to the Insolvency Law Reform
Act 2016 applies in relation to deeds of company arrangement
executed on or after the commencement day.
1627 Office of liquidator appointed by the Court
Vacancies in office of liquidator appointed by the Court
(1) Despite the repeal of section 473 of the old Act by Schedule 2 to
the Insolvency Law Reform Act 2016, that section continues to
apply in relation to a vacancy in the office of a liquidator appointed
by the Court that occurs before the commencement day.
(2) Section 473A, as inserted by Schedule 2 to the Insolvency Law
Reform Act 2016, applies in relation to vacancies in the office of a
liquidator appointed by the Court that occur on or after the
commencement day.
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Application of other consequential amendments Division 5
Section 1628
Corporations Act 2001 237
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Where there are 2 or more liquidators appointed by the Court
(3) Subsections 473A(4) and (5), as inserted by Schedule 2 to the
Insolvency Law Reform Act 2016, apply in relation to 2 or more
liquidators appointed by the Court, whether the liquidators were
appointed before, on or after the commencement day.
1628 Report as to company’s affairs to be submitted to liquidator
(1) The amendments of section 475 by Schedule 2 to the Insolvency
Law Reform Act 2016 apply where a winding up order is made on
or after the commencement day.
(2) The repeal of section 476 of the old Act by Schedule 2 to the
Insolvency Law Reform Act 2016 applies where a report referred to
in subsection 475(1) or (2) is received on or after the
commencement day.
1629 Orders for release or deregistration
Despite the amendment of paragraph 481(1)(a) by Schedule 2 to
the Insolvency Law Reform Act 2016, that paragraph continues to
apply in relation to auditors appointed by ASIC under section 539
of the old Act.
1630 Meeting relating to the voluntary winding up of a company
The repeal and substitution of section 506A by Schedule 2 to the
Insolvency Law Reform Act 2016 applies where the resolution for
the voluntary winding up of a company is passed on or after the
commencement day.
1631 Pooling determinations
(1) The repeal of sections 574 to 576 of the old Act by Schedule 2 to
the Insolvency Law Reform Act 2016 apply where a pooling
determination is made or varied on or after the commencement
day.
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(Corporations)
Division 5 Application of other consequential amendments
Section 1632
238 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Subsection 577(1A), as inserted by Schedule 2 to the Insolvency
Law Reform Act 2016, applies where a pooling determination is
made or varied on or after the commencement day.
(3) The repeal of subsection 577(2) of the old Act by Schedule 2 to the
Insolvency Law Reform Act 2016 applies to resolutions agreed on
or after the commencement day.
1632 Electronic methods of giving or sending certain notices
(1) If:
(a) a notice or other document was authorised or required to be
given or sent under a provision of the old Act mentioned in a
paragraph of subsection 600G(1) that is repealed by
Schedule 2 to the Insolvency Law Reform Act 2016; and
(b) although the authorisation or requirement arose before the
commencement day, the notice or other document is required
to be given or sent on or after the commencement day;
that paragraph of subsection 600G(1) continues to apply in relation
to the giving or sending of the notice or other document.
(2) Subsections 600G(4) and (4A), as inserted by Schedule 2 to the
Insolvency Law Reform Act 2016, apply in relation to notices or
other documents given or sent on or after the commencement day.
1633 Deregistration following winding up
(1) If, on or after the commencement day, the Court orders the
deregistration of a company under subsection 509(6) of the old
Act, subsection 601AC(1) of the old Act continues to apply in
relation to the order.
(2) Subsection 601AC(2) of the old Act continues to apply in relation
to a company for which a return has been lodged under section 509
before the commencement day.
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Part 10.25
Regulations Division 6
Section 1634
Corporations Act 2001 239
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Division 6—Regulations
1634 Regulations
(1) The Governor-General may make regulations prescribing matters
of a transitional nature (including prescribing any saving or
application provisions) relating to the amendments and repeals
made by Schedule 2 to the Insolvency Law Reform Act 2016.
(2) The regulations may provide that certain provisions of Schedule 2
to the Insolvency Law Reform Act 2016 are taken to be modified as
set out in the regulations. Those provisions then have effect as if
they were so modified.
(3) The provisions of Schedule 2 to the Insolvency Law Reform Act
2016 that provide for regulations to deal with matters do not limit
each other.
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Chapter 10 Transitional provisions
Part 10.26 Transitional provisions relating to Schedule 3 to the Insolvency Law
Reform Act 2016
Section 1635
240 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 10.26—Transitional provisions relating to
Schedule 3 to the Insolvency Law Reform
Act 2016
1635 Application of amendments made by Schedule 3 to the
Insolvency Law Reform Act 2016
(1) The amendment made by Part 1 of Schedule 3 to the Insolvency
Law Reform Act 2016 applies in relation to the administration of a
company that begins on or after the commencement of that
Schedule.
(2) The amendment made by Part 2 of Schedule 3 to the Insolvency
Law Reform Act 2016 applies in relation to material
contraventions, and likely material contraventions, of a deed of
company arrangement that occur on or after the commencement of
that Schedule, regardless of when the deed was executed.
(3) The amendment made by item 9 of Part 4 of Schedule 3 to the
Insolvency Law Reform Act 2016 applies in relation to deeds of
company arrangement that are terminated on or after the
commencement of that Schedule.
(4) The amendments made by Part 5 of Schedule 3 to the Insolvency
Law Reform Act 2016 apply for the purposes of working out the
relation-back day in relation to a winding up of a company or
Part 5.7 body starting on or after the commencement of that
Schedule.
(5) The amendments made by items 22, 23, 25, 26, 29 and 30 of Part 6
of Schedule 3 to the Insolvency Law Reform Act 2016 apply in
relation to declarations made after the commencement of that
Schedule.
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Part 10.26
Section 1635
Corporations Act 2001 241
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(6) The amendment made by item 28 of Part 6 of Schedule 3 to the
Insolvency Law Reform Act 2016 applies in relation to resolutions
passed on or after the commencement of that Schedule.
(7) The amendments made by items 31 and 32 of Part 6 of Schedule 3
to the Insolvency Law Reform Act 2016 apply in relation to orders
made on or after the commencement of that Schedule.
(8) The amendment made by item 33 of Part 6 of Schedule 3 to the
Insolvency Law Reform Act 2016 applies in relation to orders and
declarations made on or after the commencement of that Schedule.
(9) The amendment made by item 34 of Part 6 of Schedule 3 to the
Insolvency Law Reform Act 2016 applies whether the payment of
an amount in respect of a liability was made before, on or after the
commencement of that Schedule.
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Chapter 10 Transitional provisions
Part 10.28 Transitional provisions relating to the Treasury Laws Amendment (2016
Measures No. 1) Act 2017
Section 1637
242 Corporations Act 2001
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Part 10.28—Transitional provisions relating to the
Treasury Laws Amendment (2016
Measures No. 1) Act 2017
1637 Application of subparagraph 1274(2)(a)(iva) and
subsections 1274(2AA) and (2AB)
Subparagraph 1274(2)(a)(iva) and subsections 1274(2AA) and
(2AB), as inserted by Schedule 2 to the Treasury Laws Amendment
(2016 Measures No. 1) Act 2017, apply to the following:
(a) a disclosure document lodged under section 718 after that
Schedule commences;
(b) a replacement document lodged under section 719 after that
commencement;
(c) a supplementary document lodged under section 719 after
that commencement if the disclosure document it
supplements was also lodged after that commencement.
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Insolvency Practice Schedule (Corporations) Schedule 2
Introduction Part 1
Introduction Division 1
Section 1-1
Corporations Act 2001 243
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Schedule 2—Insolvency Practice Schedule
(Corporations) Note: See section 600K.
Part 1—Introduction
Division 1—Introduction
1-1 Object of this Schedule
(1) The object of this Schedule is to ensure that any person registered
as a liquidator:
(a) has an appropriate level of expertise; and
(b) behaves ethically; and
(c) maintains sufficient insurance to cover his or her liabilities in
practising as a registered liquidator.
(2) The object of this Schedule is also:
(a) to regulate the external administration of companies
consistently, unless there is a clear reason to treat a matter
that arises in relation to a particular kind of external
administration differently; and
(b) to regulate the external administration of companies to give
greater control to creditors.
1-5 Simplified outline of this Schedule
Registering liquidators
Under this Act, only a registered liquidator can perform certain
roles, such as that of the receiver of the property of a corporation,
the administrator of a company or of a deed of company
arrangement, or the liquidator or provisional liquidator of a
company.
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Section 1-5
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Part 2 of this Schedule sets out the process for registering
liquidators, and also deals with disciplining registered liquidators.
Consistently regulating the external administration of companies
Part 3 of this Schedule sets out provisions to regulate the external
administration of companies consistently.
A company is under external administration if the company is
under administration, is the subject of a deed of company
arrangement or has had a liquidator or provisional liquidator
appointed in relation to it. A company is not under external
administration merely because a person has been appointed as a
receiver, receiver and manager or other controller in relation to the
property of the company.
Other provisions
There are other matters relevant to the external administration of a
company regulated in Chapter 5.
This Schedule also gives authority for a legislative instrument, the
Insolvency Practice Rules, to deal with some matters.
Many of the terms in this Schedule are defined. The Dictionary in
section 5-5 contains a list of every term that is defined in this
Schedule. Other terms are defined in section 9 of this Act.
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Introduction Part 1
Definitions Division 5
Section 5-1
Corporations Act 2001 245
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Division 5—Definitions
Subdivision A—Introduction
5-1 Simplified outline of this Division
Terms used in this Schedule are defined in the Dictionary. In some
cases, the definition is a signpost to another provision of the
Schedule in which the meaning of the term is explained.
Some of the key terms, the meaning of which is explained in this
Division, are external administration of a company and external
administrator of a company.
Subdivision B—The Dictionary
5-5 The Dictionary
In this Schedule:
adequate and appropriate fidelity insurance has a meaning
affected by subsection 25-1(2).
adequate and appropriate professional indemnity insurance has a
meaning affected by subsection 25-1(2).
administration account: see section 65-5.
annual administration return means the return required to be
lodged under subsection 70-5(3).
annual liquidator return means the return required to be lodged
under subsection 30-1(1).
approved form: a document is lodged in the approved form if it is
lodged in accordance with section 100-6.
committee of inspection for a company means:
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Section 5-5
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(a) a committee appointed under sections 80-10 to 80-25 in
relation to the external administration of the company; or
(b) a committee that is taken to be a committee of inspection in
relation to the external administration of the company under
subsection 80-26(3) (the company is a member of a pooled
group).
creditor, when used in relation to a company under external
administration, means a creditor of the company.
current conditions: see section 5-10.
end of administration return means the return required to be
lodged under subsection 70-6(2).
end of an external administration of a company means:
(a) in relation to a company under administration—the day
worked out under paragraph 435C(1)(b); and
(b) in relation to a company subject to a deed of company
arrangement—the day the deed is terminated; and
(c) in the case of a winding up of a company—the day on which
the affairs of the company are fully wound up.
external administration of a company: see section 5-15.
external administrator of a company: see section 5-20.
financial interest: a person has a financial interest in the external
administration of a company in the circumstances set out in
section 5-30.
GST has the same meaning as in the A New Tax System (Goods
and Services Tax) Act 1999.
Insolvency Practice Rules means the rules made by the Minister
under section 105-1.
Insolvency Practice Schedule (Bankruptcy) means Schedule 2 to
the Bankruptcy Act 1966, and includes rules made under
section 105-1 of that Schedule.
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March quarter means the period of 3 months beginning on
1 January.
maximum default amount for an external administrator of a
company: see section 60-15.
member of a pooled group: see section 5-27.
pooled group: see section 5-27.
prescribed means prescribed by the Insolvency Practice Rules.
property has a meaning affected by section 5-26.
registered liquidator means an individual who is registered as a
liquidator under Part 2 of this Schedule.
Register of Liquidators means the register established and
maintained by ASIC under section 15-1.
related entity, in relation to an individual, has the same meaning as
in the Bankruptcy Act 1966.
remuneration determination, for an external administrator of a
company, means a determination made in accordance with
section 60-10 in relation to the external administrator.
resolution: a resolution is passed by creditors or contributories of a
company:
(a) in a meeting—in the circumstances prescribed under
paragraph 75-50(2)(k); or
(b) without a meeting—in the circumstances prescribed under
paragraph 75-40(5)(b).
reviewing liquidator means a registered liquidator who has been
appointed under section 90-23 or 90-24 to conduct a review.
special resolution: a special resolution is passed by creditors or
contributories of a company:
(a) in a meeting—in the circumstances prescribed under
paragraph 75-50(2)(k); or
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(b) without a meeting—in the circumstances prescribed under
paragraph 75-40(5)(b).
start of an external administration of a company means:
(a) in relation to a company under administration—the day an
administrator of the company is appointed under
section 436A, 436B or 436C; and
(b) in relation to a company that is subject to a deed of company
arrangement—the day the deed is executed; and
(c) in the case of a winding up of a company—the day the
winding up of the company is taken to have begun under
section 513A or 513B; and
(d) in relation to a company for which a provisional liquidator
has been appointed—the day the provisional liquidator is
appointed.
this Schedule includes the Insolvency Practice Rules.
Subdivision C—Other definitions
5-10 Meaning of current conditions
(1) Each of the following is a current condition imposed on a
registered liquidator:
(a) a condition that a committee decides that the registered
liquidator is to be subject to under subsection 20-20(5) or (6),
subject to any variation that a committee has decided should
be made to the condition under section 20-55;
(b) a condition imposed on all registered liquidators, or on
registered liquidators of the liquidator’s class, under
section 20-35;
(c) a condition imposed under subsection 40-15(2) (direction not
to accept further appointments);
(d) a condition that a committee decides that the registered
liquidator is to be subject to under paragraph 40-55(1)(f) or
(g) (conditions as a result of disciplinary action), subject to
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Section 5-15
Corporations Act 2001 249
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any variation that a committee has decided should be made to
the condition under section 20-55;
(e) a condition imposed on the registered liquidator by the Court
under section 45-1.
(2) However, the current conditions imposed on a registered
liquidator do not include:
(a) a condition that a committee has decided to remove under
section 20-55; or
(b) a condition that is removed under subsection 40-15(4)
(condition removed because a direction not to accept further
appointments has been withdrawn); or
(c) a condition that the Court has ordered be removed under
section 45-1.
5-15 Meaning of external administration of a company
A company is taken to be under external administration if:
(a) the company is under administration; or
(b) a deed of company arrangement has been entered into in
relation to the company; or
(c) a liquidator has been appointed in relation to the company; or
(d) a provisional liquidator has been appointed in relation to the
company.
Note: A company is not under external administration for the purposes of
this Schedule merely because a receiver, receiver and manager, or
other controller has been appointed in relation to property of the
company.
5-20 Meaning of external administrator of a company
A person is an external administrator of a company if the person
is:
(a) the administrator of the company; or
(b) the administrator under a deed of company arrangement that
has been entered into in relation to the company; or
(c) the liquidator of the company; or
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Section 5-25
250 Corporations Act 2001
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(d) the provisional liquidator of the company.
Note: A person is not an external administrator of a company for the
purposes of this Schedule merely because the person has been
appointed as a receiver, receiver and manager, or controller in relation
to property of the company.
5-25 References to the external administrator of a company
A reference in this Schedule to the external administrator of a
company is to be read:
(a) in relation to a company in respect of which there are 2 or
more joint external administrators—as a reference to all of
the external administrators; and
(b) in relation to a company in respect of which there are 2 or
more joint and several external administrators—as a
reference to all of the external administrators or any one or
more of the external administrators.
5-26 Property of a company
The property of a company includes any PPSA retention of title
property of the company.
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
5-27 Meaning of pooled group
If:
(a) a pooling determination is in force in relation to a group of 2
or more companies; or
(b) a pooling order is in force in relation to a group of 2 or more
companies;
then:
(c) the companies are together a pooled group; and
(d) each of the companies is a member of the pooled group.
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5-30 Persons with a financial interest in the external administration
of a company
A person has a financial interest in the external administration of a
company:
(a) if the person is one of the following:
(i) the company;
(ii) a creditor of the company;
(iii) an external administrator of the company;
(iv) in a members’ voluntary winding up—a member of the
company; or
(b) in any other circumstances prescribed.
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Part 2 Registering and disciplining practitioners
Division 10 Introduction
Section 10-1
252 Corporations Act 2001
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Part 2—Registering and disciplining practitioners
Division 10—Introduction
10-1 Simplified outline of this Part
Registering liquidators
An individual may apply to ASIC to be registered as a liquidator.
ASIC will refer the application to a committee who will consider
the applicant’s qualifications, conduct and fitness and whether the
applicant will take out appropriate insurance. Registration may be
subject to conditions, is for 3 years and may be renewed.
A registered liquidator must:
(a) lodge an annual return with ASIC that includes proof
that the liquidator has appropriate insurance; and
(b) give ASIC notice if the liquidator’s circumstances
change or if certain other events happen.
Disciplining registered liquidators
If a registered liquidator fails to comply with certain requirements,
such as the requirement to lodge a document or give information,
ASIC may give directions that may result in the liquidator being
unable to accept further appointments. ASIC may also seek a Court
order.
ASIC may suspend or cancel a liquidator’s registration in certain
circumstances. ASIC may also give the liquidator a show-cause
notice. If such a notice is given and no sufficient explanation is
given, ASIC may take further disciplinary action on the decision of
a committee.
Industry bodies may notify ASIC where they suspect there are
grounds for disciplinary action.
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Section 10-5
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Court powers
The Court has broad powers to make orders in relation to
registered liquidators (including imposing conditions on
registration).
10-5 Working cooperatively with the Inspector-General in
Bankruptcy
In performing its functions and exercising its powers under this Act
in relation to persons who are, have been or may become both
registered liquidators under this Act and registered trustees under
the Bankruptcy Act 1966, ASIC must work cooperatively with the
Inspector-General in Bankruptcy.
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Division 15 Register of liquidators
Section 15-1
254 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 15—Register of liquidators
15-1 Register of Liquidators
(1) ASIC must establish and maintain a Register of Liquidators.
(2) The Register of Liquidators may be kept in any form that ASIC
considers appropriate.
(3) The Insolvency Practice Rules may provide for and in relation to
the Register of Liquidators.
(4) Without limiting subsection (3), the Insolvency Practice Rules may
provide for and in relation to:
(a) the details to be entered on the Register of Liquidators; and
(b) the parts of the Register that are to be made available to the
public.
(5) Without limiting paragraph (4)(a), those details may include:
(a) details of any disciplinary action decided by a committee
under section 40-55; and
(b) details of persons who have had their registration as a
liquidator under this Act suspended or cancelled.
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Section 20-1
Corporations Act 2001 255
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 20—Registering liquidators
Subdivision A—Introduction
20-1 Simplified outline of this Division
An individual may apply to ASIC to be registered as a liquidator.
The application will be referred to a committee, which will assess
the application against specified criteria (the applicant’s
qualifications, conduct and fitness and whether the applicant will
take out appropriate insurance). The committee will report its
decision to ASIC and, if the committee decides that the applicant
should be registered, ASIC will register the applicant as a
liquidator.
A registration may be subject to conditions. Conditions may be
imposed on a particular registered liquidator by the committee, or
on all registered liquidators or a class of registered liquidators by
the Insolvency Practice Rules. A registered liquidator may apply to
ASIC to have a condition imposed by a committee removed or
varied. That application will be referred to a committee.
Registration is for 3 years, but may be renewed. An application for
renewal may be made to ASIC within specified time periods.
A decision of a committee about an application for registration or
about a condition of registration is reviewable by the
Administrative Appeals Tribunal (see Part 9.4A of this Act).
Subdivision B—Registration
20-5 Application for registration
(1) An individual may apply to ASIC to be registered as a liquidator.
(2) The application must be lodged with ASIC in the approved form.
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Division 20 Registering liquidators
Section 20-10
256 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Fees for lodging documents may be imposed under the Corporations
(Fees) Act 2001.
(3) The application is properly made if subsection (2) is complied
with.
20-10 ASIC may convene a committee to consider
(1) ASIC may convene a committee for the purposes of considering an
application, or applications, for registration as a liquidator.
(2) The committee must consist of:
(a) ASIC; and
(b) a registered liquidator chosen by a prescribed body; and
(c) a person appointed by the Minister.
Note 1: Section 50-5 sets out the knowledge and experience that a prescribed
body must be satisfied a person has before making an appointment
under paragraph (2)(b).
Note 2: Section 50-10 sets out the matters of which the Minister must be
satisfied before making an appointment under paragraph (2)(c).
20-15 ASIC must refer applications to a committee
(1) ASIC must refer an application for registration as a liquidator that
is properly made to a committee convened under section 20-10 for
consideration.
(2) ASIC must do so within 2 months after receiving the application.
20-20 Committee to consider applications
Committee must consider referred applications
(1) If an application for registration as a liquidator is referred to a
committee, the committee must consider the application.
(2) For the purposes of considering the application, the committee:
(a) must interview the applicant; and
(b) may require the applicant to sit for an exam.
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Section 20-20
Corporations Act 2001 257
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Decision of committee
(3) Within 45 business days after interviewing the applicant, the
committee must decide whether the applicant should be registered
as a liquidator or not.
(4) The committee must decide that the applicant should be registered
as a liquidator if it is satisfied that the applicant:
(a) has the qualifications, experience, knowledge and abilities
prescribed; and
(b) will take out:
(i) adequate and appropriate professional indemnity
insurance; and
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the applicant may incur working as
a registered liquidator; and
(c) has not been convicted, within 10 years before making the
application, of an offence involving fraud or dishonesty; and
(d) is not, and has not been within 10 years before making the
application, an insolvent under administration; and
(e) has not had his or her registration as a liquidator under this
Act cancelled within 10 years before making the application,
other than in response to a written request by the applicant to
have the registration cancelled; and
(f) has not had his or her registration as a trustee under the
Bankruptcy Act 1966 cancelled within 10 years before
making the application, other than in response to a written
request by the applicant to have the registration cancelled;
and
(g) is not disqualified from managing corporations under
Part 2D.6 of this Act, or under a law of an external Territory
or a law of a foreign country; and
(h) is otherwise a fit and proper person; and
(i) is resident in Australia or in another prescribed country.
(5) The committee may decide that the applicant should be registered
even if the committee is not satisfied of a matter mentioned in
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Section 20-25
258 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
paragraph (4)(a),(e), (f) or (i), provided the committee is satisfied
that the applicant would be suitable to be registered as a liquidator
if the applicant complied with conditions specified by the
committee.
Registration may be subject to conditions
(6) The committee may decide that the applicant’s registration is to be
subject to any other conditions specified by the committee.
Spent convictions
(7) Nothing in this section affects the operation of Part VIIC of the
Crimes Act 1914.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
convictions and require persons aware of such convictions to
disregard them.
20-25 Committee to report
The committee must give the applicant and ASIC a report setting
out:
(a) the committee’s decision on the application; and
(b) the committee’s reasons for that decision; and
(c) if the committee decides under subsection 20-20(5) or (6)
that the applicant should be registered subject to a condition:
(i) the condition; and
(ii) the committee’s reasons for imposing the condition.
20-30 Registration
Registration as liquidator
(1) ASIC must register the applicant as a liquidator if:
(a) the committee has decided that the applicant should be
registered; and
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Section 20-35
Corporations Act 2001 259
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the applicant has produced evidence in writing to ASIC that
the applicant has taken out:
(i) adequate and appropriate professional indemnity
insurance; and
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the applicant may incur working as
a registered liquidator.
Note: Fees may be imposed under the Corporations (Fees) Act 2001 for the
doing of an act by ASIC.
(2) ASIC registers an applicant by entering on the Register of
Liquidators the details relating to the applicant prescribed for the
purposes of subsection 15-1(3).
Registration subject to current conditions
(3) The registration is subject to the current conditions imposed on the
registered liquidator.
Certificate of registration
(4) After registering a person as a liquidator, ASIC must give the
person a certificate of registration.
(5) The certificate may be given electronically.
Period of registration
(6) The registration has effect for 3 years.
20-35 Conditions imposed on all registered liquidators or a class of
registered liquidators
(1) The Insolvency Practice Rules may impose conditions on all
registered liquidators, or registered liquidators of a specified class.
(2) Without limiting subsection (1), a condition may be imposed
limiting the kinds of activity in which a liquidator may engage,
either for the duration of the registration or for a shorter period.
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Division 20 Registering liquidators
Section 20-40
260 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—Varying etc. conditions of registration
20-40 Application to vary etc. conditions of registration
(1) If a committee has decided under this Schedule that a person’s
registration as a liquidator is to be subject to a condition, the
person may apply to ASIC for the condition to be varied or
removed.
(2) However, an application cannot be made:
(a) if the person’s registration as a liquidator is suspended; or
(b) if the condition is of a prescribed kind; or
(c) in prescribed circumstances.
(3) The application must be lodged with ASIC in the approved form.
(4) The application is properly made if:
(a) an application can be made; and
(b) subsection (3) is complied with.
(5) A single application by a registered liquidator may deal with more
than one condition.
20-45 ASIC may convene a committee to consider applications
(1) ASIC may convene a committee for the purposes of considering an
application, or applications, made under section 20-40.
(2) The committee must consist of:
(a) ASIC; and
(b) a registered liquidator chosen by a prescribed body; and
(c) a person appointed by the Minister.
Note 1: Section 50-5 sets out the knowledge and experience that a prescribed
body must be satisfied a person has before making an appointment
under paragraph (2)(b).
Note 2: Section 50-10 sets out the matters of which the Minister must be
satisfied before making an appointment under paragraph (2)(c).
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Section 20-50
Corporations Act 2001 261
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
20-50 ASIC must refer applications to a committee
(1) ASIC must refer an application that is properly made under
section 20-40 to a committee convened under section 20-45 for
consideration.
(2) ASIC must do so within 2 months after receiving the application.
20-55 Committee to consider applications
(1) If an application to vary or remove a condition of registration is
referred to a committee, the committee must consider the
application.
(2) Unless the applicant otherwise agrees, the committee must, for the
purposes of considering the application, interview the applicant.
(3) The committee must, within 20 business days after interviewing
the applicant or obtaining the agreement of the applicant as
referred to in subsection (2):
(a) decide whether the condition to which the application relates
should be varied or removed; and
(b) if a condition is to be varied—specify the way in which it is
to be varied.
20-60 Committee to report
The committee must give the applicant and ASIC a report setting
out:
(a) the committee’s decision on the application; and
(b) the committee’s reasons for that decision; and
(c) if the committee decides that a condition should be varied—
the variation that is to be made.
20-65 Committee’s decision given effect
If the committee decides that a condition imposed on a registered
liquidator is to be varied or removed, the condition is varied or
removed in accordance with that decision.
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Division 20 Registering liquidators
Section 20-70
262 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision D—Renewal
20-70 Application for renewal
(1) An individual may apply to ASIC to have the individual’s
registration as a liquidator renewed.
(2) The application must be lodged with ASIC in the approved form:
(a) if the Court makes an order under subsection (3)—on or
before the time specified in the order; or
(b) otherwise—before the applicant’s registration as a liquidator
ceases to have effect.
Note: Fees for lodging documents and late lodgement fees may be imposed
under the Corporations (Fees) Act 2001.
(3) The Court may, on application, extend the time within which the
individual may apply to ASIC to have the individual’s registration
as a liquidator renewed.
(4) The application for renewal is properly made if subsection (2) is
complied with.
20-75 Renewal
Renewal of registration
(1) On application under section 20-70, ASIC must renew the
registration of the applicant as a liquidator if:
(a) the application is properly made; and
(b) the applicant has produced evidence in writing to ASIC that
the applicant maintains:
(i) adequate and appropriate professional indemnity
insurance; and
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the applicant may incur working as
a registered liquidator; and
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Section 20-80
Corporations Act 2001 263
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the applicant has complied with any condition dealing with
continuing professional education to which the applicant is
subject during the applicant’s current registration.
(2) ASIC renews the registration of the applicant by entering, or
maintaining, on the Register of Liquidators the details relating to
the applicant prescribed for the purposes of subsection 15-1(3).
Registration subject to current conditions
(3) The renewed registration is subject to the current conditions
imposed on the registered liquidator.
Certificate of registration
(4) After renewing the registration of a person as a liquidator, ASIC
must give the person a certificate of registration.
(5) The certificate may be given electronically.
Period of registration
(6) The renewed registration has effect for 3 years, beginning on the
day after the person’s immediately preceding registration as a
liquidator ceased to have effect.
Subdivision E—Offences relating to registration
20-80 False representation that a person is a registered liquidator
A person commits an offence if:
(a) the person makes a representation; and
(b) the representation is that the person is a registered liquidator;
and
(c) the representation is false.
Penalty: 30 penalty units.
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Division 25 Insurance
Section 25-1
264 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 25—Insurance
25-1 Registered liquidators to maintain insurance
Registered liquidator must maintain insurance
(1) A registered liquidator must maintain:
(a) adequate and appropriate professional indemnity insurance;
and
(b) adequate and appropriate fidelity insurance;
against the liabilities that the liquidator may incur working as a
registered liquidator.
(2) ASIC may, by legislative instrument, determine what constitutes
adequate and appropriate professional indemnity insurance, and
adequate and appropriate fidelity insurance, in relation to either or
both of the following:
(a) specified circumstances;
(b) one or more specified classes of registered liquidators.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 1,000 penalty units.
(4) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 60 penalty units.
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Annual liquidator returns Division 30
Section 30-1
Corporations Act 2001 265
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 30—Annual liquidator returns
30-1 Annual liquidator returns
Registered liquidator must lodge annual return
(1) A person who is a registered liquidator during all or part of a
liquidator return year for the person must, within 1 month after the
end of that year, lodge with ASIC a return that conforms with
subsection (3).
(2) Each of the following is a liquidator return year for a person who
is or was registered as a liquidator under section 20-30:
(a) the period of 12 months beginning on the day on which that
registration first began;
(b) each subsequent period of 12 months.
(3) A return under subsection (1) must:
(a) be in the approved form; and
(b) include evidence that the person has, during the whole of any
period of the year during which the person was registered as
a liquidator, maintained:
(i) adequate and appropriate professional indemnity
insurance; and
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the person may incur working as a
registered liquidator.
(4) ASIC may, on the application of the registered liquidator made
before the end of the period for lodging a return under
subsection (1), extend, or further extend, that period.
Offence
(5) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
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Section 30-1
266 Corporations Act 2001
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(b) the person fails to comply with the requirement.
Penalty: 5 penalty units.
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Notice requirements Division 35
Section 35-1
Corporations Act 2001 267
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 35—Notice requirements
35-1 Notice of significant events
Registered liquidator must lodge notice
(1) A registered liquidator must lodge with ASIC a notice, in the
approved form, if any of the following events occur:
(a) the liquidator becomes an insolvent under administration;
(b) a bankruptcy notice is issued under the Bankruptcy Act 1966
in relation to the liquidator as debtor, or a corresponding
notice is issued in relation to the liquidator as debtor under a
law of an external Territory or a law of a foreign country;
(c) the liquidator is convicted of an offence involving fraud or
dishonesty;
(d) the liquidator is disqualified from managing corporations
under Part 2D.6 of this Act, or under a law of an external
Territory or a law of a foreign country;
(e) the liquidator ceases to have:
(i) adequate and appropriate professional indemnity
insurance; or
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the liquidator may incur working as
a registered liquidator;
(f) the liquidator is issued with a notice under section 40-40 of
Schedule 2 to the Bankruptcy Act 1966 (a show-cause notice)
in relation to the liquidator’s registration as a trustee under
that Act;
(g) the liquidator’s registration as a trustee under the Bankruptcy
Act 1966 is suspended or cancelled;
(h) any other event prescribed.
The notice must be lodged within 5 business days after the
registered liquidator could reasonably be expected to be aware that
the event has occurred.
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Division 35 Notice requirements
Section 35-5
268 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 100 penalty units.
35-5 Notice of other events
Registered liquidator must lodge notice
(1) A registered liquidator must lodge with ASIC a notice, in the
approved form, if any of the following events occur:
(a) information included in an annual liquidator return, an annual
administration return or an end of administration return,
prepared by or on behalf of the liquidator, is or becomes
inaccurate in a material particular;
(b) any other event prescribed.
The notice must be lodged within 10 business days after the
registered liquidator could reasonably be expected to be aware that
the event has occurred.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 5 penalty units.
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Disciplinary and other action Division 40
Section 40-1
Corporations Act 2001 269
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 40—Disciplinary and other action
Subdivision A—Introduction
40-1 Simplified outline of this Division
Remedying failure to lodge documents or give information or
documents
ASIC may direct a registered liquidator to comply with a
requirement to lodge a document, or give any information or
document, to ASIC. If the liquidator fails to comply with the
direction, ASIC can direct that the liquidator accept no further
appointments or seek an order from the Court directing the
liquidator to comply.
Correcting and completing information given to ASIC
If ASIC reasonably suspects that information that a registered
liquidator is required to give ASIC is incomplete or inaccurate,
ASIC can direct the liquidator to confirm, complete or correct the
information. ASIC can also direct the liquidator to tell someone
about the defect in the information. If the liquidator fails to comply
with a direction, ASIC can direct that the liquidator accept no
further appointments or seek an order from the Court directing the
liquidator to comply.
Other grounds for a direction not to accept further appointments
There are other grounds on which ASIC can issue a direction not to
accept further appointments, for example, if the registered
liquidator fails to comply with a direction to convene a meeting.
Suspending or cancelling registration
An individual’s registration as a liquidator can be suspended or
cancelled.
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Division 40 Disciplinary and other action
Section 40-5
270 Corporations Act 2001
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The registration is automatically cancelled if the registered
liquidator becomes an insolvent under administration or dies.
In some circumstances, ASIC can suspend or cancel the
registration of a person as a liquidator. ASIC can also give a
registered liquidator notice to show-cause why the liquidator
should continue to be registered. If ASIC is not satisfied with the
answer, ASIC can refer the matter to a committee which will make
a decision on what action should be taken.
An industry body can give ASIC notice of possible grounds for
disciplinary action.
If a registration is suspended, the liquidator can apply to ASIC to
have the suspension lifted or shortened.
A decision about the suspension or cancellation of the registration
of a liquidator is reviewable by the Administrative Appeals
Tribunal (see Part 9.4A of this Act).
Subdivision B—Direction to comply
40-5 Registered liquidator to remedy failure to lodge documents or
give information or documents
Application of this section
(1) This section applies if a registered liquidator fails to comply with a
requirement to lodge any document, or give any information or
document, that the liquidator is required under this Act to lodge
with or give to ASIC.
ASIC may give direction to comply
(2) ASIC may, in writing, direct the liquidator to comply with the
requirement within 10 business days after the direction is given.
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Disciplinary and other action Division 40
Section 40-10
Corporations Act 2001 271
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(3) ASIC may, on the application of a registered liquidator made
before the end of the period referred to in subsection (2), extend, or
further extend, that period.
Consequences for failing to comply
(4) If the liquidator does not comply within the period, ASIC may do
either or both of the following:
(a) give a direction under subsection 40-15(1) (direction not to
accept further appointments);
(b) apply to the Court for an order, under subsection 1274(11)
(registers), section 45-1 of this Schedule or any other
provision that is relevant, directing the liquidator to comply
with the requirement within such time as is specified in the
order.
Direction is not a legislative instrument
(5) A direction under subsection (2) is not a legislative instrument.
Relationship with other laws
(6) Nothing in this section limits the operation of any other provision
of this Act, or any other law, in relation to a person who fails to
comply with a requirement to lodge a document with, or give
information or a document to, ASIC.
40-10 Registered liquidator to correct inaccuracies etc.
Application of this section
(1) This section applies if ASIC reasonably suspects that any
information that a registered liquidator is required under this Act to
give to ASIC (whether in a document lodged or given to ASIC or
otherwise) is incomplete or incorrect in any particular.
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Section 40-10
272 Corporations Act 2001
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ASIC may give direction to correct information etc.
(2) ASIC may, in writing, direct the liquidator to do one or more of the
following within a period of 10 business days after the direction is
given:
(a) confirm to ASIC that the information is complete and
correct;
(b) complete or correct the information (as the case requires);
(c) notify any persons specified by ASIC in the direction of the
addition or correction.
(3) ASIC may, on the application of a registered liquidator made
before the end of the period referred to in subsection (2), extend, or
further extend, that period.
Consequences for failing to comply
(4) If the liquidator does not comply within the period, ASIC may do
either or both of the following:
(a) give a direction under subsection 40-15(1) (direction not to
accept further appointments);
(b) apply to the Court for an order, under subsection 1274(11)
(registers), section 45-1 of this Schedule or any other
provision that is relevant, directing the liquidator to comply
with the requirement within such time as is specified in the
order.
Direction is not a legislative instrument
(5) A direction under subsection (2) is not a legislative instrument.
Relationship with other laws
(6) Nothing in this section limits the operation of any other provision
of this Act, or any other law, in relation to a person giving
incomplete or incorrect information.
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Disciplinary and other action Division 40
Section 40-15
Corporations Act 2001 273
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40-15 Direction not to accept further appointments
ASIC may give direction not to accept further appointments
(1) ASIC may, in writing, direct a registered liquidator not to accept
any further appointments under Chapter 5 (external
administration), or not to accept any further appointments under
Chapter 5 during a period specified in the direction, if:
(a) the liquidator has failed to comply with a direction given to
the liquidator under section 40-5 (direction to remedy failure
to lodge documents, or give information or documents); or
(b) the liquidator has failed to comply with a direction given to
the liquidator under section 40-10 (direction to correct
inaccuracies); or
(c) a committee has decided under paragraph 40-55(1)(d) that
ASIC should give the direction referred to in that paragraph;
or
(d) the liquidator has failed to comply with a direction given to
the liquidator under section 70-70 (direction to give relevant
materian( � or
(e) the liquidator has failed to comply with a direction given to
the liquidator under subsection 75-20(1) or (2), or
subsection 80-27(1) (direction to convene a meeting of
creditors or comply with requirements in relation to such a
meeting).
Condition of registration to comply with direction
(2) If ASIC gives a direction to a registered liquidator under
subsection (1), it is a condition of the liquidator’s registration that
the liquidator must comply with the direction.
Withdrawal of direction
(3) ASIC may withdraw a direction given under subsection (1).
(4) The condition is removed from the liquidator’s registration if ASIC
withdraws the direction.
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Direction is not a legislative instrument
(5) A direction under subsection (1) is not a legislative instrument.
Relationship with other laws
(6) Nothing in this section limits the operation of any other provision
of this Act, or any other law, in relation to:
(a) a person who fails to comply with a requirement to lodge a
document with, or give information or a document to, ASIC;
or
(b) a person giving incomplete or incorrect information; or
(c) any matter in relation to which a committee makes a decision
under subsection 40-55(1).
(7) Nothing in this section limits ASIC’s power under this Act, or any
other law, to apply to the Court for an order in relation to a failure
to comply with a direction mentioned in subsection (1).
Subdivision C—Automatic cancellation
40-20 Automatic cancellation
(1) The registration of a person as a liquidator is cancelled if:
(a) the person becomes an insolvent under administration; or
(b) the person dies.
(2) The cancellation takes effect on the day the event mentioned in
subsection (1) happens.
Subdivision D—ASIC may suspend or cancel registration
40-25 ASIC may suspend registration
(1) ASIC may suspend the registration of a person as a liquidator if:
(a) the person is disqualified from managing corporations under
Part 2D.6 of this Act, or under a law of an external Territory
or a law of a foreign country; or
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(b) the person ceases to have:
(i) adequate and appropriate professional indemnity
insurance; or
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the person may incur working as a
registered liquidator; or
(c) the person’s registration as a trustee under the Bankruptcy
Act 1966 has been cancelled or suspended, other than in
compliance with a written request by the person to cancel or
suspend the registration; or
(d) if the Court has made an order under section 90-15 that the
person repay remuneration—the person has failed to repay
the remuneration; or
(e) the person has been convicted of an offence involving fraud
or dishonesty; or
(f) the person lodges a request with ASIC in the approved form
to have the registration suspended; or
(g) in the case of a person who is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
person;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
(2) Nothing in this section affects the operation of Part VIIC of the
Crimes Act 1914.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
convictions and require persons aware of such convictions to
disregard them.
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40-30 ASIC may cancel registration
(1) ASIC may cancel the registration of a person as a liquidator if:
(a) the person is disqualified from managing corporations under
Part 2D.6 of this Act, or under a law of an external Territory
or a law of a foreign country; or
(b) the person ceases to have:
(i) adequate and appropriate professional indemnity
insurance; or
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the person may incur working as a
registered liquidator; or
(c) the person’s registration as a trustee under the Bankruptcy
Act 1966 has been cancelled, other than in compliance with a
written request by the person to cancel the registration; or
(d) if the Court has made an order under section 90-15 that the
person repay remuneration—the person has failed to repay
the remuneration; or
(e) the person has been convicted of an offence involving fraud
or dishonesty; or
(f) the person lodges a request with ASIC in the approved form
to have the registration cancelled; or
(g) in the case of a person who is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
person;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
(2) Nothing in this section affects the operation of Part VIIC of the
Crimes Act 1914.
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Section 40-35
Corporations Act 2001 277
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Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
convictions and require persons aware of such convictions to
disregard them.
40-35 Notice of suspension or cancellation
Application of this section
(1) This section applies if ASIC decides under section 40-25 or 40-30
to suspend or cancel the registration of a person as a liquidator.
ASIC must give notice of decision
(2) ASIC must, within 10 business days after making the decision,
give the person a written notice setting out the decision, and the
reasons for the decision.
When decision comes into effect
(3) The decision comes into effect on the day after the notice is given
to the person.
Failure to give notice does not affect validity of decision
(4) A failure by ASIC to give the notice under subsection (2) within 10
business days does not affect the validity of the decision.
Subdivision E—Disciplinary action by committee
40-40 ASIC may give a show-cause notice
(1) ASIC may give a registered liquidator notice in writing asking the
liquidator to give ASIC a written explanation why the liquidator
should continue to be registered, if ASIC believes that:
(a) the liquidator no longer has the qualifications, experience,
knowledge and abilities prescribed under
paragraph 20-20(4)(a); or
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(b) the liquidator has committed an act of bankruptcy, within the
meaning of the Bankruptcy Act 1966 or a corresponding law
of an external Territory or a foreign country; or
(c) the liquidator is disqualified from managing corporations
under Part 2D.6 of this Act, or under a law of an external
Territory or a law of a foreign country; or
(d) the liquidator has ceased to have:
(i) adequate and appropriate professional indemnity
insurance; or
(ii) adequate and appropriate fidelity insurance;
against the liabilities that the person may incur working as a
registered liquidator; or
(e) the liquidator has breached a current condition imposed on
the liquidator; or
(f) the liquidator has contravened a provision of this Act; or
(g) the liquidator has been appointed to act as a reviewing
liquidator under Subdivision C of Division 90 of this
Schedule, and has failed to properly exercise the powers or
perform the duties of a reviewing liquidator; or
(h) the liquidator’s registration as a trustee under the Bankruptcy
Act 1966 has been cancelled or suspended, other than in
compliance with a written request by the liquidator to cancel
or suspend the registration; or
(i) if the Court has made an order under section 90-15 that the
liquidator repay remuneration—the liquidator has failed to
repay the remuneration; or
(j) the liquidator has been convicted of an offence involving
fraud or dishonesty; or
(k) the liquidator is permanently or temporarily unable to
perform the functions and duties of a liquidator because of
physical or mental incapacity; or
(l) the liquidator has failed to carry out adequately and properly
(whether in Australia or in an external Territory or in a
foreign country):
(i) the duties of a liquidator; or
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(ii) any other duties or functions that a registered liquidator
is required to carry out under a law of the
Commonwealth or of a State or Territory, or the general
law; or
(m) the liquidator is not a fit and proper person; or
(n) the liquidator is not resident in Australia or in another
prescribed country.
(2) A notice under subsection (1) is not a legislative instrument.
(3) Nothing in this section affects the operation of Part VIIC of the
Crimes Act 1914.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
convictions and require persons aware of such convictions to
disregard them.
40-45 ASIC may convene a committee
(1) ASIC may convene a committee to make a decision of a kind
mentioned in section 40-55 in relation to a registered liquidator, or
registered liquidators.
(2) The committee must consist of:
(a) ASIC; and
(b) a registered liquidator chosen by a prescribed body; and
(c) a person appointed by the Minister.
Note 1: Section 50-5 sets out the knowledge and experience that a prescribed
body must be satisfied a person has before making an appointment
under paragraph (2)(b).
Note 2: Section 50-10 sets out the matters of which the Minister must be
satisfied before making an appointment under paragraph (2)(c).
40-50 ASIC may refer matters to the committee
ASIC may refer a registered liquidator to a committee convened
under section 40-45 if ASIC:
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(a) gives the liquidator a notice under section 40-40 (a
show-cause notice); and
(b) either:
(i) does not receive an explanation within 20 business days
after the notice is given; or
(ii) is not satisfied by the explanation.
40-55 Decision of the committee
(1) If a registered liquidator is referred to a committee under
section 40-50, the committee must decide one or more of the
following:
(a) that the liquidator should continue to be registered;
(b) that the liquidator’s registration should be suspended for a
period, or until the occurrence of an event, specified in the
decision;
(c) that the liquidator’s registration should be cancelled;
(d) that ASIC should direct the liquidator not to accept any
further appointments as liquidator, or not to accept any
further appointments as liquidator during the period specified
in the decision;
(e) that the liquidator should be publicly admonished or
reprimanded;
(f) that a condition specified in the decision should be imposed
on the liquidator;
(g) that a condition should be imposed on all other registered
liquidators that they must not allow the liquidator to carry out
any of the functions or duties, or exercise any of the powers,
of a registered liquidator on their behalf (whether as
employee, agent, consultant or otherwise) for a period
specified in the decision of no more than 10 years;
(h) that ASIC should publish specified information in relation to
the committee’s decision and the reasons for that decision.
(2) Without limiting paragraph (1)(f), conditions imposed under that
paragraph may include one or more of the following:
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(a) a condition that the liquidator engage in, or refrain from
engaging in, specified conduct;
(b) a condition that the liquidator engage in, or refrain from
engaging in, specified conduct except in specified
circumstances;
(c) a condition that the liquidator publish specified information;
(d) a condition that the liquidator notify a specified person or
class of persons of specified information;
(e) a condition that the liquidator publish a specified statement;
(f) a condition that the liquidator make a specified statement to a
specified person or class of persons.
(3) In making its decision, the committee may have regard to:
(a) any information provided to the committee by ASIC; and
(b) any explanation given by the liquidator; and
(c) any other information given by the liquidator to the
committee; and
(d) if the liquidator is or was also a registered trustee under the
Bankruptcy Act 1966—any information in relation to the
liquidator given to the committee by the Inspector-General in
Bankruptcy or a committee convened under the Insolvency
Practice Schedule (Bankruptcy); and
(e) any other matter that the committee considers relevant.
40-60 Committee to report
The committee must give the registered liquidator and ASIC a
report setting out:
(a) the committee’s decision in relation to the liquidator; and
(b) the committee’s reasons for that decision; and
(c) if the committee decides under paragraph 40-55(1)(f) that the
liquidator should be registered subject to a condition:
(i) the condition; and
(ii) the committee’s reasons for imposing the condition; and
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(d) if the committee decides under paragraph 40-55(1)(g) that a
condition should be imposed on all other registered
liquidators in relation to the liquidator:
(i) the condition; and
(ii) the committee’s reasons for imposing the condition.
40-65 ASIC must give effect to the committee’s decision
ASIC must give effect to the committee’s decision.
Subdivision F—Lifting or shortening suspension
40-70 Application to lift or shorten suspension
Application of this section
(1) This section applies if a person’s registration as a liquidator has
been suspended.
Suspended liquidator may apply to ASIC
(2) The person may apply to ASIC:
(a) for the suspension to be lifted; or
(b) for the period of the suspension to be shortened.
(3) The application must be lodged with ASIC in the approved form.
(4) The application is properly made if subsection (3) is complied
with.
40-75 ASIC may convene a committee to consider applications
(1) ASIC may convene a committee for the purposes of considering an
application, or applications, made under section 40-70.
(2) The committee must consist of:
(a) ASIC; and
(b) a registered liquidator chosen by a prescribed body; and
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(c) a person appointed by the Minister.
Note 1: Section 50-5 sets out the knowledge and experience that a prescribed
body must be satisfied a person has before making an appointment
under paragraph (2)(b).
Note 2: Section 50-10 sets out the matters of which the Minister must be
satisfied before making an appointment under paragraph (2)(c).
40-80 ASIC must refer applications to a committee
(1) ASIC must refer an application that is properly made under
section 40-70 to a committee convened under section 40-75 for
consideration.
(2) ASIC must do so within 2 months after receiving the application.
40-85 Committee to consider applications
(1) If an application is referred to a committee, the committee must
consider the application.
(2) Unless the applicant otherwise agrees, the committee must
interview the applicant for the purposes of considering the
application.
(3) Within 10 business days after interviewing the applicant or
obtaining the agreement of the applicant as referred to in
subsection (2), the committee must:
(a) decide whether the suspension should be lifted, or the period
of the suspension shortened; and
(b) if the period of the suspension is to be shortened—specify
when the suspension is to end.
40-90 Committee to report
The committee must give the applicant and ASIC a report setting
out:
(a) the committee’s decision on the application; and
(b) the committee’s reasons for that decision; and
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(c) if the committee decides that the period of the suspension
should be shortened—when the suspension is to end.
40-95 Committee’s decision given effect
If the committee decides that a suspension is to be lifted or
shortened, the suspension is lifted or shortened in accordance with
the decision.
Subdivision G—Action initiated by industry body
40-100 Notice by industry bodies of possible grounds for disciplinary
action
Industry body may lodge notice
(1) An industry body may lodge with ASIC a notice in the approved
form (an industry notice):
(a) stating that the body reasonably suspects that there are
grounds for ASIC:
(i) to suspend the registration of a registered liquidator
under section 40-25; or
(ii) to cancel the registration of a registered liquidator under
section 40-30; or
(iii) to give a registered liquidator a notice under
section 40-40 (a show-cause notice); or
(iv) to impose a condition on a registered liquidator under
another provision of this Schedule; and
(b) identifying the registered liquidator; and
(c) including the information and copies of any documents upon
which the suspicion is founded.
ASIC must consider information and documents
(2) ASIC must consider the information and the copies of any
documents included with the industry notice.
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ASIC must give notice if no action to be taken
(3) If, after such consideration, ASIC decides to take no action in
relation to the matters raised by the industry notice, ASIC must
give the industry body written notice of that fact.
45 business days to consider and decide
(4) The consideration of the information and the copies of any
documents included with the industry notice must be completed
and, if ASIC decides to take no action, a notice under
subsection (3) given, within 45 business days after the industry
notice is lodged.
ASIC not precluded from taking action
(5) ASIC is not precluded from:
(a) suspending the registration of a registered liquidator under
section 40-25; or
(b) cancelling the registration of a registered liquidator under
section 40-30; or
(c) giving a registered liquidator a notice under section 40-40 (a
show-cause notice); or
(d) imposing a condition on a registered liquidator under another
provision of this Schedule;
wholly or partly on the basis of information or a copy of a
document included with the industry notice, merely because ASIC
has given a notice under subsection (3) in relation to the matters
raised by the industry notice.
Notice to industry body if ASIC takes action
(6) If ASIC does take action of the kind mentioned in subsection (5)
wholly or partly on the basis of information or a copy of a
document included with the industry notice, ASIC must give the
industry body notice of that fact.
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Section 40-105
286 Corporations Act 2001
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Notices are not legislative instruments
(7) A notice under subsection (3) or (6) is not a legislative instrument.
40-105 No liability for notice given in good faith etc.
(1) An industry body is not liable civilly, criminally or under any
administrative process for giving a notice under
subsection 40-100(1) if:
(a) the body acted in good faith in giving the notice; and
(b) the suspicion that is the subject of the notice is a reasonable
suspicion.
(2) A person who, in good faith, makes a decision as a result of which
the industry body gives a notice under subsection 40-100(1) is not
liable civilly, criminally or under any administrative process for
making the decision.
(3) A person who, in good faith, gives information or a document to an
industry body that is included, or a copy of which is included, in a
notice under subsection 40-100(1) is not liable civilly, criminally
or under any administrative process for giving the information or
document.
40-110 Meaning of industry bodies
The Insolvency Practice Rules may prescribe industry bodies for
the purposes of this Subdivision.
Subdivision H—Consequences of certain disciplinary and other
action
40-111 Appointment of another liquidator if liquidator’s
registration is suspended or cancelled
(1) If:
(a) the registration of a liquidator is suspended or cancelled
under this Division; and
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(b) the liquidator is conducting the external administration of a
company at the time the registration is suspended or
cancelled;
ASIC may, in writing, appoint another registered liquidator to
conduct the external administration of the company.
(2) If:
(a) a liquidator fails to renew his or her registration as a
liquidator before that registration ceases to have effect; and
(b) no order has been made by the Court under
subsection 20-70(3) extending the period during which the
liquidator may apply for renewal; and
(c) the liquidator is conducting the external administration of a
company at the time his or her registration as a liquidator
ceases to have effect;
ASIC may, in writing, appoint another registered liquidator to
conduct the external administration of the company.
(3) Subsections (1) and (2) do not apply to:
(a) a liquidator appointed by the Court; or
(b) a winding up ordered by ASIC under section 489EA; or
(c) a members’ voluntary winding up.
Note: For court-appointed liquidators, see section 473A. For a winding up
ordered by ASIC, see section 489EA. For a members’ voluntary
winding up, see section 495.
(4) An appointment of a registered liquidator by ASIC under
subsection (1) must not be made without the written consent of the
liquidator.
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Division 45 Court oversight of registered liquidators
Section 45-1
288 Corporations Act 2001
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Division 45—Court oversight of registered liquidators
45-1 Court may make orders in relation to registered liquidators
(1) The Court may make such orders as it thinks fit in relation to a
registered liquidator.
(2) The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under subsection (3).
(3) Each of the following persons may apply for an order under
subsection (1):
(a) the registered liquidator;
(b) ASIC.
(4) Without limiting the matters which the Court may take into
account when making orders, the Court may take into account:
(a) whether the registered liquidator has faithfully performed, or
is faithfully performing, the registered liquidator’s duties;
and
(b) whether an action or failure to act by the registered liquidator
is in compliance with this Act and the Insolvency Practice
Rules; and
(c) whether an action or failure to act by the registered liquidator
is in compliance with an order of the Court; and
(d) whether any person has suffered, or is likely to suffer, loss or
damage because of an action or failure to act by the
registered liquidator; and
(e) the seriousness of the consequences of any action or failure
to act by the registered liquidator, including the effect of that
action or failure to act on public confidence in registered
liquidators as a group.
(5) This section does not limit the Court’s powers under any other
provision of this Act, or under any other law.
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Section 45-5
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45-5 Court may make orders about costs
(1) Without limiting section 45-1, the Court may make orders in
relation to a registered liquidator that deal with the costs of a
matter considered by the Court.
(2) Those orders may include an order that:
(a) the registered liquidator is personally liable for some or all of
those costs; and
(b) the registered liquidator is not entitled to be reimbursed by a
company or its creditors in relation to some or all of those
costs.
(3) This section does not limit the Court’s powers under any other
provision of this Act, or under any other law.
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Division 50 Committees under this Part
Section 50-1
290 Corporations Act 2001
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Division 50—Committees under this Part
50-1 Simplified outline of this Division
This Division sets out common rules for committees established
under this Part.
If a prescribed body appoints a person to a committee, that person
must have the prescribed knowledge or experience or, if no
knowledge or experience is prescribed, the knowledge and
experience necessary to carry out the functions to be performed. If
the Minister appoints a person to a committee, that person must
have knowledge or experience in a field such as business, law
(including the law of corporate insolvency) or public policy
relating to corporate insolvency.
A single committee may consider more than one matter. The
consideration of a matter is not affected by a change in the
membership of the committee. A matter may be adjourned or
transferred to another committee. The Insolvency Practice Rules
may prescribe procedures and make other rules for committees.
The use and disclosure of information given to a committee is
restricted to listed purposes.
50-5 Prescribed body appointing a person to a committee
Application of this section
(1) This section applies if a prescribed body is to appoint a person to a
committee under this Part.
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Prescribed body must only appoint a person with appropriate
knowledge and experience
(2) The prescribed body is to appoint a person as a member of the
committee only if the prescribed body is satisfied that the person
has:
(a) if any knowledge or experience is prescribed in relation to
appointments of the kind to be made—that knowledge or
experience; or
(b) if no knowledge or experience is prescribed in relation to
appointments of the kind to be made—the knowledge and
experience necessary to carry out the person’s functions as a
member of the committee if appointed.
50-10 Minister appointing a person to a committee
Application of this section
(1) This section applies if the Minister is to appoint a person to a
committee under any of the following paragraphs:
(a) paragraph 20-10(2)(c);
(b) paragraph 20-45(2)(c);
(c) paragraph 40-45(2)(c);
(d) paragraph 40-75(2)(c).
Matters of which the Minister must be satisfied before appointing
(2) The Minister is to appoint a person as a member of the committee
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:
(a) business;
(b) law, including the law relating to corporate insolvency;
(c) economics;
(d) accounting;
(e) public policy relating to corporate insolvency;
(f) administration of companies, including insolvent companies.
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Part 2 Registering and disciplining practitioners
Division 50 Committees under this Part
Section 50-15
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Minister must not appoint member or staff member of ASIC
(3) The Minister must not appoint:
(a) a member of ASIC (within the meaning of section 9 of the
Australian Securities and Investments Commission Act
2001); or
(b) a staff member of ASIC;
to be a member of the committee.
Delegation of power to appoint
(4) The Minister may, in writing, delegate the Minister’s powers to
appoint a person to a committee to:
(a) ASIC; or
(b) a member of ASIC (within the meaning of section 9 of the
Australian Securities and Investments Commission Act
2001); or
(c) a staff member of ASIC who:
(i) is an SES employee or acting SES employee; or
(ii) is an APS employee who holds, or is acting in, an
Executive Level 2 position; or
(iii) holds, or is acting in, an office or position that is
equivalent to an SES employee, or an Executive Level
2.
(5) In exercising powers under a delegation, the delegate must comply
with any directions of the Minister.
50-15 Single committee may consider more than one matter
A single committee may be convened under this Part to consider
one or more of the following:
(a) a matter or matters relating to one applicant for registration
as a liquidator;
(b) a matter or matters relating to more than one applicant for
registration as a liquidator;
(c) a matter or matters relating to one registered liquidator;
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Committees under this Part Division 50
Section 50-20
Corporations Act 2001 293
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(d) a matter or matters relating to more than one registered
liquidator.
50-20 Ongoing consideration of matters by committee
If a committee is convened under this Part to consider a matter:
(a) the committee’s powers, functions and duties in relation to
the matter are not affected by a change in the membership of
the committee; and
(b) the committee may adjourn its consideration of the matter,
and may do so more than once; and
(c) the matter may be transferred to another committee with
powers, functions and duties under this Part in relation to
matters of that kind.
50-25 Procedure and other rules relating to committees
The Insolvency Practice Rules may provide for and in relation to:
(a) the manner in which the committees convened under this Part
are to perform their functions, including:
(i) meetings of committees; and
(ii) the number of committee members required to
constitute a quorum; and
(iii) disclosure of interests in a matter before a committee;
and
(iv) the manner in which questions are to be decided by the
committee; and
(b) the reconstitution of a committee; and
(c) the termination of the consideration of a matter by a
committee, and the transfer of matters to another committee.
50-30 Remuneration of committee members
(1) A member of a committee convened under this Part is entitled to
receive the remuneration that is determined by the Remuneration
Tribunal. If no determination of that remuneration by the Tribunal
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Section 50-35
294 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
is in operation, the member is entitled to receive such remuneration
as the Minister determines in writing.
(2) A member is entitled to receive such allowances as the Minister
determines in writing.
(3) This section has effect subject to the Remuneration Tribunal Act
1973.
50-35 Committee must only use information etc. for purposes for
which disclosed
Offence
(1) A person commits an offence if:
(a) the person is or was a member of a committee convened
under this Part; and
(b) information or a document is or was disclosed to the person
for the purposes of exercising powers or performing
functions as a member of the committee; and
(c) the person uses or discloses the information or document.
Penalty: 50 penalty units.
Exception—information or document disclosed to the
Inspector-General in Bankruptcy or another committee etc.
(2) Subsection (1) does not apply if the information or document:
(a) is used or disclosed by the person for the purposes of
exercising powers or performing functions as a member of
the committee mentioned in subsection (1); or
(b) is disclosed:
(i) to the Inspector-General in Bankruptcy to assist the
Inspector-General to exercise his or her powers or
perform his or her functions under the Bankruptcy Act
1966; or
(ii) to a committee convened under Part 2 of the Insolvency
Practice Schedule (Bankruptcy) to assist the committee
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Corporations Act 2001 295
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to exercise its powers or perform its functions under that
Part; or
(iii) to another committee convened under this Part to assist
the committee to exercise its powers or perform its
functions under this Part; or
(iv) to enable or assist a body prescribed for the purposes of
this paragraph to perform its disciplinary function in
relation to its members; or
(v) in order to enable or assist an authority or person in a
State or Territory, or a foreign country, to perform or
exercise a function or power that corresponds, or is
analogous, to any of the committee’s or ASIC’s
functions and powers; or
(vi) to a court or tribunal in relation to proceedings before
the court or tribunal.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2) (see subsection 13.3(3) of the Criminal Code).
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Part 3 General rules relating to external administrations
Division 55 Introduction
Section 55-1
296 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 3—General rules relating to external
administrations
Division 55—Introduction
55-1 Simplified outline of this Part
This Part sets out requirements for conducting the external
administration of a company.
The main provisions deal with:
(a) the remuneration of the external administrator; and
(b) the duties of the external administrator in handling the
money and other property of the company; and
(c) conflicts of interest; and
(d) the duties of the external administrator to keep
appropriate records, to report to ASIC and to give
information, documents and reports to creditors,
members of the company and others; and
(e) creditor and company meetings; and
(f) the creation and conduct of a committee to monitor the
external administration (called a committee of
inspection); and
(g) the rights of creditors to review the external
administration; and
(h) the rights of creditors to remove the external
administrator and appoint another; and
(i) the review of the external administration by the Court.
There are additional rules that apply to companies under external
administration in Chapter 5 (for example, about appointment of
external administrators) of this Act.
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Section 55-1
Corporations Act 2001 297
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Companies in receivership are not covered in this Part (see
generally Part 5.2 of this Act).
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Division 60 Remuneration and other benefits received by external administrators
Section 60-1
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 60—Remuneration and other benefits received by
external administrators
Subdivision A—Introduction
60-1 Simplified outline of this Division
Remuneration
The external administrator of a company is entitled to receive
remuneration for necessary work properly performed by the
external administrator in relation to the external administration.
The amount of remuneration will usually be set under a
remuneration determination. Remuneration determinations are
made by:
(a) in a members voluntary winding up—the members; and
(b) in most other cases—the creditors or the committee of
inspection (if there is one).
However, if there is no remuneration determination, the external
administrator will be entitled to receive a reasonable amount for
the work. The maximum amount that the external administrator
may receive in this way is $5,000 (exclusive of GST and indexed).
The remuneration of provisional liquidators is, in most cases,
determined by the Court.
The Court may review the remuneration of the external
administrator of a company and may also make orders under
Division 90 about remuneration (including ordering repayment of
remuneration).
Other benefits
The external administrator of a company must not:
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Corporations Act 2001 299
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(a) employ a related entity, unless certain requirements are
met;
(b) purchase any assets of the company; or
(c) get any other benefits or profits from the administration.
Subdivision B—Remuneration of external administrators—
general rules
60-2 Application of this Subdivision
This Subdivision applies in relation to an external administrator of
a company other than:
(a) a provisional liquidator; or
(b) a liquidator appointed by ASIC under section 489EC
(winding up by ASIC).
Note: For the remuneration of provisional liquidators, see Subdivision C of
this Division. For the remuneration of liquidators appointed by ASIC
under section 489EC, see Subdivision D of this Division.
60-5 External administrator’s remuneration
Remuneration in accordance with remuneration determinations
(1) An external administrator of a company is entitled to receive
remuneration for necessary work properly performed by the
external administrator in relation to the external administration, in
accordance with the remuneration determinations (if any) for the
external administrator (see section 60-10).
Remuneration for external administrators if no remuneration
determination made
(2) If no remuneration determination is made in relation to necessary
work properly performed by the external administrator of a
company in relation to the external administration, the
administrator is entitled to receive reasonable remuneration for the
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Section 60-10
300 Corporations Act 2001
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work. However, that remuneration must not exceed the maximum
default amount.
60-10 Remuneration determinations
Remuneration determinations
(1) A determination, specifying remuneration that an external
administrator of a company (other than an external administrator in
a members’ voluntary winding up) is entitled to receive for
necessary work properly performed by the external administrator in
relation to the external administration, may be made:
(a) by resolution of the creditors; or
(b) if there is a committee of inspection and a determination is
not made under paragraph (a)—by the committee of
inspection; or
(c) if a determination is not made under paragraph (a) or (b)—by
the Court.
Note: For determinations made by the Court, see also section 60-12 (matters
to which the Court must have regard).
(2) A determination, specifying remuneration that an external
administrator of a company in a members’ voluntary winding up is
entitled to receive for necessary work properly performed by the
external administrator in relation to the external administration,
may be made:
(a) by resolution of the company at a general meeting; or
(b) if a determination is not made under paragraph (a)—by the
Court.
Note: For determinations made by the Court, see also section 60-12 (matters
to which the Court must have regard).
(3) A determination under this section may specify remuneration that
the external administrator is entitled to receive in either or both of
the following ways:
(a) by specifying an amount of remuneration;
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Corporations Act 2001 301
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(b) by specifying a method for working out an amount of
remuneration.
Remuneration on a time-cost basis
(4) If a determination under this section specifies that the external
administrator is entitled to receive remuneration worked out wholly
or partly on a time-cost basis, the determination must include a cap
on the amount of remuneration worked out on a time-cost basis
that the external administrator is entitled to receive.
More than one remuneration determination may be made
(5) To avoid doubt, more than one determination under this section
may be made in relation to a particular external administrator of a
company and a particular external administration of a company.
60-11 Review of remuneration determinations
Review on application
(1) Any of the following may apply to the Court for a review of a
remuneration determination for an external administrator of a
company:
(a) ASIC;
(b) a person with a financial interest in the external
administration of the company;
(c) an officer of the company.
(2) Paragraph (1)(c) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company is
under external administration.
(3) On application under subsection (1), the Court may, if it considers
it appropriate to do so, review the remuneration determination.
Note: See also section 60-12 (matters to which the Court must have regard).
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Section 60-12
302 Corporations Act 2001
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Court must affirm, vary or set aside remuneration determination
(4) After reviewing the remuneration determination, the Court must:
(a) affirm the remuneration determination; or
(b) vary the remuneration determination; or
(c) set aside the remuneration determination and substitute
another remuneration determination.
Exception
(5) Subsection (1) does not apply to a remuneration determination
made by the Court.
60-12 Matters to which the Court must have regard
In making a remuneration determination under
paragraph 60-10(1)(c) or (2)(b), or reviewing a remuneration
determination under section 60-11, the Court must have regard to
whether the remuneration is reasonable, taking into account any or
all of the following matters:
(a) the extent to which the work by the external administrator
was necessary and properly performed;
(b) the extent to which the work likely to be performed by the
external administrator is likely to be necessary and properly
performed;
(c) the period during which the work was, or is likely to be,
performed by the external administrator;
(d) the quality of the work performed, or likely to be performed,
by the external administrator;
(e) the complexity (or otherwise) of the work performed, or
likely to be performed, by the external administrator;
(f) the extent (if any) to which the external administrator was, or
is likely to be, required to deal with extraordinary issues;
(g) the extent (if any) to which the external administrator was, or
is likely to be, required to accept a higher level of risk or
responsibility than is usually the case;
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(h) the value and nature of any property dealt with, or likely to
be dealt with, by the external administrator;
(i) the number, attributes and conduct, or the likely number,
attributes and conduct, of the creditors;
(j) if the remuneration is worked out wholly or partly on a
time-cost basis—the time properly taken, or likely to be
properly taken, by the external administrator in performing
the work;
(k) whether the external administrator was, or is likely to be,
required to deal with one or more controllers, or one or more
managing controllers;
(l) if:
(i) a review has been carried out under Subdivision C of
Division 90 (review by another registered liquidator)
into a matter that relates to the external administration;
and
(ii) the matter is, or includes, remuneration of the external
administrator;
the contents of the report on the review that relate to that
matter;
(m) any other relevant matters.
60-15 Maximum default amount
Maximum default amount
(1) The maximum default amount for an external administrator of a
company is an amount (exclusive of GST) worked out as follows:
(a) if the external administrator is appointed in relation to the
external administration of the company during the financial
year beginning on 1 July 2016—$5,000;
(b) if the external administrator is appointed in relation to the
external administration of the company during a financial
year beginning on or after 1 July 2017—the greater of:
(i) the amount worked out by multiplying the indexation
factor for the financial year (worked out under
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Section 60-15
304 Corporations Act 2001
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subsections (3) and (4)) by the maximum default
amount for an external administrator appointed during
the previous financial year; and
(ii) the amount (if any) prescribed for the purposes of this
subparagraph.
Rounding
(2) Amounts worked out under subsection (1) must be rounded to the
nearest whole dollar (rounding 50 cents upwards).
Indexation factor
(3) Subject to subsection (4), the indexation factor for a financial year
is the number worked out by dividing the index number for the
March quarter immediately preceding that financial year by the
index number for the March quarter immediately preceding that
first-mentioned March quarter.
(4) If an indexation factor worked out under subsection (3) would be
less than 1, the indexation factor is to be increased to 1.
Changes to CPI index reference period and publication of
substituted index numbers
(5) In working out the indexation factor:
(a) use only the index numbers published in terms of the most
recently published index reference period for the Consumer
Price Index; and
(b) disregard index numbers published in substitution for
previously published index numbers (except where the
substituted numbers are published to take account of changes
in the index reference period).
Definition—index number
(6) In this section:
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Section 60-16
Corporations Act 2001 305
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index number, in relation to a quarter, means the All Groups
Consumer Price Index number, being the weighted average of the 8
capital cities, published by the Australian Statistician in respect of
that quarter.
Subdivision C—Remuneration of provisional liquidators
60-16 Remuneration of provisional liquidators
(1) A provisional liquidator is entitled to receive such remuneration,
by way of percentage or otherwise, as is:
(a) determined by the Court; or
(b) if:
(i) no determination by the Court is in force; and
(ii) there is a committee of inspection;
determined by agreement between the liquidator and the
committee of inspection; or
(c) if:
(i) no determination by the Court is in force; and
(ii) there is no committee of inspection or the liquidator and
the committee of inspection fail to agree;
determined by resolution of the creditors.
(2) Sections 60-11 and 60-12 (Court review) apply in relation to a
determination mentioned in this section in the same way as they
apply to a remuneration determination made under section 60-10.
Subdivision D—Remuneration of liquidators in winding up by
ASIC
60-17 Remuneration of liquidators in winding up by ASIC
If ASIC orders under section 489EA that a company be wound up,
ASIC may determine the remuneration that the liquidator is
entitled to receive.
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Division 60 Remuneration and other benefits received by external administrators
Section 60-20
306 Corporations Act 2001
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Subdivision E—Duties of external administrators relating to
remuneration and benefits etc.
60-20 External administrator must not derive profit or advantage
from the administration of the company
Deriving profit or advantage from the company
(1) An external administrator of a company must not directly or
indirectly derive any profit or advantage from the external
administration of the company.
Circumstances in which profit or advantage is taken to be derived
(2) To avoid doubt, an external administrator of a company is taken to
derive a profit or advantage from the external administration of the
company if:
(a) the external administrator directly or indirectly derives a
profit or advantage from a transaction (including a sale or
purchase) entered into for or on account of the company; or
(b) the external administrator directly or indirectly derives a
profit or advantage from a creditor or member of the
company; or
(c) a related entity of the external administrator directly or
indirectly derives a profit or advantage from the external
administration of the company.
Exceptions
(3) Subsection (1) does not apply to the extent that:
(a) another provision of this Act, or of another law, requires or
permits the external administrator to derive the profit or
advantage; or
(b) the Court gives leave to the external administrator to derive
the profit or advantage.
Note: Subsection (1) would not, for example, prevent the external
administrator from recovering remuneration for necessary work
properly performed by the external administrator in relation to the
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Section 60-20
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external administration of the company, as the external administrator
is permitted to do so under other provisions of this Act.
(4) Despite paragraph (2)(c), subsection (1) does not apply to the
extent that:
(a) the external administrator employs or engages a person to
provide services in connection with the external
administration of the company; and
(b) a related entity of the external administrator directly or
indirectly derives a profit or advantage as a result of that
employment or engagement; and
(c) one of the following is satisfied:
(i) the external administrator does not know, and could not
reasonably be expected to know, that the related entity
would derive that profit or advantage;
(ii) the creditors, by resolution, agree to the related entity
deriving the profit or advantage;
(iii) it is not reasonably practicable in all the circumstances
to obtain the agreement, by resolution, of the creditors
to the related entity deriving the profit or advantage and
the cost of employing or engaging the person to provide
the services is reasonable in all the circumstances.
(4A) Despite paragraph (2)(c), subsection (1) does not apply to the
extent that a related entity of the external administrator directly or
indirectly derives a profit or advantage:
(a) from remuneration paid to the external administrator in
accordance with section 60-5 of this Schedule; or
(b) from a profit or advantage covered by subsection (4).
(5) Subsection (1) does not apply to the extent that the profit or
advantage is a payment that:
(a) is made to the external administrator by or on behalf of the
Commonwealth or an agency or authority of the
Commonwealth; and
(b) is of a kind prescribed.
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Section 60-20
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Offence
(6) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matters in
subsections (3), (4) and (5) (see subsection 13.3(3) of the Criminal
Code).
Effect of contravention of this section
(7) A transaction or any other arrangement entered into in
contravention of this section may be set aside by the Court.
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Funds handling Division 65
Section 65-1
Corporations Act 2001 309
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Division 65—Funds handling
65-1 Simplified outline of this Division
The external administrator of a company has duties to:
(a) promptly pay all company money into an account
(called an administration account); and
(b) promptly deposit instruments such as securities with a
bank; and
(c) keep the account separate and not pay any money that is
not company money into the account; and
(d) only pay money out of the account if it is for a
legitimate purpose.
The external administrator of a company may keep a single
account for a group of related companies (called a pooled group).
People with a financial interest in the external administration of a
company (such as creditors) may ask the Court to give directions to
the external administrator about the way money and other property
of the company is to be handled.
If the external administrator of a company does not comply with
this Division, the external administrator may have to pay penalties,
be paid less remuneration or be removed as external administrator.
65-5 External administrator must pay all money into an
administration account
External administrator must pay money into the administration
account
(1) The external administrator of a company must pay all money
received by the external administrator on behalf of, or in relation
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Section 65-10
310 Corporations Act 2001
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to, the company into an administration account for the company
within 5 business days after receipt.
Exception
(2) If the Court gives a direction that is inconsistent with
subsection (1), that subsection does not apply to the extent of the
inconsistency.
Offence
(3) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2) (see subsection 13.3(3) of the Criminal Code).
65-10 Administration accounts
(1) A bank account is an administration account for a company if:
(a) the account is maintained in relation to the external
administration of the company; and
(b) if any requirements are prescribed in relation to the
administration accounts of companies under external
administration, the account complies with those
requirements.
(2) A bank account is an administration account for a member of a
pooled group of companies if:
(a) the account is maintained in relation to the external
administration of the pooled group of companies; and
(b) if any requirements are prescribed in relation to the
administration accounts of companies under external
administration, the account complies with those
requirements.
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Section 65-15
Corporations Act 2001 311
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65-15 External administrator must not pay other money into the
administration account
External administrator must not pay other money into the
administration account
(1) The external administrator of a company must not pay any money
into an administration account for the company if it is not received
by the external administrator on behalf of, or in relation to:
(a) the company; or
(b) if the company is a member of a pooled group—another
member of the pooled group.
Exception
(2) If the Court gives a direction that is inconsistent with
subsection (1), that subsection does not apply to the extent of the
inconsistency.
Offence
(3) A person commits an offence of strict liability if:
(a) the person is subject to the requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2) (see subsection 13.3(3) of the Criminal Code).
65-20 Consequences for failure to pay money into administration
account
Application of this section
(1) This section applies if:
(a) an external administrator of a company:
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Section 65-25
312 Corporations Act 2001
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(i) is subject to a requirement under subsection 65-5(1)
(paying money into administration account); and
(ii) fails to comply with the requirement in relation to an
amount of money; and
(b) the amount exceeds:
(i) $50; or
(ii) if another amount is prescribed—that other amount.
Exception
(2) Subsection (1) does not apply if, on the application of the external
administrator of the company, the Court is satisfied that the
external administrator had sufficient reason for failing to comply
with the requirement in relation to the amount.
External administrator must pay penalty on excess
(3) The external administrator must, as a penalty, pay interest to the
Commonwealth on the excess, worked out:
(a) at the rate of 20% per year; or
(b) if another rate is prescribed—at that other rate;
for the period during which the external administrator fails to
comply with the requirement.
(4) The external administrator is personally liable for, and is not
entitled to be reimbursed out of the property of the company in
relation to, the payment of that interest.
65-25 Paying money out of administration account
Money only to be paid out of administration account in accordance
with this Act etc.
(1) An external administrator of a company must not pay any money
out of the administration account for the company otherwise than:
(a) for purposes related to the external administration of the
company; or
(b) in accordance with this Act; or
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Section 65-40
Corporations Act 2001 313
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(c) in accordance with a direction of the Court.
Offence
(2) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
65-40 Handling securities
Securities must be deposited with administration account bank
(1) An external administrator of a company must deposit in a bank:
(a) the negotiable instruments; and
(b) any other securities;
payable to the company or the external administrator as soon as
practicable after they are received by the external administrator.
Exception
(2) If the Court gives a direction that is inconsistent with
subsection (1), that subsection does not apply to the extent of the
inconsistency.
Offence
(3) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 5 penalty units.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2) (see subsection 13.3(3) of the Criminal Code).
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Section 65-45
314 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Delivery of securities
(4) The negotiable instruments or other security must be delivered out
on the signed request of the external administrator.
65-45 Handling of money and securities—Court directions
(1) The Court may, on application, give directions regarding the
payment, deposit or custody of:
(a) money; and
(b) negotiable instruments and other securities;
that are payable to, or held by, an external administrator of a
company.
(2) The Court may, on application, give directions authorising the
external administrator of a company to make payments into and out
of a special bank account.
(3) Without limiting subsection (2), the Court may:
(a) authorise the payments for the time and on the terms it thinks
fit; and
(b) if the Court thinks the account is no longer required—at any
time order it to be closed.
(4) A copy of an order under paragraph (3)(b) must be served by the
external administrator on the bank with which the special bank
account was opened.
(5) An application under this section may be made by:
(a) any person with a financial interest in the external
administration of the company; or
(b) an officer of the company.
(6) Paragraph (5)(b) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company is
under external administration.
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Section 65-50
Corporations Act 2001 315
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65-50 Rules in relation to consequences for failure to comply with
this Division
The Insolvency Practice Rules may provide for and in relation to:
(a) the payment by an external administrator of a company of
interest at such rate, on such amount and in respect of such
period as is prescribed; and
(b) disallowance of all or of such part as is prescribed of the
remuneration of an external administrator of a company; and
(c) the removal from office of an external administrator of a
company by the Court; and
(d) the payment by an external administrator of a company of
any expenses occasioned by reason of his or her default;
in cases where an external administrator contravenes or fails to
comply with this Division (including Insolvency Practice Rules
made under this Division).
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Division 70 Information
Section 70-1
316 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 70—Information
Subdivision A—Introduction
70-1 Simplified outline of this Division
The external administrator of a company must:
(a) give annual reports of the administration (called annual
administrative returns) to ASIC; and
(b) give a report of the administration to ASIC when the
administration ends; and
(c) keep books of meetings and other company affairs; and
(d) allow those books to be audited if required to do so; and
(e) allow access to those books by creditors; and
(f) give creditors, members and others requested
information, documents and reports relating to the
administration.
The committee of inspection (if there is one) may also request
information, documents and reports from the external administrator
under Division 80.
If the external administrator does not comply with a request, ASIC
may direct the external administrator to do so. If the external
administrator does not comply with the direction, ASIC may ask
the Court to order compliance. Alternatively, the person who
requested the information may ask the Court to order compliance
with the request.
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Section 70-5
Corporations Act 2001 317
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Administration returns
70-5 Annual administration return
Application of this section
(1) This section applies if a person is the external administrator of a
company during all or part of an administration return year for the
external administrator for the company.
(2) However, this section does not apply if:
(a) the external administration of the company ends during the
administration return year; and
(b) the person is the external administrator of the company when
the external administration of the company ends.
Note: If a person is the external administrator of a company when the
external administration of the company ends, the person must instead
lodge a return under section 70-6.
Annual administration return to be lodged
(3) The person must lodge a return in relation to the external
administration of the company by the person during the year or
part of the year (as the case requires).
(4) The return must:
(a) be in the approved form; and
(b) be lodged with ASIC within 3 months after the end of the
year.
Note: Fees for lodging documents and late lodgement fees may be imposed
under the Corporations (Fees) Act 2001.
Meaning of administration return year
(5) Each of the following is an administration return year for an
external administrator for a company:
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(a) the period of 12 months beginning on the day on which the
person first began to be an external administrator of the
company;
(b) each subsequent period of 12 months.
Notice of lodgement to be given
(6) The person must give notice that the return has been lodged:
(a) in a members’ voluntary winding up—to the members of the
company; and
(b) in a creditors’ voluntary winding up—to the creditors; and
(c) in a court-ordered winding up—to the creditors; and
(d) if the external administrator is appointed as a provisional
liquidator—to the Court; and
(e) if the company is under administration or has executed a
deed of company arrangement—to the company;
when next forwarding any report, notice of meeting, notice of call
or dividend.
Note: For notification, see section 600G.
Returns for pooled groups
(7) If 2 or more companies are members of a pooled group, then the
returns under subsection (3) for those companies may be set out in
the same document.
70-6 End of administration return
Application of this section
(1) This section applies if the external administration of a company
ends.
End of administration return to be lodged
(2) The person who is the external administrator of the company when
the external administration of the company ends (the last external
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administrator) must lodge a return in relation to the external
administration of the company.
(3) The return must:
(a) be in the approved form; and
(b) be lodged with ASIC within 1 month after the end of the
external administration of the company.
Note 1: Fees for lodging documents and late lodgement fees may be imposed
under the Corporations (Fees) Act 2001.
Note 2: ASIC must deregister the company 3 months after the end of
administration return is lodged (see section 509).
Notice of lodgement to be given
(4) The last external administrator must give notice that the return has
been lodged to a person mentioned in subsection (5), if that person
requests in writing that the last external administrator give the
person such a notice.
Note: For notification, see section 600G.
(5) The persons who may request such a notice are:
(a) in a members’ voluntary winding up—the members of the
company; and
(b) in a creditors’ voluntary winding up—the creditors; and
(c) in a court-ordered winding up—the creditors; and
(d) if the external administrator is appointed as a provisional
liquidator—the Court; and
(e) if the company is under administration or has executed a
deed of company arrangement—the company.
Note: For notification, see section 600G.
Returns for pooled groups
(6) If 2 or more companies are members of a pooled group, then the
returns under subsection (2) for those companies may be set out in
the same document.
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Section 70-10
320 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—Record-keeping
70-10 Administration books
External administrator must keep proper books
(1) An external administrator of a company must keep proper books in
which the external administrator must cause to be made:
(a) entries or minutes of proceedings at meetings relating to the
external administration of the company; and
(b) such other entries as are necessary to give a complete and
correct record of the external administrator’s administration
of the company’s affairs.
(2) The external administrator must:
(a) ensure that the books are available at the external
administrator’s office for inspection; and
(b) permit a creditor or contributory, or another person acting on
the creditor’s or contributory’s behalf, to inspect the books at
all reasonable times.
Exception
(3) Subsections (1) and (2) do not apply if the external administrator
has a reasonable excuse.
Offence
(4) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1) or
(2); and
(b) the person fails to comply with the requirement.
Penalty: 5 penalty units.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3) (see subsection 13.3(3) of the Criminal Code).
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Section 70-15
Corporations Act 2001 321
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
70-15 Audit of administration books—ASIC
ASIC may cause books to be audited
(1) ASIC may cause the books referred to in section 70-5 (annual
administration return), 70-6 (end of administration return) or 70-10
(administration books) to be audited by a registered company
auditor.
Audit on the ASIC’s initiative or on request
(2) The audit may be conducted:
(a) on ASIC’s own initiative; or
(b) at the request of the company; or
(c) at the request of a creditor; or
(d) at the request of any other person prescribed.
Auditor must prepare a report
(3) The auditor must prepare a report on the audit.
ASIC must give a copy of the report
(4) If ASIC causes books to be audited under subsection (1):
(a) ASIC must give a copy of the report prepared by the auditor
to:
(i) the external administrator of the company; and
(ii) the person who requested the report (if any); and
(b) subsection 1289(5) applies in relation to the report prepared
by the auditor as if it were a document required to be lodged.
Costs of an audit
(5) The costs of an audit under this section must be determined by
ASIC and form part of the expenses of the external administration
of the company.
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Section 70-20
322 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
70-20 Audit of administration books—on order of the Court
(1) The Court may order that an audit of the books referred to in
section 70-5 (annual administration return), 70-6 (end of
administration return) or 70-10 (administration books) be
conducted by a registered company auditor.
(2) The order may be made on application of:
(a) any person with a financial interest in the external
administration of the company; or
(b) an officer of the company.
(3) Paragraph (2)(b) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company
under external administration.
(4) The Court may make such orders in relation to the audit as it thinks
fit, including:
(a) the preparation and provision of a report on the audit; and
(b) orders as to the costs of the audit.
70-25 External administrator to comply with auditor requirements
Application of this section
(1) This section applies if books are audited under section 70-15 or
70-20.
External administrator must give assistance etc.
(2) The external administrator must give the auditor such books,
information and assistance as the auditor reasonably requires.
Exception
(3) Subsection (2) does not apply if the external administrator has a
reasonable excuse.
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Section 70-30
Corporations Act 2001 323
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offence
(4) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (2);
and
(b) the person fails to comply with the requirement.
Penalty: 5 penalty units.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3) (see subsection 13.3(3) of the Criminal Code).
70-30 Transfer of books to new administrator
Application of this section
(1) This section applies if:
(a) a person (the former administrator) ceases to be the external
administrator of a company; and
(b) ASIC has not issued a notice to the former administrator
under section 70-31; and
(c) a registered liquidator (the new administrator) is appointed
as external administrator of the company instead.
Transfer of books to new administrator
(2) The former administrator must transfer to the new administrator,
within the handover period, possession or control of any books
relating to the external administration of the company that are in
the former administrator’s possession or control.
(3) The handover period is:
(a) the period of 10 business days beginning on the day after the
new administrator is appointed; or
(b) if another period is agreed between the former administrator
and the new administrator—that other period.
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Section 70-30
324 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The former administrator may take a copy of any part of the books
before transferring possession or control of them to the new
administrator.
New administrator must accept the books
(5) The new administrator must take possession or accept control of
any books relating to the external administration of the company.
New administrator must allow inspection etc.
(6) After possession or control of the books is transferred, the new
administrator must allow the former administrator to inspect them
at any reasonable time and take a copy of any part of the books.
Offence
(7) A person commits an offence if:
(a) the person is subject to a requirement under subsection (2),
(5) or (6); and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 50 penalty units.
Lien against books not prejudiced
(8) If the new administrator is entitled to take possession or control of
the books under this section:
(a) a person is not entitled, as against the new administrator, to
claim a lien on the books; and
(b) such a lien is not otherwise prejudiced.
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Information Division 70
Section 70-31
Corporations Act 2001 325
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
70-31 Transfer of books to ASIC etc.
Transfer of books to ASIC
(1) If a person ceases to be the external administrator of a company,
ASIC may, by written notice given to the person, require the
person to:
(a) if the person has books relating to the external administration
of the company in his or her possession or control—transfer
possession or control of those books to ASIC within the
period specified in the notice; or
(b) otherwise—notify ASIC, within the period and in the manner
specified in the notice, that the person does not have books
relating to the external administration of the company in the
person’s possession or control.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 50 penalty units.
ASIC must transfer books to new external administrator
(3) If:
(a) possession or control of books relating to an external
administration of a company is transferred to ASIC under
this section; and
(b) the books are in ASIC’s possession or control; and
(c) a person (the new administrator) is or becomes the external
administrator of the company;
ASIC must, as soon as practicable, transfer possession or control of
those books to the new administrator.
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Section 70-31
326 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
ASIC must transfer books to company
(4) If:
(a) possession or control of books relating to a company is
transferred to ASIC under this section; and
(b) the books are in ASIC’s possession or control; and
(c) the company ceases to be a company under external
administration;
ASIC must, as soon as practicable, transfer possession or control of
those books to the company.
Lien against books not prejudiced
(5) If ASIC is entitled to take possession or control of the books under
this section:
(a) a person is not entitled, as against ASIC, to claim a lien on
the books; and
(b) such a lien is not otherwise prejudiced.
(6) If ASIC is required to give possession or control of the books to
the new administrator under this section:
(a) a person is not entitled, as against the new administrator, to
claim a lien on the books; and
(b) such a lien is not otherwise prejudiced.
Notice is not a legislative instrument
(7) A notice under subsection (1) is not a legislative instrument.
Retention period for books
(8) ASIC must retain all books of the company, and of the external
administration of the company:
(a) that are relevant to affairs of the company; and
(b) possession or control of which is transferred to ASIC under
this section; and
(c) possession or control of which is not transferred to another
entity under this section, or under any other law;
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Section 70-35
Corporations Act 2001 327
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
for a period (the retention period) of 2 years after the end of the
external administration of the company.
Destruction of books at end of retention period
(9) ASIC may destroy the books at the end of the retention period.
Relationship with other laws
(10) Subsections (8) and (9) do not apply to the extent that ASIC is
under an obligation to retain the books, or a part of the books,
under another provision of this Act or under any other law.
70-35 Retention and destruction of books
Retention period for books
(1) The last external administrator of a company must retain all books
of the company, and of the external administration of the company,
that:
(a) are relevant to affairs of the company; and
(b) are in the external administrator’s possession or control at the
end of the external administration;
for a period (the retention period) of 5 years from the end of the
external administration.
Exception—reasonable excuse
(2) Subsection (1) does not apply if the external administrator has a
reasonable excuse.
Exception—consent of ASIC etc.
(3) Despite subsection (1), the books may be destroyed within the
retention period:
(a) in the case of a members’ voluntary winding up—as the
company by resolution directs; and
(b) in the case of a creditor’s voluntary winding up or a
court-ordered winding up:
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(i) if there is a committee of inspection—as the committee
directs; and
(ii) otherwise—as the creditors by resolution direct; and
(c) if the external administrator is appointed as a provisional
liquidator—as the Court directs;
if ASIC consents to the destruction.
Destruction of books at end of retention period
(4) The external administrator may destroy the books at the end of the
retention period.
Offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matters in
subsections (2) and (3) (see subsection 13.3(3) of the Criminal Code).
Relationship with other laws
(6) Subsections (3) and (4) do not apply to the extent that the external
administrator is under an obligation to retain the books, or a part of
the books, under another provision of this Act or under any other
law.
70-36 Books of company in external administration—evidence
If a company is in external administration, all books of the
company, and of the external administrator of the company, that
are relevant to affairs of the company at or after the start of the
external administration are, as between the contributories of the
company, prima facie evidence of the truth of all matters
purporting to be recorded in those books.
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Section 70-40
Corporations Act 2001 329
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision D—Giving information etc. to creditors and others
70-40 Right of creditors to request information etc. from external
administrator
(1) The creditors may by resolution request the external administrator
of a company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the creditors.
(2) The external administrator must comply with the request unless:
(a) the information, report or document is not relevant to the
external administration of the company; or
(b) the external administrator would breach his or her duties in
relation to the external administration of the company if the
external administrator complied with the request; or
(c) it is otherwise not reasonable for the external administrator to
comply with the request.
(3) The Insolvency Practice Rules may prescribe circumstances in
which it is, or is not, reasonable for an external administrator of a
company to comply with a request of a kind mentioned in
subsection (1).
70-45 Right of individual creditor to request information etc. from
external administrator
(1) A creditor may request the external administrator of a company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the creditor.
(2) The external administrator must comply with the request unless:
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Section 70-46
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(a) the information, report or document is not relevant to the
external administration of the company; or
(b) the external administrator would breach his or her duties in
relation to the external administration of the company if the
external administrator complied with the request; or
(c) it is otherwise not reasonable for the external administrator to
comply with the request.
(3) The Insolvency Practice Rules may prescribe circumstances in
which it is, or is not, reasonable for an external administrator of a
company to comply with a request of a kind mentioned in
subsection (1).
70-46 Right of members to request information etc. from external
administrator in a members’ voluntary winding up
(1) This section applies in relation to a members’ voluntary winding
up.
(2) The members of the company may by resolution request the
external administrator of the company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the members.
(3) The external administrator must comply with the request unless:
(a) the information, report or document is not relevant to the
external administration of the company; or
(b) the external administrator would breach his or her duties in
relation to the external administration of the company if the
external administrator complied with the request; or
(c) it is otherwise not reasonable for the external administrator to
comply with the request.
(4) The Insolvency Practice Rules may prescribe circumstances in
which it is, or is not, reasonable for an external administrator of a
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Section 70-47
Corporations Act 2001 331
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
company to comply with a request of a kind mentioned in
subsection (2).
70-47 Right of individual member to request information etc. from
external administrator in a members’ voluntary winding
up
(1) This section applies in relation to a members’ voluntary winding
up.
(2) A member of the company may request the external administrator
of a company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the member.
(3) The external administrator must comply with the request unless:
(a) the information, report or document is not relevant to the
external administration of the company; or
(b) the external administrator would breach his or her duties in
relation to the external administration of the company if the
external administrator complied with the request; or
(c) it is otherwise not reasonable for the external administrator to
comply with the request.
(4) The Insolvency Practice Rules may prescribe circumstances in
which it is, or is not, reasonable for an external administrator of a
company to comply with a request of a kind mentioned in
subsection (2).
70-50 Reporting to creditors and members
(1) The Insolvency Practice Rules may provide for and in relation to
the obligations of external administrators of companies:
(a) to give information; and
(b) to provide reports; and
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(c) to produce documents;
to creditors or members.
(2) Without limiting subsection (1), the Insolvency Practice Rules may
provide for and in relation to:
(a) other circumstances in which the external administrator of a
company must give information, provide a report or produce
a document to a creditor or member; and
(b) the manner and form in which information is to be given, a
report provided or a document produced; and
(c) the timeframes in which information is to be given, a report
provided or a document produced; and
(d) who is to bear the cost of giving information, providing a
report or producing a document.
(3) The Insolvency Practice Rules may:
(a) make different provision in relation to different kinds of
external administration; and
(b) provide that specified requirements imposed under the
Insolvency Practice Rules may be replaced or modified, by
resolution, by:
(i) the creditors; or
(ii) the members; or
(iii) if there is a committee of inspection—the committee.
Subdivision E—Other requests for information etc.
70-55 Commonwealth may request information etc.
Application of this section
(1) This section applies if either:
(a) a former employee of a company under external
administration has made a claim for financial assistance from
the Commonwealth in relation to unpaid employment
entitlements; or
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(b) the Commonwealth considers that such a claim is likely to be
made.
Commonwealth may request information etc.
(2) The Commonwealth may request the external administrator of the
company to provide specified information, reports or documents in
relation to the external administration.
(3) The external administrator must comply with the request.
(4) The Insolvency Practice Rules may provide for and in relation to
who is to bear the cost of providing the information, reports or
documents.
Subdivision F—Reporting to ASIC
70-60 Insolvency Practice Rules may provide for reporting to ASIC
(1) The Insolvency Practice Rules may provide for and in relation to
the obligations of an external administrator of a company:
(a) to give information; and
(b) to provide reports; and
(c) to produce documents;
to ASIC.
(2) Without limiting subsection (1), the Insolvency Practice Rules may
provide for and in relation to:
(a) the manner and form in which information is to be given, a
report provided or a document produced; and
(b) the timeframes in which information is to be given, a report
provided or a document produced; and
(c) who is to bear the cost of giving information, providing a
report or producing a document.
(3) The Insolvency Practice Rules may make different provision in
relation to different kinds of external administration.
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Section 70-65
334 Corporations Act 2001
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Note: A failure to give information, provide a report or produce a document
to ASIC in accordance with the Insolvency Practice Rules may lead to
disciplinary action under Subdivision B of Division 40 of Part 2 of
this Schedule.
Subdivision G—External administrator may be compelled to
comply with requests for information etc.
70-65 Application of this Subdivision
(1) This Subdivision applies if the external administrator of a company
refuses a request made by a person under:
(a) Subdivision D; or
(b) a rule made under section 70-50;
(c) Subdivision E; or
(d) section 80-40;
to give information, provide a report or produce a document.
(2) In this Subdivision:
(a) the information, report or document is referred to as the
relevant material; and
(b) the request is referred to as the request for relevant material;
and
(c) giving the information, providing the report or producing the
document is referred to as giving the relevant material.
70-70 ASIC may direct external administrator to comply with the
request for relevant material
(1) ASIC may, in writing, direct the external administrator to give all
or part of the relevant material to the person or persons who made
the request for the relevant material within 5 business days after
the direction is given.
(2) A direction under subsection (1) is not a legislative instrument.
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Section 70-75
Corporations Act 2001 335
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70-75 ASIC must notify external administrator before giving a
direction under section 70-70
(1) Before giving the external administrator a direction under
section 70-70, ASIC must give the external administrator notice in
writing:
(a) stating that ASIC proposes to give the external administrator
a direction under that section; and
(b) identifying:
(i) the relevant material, or the part of the relevant material,
that ASIC proposes to direct be given; and
(ii) the person or persons to whom ASIC proposes to direct
that the relevant material, or that part of the relevant
material, be given; and
(c) inviting the external administrator to make a written
submission to ASIC within 10 business days after the notice
is given, stating:
(i) whether the external administrator has any objection to
giving the relevant material, or that part of the relevant
material, to a person or persons as proposed; and
(ii) if the external administrator has such an objection—the
reasons for that objection.
(2) If the external administrator objects to giving the relevant material,
or part of the relevant material, to a person, ASIC must take into
account the reasons for that objection when deciding whether to
direct that the relevant material, or that part of the relevant
material, be given to the person.
(3) A notice under subsection (1) is not a legislative instrument.
70-80 ASIC must not direct external administrator to give the
relevant material if external administrator entitled not to
comply with the request
ASIC must not give a direction under section 70-70 to give the
relevant material, or part of the relevant material, to a person if
ASIC is satisfied that the external administrator was entitled, under
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Section 70-85
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a provision of this Act or any other law, not to comply with the
request for the relevant material, or that part of the relevant
material, to the person.
70-85 ASIC may impose conditions on use of the relevant material
ASIC may, by notice, impose conditions
(1) ASIC may, by notice in writing to the person or persons to whom
the relevant material is to be given, impose conditions on the use
and disclosure of the relevant material, or part of the relevant
material, by the person or persons.
Offence
(2) A person commits an offence if:
(a) ASIC directs that the relevant material, or part of the relevant
material, be given to the person; and
(b) ASIC has given the person notice under subsection (1)
imposing a condition in relation to the use or disclosure of
that material by the person; and
(c) the person does not comply with the condition.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
Notice is not a legislative instrument
(3) A notice under subsection (1) is not a legislative instrument.
70-90 Court may order relevant material to be given
(1) The person or persons who made the request for the relevant
material may apply to the Court for an order that the external
administrator give the person or persons all or part of the relevant
material.
(2) If:
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(a) ASIC gives the external administrator a direction under
section 70-70 in relation to all or part of the relevant
material; and
(b) the external administrator does not comply with the direction;
ASIC may apply to the Court for an order that the external
administrator comply with the direction.
(3) On application under subsection (1) or (2), the Court may:
(a) order the external administrator to give the person, or any or
all of the persons, who made the request for the relevant
material all or part of that material; and
(b) make such other orders, including orders as to costs, as it
thinks fit.
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Section 75-1
338 Corporations Act 2001
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Division 75—Meetings
75-1 Simplified outline of this Division
The external administrator of a company may convene creditor or
company meetings at any time and must convene them in particular
circumstances, for example when directed to do so by certain
creditors or by ASIC.
Under Chapter 5 of this Act, there are other instances in which an
external administrator must hold a meeting.
Requirements for convening and holding meetings (including
notice, agenda, quorum, voting on proposals and costs) are set out
in the Insolvency Practice Rules.
There is a mechanism for resolving a matter without holding a
meeting.
75-5 Other obligations to convene meetings not affected
Nothing in this Division limits the operation of any other provision
of this Act, or any other law, imposing an obligation to convene a
meeting in relation to a company, or the external administration of
a company.
75-10 External administrator may convene meetings
The external administrator of a company may convene:
(a) a meeting of the creditors; or
(b) in the case of a members’ voluntary winding up—a general
meeting of the company;
at any time.
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Section 75-15
Corporations Act 2001 339
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75-15 External administrator must convene meeting in certain
circumstances
(1) The external administrator of a company must convene a meeting
of the creditors if:
(a) where there is a committee of inspection—the committee of
inspection directs the external administrator to do so; or
(b) the creditors direct the external administrator to do so by
resolution; or
(c) at least 25% in value of the creditors direct the external
administrator to do so in writing; or
(d) both of the following are satisfied:
(i) less than 25%, but more than 10%, in value of the
creditors direct the external administrator to do so in
writing;
(ii) security for the cost of holding the meeting is given to
the external administrator before the meeting is
convened; or
(e) all of the following are satisfied:
(i) the company is being wound up under a creditors’
voluntary winding up;
(ii) less than 25%, but more than 5%, in value of the
creditors direct the external administrator to do so in
writing;
(iii) none of the creditors who give the direction is a related
entity in relation to the company;
(iv) the direction is given no more than 20 business days
after the resolution for the voluntary winding up of the
company is passed.
(2) However, the external administrator need not comply with the
direction if the direction is not reasonable.
(3) The Insolvency Practice Rules may prescribe circumstances in
which a direction is, or is not, reasonable.
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Section 75-20
340 Corporations Act 2001
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(4) For the purposes of paragraphs (1)(c), (d) and (e), the value of the
creditors is to be worked out by reference to the value of the
creditors’ claims against the company that are known at the time
the direction is given.
(5) This section does not apply if:
(a) the external administrator is a provisional liquidator of the
company; or
(b) the external administrator is the administrator of the company
and the company is under administration.
75-20 External administrator must convene meeting if required by
ASIC
(1) ASIC may, in writing, direct an external administrator of a
company to convene a meeting of the creditors.
(2) ASIC may include in the direction requirements to be complied
with by the external administrator in notifying the creditors of the
meeting and in conducting the meeting.
(3) The external administrator must comply with a direction given
under subsection (1), and any requirements included in the
direction under subsection (2).
(4) A direction given under subsection (1) is not a legislative
instrument.
75-25 External administrator’s representative at meetings
(1) The external administrator of a company may, in writing, appoint a
person to represent the external administrator at a meeting.
(2) Subsection (1) does not apply to a meeting of a kind prescribed.
(3) If the external administrator is not personally present at a meeting,
then a reference in a provision of this Act to the external
administrator of a company, in respect of matters occurring at or in
connection with the meeting, is a reference to a person appointed to
represent the external administrator at the meeting.
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Section 75-30
Corporations Act 2001 341
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75-30 ASIC may attend meetings
(1) ASIC is entitled to attend any meeting of creditors or contributories
held under this Act.
(2) Subject to any provision of this Act (including any provision in
relation to voting), ASIC is entitled to participate in any meeting of
creditors held under this Act.
75-35 Commonwealth may attend certain meetings etc.
Application of this section
(1) This section applies if:
(a) a company is under external administration; and
(b) either:
(i) a former employee of the company has made a claim for
financial assistance from the Commonwealth in relation
to unpaid employment entitlements; or
(ii) the Commonwealth considers that such a claim is likely
to be made.
Commonwealth may nominate representative for meetings
(2) The Commonwealth is entitled to nominate a representative to
attend any meeting of creditors or contributories held in relation to
the external administration.
75-40 Proposals to creditors or contributories without meeting
Proposal by notice to creditors
(1) The external administrator of a company may at any time put a
proposal to the creditors or contributories by giving notice, in
writing, under this section.
Content and service of notice
(2) The notice must:
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(a) contain a single proposal; and
(b) include a statement of the reasons for the proposal and the
likely impact it will have on creditors or contributories, as the
case may be (if it is passed); and
(c) be given to each creditor or contributory, as the case may be,
who would be entitled to receive notice of a meeting of
creditors or contributories, as the case may be; and
(d) invite the creditor or contributory, as the case may be, to
either:
(i) vote Yes or No on the proposal; or
(ii) object to the proposal being resolved without a meeting
of creditors or contributories, as the case may be; and
(e) specify a reasonable time by which replies must be received
by the external administrator (in order to be taken into
account).
Evidentiary certificate relating to proposals
(3) A certificate signed by the external administrator of the company
stating any matter relating to a proposal under this section is prima
facie evidence of the matter.
Insolvency Practice Rules relating to proposals
(4) The Insolvency Practice Rules may provide for and in relation to
proposals without meeting under this section.
(5) Without limiting subsection (4), the Insolvency Practice Rules may
provide for and in relation to:
(a) the circumstances in which a proposal is taken to be passed;
and
(b) whether a proposal, if passed, is to be taken to have been
passed as a resolution or a special resolution; and
(c) costs and security for those costs in relation to a proposal.
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Section 75-41
Corporations Act 2001 343
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75-41 Outcome of voting at creditors’ meeting determined by
related entity—Court powers
Application of this section
(1) This section applies if, on the application of a creditor of a
company under external administration, the external administrator
of the company or ASIC, the Court is satisfied of the following
matters:
(a) a proposal has been voted on by creditors (either at a meeting
of the creditors or under section 75-40 without a meeting);
(b) if the vote or votes that a particular related creditor, or
particular related creditors, of the company cast on the
proposal had been disregarded for the purposes of
determining whether or not the proposal was passed, the
proposal:
(i) if it was in fact passed—would not have been passed; or
(ii) if in fact it was not passed—would have been passed;
or the question would have had to be decided on a casting
vote;
(c) the passing of the proposal, or the failure to pass it, as the
case requires:
(i) is contrary to the interests of the creditors as a group or
of that class of creditors as a group, as the case may be;
or
(ii) has prejudiced, or is reasonably likely to prejudice, the
interests of the creditors who voted against the proposal,
or for it, as the case may be, to an extent that is
unreasonable having regard to the matters in
subsection (2).
Unreasonable prejudice to interests of creditors—matters to be
taken into account
(2) For the purposes of subparagraph (1)(c)(ii), the matters are:
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(a) the benefits resulting to the related creditor, or to some or all
of the related creditors, from the proposal if passed, or from
the failure to pass the proposal, as the case may be; and
(b) the nature of the relationship between the related creditor and
the company, or of the respective relationships between the
related creditors and the company; and
(c) any other relevant matter.
Court may make orders
(3) The Court may make one or more of the following:
(a) an order that the proposal be considered and voted on at a
meeting of the creditors convened and held as specified in the
order;
(b) an order directing that the related creditor is not, or such of
the related creditors as the order specifies are not, entitled to
vote on:
(i) the proposal; or
(ii) a resolution to amend or vary the proposal;
(c) if the proposal was passed—an order setting aside the
resolution passing the proposal;
(d) such other orders as the Court thinks fit.
Definition—related creditor
(4) In this section:
related creditor, for the purposes of a vote, in relation to a
company, means a person who, when the vote was cast, was a
related entity, and a creditor, of the company.
75-42 Creditors’ resolution passed because of casting vote—Court
review
Application of this section
(1) This section applies if:
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(a) a resolution is passed at a meeting of creditors of a company
under external administration; and
(b) the resolution is passed because the person presiding at the
meeting exercises a casting vote.
Application to the Court
(2) ASIC may apply to the Court for an order setting aside or varying
the resolution.
(3) A person (other than ASIC) may apply to the Court for an order
setting aside or varying the resolution, but only if:
(a) the person voted against the resolution in some capacity
(even if the person voted for the resolution in another
capacity); or
(b) a person voted against the resolution on the first-mentioned
person’s behalf.
Court may make orders
(4) On application under subsection (2) or (3), the Court may:
(a) by order set aside or vary the resolution; and
(b) if it does so—make such further orders, and give such
directions, as it thinks fit.
(5) On and after the making of an order varying the resolution, the
resolution has effect as varied by the order.
75-43 Proposed creditors’ resolution not passed because of casting
vote—Court’s powers
Application of this section
(1) This section applies if:
(a) a resolution is not passed at a meeting of creditors of a
company under external administration; and
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(b) the resolution is not passed because the person presiding at
the meeting exercises a casting vote, or refuses or fails to
exercise such a vote.
Application to the Court
(2) ASIC may apply to the Court for an order under subsection (4).
(3) A person (other than ASIC) may apply to the Court for an order
under subsection (4), but only if:
(a) the person voted for the proposed resolution in some capacity
(even if the person voted against the proposed resolution in
another capacity); or
(b) a person voted for the proposed resolution on the
first-mentioned person’s behalf.
Court may make orders
(4) On application under subsection (2) or (3), the Court may:
(a) order that the proposed resolution is taken to have been
passed at the meeting; and
(b) if it does so—make such further orders, and give such
directions, as it thinks fit.
(5) If an order is made under paragraph (4)(a), the proposed resolution:
(a) is taken for all purposes (other than those of subsection (1))
to have been passed at the meeting; and
(b) is taken to have taken effect:
(i) if the order specifies a time when the proposed
resolution is taken to have taken effect—at that time,
even if it is earlier than the making of the order; or
(ii) otherwise—on the making of the order.
75-44 Interim order on application under section 75-41, 75-42 or
75-43
(1) If:
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(a) an application under section 75-41, 75-42 or 75-43 has not
yet been determined; and
(b) the Court is of the opinion that it is desirable to do so;
the Court may make such interim orders as it thinks fit
(2) An interim order must be expressed to apply until the application is
determined, but may be varied or discharged.
75-45 Order under section 75-41 or 75-42 does not affect act already
done pursuant to resolution
An act done pursuant to a resolution as in force before the making,
under section 75-41 or 75-42, of an order setting aside or varying
the resolution is as valid and binding on and after the making of the
order as if the order had not been made.
75-50 Rules relating to meetings
(1) The Insolvency Practice Rules may provide for and in relation to
meetings concerning companies under external administration.
(2) Without limiting subsection (1), the Insolvency Practice Rules may
provide for and in relation to:
(a) the circumstances in which meetings must or may be
convened; and
(b) notice for convening meetings; and
(c) agenda; and
(d) information to be given in connection with meetings; and
(e) who is to preside at meetings; and
(f) the number of creditors or contributories required to
constitute a quorum; and
(g) proxies and attorneys; and
(h) motions; and
(i) voting (including casting votes); and
(j) the circumstances in which a resolution must or may be put
to creditors or contributories in a meeting; and
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Section 75-50
348 Corporations Act 2001
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(k) the circumstances in which a resolution or a special
resolution put to creditors or contributories in a meeting is
passed; and
(l) facilities, including electronic communication facilities, to be
available at meetings; and
(m) minutes; and
(n) costs in relation to meetings and security for those costs.
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Committees of inspection Division 80
Section 80-1
Corporations Act 2001 349
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Division 80—Committees of inspection
80-1 Simplified outline of this Division
Creditors of a company under external administration may decide
that there is to be a committee of inspection to monitor the
administration and to give assistance to the external administrator.
Appointing the committee
Each of the following have rights to appoint members to the
committee (and to remove those members and fill the vacancy):
(a) the creditors by resolution;
(b) a single creditor who is owed, or a group of creditors
who together are owed, a large amount;
(c) a single employee who is owed, or a group of employees
who together are owed, a large amount.
Once a person exercises a right in one capacity to appoint a
member, the person cannot exercise a right in another capacity to
do so. A person can exercise the right in a particular capacity to
appoint only one person (unless the person is filling a vacancy in
that appointment).
If a company is in a related group of companies (called a pooled
group), creditors of all the companies may decide together that
there is to be a committee of inspection for the group and appoint
members of the committee.
Procedures and powers
This Division also deals with the procedures and powers of
committees of inspection (including requesting information,
documents and reports from the external administrator and
obtaining specialist advice).
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Section 80-5
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
An external administrator of a company must have regard to
directions of the committee but is not obliged to comply.
Review
The Court may inquire into and make orders about the conduct of
committees of inspection.
80-5 Application of sections 80-10 to 80-25
(1) The rules in sections 80-10 to 80-25 apply if the external
administrator of a company convenes a meeting of creditors for the
purpose of determining either or both of the following:
(a) whether there is to be a committee of inspection for the
company;
(b) if there is, or is to be, a committee of inspection—who are to
be appointed members of the committee.
(2) However, those rules do not apply if the company is a member of a
pooled group.
Note: Committees of inspection for pooled groups are dealt with in
sections 80-26 and 80-27.
80-10 Committee of inspection—company not a member of a pooled
group
The creditors of a company may, by resolution, determine that
there is to be a committee of inspection in relation to the external
administration of the company.
80-15 Appointment and removal of members of committee of
inspection by creditors generally
(1) The creditors of a company may, by resolution, appoint members
of a committee of inspection in relation to the external
administration of the company.
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Section 80-20
Corporations Act 2001 351
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The creditors of a company may by resolution:
(a) remove a person appointed as a member of the committee
under this section; and
(b) appoint another person to fill a vacancy in the office of a
member of the committee of inspection appointed under this
section.
(3) A person is not entitled to vote on a resolution to appoint or
remove a member of a committee of inspection under this section
if:
(a) the person, acting either alone or with others, appoints a
person as a member of the committee under section 80-20; or
(b) the person, acting either alone or with others, appoints a
person as a member of the committee under section 80-25.
80-20 Appointment of committee member by large creditor
(1) A creditor representing at least 10% in value of the creditors, or a
group of creditors who together represent at least 10% in value of
the creditors, of a company may appoint a person as a member of a
committee of inspection in relation to the external administration
of the company.
(2) If a creditor or a group of creditors appoints a person as a member
of a committee of inspection under this section, the creditor or
group of creditors may:
(a) remove the person as a member of the committee; and
(b) appoint another person to fill a vacancy in the office of that
member of the committee.
(3) A creditor, acting either alone or with others, is not entitled to
appoint a person as a member of a committee of inspection under
subsection (1) if:
(a) the creditor votes on a resolution to appoint or remove a
member of the committee under section 80-15; or
(b) the creditor, acting either alone or with others, appoints a
member of the committee under subsection 80-25(1); or
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-25
352 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the creditor, acting either alone or with others, has already
appointed a member of the committee under subsection (1) of
this section.
80-25 Appointment of committee member by employees
(1) Either:
(a) an employee of the company; or
(b) employees of the company;
representing at least 50% in value of entitlements owed to or in
respect of employees by the company may appoint a person as a
member of the committee of inspection to represent the employees.
(2) If an employee or a group of employees appoints a person as a
member of a committee of inspection under this section, the
employee or group of employees may:
(a) remove the person as a member of the committee; and
(b) appoint another person to fill a vacancy in the office of that
member of the committee.
(3) An employee, acting either alone or with others, is not entitled to
appoint a person as a member of a committee of inspection under
subsection (1) if:
(a) the employee votes on a resolution to appoint or remove a
member of the committee under section 80-15; or
(b) the employee, acting either alone or with others, appoints a
member of the committee under subsection 80-20(1); or
(c) the employee, acting either alone or with others, has already
appointed a member of the committee under subsection (1) of
this section.
(4) In this section:
employee of a company has the same meaning as in Part 5.8A.
entitlements of an employee of a company has the same meaning
as in Part 5.8A.
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General rules relating to external administrations Part 3
Committees of inspection Division 80
Section 80-26
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
80-26 Committee of inspection—pooled groups
Application of this section
(1) This section applies if each company that is a member of a pooled
group is being wound up.
Meeting to form a committee of inspection for a pooled group
(2) The external administrator or external administrators must, if
directed to do so under section 80-27, convene a meeting, on a
consolidated basis, of the creditors of all of the companies for the
purposes of determining either or both of the following:
(a) whether there is to be a committee of inspection for the
pooled group;
(b) if there is, or is to be, a committee of inspection for the
pooled group—who are to be appointed members of the
committee.
Committee of inspection for a pooled group becomes the committee
of inspection for each member of the pooled group
(3) A committee of inspection for a pooled group is taken to be a
committee of inspection for each company that is a member of the
pooled group.
Existing committee of inspection for a member of a pooled group
ceases to exist
(4) If:
(a) at the meeting, it is resolved that there is to be a committee of
inspection for the pooled group; and
(b) immediately before the meeting, a committee of inspection
was in existence for a company that is a member of the
pooled group;
the committee mentioned in paragraph (b) ceases to exist when the
resolution mentioned in paragraph (a) is passed.
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-27
354 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Rules relating to companies under external administration who are
members of a pooled group
(5) The Insolvency Practice Rules may provide for and in relation to
meetings in relation to the external administration of companies
that are members of a pooled group (pooled group meetings).
(6) Without limiting subsection (5), the Insolvency Practice Rules may
provide for and in relation to:
(a) other circumstances in which pooled group meetings must or
may be convened; and
(b) voting (including casting votes) at pooled group meetings;
and
(c) the circumstances in which a resolution or a special
resolution put to creditors or contributories in a pooled group
meeting is passed; and
(d) costs in relation to pooled group meetings and security for
those costs.
80-27 External administrator must convene meeting in certain
circumstances
(1) The external administrator, or the external administrators, of the
members of a pooled group must convene a meeting under
section 80-26 if:
(a) where there is a committee of inspection for a member of the
pooled group—the committee of inspection directs the
external administrator, or external administrators, to do so; or
(b) the creditors of one of the members of the pooled group
direct the external administrator, or external administrators,
to do so, by resolution; or
(c) at least 25% in value of the creditors of one of the members
of the pooled group, direct the external administrator, or
external administrators, to do so in writing; or
(d) both of the following are satisfied:
(i) less than 25%, but more than 10%, in value of the
creditors of one of the members of the pooled group
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Committees of inspection Division 80
Section 80-27
Corporations Act 2001 355
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
direct the external administrator, or external
administrators, to do so in writing;
(ii) security for the cost of holding the meeting is given to
the external administrator, or external administrators,
before the meeting is convened; or
(e) all of the following are satisfied:
(i) the members of the pooled group are each being wound
up under a creditors’ voluntary winding up;
(ii) less than 25%, but more than 5%, in value of the
creditors of one of the members of the pooled group
direct the external administrator, or external
administrators, to do so in writing;
(iii) none of the creditors who give the direction is a related
entity in relation to that member of the pooled group;
(iv) the direction is given no more than 20 business days
after the last resolution for the voluntary winding up of
the members of the pooled group is passed.
(2) However, the external administrator, or external administrators,
need not comply with the direction if the direction is not
reasonable.
(3) The Insolvency Practice Rules may prescribe circumstances in
which a direction is, or is not, reasonable.
(4) For the purposes of paragraphs (1)(c), (d) and (e), the value of the
creditors is to be worked out by reference to the value of the
creditors’ claims (that are known at the time the direction is given)
against the member of the pooled group.
(5) This section does not apply if:
(a) one of the external administrators is a provisional liquidator
of a member of the pooled group; or
(b) one of the external administrators is the administrator of a
member of the pooled group and the member is under
administration.
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-30
356 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
80-30 Committees of inspection—procedures etc.
(1) Subject to subsection (2), a committee of inspection is to determine
its own procedures.
(2) The Insolvency Practice Rules may provide for and in relation to
committees of inspection.
(3) Without limiting subsection (2), the Insolvency Practice Rules may
provide for and in relation to:
(a) eligibility to be appointed as a member of a committee of
inspection; and
(b) the convening of, conduct of, and procedure and voting at,
meetings; and
(c) resignation and removal of members; and
(d) vacancies in membership.
80-35 Functions of committee of inspection
(1) A committee of inspection has the following functions:
(a) to advise and assist the external administrator of the
company;
(b) to give directions to the external administrator of the
company;
(c) to monitor the conduct of the external administration of the
company;
(d) such other functions as are conferred on the committee by
this Act;
(e) to do anything incidental or conducive to the performance of
any of the above functions.
(2) An external administrator of a company must have regard to any
directions given to the external administrator by the committee of
inspection, but the external administrator is not required to comply
with such directions.
(3) If an external administrator of a company does not comply with a
direction, the external administrator must make a written record of
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General rules relating to external administrations Part 3
Committees of inspection Division 80
Section 80-40
Corporations Act 2001 357
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
that fact, along with the external administrator’s reasons for not
complying with the direction.
80-40 Committee of inspection may request information etc.
(1) A committee of inspection may request the external administrator
of a company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the committee.
(2) The external administrator must comply with the request unless:
(a) the information, report or document is not relevant to the
external administration of the company; or
(b) the external administrator would breach his or her duties in
relation to the external administration of the company if the
external administrator complied with the request; or
(c) it is otherwise not reasonable for the external administrator to
comply with the request.
(3) The Insolvency Practice Rules may prescribe circumstances in
which it is, or is not, reasonable for an external administrator of a
company to comply with a request of a kind mentioned in
subsection (1).
80-45 Reporting to committee of inspection
(1) The Insolvency Practice Rules may provide for and in relation to
the obligations of external administrators of companies:
(a) to give information; and
(b) to provide reports; and
(c) to produce documents;
to committees of inspection.
(2) Without limiting subsection (1), the Insolvency Practice Rules may
provide for and in relation to:
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-50
358 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) other circumstances in which the external administrator of a
company must give information, provide a report or produce
a document to a committee of inspection; and
(b) the manner and form in which information is to be given, a
report provided or a document produced; and
(c) the timeframes in which information is to be given, a report
provided or a document produced; and
(d) who is to bear the cost of giving information, providing a
report or producing a document.
(3) The Insolvency Practice Rules may:
(a) make different provision in relation to different classes of
company or external administration of a company; and
(b) provide that specified requirements imposed under the
Insolvency Practice Rules may be replaced or modified, by
resolution, by:
(i) the creditors; or
(ii) the committee of inspection.
80-50 Committee of inspection may obtain specialist advice or
assistance
(1) A committee of inspection may resolve that a member of the
committee obtain, on behalf of the committee, such advice or
assistance as the committee considers desirable in relation to the
conduct of the external administration.
(2) The committee of inspection must obtain the approval of the
external administrator of the company or the Court before expenses
are incurred in obtaining the advice or assistance.
(3) To avoid doubt, an expense incurred under subsection (2) is to be
taken to be an expense incurred by a person as a member of the
committee, unless the Court orders otherwise.
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General rules relating to external administrations Part 3
Committees of inspection Division 80
Section 80-55
Corporations Act 2001 359
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
80-55 Obligations of members of committee of inspection
Deriving profit or advantage from the company
(1) A member of a committee of inspection must not directly or
indirectly derive any profit or advantage from the external
administration of the company.
Circumstances in which profit or advantage is taken to be derived
(2) To avoid doubt, a member of a committee of inspection is taken to
derive a profit or advantage from the external administration of the
company if:
(a) the member directly or indirectly derives a profit or
advantage from a transaction (including a sale or purchase)
entered into for or on account of the company; or
(b) the member directly or indirectly derives a profit or
advantage from a creditor of the company; or
(c) a related entity of the member directly or indirectly derives a
profit or advantage from the external administration of the
company.
Exceptions
(3) Subsection (1) does not apply if the creditors resolve otherwise.
(4) The member of the committee is not entitled to vote on the
resolution referred to in subsection (3).
(5) Subsection (1) does not apply to the extent that:
(a) another provision of this Act, or of another law, requires or
permits the member of the committee of inspection to derive
the profit or advantage; or
(b) the Court gives leave to the member of the committee to
derive the profit or advantage.
Note: Subsection (1) would not, for example, prevent a creditor from
recovering debts proved in a winding up, as this is permitted under
Part 5.6 of Chapter 5.
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-55
360 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) Despite paragraph (2)(c), subsection (1) does not apply to the
extent that:
(a) the profit or advantage arises because the external
administrator employs or engages a person to provide
services in connection with the external administration of the
company; and
(b) the person is a related entity of a member of the committee of
inspection; and
(c) one of the following applies:
(i) the member does not know, and could not reasonably be
expected to know, that the external administrator has
employed or engaged a related entity of the member;
(ii) the creditors, by resolution, agree to the related entity
being employed or engaged.
Offence
(7) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (1);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matters in
subsections (3), (5) and (6) (see subsection 13.3(3) of the Criminal
Code).
Effect of contravention of this section
(8) A transaction or any other arrangement entered into in
contravention of this section may be set aside by the Court.
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General rules relating to external administrations Part 3
Committees of inspection Division 80
Section 80-60
Corporations Act 2001 361
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
80-60 Obligations of creditor appointing a member of committee of
inspection
Application of this section
(1) This section applies if a creditor representing at least 10% in value
of the creditors of a company appoints a person under
section 80-20 as a member of a committee of inspection in relation
to the external administration of the company.
(2) The creditor must not directly or indirectly become the purchaser
of any part of the property of the company.
Exceptions
(3) Subsection (2) does not apply if the creditors resolve otherwise.
(4) The creditor is not entitled to vote on the resolution referred to in
subsection (3).
(5) Subsection (2) does not apply to the extent that:
(a) another provision of this Act, or of another law, requires or
permits the creditor to purchase the property; or
(b) the Court gives leave to the creditor to purchase the property.
Offence
(6) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection (2);
and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
Note: A defendant bears an evidential burden in relation to the matters in
subsections (3) and (5) (see subsection 13.3(3) of the Criminal Code).
Effect of contravention of this section
(7) A transaction or any other arrangement entered into in
contravention of this section may be set aside by the Court.
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Part 3 General rules relating to external administrations
Division 80 Committees of inspection
Section 80-65
362 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
80-65 ASIC may attend committee meetings
ASIC is entitled to attend any meeting of a committee of
inspection.
80-70 The Court may inquire into conduct of the committee
The Court may inquire into the conduct of a committee of
inspection and make such orders as it thinks fit to ensure the proper
conduct of the committee.
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General rules relating to external administrations Part 3
Directions by creditors Division 85
Section 85-1
Corporations Act 2001 363
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 85—Directions by creditors
85-1 Simplified outline of this Division
The external administrator of a company must have regard to
directions given to the administrator by the creditors of the
company but is not obliged to comply with those directions.
85-5 External administrator to have regard to directions given by
creditors
(1) The creditors of a company under external administration (other
than a members’ voluntary winding up) may, by resolution, give
directions to the external administrator of the company in relation
to the external administration.
(2) An external administrator of a company must have regard to any
directions mentioned in subsection (1), but the external
administrator is not required to comply with such directions.
(3) If the external administrator does not comply with a direction, the
external administrator must make a written record of that fact,
along with the external administrator’s reasons for not complying
with the direction.
(4) If there is a conflict between directions given by the creditors
under subsection (1) and by the committee of inspection under
section 80-35, directions given by the creditors override any
directions given by the committee.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-1
364 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 90—Review of the external administration of a
company
Subdivision A—Introduction
90-1 Simplified outline of this Division
Review by the Court
The Court may inquire into the external administration of a
company either on its own initiative or on the application of the
company, the external administrator, ASIC or a person with a
financial interest in the external administration of the company
(such as a creditor of the company).
The Court has wide powers to make orders, including orders
replacing the external administrator or dealing with losses resulting
from a breach of duty by the external administrator.
Review by another registered liquidator
ASIC, the Court, creditors or members of a company may appoint
a registered liquidator to review the external administration of the
company. Such a review may look at a range of matters, including
whether the remuneration of the external administrator is
reasonable and whether costs and expenses have been properly
incurred.
The Insolvency Practice Rules may set the powers and duties of a
registered liquidator conducting such a review and may deal with
issues relating to the review process.
If a provisional liquidator has been appointed for the company,
review by another registered liquidator is not available.
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General rules relating to external administrations Part 3
Review of the external administration of a company Division 90
Section 90-5
Corporations Act 2001 365
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Removal of external administrator by creditors
The creditors of a company under external administration (other
than a company for which a provisional liquidator has been
appointed) may remove the external administrator of the company
and appoint another. However, the external administrator may
apply to the Court to be reappointed.
Subdivision B—Court powers to inquire and make orders
90-5 Court may inquire on own initiative
(1) The Court may, on its own initiative during proceedings before the
Court, inquire into the external administration of a company.
(2) The Court may, for the purposes of such an inquiry, require a
person who is or has at any time been the external administrator of
the company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the Court in relation to the external administration of the
company.
(3) This section does not limit the Court’s powers under any other
provision of this Act, or under any other law.
90-10 Court may inquire on application of creditors etc.
(1) The Court may, on the application of a person mentioned in
subsection (2), inquire into the external administration of a
company.
(2) Each of the following persons may make an application for an
inquiry:
(a) a person with a financial interest in the external
administration of the company;
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Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-15
366 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) an officer of the company;
(c) if the committee of inspection (if any) so resolves—a
creditor, on behalf of the committee;
(d) ASIC.
(3) Paragraph (2)(b) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company is
under external administration.
(4) The Court may, for the purposes of such an inquiry, require a
person who is or has at any time been the external administrator of
the company to:
(a) give information; or
(b) provide a report; or
(c) produce a document;
to the Court in relation to the external administration of the
company.
(5) If an application is made by a person referred to in
paragraph (2)(c), the reasonable expenses associated with the
application are to be taken to be expenses incurred by a person as a
member of the committee unless otherwise ordered by the Court.
(6) This section does not limit the Court’s powers under any other
provision of this Act, or under any other law.
90-15 Court may make orders in relation to external administration
Court may make orders
(1) The Court may make such orders as it thinks fit in relation to the
external administration of a company.
Orders on own initiative or on application
(2) The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under section 90-20.
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Review of the external administration of a company Division 90
Section 90-15
Corporations Act 2001 367
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Examples of orders that may be made
(3) Without limiting subsection (1), those orders may include any one
or more of the following:
(a) an order determining any question arising in the external
administration of the company;
(b) an order that a person cease to be the external administrator
of the company;
(c) an order that another registered liquidator be appointed as the
external administrator of the company;
(d) an order in relation to the costs of an action (including court
action) taken by the external administrator of the company or
another person in relation to the external administration of
the company;
(e) an order in relation to any loss that the company has
sustained because of a breach of duty by the external
administrator;
(f) an order in relation to remuneration, including an order
requiring a person to repay to a company, or the creditors of
a company, remuneration paid to the person as external
administrator of the company.
Matters that may be taken into account
(4) Without limiting the matters which the Court may take into
account when making orders, the Court may take into account:
(a) whether the liquidator has faithfully performed, or is
faithfully performing, the liquidator’s duties; and
(b) whether an action or failure to act by the liquidator is in
compliance with this Act and the Insolvency Practice Rules;
and
(c) whether an action or failure to act by the liquidator is in
compliance with an order of the Court; and
(d) whether the company or any other person has suffered, or is
likely to suffer, loss or damage because of an action or failure
to act by the liquidator; and
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Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-20
368 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) the seriousness of the consequences of any action or failure
to act by the liquidator, including the effect of that action or
failure to act on public confidence in registered liquidators as
a group.
Costs orders
(5) Without limiting subsection (1), an order mentioned in
paragraph (3)(d) in relation to the costs of an action may include an
order that:
(a) the external administrator or another person is personally
liable for some or all of those costs; and
(b) the external administrator or another person is not entitled to
be reimbursed by the company or its creditors in relation to
some or all of those costs.
Orders to make good loss sustained because of a breach of duty
(6) Without limiting subsection (1), an order mentioned in
paragraph (3)(e) in relation to a loss may include an order that:
(a) the external administrator is personally liable to make good
some or all of the loss; and
(b) the external administrator is not entitled to be reimbursed by
the company or creditors in relation to the amount made
good.
Section does not limit Court’s powers
(7) This section does not limit the Court’s powers under any other
provision of this Act, or under any other law.
90-20 Application for Court order
(1) Each of the following persons may apply for an order under
section 90-15:
(a) a person with a financial interest in the external
administration of the company;
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Review of the external administration of a company Division 90
Section 90-21
Corporations Act 2001 369
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if the committee of inspection (if any) so resolves—a
creditor, on behalf of the committee;
(c) ASIC;
(d) an officer of the company;
(e) if the application is in relation to a company that is a friendly
society within the meaning of the Life Insurance Act 1995
and which may be wound up voluntarily under
subsection 180(2) of that Act—APRA.
(2) Paragraph (1)(d) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company is
under external administration.
(3) If an application is made by a person referred to in
paragraph (1)(b), the reasonable expenses associated with the
application are to be taken to be expenses incurred by a person as a
member of the committee.
90-21 Meetings to ascertain wishes of creditors or contributories
(1) The Court may, as to all matters relating to the external
administration of a company, have regard to the wishes of the
creditors or contributories as proved to it by any sufficient
evidence.
(2) The Court may, if it thinks fit for the purpose of ascertaining those
wishes, direct meetings of the creditors or contributories to be
convened, held and conducted in such manner as the Court directs,
and may appoint a person to act as chair of any such meeting and
to report the result of the meeting to the Court.
(3) In the case of creditors, regard is to be had to the value of each
creditor’s debt.
(4) In the case of contributories, regard is to be had to the number of
votes conferred on each contributory by this Act or the company’s
constitution.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-22
370 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—Review by another registered liquidator
90-22 Application of this Subdivision
This Subdivision applies in relation to a company that is under
external administration, other than a company in relation to which
a provisional liquidator has been appointed.
90-23 Appointment of reviewing liquidator by ASIC or the Court
Appointment by ASIC
(1) A registered liquidator may be appointed by ASIC to carry out a
review into a matter that relates to the external administration of
the company, if ASIC considers it appropriate to do so.
(2) ASIC may exercise the power under subsection (1):
(a) on its own initiative; or
(b) on application by a person with a financial interest in the
external administration of the company; or
(c) on the application of an officer of the company.
(3) An application under paragraph (2)(b) or (c) must be lodged with
ASIC in the approved form.
(4) Paragraph (2)(c) has effect despite section 198G.
Note: Section 198G deals with powers of officers etc. while a company
under external administration.
(5) If ASIC appoints a registered liquidator to carry out a review,
ASIC must specify:
(a) the matters in relation to the external administration of the
company which the liquidator is appointed to review; and
(b) the way in which the cost of carrying out the review is to be
determined.
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Insolvency Practice Schedule (Corporations) Schedule 2
General rules relating to external administrations Part 3
Review of the external administration of a company Division 90
Section 90-24
Corporations Act 2001 371
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Appointment by the Court
(6) A registered liquidator may be appointed by the Court to carry out
a review into a matter that relates to the external administration of
the company.
(7) The Court may exercise the power under subsection (6):
(a) on application under subsection (8); and
(b) if the Court considers it appropriate to do so.
(8) Either of the following may make an application under this
subsection:
(a) ASIC;
(b) a person with a financial interest in the external
administration of the company.
(9) If the Court appoints a registered liquidator to carry out a review,
the Court must specify:
(a) the matters in relation to the external administration of the
company which the liquidator is appointed to review; and
(b) the way in which the cost of carrying out the review is to be
determined.
Appointments by ASIC or by the Court—limit
(10) A matter referred to in paragraph (5)(a) or (9)(a) must not relate to
remuneration which an external administrator of the company is
entitled to receive under subsection 60-5(2) (remuneration if no
remuneration determinations made).
90-24 Appointment of reviewing liquidator by creditors etc.
Appointment to carry out review
(1) A registered liquidator may be appointed to carry out a review into
either or both of the following matters:
(a) remuneration of the external administrator of the company;
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-24
372 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a cost or expense incurred by the external administrator of
the company.
Appointment by resolution
(2) The appointment may be made by resolution of:
(a) the creditors; or
(b) if the company is being wound up under a members’
voluntary winding up—the company;
(3) If the appointment is made by resolution, the resolution must
specify:
(a) the remuneration, costs or expenses which the liquidator is
appointed to review; and
(b) the way in which the cost of carrying out the review is to be
determined.
Appointment by one or more creditors or members
(4) The appointment may be made by:
(a) one or more of the creditors; or
(b) if the company is being wound up under a members’
voluntary winding up—one or more of the members.
(5) However, an appointment may only be made under subsection (4)
if the external administrator of the company agrees to the
appointment.
(6) The agreement must:
(a) be in accordance with the Insolvency Practice Rules; and
(b) specify:
(i) the remuneration, costs or expenses which the liquidator
is appointed to review; and
(ii) the way in which the cost of carrying out the review is
to be determined.
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Insolvency Practice Schedule (Corporations) Schedule 2
General rules relating to external administrations Part 3
Review of the external administration of a company Division 90
Section 90-25
Corporations Act 2001 373
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Appointments by creditors etc.—limit
(7) Despite subsection (1), a registered liquidator appointed under this
section has no power to review the remuneration to which the
external administrator of a company is entitled under
subsection 60-5(2) (remuneration if no remuneration
determinations made).
90-25 Reviewing liquidator must consent to appointment
A registered liquidator cannot be appointed under this Subdivision
as a reviewing liquidator in relation to a matter unless:
(a) the liquidator has consented in writing to the appointment;
and
(b) as at the time of the appointment, the liquidator has not
withdrawn the consent.
90-26 Review
Review—general
(1) If a reviewing liquidator is appointed under this Subdivision in
relation to a matter, the reviewing liquidator must carry out a
review into that matter.
Reviews relating to remuneration, costs or expenses
(2) If the matter is, or includes, remuneration of the external
administrator of the company, the review may (but need not)
include an assessment of whether the remuneration is reasonable.
(3) If the matter is, or includes, a cost or expense incurred by the
external administrator of the company, the review must include an
assessment of whether the cost or expense was properly incurred
by the external administrator.
Note: Insolvency Practice Rules made under section 90-29 may provide for
the meaning of properly incurred.
(4) A reviewing liquidator must not review:
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-27
374 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) remuneration of an external administrator of the company
that relates to a period; or
(b) a cost or expense incurred by the external administrator of
the company incurred during a period;
unless the period is:
(c) for a reviewing liquidator appointed by the Court under
paragraph 90-28(2)(c) or (3)(b)—the period determined by
the Court; or
(d) otherwise—the prescribed period.
Report of review
(5) A reviewing liquidator must prepare a report on the review.
90-27 Who pays for a review?
(1) The cost of carrying out a review under this Subdivision:
(a) in the case of a reviewing liquidator appointed with the
agreement of the external administrator of the company
under subsection 90-24(5)—is to be borne by the creditors or
members referred to in that subsection; or
(b) in any other case—forms part of the expenses of the external
administration of the company.
(2) Subsection (1) has effect subject to an order of the Court under
section 90-28.
90-28 Court orders in relation to review
Application of this section
(1) This section applies if:
(a) a reviewing liquidator has been appointed under this
Subdivision in relation to one or more matters; and
(b) the review has not been completed.
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Insolvency Practice Schedule (Corporations) Schedule 2
General rules relating to external administrations Part 3
Review of the external administration of a company Division 90
Section 90-28
Corporations Act 2001 375
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Court orders on application by the reviewing liquidator
(2) On application by the reviewing liquidator, the Court may make
any or all of the following orders in relation to the review:
(a) requiring the external administrator of the company or any
other person to provide books, information or assistance to
the reviewing liquidator;
(b) requiring the reviewing liquidator to carry out a review of
one or more matters that relate to the external administration
of the company and that are specified in the order instead of,
or in addition to, the matters referred to in paragraph (1)(a);
(c) accepting the resignation of the reviewing liquidator, and
appointing another registered liquidator as reviewing
liquidator for the matter or matters;
(d) any other order that the Court thinks fit.
Court orders on application by a person with a financial interest
(3) On application by a person mentioned in subsection (4), the Court
may make any or all of the following orders in relation to the
review:
(a) requiring the reviewing liquidator to carry out a review of
one or more matters that relate to the external administration
and that are specified in the order instead of, or in addition to,
the matters referred to in paragraph (1)(a) of this section;
(b) removing from office the reviewing liquidator, and
appointing another registered liquidator as reviewing
liquidator for the matter or matters;
(c) any other order that the Court thinks fit.
(4) The persons who may make an application under subsection (3)
are:
(a) a person with a financial interest in the external
administration of the company; or
(b) an officer of the company.
(5) Paragraph (4)(b) has effect despite section 198G.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-29
376 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Section 198G deals with powers of officers etc. while a company is
under external administration.
90-29 Rules about reviews
(1) The Insolvency Practice Rules may provide for and in relation to
reviews under this Subdivision.
(2) Without limiting subsection (1), the Insolvency Practice Rules may
provide for and in relation to any or all of the following matters:
(a) the giving of notice to the external administrator of a
company before appointing, or making an application for the
appointment of, a reviewing liquidator under this
Subdivision;
(b) the meaning, for the purposes of section 90-26, of properly
incurred in relation to costs or expenses incurred by an
external administrator of a company;
(c) the appointment of reviewing liquidators, including
requirements as to who may be appointed and the provision
of declarations of relevant relationships;
(d) the powers and duties of reviewing liquidators in carrying out
a review;
(e) the form and content of reports by reviewing liquidators;
(f) the preparation and provision of reports by reviewing
liquidators.
Subdivision D—Removal by creditors
90-30 Application of this Subdivision
This Subdivision applies in relation to a company that is under
external administration, other than a company in relation to which
a provisional liquidator has been appointed.
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Insolvency Practice Schedule (Corporations) Schedule 2
General rules relating to external administrations Part 3
Review of the external administration of a company Division 90
Section 90-35
Corporations Act 2001 377
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
90-35 Removal by creditors
Creditors may remove external administrator and appoint another
(1) The creditors may:
(a) by resolution at a meeting, remove the external administrator
of a company; and
(b) by resolution at the same or a subsequent meeting, appoint
another person as the external administrator of the company.
Note: For the general rules relating to meetings, see Division 75.
(2) However, the creditors may not do so unless at least 5 business
days’ notice of the meeting is given to all persons who are entitled
to receive notice of creditors’ meetings.
(3) The removal of an external administrator does not take effect until
another person is appointed as external administrator of the
company.
Former administrator may apply to Court to be reappointed
(4) A person (the former administrator) who has been removed as
external administrator of the company by resolution of the
creditors may apply to the Court to be reappointed as external
administrator of the company.
(5) However, if the former administrator makes such an application,
the former administrator must:
(a) record all costs incurred by the former administrator and the
company in relation to the application; and
(b) do so in a way that separates those costs from the costs
incurred by the former administrator and the company in
relation to other matters.
(6) The Court may order that the former administrator be reappointed
as external administrator of the company if the Court is satisfied
that the removal of the former administrator was an improper use
of the powers of one or more creditors.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 3 General rules relating to external administrations
Division 90 Review of the external administration of a company
Section 90-35
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(7) The Court may make such other orders in relation to the
application as it thinks fit including orders in relation to:
(a) the costs of the application; and
(b) the remuneration of the former administrator.
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Insolvency Practice Schedule (Corporations) Schedule 2
Other matters Part 4
Introduction Division 95
Section 95-1
Corporations Act 2001 379
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 4—Other matters
Division 95—Introduction
95-1 Simplified outline of this Part
This Part deals with a variety of matters:
(a) an external administrator of a company may assign a
right to sue; and
(b) forms are approved by ASIC (provision is made for
what may be required in the form or to accompany the
form); and
(c) the Minister has power to make rules to be called the
Insolvency Practice Rules.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 4 Other matters
Division 100 Other matters
Section 100-5
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 100—Other matters
100-5 External administrator may assign right to sue under this Act
(1) Subject to subsections (2) and (3), an external administrator of a
company may assign any right to sue that is conferred on the
external administrator by this Act.
(2) If the external administrator’s action has already begun, the
external administrator cannot assign the right to sue unless the
external administrator has the approval of the Court.
(3) Before assigning any right under subsection (1), the external
administrator must give written notice to the creditors of the
proposed assignment.
(4) If a right is assigned under this section, a reference in this Act to
the external administrator in relation to the action is taken to be a
reference to the person to whom the right has been assigned.
100-6 Approved forms
(1) A document that this Schedule requires to be lodged with ASIC in
an approved form must:
(a) be in the form approved by ASIC for the document; and
(b) include the information, statements, explanations or other
matters required by the form; and
(c) be accompanied by any other material required by the form.
(2) A reference in this Schedule to a document that has been lodged
(being a document to which subsection (1) applies), includes a
reference to any other material lodged with the document as
required by the relevant form.
(3) If:
(a) this Schedule requires a document to be lodged with ASIC in
an approved form; and
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Insolvency Practice Schedule (Corporations) Schedule 2
Other matters Part 4
Other matters Division 100
Section 100-6
Corporations Act 2001 381
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a provision of this Schedule specifies information,
statements, explanations or other matters that must be
included in the document, or other material that must
accompany the document;
that other provision is not taken to exclude or limit the operation of
subsection (1) in relation to the approved form (and so the
approved form may also require information etc. to be included in
the form or material to accompany the form).
(4) The Insolvency Practice Rules may provide for and in relation to:
(a) methods of verifying any information required by or in
approved forms; and
(b) the manner in which, the persons by whom, and the
directions or requirements in accordance with which,
approved forms are required or permitted to be signed,
prepared, or completed.
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Schedule 2 Insolvency Practice Schedule (Corporations)
Part 4 Other matters
Division 105 The Insolvency Practice Rules
Section 105-1
382 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 105—The Insolvency Practice Rules
105-1 The Insolvency Practice Rules
(1) The Minister may, by legislative instrument, make rules providing
for matters:
(a) required or permitted by this Schedule to be provided by the
rules; or
(b) necessary or convenient to be provided in order to carry out
or give effect to this Schedule.
(2) Rules made under subsection (1) may include offences.
(3) The penalties for offences described in subsection (2) must not be
more than 50 penalty units for an individual or 250 penalty units
for a body corporate.
(4) To avoid doubt, the rules may not do the following:
(a) create a civil penalty;
(b) provide powers of:
(i) arrest or detention; or
(ii) entry, search or seizure;
(c) impose a tax;
(d) set an amount to be appropriated from the Consolidated
Revenue Fund under an appropriation in this Act;
(e) directly amend the text of this Act.
(5) Rules that are inconsistent with the regulations have no effect to
the extent of the inconsistency, but rules are taken to be consistent
with the regulations to the extent that the rules are capable of
operating concurrently with the regulations.
(6) Despite subsection 1345A(1), the Minister’s power to make rules
under this section may not be delegated to any other person.
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Penalties Schedule 3
Corporations Act 2001 383
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Schedule 3—Penalties Note: See section 1311.
Penalties
Item Provision Penalty
1 Section 111AU 200 penalty units or imprisonment for 5 years,
or both.
2 Subsection 113(1) 50 penalty units or imprisonment for 1 year, or
both.
3 Subsection 113(3) 5 penalty units.
4 Section 115 5 penalty units.
5 Subsection 117(5) 10 penalty units, or imprisonment for 3
months, or both.
6 Subsection 123(3) 10 penalty units, or imprisonment for 3
months, or both.
7 Subsection 136(5) 5 penalty units.
8 Subsection 139(1) 5 penalty units.
9 Subsections 142(1) and
(2)
60 penalty units.
10 Subsection 143(1) 5 penalty units.
11 Section 144 10 penalty units or imprisonment for 3
months, or both.
12 Subsections 145(1) and
(3)
60 penalty units.
13 Subsection 146(1) 60 penalty units.
14 Subsections 148(2), (3)
and (4)
10 penalty units or imprisonment for 3
months, or both.
15 Subsection 150(2) 5 penalty units.
16 Subsection 151(2) 5 penalty units.
17 Subsections 153(1) and
(2)
10 penalty units or imprisonment for 3
months, or both.
18 Subsection 156(1) 10 penalty units or imprisonment for 3
months, or both.
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Schedule 3 Penalties
384 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Penalties
Item Provision Penalty
19 Subsection 157(2) 5 penalty units.
20 Subsection 158(2) 50 penalty units or imprisonment for 1 year, or
both.
20A Subsection 161A(2) or
(3)
10 penalty units or imprisonment for 3
months, or both.
21 Subsection 162(3) 5 penalty units.
22 Subsection 163(5) 10 penalty units or imprisonment for 3
months, or both.
23 Subsection 165(2) 50 penalty units or imprisonment for 1 year, or
both.
24 Section 168 10 penalty units or imprisonment for 3
months, or both.
25 Subsection 170(3) 10 penalty units or imprisonment for 3
months, or both.
26 Section 172 10 penalty units or imprisonment for 3
months, or both.
27 Section 173 10 penalty units or imprisonment for 3
months, or both.
28 Subsection 174(1) 10 penalty units or imprisonment for 3
months, or both.
29 Subsection 177(1) 50 penalty units.
29AA Subsection 177(1AA) 50 penalty units.
29A Subsection 178A(1) 60 penalty units.
29B Subsection 178C(1) 60 penalty units.
30 Section 184 2,000 penalty units or imprisonment for 5
years, or both.
32 Subsection 191(1) 10 penalty units or imprisonment for 3
months, or both.
33 Subsection 195(1) 5 penalty units.
34 Subsection 199B(1) 5 penalty units.
35 Subsection 200B(1) 180 penalty units or imprisonment for 6
months, or both.
36 Subsection 200C(1) 180 penalty units or imprisonment for 6
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Corporations Act 2001 385
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Penalties
Item Provision Penalty
months, or both.
37 Section 200D 180 penalty units or imprisonment for 6
months, or both.
38 Subsection 201D(1) 10 penalty units or imprisonment for 3
months, or both.
39 Subsection 201D(2) 5 penalty units.
39A Subsections 201R(2) and
(3)
5 penalty units.
40 Subsection 202B(1) 5 penalty units.
41 Subsections 203D(3) and
(5)
5 penalty units.
42 Section 204A 5 penalty units.
43 Subsections 204C(1) and
(2)
5 penalty units.
44 Subsections 205B(1),
(2), (4) and (5)
60 penalty units or imprisonment for 1 year, or
both.
45 Subsections 205C(1) and
(2)
10 penalty units or imprisonment for 3
months, or both.
46 Subsection 205E(2) 10 penalty units or imprisonment for 3
months, or both.
47 Subsection 205F(1) 10 penalty units or imprisonment for 3
months, or both.
48 Subsections 205G(1), (3)
and (4)
10 penalty units or imprisonment for 3
months, or both.
49 Subsection 206A(1) 50 penalty units or imprisonment for 1 year, or
both.
49A Subsections 206J(4), (6)
and (7)
60 penalty units.
49B Subsection 206K(4) 60 penalty units.
49C Subsections 206L(3) and
(4)
60 penalty units.
49D Subsection 206M(2) 60 penalty units.
50 Subsection 209(3) 2000 penalty units, or imprisonment for 5
years, or both.
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Schedule 3 Penalties
386 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Penalties
Item Provision Penalty
51 Section 224 200 penalty units or imprisonment for 5 years,
or both.
52 Section 225 5 penalty units.
53 Section 235 50 penalty units or imprisonment for 1 year, or
both.
54 Section 237 25 penalty units or imprisonment for 6
months, or both.
55 Section 242 10 penalty units or imprisonment for 3
months, or both.
56 Subsection 242AA(3) 5 penalty units.
58 Subsection 246B(3) 5 penalty units.
59 Subsection 246D(6) 5 penalty units.
60 Subsections 246F(1) and
(3)
5 penalty units.
61 Subsection 246G(1) 5 penalty units.
62 Section 247C 5 penalty units.
63 Subsections 249E(3) and
(4)
5 penalty units.
64 Section 249K 5 penalty units.
65 Section 249Z 5 penalty units.
65A Subsection 249L(1) or
(2)
5 penalty units.
66 Subsections 250BB(2),
(3) and (4)
5 penalty units.
66A Subsection 250BD(1) 200 penalty units or imprisonment for 5 years,
or both.
67 Subsections 250N(1) and
(2)
10 penalty units or imprisonment for 3
months, or both.
68 Subsections 250P(3) and
(4)
10 penalty units or imprisonment for 3
months, or both.
68A Subsections 250PA(3),
(4), (6) and (9)
5 penalty units.
68AA Subsection 250R(2) 5 penalty units.
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Penalties Schedule 3
Corporations Act 2001 387
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Penalties
Item Provision Penalty
68AB Subsection 250R(7) 200 penalty units or imprisonment for 5 years,
or both.
68B Subsections 250RA(1)
and (3)
10 penalty units.
69 Section 250S 5 penalty units.
69A Section 250SA 5 penalty units.
70 Subsections 250T(1) and
(4)
5 penalty units.
70A Subsection 250W(5) 10 penalty units.
71 Subsections 251A(1) to
(5)
10 penalty units or imprisonment for 3
months, or both.
72 Subsections 251B(1), (3)
and (4)
5 penalty units.
73 Subsections 252C(3) and
(4)
5 penalty units.
74 Section 252H 5 penalty units.
75 Section 252X 5 penalty units.
76 Subsection 252Y(5) 5 penalty units.
77 Subsections 253M(1),
(2) and (3)
10 penalty units or imprisonment for 3
months, or both.
78 Subsections 253N(1), (3)
and (4)
5 penalty units.
79 Subsection 254H(4) 5 penalty units.
80 Subsection 254L(3) 2,000 penalty units, or imprisonment for 5
years, or both.
81 Subsection 254N(2) 5 penalty units.
82 Subsection 254Q(13) 5 penalty units.
82A Section 254SA 100 penalty units or imprisonment for 2 years,
or both.
83 Section 254T 100 penalty units or imprisonment for 2 years,
or both.
84 Subsections 254X(1) and
(2)
60 penalty units.
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Schedule 3 Penalties
388 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Penalties
Item Provision Penalty
85 Section 254Y 5 penalty units.
86 Subsection 256D(4) 2,000 penalty units, or imprisonment for 5
years, or both.
87 Subsection 259B(6) 5 penalty units.
88 Subsection 259D(4) 5 penalty units.
89 Subsection 259F(3) 2,000 penalty units, or imprisonment for 5
years, or both.
90 Subsection 260D(3) 2,000 penalty units, or imprisonment for 5
years, or both.
91 Subsection 283AA(1) 25 penalty units or imprisonment for 6
months, or both.
92 Subsection 283AA(3) 25 penalty units or imprisonment for 6
months, or both.
93 Section 283AB 25 penalty units or imprisonment for 6
months, or both.
94 Subsection 283AC(1) 25 penalty units or imprisonment for 6
months, or both.
95 Subsection 283AC(2) 25 penalty units or imprisonment for 6
months, or both.
96 Subsection 283BH(1) 200 penalty units or imprisonment for 5 years,
or both.
97 Section 283BI 25 penalty units or imprisonment for 6
months, or both.
98 Section 283CE 25 penalty units or imprisonment for 6
months, or both.
99 Subsections 286(1) and
(2)
25 penalty units or imprisonment for 6
months, or both.
100 Section 287 25 penalty units or imprisonment for 6
months, or both.
101 Section 288 25 penalty units or imprisonment for 6
months, or both.
102 Subsection 289(2) 25 penalty units or imprisonment for 6
months, or both.
103 Section 294 10 penalty units or imprisonment for 3
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Corporations Act 2001 389
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Penalties
Item Provision Penalty
months, or both.
103AA Section 294B 10 penalty units or imprisonment for 3
months, or both.
103A Subsections 307C(1) and
(2)
10 penalty units.
103B Subsections 307A(1) and
(2)
50 penalty units.
103C Subsection 307B(1) 50 penalty units.
103D Subsection 307B(3) 50 penalty units.
104 Subsections 308(1), (2),
(3), (3AA), (3AB), (3A),
(3C) and (4)
50 penalty units.
104A Subsections 309(1), (2),
(3), (4), (5), (5A) and (6)
50 penalty units.
105 Subsection 311(1), (2) or
(3)
50 penalty units or imprisonment for 1 year, or
both.
106 Subsection 312(1) 25 penalty units or imprisonment for 6
months, or both.
107 Section 313 10 penalty units or imprisonment for 3
months, or both.
108 Subsection 314(1) or
(1AB)
10 penalty units or imprisonment for 3
months, or both.
109 Section 316 10 penalty units or imprisonment for 3
months, or both.
109A Subsections 316A(3) and
(4)
10 penalty units or imprisonment for 3
months, or both.
110 Subsection 317(1) 10 penalty units or imprisonment for 3
months, or both.
111 Subsections 318(1), (3)
and (4)
25 penalty units or imprisonment for 6
months, or both.
112 Subsection 319(1) 60 penalty units or imprisonment for 1 year, or
both.
112A Section 320 60 penalty units or imprisonment for 1 year, or
both.
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Penalties
Item Provision Penalty
112B Section 321 10 penalty units or imprisonment for 3
months, or both
113 Section 322 10 penalty units or imprisonment for 3
months, or both.
114 Subsection 323(1) 25 penalty units or imprisonment for 6
months, or both.
115 Subsection 323B(1) 25 penalty units or imprisonment for 6
months, or both.
116 Subsection 323D(3) 10 penalty units or imprisonment for 3
months, or both.
116BA Section 324BA 25 penalty units or imprisonment for 6
months, or both.
116BB Subsection 324BB(1) 25 penalty units or imprisonment for 6
months, or both.
116BC Subsection 324BB(2) 10 penalty units.
116BD Subsections 324BC(1)
and (2)
25 penalty units or imprisonment for 6
months, or both.
116BE Subsection 324BC(3) 10 penalty units.
116CA Subsection 324CA(1) 25 penalty units or imprisonment for 6
months, or both.
116CB Subsections 324CA(1A)
and (2)
10 penalty units.
116CC Subsection 324CB(1) 25 penalty units or imprisonment for 6
months, or both.
116CD Subsections 324CB(1A),
(2) and (4)
10 penalty units.
116CE Subsection 324CC(1) 25 penalty units or imprisonment for 6
months, or both.
116CF Subsections 324CC(1A),
(2) and (4)
10 penalty units.
116DA Subsection 324CE(1) 25 penalty units or imprisonment for 6
months, or both.
116DB Subsections 324CE(1A)
and (2)
10 penalty units.
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Penalties
Item Provision Penalty
116EA Subsection 324CF(1) 25 penalty units or imprisonment for 6
months, or both.
116EB Subsections 324CF(1A)
and (2)
10 penalty units.
116FA Subsection 324CG(1) 25 penalty units or imprisonment for 6
months, or both.
116FB Subsections 324CG(1A)
and (2)
10 penalty units.
116FC Subsection 324CG(5) 25 penalty units or imprisonment for 6
months, or both.
116FD Subsections 324CG(5A)
and (6)
10 penalty units.
116GA Section 324CI 25 penalty units or imprisonment for 6
months, or both.
116GB Section 324CJ 25 penalty units or imprisonment for 6
months, or both.
116GC Section 324CK 25 penalty units or imprisonment for 6
months, or both.
116H Subsections 324CM(1),
(2) and (3)
25 penalty units or imprisonment for 6
months, or both.
116I Section 324DB 25 penalty units or imprisonment for 6
months, or both.
116JA Subsection 324DC(1) 25 penalty units or imprisonment for 6
months, or both.
116JB Subsection 324DC(2) 10 penalty units.
116KA Subsections 324DD(1)
and (2)
25 penalty units or imprisonment for 6
months, or both.
116KB Subsection 324DD(3) 10 penalty units.
116LA Subsection 327A(3) 25 penalty units or imprisonment for 6
months, or both.
116LB Subsections 327B(1) and
(3)
25 penalty units or imprisonment for 6
months, or both.
116LC Subsection 327C(3) 25 penalty units or imprisonment for 6
months, or both.
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Penalties
Item Provision Penalty
116MA Subsection 328A(4) 25 penalty units or imprisonment for 6
months, or both.
116MB Subsection 328B(2) 25 penalty units or imprisonment for 6
months, or both.
116NA Subsections 331AAA(1)
and (3)
25 penalty units or imprisonment for 6
months, or both.
116NB Subsections 331AAB(1)
and (2)
25 penalty units or imprisonment for 6
months, or both.
116NC Subsection 332A(2) 10 penalty units.
116ND Subsection 332A(3) 10 penalty units.
116O Subsection 342B(1) 5 penalty units.
117 Subsection 344(2) 2,000 penalty units, or imprisonment for 5
years, or both.
118 Subsections 346C(1) and
(2)
60 penalty units.
119 Section 347A 10 penalty units.
119A Section 347B 10 penalty units.
119B Subsection 348D(1) 60 penalty units.
119C Subsection 349A(1) 60 penalty units.
120 Section 428 10 penalty units or imprisonment for 3
months, or both.
120A Paragraph 429(2)(b) 50 penalty units.
122 Subsection 437D(5) 25 penalty units or imprisonment for 6
months, or both.
123 Subsection 438B(4) (a) if the offence relates to a provision other
than subsection 438B(2A)—50 penalty
units or imprisonment for 1 year, or both;
or
(b) if the offence relates to
subsection 438B(2A)—5 penalty units.
124 Subsection 438C(5) 50 penalty units or imprisonment for 1 year, or
both.
124A Subsection 446C(4) 25 penalty units or imprisonment for 6
months, or both.
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Penalties
Item Provision Penalty
125 Subsection 448B(1) 25 penalty units or imprisonment for 6
months, or both.
126 Section 448C 25 penalty units or imprisonment for 6
months, or both.
128 Section 450E 10 penalty units.
130 Subsection 475(9) (a) if the offence relates to a provision other
than subsection 475(4)—25 penalty units
or imprisonment for 6 months, or both; or
(b) if the offence relates to
subsection 475(4)—50 penalty units.
131 Subsection 486A(8) 100 penalty units or imprisonment for 2 years,
or both.
132 Section 494 50 penalty units or imprisonment for 1 year, or
both.
133 Subsection 497(1) 10 penalty units or imprisonment for 3
months, or both.
133A Subsection 497(4) 50 penalty units.
133B Subsection 497(7) 5 penalty units.
134 Subsection 530A(6) 50 penalty units or imprisonment for 1 year, or
both.
135 Subsections 530B(3) and
(6)
50 penalty units or imprisonment for 1 year, or
both.
136 Section 532 10 penalty units or imprisonment for 3
months, or both.
137 Subsection 541(1) 10 penalty units or imprisonment for 3
months, or both.
138 Subsection 588G(3) 2,000 penalty units, or imprisonment for 5
years, or both.
139 Subsection 590(1) 100 penalty units or imprisonment for 2 years,
or both.
140 Subsection 590(5) 50 penalty units or imprisonment for 1 year, or
both.
141 Subsection 592(1) 50 penalty units or imprisonment for 1 year, or
both.
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Penalties
Item Provision Penalty
142 Subsection 592(6) 100 penalty units or imprisonment for 2 years,
or both.
143 Subsection 595(1) 50 penalty units or imprisonment for 3
months, or both.
144 Subsection 596(1) 100 penalty units or imprisonment for 2 years,
or both.
145 Subsection 596AB(1) 1,000 penalty units or imprisonment for 10
years, or both.
146 Subsection 596F(3) 100 penalty units or imprisonment for 2 years,
or both.
147 Section 597 100 penalty units or imprisonment for 2 years,
or both.
148 Subsections 597(6), (7),
(10A) and (13)
100 penalty units or imprisonment for 2 years,
or both.
149 Subsection 597A(3) 100 penalty units or imprisonment for 2 years,
or both.
150 Subsection 601AD(5) 5 penalty units.
151 Subsection 601BC(5) 10 penalty units or imprisonment for 3
months, or both.
152 Subsections 601BH(1)
and (2)
5 penalty units.
153 Subsection 601BJ(3) 5 penalty units.
154 Subsection 601BK(1) 5 penalty units.
155 Subsection 601BP(1) 5 penalty units.
156 Subsection 601BR(1) 5 penalty units.
157 Section 601CW 10 penalty units or imprisonment for 3
months, or both.
158 Subsection 601CZB(1) 10 penalty units or imprisonment for 3
months, or both.
159 Section 601CZC 10 penalty units or imprisonment for 3
months, or both.
160 Subsection 601DD(1) 5 penalty units.
161 Subsection 601DE(1) 10 penalty units or imprisonment for 3
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Penalties
Item Provision Penalty
months, or both.
162 Subsection 601DH(1) 5 penalty units.
163 Subsection 601ED(5) 200 penalty units or imprisonment for 5 years,
or both.
163B Subsection 601FD(4) 2,000 penalty units or imprisonment for 5
years, or both.
163C Subsection 601FE(4) 2,000 penalty units or imprisonment for 5
years, or both.
164 Subsection 601FF(3) 200 penalty units or imprisonment for 5 years,
or both.
164A Subsection 601FG(3) 2,000 penalty units or imprisonment for 5
years, or both.
164B Subsection 601JD(4) 2,000 penalty units or imprisonment for 5
years, or both.
165 Subsection 601FL(4) 100 penalty units or imprisonment for 2 years,
or both.
166 Subsection 601FM(3) 100 penalty units or imprisonment for 2 years,
or both.
167 Subsection 601FQ(6) 100 penalty units or imprisonment for 2 years,
or both.
168 Subsection 601HD(1) 25 penalty units or imprisonment for 6
months, or both.
168A Subsection 601HG(4),
(4A) or (4B)
50 penalty units or imprisonment for 1 year, or
both.
169 Subsection 601HG(6) 25 penalty units or imprisonment for 6
months, or both.
170 Subsection 601JA(3) 100 penalty units or imprisonment for 2 years,
or both.
171 Subsection 601JA(4) 25 penalty units or imprisonment for 6
months, or both.
172 Subsection 601JB(5) 25 penalty units or imprisonment for 6
months, or both.
173 Subsection 601KA(3) 25 penalty units or imprisonment for 6
months, or both.
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Penalties
Item Provision Penalty
173A Subsection 601SBB(1) 50 penalty units.
173B Subsection 601SBC(2) 50 penalty units.
173C Subsection 601SCB(1) 50 penalty units.
173D Subsection 601SCB(2) 50 penalty units.
173E Subsection 601SCB(3) 60 penalty units or imprisonment for 12
months, or both.
173EA Subsection 601SCD(1) 2,000 penalty units or imprisonment for 5
years, or both.
173F Section 601TAA 60 penalty units or imprisonment for 12
months, or both.
173G Subsection 601TAB(1) 60 penalty units or imprisonment for 12
months, or both.
173H Subsection 601TBA(2) 60 penalty units or imprisonment for 12
months, or both.
173J Subsection 601UAA(1) 300 penalty units or imprisonment for 5 years,
or both.
173K Subsection 601UAB(1) 300 penalty units or imprisonment for 5 years,
or both.
173L Section 601VAB 120 penalty units or imprisonment for 2 years,
or both.
173M Subsection 601VBD(8) 60 penalty units or imprisonment for 12
months, or both.
173N Subsection 601VCC(2) 120 penalty units or imprisonment for 2 years,
or both.
173P Subsection 601WBE(5) 50 penalty units.
173Q Section 601WCF 60 penalty units, or imprisonment for 12
months, or both.
173R Section 601WCG 60 penalty units, or imprisonment for 12
months, or both.
173S subsection 601WDA(1) 120 penalty units or imprisonment for 2 years,
or both.
173T subsection 601WDA(2) 120 penalty units or imprisonment for 2 years,
or both.
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Penalties
Item Provision Penalty
173U Subsection 601WDA(3) 120 penalty units or imprisonment for 2 years,
or both.
173V Section 601XAB 50 penalty units or imprisonment for 12
months, or both.
174 Subsection 606(1) 25 penalty units or imprisonment for 6
months, or both.
175 Subsection 606(2) 25 penalty units or imprisonment for 6
months, or both.
176 Subsection 606(4) 25 penalty units or imprisonment for 6
months, or both.
177 Paragraphs 614(1)(a),
(b), (c) and (d)
100 penalty units or imprisonment for 2 years,
or both.
178 Subsection 622(1) 25 penalty units or imprisonment for 6
months, or both.
179 Subsection 623(1) 25 penalty units or imprisonment for 6
months, or both.
180 Subsection 624(2) 25 penalty units or imprisonment for 6
months, or both.
181 Subsections 630(2), (3)
and (4)
25 penalty units or imprisonment for 6
months, or both.
182 Subsection 631(1) 100 penalty units or imprisonment for 2 years,
or both.
183 Subsection 631(2) 200 penalty units or imprisonment for 5 years,
or both.
184 Subsection 633(1)
(items 4, 5, 7, 8, 9, 11,
12, 13, 14)
25 penalty units or imprisonment for 6
months, or both.
185 Subsection 635(1)
(items 5, 7, 8, 10, 11, 12,
13, 14)
25 penalty units or imprisonment for 6
months, or both.
186 Subsection 636(3) 25 penalty units or imprisonment for 6
months, or both.
187 Subsection 636(4) 10 penalty units.
188 Subsection 637(1) 25 penalty units or imprisonment for 6
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Penalties
Item Provision Penalty
months, or both.
189 Subsection 638(1) 25 penalty units or imprisonment for 6
months, or both.
190 Subsection 638(3) 25 penalty units or imprisonment for 6
months, or both.
191 Subsection 638(5) 25 penalty units or imprisonment for 6
months, or both.
192 Subsection 638(6) 10 penalty units.
193 Subsection 639(1) 25 penalty units or imprisonment for 6
months, or both.
194 Subsection 640(1) 25 penalty units or imprisonment for 6
months, or both.
195 Subsection 641(1) 25 penalty units or imprisonment for 6
months, or both.
196 Section 643 25 penalty units or imprisonment for 6
months, or both.
197 Section 644 25 penalty units or imprisonment for 6
months, or both.
198 Subsections 647(1), (2)
and (3)
25 penalty units or imprisonment for 6
months, or both.
199 Subsection 648A(1) 25 penalty units or imprisonment for 6
months, or both.
200 Subsections 648E(1) and
(2)
25 penalty units or imprisonment for 6
months, or both.
201 Section 648G 50 penalty units or imprisonment for 1 year, or
both.
202 Subsection 649C(2) 25 penalty units or imprisonment for 6
months, or both.
203 Subsection 650B(3) 25 penalty units or imprisonment for 6
months, or both.
204 Subsections 650E(5) and
(6)
25 penalty units or imprisonment for 6
months, or both.
205 Subsection 650F(3) 25 penalty units or imprisonment for 6
months, or both.
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Penalties
Item Provision Penalty
206 Subsection 651A(4) 25 penalty units or imprisonment for 6
months, or both.
207 Section 651C 25 penalty units or imprisonment for 6
months, or both.
208 Subsection 652C(3) 25 penalty units or imprisonment for 6
months, or both.
209 Subsection 654A(1) 25 penalty units or imprisonment for 6
months, or both.
210 Subsection 654C(1) 25 penalty units or imprisonment for 6
months, or both.
211 Subsection 654C(3) 25 penalty units or imprisonment for 6
months, or both.
212 Subsection 657F(1) 25 penalty units or imprisonment for 6
months, or both.
213 Subsection 661D(1) 25 penalty units or imprisonment for 6
months, or both.
214 Subsection 662A(1) 25 penalty units or imprisonment for 6
months, or both.
215 Subsection 663A(1) 25 penalty units or imprisonment for 6
months, or both.
216 Subsections 664D(1), (2)
and (3)
25 penalty units or imprisonment for 6
months, or both.
217 Subsections 664E(2), (3)
and (4)
25 penalty units or imprisonment for 6
months, or both.
218 Subsection 665A(2) 25 penalty units or imprisonment for 6
months, or both.
221 Subsection 666A(1) 25 penalty units or imprisonment for 6
months, or both.
222 Subsections 666B(2) and
(3)
25 penalty units or imprisonment for 6
months, or both.
223 Subsection 667A(3) 25 penalty units or imprisonment for 6
months, or both.
224 Subsections 668A(1), (3)
and (4)
25 penalty units or imprisonment for 6
months, or both.
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Penalties
Item Provision Penalty
225 Subsection 668B(1) 25 penalty units or imprisonment for 6
months, or both.
226 Subsection 670A(3) 50 penalty units or imprisonment for 1 year, or
both.
227 Subsections 670C(1), (2)
and (3)
25 penalty units or imprisonment for 6
months, or both.
228 Subsection 671B(1) 25 penalty units or imprisonment for 6
months, or both.
229 Subsection 672B(1) 25 penalty units or imprisonment for 6
months, or both.
229AA Subsections 672DA(1),
(2), (3), (4), (6), (7), (8)
and (9)
10 penalty units.
229A Subsection 674(2) 200 penalty units or imprisonment for 5 years,
or both.
229B Subsection 674(5) 100 penalty units or imprisonment for 2 years,
or both.
229C Subsection 675(2) 200 penalty units or imprisonment for 5 years,
or both.
229CA Subsection 708AA(10) 25 penalty units or imprisonment for 6
months, or both.
229D Subsection 708A(9) 25 penalty units or imprisonment for 6
months, or both.
230 Subsection 721(5) 200 penalty units or imprisonment for 5 years,
or both.
232 Subsection 722(1) 25 penalty units or imprisonment for 6
months, or both.
233 Subsection 724(1) 25 penalty units or imprisonment for 6
months, or both.
234 Subsection 725(1) 25 penalty units or imprisonment for 6
months, or both.
235 Section 726 200 penalty units or imprisonment for 5 years,
or both.
236 Subsection 727(1) 200 penalty units or imprisonment for 5 years,
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Penalties
Item Provision Penalty
or both.
237 Subsection 727(2) 200 penalty units or imprisonment for 5 years,
or both.
238 Subsection 727(3) 200 penalty units or imprisonment for 5 years,
or both.
239 Subsection 727(4) 200 penalty units or imprisonment for 5 years,
or both.
240 Subsection 728(3) 200 penalty units or imprisonment for 5 years,
or both.
241 Subsection 730(1) 50 penalty units or imprisonment for 1 year, or
both.
242 Subsection 734(1) 25 penalty units or imprisonment for 6
months, or both.
243 Subsection 734(2) 25 penalty units or imprisonment for 6
months, or both.
244 Subsection 735(1) 10 penalty units or imprisonment for 3
months, or both.
245 Subsection 736(1) 25 penalty units or imprisonment for 6
months, or both.
246A Subsection 791A(1) 500 penalty units or imprisonment for 5 years,
or both.
246B Subsection 791B(1) 500 penalty units or imprisonment for 5 years,
or both.
246C Subsection 792B(1) 100 penalty units or imprisonment for 2 years,
or both.
247A Subsection 792B(2) 100 penalty units or imprisonment for 2 years,
or both.
247B Subsection 792B(3) 100 penalty units or imprisonment for 2 years,
or both.
247C Subsection 792B(4) 100 penalty units or imprisonment for 2 years,
or both.
248A Subsection 792B(5) 100 penalty units or imprisonment for 2 years,
or both.
248B Subsection 792C(1) 100 penalty units or imprisonment for 2 years,
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Penalties
Item Provision Penalty
or both.
248C Subsection 792D(1) 25 penalty units or imprisonment for 6
months, or both.
249A Section 792E 100 penalty units or imprisonment for 2 years,
or both.
249B Subsection 792F(1) 100 penalty units or imprisonment for 2 years,
or both.
249C Subsection 792F(2) 50 penalty units.
250A Subsection 792F(3) 100 penalty units or imprisonment for 2 years,
or both.
250B Subsection 792G(1) 100 penalty units or imprisonment for 2 years,
or both.
250C Subsection 792G(2) 100 penalty units or imprisonment for 2 years,
or both.
250D Section 792I 50 penalty units.
251A Subsection 793D(3) 100 penalty units or imprisonment for 2 years,
or both.
251B Subsection 794B(3) 100 penalty units or imprisonment for 2 years,
or both.
251C Subsection 794D(3) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
252A Subsection 794E(2) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
252B Subsection 798C(3) 100 penalty units or imprisonment for 2 years,
or both.
252C Subsection 798C(6) 100 penalty units or imprisonment for 2 years,
or both.
253A Subsection 798D(4) 100 penalty units or imprisonment for 2 years,
or both.
253AA Subsection 798DA(4) 100 penalty units or imprisonment for 2 years,
or both.
253B Subsection 820A(1) 500 penalty units or imprisonment for 5 years,
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Penalties
Item Provision Penalty
or both.
253C Subsection 820B(1) 500 penalty units or imprisonment for 5 years,
or both.
254A Subsection 821B(1) 100 penalty units or imprisonment for 2 years,
or both.
254B Subsection 821B(2) 100 penalty units or imprisonment for 2 years,
or both.
254C Subsection 821B(3) 100 penalty units or imprisonment for 2 years,
or both.
255A Subsection 821B(4) 100 penalty units or imprisonment for 2 years,
or both.
255AA Subsection 821BA(1) 100 penalty units or imprisonment for 2 years,
or both.
255B Subsection 821C(1) 25 penalty units or imprisonment for 6
months, or both.
255BA Subsection 821C(3) 25 penalty units or imprisonment for 6
months, or both.
255C Section 821D 25 penalty units or imprisonment for 6
months, or both.
256A Subsection 821E(1) 100 penalty units or imprisonment for 2 years,
or both.
256B Subsection 821E(2) 50 penalty units.
256C Subsection 821E(3) 100 penalty units or imprisonment for 2 years,
or both.
257A Subsection 822D(3) 100 penalty units or imprisonment for 2 years,
or both.
257B Subsection 823B(3) 100 penalty units or imprisonment for 2 years,
or both.
257C Subsection 823D(5) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
257D Subsection 823E(3) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
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Penalties
Item Provision Penalty
258A Section 850C 400 penalty units or imprisonment for 4 years,
or both.
258B Subsection 851D(8) 100 penalty units or imprisonment for 2 years,
or both.
258C Subsection 852B(2) 400 penalty units or imprisonment for 4 years,
or both.
259A Subsection 853F(1) 500 penalty units or imprisonment for 5 years,
or both.
259B Subsection 853F(2) 500 penalty units or imprisonment for 5 years,
or both.
259C Subsection 854A(5) 100 penalty units or imprisonment for 2 years,
or both.
260A Subsection 892B(1) 200 penalty units or imprisonment for 5 years,
or both.
260B Subsection 892B(4) 200 penalty units or imprisonment for 5 years,
or both.
260C Subsection 892H(1) 200 penalty units or imprisonment for 5 years,
or both.
261A Subsection 892H(2) 200 penalty units or imprisonment for 5 years,
or both.
261B Subsection 892H(3) 200 penalty units or imprisonment for 5 years,
or both.
261C Subsection 892H(6) 50 penalty units or imprisonment for 1 year, or
both.
262A Subsection 892H(7) 50 penalty units or imprisonment for 1 year, or
both.
262B Subsection 892K(2) 100 penalty units or imprisonment for 2 years,
or both.
262BA subsection 904B(1) or
(5)
1,000 penalty units.
262BB subsection 904C(1) or
(3)
100 penalty units.
262BC subsection 904D(2) 100 penalty units.
262BD section 904E 100 penalty units.
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Penalties
Item Provision Penalty
262BE subsection 904G(5) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
262BF subsection 904H(3) 100 penalty units.
262BG subsection 904K(4) 100 penalty units for each day, or part of a
day, in respect of which the offence is
committed.
262BH subsection 905A(2) 500 penalty units.
262BI section 907A 500 penalty units.
262C Subsection 911A(1) 200 penalty units or imprisonment for 2 years,
or both.
263A Subsection 911B(1) 200 penalty units or imprisonment for 2 years,
or both.
263B Section 911C 50 penalty units or imprisonment for 1 year, or
both.
263C Subsection 912C(3) 25 penalty units or imprisonment for 6
months, or both.
264A Subsection 912D(1B) 50 penalty units or imprisonment for 1 year, or
both.
264B Subsection 912D(2) 50 penalty units or imprisonment for 1 year, or
both.
264C Subsection 912E(1) 25 penalty units or imprisonment for 6
months, or both.
265A Subsection 912F(1) 10 penalty units.
265AA Subsection 916A(3A) 100 penalty units or imprisonment for 2 years,
or both.
265AB Subsection 916B(2A) 100 penalty units or imprisonment for 2 years,
or both.
265AC Subsection 916B(5A) 50 penalty units or imprisonment for 1 year, or
both.
265AD Subsection 916C(3) 100 penalty units or imprisonment for 2 years,
or both.
265AE Subsection 916D(2A) 100 penalty units or imprisonment for 2 years,
or both.
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Item Provision Penalty
265B Subsection 916F(1) 25 penalty units or imprisonment for 6
months, or both.
265BA Subsection 916F(1A) 25 penalty units or imprisonment for 6
months, or both.
265C Subsection 916F(3) 25 penalty units or imprisonment for 6
months, or both.
266A Subsection 916G(2) 50 penalty units or imprisonment for 1 year, or
both.
266B Subsection 916G(3) 50 penalty units or imprisonment for 1 year, or
both.
266C Subsection 919B(4) 25 penalty units or imprisonment for 6
months, or both.
267A Subsection 919C(1) 50 penalty units or imprisonment for 1 year, or
both.
267B Subsection 919C(2) 50 penalty units or imprisonment for 1 year, or
both.
267C Subsection 919C(3) 50 penalty units or imprisonment for 1 year, or
both.
268A Section 919D 25 penalty units or imprisonment for 6
months, or both.
268B Subsection 920C(2) 25 penalty units or imprisonment for 6
months, or both.
268C Subsection 923A(1) 10 penalty units for each day, or part of a day,
in respect of which the offence is committed.
269A Subsection 923B(1) 10 penalty units for each day, or part of a day,
in respect of which the offence is committed.
269AAA Subsection 923C(1) 10 penalty units for each day, or part of a day,
in respect of which the offence is committed.
269AAB Subsection 923C(2) 10 penalty units for each day, or part of a day,
in respect of which the offence is committed.
269AA Subsection 942B(8) 50 penalty units or imprisonment for 1 year, or
both.
269AB Subsection 942C(8) 50 penalty units or imprisonment for 1 year, or
both.
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Item Provision Penalty
269B Section 942E 100 penalty units or imprisonment for 2 years,
or both.
269C Section 943F 100 penalty units or imprisonment for 2 years,
or both.
270CA Subsection 946AA(4) 50 penalty units.
270CB Subsection 946B(3A)
or (9)
50 penalty units.
271B Subsection 949A(2) 100 penalty units or imprisonment for 2 years,
or both.
271C Subsection 949A(5) 200 penalty units or imprisonment for 5 years,
or both.
272A Subsection 949B(2) 50 penalty units or imprisonment for 1 year, or
both.
272B Subsection 949B(4) 50 penalty units or imprisonment for 1 year, or
both.
273B Subsection 952C(1) 50 penalty units.
273C Subsection 952C(3) 100 penalty units or imprisonment for 2 years,
or both.
274A Subsection 952D(1) 200 penalty units or imprisonment for 5 years,
or both.
274B Subsection 952D(2) 200 penalty units or imprisonment for 5 years,
or both.
274C Subsection 952E(1) 100 penalty units or imprisonment for 2 years,
or both.
275A Subsection 952E(3) 100 penalty units or imprisonment for 2 years,
or both.
275B Subsection 952F(2) 200 penalty units or imprisonment for 5 years,
or both.
275C Subsection 952F(3) 200 penalty units or imprisonment for 5 years,
or both.
276A Subsection 952F(4) 200 penalty units or imprisonment for 5 years,
or both.
276B Subsection 952G(2) 100 penalty units or imprisonment for 2 years,
or both.
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Item Provision Penalty
276C Subsection 952G(4) 100 penalty units or imprisonment for 2 years,
or both.
277A Subsection 952G(6) 100 penalty units or imprisonment for 2 years,
or both.
277B Section 952H 200 penalty units or imprisonment for 5 years,
or both.
277C Subsection 952I(1) 10 penalty units.
278A Subsection 952I(2) 10 penalty units.
278B Subsection 952I(3) 10 penalty units.
278C Subsection 952I(4) 10 penalty units.
279A Subsection 952J(1) 10 penalty units.
279B Section 952K 200 penalty units or imprisonment for 5 years,
or both.
279C Subsection 952L(1) 200 penalty units or imprisonment for 5 years,
or both.
280A Subsection 952L(2) 100 penalty units or imprisonment for 2 years,
or both.
280B Subsection 952L(3) 200 penalty units or imprisonment for 5 years,
or both.
280C Section 952M 200 penalty units or imprisonment for 5 years,
or both.
281A Subsection 982C(1) 100 penalty units or imprisonment for 2 years,
or both.
281B Subsection 982C(2) 100 penalty units or imprisonment for 2 years,
or both.
281C Section 982D 25 penalty units or imprisonment for 6
months, or both.
282A Section 983C 25 penalty units or imprisonment for 6
months, or both.
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Item Provision Penalty
282B Subsection 984B(1) (a) if the offence relates only to a
contravention of requirements referred to
in paragraph 984B(1)(a)—50 penalty
units;
(b) otherwise—100 penalty units or
imprisonment for 2 years, or both.
282BA Subsection 985D(1) 50 penalty units.
282BB Subsection 985J(1) 50 penalty units.
282BC Subsection 985J(2) 50 penalty units.
282BD Subsection 985J(4) 50 penalty units.
282BE Subsection 985K(1) 100 penalty units, or imprisonment for 2
years, or both.
282C Subsection 988A(1) 200 penalty units or imprisonment for 5 years,
or both.
283A Subsection 989B(1) 200 penalty units or imprisonment for 5 years,
or both.
283B Subsection 989B(2) 200 penalty units or imprisonment for 5 years,
or both.
283C Subsection 989B(3) 200 penalty units or imprisonment for 5 years,
or both.
283CA Subsections 989CA(1)
and (2)
50 penalty units.
284A Subsection 990B(1) 200 penalty units or imprisonment for 5 years,
or both.
284B Subsection 990B(2) 200 penalty units or imprisonment for 5 years,
or both.
284C Subsection 990B(6) 25 penalty units or imprisonment for 6
months, or both.
285A Subsection 990D(1) 100 penalty units or imprisonment for 2 years,
or both.
285B Subsection 990D(2) 100 penalty units or imprisonment for 2 years,
or both.
285C Paragraph 990F(a) 100 penalty units or imprisonment for 2 years,
or both.
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Penalties
Item Provision Penalty
286A Subsection 990I(3) 100 penalty units or imprisonment for 2 years,
or both.
286B Subsection 990K(1) 50 penalty units or imprisonment for 1 year, or
both.
286C Subsection 991B(2) 25 penalty units or imprisonment for 6
months, or both.
287A Subsection 991E(1) 25 penalty units or imprisonment for 6
months, or both.
287B Subsection 991E(3) 25 penalty units or imprisonment for 6
months, or both.
287C Subsection 991F(1) 25 penalty units or imprisonment for 6
months, or both.
288A Subsection 991F(2) 25 penalty units or imprisonment for 6
months, or both.
288B Subsection 991F(3) 25 penalty units or imprisonment for 6
months, or both.
288C Subsection 992A(1) 25 penalty units or imprisonment for 6
months, or both.
288CA Subsection 992A(3) 25 penalty units or imprisonment for 6
months, or both.
288CB Subsection 992AA(1) 25 penalty units or imprisonment for 6
months, or both.
289A Subsection 993B(1) 50 penalty units.
289B Subsection 993B(3) 200 penalty units or imprisonment for 5 years,
or both.
289C Subsection 993C(1) 50 penalty units.
290A Subsection 993C(3) 100 penalty units or imprisonment for 2 years,
or both.
290B Subsection 993D(1) 50 penalty units.
290C Subsection 993D(3) 200 penalty units or imprisonment for 5 years,
or both.
290CA Subsection 1012DAA(
10)
25 penalty units or imprisonment for 6
months, or both.
290D Subsection 1012DA(9) 25 penalty units or imprisonment for 6
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Item Provision Penalty
months, or both.
291A Subsection 1012H(2) 100 penalty units or imprisonment for 2 years,
or both.
291B Subsection 1013I(4) 100 penalty units or imprisonment for 2 years,
or both.
291C Subsection 1013K(1) 100 penalty units or imprisonment for 2 years,
or both.
292A Subsection 1013K(2) 100 penalty units or imprisonment for 2 years,
or both.
292B Subsection 1015B(1) 100 penalty units or imprisonment for 2 years,
or both.
292C Subsection 1015D(2) 100 penalty units or imprisonment for 2 years,
or both.
293A Subsection 1015D(3) 100 penalty units or imprisonment for 2 years,
or both.
293B Subsection 1015D(4) 100 penalty units or imprisonment for 2 years,
or both.
293C Subsection 1015E(1) 100 penalty units or imprisonment for 2 years,
or both.
294A Subsection 1016A(2) 200 penalty units or imprisonment for 5 years,
or both.
294B Subsection 1016A(3) 200 penalty units or imprisonment for 5 years,
or both.
294C Subsection 1016B(1) 100 penalty units or imprisonment for 2 years,
or both.
295A Section 1016C 100 penalty units or imprisonment for 2 years,
or both.
295B Subsection 1016D(1) 100 penalty units or imprisonment for 2 years,
or both.
295C Paragraph 1016D(2)(d) 100 penalty units or imprisonment for 2 years,
or both.
296A Subsection 1016E(2) 100 penalty units or imprisonment for 2 years,
or both.
296B Subsection 1017B(1) 200 penalty units or imprisonment for 5 years,
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or both.
296C Subsection 1017C(2) 100 penalty units or imprisonment for 2 years,
or both.
296D Subsection 1017C(2A) 100 penalty units or imprisonment for 2 years,
or both.
297A Subsection 1017C(3) 100 penalty units or imprisonment for 2 years,
or both.
297AA Subsection 1017C(3A) 100 penalty units or imprisonment for 2 years,
or both.
297B Subsection 1017C(5) 100 penalty units or imprisonment for 2 years,
or both.
297C Subsection 1017D(1) 100 penalty units or imprisonment for 2 years,
or both.
297CA Subsection 1017DA(3) 50 penalty units.
298A Subsection 1017E(3) 100 penalty units or imprisonment for 2 years,
or both.
298B Subsection 1017E(4) 100 penalty units or imprisonment for 2 years,
or both.
298C Subsection 1017F(2) 100 penalty units or imprisonment for 2 years,
or both.
299A Subsection 1017G(1) 100 penalty units or imprisonment for 2 years,
or both.
299B Subsection 1018A(1) 100 penalty units or imprisonment for 2 years,
or both.
299C Subsection 1018A(2) 100 penalty units or imprisonment for 2 years,
or both.
300A Subsection 1018B(1) 100 penalty units or imprisonment for 2 years,
or both.
300AA Subsection 1020AB(3) 25 penalty units or imprisonment for 6
months, or both.
300AB Subsection 1020AC(2) 25 penalty units or imprisonment for 6
months, or both.
300AC Subsection 1020AD(2) 25 penalty units or imprisonment for 6
months, or both.
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Item Provision Penalty
300AD Section 1020AE 25 penalty units or imprisonment for 6
months, or both.
300AE Subsection 1020AI(3) 50 penalty units.
300AF Subsection 1020AI(5) 100 penalty units or imprisonment for 2 years,
or both.
300AG Subsection 1020AI(7) 200 penalty units or imprisonment for 5 years,
or both.
300AH Section 1020AJ 100 penalty units or imprisonment for 2 years,
or both.
300B Subsection 1020A(1) 200 penalty units or imprisonment for 5 years,
or both.
300C Subsection 1020B(2) (a) for a first offence—25 penalty units or
imprisonment for 6 months, or both;
(b) for a further offence—100 penalty units or
imprisonment for 2 years, or both.
302A Subsection 1020E(8) 100 penalty units or imprisonment for 2 years,
or both.
302B Subsection 1020E(9) 100 penalty units or imprisonment for 2 years,
or both.
302C Subsection 1021C(1) 50 penalty units.
303A Subsection 1021C(3) 100 penalty units or imprisonment for 2 years,
or both.
303B Subsection 1021D(1) 200 penalty units or imprisonment for 5 years,
or both.
303C Subsection 1021D(2) 200 penalty units or imprisonment for 5 years,
or both.
304A Subsection 1021E(1) 100 penalty units or imprisonment for 2 years,
or both.
304B Subsection 1021E(2) 100 penalty units or imprisonment for 2 years,
or both.
304C Subsection 1021F(1) 200 penalty units or imprisonment for 5 years,
or both.
304D Subsection 1021FA(1) 200 penalty units or imprisonment for 5 years,
or both.
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Item Provision Penalty
304E Subsection 1021FA(2) 100 penalty units or imprisonment for 2 years,
or both.
304F Subsection 1021FB(1) 200 penalty units or imprisonment for 5 years,
or both.
304G Subsection 1021FB(2) 200 penalty units or imprisonment for 5 years,
or both.
304H Subsection 1021FB(3) 100 penalty units or imprisonment for 2 years,
or both.
304I Subsection 1021FB(6) 100 penalty units or imprisonment for 2 years,
or both.
305A Section 1021G 200 penalty units or imprisonment for 5 years,
or both.
305B Subsection 1021H(1) 10 penalty units.
305C Subsection 1021I(1) 200 penalty units or imprisonment for 5 years,
or both.
306A Subsection 1021J(1) 200 penalty units or imprisonment for 5 years,
or both.
306B Subsection 1021J(2) 100 penalty units or imprisonment for 2 years,
or both.
306C Subsection 1021J(3) 100 penalty units or imprisonment for 2 years,
or both.
307A Subsection 1021K(1) 200 penalty units or imprisonment for 5 years,
or both.
307B Subsection 1021L(1) 200 penalty units or imprisonment for 5 years,
or both.
307C Subsection 1021L(2) 200 penalty units or imprisonment for 5 years,
or both.
307CA Subsection 1021M(1) 50 penalty units.
307CB Subsection 1021M(3) 100 penalty units or imprisonment for 2 years,
or both.
308A Section 1021N 100 penalty units or imprisonment for 2 years,
or both.
308AA Subsection 1021NA(1) 100 penalty units or imprisonment for 2 years,
or both.
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308AB Subsection 1021NA(2) 200 penalty units or imprisonment for 5 years,
or both.
308AC Subsection 1021NA(3) 100 penalty units or imprisonment for 2 years,
or both.
308AD Subsection 1021NB(1) 100 penalty units or imprisonment for 2 years,
or both.
308AE Subsection 1021NB(2) 200 penalty units or imprisonment for 5 years,
or both.
308AF Subsection 1021NB(3) 100 penalty units or imprisonment for 2 years,
or both.
308AG Subsections 1021NC(1
) and (2)
100 penalty units or imprisonment for 2 years,
or both.
308AH Subsection 1021NC(3) 200 penalty units or imprisonment for 5 years,
or both.
308AI Subsection 1021NC(4) 100 penalty units or imprisonment for 2 years,
or both.
308C Subsection 1021O(1) 50 penalty units or imprisonment for 6
months, or both.
309A Subsection 1021O(3) 200 penalty units or imprisonment for 5 years,
or both.
309AA Subsection 1021P(1) 100 penalty units or imprisonment for 2 years,
or both.
309AB Subsection 1021P(2) 100 penalty units or imprisonment for 2 years,
or both.
309AC Subsection 1021P(3) 50 penalty units.
309AD Subsection 1021P(4) 100 penalty units or imprisonment for 2 years,
or both.
309AE Subsection 1021P(5) 50 penalty units.
309AF Subsection 1021P(6) 50 penalty units.
310 Section 1041A,
subsections 1041B(1),
and 1041C(1),
section 1041D and
subsections 1041E(1),
In the case of an individual, imprisonment for
10 years or a fine the greater of the following:
(a) 4,500 penalty units;
(b) if the court can determine the total value of
the benefits that have been obtained by one
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Penalties
Item Provision Penalty
1041F(1), 1041G(1),
1043A(1) and
1043A(2)
or more persons and are reasonably
attributable to the commission of the
offence—3 times that total value;
or both.
In the case of a body corporate, a fine the
greatest of the following:
(a) 45,000 penalty units;
(b) if the court can determine the total value of
the benefits that have been obtained by one
or more persons and are reasonably
attributable to the commission of the
offence—3 times that total value;
(c) if the court cannot determine the total
value of those benefits—10% of the body
corporate’s annual turnover during the
12-month period ending at the end of the
month in which the body corporate
committed, or began committing, the
offence.
312B Subsection 1070B(1) 10 penalty units.
312C Subsection 1070C(1) 10 penalty units.
313A Subsection 1070D(3) 10 penalty units.
313B Subsection 1071B(2) 10 penalty units.
313C Section 1071E 10 penalty units.
314A Subsection 1072E(11) 10 penalty units.
314B Subsection 1072H(1) 10 penalty units.
314C Subsection 1072H(3) 10 penalty units.
315A Subsection 1072H(4) 10 penalty units.
315B Subsection 1072H(5) 10 penalty units.
315C Subsection 1072H(6) 10 penalty units.
316A Subsection 1101B(10) 100 penalty units or imprisonment for 2 years,
or both.
316B Subsection 1101C(1) 50 penalty units or imprisonment for 12
months, or both.
316C Subsection 1101C(2) 50 penalty units or imprisonment for 12
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Item Provision Penalty
months, or both.
317A Subsection 1101C(3) 50 penalty units or imprisonment for 12
months, or both.
317B Subsection 1101E(1) 50 penalty units or imprisonment for 12
months, or both.
317BA Subsection 1101F(1A) 50 penalty units or imprisonment for 12
months, or both.
317C Subsection 1101F(1) 50 penalty units or imprisonment for 12
months, or both.
318A Section 1101G 50 penalty units or imprisonment for 12
months, or both.
322 Subsection 1200N(7) 100 penalty units or imprisonment for 2 years,
or both.
323 Subsection 1200N(8) 100 penalty units or imprisonment for 2 years,
or both.
324 Subsection 1200Q(1) 200 penalty units or imprisonment for 5 years,
or both.
325 Subsection 1200Q(2) 200 penalty units or imprisonment for 5 years,
or both.
326 Section 1200S 100 penalty units or imprisonment for 2 years,
or both.
327 Subsection 1200U(6) 100 penalty units or imprisonment for 2 years,
or both.
328 Subsection 1200U(7) 100 penalty units or imprisonment for 2 years,
or both.
332 Section 1274 50 penalty units or imprisonment for 1 year, or
both.
332A Subsections 1299F(1),
(3) and (5)
5 penalty units
332B Subsection 1299G(1) 5 penalty units
332C Subsection 1299G(4) 5 penalty units
333 Subsection 1300(2A) 10 penalty units or imprisonment for 3
months, or both.
334 Section 1307 100 penalty units or imprisonment for 2 years,
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Item Provision Penalty
or both.
335 Subsection 1308(2) 200 penalty units or imprisonment for 5 year,
or both.
336 Subsection 1309(1) 200 penalty units or imprisonment for 5 year,
or both.
337 Subsection 1309(2) 100 penalty units or imprisonment for 2 year,
or both.
338 Subsection 1317AC(1),
(2) or (3)
25 penalty units or imprisonment for 6
months, or both.
338A Subsection 1317AE(1) 25 penalty units.
339 Section 1323 25 penalty units or imprisonment for 6
months, or both.
340 Subsections 1423(1)
and (2)
5 penalty units.
341 Subsection 1431(6) 5 penalty units.
342 Section 1432 5 penalty units.
343 Subsection 1436(2) 5 penalty units.
344 Subsection 1412(3) 100 penalty units or imprisonment for 2 years,
or both.
345 Subsection 1424(3) 100 penalty units or imprisonment for 2 years,
or both.
346 Subsection 1438(6) 50 penalty units.
Note: Chapter 2 of the Criminal Code sets out the general principles of
criminal responsibility.
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Preliminary Part 1
Clause 1
Corporations Act 2001 419
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Schedule 4—Transfer of financial institutions
and friendly societies Note: See section 1465A.
Part 1—Preliminary
1 Definitions
In this Schedule, except so far as the contrary intention appears:
AFIC Code of a State or Territory means the Australian Financial
Institutions Commission Code as set out in the Australian
Financial Institutions Commission Act 1992 of Queensland as in
force immediately before the transfer date and as applied as a law
of the State or Territory.
building society of a State or Territory means a transferring
financial institution authorised under the Financial Institutions
Code of the State or Territory to operate as a building society
immediately before the transfer date.
Financial Institutions Code of a State or Territory means the
Financial Institutions Code set out in the Financial Institutions
(Queensland) Act 1992 as in force immediately before the transfer
date and as applied as a law of the State or Territory.
Friendly Societies Code means the Friendly Societies Code set out
in Schedule 1 to the Friendly Societies (Victoria) Act 1996 as in
force immediately before the transfer date.
Friendly Societies Code of a State or Territory means:
(a) the Friendly Societies Code as applied as a law of the State or
Territory; or
(b) if the State is Western Australia—the Friendly Societies
(Western Australia) Code set out in the Friendly Societies
(Western Australia) Act 1999.
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Clause 1
420 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
member of a transferring financial institution means a person
who, immediately before the transfer date, is a member of the
institution under:
(a) the previous governing Code; or
(b) the rules of the institution.
membership share means a share in a company that was a
transferring financial institution:
(a) that was taken to have been issued under clause 12 of the
transfer provisions; and
(b) that carries the rights and obligations that were conferred or
imposed on the person in a capacity other than that of
shareholder, by:
(i) the institution’s rules (as in force immediately before
the transfer date); and
(ii) the previous governing Code; and
(c) on which no amount is paid; and
(d) on which no amount is unpaid; and
(e) that is not:
(i) transferable or transmissible; or
(ii) capable of devolution by will or by operation of law;
and
(f) that can be cancelled as set out in subclause 12(3).
previous governing Code for a transferring financial institution
means the Code or law under which the institution is registered
immediately before the transfer date.
State Supervisory Authority (SSA) for a transferring financial
institution means:
(a) the SSA for the institution within the meaning of the previous
governing Code; or
(b) in the case of The Cairns Cooperative Weekly Penny Savings
Bank Limited—the Queensland Office of Financial
Supervision.
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transfer date means the date that is the transfer date for the
purposes of the Financial Sector Reform (Amendments and
Transitional Provisions) Act (No. 1) 1999.
transfer provisions of a State or Territory means Schedule 4 to the
Corporations Law of the State or Territory.
transferring financial institution of a State or Territory means:
(a) a building society of the State or Territory (that is, a society
that was registered under the Financial Institutions Code of
the State or Territory, and authorised to operate as a building
society, immediately before the transfer date); or
(b) a credit union of the State or Territory (that is, a society that
was registered under the Financial Institutions Code of the
State or Territory, and authorised to operate as a credit union,
immediately before the transfer date); or
(c) a friendly society of the State or Territory (that is, a body that
was registered as a friendly society under the Friendly
Societies Code of the State or Territory immediately before
the transfer date); or
(d) a body registered as an association under Part 12 of the
Financial Institutions Code of the State or Territory
immediately before the transfer date; or
(e) a body registered as a Special Services Provider under the
AFIC Code of the State or Territory immediately before the
transfer date; or
(f) a body registered as an association under Part 12 of the
Friendly Societies Code of the State or Territory immediately
before the transfer date; or
(g) The Cairns Cooperative Weekly Penny Savings Bank
Limited referred to in section 263 of the Financial
Intermediaries Act 1996 of Queensland if:
(i) the State is Queensland; and
(ii) a determination by APRA under subitem 7(2) of the
Financial Sector Reform (Amendments and Transitional
Provisions) Act (No. 1) 1999 is in force immediately
before the transfer date.
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Part 1 Preliminary
Clause 1
422 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: If a determination is made, the Bank will be covered by the Banking Act 1959 from the transfer date. APRA may only make a determination if the Treasurer and the Queensland Minister responsible for the administration of the Financial Intermediaries Act 1996 of Queensland have agreed that the Bank should be covered by the Banking Act 1959.
transition period means the period of 18 months starting on the
transfer date.
withdrawable share of a transferring financial institution of a State
or Territory means a withdrawable share within the meaning of the
Financial Institutions Code of the State or Territory as in force
immediately before the transfer date.
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Registration and its consequences Division 1
Clause 3
Corporations Act 2001 423
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Part 2—Financial institutions that became
companies
Division 1—Registration and its consequences
3 Background (registration of transferring financial institution as
company)
(1) On the transfer date, each transferring financial institution of a
State or Territory was taken to be registered as a company under
the Corporations Law of the State or Territory under the name
under which the institution was registered under the previous
governing Code immediately before the transfer date.
(2) Subclause 3(2) of the transfer provisions governed the kind of
company the transferring financial institution was registered as.
(3) Under clause 7 of the transfer provisions, ASIC:
(a) gave the company an ACN; and
(b) kept a record of the company’s registration; and
(c) issued a certificate to the company that stated:
(i) the company’s name; and
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under the
Corporations Law of the State or Territory.
4 Rules applied to transferring institution that was registered as a
company under the transfer provisions
Application of section 1274 to registration documents
(1) Subsections 1274(2) and (5) apply to the record of the company’s
registration referred to in paragraph 3(3)(b) of this Schedule as if it
were a document lodged with ASIC.
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Division 1 Registration and its consequences
Clause 11
424 Corporations Act 2001
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ASIC may keep documents relating to company lodged while it was
a registered body
(2) ASIC may keep any of the documents relating to the company that
were lodged because the company used to be a registered body.
Application of replaceable rules
(3) The replaceable rules (as described in section 135) do not apply to
the company, despite section 135, unless the company:
(a) repealed its constitution after the transfer date and before the
commencement of this Act; or
(b) repeals its constitution on or after the commencement of this
Act.
11 Transferring financial institution under external administration
Background
(1) Clause 11 of the transfer provisions provided that if, immediately
before the transfer date, provisions of Chapter 5 of the
Corporations Law of a State or Territory applied to:
(a) a compromise or arrangement between a transferring
financial institution of the State or Territory and its creditors;
or
(b) a reconstruction of a transferring financial institution of the
State or Territory; or
(c) a receiver or other controller of property of a transferring
financial institution of the State or Territory; or
(d) the winding-up or dissolution of a transferring financial
institution of the State or Territory;
because of Part 9 of the Financial Institutions Code, or Part 9 of the
Friendly Societies Code, of the State or Territory, those provisions
of Chapter 5 continued to apply to that matter after the transfer
date.
Note: Clause 11 of the transfer provisions also provided that:
(a) a matter referred to in paragraph (1)(a), (b) or (d) included an application or other step preliminary to the matter; and
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Corporations Act 2001 425
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(b) any act done before the transfer date under or for the purposes of the provisions of Chapter 5 as applied by the Code were to have effect as if it had been done under or for the purposes of Chapter 5 as it applied after the transfer date.
(2) Clause 11 of the transfer provisions also provided that if, before the
transfer date, a liquidator of a transferring financial institution of a
State or Territory had been appointed under:
(a) section 341 of the Financial Institutions Code of the State or
Territory; or
(b) section 402 of the Friendly Societies Code of the State or
Territory;
the institution could be wound up in accordance with the
provisions of Chapter 5 of the Corporations Law of the State or
Territory.
Continuing external administration under Chapter 5 of the
Corporations Act 2001
(3) If, immediately before the commencement of this Act, provisions
of Chapter 5 of the Corporations Law of a State or Territory
applied to:
(a) a compromise or arrangement between a transferring
financial institution of the State or Territory and its creditors;
or
(b) a reconstruction of a transferring financial institution of the
State or Territory; or
(c) a receiver or other controller of property of a transferring
financial institution of the State or Territory; or
(d) the winding-up or dissolution of a transferring financial
institution of the State or Territory;
because of clause 11 of the transfer provisions, the corresponding
provisions of Chapter 5 of this Act apply (as a law of the
Commonwealth) to that matter after the commencement of this
Act.
(4) Subclause (3) does not limit the regulations that may be made
under clause 28.
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Part 2 Financial institutions that became companies
Division 1 Registration and its consequences
Clause 11
426 Corporations Act 2001
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(5) Any act done:
(a) before the transfer date under or for the purposes of the
provisions of Chapter 5 of the Corporations Law of the State
or Territory as applied by the Code; or
(b) on or after the transfer date and before the commencement of
this Act for the purposes of the provisions of Chapter 5 of the
Corporations Law of the State or Territory as applied by
clause 11 of the transfer provisions;
has effect as if it had been done under or for the purposes of
Chapter 5 of this Act as it applies after the commencement of this
Act.
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Membership Division 2
Clause 12
Corporations Act 2001 427
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Division 2—Membership
12 Institution that became a company limited by shares
Background
(1) Clause 12 of the transfer provisions applied to a transferring
financial institution of a State or Territory if the institution was
taken to be registered as a company limited by shares under
clause 3 of the transfer provisions.
(2) Clause 12 of the transfer provisions provided that:
(a) any shares in the institution on issue immediately before the
transfer date (other than withdrawable shares) became shares
of the company; and
(b) any withdrawable shares of the institution on issue
immediately before the transfer date became redeemable
preference shares of the company; and
(c) in the case of a building society—each person who was a
member of the society immediately before the transfer date,
other than by virtue of only holding shares in the society, was
taken to have been issued with a membership share on the
transfer date; and
(d) in any case other than that of a building society—any person:
(i) who was a member of the institution immediately before
the transfer date; and
(ii) who did not hold any shares in the institution;
was taken to have been issued with a membership share on
the transfer date.
Joint members of institution that became a company limited by
shares
(3) If a person who was taken to have been issued with a membership
share was a joint member, they hold the membership share jointly
with the other member or members of the joint membership. This
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Clause 13
428 Corporations Act 2001
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is so, even if the other member, or another member, held shares in
the institution immediately before the transfer date. However, the
joint membership does not have any more votes because of the
membership share or shares than it had immediately before the
transfer date.
Cancellation shares
(4) A membership share can be cancelled at the option of the holder or
the company in the circumstances (if any):
(a) set out in the company’s constitution; or
(b) in which the member who holds the share could have had
their membership of the institution cancelled immediately
before the transfer date.
Part 2J.1 does not apply to the cancellation of a membership share.
13 Institution that became a company limited by guarantee
Background
(1) Clause 13 of the transfer provisions applied to a transferring
financial institution of a State or Territory if the institution was
taken to be registered as a company limited by guarantee under
clause 3 of the transfer provisions.
(2) Clause 13 of the transfer provisions provided that each person who
was a member of the institution immediately before the transfer
date was taken to have given a guarantee (but only for the purpose
of determining whether the person is a member of the company).
Guarantees
(3) Each person who becomes a member of the company after the
commencement of this Act and before the amount of the relevant
guarantee is determined is taken to have given a guarantee (but
only for the purpose of determining whether the person is a
member of the company).
Note: Someone who became a member after the transfer date and this Act
commences was taken to have given a guarantee by clause 13 of the
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Clause 14
Corporations Act 2001 429
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transfer provisions. This guarantee is preserved by sections 1373 and
1399.
(4) If a person who is taken to have given a guarantee by subclause (2)
is a joint member, they are taken to have given the guarantee
jointly with the other member or members of the joint membership.
However, the joint membership does not have any more votes
because of giving the guarantee or guarantees than it had
immediately before the transfer date.
14 Institution becoming a company limited by shares and guarantee
Background
(1) Clause 14 of the transfer provisions applied to a transferring
financial institution of a State or Territory if the institution was
taken to be registered as a company limited by shares and
guarantee under clause 3 of the transfer provisions.
(2) Clause 14 of the transfer provisions provided that each person who
was a member of the institution immediately before the transfer
date was taken to have given a guarantee (but only for the purpose
of determining whether the person is a member of the company).
Guarantees
(3) Each person who becomes a member of the company after this Act
commences and before the amount of the relevant guarantee is
determined is taken to have given a guarantee (but only for the
purpose of determining whether the person is a member of the
company).
Note: Someone who became a member after the transfer date and this Act
commences was taken to have given a guarantee by clause 13 of the
transfer provisions. This guarantee is preserved by sections 1373 and
1399.
(4) If a person who is taken to have given a guarantee by subclause (2)
is a joint member, they are taken to have given the guarantee
jointly with the other member or members of the joint membership.
However, the joint membership does not have any more votes
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Clause 15
430 Corporations Act 2001
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because of giving the guarantee or guarantees than it had
immediately before the transfer date.
15 Redeemable preference shares that were withdrawable shares
(1) This Act applies to a redeemable preference share that was a
withdrawable share of a transferring financial institution of a State
or Territory immediately before the transfer date, except that:
(a) the share is redeemable on the same terms that the
withdrawable share was withdrawable under the Financial
Institutions Code of the State or Territory and the
institution’s rules or constitution; and
(b) the holder of the share continues to have the same rights and
obligations that they had by holding the withdrawable share.
(2) The provisions of this Act that apply to redeemable preference
shares apply:
(a) subject to subclause (1), to redeemable preference shares of a
company registered under clause 3 of the transfer provisions;
and
(b) to redeemable preference shares of a company (other than a
company referred to in paragraph (a)) that is permitted to use
the expression building society, credit union or credit society
under section 66 of the Banking Act 1959;
even if the shares are the only class of shares issued by the
company.
16 Liability of members on winding up
(1) If a transferring financial institution of a State or Territory that was
registered under clause 3 of the transfer provisions is wound up,
each person:
(a) who was a past member of the institution at the time it
became registered; and
(b) who did not again become a member; and
(c) who had not held shares in the institution;
is not liable under Division 2 of Part 5.6 on the winding up.
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Clause 16
Corporations Act 2001 431
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Note: A person who was a past member at the time of registration and who
held shares in the institution may be liable as a past member under
Division 2 of Part 5.6.
(2) If a company that is registered under clause 3 of the transfer
provisions is wound up, a person who is taken to have given a
guarantee by subclause 13(1) or 14(1) of the transfer provisions, or
clause 13 or 14 of this Schedule, is not liable under:
(a) section 515 merely because the person is or was a member
who is taken to have given a guarantee; or
(b) section 517 or paragraph 518(b) merely because the person is
taken to have given a guarantee.
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Part 2 Financial institutions that became companies
Division 3 Share capital
Clause 17
432 Corporations Act 2001
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Division 3—Share capital
17 Share capital
Background (transfer of certain amounts to share capital)
(1) On registration of a transferring financial institution of a State or
Territory as a company under clause 3 of the transfer provisions:
(a) any amount of withdrawable share capital (within the
meaning of the Financial Institutions Code of the State or
Territory); and
(b) any amount standing to the credit of its share premium
account; and
(c) any amount standing to the credit of its capital redemption
reserve;
immediately before the transfer date became part of the company’s
share capital under clause 17 of the transfer provisions.
Use of amount standing to credit of share premium account
(2) The company may use the amount standing to the credit of its share
premium account immediately before the transfer date (if any) to:
(a) provide for the premium payable on redemption of
debentures or redeemable preference shares issued before the
transfer date; or
(b) write off:
(i) the preliminary expenses of the institution incurred
before the transfer date; or
(ii) expenses incurred, payments made, or discounts
allowed before the transfer date, in respect of any issue
of shares in, or debentures of, the institution.
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Clause 18
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18 Application of no par value rule
(1) Section 254C applies to shares issued by a transferring financial
institution of a State or Territory before the transfer date as well as
shares issued on and after that.
(2) In relation to a share issued by the institution before the transfer
date:
(a) the amount paid on the share is the sum of all amounts paid
to the institution at any time for the share (but not including
any premium); and
(b) the amount unpaid on the share is the difference between the
issue price of the share (but not including any premium) and
the amount paid on the share (see paragraph (a)).
19 Calls on partly-paid shares
The liability of a shareholder for calls in respect of money unpaid
on shares issued before the transfer date by a transferring financial
institution of a State or Territory (whether on account of the par
value of the shares or by way of premium) is not affected by the
share ceasing to have a par value.
20 References in contracts and other documents to par value
(1) This clause applies for the purpose of interpreting and applying the
following after the commencement of this Act:
(a) a contract entered into by a transferring financial institution
of a State or Territory before the transfer date (including the
institution’s constitution);
(b) a trust deed or other document executed by or in relation to
the institution before the transfer date.
Note: The interpretation and application of contracts and deeds before this
Act commences was governed by clause 20 of the transfer provisions.
(2) A reference to the par value of a share issued by a transferring
financial institution of a State or Territory is taken to be a reference
to:
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Clause 20
434 Corporations Act 2001
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(a) if the share is issued before the transfer date—the par value
of the share immediately before then; or
(b) if the share is issued on or after the transfer date but shares of
the same class were on issue immediately before then—the
par value that the share would have had if it had been issued
then; or
(c) if the share is issued on or after the transfer date and shares of
the same class were not on issue immediately before then—
the par value determined by the directors.
A reference to share premium is taken to be a reference to any
residual share capital in relation to the share.
(3) A reference to a right to a return of capital on a share issued by the
institution is taken to be a reference to a right to a return of capital
of a value equal to the amount paid in respect of the share’s par
value.
(4) A reference to the aggregate par value of the institution’s issued
share capital is taken to be a reference to that aggregate as it
existed immediately before the transfer date and:
(a) increased to take account of the par value of any shares
issued after then; and
(b) reduced to take account of the par value of any shares
cancelled after then.
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The transition period Part 4
Clause 25
Corporations Act 2001 435
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Part 4—The transition period
25 ASIC may direct directors of a company to modify its
constitution
(1) If a company registered under clause 3 of the transition provisions
has not modified its constitution so that it complies with
subclause 24(1) of the transition provisions by the end of the
transition period, ASIC may direct, in writing, the directors of the
company to:
(a) take the necessary or specified steps to:
(i) ensure that the company modifies its constitution so that
it does comply; or
(ii) ensure that the company makes the modifications to its
constitution that ASIC specifies; and
(b) take those steps within a specified time (which must be more
than 28 days).
A direction may require the directors to take steps that are
inconsistent with the company’s constitution.
(2) ASIC may issue a direction under subclause (1) before the end of
the transition period if requested by a majority of directors of the
company.
(3) No civil or criminal liability arises from action taken by a director
in good faith and in accordance with a direction issued under
subclause (1).
(4) A person contravenes this subclause if, without reasonable excuse,
they contravene a direction under subclause (1).
(5) A person who intentionally or recklessly contravenes a direction
under subclause (1) is guilty of an offence.
Penalty: 100 penalty units or imprisonment for 2 years, or both.
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Part 4 The transition period
Clause 27
436 Corporations Act 2001
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27 When certain modifications of a company’s constitution under an
exemption or declaration take effect
(1) If the constitution of a company registered under clause 3 of the
transition provisions was modified under an exemption or
declaration made under clause 26 of the transition provisions, and
that modification varies or cancels, or allows the variation or
cancellation of:
(a) rights attached to shares in a class of shares; or
(b) rights of members in a class of members;
the following provisions apply, and to the exclusion of
section 246D if it would otherwise apply.
(2) If the company is not required to lodge a copy of the modification
with ASIC by or under any other provision of this Act, the
company must lodge a copy of the modification with ASIC within
14 days of the modification being made.
(3) If:
(a) members in the class do not all agree (whether by resolution
or written consent) to the modification of the company’s
constitution; or
(b) the members in the class did not have an opportunity to vote
on or consent to the modification;
10% or more of the members in the class may apply to the Court to
have the modification set aside.
Note: If a company has only 1 class of shares, all members are members of
the class.
(4) An application may only be made within 1 month after the
modification is lodged.
(5) The modification takes effect:
(a) if no application is made to the Court to have it set aside—1
month after the modification is lodged; or
(b) if an application is made to the Court to have it set aside—
when the application is withdrawn or finally determined.
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(6) The members of the class who want to have the modification set
aside may appoint 1 or more of themselves to make the application
on their behalf. The appointment must be in writing.
(7) The Court may set aside the modification if it is satisfied that it
would unfairly prejudice the applicants. However, the Court must
confirm the modification if the Court is not satisfied of unfair
prejudice.
(8) Within 14 days after the Court makes an order, the company must
lodge a copy of it with ASIC.
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Part 5 Demutualisations
Clause 29
438 Corporations Act 2001
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Part 5—Demutualisations
29 Disclosure for proposed demutualisation
(1) If a modification of the constitution of an unlisted company
registered under clause 3 of the transition provisions is proposed
and the modification would have the effect of:
(a) varying or cancelling the rights of members, or a class of
members, to the reserves of the company; or
(b) varying or cancelling the rights of members, or a class of
members, to the assets of the company on a winding up; or
(c) varying or cancelling the voting rights of members or a class
of members; or
(d) otherwise varying or cancelling rights so that Part 2F.2 (Class
rights) applies; or
(e) allowing 1 of those variations or cancellations of rights;
the following rules apply:
(f) notice of the meeting of the company’s members at which the
proposed modification is to be considered must be
accompanied by the documents listed in subclause (4);
(g) notice of the meeting may not be shortened under
subsection 249H(2);
(h) the company must lodge with ASIC the notice and the
documents referred to in paragraphs (4)(a) and (c) within 7
days after notice of the meeting is given.
(2) If:
(a) an issue of shares by an unlisted company registered under
clause 3 of the transition provisions would have the effect of
varying or cancelling rights so that Part 2F.2 (Class rights)
applies; and
(b) at least 1 of the following is required to approve the share
issue, or variation or cancellation of rights:
(i) a meeting of the company’s members;
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(ii) a resolution passed at a meeting of the class of members
concerned;
(iii) written consent of a specified proportion of members in
the class concerned;
the following rules apply (in addition to those that apply under
Part 2F.2):
(c) notice of the meeting or consent process must be
accompanied by the documents listed in subclause (4);
(d) the company must lodge with ASIC the notice of the meeting
or consent process and the documents referred to in
paragraphs (4)(a) and (c) within 7 days after the notice is
given;
(e) notice of the meeting may not be shortened under
subsection 249H(2).
Paragraph (c) need not be complied with to the extent that a person
has already been given the documents.
(3) ASIC may exempt a company from this Part under clause 30.
(4) The documents that must accompany the notice are:
(a) a disclosure statement that:
(i) satisfies clause 31; and
(ii) ASIC has registered under clause 32; and
(b) in the case of a proposed modification of the constitution of a
company—an estimate of the financial benefits (if any) the
member will be offered if the proposed modification occurs;
and
(c) a report by an expert that:
(i) states whether, in the expert’s opinion, the proposed
modification or share issue is in the best interests of the
members of the company as a whole; and
(ii) gives the expert’s reasons for forming that opinion; and
(iii) complies with subclauses 33(2) and (3).
(5) If the company contravenes subclause (1) or (2) it is not guilty of
an offence.
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Clause 30
440 Corporations Act 2001
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(6) A person contravenes this subclause if they are involved in a
contravention of subclause (1) or (2).
Note 1: This subclause is a civil penalty provision.
Note 2: Section 79 defines involved.
(7) A person commits an offence if they are involved in a
contravention of subclause (1) or (2) and the involvement is
dishonest.
Penalty: 2,000 penalty units or imprisonment for 5 years, or both.
(8) In this clause:
reserves includes general reserves and retained earnings of the
company.
unlisted company means a company (registered under clause 3)
that does not have voting shares quoted on a prescribed financial
market.
30 ASIC’s exemption power
(1) If ASIC is satisfied that a company does not have a mutual
structure, it may exempt the company from this Part.
(2) If ASIC is satisfied that:
(a) a proposed modification of the constitution of a company
will not result in or allow a modification of the mutual
structure of the company; or
(b) an issue of shares would not result in or allow a modification
of the mutual structure of the company;
it may exempt the company from this Part in relation to the
proposed modification or share issue.
(3) In determining whether the company has a mutual structure, ASIC
may take into account:
(a) the particular structure, circumstances and history of the
company; and
(b) whether:
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(i) each customer of the company (for example an account
holder, mortgagor or policy holder) is required to be a
member of the company; or
(ii) each member (or joint membership) has only 1 vote;
and
(c) any other relevant matter in relation to the company or its
members.
(4) In determining whether the proposed modification or share issue
will result in or allow a modification of the mutual structure of the
company, ASIC must take into account whether the proposed
modification or share issue would have the effect of converting the
company into a company run for the purpose of yielding a return to
shareholders.
(5) An exemption under subclause (2) may apply unconditionally or
subject to specified conditions. A person to whom a condition
specified in an exemption applies must comply with the condition.
The Court may order the person to comply with the condition in a
specified way. Only ASIC may apply to the Court for the order.
(6) The exemption must be in writing and ASIC must publish notice of
it in the Gazette.
(7) For the purposes of this clause, the provisions of this Part include
regulations made for the purposes of this Part.
31 Coverage of disclosure statement
The disclosure statement must give all the information that
members would reasonably require and expect to be given to make
an informed decision about the proposed modification or share
issue.
32 Registration of disclosure statement
(1) ASIC must register the disclosure statement if satisfied that the
statement adequately sets out or explains the following (if
relevant):
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Part 5 Demutualisations
Clause 32
442 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the variation or cancellation of members’ rights
(b) that the proposed modification will allow the variation or
cancellation of members’ rights
(c) in relation to a share issue:
(i) who will and will not receive shares under the issue; and
(ii) the rights and obligations attached to the shares; and
(iii) the implications of the share issue for the management
and structure of the company
(d) what financial benefits (if any) members will be offered if the
proposed modification occurs and why the benefits are
considered to be appropriate
(e) the basis upon which members’ entitlement to the financial
benefits will be determined, including:
(i) any minimum period of membership that a member
must satisfy to receive benefits; or
(ii) whether members must pay an amount or provide other
value to receive benefits
(f) any preferential allocation of benefits to members, or a class
of members, and how that allocation is to be determined
(g) any benefits officers of the company (including retiring
officers) may receive (whether directly or indirectly) in
connection with the proposed modification or share issue
(h) any other proposed changes to the company that are related
to the proposed modification or share issue (for example,
whether the company proposes to list its securities for
quotation on a prescribed financial market or merge with
another company)
(i) the new name of the company, if the company’s name is to
be changed in connection with the proposed modification or
share issue, or that it is not proposed to change the
company’s name
(j) the procedural steps required to vary or cancel the members’
rights
(k) the procedural steps required to issue the shares
(l) how voting on the proposed modification or share issue will
take place.
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Clause 33
Corporations Act 2001 443
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) In deciding whether the disclosure statement adequately sets out or
explains the matters in subclause (1), ASIC may also have regard
to:
(a) the readability of the statement; and
(b) whether the statement would be readily comprehensible by
the members of the company concerned.
(3) The disclosure statement must include a statement to the effect that
registration of the disclosure statement:
(a) is on the basis that the statement adequately sets out or
explains the matters in subclause (1); and
(b) does not mean that ASIC has considered whether the
proposed modification or share issue is in the best interests of
the members of the company as a whole.
(4) Subclause (1) does not limit clause 31.
33 Expert’s report
(1) If the company obtains 2 or more reports each of which could be
used for the purposes of paragraph 29(4)(c), a copy of each report
must:
(a) be lodged with ASIC; and
(b) be given to each member entitled to receive a disclosure
statement.
Penalty: 25 penalty units or imprisonment for 6 months, or both.
(2) The report must be by an expert who is not an associate of the
company.
(3) The report must set out details of:
(a) any relationship between the expert and the company,
including any circumstances in which the expert gives it
advice, or acts on its behalf, in the proper performance of the
functions attaching to the expert’s professional capacity or
business relationship with the company; and
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444 Corporations Act 2001
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(b) any financial or other interest of the expert that could
reasonably be regarded as being capable of affecting the
expert’s ability to give an unbiased opinion; and
(c) any fee, payment or other benefit (whether direct or indirect)
that the expert has received or will or may receive in
connection with making the report.
34 Unconscionable conduct in relation to demutualisations
(1) A person must not engage in:
(a) conduct that is, in all the circumstances, unconscionable; or
(b) conduct that is misleading or deceptive or is likely to mislead
or deceive;
in relation to:
(c) a modification of the constitution of an unlisted company that
is a modification to which this Part applies; or
(d) anything done in reliance on, in conjunction with or in
connection with the modification; or
(e) a share issue to which this Part applies.
(2) In determining whether a person has engaged in conduct that
contravenes paragraph (1)(a), have regard to:
(a) whether the person, or someone acting for the person, exerted
undue influence or pressure on, or used unfair tactics against,
members of the company; and
(b) whether the person, or someone acting for the person,
engaged in conduct that resulted in a member or someone
else gaining, or being in a position to gain, a benefit that the
members generally did not, or would not be in a position to,
gain.
This subclause does not limit subclause (1).
(3) A person who contravenes subclause (1) is not guilty of an offence.
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35 Orders the Court may make
(1) Without limiting the Court’s powers under Part 9.5, if the Court is
satisfied that a person has engaged in conduct constituting a
contravention of subclause 34(1), the Court may make 1 or more of
the following orders:
(a) an order requiring the person or a person involved in the
contravention to disclose to the public, to a particular person
or to a particular class of persons, in the manner specified in
the order, specified information, or information of a specified
kind, (being information that is in the possession of the
person to whom the order is directed or to which that person
has access)
(b) an order requiring the person or a person involved in the
contravention to publish, at their own expense, in a manner
and at times specified in the order, advertisements the terms
of which are specified in, or are to be determined in
accordance with, the order
(c) any order that it thinks necessary or desirable:
(i) to protect the rights or interests of any person affected
by the conduct; or
(ii) to ensure, as far as possible, that a proposed
modification or share issue proceeds in the manner in
which it would have proceeded if the conduct had not
been engaged in
(d) without limiting the generality of paragraph (c):
(i) an order prohibiting the exercise of voting or other
rights attached to specified shares; or
(ii) an order directing a company not to make payment, or
to defer making payment, of any amount or amounts
due from the company in respect of specified shares; or
(iii) an order prohibiting the acquisition or disposal of, or of
an interest in, specified shares; or
(iv) an order directing the disposal of, or of an interest in,
specified shares; or
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(v) an order directing a company not to register a transfer or
transmission of specified shares; or
(vi) an order that an exercise of the voting or other rights
attached to specified shares be disregarded; or
(vii) an order directing a company not to issue shares to a
person who holds shares in the company, being shares
that were proposed to be issued to the person because
the person holds shares in the company or pursuant to
an offer or invitation made or issued to the person
because the person holds shares in the company.
(2) Without limiting the Court’s powers under Part 9.5, if, in a
proceeding, the Court is satisfied that:
(a) a person has engaged in conduct constituting a contravention
of subclause 34(1); and
(b) a member of the company has suffered, or is likely to suffer,
loss or damage because of that conduct;
the Court may make the orders that it thinks are appropriate to
compensate the member (in whole or in part) or to prevent or
reduce the loss or damage, including:
(c) an order directing the person or a person who was involved
in the contravention to refund money or return property to the
member
(d) an order directing the person or a person who was involved
in the contravention to pay to the member the amount of the
loss or damage
(e) an order listed in paragraph (1)(d).
(3) An application for an order under this clause may be made by
ASIC or a member of the company.
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Continued application of fundraising provisions of the Friendly Societies Code Part 6
Clause 36
Corporations Act 2001 447
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6—Continued application of fundraising
provisions of the Friendly Societies Code
36 Friendly Societies Code to apply to offers of interests in benefit
funds
(1) The following apply as a law of the Commonwealth as from the
transfer date:
(a) Divisions 2 and 3 of Part 4B of the Friendly Societies Code
(b) Division 2 of Part 1, and Division 1 of Part 4B, of that Code
to the extent to which they provide for the interpretation of
terms used in the Divisions referred to in paragraph (a)
(c) sections 28, 29 and 128 of that Code to the extent to which
they apply for the purposes of the Divisions referred to in
paragraph (a)
(d) the regulations in force immediately before the transfer date
under Part 4B of that Code to the extent to which they were
made for the purposes of the provisions referred to in
paragraphs (a), (b) and (c)
(e) standards adopted by that Code for the purposes of the
provisions referred to in paragraphs (a), (b) and (c).
(2) The provisions referred to in subclause (1) apply as if:
(a) references in the provisions to a society were references to a
friendly society within the meaning of the Life Insurance Act
1995; and
(b) references to a benefit fund were references to an approved
benefit fund within the meaning of the Life Insurance Act
1995; and
(c) references in the provisions to an SSA were references to
ASIC; and
(d) references in the provisions to lodging a document were
references to lodging the document with ASIC; and
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Clause 36
448 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) references in the provisions to the Code were references to
this Act; and
(f) references in the provisions to Part 4B of the Code were
references to the provisions applied by this clause; and
(g) references to a penalty of $20,000 were references to a
penalty of 200 penalty units; and
(h) references to a penalty of $5,000 were references to a penalty
of 50 penalty units; and
(i) references to a penalty of $2,500 were references to a penalty
of 25 penalty units; and
(j) references to a penalty of $1,000 were references to a penalty
of 10 penalty units; and
(k) subsection 135(2) of the Friendly Societies Code were
omitted; and
(l) paragraph 137(1)(e) of the Friendly Societies Code were
omitted and replaced with a provision that requires a
disclosure document to contain any other information that
ASIC requires to be included in the document; and
(m) subsection 137(3) of the Friendly Societies Code were
omitted and replaced with a provision that requires each copy
of a disclosure document to:
(i) state that the document has been lodged with ASIC; and
(ii) specify the date of lodgment; and
(iii) state that ASIC takes no responsibility as to the contents
of the document.
(3) If there is an inconsistency between:
(a) the provisions of Division 2 of Part 1, or Division 1 of
Part 4B, of the Friendly Societies Code; and
(b) the provisions of Chapter 1 of this Act;
the provisions of the Code prevail for the purposes of interpreting
the provisions applied by subclause (1).
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Clause 37
Corporations Act 2001 449
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7—Transitional provisions
37 Unclaimed money
(1) On and from the transfer date, section 414 applies to a sum or other
property that, immediately before the transfer date, is covered by
section 414 as applied by:
(a) section 337 of the Financial Institutions Code of a State or
Territory; or
(b) section 399 of the Friendly Societies Code of a State or
Territory.
(2) On and from the transfer date, section 544 applies to an amount of
money that, immediately before the transfer date, is covered by
section 544 as applied by:
(a) section 342 of the Financial Institutions Code of a State or
Territory; or
(b) section 403 of the Friendly Societies Code of a State or
Territory.
(3) Sections 414 and 544, as applied by this clause, apply as if:
(a) references to Part 9.7 were references to the unclaimed
money law of the State or Territory; and
(b) references to the Commission or ASIC were references to the
Minister administering the unclaimed money law of the State
or Territory.
(4) In this clause:
unclaimed money law means:
(a) the Unclaimed Money Act 1995 of New South Wales; or
(b) the Unclaimed Moneys Act 1962 of Victoria; or
(c) Part 8 of the Public Trustee Act 1978 of Queensland; or
(d) the Unclaimed Money Act 1990 of Western Australia; or
(e) the Unclaimed Moneys Act 1891 of South Australia; or
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(f) the Unclaimed Moneys Act 1918 of Tasmania; or
(g) the Unclaimed Moneys Act 1950 of the Australian Capital
Territory; or
(h) the Companies (Unclaimed Assets and Moneys) Act of the
Northern Territory.
38 Modification by regulations
(1) The regulations may modify the operation of this Act (including
the provisions applied by clause 36) in relation to:
(a) a company registered under clause 3; or
(b) a company that is permitted to use the expression building
society, credit union or credit society under section 66 of the
Banking Act 1959; or
(c) a company that is a friendly society for the purposes of the
Life Insurance Act 1995; or
(d) a specified class of any of those companies.
(2) Regulations made for the purposes of this clause may only modify
this Act in relation to the following matters:
(a) issuing, cancelling or redeeming membership shares or
redeemable preference shares
(b) inspection of the register of members required by section 169
(c) giving notice of a meeting of a company’s members
(d) members’ rights to request the directors to hold a general
meeting or to move a resolution at a general meeting
(e) issuing share certificates for membership shares or
redeemable preference shares, or numbering those shares
(f) the publication of the names and addresses of members in the
annual return
(g) the report to members required by section 314
(h) disposing of securities in a company if the whereabouts of
the holder of the securities is unknown as described in
section 1343
(i) the treatment of members who hold shares jointly or who
have jointly given a guarantee
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Clause 39
Corporations Act 2001 451
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(j) selective buy-backs.
(3) Regulations made for the purposes of this clause may not:
(a) create an offence with a penalty greater than 10 penalty units;
or
(b) increase the penalty for an existing offence; or
(c) substitute for an existing offence an offence with a penalty
greater than the penalty for the existing offence; or
(d) modify an obligation, contravention of which will result in
committing an offence, so as to make it more difficult to
comply with.
39 Regulations may deal with transitional, saving or application
matters
(1) The regulations may deal with matters of a transitional, saving or
application nature relating to:
(a) the transfer of the registration of transferring financial
institutions to this Act; or
(b) the amendments made by Schedule 3 to the Financial Sector
Reform (Amendments and Transitional Provisions) Act
(No. 1) 1999.
(2) Without limiting subclause (1), the regulations may provide for a
matter to be dealt with, wholly or partly, in any of the following
ways:
(a) by applying (with or without modifications) to the matter:
(i) provisions of a law of the Commonwealth, or of a State
or Territory; or
(ii) provisions of a repealed or amended law of the
Commonwealth, or of a State or Territory, in the form
that those provisions took before the repeal or
amendment; or
(iii) a combination of provisions referred to in
subparagraphs (i) and (ii)
(b) by otherwise specifying rules for dealing with the matter
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(c) by specifying a particular consequence of the matter, or of an
outcome of the matter, for the purposes of this Act.
(3) Without limiting subclause (1) or (2), the regulations may provide
for the continued effect, for the purposes of this Act, of a thing
done or instrument made, or a class of things done or instruments
made, before the transfer date under or for the purposes of a
provision of a previous governing Code of a transferring financial
institution of a State or Territory. In the case of an instrument, or
class of instruments, the regulations may provide for the instrument
or instruments to continue to have effect subject to modifications.
(4) Without limiting subclause (3), regulations providing for the
continued effect of things done or instruments made may permit all
or any of the following matters to be determined in writing by a
specified person, or by a person in a specified class of persons:
(a) the identification of a thing done or instrument made, or a
class of them, that is to continue to have effect
(b) the purpose for which a thing done or instrument made, or a
class of them, is to continue to have effect
(c) any modifications subject to which an instrument made, or a
class of instruments made, is to continue to have effect.
(5) Without limiting subclause (1) or (2), the regulations may provide
for the application of Chapter 5 of this Act or a similar law about
external administration (in whole or in part and with or without
modification) to a transferring financial institution of a State or
Territory if, immediately before the transfer date:
(a) the institution is under external administration (however
described); and
(b) the provisions of Chapter 5 are not already applied to it, or in
relation to it, by a law of the State or Territory.
(6) In this clause, a reference to a law, whether of the Commonwealth
or of a State or Territory, includes a reference to an instrument
made under such a law.
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Endnotes
Endnote 1—About the endnotes
Corporations Act 2001 453
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Endnotes
Endnote 1—About the endnotes
The endnotes provide information about this compilation and the compiled law.
The following endnotes are included in every compilation:
Endnote 1—About the endnotes
Endnote 2—Abbreviation key
Endnote 3—Legislation history
Endnote 4—Amendment history
Abbreviation key—Endnote 2
The abbreviation key sets out abbreviations that may be used in the endnotes.
Legislation history and amendment history—Endnotes 3 and 4
Amending laws are annotated in the legislation history and amendment history.
The legislation history in endnote 3 provides information about each law that
has amended (or will amend) the compiled law. The information includes
commencement details for amending laws and details of any application, saving
or transitional provisions that are not included in this compilation.
The amendment history in endnote 4 provides information about amendments at
the provision (generally section or equivalent) level. It also includes information
about any provision of the compiled law that has been repealed in accordance
with a provision of the law.
Editorial changes
The Legislation Act 2003 authorises First Parliamentary Counsel to make
editorial and presentational changes to a compiled law in preparing a
compilation of the law for registration. The changes must not change the effect
of the law. Editorial changes take effect from the compilation registration date.
If the compilation includes editorial changes, the endnotes include a brief
outline of the changes in general terms. Full details of any changes can be
obtained from the Office of Parliamentary Counsel.
Misdescribed amendments
A misdescribed amendment is an amendment that does not accurately describe
the amendment to be made. If, despite the misdescription, the amendment can
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Endnotes
Endnote 1—About the endnotes
454 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
be given effect as intended, the amendment is incorporated into the compiled
law and the abbreviation “(md)” added to the details of the amendment included
in the amendment history.
If a misdescribed amendment cannot be given effect as intended, the
abbreviation “(md not incorp)” is added to the details of the amendment
included in the amendment history.
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Endnotes
Endnote 2—Abbreviation key
Corporations Act 2001 455
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Endnote 2—Abbreviation key
ad = added or inserted o = order(s)
am = amended Ord = Ordinance
amdt = amendment orig = original
c = clause(s) par = paragraph(s)/subparagraph(s)
C[x] = Compilation No. x /sub-subparagraph(s)
Ch = Chapter(s) pres = present
def = definition(s) prev = previous
Dict = Dictionary (prev…) = previously
disallowed = disallowed by Parliament Pt = Part(s)
Div = Division(s) r = regulation(s)/rule(s)
ed = editorial change reloc = relocated
exp = expires/expired or ceases/ceased to have renum = renumbered
effect rep = repealed
F = Federal Register of Legislation rs = repealed and substituted
gaz = gazette s = section(s)/subsection(s)
LA = Legislation Act 2003 Sch = Schedule(s)
LIA = Legislative Instruments Act 2003 Sdiv = Subdivision(s)
(md) = misdescribed amendment can be given SLI = Select Legislative Instrument
effect SR = Statutory Rules
(md not incorp) = misdescribed amendment Sub-Ch = Sub-Chapter(s)
cannot be given effect SubPt = Subpart(s)
mod = modified/modification underlining = whole or part not
No. = Number(s) commenced or to be commenced
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Endnote 3—Legislation history
456 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Endnote 3—Legislation history
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Act 2001 50, 2001 28 June
2001
15 July 2001 (s 2 and
gaz 2001, No S285)
Corporations (Repeals,
Consequentials and
Transitionals) Act 2001
55, 2001 28 June
2001
s 4–14, Sch 2 (items 12–
16) and Sch 6: 15 July
2001 (s 2(1) items 1, 2,
14)
s 4–14
as amended by
Statute Law Revision
Act 2006
9, 2006 23 Mar
2006
Sch 2 (items 11–13):
15 July 2001 (s 2(1)
item 28)
—
Treasury Legislation
Amendment
(Application of Criminal
Code) Act (No. 3) 2001
117, 2001 18 Sept
2001
s 4 and Sch 1 (items 1–
178, 183–188, 191–306):
15 Dec 2001 (s 2(1))
Sch 1 (items 179–182,
189, 190): 18 Sept 2001
(s 2(3))
s 4
as amended by
Treasury Legislation
Amendment
(Application of
Criminal Code) Act
(No. 2) 2001
146, 2001 1 Oct 2001 Sch 5 (item 10): 15 Dec
2001 (s 2(1))
—
General Insurance
Reform Act 2001
119, 2001 19 Sept
2001
Sch 3 (items 8–10):
1 July 2002 (s 2(2))
—
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Endnote 3—Legislation history
Corporations Act 2001 457
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Financial Services
Reform Act 2001
122, 2001 27 Sept
2001
Sch 1 (items 1, 138–
459), Sch 2 and Sch 3
(items 28–30): 11 Mar
2002 (s 2(2) and gaz
2001, No GN42)
Sch 3 (items 1–27):
27 Sept 2001 (s 2(1)(b),
(c))
—
as amended by
Treasury Legislation
Amendment
(Application of
Criminal Code) Act
(No. 2) 2001
146, 2001 1 Oct 2001 Sch 5 (items 6–8):
15 Dec 2001 (s 2(1))
—
Statute Law Revision
Act 2005
100, 2005 6 July 2005 Sch 2 (item 13): 11 Mar
2002 (s 2(1) item 33)
—
Financial Services
Reform (Consequential
Provisions) Act 2001
123, 2001 27 Sept
2001
Sch 1 (items 219–222):
15 July 2001 (s 2(4))
Sch 1 (items 223, 224):
27 Sept 2001 (s 2(2))
—
Treasury Legislation
Amendment
(Application of Criminal
Code) Act (No. 2) 2001
146, 2001 1 Oct 2001 s 4 and Sch 5 (items 4,
5): 15 Dec 2001 (s 2(1))
Sch 5 (item 3): 11 Mar
2002 (s 2(3))
s 4
Financial Services
Reform (Consequential
Provisions) Act 2002
29, 2002 5 Apr 2002 Sch 2: 11 Mar 2002
(s 2(1) items 3–5)
—
as amended by
Statute Law Revision
Act 2005
100, 2005 6 July 2005 Sch 2 (item 16): 11 Mar
2002 (s 2(1) item 35)
—
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Endnote 3—Legislation history
458 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Legislation
Amendment Act 2003
24, 2003 11 Apr
2003
Sch 1–4: 1 July 2003
(s 2(1) items 2–4)
Sch 5 (items 3, 7–9):
11 Apr 2003 (s 2(1)
items 5, 7)
Sch 5 (items 4–6):
15 July 2001 (s 2(1)
item 6)
—
Corporations
Amendment (Repayment
of Directors’ Bonuses)
Act 2003
25, 2003 11 Apr
2003
11 Apr 2003 (s 2) —
Crimes Legislation
Enhancement Act 2003
41, 2003 3 June 2003 Sch 2 (items 1D–1F):
1 Jan 2003 (s 2(1)
item 5B)
—
Financial Sector
Legislation Amendment
Act (No. 1) 2003
116, 2003 27 Nov
2003
Sch 3: 28 Nov 2003
(s 2(1) item 4)
—
Legislative Instruments
(Transitional Provisions
and Consequential
Amendments) Act 2003
140, 2003 17 Dec
2003
s 4 and Sch 1 (item 15):
1 Jan 2005 (s 2(1)
items 2, 3)
s 4
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Endnote 3—Legislation history
Corporations Act 2001 459
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Financial Services
Reform Amendment Act
2003
141, 2003 17 Dec
2003
Sch 1: 14 Jan 2004
(s 2(1) item 2)
Sch 2 (items 1A, 114):
17 Dec 2003 (s 2(1)
item 1)
Sch 2 (items 1–46C, 47–
72, 73–87, 89–113),
Sch 3 and 4: 18 Dec
2003 (s 2(1) items 3, 3B,
3D, 5, 5A, 6–8)
Sch 2 (items 46D–46F,
72A, 88, 88A): 1 July
2004 (s 2(1) items 3A,
3C, 4, 4A)
—
Bankruptcy Legislation
Amendment Act 2004
80, 2004 23 June
2004
Sch 1 (items 191A–
191D, 212, 213, 215):
1 Dec 2004 (s 2(1)
item 2 and gaz 2004, No
GN34)
Sch 1 (items 212,
213, 215)
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Endnote 3—Legislation history
460 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporate Law
Economic Reform
Program (Audit Reform
and Corporate
Disclosure) Act 2004
103, 2004 30 June
2004
Sch 1 (items 37–129,
176–178), Sch 2
(items 1–9, 17–19),
Sch 2A, Sch 4–8, Sch 9
(items 7–88) and Sch 11
(items 3–14) : 1 July
2004 (s 2(1) items 2, 2A,
2D, 4–11, 13)
Sch 2 (items 12–16) and
Sch 10 and 11A: 1 Jan
2005 (s 2(1) items 2B,
12, 13A)
Sch 3 (items 3, 4):
26 July 2004 (s 2(1)
item 3 and gaz 2004, No
GN28)
Sch 12 (item 2): 30 June
2004 (s 2(1) item 14)
—
Treasury Legislation
Amendment
(Professional Standards)
Act 2004
118, 2004 13 July
2004
Sch 1 (items 4–8):
13 July 2004 (s 2)
—
Financial Framework
Legislation Amendment
Act 2005
8, 2005 22 Feb
2005
s 4 and Sch 1 (items 120,
121, 496): 22 Feb 2005
(s 2(1) items 1, 2, 10)
s 4 and Sch 1
(item 496)
Corporations
Amendment Act (No. 1)
2005
138, 2005 18 Nov
2005
Sch 2: 30 June 2004
(s 2(1) item 3)
Remainder: 18 Nov 2005
(s 2(1) items 1, 2)
—
Offshore Petroleum
(Repeals and
Consequential
Amendments) Act 2006
17, 2006 29 Mar
2006
Sch 2 (item 13): 1 July
2008 (s 2(1) item 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 461
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Tax Laws Amendment
(Repeal of Inoperative
Provisions) Act 2006
101, 2006 14 Sept
2006
Sch 2 (items 29–35) and
Sch 6 (items 1, 6–11):
14 Sept 2006 (s 2(1)
items 2, 4)
Sch 6 (items 1, 6–
11)
Corporations
Amendment (Aboriginal
and Torres Strait
Islander Corporations)
Act 2006
126, 2006 4 Nov 2006 Sch 1: 1 July 2007
(s 2(1) item 2)
—
Trade Practices
Legislation Amendment
Act (No. 1) 2006
131, 2006 6 Nov 2006 Sch 9 (items 16–19, 21):
1 Jan 2007 (s 2(1)
item 3)
Sch 9 (item 21)
Anti-Money Laundering
and Counter-Terrorism
Financing (Transitional
Provisions and
Consequential
Amendments) Act 2006
170, 2006 12 Dec
2006
Sch 1 (item 18): 13 Dec
2006 (s 2(1) item 4)
—
Australian Securities and
Investments
Commission
Amendment (Audit
Inspection) Act 2007
1, 2007 19 Feb
2007
Sch 1 (item 17): 20 Feb
2007 (s 2(1) item 2)
Sch 2: 1 July 2004
(s 2(1) item 3)
—
Private Health Insurance
(Transitional Provisions
and Consequential
Amendments) Act 2007
32, 2007 30 Mar
2007
Sch 2 (item 8B): 1 Apr
2007 (s 2(1) item 7)
—
Corporations
Amendment (Takeovers)
Act 2007
64, 2007 15 Apr
2007
Sch 1: 13 May 2007
(s 2(1) item 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
462 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Governance Review
Implementation
(Treasury Portfolio
Agencies) Act 2007
74, 2007 5 June 2007 Sch 1 (items 13–39) and
Sch 2 (items 1–9, 20):
1 July 2007 (s 2(1)
item 2)
Sch 2 (items 1–9,
20)
Corporations (NZ Closer
Economic Relations) and
Other Legislation
Amendment Act 2007
85, 2007 21 June
2007
Sch 1 (items 1–19, 21,
22): 21 Dec 2007 (s 2(1)
items 2, 3, 5)
Sch 1 (item 20): never
commenced 2007 (s 2(1)
item 4)
Sch 2: 1 Sept 2007
(s 2(1) item 6)
—
Corporations Legislation
Amendment (Simpler
Regulatory System) Act
2007
101, 2007 28 June
2007
Sch 1 (items 1–175,
227–246): 28 June 2007
(s 2(1) items 2, 7)
Sch 1 (items 188–197):
1 July 2007 (s 2(1)
item 3)
Sch 1 (items 198–215,
221): 1 Sept 2007 (s 2(1)
item 4)
Sch 1 (items 216–220):
28 Dec 2007 (s 2(1)
item 4)
Sch 1 (item 223): 1 July
2008 (s 2(1) item 5)
Sch 1 (items 224–226):
1 Jan 2009 (s 2(1)
item 6)
Sch 1 (items 227–
246)
as amended by
Statute Law Revision
Act 2008
73, 2008 3 July 2008 Sch 2 (items 3, 4):
28 June 2007 (s 2(1)
(items 46, 47)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 463
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations
Amendment
(Insolvency) Act 2007
132, 2007 20 Aug
2007
Sch 1 (items 1–10, 16–
48, 51–120, 122–133),
Sch 2 (items 2–10, 12),
Sch 3, 4, Sch 5 (items 3–
15) and Sch 6: 31 Dec
2007 (s 2(1) items 2, 4,
6, 7, 9, 10)
Sch 1 (items 49, 50, 121)
and Sch 2 (item 11):
1 July 2008 (s 2(1)
items 3, 8)
—
Financial Sector
Legislation Amendment
(Discretionary Mutual
Funds and Direct
Offshore Foreign
Insurers) Act 2007
149, 2007 24 Sept
2007
Sch 2 (items 1, 2): 1 July
2008 (s 2(1) item 2)
Sch 3: 22 Oct 2007
(s 2(1) item 3)
—
Financial Sector
Legislation Amendment
(Simplifying Regulation
and Review) Act 2007
154, 2007 24 Sept
2007
Sch 1 (items 52, 296)
and Sch 4 (items 16–30):
24 Sept 2007 (s 2(1)
item 2, 6, 7)
Sch 1 (items 167–172):
1 Jan 2008 (s 2(1)
item 3)
Sch 1 (item 296)
First Home Saver
Accounts (Consequential
Amendments) Act 2008
45, 2008 25 June
2008
Sch 2 (items 3–14):
26 June 2008 (s 2)
—
Private Health Insurance
Legislation Amendment
Act 2008
54, 2008 25 June
2008
Sch 1 (item 3): 25 June
2008 (s 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
464 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Financial System
Legislation Amendment
(Financial Claims
Scheme and Other
Measures) Act 2008
105, 2008 17 Oct
2008
Sch 1 (items 54, 62) and
Sch 3 (items 27–31):
18 Oct 2008 (s 2(1)
items 2, 3)
Sch 1 (item 62)
and Sch 3
(item 31)
Offshore Petroleum
Amendment
(Greenhouse Gas
Storage) Act 2008
117, 2008 21 Nov
2008
Sch 3 (item 5): 22 Nov
2008 (s 2(1) item 4)
—
Same-Sex Relationships
(Equal Treatment in
Commonwealth Laws—
General Law Reform)
Act 2008
144, 2008 9 Dec 2008 Sch 14 (items 130–150):
10 Dec 2008 (s 2(1)
item 36)
—
Corporations
Amendment (Short
Selling) Act 2008
146, 2008 11 Dec
2008
Sch 2: 8 Jan 2009 (s 2(1)
item 3)
Sch 3: 11 Dec 2009
(s 2(1) item 4)
Remainder: 11 Dec 2008
(s 2(1) items 1, 2)
—
Corporations
Amendment (No. 1) Act
2009
9, 2009 25 Feb
2009
25 Feb 2009 (s 2) —
Fair Work (State
Referral and
Consequential and Other
Amendments) Act 2009
54, 2009 25 June
2009
Sch 18 (items 2, 3):
1 July 2009 (s 2(1)
item 41)
—
Financial Sector
Legislation Amendment
(Enhancing Supervision
and Enforcement) Act
2009
75, 2009 27 Aug
2009
Sch 1 (items 195–199):
27 Feb 2010 (s 2(1)
item 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 465
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Legislation
Amendment (Financial
Services Modernisation)
Act 2009
108, 2009 6 Nov 2009 Sch 1 and Sch 3
(items 2, 3): 1 Jan 2010
(s 2(1) items 2, 5)
Sch 2 (items 4–28):
6 May 2010 (s 2(1)
item 3)
Sch 3 (item 1), Sch 4 and
Sch 5: 6 Nov 2009
(s 2(1) items 4, 6, 7)
—
Tax Agent Services
(Transitional Provisions
and Consequential
Amendments) Act 2009
114, 2009 16 Nov
2009
Sch 1 (item 2) and Sch 2:
1 Mar 2010 (s 2(1)
items 2, 4)
Sch 2
Corporations
Amendment (Improving
Accountability on
Termination Payments)
Act 2009
115, 2009 23 Nov
2009
Sch 1: 24 Nov 2009
(s 2(1) items 2–4)
Sch 1 (item 43)
National Consumer
Credit Protection
(Transitional and
Consequential
Provisions) Act 2009
135, 2009 15 Dec
2009
Sch 3 (items 2, 3): 1 Apr
2010 (s 2(1) item 4)
—
Crimes Legislation
Amendment (Serious
and Organised Crime)
Act (No. 2) 2010
4, 2010 19 Feb
2010
Sch 10 (item 6): 20 Feb
2010 (s 2(1) item 13)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
466 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations
Amendment (Financial
Market Supervision) Act
2010
26, 2010 25 Mar
2010
Sch 1: 1 Aug 2010
(s 2(1) item 2)
—
as amended by
Corporations
Amendment
(Corporate Reporting
Reform) Act 2010
66, 2010 28 June
2010
Sch 1 (item 53): 28 June
2010 (s 2(1) item 3)
—
Trade Practices
Amendment (Australian
Consumer Law) Act
(No. 1) 2010
44, 2010 14 Apr
2010
Sch 3 (items 15–17):
15 Apr 2010 (s 2(1)
item 9)
—
Corporations
Amendment (Corporate
Reporting Reform) Act
2010
66, 2010 28 June
2010
Sch 1 (items 1–52):
28 June 2010 (s 2(1)
items 2, 3)
Sch 1 (item 54): never
commenced (s 2(1)
item 4)
—
Tax Laws Amendment
(Transfer of Provisions)
Act 2010
79, 2010 29 June
2010
Sch 1 (item 13): 1 July
2010 (s 2(1) item 2)
—
Personal Property
Securities (Corporations
and Other Amendments)
Act 2010
96, 2010 6 July 2010 Sch 1 (items 1–185,
187): 30 Jan 2012 (s 2(1)
items 2, 4)
Sch 1 (item 186): 6 July
2010 (s 2(1) item 3)
—
as amended by
Statute Law Revision
Act 2013
103, 2013 29 June
2013
Sch 2 (item 10): 29 June
2013 (s 2(1) item 3)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 467
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Trade Practices
Amendment (Australian
Consumer Law) Act
(No. 2) 2010
103, 2010 13 July
2010
Sch 3 (items 33–36):
1 Jan 2011 (s 2(1)
item 2)
—
Corporations
Amendment (No. 1) Act
2010
131, 2010 24 Nov
2010
Sch 1 (items 4–20):
13 Dec 2010 (s 2(1)
item 2)
—
Corporations
Amendment (Sons of
Gwalia) Act 2010
150, 2010 17 Dec
2010
Sch 1: 18 Dec 2010
(s 2(1) item 2)
Sch 1 (item 4)
Statute Law Revision
Act 2011
5, 2011 22 Mar
2011
Sch 1 (items 15–53):
22 Mar 2011 (s 2(1)
item 2)
—
Corporations and Other
Legislation Amendment
(Trustee Companies and
Other Measures) Act
2011
24, 2011 12 Apr
2011
Sch 1 (items 3–7, 9–11):
13 Apr 2011 (s 2(1)
items 2, 4)
Sch 1 (items 8, 13–36):
10 May 2011 (s 2(1)
items 3, 6)
Sch 1 (item 12): 6 May
2010 (s 2(1) item 5)
—
Personal Property
Securities (Corporations
and Other Amendments)
Act 2011
35, 2011 26 May
2011
Sch 1: 30 Jan 2012
(s 2(1) item 2)
—
Corporations
Amendment (Improving
Accountability on
Director and Executive
Remuneration) Act 2011
42, 2011 27 June
2011
1 July 2011 (s 2) —
Carbon Credits
(Consequential
Amendments) Act 2011
102, 2011 15 Sept
2011
Sch 1 (items 9–11):
8 Dec 2011 (s 2(1)
item 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
468 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Business Names
Registration
(Transitional and
Consequential
Provisions) Act 2011
127, 2011 3 Nov 2011 Sch 2 (items 14–20):
20 Apr 2012 (s 2(1)
item 4)
Act No 172, 2011
(Sch 1 item 4)
Clean Energy
(Consequential
Amendments) Act 2011
132, 2011 18 Nov
2011
Sch 1 (items 259, 260):
1 July 2012 (s 2(1)
item 3)
—
Corporations
Amendment (Phoenixing
and Other Measures) Act
2012
48, 2012 26 May
2012
Sch 1 and 2: 1 July 2012
(s 2(1) item 2)
—
Corporations
Amendment (Future of
Financial Advice) Act
2012
67, 2012 27 June
2012
Sch 1: 1 July 2012
(s 2(1) item 2)
—
Corporations
Amendment (Further
Future of Financial
Advice Measures) Act
2012
68, 2012 27 June
2012
Sch 1: 1 July 2012
(s 2(1) item 2)
—
as amended by
Statute Law Revision
Act 2013
103, 2013 29 June
2013
Sch 2 (item 6): 1 July
2012 (s 2(1) item 7)
—
Corporations Legislation
Amendment (Audit
Enhancement) Act 2012
72, 2012 27 June
2012
Sch 1: 25 July 2012
(s 2(1) item 2)
—
Corporations
Amendment (Proxy
Voting) Act 2012
73, 2012 27 June
2012
28 June 2012 (s 2) —
Tax Laws Amendment
(2012 Measures No. 2)
Act 2012
99, 2012 29 June
2012
Sch 1 (items 24–34, 47):
30 June 2012 (s 2(1)
item 4)
Sch 1 (item 47)
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 469
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Legislation
Amendment (Financial
Reporting Panel) Act
2012
118, 2012 12 Sept
2012
Sch 1 (items 3–6, 8):
1 Oct 2012 (s 2(1)
item 2)
—
Commonwealth
Government Securities
Legislation Amendment
(Retail Trading) Act
2012
155, 2012 17 Nov
2012
Sch 1 (items 8–17):
18 Nov 2012 (s 2)
—
Superannuation
Legislation Amendment
(MySuper Core
Provisions) Act 2012
162, 2012 28 Nov
2012
Sch 1 (item 1A): 28 Nov
2012 (s 2(1) item 1A)
—
Australian Charities and
Not-for-profits
Commission
(Consequential and
Transitional) Act 2012
169, 2012 3 Dec 2012 Sch 2 (items 135–137)
and Sch 3 (item 24):
3 Dec 2012 (s 2(1)
items 3, 10)
Sch 3 (items 25–32):
1 July 2013 (s 2(1)
item 11)
Sch 3 (item 29)
Superannuation
Legislation Amendment
(Further MySuper and
Transparency Measures)
Act 2012
171, 2012 3 Dec 2012 Sch 3 (items 5–23):
1 July 2013 (s 2(1)
item 16)
—
Treasury Legislation
Amendment (Unclaimed
Money and Other
Measures) Act 2012
176, 2012 4 Dec 2012 Sch 5 (items 2–8): 5 Dec
2012 (s 2(1) item 11)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
470 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Legislation
Amendment (Derivative
Transactions) Act 2012
178, 2012 6 Dec 2012 Sch 1 (items 1–43):
3 Jan 2013 (s 2(1)
item 2)
—
as amended by
Statute Law Revision
Act 2013
103, 2013 29 June
2013
Sch 2 (item 7): 3 Jan
2013 (s 2(1) item 8)
—
Personal Liability for
Corporate Fault Reform
Act 2012
180, 2012 10 Dec
2012
Sch 1 and 7: 11 Dec
2012 (s 2)
Sch 7
Corporations and
Financial Sector
Legislation Amendment
Act 2013
59, 2013 21 June
2013
Sch 1 (items 10–15, 39–
41): 19 July 2013 (s 2(1)
item 2)
—
Superannuation
Legislation Amendment
(Service Providers and
Other Governance
Measures) Act 2013
61, 2013 26 June
2013
Sch 1 (items 1–3, 9,
10A–10E, 11, 12A):
1 July 2013 (s 2(1)
items 2, 5, 6A, 7, 8A)
Sch 1 (items 4–6): 1 July
2015 (s 2(1) item 3)
Sch (items 7, 8, 12):
27 June 2013 (s 2(1)
items 4, 8)
Sch 1 (item 10): 28 Nov
2012 (s 2(1) item 6)
—
Clean Energy
Legislation (Carbon Tax
Repeal) Act 2014
83, 2014 17 July
2014
Sch 1 (items 105–107):
1 July 2014 (s 2(1)
item 2)
—
Corporations
Amendment (Simple
Corporate Bonds and
Other Measures) Act
2014
100, 2014 11 Sept
2014
19 Dec 2014 (s 2(1)
item 2)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
Corporations Act 2001 471
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations Legislation
Amendment
(Deregulatory and Other
Measures) Act 2015
19, 2015 19 Mar
2014
Sch 1: 19 Mar 2014 (s 2) —
Public Governance and
Resources Legislation
Amendment Act (No. 1)
2015
36, 2015 13 Apr
2015
Sch 5 (items 32–36, 74–
77) and Sch 7: 14 Apr
2015 (s 2)
Sch 5 (items 74–
77) and Sch 7
as amended by
Acts and Instruments
(Framework Reform)
(Consequential
Provisions) Act 2015
126, 2015 10 Sept
2015
Sch 1 (item 486):
5 March 2016 (s 2(1)
item 2)
—
Tax and Superannuation
Laws Amendment (2015
Measures No. 1) Act
2015
70, 2015 25 June
2015
Sch 1 (items 27–38,
195–205): 1 July 2015
(s 2(1) items 3, 6)
Sch 1 (items 195–
205)
Insolvency Law Reform
Act 2016
11, 2016 29 Feb
2016
Sch 2 (items 1, 2, 63–93,
95–265, 322) and Sch 3
(items 1–3, 5–35): 1 Mar
2017 (s 2(1) items 3, 5,
7, 8)
Sch 2 (item 94): awaiting
commencement (s 2(1)
item 4)
—
Corporations
Amendment (Financial
Advice Measures) Act
2016
22, 2016 18 Mar
2016
Sch 1: 19 Mar 2016
(s 2(1) item 2)
—
Corporations
Amendment (Auditor
Registration) Act 2016
58, 2016 23 Sept
2016
Sch 1: 24 Sept 2016 (s
2(1) item 1)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 3—Legislation history
472 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Act Number
and year
Assent Commencement Application,
saving and
transitional
provisions
Corporations
Amendment (Life
Insurance Remuneration
Arrangements) Act 2017
6, 2017 22 Feb
2017
Sch 1: 1 Jan 2018 (s 2(1)
item 2)
—
Corporations
Amendment
(Professional Standards
of Financial Advisers)
Act 2017
7, 2017 22 Feb
2017
Sch 1 (items 1–20, 27):
15 Mar 2017 (s 2(1)
item 1)
—
Corporations
Amendment
(Crowd-sourced
Funding) Act 2017
17, 2017 28 Mar
2017
Sch 1 (items 1–34) and
Sch 2: awaiting
commencement (s 2(1)
item 2)
Sch 3: 29 Mar 2017
(s 2(1) item 3)
Sch 3 (items 2, 5)
Treasury Laws
Amendment (2016
Measures No. 1) Act
2017
25, 2017 4 Apr 2017 Sch 2: 5 Apr 2017 (s
2(1) item 3)
Sch 5: 4 Apr 2018 (s
2(1) item 7)
—
ASIC Supervisory Cost
Recovery Levy
(Consequential
Amendments) Act 2017
45, 2017 19 June
2017
Sch 1 (items 3–19, 29):
1 July 2017 (s 2(1)
item 1)
Sch 1 (item 29)
Treasury Laws
Amendment (2017
Measures No. 2) Act
2017
55, 2017 22 June
2017
Sch 2 (items 3–8):
22 June 2017 (s 2(1)
item 8)
—
Treasury Laws
Amendment (2017
Measures No. 3) Act
2017
75, 2017 26 June
2017
Sch 1 (items 8–11):
15 July 2001 (s 2(1) item
1)
—
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 473
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Endnote 4—Amendment history
Provision affected How affected
Title ...............................................am No 122, 2001
Chapter 1
Part 1.1
s. 5 .................................................am. No. 122, 2001
s. 5A...............................................am. No. 122, 2001; No. 108, 2009
s. 5C...............................................rs. No. 140, 2003
Part 1.1A
s 5D................................................am No 108, 2009
Part 1.2
Division 1
s. 6 .................................................am. No. 122, 2001
s. 7 .................................................am. No. 122, 2001
s 9 ..................................................am No 55, 2001; No 117, 2001; No 122, 2001; No 24, 2003; No 25,
2003; No 116, 2003; No 141, 2003; No 80, 2004; No 103, 2004; No 17,
2006; No 126, 2006; No 64, 2007; No 74, 2007; No 85, 2007; No 101,
2007; No 132, 2007; No 45, 2008; No 117, 2008; No 144, 2008; No
108, 2009; No 115, 2009; No 26, 2010; No 66, 2010; No 96, 2010; No
5, 2011; No 24, 2011; No 42, 2011; No 102, 2011; No 127, 2011; No
132, 2011; No 48, 2012; No 68, 2012; No 72, 2012; No 118, 2012; No
169, 2012; No 176, 2012; No 178, 2012; No 59, 2013; No 83, 2014; No
100, 2014; No 70, 2015; No 11, 2016; No 17, 2017; No 25, 2017
s. 9AA............................................ad. No. 144, 2008
s. 9A...............................................ad. No. 101, 2007
s. 9B...............................................ad. No. 42, 2011
Division 2
s. 12 ...............................................rs. No. 122, 2001
s. 13 ...............................................am. No. 122, 2001
s. 14 ...............................................rep. No. 122, 2001
s. 16 ...............................................am. No. 122, 2001
s. 17 ...............................................rs. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
474 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 3
s. 21 ...............................................am. No. 96, 2010
Division 4 ......................................rep. No. 122, 2001
ss. 23–29........................................rep. No. 122, 2001
Division 5A
s. 45A.............................................am. No. 103, 2004; No. 101, 2007
s. 45B.............................................ad. No. 66, 2010
am No 36, 2015
Division 6
s. 50AAA.......................................ad. No. 103, 2004
Division 6A
Division 6A....................................ad. No. 96, 2010
s. 51 ...............................................rep. No. 122, 2001
ad. No. 96, 2010
s. 51A.............................................ad. No. 96, 2010
s. 51B.............................................ad. No. 96, 2010
s. 51C.............................................ad. No. 96, 2010
s. 51D.............................................ad. No. 96, 2010
s. 51E.............................................ad. No. 96, 2010
s. 51F .............................................ad. No. 96, 2010
Division 7
s. 53 ...............................................am. No. 116, 2003; No. 24, 2011
s. 53AB..........................................am. No. 80, 2004
ss. 54–56........................................rep. No. 122, 2001
s 57A..............................................am No 103, 2004; No 126, 2006; No 11, 2016
s. 58AA..........................................am. No. 5, 2011
s. 60 ...............................................ad. No. 132, 2007
am. No. 96, 2010
s. 61 ...............................................rep. No. 122, 2001
s. 64 ...............................................am. No. 122, 2001
ss. 67, 68 ........................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 475
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
ss. 71, 72 ........................................rep. No. 122, 2001
s. 72A.............................................rep. No. 122, 2001
s. 73 ...............................................rep. No. 122, 2001
s. 77 ...............................................rep. No. 122, 2001
s. 82A.............................................rep. No. 103, 2004
s. 84 ...............................................rep. No. 122, 2001
ss. 87, 88 ........................................rep. No. 122, 2001
s. 88B.............................................ad. No. 122, 2001
s 91 ................................................rep No 116, 2003
ad No 11, 2016
s. 92 ...............................................am. No. 122, 2001
s. 92A.............................................rep. No. 122, 2001
ss. 93, 94 ........................................rep. No. 122, 2001
s. 95A.............................................rep. No. 122, 2001
ad. No. 29, 2002
s. 97 ...............................................rep. No. 122, 2001
Division 8
s. 103 .............................................am. No. 122, 2001
s. 107 .............................................ad. No. 24, 2003
s. 109X...........................................am. No. 116, 2003
Part 1.2A
Division 2
s. 111AD........................................am. No. 122, 2001
s. 111AE ........................................am. No. 122, 2001
s. 111AF ........................................am. No. 122, 2001; No. 85, 2007
s. 111AFA......................................ad. No. 122, 2001
am. No. 85, 2007
s. 111AH........................................am. No. 122, 2001
s. 111AI .........................................rs. No. 85, 2007
Division 3
s. 111ANA.....................................ad. No. 42, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
476 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 111AO........................................am. No. 103, 2004
s. 111AP ........................................am. No. 122, 2001
s. 111AQA.....................................ad. No. 122, 2001
am. No. 103, 2004
Division 4
s. 111AR ........................................am. No. 122, 2001
Part 1.5
s. 1 (to Part 1.5)..............................am. No. 116, 2003
s. 3 (to Part 1.5)..............................am. No. 116, 2003; No. 96, 2010
s. 4 (to Part 1.5)..............................am. No. 24, 2003; No. 101, 2007; No. 96, 2010
s. 5 (to Part 1.5)..............................am. Nos. 24 and 116, 2003; No. 101, 2007
s. 7 (to Part 1.5)..............................am. Nos. 24 and 116, 2003
s. 8 (to Part 1.5)..............................am. No. 96, 2010
s. 9 (to Part 1.5)..............................am. No. 116, 2003; No. 66, 2010
s. 11 (to Part 1.5)............................am. No. 116, 2003; No. 5, 2011
s. 12 (to Part 1.5)............................am. No. 116, 2003; No. 96, 2010
Part 1.6
Part 1.6...........................................ad. No. 169, 2012
s. 111K...........................................ad. No. 169, 2012
am No 36, 2015
s. 111L ...........................................ad. No. 169, 2012
am No 169, 2012
s. 111M..........................................ad. No. 169, 2012
s. 111N...........................................ad. No. 169, 2012
s 111P ............................................ad No 169, 2012
s. 111Q...........................................ad. No. 169, 2012
Chapter 2A
Part 2A.1
s. 112 .............................................am. No. 5, 2011
s. 113 .............................................am. No. 117, 2001
s. 115 .............................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 477
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 2A.2
s 117 ..............................................am No 117, 2001; No 24, 2003; No 17, 2017
s. 123 .............................................am. No. 117, 2001; No. 24, 2003
Chapter 2B
Part 2B.1
s. 124 .............................................am. No. 96, 2010
Part 2B.2
s. 130 .............................................am. No. 35, 2011
Part 2B.4
s. 136 .............................................am. No. 117, 2001
s. 139 .............................................am. No. 117, 2001
s. 141 .............................................am. No. 122, 2001; No. 116, 2003; No. 103, 2004
Part 2B.5
s. 142 .............................................am. No. 117, 2001; No. 24, 2003; No. 101, 2007
s. 143 .............................................am. No. 117, 2001; No. 103, 2004
s. 144 .............................................am. No. 117, 2001
s. 145 .............................................am. No. 117, 2001
s. 146 .............................................am. No. 117, 2001; No. 24, 2003
s. 146A...........................................ad. No. 101, 2007
Part 2B.6
Division 1
s. 147 .............................................am. No. 127, 2011
s. 148 .............................................am. No. 117, 2001
s. 149 .............................................am. No. 24, 2003
s. 150 .............................................am. No. 117, 2001; No. 169, 2012
s. 151 .............................................am. No. 117, 2001; No. 101, 2007
s. 153 .............................................am. No. 117, 2001; No. 24, 2003
s. 156 .............................................am. No. 117, 2001
Division 2
s. 157 .............................................am. No. 117, 2001
s. 157A...........................................ad. No. 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
478 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 96, 2010
s. 158 .............................................am. No. 117, 2001
s 161A............................................ad No 132, 2007
am No 5, 2011; No 11, 2016
Part 2B.7
s 162 ..............................................am No 117, 2001; No 11, 2016
s 163 ..............................................am No 117, 2001; No 24, 2003; No 103, 2004; No 101, 2007; No 17,
2017
s. 165 .............................................am. No. 117, 2001
Chapter 2C
Part 2C.1
Part 2C.1 heading...........................ad. No. 24, 2003
s. 168 .............................................am. No. 117, 2001; No. 103, 2004; No. 96, 2010
s. 169 .............................................am. No. 24, 2003; No. 5, 2011
s. 170 .............................................am. Nos. 117 and 122, 2001
s. 172 .............................................am. No. 117, 2001
s. 173 .............................................am. No. 117, 2001; No. 131, 2010
s. 174 .............................................am. No. 117, 2001
s. 175 .............................................am. No. 24, 2003
s. 177 .............................................am. No. 117, 2001; No. 131, 2010
Part 2C.2
Part 2C.2 ........................................ad. No. 24, 2003
s. 178A...........................................ad. No. 24, 2003
s. 178B...........................................ad. No. 24, 2003
s. 178C...........................................ad. No. 24, 2003
s. 178D...........................................ad. No. 24, 2003
Chapter 2D
Part 2D.1
Division 1
s. 188 .............................................am. No. 117, 2001; No. 24, 2003; No. 116, 2003; No. 103, 2004
rs. No. 180, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 479
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 190B...........................................ad. No. 126, 2006
Division 2
s. 191 .............................................am. No. 117, 2001
s. 195 .............................................am. No. 117, 2001
Division 3
s. 197 .............................................am. No. 138, 2005; No. 126, 2006
Division 5
Division 5 ......................................ad No 11, 2016
s 198G............................................ad No 11, 2016
Part 2D.2
Division 1
s. 199A...........................................am. No. 103, 2004; No. 9, 2009; No. 26, 2010; No. 68, 2012
s. 199B...........................................am. No. 117, 2001
Division 2
s. 200 .............................................ad. No. 115, 2009
s. 200AA........................................ad. No. 115, 2009
s. 200AB ........................................ad. No. 115, 2009
s. 200A...........................................am. No. 115, 2009
s. 200B...........................................am. No. 117, 2001; No. 115, 2009
s. 200C...........................................am. No. 117, 2001; No. 115, 2009
s. 200D...........................................am. No. 115, 2009
s. 200E ...........................................am. No. 115, 2009
s. 200F ...........................................am. No. 117, 2001; No. 115, 2009
s. 200G...........................................am. No. 115, 2009
s. 200J............................................am. No. 115, 2009
Part 2D.3
Division 1
Subdivision A
Subdivision A heading...................ad. No. 42, 2011
s. 201C...........................................rep. No. 24, 2003
s. 201D...........................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
480 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 201L ...........................................am. No. 103, 2004
Subdivision B
Subdivision B ................................ad. No. 42, 2011
s. 201N...........................................ad. No. 42, 2011
s. 201P ...........................................ad. No. 42, 2011
s. 201Q...........................................ad. No. 42, 2011
s. 201R...........................................ad. No. 42, 2011
s. 201S ...........................................ad. No. 42, 2011
s. 201T ...........................................ad. No. 42, 2011
s. 201U...........................................ad. No. 42, 2011
Division 2
s. 202B...........................................am. No. 117, 2001
Division 3
s. 203D...........................................am. No. 117, 2001
Part 2D.4
s. 204A...........................................am. No. 117, 2001
s. 204C...........................................am. No. 117, 2001
s. 204D...........................................am. No. 103, 2004
Part 2D.5
s. 205A...........................................am. No. 101, 2007
s. 205B...........................................am. No. 117, 2001; No. 24, 2003; No. 101, 2007
s. 205C...........................................am. No. 117, 2001
s. 205E ...........................................am. No. 117, 2001
s. 205F ...........................................am. No. 117, 2001
s. 205G...........................................am. Nos. 117 and 122, 2001; No. 24, 2003
Part 2D.6
s 206A............................................am No 117, 2001
s 206B............................................am No 80, 2004; No 126, 2006; No 9, 2009; No 11, 2016
s 206BA.........................................ad No 103, 2004
am No 126, 2006; No 11, 2016
s. 206C...........................................am. No. 122, 2001; No. 126, 2006
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 481
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 206D...........................................am. No. 103, 2004; No. 126, 2006
s. 206E ...........................................am. No. 126, 2006
s. 206EAA .....................................ad. No. 9, 2009
s. 206EA ........................................ad. No. 131, 2006
rs. No. 103, 2010
s. 206EB ........................................ad. No. 44, 2010
s. 206F ...........................................am. No. 126, 2006
s. 206GA........................................ad. No. 131, 2006
s. 206H...........................................am. No. 9, 2009
s. 206HB........................................ad. No. 126, 2006
Part 2D.7
Part 2D.7........................................ad. No. 42, 2011
s. 206J............................................ad. No. 42, 2011
Part 2D.8
Part 2D.8........................................ad. No. 42, 2011
s. 206K...........................................ad. No. 42, 2011
s. 206L ...........................................ad. No. 42, 2011
s. 206M..........................................ad. No. 42, 2011
Chapter 2E
Part 2E.1
s. 208 .............................................am. No. 180, 2012
Division 2
s 211 ..............................................am No 61, 2013 (md)
s. 213 .............................................rs. No. 101, 2007
Division 3
s. 219 .............................................am. No. 116, 2003
s. 220 .............................................am. No. 122, 2001
s. 225 .............................................am. No. 117, 2001
Part 2E.2
s. 228 .............................................am. No. 144, 2008
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
482 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Chapter 2F
Part 2F.1
s. 235 .............................................am. No. 117, 2001
Part 2F.2
s. 246B...........................................am. No. 117, 2001
s. 246D...........................................am. No. 117, 2001
s. 246F ...........................................am. No. 117, 2001; No. 24, 2003
s. 246G...........................................am. No. 117, 2001
Part 2F.3
s. 247C...........................................am. No. 117, 2001
Part 2F.4
Part 2F.4 ........................................ad. No. 150, 2010
s. 247E ...........................................ad. No. 150, 2010
Chapter 2G
Part 2G.2
Division 2
s 249CA.........................................am No 122, 2001
s 249D............................................am No 19, 2015
s 249E ............................................am No 117, 2001
Division 3
s. 249HA........................................am. No. 122, 2001
s. 249J............................................am. No. 103, 2004
s. 249K...........................................am. No. 117, 2001
s. 249L ...........................................am. No. 103, 2004; No. 42, 2011
s. 249LA ........................................ad. No. 103, 2004
Division 5
s. 249V...........................................am. No. 103, 2004
Division 6
s. 249X...........................................am. No. 103, 2004
s. 249Z ...........................................am. No. 117, 2001
s. 250A...........................................am. No. 117, 2001; No. 103, 2004; No. 42, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 483
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 250B...........................................am. No. 103, 2004
s. 250BA........................................am. No. 122, 2001; No. 103, 2004
s. 250BB ........................................ad. No. 42, 2011
s. 250BC ........................................ad. No. 42, 2011
s. 250BD........................................ad. No. 42, 2011
s. 250D...........................................am. No. 103, 2004
Division 7
s. 250H...........................................am. No. 42, 2011
Division 8
s 250N............................................am No 117, 2001; No 17, 2017
s. 250P ...........................................am. No. 117, 2001
s. 250PAA......................................ad. No. 132, 2007
s. 250PAB......................................ad. No. 132, 2007
s. 250PA ........................................ad. No. 103, 2004
s. 250R...........................................am. No. 103, 2004; No. 42, 2011; No. 73, 2012
s. 250RA........................................ad. No. 103, 2004
s. 250S ...........................................am. No. 117, 2001
s. 250SA ........................................ad. No. 103, 2004
s. 250T ...........................................am. No. 117, 2001; No. 103, 2004
Division 9
Division 9 ......................................ad. No. 42, 2011
s. 250U...........................................ad. No. 42, 2011
s. 250V...........................................ad. No. 42, 2011
s. 250W..........................................ad. No. 42, 2011
s. 250X...........................................ad. No. 42, 2011
s. 250Y...........................................ad. No. 42, 2011
Part 2G.3
s. 251A...........................................am. No. 117, 2001
s. 251AA........................................am. No. 122, 2001
s. 251B...........................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
484 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 2G.4
Division 1
s. 252C...........................................am. No. 117, 2001
Division 2
s. 252H...........................................am. No. 117, 2001
Division 5
s. 252X...........................................am. No. 117, 2001
s. 252Y...........................................am. No. 117, 2001
s. 252Z ...........................................am. No. 116, 2003
Division 6
s. 253F ...........................................am. No. 122, 2001
Division 7
s. 253M..........................................am. No. 117, 2001
s. 253N...........................................am. No. 117, 2001
Chapter 2H
Part 2H.1
s. 254G...........................................am. No. 116, 2003
s. 254H...........................................am. No. 117, 2001
Part 2H.2
s. 254J............................................am. No. 180, 2012
s. 254K...........................................am. No. 180, 2012
Part 2H.3
s 254N............................................am No 117, 2001; No 11, 2016
s. 254Q...........................................am. No. 117, 2001; No. 180, 2012
Part 2H.5
s. 254SA ........................................ad. No. 66, 2010
s. 254T ...........................................rs. No. 66, 2010
Part 2H.6
s. 254X...........................................am. No. 117, 2001; No. 24, 2003
s. 254Y...........................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 485
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Chapter 2J
Part 2J.1
Division 1
s. 256B...........................................am. No. 132, 2007; No. 180, 2012
s. 256C...........................................am. No. 24, 2003
s. 256D...........................................am. No. 180, 2012
s. 256E ...........................................am. No. 122, 2001
Division 2
s. 257B...........................................am. No. 122, 2001; No. 5, 2011
s. 257H...........................................am. No. 122, 2001
s. 257J............................................am. No. 122, 2001
Division 3
s. 258F ...........................................am. No. 66, 2010
Part 2J.2
s. 259A...........................................am No. 180, 2012
s. 259B...........................................am. No. 117, 2001; No. 180, 2012
s. 259D...........................................am. No. 117, 2001
Part 2J.3
s. 260A...........................................am. No. 180, 2012
Chapter 2K.....................................rep. No. 96, 2010
s. 261 .............................................rep. No. 96, 2010
s. 262 .............................................am. No. 24, 2003
rep. No. 96, 2010
s. 263 .............................................rep. No. 96, 2010
s. 264 .............................................am. No. 101, 2007
rep. No. 96, 2010
s. 265 .............................................rep. No. 96, 2010
s. 265A...........................................rep. No. 96, 2010
ss. 266–271 ....................................rep. No. 96, 2010
s. 272 .............................................am. No. 101, 2007
rep. No. 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
486 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 273A...........................................am. No. 116, 2003
rep. No. 96, 2010
s. 273B...........................................am. No. 116, 2003
rep. No. 96, 2010
s. 273C...........................................am. No. 116, 2003
rep. No. 96, 2010
s. 273D...........................................rep. No. 96, 2010
s. 274 .............................................am. No. 101, 2007
rep. No. 96, 2010
ss. 277–282 ....................................rep. No. 96, 2010
Chapter 2L
Part 2L.1
s. 283AA........................................am. No. 117, 2001; No. 103, 2004; No. 101, 2007; No 100, 2014
s. 283AB ........................................am. No. 117, 2001
s 283AC.........................................am No 117, 2001; No 75, 2009; No 108, 2009; No 11, 2016
Part 2L.2
s. 283BC ........................................rs. No. 108, 2009
s. 283BCA .....................................ad. No. 108, 2009
s. 283BE ........................................am. No. 96, 2010
s. 283BF.........................................am. No. 96, 2010
s. 283BG........................................rs. No. 96, 2010
s. 283BH........................................am. No. 117, 2001; No. 96, 2010
Part 2L.3
s. 283CC ........................................am. No. 96, 2010
s. 283CD........................................rs. No. 96, 2010
Part 2L.4
s. 283DA........................................am. No. 96, 2010
Chapter 2M
Part 2M.1
s. 285 .............................................am. No. 103, 2004; No. 101, 2007; No. 66, 2010
s. 285A...........................................ad. No. 66, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 487
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 2M.2
s. 286 .............................................am. No. 117, 2001
s. 287 .............................................am. No. 117, 2001
s. 288 .............................................am. No. 117, 2001
s. 289 .............................................am. No. 117, 2001
Part 2M.3
Division 1
s. 292 .............................................am. No. 66, 2010
s. 294 .............................................am. No. 117, 2001
s. 294A...........................................ad. No. 66, 2010
s. 294B...........................................ad. No. 66, 2010
s. 295 .............................................am. No. 103, 2004; No. 66, 2010
s. 295A...........................................ad. No. 103, 2004
s. 296 .............................................am. No. 66, 2010
s 298 ..............................................am No 103, 2004; No 66, 2010; No 17, 2017
s. 299A...........................................ad. No. 103, 2004
am. No. 66, 2010
s. 300 .............................................am. No. 122, 2001; No. 103, 2004; No. 72, 2012
s 300A............................................am No 55, 2001; No 122, 2001; No 103, 2004; No 101, 2007; No 42,
2011; No 19, 2015
s. 300B...........................................ad. No. 66, 2010
s 301 ..............................................am No 66, 2010; No 36, 2015; No 17, 2017
Division 2
s. 303 .............................................am. No. 103, 2004; No. 66, 2010
s. 306 .............................................am. No. 103, 2004; No. 5, 2011
Division 3
s. 307 .............................................am. No. 103, 2004
s. 307A...........................................ad. No. 103, 2004
am. No. 66, 2010
s. 307B...........................................ad. No. 103, 2004
am. No. 66, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
488 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 307C...........................................ad. No. 103, 2004
am. No. 101, 2007; No. 66, 2010
s. 308 .............................................am. No. 117, 2001; No. 103, 2004; No. 101, 2007; No. 66, 2010
s. 309 .............................................am. No. 103, 2004
s. 311 .............................................am. No. 117, 2001
rs. No. 103, 2004
am. No. 72, 2012
s. 312 .............................................am. No. 117, 2001
s. 313 .............................................am. No. 117, 2001
Division 4
s 314 ..............................................am No 117, 2001; No 103, 2004; No 101, 2007; No 66, 2010; No 5,
2011; No 17, 2017
s. 315 .............................................am. No. 101, 2007
s. 316 .............................................am. No. 117, 2001; No. 66, 2010
s. 316A...........................................ad. No. 66, 2010
s. 317 .............................................am. No. 117, 2001; No. 103, 2004; No. 66, 2010
s. 318 .............................................am. No. 117, 2001; No. 101, 2007
Division 5
s. 319 .............................................am. No. 117, 2001; No. 116, 2003; No. 101, 2007; No. 66, 2010;
No. 180, 2012
s. 320 .............................................am. No. 117, 2001
s. 321 .............................................am. No. 117, 2001
s. 322 .............................................am. No. 117, 2001
Division 6
s. 323 .............................................am. No. 117, 2001
s. 323B...........................................am. No. 117, 2001
Division 7
s 323D............................................am No 117, 2001; No 66, 2010; No 19, 2015
Division 8
s. 323DA........................................am. No. 122, 2001
Division 9 ......................................ad. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 489
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
rep. No. 118, 2012
s. 323EA ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EB ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EC ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323ED ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EE.........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EF.........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EG ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EH ........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EI..........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EJ..........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EK ........................................ad. No. 103, 2004
am. No. 5, 2011
rep. No. 118, 2012
s. 323EL.........................................ad. No. 103, 2004
rep. No. 118, 2012
s. 323EM........................................ad. No. 103, 2004
rep. No. 118, 2012
Part 2M.4
Division 1
Division 1 heading.........................rs. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
490 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 324 .............................................rep. No. 103, 2004
s. 324AA........................................ad. No. 103, 2004
s. 324AB ........................................ad. No. 103, 2004
s. 324AC ........................................ad. No. 103, 2004
s. 324AD........................................ad. No. 103, 2004
s. 324AE ........................................ad. No. 103, 2004
am. No. 101, 2007
s. 324AF ........................................ad. No. 103, 2004
Division 2
Division 2 ......................................ad. No. 103, 2004
s. 324BA........................................ad. No. 103, 2004
s. 324BB ........................................ad. No. 103, 2004
am. No. 127, 2011
s. 324BC ........................................ad. No. 103, 2004
s. 324BD........................................ad. No. 103, 2004
s. 324BE ........................................ad. No. 66, 2010
am No 169, 2012
Division 3
Division 3 ......................................ad. No. 103, 2004
Subdivision A
s 324CA.........................................ad No 103, 2004
am No 101, 2007; No 17, 2017
s 324CB .........................................ad No 103, 2004
am No 101, 2007; No 17, 2017
s 324CC .........................................ad No 103, 2004
am No 101, 2007; No 17, 2017
s. 324CD........................................ad. No. 103, 2004
Subdivision B
s 324CE .........................................ad No 103, 2004
am No 101, 2007; No 17, 2017
s 324CF..........................................ad No 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 491
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am No 101, 2007; No 17, 2017
s 324CG.........................................ad No 103, 2004
am No 101, 2007; No 17, 2017
s. 324CH........................................ad. No. 103, 2004
am. No. 101, 2007; No. 75, 2009; No. 66, 2010
s. 324CI..........................................ad. No. 103, 2004
am. No. 101, 2007
s. 324CJ .........................................ad. No. 103, 2004
am. No. 101, 2007
s. 324CK........................................ad. No. 103, 2004
am. No. 101, 2007
Subdivision C
s. 324CL ........................................ad. No. 103, 2004
Division 4
Division 4 ......................................ad. No. 103, 2004
s. 324CM .......................................ad. No. 103, 2004
Division 5
Division 5 ......................................ad. No. 103, 2004
s. 324DA........................................ad. No. 103, 2004
am. No. 72, 2012
s. 324DAA.....................................ad. No. 72, 2012
s. 324DAB .....................................ad. No. 72, 2012
s. 324DAC .....................................ad. No. 72, 2012
s. 324DAD.....................................ad. No. 72, 2012
s. 324DB........................................ad. No. 103, 2004
s. 324DC........................................ad. No. 103, 2004
am. No. 72, 2012
s. 324DD........................................ad. No. 103, 2004
am. No. 72, 2012
Division 6
Division 6 heading.........................ad. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
492 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision A
Subdivision A heading...................ad No 103, 2004
s 327 ..............................................rep No 103, 2004
s 327A............................................ad No 103, 2004
am No 19, 2015; No 17, 2017
s 327B............................................ad No 103, 2004
am No 101, 2007; No 19, 2015
s 327C............................................ad No 103, 2004
am No 19, 2015
s. 327D...........................................ad. No. 103, 2004
s. 327E ...........................................ad. No. 103, 2004
s. 327F ...........................................ad. No. 103, 2004
s. 327G...........................................ad. No. 103, 2004
s. 327H...........................................ad. No. 103, 2004
s. 327I ............................................ad. No. 103, 2004
s. 328 .............................................rep. No. 103, 2004
s. 328A...........................................ad. No. 103, 2004; No. 180, 2012
s. 328B...........................................ad. No. 103, 2004; No. 180, 2012
s 328C............................................ad No 17, 2017
s 328D............................................ad No 17, 2017
s 328E ............................................ad No 17, 2017
Subdivision B
Subdivision B heading ...................ad. No. 103, 2004
s. 329 .............................................am. No. 103, 2004; No. 66, 2010
s. 330 .............................................am. No. 103, 2004
Subdivision C
Subdivision C heading ...................ad. No. 103, 2004
Division 7
Division 2 heading.........................rep. No. 103, 2004
Division 7 heading.........................ad. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 493
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision A
Subdivision A heading...................ad. No. 103, 2004
s. 331AA........................................rep. No. 103, 2004
s. 331AB ........................................rep. No. 103, 2004
s. 331AAA.....................................ad. No. 103, 2004
am. No. 101, 2007
s. 331AAB .....................................ad. No. 103, 2004
s. 331AAC .....................................ad. No. 103, 2004
s. 331AAD.....................................ad. No. 103, 2004
Subdivision B
Subdivision B heading ...................ad. No. 103, 2004
s. 331AC ........................................am. No. 103, 2004
s. 331AD........................................am. No. 103, 2004
Subdivision C
Subdivision C heading ...................ad. No. 103, 2004
Part 2M.4A
Part 2M.4A ....................................ad. No. 72, 2012
s. 332 .............................................ad. No. 72, 2012
s. 332A...........................................ad. No. 72, 2012
s. 332B...........................................ad. No. 72, 2012
s. 332C...........................................ad. No. 72, 2012
s. 332D...........................................ad. No. 72, 2012
s. 332E ...........................................ad. No. 72, 2012
s. 332F ...........................................ad. No. 72, 2012
s. 332G...........................................ad. No. 72, 2012
Part 2M.5
Part 2M.5 heading..........................rs. No. 103, 2004
s. 334 .............................................am. No. 154, 2007
s. 336 .............................................ad. No. 103, 2004
am. No. 154, 2007
s. 337 .............................................rs. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
494 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 338 .............................................ad. No. 103, 2004
s. 339 .............................................rep. No. 103, 2004
Part 2M.6
s. 340 .............................................am. No. 103, 2004; No. 101, 2007
s. 341 .............................................am. No. 103, 2004; No. 101, 2007
s. 342 .............................................rs. No. 101, 2007
s. 342AA........................................ad. No. 101, 2007
s. 342AB ........................................ad. No. 101, 2007
s. 342AC ........................................ad. No. 101, 2007
s. 342A...........................................ad. No. 103, 2004
s. 342B...........................................ad. No. 103, 2004
Part 2M.7
s. 344 .............................................am. No. 72, 2012
Chapter 2N
Chapter 2N heading .......................rs. No. 24, 2003
Part 2N.1
Part 2N.1........................................rs. No. 24, 2003
s. 345 .............................................am. No. 117, 2001
rep. No. 24, 2003
s. 345A...........................................ad. No. 24, 2003
s. 345B...........................................ad. No. 24, 2003
s. 345C...........................................ad. No. 24, 2003
s. 346 .............................................am. No. 117, 2001
rep. No. 24, 2003
Part 2N.2
Part 2N.2 heading ..........................rep. No. 24, 2003
Part 2N.2........................................ad. No. 24, 2003
s. 346A...........................................ad. No. 24, 2003
s. 346B...........................................ad. No. 24, 2003
s. 346C...........................................ad. No. 24, 2003
s. 347 .............................................rep. No. 24, 2003
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 495
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 2N.3
Part 2N.3........................................ad. No. 24, 2003
s. 347A...........................................ad. No. 24, 2003
s. 347B...........................................ad. No. 24, 2003
s. 347C...........................................ad. No. 24, 2003
s. 348 .............................................rep. No. 24, 2003
Part 2N.4
Part 2N.4........................................ad. No. 24, 2003
s. 348A...........................................ad. No. 24, 2003
am. No. 101, 2007
s. 348B...........................................ad. No. 24, 2003
s. 348C...........................................ad. No. 24, 2003
s. 348D...........................................ad. No. 24, 2003
am. No. 103, 2004; No. 101, 2007
s. 349 .............................................rep. No. 24, 2003
Part 2N.5
Part 2N.5........................................ad. No. 24, 2003
s. 349A...........................................ad. No. 24, 2003
s. 349B...........................................ad. No. 24, 2003
s. 349C...........................................ad. No. 24, 2003
s. 349D...........................................ad. No. 24, 2003
Chapter 2P
Chapter 2P heading........................ad. No. 24, 2003
s. 350 .............................................rs. No. 122, 2001
s. 352 .............................................am. No. 24, 2003; No. 101, 2007
s. 353 .............................................ad. No. 24, 2003
s. 354 .............................................ad. No. 24, 2003
am. No. 5, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
496 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Chapter 5
Part 5.1
s 411 ..............................................am No 116, 2003; No 103, 2004; No 132, 2007; No 96, 2010; No 150,
2010; No 11, 2016; No 55, 2017
s. 412 .............................................am. No. 48, 2012
s. 413 .............................................am. No. 96, 2010
s 415A............................................ad No 11, 2016
s 415B............................................ad No 11, 2016
s 415C............................................ad No 11, 2016
Part 5.2
s. 417 .............................................am. No. 126, 2006
s 418 ..............................................am No 103, 2004; No 96, 2010; No 11, 2016
s. 418A...........................................am. No. 96, 2010
s. 419 .............................................am. No. 96, 2010
s. 419A...........................................am. No. 96, 2010; No. 35, 2011
s. 420 .............................................am. No. 96, 2010
s. 420B...........................................am. No. 96, 2010
s. 421 .............................................am. No. 132, 2007
s. 421A...........................................am. No. 132, 2007
s. 422 .............................................am. No. 103, 2004; No. 132, 2007
s 422A............................................ad No 11, 2016
s 422B............................................ad No 11, 2016
s 422C............................................ad No 11, 2016
s 422D............................................ad No 11, 2016
s. 425 .............................................am. No. 132, 2007
s 426 ..............................................am No 11, 2016
s. 427 .............................................am. No. 132, 2007; No. 96, 2010
s 428 ..............................................am No 117, 2001
s 429 ..............................................am No 96, 2010; No 11, 2016
s 432 ..............................................am No 96, 2010; No 11, 2016
s. 433 .............................................am. No. 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 497
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 434B...........................................am. No. 96, 2010
s. 434C...........................................am. No. 96, 2010
s. 434D...........................................ad. No. 132, 2007
s. 434E ...........................................ad. No. 132, 2007
s. 434F ...........................................ad. No. 132, 2007
s. 434G...........................................ad. No. 132, 2007
s 434H............................................ad No 11, 2016
Part 5.3A
Division 1
s 435A............................................am No 11, 2016
s. 435B...........................................am. No. 96, 2010
s 435C............................................am No 105, 2008; No 11, 2016
Division 2
s. 436A...........................................am. No. 132, 2007
s. 436B...........................................am. No. 132, 2007
s. 436C...........................................am. No. 132, 2007; No. 96, 2010
s 436DA.........................................ad No 132, 2007
am No 11, 2016
s 436E ............................................am No 132, 2007; No 48, 2012; No 11, 2016
s 436F ............................................rep No 11, 2016
s 436G............................................am No 132, 2007
rep No 11, 2016
Division 3
s. 437A...........................................ad. No. 96, 2010
s 437C............................................am No 117, 2001; No 103, 2004
rep No 11, 2016
s. 437D...........................................am. No. 103, 2004
s. 437F ...........................................rs. No. 132, 2007
Division 4
s 438B............................................am No 117, 2001; No 132, 2007; No 11, 2016
s. 438C...........................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
498 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 438D...........................................am. No. 103, 2004
s 438E ............................................ad No 132, 2007
rep No 11, 2016
Division 5
s 439A............................................am No 132, 2007; No 48, 2012; No 11, 2016
s 439B............................................am No 132, 2007
rep No 11, 2016
s 439C............................................am No 11, 2016
Division 6
s 440A............................................am No 11, 2016
s. 440B...........................................rs. No. 96, 2010
ss. 440BA, 440BB .........................ad. No. 132, 2007
rep. No. 96, 2010
s. 440C...........................................rep. No. 96, 2010
s. 440J............................................am. No. 144, 2008
s. 440JA .........................................ad. No. 132, 2007
am. No. 96, 2010
Division 7
Division 7 heading.........................rs. No. 132, 2007; No. 96, 2010
Subdivision A
Subdivision A heading...................ad. No. 96, 2010
s. 441 .............................................ad. No. 96, 2010
Subdivision B
Subdivision B heading ...................ad. No. 96, 2010
s. 441AA........................................ad. No. 96, 2010
s 441A............................................am No 132, 2007
rs No 96, 2010
am No 11, 2016
s 441B............................................am No 132, 2007; No 96, 2010; No 11, 2016
s 441C............................................rs No 96, 2010
am No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 499
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 441D...........................................am. No. 132, 2007; No. 96, 2010
s 441E ............................................am No 96, 2010; No 11, 2016
s. 441EA ........................................ad. No. 96, 2010
am. No. 35, 2011
Subdivision C
Subdivision C heading ...................ad. No. 96, 2010
s. 441EB ........................................ad. No. 96, 2010
s 441F ............................................am No 96, 2010; No 11, 2016
s 441G............................................am No 96, 2010; No 11, 2016
s 441J.............................................am No 11, 2016
s. 441JA .........................................ad. No. 132, 2007
rep. No. 96, 2010
s. 441K...........................................rep. No. 96, 2010
Division 8
s. 442B...........................................rs. No. 96, 2010
s 442C............................................am No 132, 2007; No 96, 2010; No 11, 2016
s 442CA.........................................ad No 132, 2007
am No 96, 2010
s. 442CB ........................................ad. No. 132, 2007
am. No. 96, 2010
s. 442CC ........................................ad. No. 132, 2007
am. No. 96, 2010
s. 442D...........................................am. No. 96, 2010
Division 9
Subdivision A
s. 443A...........................................am. No. 132, 2007; No. 96, 2010
s 443B............................................am No 132, 2007; No 96, 2010; No 35, 2011; No 11, 2016
s 443BA.........................................am No 123, 2001; No 101, 2006; No 79, 2010
Subdivision B
s 443D............................................am No 132, 2007; No 96, 2010; No 11, 2016
s. 443E ...........................................am. No. 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
500 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
rs. No. 96, 2010
s. 443F ...........................................am. No. 96, 2010
Division 10
s. 444A...........................................am. No. 132, 2007
s 444B............................................am No 132, 2007; No 11, 2016
s. 444D...........................................am. No. 132, 2007; No. 96, 2010
s. 444DA........................................ad. No. 132, 2007
s. 444DB........................................ad. No. 132, 2007
s. 444E ...........................................am. No. 96, 2010
s. 444F ...........................................am. No. 132, 2007; No. 96, 2010
s. 444GA........................................ad. No. 132, 2007
s. 444J............................................ad. No. 132, 2007
Division 11
s 445A............................................am No 11, 2016
s 445C............................................am No 132, 2007; No 11, 2016
s. 445CA........................................ad. No. 132, 2007
s 445D............................................am No 132, 2007; No 11, 2016
s 445E ............................................am No 11, 2016
s 445F ............................................am No 132, 2007
rep No 11, 2016
s. 445FA ........................................ad. No. 132, 2007
Division 11AA
Division 11AA...............................ad No 11, 2016
s 445HA.........................................ad No 11, 2016
Division 11A..................................ad No 132, 2007
rep No 11, 2016
s 445J.............................................ad No 132, 2007
rep No 11, 2016
Division 12
s 446A............................................am No 132, 2007; No 48, 2012; No 11, 2016
s 446AA.........................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 501
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 446B............................................am No 11, 2016
s. 446C...........................................ad. No. 132, 2007
am. No. 96, 2010
Division 13
s 447D............................................rep No 11, 2016
s 448E ............................................rep No 11, 2016
Division 14
s. 448B...........................................am. No. 117, 2001
s. 448C...........................................am. No. 117, 2001; No. 103, 2004; No. 132, 2007; No. 75, 2009;
No. 96, 2010
s 448D............................................rep No 11, 2016
Division 15
Division 15 heading .......................rs No 11, 2016
s 449B............................................am No 132, 2007
rep No 11, 2016
s 449C............................................am No 132, 2007; No 96, 2010; No 48, 2012; No 11, 2016
s 449CA.........................................ad No 132, 2007
am No 11, 2016
s 449D............................................rep No 11, 2016
s 449E ............................................am No 132, 2007
rep No 11, 2016
Division 16
s. 450A...........................................am. No. 132, 2007; No. 96, 2010; No. 48, 2012
s 450B............................................am No 132, 2007; No 11, 2016
s. 450C...........................................am. No. 132, 2007
s. 450D...........................................am. No. 132, 2007
s. 450E ...........................................am. No. 117, 2001; No. 132, 2007
Part 5.4
Division 1
s. 459C...........................................am. No. 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
502 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 2
s. 459E ...........................................am. No. 123, 2001; No. 101, 2006
Part 5.4A
s. 461 .............................................am. No. 105, 2008
s. 462 .............................................am. No. 119, 2001; No. 105, 2008
Part 5.4B
Division 1A
Division 1A....................................ad. No. 96, 2010
s. 465 .............................................ad. No. 96, 2010
Division 1
s 465A............................................am No 48, 2012; No 11, 2016
s. 466 .............................................am. No. 103, 2004
s. 467 .............................................am. No. 96, 2010
s. 468 .............................................am. No. 132, 2007
s. 468A...........................................ad. No. 132, 2007
Division 1A
s 471A............................................am No 117, 2001; No 103, 2004
rep No 11, 2016
s 471C............................................am No 96, 2010; No 11, 2016
Division 2
s 472 ..............................................am No 11, 2016
s 473 ..............................................am No 132, 2007
rs No 11, 2016
s 473A............................................ad No 11, 2016
s. 474 .............................................am. No. 96, 2010
s 475 ..............................................am No 117, 2001; No 11, 2016
s 476 ..............................................rep No 11, 2016
s 477 ..............................................am No 132, 2007; No 96, 2010; No 11, 2016
s 479 ..............................................rep No 11, 2016
s 481 ..............................................am No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 503
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 3
Subdivision A
Subdivision A heading...................ad. No. 132, 2007
s 482 ..............................................am No 132, 2007; No 75, 2009; No 11, 2016
s. 483 .............................................am. No. 103, 2004; No. 96, 2010
s. 486A...........................................am. No. 117, 2001; No. 103, 2004; No. 132, 2007
s. 486B...........................................ad. No. 132, 2007
s 488 ..............................................am No 11, 2016
Subdivision B
Subdivision B ................................ad. No. 132, 2007
s. 489A...........................................ad. No. 132, 2007
s. 489B...........................................ad. No. 132, 2007
s. 489C...........................................ad. No. 132, 2007
s 489D............................................ad No 132, 2007
am No 11, 2016
s. 489E ...........................................ad. No. 132, 2007
Part 5.4C
Part 5.4C........................................ad. No. 48, 2012
s. 489EA ........................................ad. No. 48, 2012
s. 489EB ........................................ad. No. 48, 2012
s 489EC .........................................ad No 48, 2012
am No 11, 2016
Part 5.5
Division 1A
Division 1A....................................ad. No. 96, 2010
s. 489F ...........................................ad. No. 96, 2010
Division 1
s. 490 .............................................am. No. 108, 2009
s 491 ..............................................am No 48, 2012; No 11, 2016
s. 493 .............................................am. No. 132, 2007
s. 493A...........................................ad. No. 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
504 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 2
s 495 ..............................................am No 132, 2007
rs No 11, 2016
s 496 ..............................................am No 117, 2001; No 132, 2007; No 11, 2016
Division 3
s 497 ..............................................am No 117, 2001; No 132, 2007; No 48, 2012
rs No 11, 2016
s 498 ..............................................am No 48, 2012
rep No 11, 2016
s 499 ..............................................am No 132, 2007; No 11, 2016
s. 500 .............................................am. No. 103, 2004; No. 96, 2010
Division 4
s 502 ..............................................rep No 11, 2016
s 503 ..............................................rep No 11, 2016
s 504 ..............................................am No 132, 2007
rep No 11, 2016
s 505 ..............................................am No 96, 2010
rep No 11, 2016
s 506 ..............................................am No 132, 2007; No 11, 2016
s 506A............................................ad No 132, 2007
rs No 11, 2016
am No 11, 2016
s 508 ..............................................am No 132, 2007
rep No 11, 2016
s 509 ..............................................am No 48, 2012
rs No 11, 2016
s 510 ..............................................am No 96, 2010
s 511 ..............................................rep No 11, 2016
s 512 ..............................................rep No 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 505
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 5.6
Division 1
s. 513AA........................................ad. No. 96, 2010
Division 1A
s 513B............................................am No 11, 2016
Division 3
s. 530 .............................................ad. No. 132, 2007
s. 530AA........................................ad. No. 132, 2007
s. 530A...........................................am. No. 117, 2001; No. 103, 2004
s. 530B...........................................am. No. 117, 2001
s 531 ..............................................rep No 11, 2016
s 532 ..............................................am No 117, 2001; No 103, 2004; No 75, 2009; No 96, 2010; No 11,
2016
s. 533 .............................................am. No. 103, 2004; No. 132, 2007
s. 534 .............................................am. No. 96, 2010
s 536 ..............................................rep No 11, 2016
s 538 ..............................................am No 132, 2007
rep No 11, 2016
s 539 ..............................................am No 132, 2007
rep No 11, 2016
s 540 ..............................................rep No 11, 2016
Division 4
s 541 ..............................................am No 117, 2001
s 542 ..............................................rep No 11, 2016
s 546 ..............................................rep No 11, 2016
s 547 ..............................................rep No 11, 2016
Division 5 ......................................rep No 11, 2016
s 548 ..............................................am No 132, 2007
rep No 11, 2016
s 548A............................................ad No 132, 2007
rep No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
506 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 549 ..............................................am No 132, 2007
rep No 11, 2016
s 550 ..............................................am No 132, 2007
rep No 11, 2016
s 551 ..............................................rep No 11, 2016
s 552 ..............................................rep No 11, 2016
Division 6
Subdivision A
s 553 ..............................................am No 132, 2007; No 11, 2016
s. 553AB ........................................ad. No. 132, 2007
am. No. 99, 2012
s. 553E ...........................................am. No. 96, 2010
Subdivision C
s. 554E ...........................................am. No. 96, 2010
s. 554F ...........................................am. No. 96, 2010
s. 554G...........................................am. No. 96, 2010
s. 554J............................................am. No. 96, 2010
Subdivision D
s 556 ..............................................am No 132, 2007; No 144, 2008; No 99, 2012; No 61, 2013; No 11,
2016
s. 560 .............................................rs. No. 132, 2007
s. 561 .............................................am. No. 96, 2010
s. 563A...........................................rs. No. 150, 2010
Subdivision E
s. 563B...........................................am. No. 150, 2010
Division 7
s. 565 .............................................am. No. 132, 2007
Division 7A
s. 568 .............................................am. No. 96, 2010
s. 568A...........................................am. No. 132, 2007; No. 48, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 507
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 8
Division 8 ......................................ad. No. 132, 2007
Subdivision A
s. 571 .............................................ad. No. 132, 2007
am. No. 96, 2010
s. 572 .............................................ad. No. 132, 2007
s. 573 .............................................ad. No. 132, 2007
s 574 ..............................................ad No 132, 2007
rep No 11, 2016
s 575 ..............................................ad No 132, 2007
rep No 11, 2016
s 576 ..............................................ad No 132, 2007
rep No 11, 2016
s 577 ..............................................ad No 132, 2007
am No 11, 2016
s 578 ..............................................ad No 132, 2007
am No 11, 2016
s 579 ..............................................ad No 132, 2007
am No 11, 2016
s 579A............................................ad No 132, 2007
am No 11, 2016
s 579B............................................ad No 132, 2007
am No 11, 2016
s 579C............................................ad No 132, 2007
am No 11, 2016
s. 579D...........................................ad. No. 132, 2007
Subdivision B
s. 579E ...........................................ad. No. 132, 2007
am. No. 96, 2010
s. 579F ...........................................ad. No. 132, 2007
s. 579G...........................................ad. No. 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
508 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 579H...........................................ad. No. 132, 2007
s. 579J............................................ad. No. 132, 2007
am. No. 5, 2011
s. 579K...........................................ad. No. 132, 2007
am. No. 5, 2011
s 579L............................................ad No 132, 2007
am No 11, 2016
Subdivision C
s. 579M..........................................ad. No. 132, 2007
s. 579N...........................................ad. No. 132, 2007
s. 579P ...........................................ad. No. 132, 2007
s. 579Q...........................................ad. No. 132, 2007
Part 5.7
s. 585 .............................................am. No. 103, 2004
s. 588 .............................................am. No. 74, 2007; No. 96, 2010
Part 5.7B
Division 1
s. 588C...........................................ad. No. 96, 2010
s. 588E ...........................................am. No. 96, 2010
s. 588F ...........................................am. No. 123, 2001; No. 101, 2006
Division 2
s. 588FDA......................................ad. No. 25, 2003
s. 588FE.........................................am. No. 25, 2003; No. 132, 2007
s. 588FF .........................................am. No. 25, 2003; No. 132, 2007
s. 588FG ........................................am. No. 25, 2003
s 588FGA.......................................am No 123, 2001; No 101, 2006; No 99, 2012; No 11, 2016
s. 588FJ..........................................am. No. 96, 2010
Division 2A
Division 2A....................................ad. No. 96, 2010
s. 588FK ........................................ad. No. 96, 2010
s. 588FL.........................................ad. No. 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 509
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 35, 2011
s. 588FM........................................ad. No. 96, 2010
am. No. 35, 2011
s. 588FN ........................................ad. No. 96, 2010
am. No. 35, 2011
s. 588FO ........................................ad. No. 96, 2010
Division 2B
Division 2B....................................ad. No. 96, 2010
s. 588FP .........................................ad. No. 96, 2010
Division 3
s. 588G...........................................am. No. 117, 2001
Part 5.8
s. 589 .............................................am. No. 96, 2010; No. 48, 2012
s. 590 .............................................am. No. 117, 2001; No. 103, 2004
s. 592 .............................................am. No. 117, 2001
s. 593 .............................................am. No. 96, 2010
s. 595 .............................................am. No. 117, 2001; No. 132, 2007
s. 596 .............................................am. No. 117, 2001; No. 103, 2004; No. 96, 2010
Part 5.8A
s 596AA.........................................am No 61, 2013
Part 5.9
Division 1
s. 596A...........................................am. No. 103, 2004
s. 597 .............................................am. No. 117, 2001
s. 597A...........................................am. No. 117, 2001; No. 132, 2007
Division 3
s 599 ..............................................ad No 11, 2016
s 600AA.........................................ad No 48, 2012
s 600A............................................rep No 11, 2016
s 600B............................................rep No 11, 2016
s 600C............................................rep No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
510 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 600D............................................rep No 11, 2016
s 600E ............................................rep No 11, 2016
s 600G............................................ad No 132, 2007
am No 11, 2016
s 600H............................................ad No 150, 2010
s 600J.............................................ad No 11, 2016
Division 4
Division 4 ......................................ad No 11, 2016
s 600K............................................ad No 11, 2016
Chapter 5A
Part 5A.1
s. 601 .............................................ad. No. 96, 2010
s. 601AA........................................am. No. 48, 2012
s 601AB.........................................am No 24, 2003; No 48, 2012; No 45, 2017
s 601AC.........................................am No 11, 2016
s 601AD.........................................am No 117, 2001; No 74, 2007; No 11, 2016
s. 601AE ........................................am. No. 74, 2007; No. 96, 2010; No 36, 2015
s. 601AF ........................................am. No. 74, 2007
s 601AH.........................................am No 74, 2007; No 48, 2012; No 45, 2017
Part 5A.2
s. 601AI .........................................am. No. 126, 2006
s. 601AJ .........................................am. No. 126, 2006
s. 601AK........................................am. No. 126, 2006
s. 601AL ........................................am. No. 126, 2006
Chapter 5B
Part 5B.1
Division 1
s 601BC .........................................am No 117, 2001; No 24, 2003; No 96, 2010; No 11, 2016
s. 601BH........................................am. No. 117, 2001
s. 601BJ .........................................am. No. 117, 2001
s. 601BK........................................am. No. 117, 2001; No. 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 511
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 2
s. 601BM .......................................am. No. 96, 2010
s. 601BP.........................................am. No. 117, 2001
s. 601BR ........................................am. No. 117, 2001
Part 5B.2
Division 1A
Division 1A....................................ad. No. 96, 2010
s. 601C...........................................ad. No. 96, 2010
Division 1
s. 601CB ........................................am. No. 96, 2010
Division 2
s. 601CDA .....................................ad. No. 85, 2007
s. 601CE ........................................am. No. 96, 2010
Division 3
s. 601CTA......................................ad. No. 85, 2007
s. 601CW .......................................am. No. 117, 2001
Division 4
s. 601CZB......................................am. No. 117, 2001
s. 601CZC......................................am. No. 117, 2001
Part 5B.3
s. 601DC........................................am. No. 127, 2011
s. 601DD........................................am. No. 117, 2001; No. 127, 2011
s. 601DE ........................................am. No. 117, 2001; No. 24, 2003
s. 601DH........................................am. No. 117, 2001
Chapter 5C
Part 5C.1
s. 601EC ........................................rs. No. 24, 2003
s. 601ED ........................................am. Nos. 55 and 122, 2001
Part 5C.2
Division 1
s. 601FA ........................................am. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
512 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 601FC.........................................am. Nos. 55 and 117, 2001; No. 101, 2007; No. 180, 2012
s. 601FD ........................................am. Nos. 55, 117 and 122, 2001
s. 601FE.........................................am. No. 55, 2001
s. 601FF .........................................am. No. 117, 2001
s. 601FG ........................................am. No. 55, 2001
Part 5C.4
s. 601HD........................................am. No. 117, 2001
s. 601HG........................................am. No. 117, 2001; No. 103, 2004; No. 101, 2007; No. 72, 2012
Part 5C.5
s. 601JA .........................................am. No. 117, 2001; No. 103, 2004; No. 144, 2008
s. 601JB .........................................am. No. 117, 2001; No. 103, 2004; No. 144, 2008
s. 601JD .........................................am. Nos. 55 and 117, 2001
Part 5C.6
s. 601KA........................................am. No. 117, 2001
Part 5C.8
s. 601MB .......................................am. No. 122, 2001
Part 5C.10
s. 601PA ........................................am. No. 122, 2001
s. 601PB.........................................am. No. 24, 2003
Chapter 5D
Chapter 5D.....................................ad. No. 108, 2009
Part 5D.1
s. 601RAA .....................................ad. No. 108, 2009
s. 601RAB .....................................ad. No. 108, 2009
am. No. 24, 2011
s. 601RAC .....................................ad. No. 108, 2009
s. 601RAD .....................................ad. No. 108, 2009
s. 601RAE......................................ad. No. 108, 2009
Part 5D.2
Division 1
s. 601SAA......................................ad. No. 108, 2009
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 513
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 601SAB......................................ad. No. 108, 2009
s. 601SAC......................................ad. No. 108, 2009
Division 2
s. 601SBA......................................ad. No. 108, 2009
s. 601SBB ......................................ad. No. 108, 2009
s. 601SBC ......................................ad. No. 108, 2009
Division 3
s. 601SCA......................................ad. No. 108, 2009
am. No. 24, 2011
s. 601SCAA...................................ad. No. 24, 2011
s. 601SCB ......................................ad. No. 108, 2009
s. 601SCC ......................................ad. No. 108, 2009
s. 601SCD......................................ad. No. 24, 2011
Part 5D.3
Division 1
s. 601TAA .....................................ad. No. 108, 2009
am No. 171, 2012
s. 601TAB......................................ad. No. 108, 2009
am. No. 24, 2011
Division 2
s. 601TBA......................................ad. No. 108, 2009
s. 601TBB......................................ad. No. 108, 2009
s. 601TBC......................................ad. No. 108, 2009
s. 601TBD......................................ad. No. 108, 2009
s. 601TBE......................................ad. No. 108, 2009
am. No. 24, 2011
Division 3
s. 601TCA......................................ad. No. 108, 2009
s. 601TCB......................................ad. No. 24, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
514 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 4
Subdivision A
s. 601TDA .....................................ad. No. 108, 2009
s. 601TDB......................................ad. No. 108, 2009
s. 601TDC......................................ad. No. 108, 2009
s. 601TDD .....................................ad. No. 108, 2009
s. 601TDE......................................ad. No. 108, 2009
s. 601TDF ......................................ad. No. 108, 2009
Subdivision B
s. 601TDG .....................................ad. No. 108, 2009
s. 601TDH .....................................ad. No. 108, 2009
s. 601TDI.......................................ad. No. 108, 2009
s. 601TDJ.......................................ad. No. 108, 2009
Division 5
s. 601TEA......................................ad. No. 108, 2009
s. 601TEB ......................................ad. No. 108, 2009
Part 5D.4
s. 601UAA.....................................ad. No. 108, 2009
s. 601UAB .....................................ad. No. 108, 2009
Part 5D.5
Division 1
s. 601VAA.....................................ad. No. 108, 2009
s. 601VAB .....................................ad. No. 108, 2009
s. 601VAC .....................................ad. No. 108, 2009
s. 601VAD.....................................ad. No. 108, 2009
Division 2
s. 601VBA .....................................ad. No. 108, 2009
s. 601VBB .....................................ad. No. 108, 2009
s. 601VBC .....................................ad. No. 108, 2009
s. 601VBD .....................................ad. No. 108, 2009
s. 601VBE......................................ad. No. 108, 2009
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 515
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 601VBF......................................ad. No. 108, 2009
s. 601VBG .....................................ad. No. 108, 2009
s. 601VBH .....................................ad. No. 108, 2009
s. 601VBI.......................................ad. No. 108, 2009
Division 3
s. 601VCA .....................................ad. No. 108, 2009
s. 601VCB .....................................ad. No. 108, 2009
s. 601VCC .....................................ad. No. 108, 2009
Part 5D.6
Part 5D.6 heading ..........................rs. No. 24, 2011
Division 1
s. 601WAA ....................................ad. No. 108, 2009
am. No. 24, 2011
Division 2
s. 601WBA ....................................ad. No. 108, 2009
am. No. 24, 2011
s. 601WBB.....................................ad. No. 108, 2009
s. 601WBC.....................................ad. No. 108, 2009
s. 601WBD ....................................ad. No. 108, 2009
s. 601WBE.....................................ad. No. 108, 2009
am. No. 24, 2011
s. 601WBF.....................................ad. No. 108, 2009
am. No. 24, 2011
s. 601WBG ....................................ad. No. 108, 2009
am. No. 24, 2011
s. 601WBH ....................................ad. No. 108, 2009
s. 601WBI......................................ad. No. 108, 2009
am. No. 24, 2011
s. 601WBJ......................................ad. No. 108, 2009
s. 601WBK ....................................ad. No. 108, 2009
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
516 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 3
s. 601WCA ....................................ad. No. 108, 2009
s. 601WCB.....................................ad. No. 108, 2009
s. 601WCC.....................................ad. No. 108, 2009
s. 601WCD ....................................ad. No. 108, 2009
s. 601WCE.....................................ad. No. 108, 2009
s. 601WCF.....................................ad. No. 108, 2009
s. 601WCG ....................................ad. No. 108, 2009
s. 601WCH ....................................ad. No. 108, 2009
Division 4
s. 601WDA ....................................ad. No. 108, 2009
am. No. 24, 2011
Part 5D.7
Part 5D.7 heading ..........................rs. No. 24, 2011
s. 601XAA.....................................ad. No. 108, 2009
s. 601XAB .....................................ad. No. 24, 2011
Part 5D.8
s. 601YAA.....................................ad. No. 108, 2009
s. 601YAB .....................................ad. No. 108, 2009
Chapter 6
s. 602A...........................................ad. No. 64, 2007
Part 6.1
s. 606 .............................................am. No. 117, 2001
s. 609 .............................................am. No. 122, 2001; No. 96, 2010
s. 610 .............................................am. No. 122, 2001
Part 6.2
s 611 ..............................................am No 122, 2001; No 96, 2010; No 17, 2017
Part 6.4
Division 1
s. 618 .............................................am. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 517
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 2
s. 621 .............................................am. No. 122, 2001
s. 622 .............................................am. No. 117, 2001
s. 623 .............................................am. No. 117, 2001
Division 3
s. 624 .............................................am. No. 117, 2001
Division 4
s. 625 .............................................am. No. 122, 2001
s. 628 .............................................am. No. 103, 2004
s. 629 .............................................am. No. 122, 2001
s. 630 .............................................am. Nos. 117 and 122, 2001
Part 6.5
Division 1
s. 631 .............................................am. No. 117, 2001
s. 632 .............................................am. No. 122, 2001
s. 633 .............................................am. Nos. 117 and 122, 2001
s. 634 .............................................am. No. 122, 2001
s. 635 .............................................am. Nos. 117 and 122, 2001; No. 5, 2011
Division 2
s. 636 .............................................am. Nos. 117 and 122, 2001; No 100, 2014
s. 637 .............................................am. No. 117, 2001
Division 3
s. 638 .............................................am. No. 117, 2001
s. 639 .............................................am. No. 117, 2001
s. 640 .............................................am. No. 117, 2001
s. 641 .............................................am. No. 117, 2001
Division 4
s. 643 .............................................am. No. 117, 2001
s. 644 .............................................am. No. 117, 2001
s. 647 .............................................am. Nos. 117 and 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
518 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 5
Subdivision A
s. 648A...........................................am. No. 117, 2001
Subdivision C
s. 648E ...........................................am. Nos. 117 and 122, 2001
s. 648G...........................................am. No. 117, 2001
s. 648H...........................................am. No. 122, 2001
Subdivision D ................................ad No 122, 2001
rep No 101, 2007
ss. 648J– 648N...............................ad. No. 122, 2001
rep. No. 101, 2007
ss. 648P–648U...............................ad. No. 122, 2001
rep. No. 101, 2007
Part 6.6
Division 1
s. 649B...........................................am. No. 122, 2001
s. 649C...........................................am. Nos. 117 and 122, 2001
Division 2
s. 650B...........................................am. Nos. 117 and 122, 2001
s. 650E ...........................................am. Nos. 117 and 122, 2001
s. 650F ...........................................am. Nos. 117 and 122, 2001
Division 3
s. 651A...........................................am. No. 117, 2001
s. 651C...........................................am. No. 117, 2001
Part 6.7
s. 652C...........................................am. Nos. 117 and 122, 2001; No. 96, 2010
Part 6.8
s. 653A...........................................am. No. 122, 2001
s. 653B...........................................am. No. 122, 2001
Part 6.9
s. 654A...........................................am. No. 117, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 519
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 654C...........................................am. No. 117, 2001
Part 6.10
Division 2
Division 2 heading.........................rs. No. 122, 2001
Subdivision B
s. 657A...........................................am. No. 64, 2007
s. 657D...........................................am. No. 64, 2007
s. 657EA ........................................am. No. 64, 2007
s. 657F ...........................................am. No. 117, 2001
Chapter 6A
Part 6A.1
Division 1
s. 661B...........................................am. Nos. 117 and 122, 2001
s. 661C...........................................am. No. 122, 2001
s. 661D...........................................am. No. 117, 2001
Division 2
s. 662A...........................................am. No. 117, 2001
s. 662B...........................................am. No. 122, 2001
Division 3
s. 663A...........................................am. No. 117, 2001
s. 663B...........................................am. No. 122, 2001
Part 6A.2
Division 1
s. 664B...........................................am. No. 122, 2001
s. 664C...........................................am. No. 122, 2001
s. 664D...........................................am. No. 117, 2001
s. 664E ...........................................am. Nos. 117 and 122, 2001
Division 2
s. 665A...........................................am. No. 117, 2001
s. 665B...........................................am. No. 122, 2001
Division 3 ......................................rep. No. 101, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
520 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
ss. 665D, 665E...............................am. No. 117, 2001
rep. No. 101, 2007
Part 6A.3
s. 666A...........................................am. No. 117, 2001
s. 666B...........................................am. No. 117, 2001
Part 6A.4
s. 667A...........................................am. No. 117, 2001
Part 6A.5
s. 668A...........................................am. No. 117, 2001
s. 668B...........................................am. No. 117, 2001
Chapter 6B
s. 670A...........................................am. No. 5, 2011
s. 670B...........................................am. No. 5, 2011
s. 670C...........................................am. Nos. 117 and 122, 2001
Chapter 6C
Part 6C.1
s. 671B...........................................am. Nos. 117 and 122, 2001
Part 6C.2
s. 672B...........................................am. No. 117, 2001
s. 672DA........................................ad. No. 103, 2004
Chapter 6CA
Chapter 6CA..................................ad. No. 122, 2001
s. 674 .............................................ad. No. 122, 2001
am. No. 103, 2004
s. 675 .............................................ad. No. 122, 2001
am. No. 103, 2004; No. 85, 2007; No. 101, 2007
s. 676 .............................................ad. No. 122, 2001
s. 677 .............................................ad. No. 122, 2001
s. 678 .............................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 521
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Chapter 6D
Part 6D.1
s. 700 .............................................am. No. 122, 2001; No. 101, 2007; No. 155, 2012; No 100, 2014
s. 701 .............................................rep. No. 122, 2001
s. 703A...........................................ad. No. 122, 2001
Part 6D.2
Part 6D.2 heading ..........................rs No 17, 2017
Division 1
s 703B............................................ad No 17, 2017
s 704 ..............................................am No 103, 2004; No 101, 2007; No 17, 2017
s. 705 .............................................am. No. 101, 2007; No 100, 2014
Division 2
s 706 ..............................................am No 101, 2007; No 17, 2017
s. 707 .............................................am. No. 122, 2001; No. 103, 2004
s 708 ..............................................am No 122, 2001; No 103, 2004; No 101, 2007; No 132, 2007; No 75,
2009; No 100, 2014; No 11, 2016
s. 708AA........................................ad. No. 101, 2007
s. 708A...........................................ad. No. 103, 2004
am. No. 101, 2007
Division 3
s 709 ..............................................am. No 101, 2007; No 100, 2014
Division 4
s. 710 .............................................am. No. 122, 2001; No 100, 2014
s. 711 .............................................am. No. 122, 2001; No 100, 2014
s 712 ..............................................am No 100, 2014
s 713 ..............................................am No 122, 2001; No 103, 2004; No 101, 2007; No 100, 2014
s 713A............................................ad No 100, 2014
s 713B............................................ad No 100, 2014
s 713C............................................ad No 100, 2014
s 713D............................................ad No 100, 2014
s 713E ............................................ad No 100, 2014
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
522 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 715A...........................................ad. No. 103, 2004
s 716 ..............................................am No 100, 2014
Division 5
s 717 ..............................................am No 100, 2014
s 718 ..............................................am No 100, 2014
s 719 ..............................................am No 103, 2004; No 100, 2014
s 719A............................................ad No 100, 2014
s 720 ..............................................am No 122, 2001; No 100, 2014
s. 721 .............................................am. No. 117, 2001
s. 722 .............................................am. No. 117, 2001
s. 723 .............................................am. Nos. 117 and 122, 2001
s 724 ..............................................am No 117 and 122, 2001; No 100, 2014
s. 725 .............................................am. No. 117, 2001
Part 6D.3
Part 6D.3 heading ..........................rs No 17, 2017
Division 1A
Division 1A....................................ad No 17, 2017
s 725A............................................ad No 17, 2017
Division 1
s. 726 .............................................rs. No. 122, 2001
s 727 ..............................................am No 103, 2004; No 101, 2007; No 100, 2014
s 728 ..............................................am No 5, 2011; No 100, 2014
s 729 ..............................................am No 5, 2011; No 100, 2014
s 730 ..............................................am No 117, 2001; No 100, 2014
s 734 ..............................................am No 117, 2001; No 122, 2001; No 85, 2007; No 101, 2007; No 17,
2017
s. 735 .............................................am. No. 117, 2001
s. 736 .............................................am. No. 117, 2001; No. 101, 2007
Part 6D.3A
Part 6D.3A.....................................ad No 17, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 523
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 1
s 738A............................................ad No 17, 2017
s 738B............................................ad No 17, 2017
s 738C............................................ad No 17, 2017
s 738D............................................ad No 17, 2017
s 738E ............................................ad No 17, 2017
s 738F ............................................ad No 17, 2017
Division 2
s 738G............................................ad No 17, 2017
s 738H............................................ad No 17, 2017
Division 3
s 738J.............................................ad No 17, 2017
s 738K............................................ad No 17, 2017
s 738L............................................ad No 17, 2017
s 738M...........................................ad No 17, 2017
s 738N............................................ad No 17, 2017
s 738P ............................................ad No 17, 2017
s 738Q............................................ad No 17, 2017
s 738R............................................ad No 17, 2017
s 738S ............................................ad No 17, 2017
s 738T............................................ad No 17, 2017
Division 4
s 738U............................................ad No 17, 2017
s 738V............................................ad No 17, 2017
s 738W...........................................ad No 17, 2017
s 738X............................................ad No 17, 2017
s 738Y............................................ad No 17, 2017
s 738Z............................................ad No 17, 2017
Division 5
s 738ZA .........................................ad No 17, 2017
s 738ZB .........................................ad No 17, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
524 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 6
s 738ZC .........................................ad No 17, 2017
s 738ZD .........................................ad No 17, 2017
s 738ZE..........................................ad No 17, 2017
Division 7
s 738ZF..........................................ad No 17, 2017
s 738ZG .........................................ad No 17, 2017
s 738ZH .........................................ad No 17, 2017
s 738ZI...........................................ad No 17, 2017
s 738ZJ...........................................ad No 17, 2017
Part 6D.4
s 739 ..............................................am No 103, 2004; No 101, 2007; No 17, 2017
s 740 ..............................................am No 17, 2017
Part 6D.5
Part 6D.5........................................ad. No. 122, 2001
s. 742 .............................................ad. No. 122, 2001
Chapter 7
Chapter 7 .......................................rs. No. 122, 2001
Part 7.1
s. 760 .............................................rep. No. 122, 2001
Division 1
s. 760A...........................................ad. No. 122, 2001
s. 760B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 108, 2009; No. 26, 2010; Nos. 67 and 178,
2012
s. 761 .............................................rep. No. 122, 2001
Division 2
s 761A............................................ad No 122, 2001
am No 141, 2003; No 101, 2007; No 45, 2008; No 108, 2009; No 26,
2010; No 131, 2010; No 155, 2012; No 171, 2012; No 178, 2012;
No 100, 2014; No 70, 2015; No 17, 2017; No 25, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 525
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 761B...........................................ad. No. 122, 2001
s. 761C...........................................ad. No. 122, 2001
s. 761CA........................................ad. No. 122, 2001
s. 761D...........................................ad. No. 122, 2001
s 761E ............................................ad No 122, 2001
am No 141, 2003; No 45, 2008; No 108, 2009; No 70, 2015
s. 761EA ........................................ad. No. 108, 2009
s. 761F ...........................................ad. No. 122, 2001
s. 761FA ........................................ad. No. 122, 2001
s 761G............................................ad No 122, 2001
am No 101, 2007; No 108, 2009; No 17, 2017
s 761GA.........................................ad No 101, 2007
am No 108, 2009; No 17, 2017
s. 761H...........................................ad. No. 122, 2001
s. 762 .............................................rep. No. 122, 2001
Division 3
Subdivision A
s. 762A...........................................ad. No. 122, 2001
s. 762B...........................................ad. No. 122, 2001
s. 762C...........................................ad. No. 122, 2001
s. 763 .............................................rep. No. 122, 2001
Subdivision B
s. 763A...........................................ad. No. 122, 2001
s. 763B...........................................ad. No. 122, 2001
s. 763C...........................................ad. No. 122, 2001
s. 763D...........................................ad. No. 122, 2001
s. 763E ...........................................ad. No. 122, 2001
s. 764 .............................................rep. No. 122, 2001
Subdivision C
s 764A............................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
526 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am No 141, 2003; No 45, 2008; No 54, 2009; No 108, 2009; No 102,
2011; No 132, 2011; No 83, 2014; No 70, 2015
s. 765 .............................................rep. No. 122, 2001
Subdivision D
s. 765A...........................................ad. No. 122, 2001
am. No. 32, 2007; No. 54, 2008; Nos. 54 and 108, 2009; No. 178, 2012
s. 766 .............................................rep. No. 122, 2001
Division 4
s 766A............................................ad No 122, 2001
am No 108, 2009; No 17, 2017
s. 766B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 170, 2006; No. 114, 2009
s 766C............................................ad No 122, 2001
am No 141, 2003; No 17, 2017
s. 766D...........................................ad. No. 122, 2001
s 766E ............................................rs. No. 122, 2001
am No 141, 2003; No 45, 2008; No 70, 2015
s 766F ............................................rep No 122, 2001
ad No 17, 2017
s 766G............................................rep No 122, 2001
s 766H............................................rep No 122, 2001
s 766I .............................................rep No 122, 2001
Division 3 ......................................ad. No. 55, 2001
rep. No. 122, 2001
s. 766J............................................ad. No. 55, 2001
rep. No. 122, 2001
s. 767 .............................................rep. No. 122, 2001
Division 5
s. 767A...........................................ad. No. 122, 2001
Division 6
s. 768A...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 527
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 769 .............................................rep. No. 122, 2001
Division 7
s. 769A...........................................rs. Nos. 122 and 146, 2001
s. 769B...........................................rs. No. 122, 2001
am. No. 68, 2012
s. 769C...........................................rs. No. 122, 2001
s. 769D...........................................rep. No. 122, 2001
s. 770 .............................................rep. No. 122, 2001
ss. 770A–770C...............................rep. No. 122, 2001
ss. 771, 772 ....................................rep. No. 122, 2001
ss. 772A, 772B...............................rep. No. 122, 2001
ss. 773–779 ....................................rep. No. 122, 2001
s 779A–779H.................................rep. No. 122, 2001
s. 779J............................................rep. No. 122, 2001
ss. 780–790 ....................................rep. No. 122, 2001
Part 7.2
Division 1
s. 790A...........................................ad. No. 122, 2001
s. 791 .............................................rep. No. 122, 2001
Division 2
s. 791A...........................................ad. No. 122, 2001
s. 791B...........................................ad. No. 122, 2001
s 791C............................................ad No 122, 2001
rs No 17, 2017
s. 791D...........................................ad. No. 122, 2001
s. 792 .............................................rep. No. 122, 2001
Division 3
Subdivision A
s. 792A...........................................ad. No. 122, 2001
am. No. 26, 2010
s. 792B...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
528 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 103, 2004
s. 792C...........................................ad. No. 122, 2001
s. 792D...........................................ad. No. 122, 2001
s. 792E ...........................................ad. No. 122, 2001
s. 792F ...........................................ad. No. 122, 2001
s. 792G...........................................ad. No. 122, 2001
s. 792H...........................................ad. No. 122, 2001
s. 792I ............................................ad. No. 122, 2001
s. 793 .............................................rep. No. 122, 2001
Subdivision B
s. 793A...........................................ad. No. 122, 2001
s. 793B...........................................ad. No. 122, 2001
am. No. 26, 2010; No. 178, 2012; No 25, 2017
s. 793C...........................................ad. No. 122, 2001
s. 793D...........................................ad. No. 122, 2001
s. 793E ...........................................ad. No. 122, 2001
s. 794 .............................................rep. No. 122, 2001
Subdivision C
s. 794A...........................................ad. No. 122, 2001
s. 794B...........................................ad. No. 122, 2001
s. 794C...........................................ad. No. 122, 2001
am. No. 41, 2003; No 59, 2013
s. 794D...........................................ad. No. 122, 2001
s. 794E ...........................................ad. No. 122, 2001
s. 795 .............................................rep. No. 122, 2001
Division 4
Subdivision A
s. 795A...........................................ad. No. 122, 2001
s. 795B...........................................ad. No. 122, 2001
am. No. 26, 2010
s. 795C...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 529
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 795D...........................................ad. No. 122, 2001
s. 795E ...........................................ad. No. 122, 2001
Subdivision B
s. 796A...........................................ad. No. 122, 2001
Subdivision C
s. 797A...........................................ad. No. 122, 2001
s 797B............................................ad No 122, 2001
am No 11, 2016; No 45, 2017
s. 797C...........................................ad. No. 122, 2001
s. 797D...........................................ad. No. 122, 2001
s. 797E ...........................................ad. No. 122, 2001
s. 797F ...........................................ad. No. 122, 2001
s. 797G...........................................ad. No. 122, 2001
s. 798 .............................................rep. No. 122, 2001
Division 5
s. 798A...........................................ad. No. 122, 2001
s. 798B...........................................ad. No. 122, 2001
s. 798C...........................................ad. No. 122, 2001
rs. No. 101, 2007
s. 798D...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 798DA........................................ad. No. 101, 2007
s. 798E ...........................................ad. No. 122, 2001
Part 7.2A
Part 7.2A........................................ad. No. 26, 2010
s. 798F ...........................................ad. No. 26, 2010
s. 798G...........................................ad. No. 26, 2010
s. 798H...........................................ad. No. 26, 2010
am. No. 178, 2012
s. 798J............................................ad. No. 26, 2010
s. 798K...........................................ad. No. 26, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
530 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 798L ...........................................ad. No. 26, 2010
s 798M...........................................ad No 17, 2017
s. 799 .............................................rep. No. 122, 2001
s. 799A...........................................rep. No. 122, 2001
ss. 800–820 ....................................rep. No. 122, 2001
Part 7.3
Division 1
s. 820A...........................................ad. No. 122, 2001
s. 820B...........................................ad. No. 122, 2001
s 820C............................................ad No 122, 2001
rs No 17, 2017
s. 820D...........................................ad. No. 122, 2001
s. 821 .............................................rep. No. 122, 2001
Division 2
Subdivision A
s. 821A...........................................ad. No. 122, 2001
s. 821B...........................................ad. No. 122, 2001
am. No. 103, 2004
s. 821BA........................................ad. No. 122, 2001
s. 821C...........................................ad. No. 122, 2001
s. 821D...........................................ad. No. 122, 2001
s. 821E ...........................................ad. No. 122, 2001
s. 821F ...........................................ad. No. 122, 2001
s. 822 .............................................rep. No. 122, 2001
Subdivision B
s. 822A...........................................ad. No. 122, 2001
s. 822B...........................................ad. No. 122, 2001
am. No. 178, 2012; No 25, 2017
s. 822C...........................................ad. No. 122, 2001
s. 822D...........................................ad. No. 122, 2001
s. 822E ...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 531
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision C
s. 823A...........................................ad. No. 122, 2001
s. 823B...........................................ad. No. 122, 2001
s. 823C...........................................ad. No. 122, 2001
am. No. 41, 2003; No 59, 2013
s. 823CA........................................ad. No. 122, 2001
am. No. 41, 2003; No 59, 2013
s. 823D...........................................ad. No. 122, 2001
s. 823E ...........................................ad. No. 122, 2001
s. 824 .............................................rep. No. 122, 2001
Division 3
Subdivision A
s. 824A...........................................ad. No. 122, 2001
s. 824B...........................................ad. No. 122, 2001
s. 824C...........................................ad. No. 122, 2001
s. 824D...........................................ad. No. 122, 2001
s. 824E ...........................................ad. No. 122, 2001
s. 825 .............................................rep. No. 122, 2001
Subdivision B
s. 825A...........................................rs. No. 122, 2001
s. 826 .............................................rep. No. 122, 2001
Subdivision C
s. 826A...........................................ad. No. 122, 2001
s 826B............................................ad No 122, 2001
am No 11, 2016; No 45, 2017
s. 826C...........................................ad. No. 122, 2001
s. 826D...........................................ad. No. 122, 2001
s. 826E ...........................................ad. No. 122, 2001
s. 826F ...........................................ad. No. 122, 2001
s. 826G...........................................ad. No. 122, 2001
s. 827 .............................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
532 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 4
s. 827A...........................................ad. No. 122, 2001
s. 827B...........................................ad. No. 122, 2001
s. 827C...........................................ad. No. 122, 2001
s. 827D...........................................ad. No. 122, 2001
am. No. 5, 2011; No. 178, 2012
ss. 828–839 ....................................rep. No. 122, 2001
ss. 841–850 ....................................rep. No. 122, 2001
Part 7.4
Division 1
Subdivision A
s. 850A...........................................ad. No. 122, 2001
s. 850B...........................................ad. No. 122, 2001
am. No. 154, 2007
s. 850C...........................................ad. No. 122, 2001
s. 850D...........................................ad. No. 122, 2001
s. 850E ...........................................ad. No. 122, 2001
s. 851 .............................................rep. No. 122, 2001
Subdivision B
s. 851A...........................................ad. No. 122, 2001
s. 851B...........................................ad. No. 122, 2001
s. 851C...........................................ad. No. 122, 2001
s. 851D...........................................ad. No. 122, 2001
s. 851E ...........................................ad. No. 122, 2001
s. 851F ...........................................ad. No. 122, 2001
s. 851G...........................................ad. No. 122, 2001
s. 851H...........................................ad. No. 122, 2001
s. 851I ............................................ad. No. 122, 2001
s. 852 .............................................rep. No. 122, 2001
Subdivision C
s. 852A...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 533
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 852B...........................................ad. No. 122, 2001
s. 853 .............................................rep. No. 122, 2001
Division 2
s. 853A...........................................ad. No. 122, 2001
s. 853B...........................................ad. No. 122, 2001
am. No. 103, 2004; No. 178, 2012
s. 853C...........................................ad. No. 122, 2001
am. No. 178, 2012
s. 853D...........................................ad. No. 122, 2001
am. No. 178, 2012
s. 853E ...........................................ad. No. 122, 2001
s. 853F ...........................................ad. No. 122, 2001
am. No. 178, 2012
s. 853G...........................................ad. No. 122, 2001
am. No. 178, 2012
s. 854 .............................................rep. No. 122, 2001
Division 3
s. 854A...........................................ad. No. 122, 2001
am. No. 178, 2012
s. 854B...........................................ad. No. 122, 2001
am. No. 141, 2003
ss. 855–865 ....................................rep. No. 122, 2001
s. 865A...........................................rep. No. 122, 2001
ss. 866–880 ....................................rep. No. 122, 2001
Part 7.5
Division 1
s. 880A...........................................ad. No. 122, 2001
s. 880B...........................................ad. No. 122, 2001
s. 881 .............................................rep. No. 122, 2001
Division 2
s. 881A...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
534 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 881B...........................................ad. No. 122, 2001
s. 881C...........................................ad. No. 122, 2001
s. 881D...........................................ad. No. 122, 2001
s. 882 .............................................rep. No. 122, 2001
Division 3
Subdivision A
s. 882A...........................................ad. No. 122, 2001
s. 882B...........................................ad. No. 122, 2001
s. 882C...........................................ad. No. 122, 2001
s. 882D...........................................ad. No. 122, 2001
s. 883 .............................................rep. No. 122, 2001
Subdivision B
s. 883A...........................................ad. No. 122, 2001
s. 883B...........................................ad. No. 122, 2001
s. 883C...........................................ad. No. 122, 2001
s. 883D...........................................ad. No. 122, 2001
s. 884 .............................................rep. No. 122, 2001
Subdivision C
s. 884A...........................................ad. No. 122, 2001
s. 884B...........................................ad. No. 122, 2001
s. 884C...........................................ad. No. 122, 2001
s. 885 .............................................rep. No. 122, 2001
Subdivision D
s. 885A...........................................ad. No. 122, 2001
s. 885B...........................................ad. No. 122, 2001
s. 885C...........................................ad. No. 122, 2001
s. 885D...........................................ad. No. 122, 2001
s. 885E ...........................................ad. No. 122, 2001
s. 885F ...........................................ad. No. 122, 2001
s. 885G...........................................ad. No. 122, 2001
s. 885H...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 535
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 885I ............................................ad. No. 122, 2001
s. 885J............................................ad. No. 122, 2001
s. 886 .............................................rep. No. 122, 2001
Subdivision E
s. 886A...........................................ad. No. 122, 2001
s. 886B...........................................ad. No. 122, 2001
s. 887 .............................................rep. No. 122, 2001
Division 4
Subdivision A
s. 887A...........................................ad. No. 122, 2001
s. 888 .............................................rep. No. 122, 2001
Subdivision B
s. 888A...........................................ad. No. 122, 2001
s. 888B...........................................ad. No. 122, 2001
s. 888C...........................................ad. No. 122, 2001
s. 888D...........................................ad. No. 122, 2001
s. 888E ...........................................ad. No. 122, 2001
s. 888F ...........................................ad. No. 122, 2001
s. 888G...........................................ad. No. 122, 2001
s. 888H...........................................ad. No. 122, 2001
s. 888I ............................................ad. No. 122, 2001
s. 888J............................................ad. No. 122, 2001
s. 888K...........................................ad. No. 122, 2001
s. 889 .............................................rep. No. 122, 2001
Subdivision C
s. 889A...........................................ad. No. 122, 2001
s. 889B...........................................ad. No. 122, 2001
s. 889C...........................................ad. No. 122, 2001
s. 889D...........................................ad. No. 122, 2001
s. 889E ...........................................ad. No. 122, 2001
s. 889F ...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
536 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 889G...........................................ad. No. 122, 2001
s. 889H...........................................ad. No. 122, 2001
s. 889I ............................................ad. No. 122, 2001
s. 889J............................................ad. No. 122, 2001
am No. 149, 2007
s. 889K...........................................ad. No. 122, 2001
s. 890 .............................................rep. No. 122, 2001
Subdivision D
s. 890A...........................................ad. No. 122, 2001
s. 890B...........................................ad. No. 122, 2001
s. 890C...........................................ad. No. 122, 2001
s. 890D...........................................ad. No. 122, 2001
s. 890E ...........................................ad. No. 122, 2001
s. 890F ...........................................ad. No. 122, 2001
s. 890G...........................................ad. No. 122, 2001
s. 890H...........................................ad. No. 122, 2001
s. 891 .............................................rep. No. 122, 2001
Subdivision E
s. 891A...........................................ad. No. 122, 2001
s. 891B...........................................ad. No. 122, 2001
s. 891C...........................................ad. No. 122, 2001
s. 892 .............................................rep. No. 122, 2001
Division 5
s. 892A...........................................ad. No. 122, 2001
s. 892B...........................................ad. No. 122, 2001
s. 892C...........................................ad. No. 122, 2001
s. 892D...........................................ad. No. 122, 2001
s. 892E ...........................................ad. No. 122, 2001
s. 892F ...........................................ad. No. 122, 2001
s. 892G...........................................ad. No. 122, 2001
s. 892H...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 537
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 103, 2004
s. 892I ............................................ad. No. 122, 2001
s. 892J............................................ad. No. 122, 2001
s. 892K...........................................ad. No. 122, 2001
s. 893 .............................................rep. No. 122, 2001
Division 6
s. 893A...........................................ad. No. 122, 2001
s 893B............................................ad No 17, 2017
ss. 894–899 ....................................rep. No. 122, 2001
Part 7.5A
Part 7.5A........................................ad. No. 178, 2012
Division 1
s. 900 .............................................rep. No. 122, 2001
s. 900A...........................................ad. No. 178, 2012
Division 2
Subdivision A
s. 901 .............................................rep. No. 122, 2001
s. 901A...........................................ad. No. 178, 2012
s. 901B...........................................ad. No. 178, 2012
s. 901C...........................................ad. No. 178, 2012
s. 901D...........................................ad. No. 178, 2012
Subdivision B
s. 901E ...........................................ad. No. 178, 2012
am No 25, 2017
s. 901F ...........................................ad. No. 178, 2012
s. 901G...........................................ad. No. 178, 2012
Subdivision C
s. 901H...........................................ad. No. 178, 2012
s. 901J............................................ad. No. 178, 2012
s. 901K...........................................ad. No. 178, 2012
s. 901L ...........................................ad. No. 178, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
538 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 901M..........................................ad. No. 178, 2012
Division 3
s. 902 .............................................rep. No. 122, 2001
s. 902A...........................................ad. No. 178, 2012
Division 4
Subdivision A
s. 903 .............................................rep. No. 122, 2001
s. 903A...........................................ad. No. 178, 2012
s. 903B...........................................ad. No. 178, 2012
s. 903C...........................................ad. No. 178, 2012
Subdivision B
s. 903D...........................................ad. No. 178, 2012
am No 25, 2017
s. 903E ...........................................ad. No. 178, 2012
Subdivision C
s. 903F ...........................................ad. No. 178, 2012
s. 903G...........................................ad. No. 178, 2012
s. 903H...........................................ad. No. 178, 2012
s. 903J............................................ad. No. 178, 2012
s. 903K...........................................ad. No. 178, 2012
Division 5
Subdivision A
s. 904 .............................................rep. No. 122, 2001
s. 904A...........................................ad. No. 178, 2012
s. 904B...........................................ad. No. 178, 2012
s. 904C...........................................ad. No. 178, 2012
s. 904D...........................................ad. No. 178, 2012
s. 904E ...........................................ad. No. 178, 2012
Subdivision B
s. 904F ...........................................ad. No. 178, 2012
s. 904G...........................................ad. No. 178, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 539
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 904H...........................................ad. No. 178, 2012
s. 904J............................................ad. No. 178, 2012
s. 904K...........................................ad. No. 178, 2012
Division 6
Subdivision A
s. 905 .............................................rep. No. 122, 2001
s. 905A...........................................ad. No. 178, 2012
Subdivision B
s. 905B...........................................ad. No. 178, 2012
s. 905C...........................................ad. No. 178, 2012
s. 905D...........................................ad. No. 178, 2012
s. 905E ...........................................ad. No. 178, 2012
Subdivision C
s. 905F ...........................................ad. No. 178, 2012
Subdivision D
s. 905G...........................................ad. No. 178, 2012
s 905H............................................ad No 178, 2012
am No 11, 2016; No 45, 2017
s. 905J............................................ad. No. 178, 2012
s. 905K...........................................ad. No. 178, 2012
s. 905L ...........................................ad. No. 178, 2012
s. 905M..........................................ad. No. 178, 2012
s. 905N...........................................ad. No. 178, 2012
Subdivision E
s. 905P ...........................................ad. No. 178, 2012
Division 7
s. 906 .............................................rep. No. 122, 2001
s. 906A...........................................ad. No. 178, 2012
Division 8
s. 907 .............................................rep. No. 122, 2001
s. 907A...........................................ad. No. 178, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
540 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 907B...........................................ad. No. 178, 2012
s. 907C...........................................ad. No. 178, 2012
s. 907D...........................................ad. No. 178, 2012
s. 907E ...........................................ad. No. 178, 2012
s. 908 .............................................rep. No. 122, 2001
s. 909 .............................................rep. No. 122, 2001
s. 910 .............................................rep. No. 122, 2001
Part 7.6
Division 1
s 910A............................................ad No 122, 2001
am No 7, 2017
s. 911 .............................................rep. No. 122, 2001
Division 2
s. 911A...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007; No. 108, 2009
s. 911B...........................................ad. No. 122, 2001
s. 911C...........................................ad. No. 122, 2001
am. No. 141, 2003
s. 911D...........................................ad. No. 122, 2001
s. 912 .............................................rep. No. 122, 2001
Division 3
s 912A............................................ad No 122, 2001
am No 103, 2004; No 61, 2013; No 7, 2017
s. 912B...........................................ad. No. 122, 2001
s 912C............................................ad No 122, 2001
am No 141, 2003; No 6, 2017
s. 912CA........................................ad. No. 141, 2003
s. 912D...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 154, 2007; No. 108, 2009
s. 912E ...........................................ad. No. 122, 2001
s. 912F ...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 541
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 141, 2003
s. 913 .............................................rep. No. 122, 2001
Division 4
Subdivision A
s. 913A...........................................ad. No. 122, 2001
s 913B............................................ad No 122, 2001
am No 67, 2012; No 7, 2017
s. 913C...........................................ad. No. 122, 2001
am. No. 135, 2009
s. 914 .............................................rep. No. 122, 2001
Subdivision B
s. 914A...........................................ad. No. 122, 2001
s. 915 .............................................rep. No. 122, 2001
Subdivision C
s. 915A...........................................ad. No. 122, 2001
s 915B............................................ad No 122, 2001
am No 108, 2009; No 11, 2016; No 45, 2017
s. 915C...........................................ad. No. 122, 2001
am. No. 67, 2012
s. 915D...........................................ad. No. 122, 2001
s. 915E ...........................................ad. No. 122, 2001
s. 915F ...........................................ad. No. 122, 2001
s. 915G...........................................ad. No. 122, 2001
s. 915H...........................................ad. No. 122, 2001
s. 915I ............................................ad. No. 122, 2001
s. 915J............................................ad. No. 122, 2001
s. 916 .............................................rep. No. 122, 2001
Division 5
s 916A............................................ad No 122, 2001
am No 7, 2017
s 916B............................................ad No 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
542 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am No 7, 2017
s. 916C...........................................ad. No. 122, 2001
s. 916D...........................................ad. No. 122, 2001
s. 916E ...........................................ad. No. 122, 2001
s. 916F ...........................................ad. No. 122, 2001
am. No. 141, 2003
s. 916G...........................................ad. No. 122, 2001
s. 917 .............................................rep. No. 122, 2001
Division 6
s. 917A...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 917B...........................................ad. No. 122, 2001
s. 917C...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 917D...........................................ad. No. 122, 2001
s. 917E ...........................................ad. No. 122, 2001
s. 917F ...........................................ad. No. 122, 2001
s. 918 .............................................rep. No. 122, 2001
s. 920 .............................................rep. No. 122, 2001
Division 8
Subdivision A
s 920A............................................ad No 122, 2001
am No 141, 2003; No 67, 2012; No 7, 2017
s. 920B...........................................ad. No. 122, 2001
s. 920C...........................................ad. No. 122, 2001
s. 920D...........................................ad. No. 122, 2001
s. 920E ...........................................ad. No. 122, 2001
s. 920F ...........................................ad. No. 122, 2001
s. 921 .............................................rep. No. 122, 2001
Subdivision B
s. 921A...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 543
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 922 ..............................................rep No 122, 2001
Division 8A
Division 8A....................................ad No 7, 2017
Subdivision A
s 921B............................................ad No 7, 2017
s 921C............................................ad No 7, 2017
s 921D............................................ad No 7, 2017
Subdivision B
s 921E ............................................ad No 7, 2017
Subdivision C
s 921F ............................................ad No 7, 2017
Division 8B
Division 8B....................................ad No 7, 2017
Subdivision A
s 921G............................................ad No 7, 2017
s 921H............................................ad No 7, 2017
s 921J.............................................ad No 7, 2017
Subdivision B
s 921K............................................ad No 7, 2017
Subdivision C
s 921L............................................ad No 7, 2017
s 921M...........................................ad No 7, 2017
s 921N............................................ad No 7, 2017
Subdivision D
s 921P ............................................ad No 7, 2017
s 921Q............................................ad No 7, 2017
s 921R............................................ad No 7, 2017
s 921S ............................................ad No 7, 2017
s 921T............................................ad No 7, 2017
Division 8C
Division 8C....................................ad No 7, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
544 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision A
s 921U............................................ad No 7, 2017
s 921V............................................ad No 7, 2017
s 921W...........................................ad No 7, 2017
Subdivision B
s 921X............................................ad No 7, 2017
s 921Y............................................ad No 7, 2017
Subdivision C
s 921Z............................................ad No 7, 2017
s 921ZA .........................................ad No 7, 2017
s 921ZB .........................................ad No 7, 2017
s 921ZC .........................................ad No 7, 2017
Division 9
Subdivision A
Subdivision A heading...................ad No 7, 2017
s 922A............................................ad No 122, 2001
am No 7, 2017
s 922B............................................ad No 122, 2001
rs No 7, 2017
s 923 ..............................................rep No 122, 2001
Subdivision B
Subdivision B ................................ad No 7, 2017
s 922D............................................ad No 7, 2017
s 922E ............................................ad No 7, 2017
s 922F ............................................ad No 7, 2017
s 922G............................................ad No 7, 2017
s 922H............................................ad No 7, 2017
s 922HA.........................................ad No 7, 2017
s 922HB.........................................ad No 7, 2017
s 922HC.........................................ad No 7, 2017
s 922HD.........................................ad No 7, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 545
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 922J.............................................ad No 7, 2017
s 922K............................................ad No 7, 2017
s 922L............................................ad No 7, 2017
s 922M...........................................ad No 7, 2017
s 922N............................................ad No 7, 2017
s 922P ............................................ad No 7, 2017
Subdivision C
Subdivision C ................................ad No 7, 2017
s 922Q............................................ad No 7, 2017
s 922R............................................ad No 7, 2017
s 922S ............................................ad No 7, 2017
Division 10
s. 923A...........................................ad. No. 122, 2001
s. 923B...........................................ad. No. 122, 2001
s. 924 .............................................rep. No. 122, 2001
s 923C............................................ad No 7, 2017
Division 11
Subdivision A
s. 924A...........................................rs. No. 122, 2001
s. 924B...........................................rep. No. 122, 2001
Subdivision B
s. 925A...........................................rs. No. 122, 2001
s. 925B...........................................ad. No. 122, 2001
s. 925C...........................................ad. No. 122, 2001
s. 925D...........................................ad. No. 122, 2001
s. 925E ...........................................ad. No. 122, 2001
s. 925F ...........................................ad. No. 122, 2001
s. 925G...........................................ad. No. 122, 2001
s. 925H...........................................ad. No. 122, 2001
s. 925I ............................................ad. No. 122, 2001
s. 926 .............................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
546 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 12
Division 12 ....................................ad. No. 141, 2003
s 926A............................................ad No 141, 2003
am No 154, 2007; No 5, 2011; No 7, 2017
s. 926B...........................................ad. No. 141, 2003
s. 927 .............................................rep. No. 122, 2001
s. 927A...........................................rep. No. 122, 2001
s. 928 .............................................rep. No. 122, 2001
ss. 928A, 928B...............................rep. No. 122, 2001
ss. 929, 930 ....................................rep. No. 122, 2001
ss. 930A–930C...............................rep. No. 122, 2001
ss. 931–940 ....................................rep. No. 122, 2001
Part 7.7
Division 1
s. 940A...........................................ad. No. 122, 2001
s. 940B...........................................ad. No. 122, 2001
s. 940C...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 940D...........................................ad. No. 122, 2001
s. 941 .............................................rep. No. 122, 2001
Division 2
Subdivision A
s. 941A...........................................ad. No. 122, 2001
s. 941B...........................................ad. No. 122, 2001
s. 941C...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 941D...........................................ad. No. 122, 2001
s. 941E ...........................................ad. No. 122, 2001
s. 941F ...........................................ad. No. 122, 2001
Subdivision B
s. 942A...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 547
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 942B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 942C...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 942D...........................................ad. No. 122, 2001
s. 942DA........................................ad. No. 141, 2003
s. 942E ...........................................ad. No. 122, 2001
s. 943 .............................................rep. No. 122, 2001
Subdivision C
s. 943A...........................................ad. No. 122, 2001
s. 943B...........................................ad. No. 122, 2001
s. 943C...........................................ad. No. 122, 2001
s. 943D...........................................ad. No. 122, 2001
s. 943E ...........................................ad. No. 122, 2001
s. 943F ...........................................ad. No. 122, 2001
s. 944 .............................................rep. No. 122, 2001
Division 3
Subdivision A
s. 944A...........................................ad. No. 122, 2001
s. 945 .............................................rep. No. 122, 2001
Subdivision B ................................rep. No. 68, 2012
ss. 945A, 945B...............................ad. No. 122, 2001
rep. No. 68, 2012
s. 946 .............................................rep. No. 122, 2001
Subdivision C
s. 946A...........................................ad. No. 122, 2001
am. No. 101, 2007
s 946AA.........................................ad No 101, 2007
am No 45, 2008; No 70, 2015
s. 946B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
548 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 946C...........................................ad. No. 122, 2001
s. 947 .............................................rep. No. 122, 2001
Subdivision D
s. 947A...........................................ad. No. 122, 2001
s. 947B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 68, 2012
s. 947C...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 68, 2012
s. 947D...........................................ad. No. 122, 2001
am. No. 141, 2003; No 61, 2013
s. 947E ...........................................ad. No. 141, 2003
s. 948 .............................................rep. No. 122, 2001
Subdivision E
s. 948A...........................................rs. No. 122, 2001
s. 949 .............................................rep. No. 122, 2001
Division 4
s. 949A...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 155, 2012
s. 949B...........................................ad. No. 122, 2001
s. 950 .............................................rep. No. 122, 2001
s. 950A...........................................rep. No. 122, 2001
s. 951 .............................................rep. No. 122, 2001
Division 6
s. 951A...........................................ad. No. 122, 2001
s. 951B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 5, 2011
s. 951C...........................................ad. No. 141, 2003
s. 952 .............................................rep. No. 122, 2001
Division 7
Subdivision A
s. 952A...........................................rs. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 549
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 952B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 952C...........................................ad. No. 122, 2001
s. 952D...........................................ad. No. 122, 2001
s. 952E ...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 952F ...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 952G...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 952H...........................................ad. No. 122, 2001
s. 952I ............................................ad. No. 122, 2001
am. No. 141, 2003
s. 952J............................................ad. No. 122, 2001
am. No. 141, 2003
s. 952K...........................................ad. No. 122, 2001
s. 952L ...........................................ad. No. 122, 2001
s. 952M..........................................ad. No. 122, 2001
s. 953 .............................................rep. No. 122, 2001
Subdivision B
s. 953A...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 953B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 68, 2012
s. 953C...........................................ad. No. 122, 2001
s. 954 .............................................rep. No. 122, 2001
ss. 954A–954H ..............................rep. No. 122, 2001
ss. 954L–954N...............................rep. No. 122, 2001
ss. 954P–954T................................rep. No. 122, 2001
ss. 954W–954Z..............................rep. No. 122, 2001
s. 954ZA ........................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
550 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 955 .............................................rep. No. 122, 2001
s. 955A...........................................rep. No. 122, 2001
s. 956 .............................................rep. No. 122, 2001
s. 957 .............................................rep. No. 122, 2001
s. 958 .............................................rep. No. 122, 2001
s. 959 .............................................rep. No. 122, 2001
Part 7.7A
Part 7.7A........................................ad. No. 67, 2012
Division 1
s 960 ..............................................rep No 122, 2001
ad No 67, 2012
am No 68, 2012; No 22, 2016; No 6, 2017
s. 960A...........................................ad. No. 67, 2012
s. 960B...........................................ad. No. 68, 2012
Division 2
Division 2 ......................................ad. No. 68, 2012
Subdivision A
s. 961 .............................................rep. No. 122, 2001
ad. No. 68, 2012
s. 961A...........................................ad. No. 68, 2012
Subdivision B
s. 961B...........................................ad. No. 68, 2012
am No 22, 2016
s. 961C...........................................rep. No. 122, 2001
ad. No. 68, 2012
s. 961D...........................................rep. No. 122, 2001
ad. No. 68, 2012
s. 961E ...........................................rep. No. 122, 2001
ad. No. 68, 2012
s 961F ............................................rep No 122, 2001
ad No 68, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 551
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am No 70, 2015; No 22, 2016
Subdivision C
s. 961G...........................................rep. No. 122, 2001
ad. No. 68, 2012
Subdivision D
s. 961H...........................................ad. No. 68, 2012
Subdivision E
s 961J.............................................ad No 68, 2012
am No 22, 2016
Subdivision F
s. 961K...........................................ad. No. 68, 2012
s. 961L ...........................................ad. No. 68, 2012
s. 961M..........................................ad. No. 68, 2012
s. 961N...........................................ad. No. 68, 2012
s. 961P ...........................................ad. No. 68, 2012
Subdivision G
s. 961Q...........................................ad. No. 68, 2012
Division 3
Subdivision A
s. 962 .............................................rep. No. 122, 2001
ad. No. 67, 2012
s. 962A...........................................ad. No. 67, 2012
s. 962B...........................................ad. No. 67, 2012
s. 962C...........................................ad. No. 67, 2012
s. 962CA........................................ad. No. 67, 2012
Subdivision B
s. 962D...........................................ad. No. 67, 2012
s. 962E ...........................................ad. No. 67, 2012
s. 962F ...........................................ad. No. 67, 2012
s 962G............................................ad No 67, 2012
am No 22, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
552 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 962H............................................ad No 67, 2012
am No 22, 2016
s. 962J............................................ad. No. 67, 2012
s 962K............................................ad No 67, 2012
am No 22, 2016
s. 962L ...........................................ad. No. 67, 2012
s. 962M..........................................ad. No. 67, 2012
s. 962N...........................................ad. No. 67, 2012
s. 962P ...........................................ad. No. 67, 2012
s. 962Q...........................................ad. No. 67, 2012
Subdivision C
s. 962R...........................................ad. No. 67, 2012
s 962S ............................................ad No 67, 2012
am No 22, 2016
Division 4
Division 4 ......................................ad. No. 68, 2012
Subdivision A
s. 963 .............................................rep. No. 122, 2001
ad. No. 68, 2012
Subdivision B
s 963A............................................ad No 68, 2012
am No 22, 2016; No 6, 2017
s 963AA.........................................ad No 6, 2017
s 963B............................................ad No 68, 2012
am No 22, 2016; No 6, 2017
s 963BA.........................................ad No 6, 2017
s 963C............................................ad No 68, 2012
am No 22, 2016; No 6, 2017
s 963D............................................ad No 68, 2012
rs No 22, 2016
am No 6, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 553
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision C
s. 963E ...........................................ad. No. 68, 2012
s. 963F ...........................................ad. No. 68, 2012
s. 963G...........................................ad. No. 68, 2012
s. 963H...........................................ad. No. 68, 2012
s. 963J............................................ad. No. 68, 2012
s. 963K...........................................ad. No. 68, 2012
s. 963L ...........................................ad. No. 68, 2012
Division 5
Division 5 ......................................ad. No. 68, 2012
Subdivision A
s. 964 .............................................rep. No. 122, 2001
ad. No. 68, 2012
am No 61, 2013
s. 964A...........................................ad. No. 68, 2012
Subdivision B
s. 964B...........................................ad. No. 68, 2012
s. 964C...........................................ad. No. 68, 2012
s. 964D...........................................ad. No. 68, 2012
s. 964E ...........................................ad. No. 68, 2012
s. 964F ...........................................ad. No. 68, 2012
s. 964G...........................................ad. No. 68, 2012
s. 964H...........................................ad. No. 68, 2012
Division 6
s. 965 .............................................rep. No. 122, 2001
ad. No. 67, 2012
am No 68, 2012
Division 7
s. 966 .............................................rep. No. 122, 2001
ad. No. 67, 2012
s. 967 .............................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
554 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
ad. No. 67, 2012
s. 968 .............................................rep. No. 122, 2001
ad. No. 67, 2012
am. No. 68, 2012
s. 969 .............................................rep. No. 122, 2001
s. 970 .............................................rep. No. 122, 2001
ss. 970A, 970B...............................rep. No. 122, 2001
ss. 971, 972 ....................................rep. No. 122, 2001
s. 972A...........................................rep. No. 122, 2001
ss. 973–980 ....................................rep. No. 122, 2001
Part 7.8
Division 1
s. 980A...........................................ad. No. 122, 2001
s. 980B...........................................ad. No. 122, 2001
s. 981 .............................................rep. No. 122, 2001
Division 2
Subdivision A
s. 981A...........................................ad. No. 122, 2001
am. No. 108, 2009
s. 981B...........................................ad. No. 122, 2001
am. No. 141, 2003
s. 981C...........................................ad. No. 122, 2001
s. 981D...........................................ad. No. 122, 2001
am No 25, 2017
s. 981E ...........................................ad. No. 122, 2001
am. No. 96, 2010
s. 981F ...........................................ad. No. 122, 2001
s. 981G...........................................ad. No. 122, 2001
s. 981H...........................................ad. No. 122, 2001
am. No. 141, 2003
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 555
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision AA
Subdivision AA .............................ad No 25, 2017
s 981J.............................................ad No 25, 2017
s 981K............................................ad No 25, 2017
s 981L............................................ad No 25, 2017
s 981M...........................................ad No 25, 2017
s 981N............................................ad No 25, 2017
s 981P ............................................ad No 25, 2017
s. 982 .............................................rep. No. 122, 2001
Subdivision B
s. 982A...........................................ad. No. 122, 2001
s. 982B...........................................ad. No. 122, 2001
s. 982C...........................................ad. No. 122, 2001
s. 982D...........................................ad. No. 122, 2001
s. 983 .............................................rep. No. 122, 2001
Subdivision C
s. 983A...........................................rs. No. 122, 2001
s. 983B...........................................ad. No. 122, 2001
s. 983C...........................................ad. No. 122, 2001
s. 983D...........................................ad. No. 122, 2001
s. 983E ...........................................ad. No. 122, 2001
s. 984 .............................................rep. No. 122, 2001
Division 3
s. 984A...........................................ad. No. 122, 2001
s. 984B...........................................ad. No. 122, 2001
am No 25, 2017
s. 985 .............................................rep. No. 122, 2001
Division 4
s. 985A...........................................ad. No. 122, 2001
am. No. 75, 2009
s. 985B...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
556 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 985C...........................................ad. No. 122, 2001
s. 985D...........................................ad. No. 149, 2007
(1)(b) exp (s 985D(3))
Division 4A
Division 4A....................................ad. No. 108, 2009
Subdivision A
s. 985EA ........................................ad. No. 108, 2009
s. 985E ...........................................ad. No. 108, 2009
s. 985F ...........................................ad. No. 108, 2009
s. 985G...........................................ad. No. 108, 2009
s. 985H...........................................ad. No. 108, 2009
s. 985J............................................ad. No. 108, 2009
s. 985K...........................................ad. No. 108, 2009
Subdivision B
s. 985L ...........................................ad. No. 108, 2009
s. 985M..........................................ad. No. 108, 2009
s. 986 .............................................rep. No. 122, 2001
Division 5
s. 986A...........................................ad. No. 122, 2001
s. 986B...........................................ad. No. 122, 2001
s. 987 .............................................rep. No. 122, 2001
Division 6
Subdivision A
s. 987A...........................................ad. No. 122, 2001
Subdivision B
s. 988A...........................................ad. No. 122, 2001
s. 988B...........................................ad. No. 122, 2001
s. 988C...........................................ad. No. 122, 2001
s. 988D...........................................ad. No. 122, 2001
s. 988E ...........................................ad. No. 122, 2001
s. 988F ...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 557
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 988G...........................................ad. No. 122, 2001
Subdivision C
s. 989A...........................................ad. No. 122, 2001
s. 989B...........................................ad. No. 122, 2001
s. 989C...........................................ad. No. 122, 2001
s. 989CA........................................ad. No. 103, 2004
s. 989D...........................................ad. No. 122, 2001
Subdivision D
s. 990A...........................................ad. No. 122, 2001
rs. No. 101, 2007
s. 990B...........................................ad. No. 122, 2001
am. No. 101, 2007
s. 990C...........................................ad. No. 122, 2001
s. 990D...........................................ad. No. 122, 2001
s. 990E ...........................................ad. No. 122, 2001
s. 990F ...........................................ad. No. 122, 2001
s. 990G...........................................ad. No. 122, 2001
s. 990H...........................................ad. No. 122, 2001
s. 990I ............................................ad. No. 122, 2001
am. No. 103, 2004; No. 101, 2007
s. 990J............................................ad. No. 122, 2001
s. 990K...........................................ad. No. 122, 2001
am. No. 103, 2004
s. 990L ...........................................ad. No. 122, 2001
rs. No. 103, 2004
Division 7
s. 991A...........................................ad. No. 122, 2001
s. 991B...........................................ad. No. 122, 2001
s. 991C...........................................ad. No. 122, 2001
s. 991D...........................................ad. No. 122, 2001
s. 991E ...........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
558 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 991F ...........................................ad. No. 122, 2001
Division 8
s. 992A...........................................ad. No. 122, 2001
am. No. 29, 2002; No. 141, 2003; No. 101, 2007
s. 992AA........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 992B...........................................ad. No. 122, 2001
am. No. 141, 2003; No. 5, 2011
s. 992C...........................................ad. No. 141, 2003
Division 9
s. 993A...........................................ad. No. 122, 2001
s. 993B...........................................ad. No. 122, 2001
s. 993C...........................................ad. No. 122, 2001
s. 993D...........................................ad. No. 122, 2001
s. 995 .............................................rep. No. 122, 2001
s. 995A...........................................rep. No. 122, 2001
ss. 997–1001 ..................................rep. No. 122, 2001
ss. 1001A–1001D ..........................rep. No. 122, 2001
s. 1002 ...........................................rep. No. 122, 2001
ss. 1002A–1002H ..........................rep. No. 122, 2001
ss. 1002J–1002N............................rep. No. 122, 2001
ss. 1002P–1002U ...........................rep. No. 122, 2001
s. 1005 ...........................................rep. No. 122, 2001
Part 7.9
Part 7.9 heading .............................rs. No. 141, 2003
Division 1
s. 1010A.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 146, 2008; No. 155, 2012
s. 1010B.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1010BA......................................ad. No. 101, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 559
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1010C.........................................ad. No. 122, 2001
s. 1010D.........................................ad. No. 122, 2001
Division 2
Subdivision A
s. 1011A.........................................ad. No. 122, 2001
s. 1011B.........................................ad. No. 122, 2001
am. No. 101, 2007
s. 1011C.........................................ad. No. 122, 2001
Subdivision B
s. 1012A.........................................ad. No. 122, 2001
am. No. 103, 2004; No. 101, 2007
s. 1012B.........................................ad. No. 122, 2001
am. No. 101, 2007
s. 1012C.........................................ad. No. 122, 2001
am. No. 103, 2004
s. 1012D.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004
s. 1012DAA...................................ad. No. 101, 2007
s. 1012DA......................................ad. No. 103, 2004
am. No. 101, 2007
s. 1012E .........................................ad. No. 122, 2001
s. 1012F .........................................ad. No. 122, 2001
s. 1012G.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1012H.........................................ad. No. 122, 2001
s. 1012I ..........................................ad. No. 122, 2001
s. 1012IA .......................................ad. No. 122, 2001
am. No. 141, 2003
s. 1012J..........................................ad. No. 122, 2001
s. 1012K.........................................ad. No. 122, 2001
s. 1013 ...........................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
560 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision C
s. 1013A.........................................ad. No. 122, 2001
s. 1013B.........................................ad. No. 122, 2001
s. 1013C.........................................ad. No. 122, 2001
s. 1013D.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004
s. 1013DA......................................ad. No. 122, 2001
s. 1013E .........................................ad. No. 122, 2001
am. No. 103, 2004
s. 1013F .........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004
s. 1013FA ......................................ad. No. 103, 2004
am. No. 101, 2007
s. 1013G.........................................ad. No. 122, 2001
s. 1013H.........................................ad. No. 122, 2001
s. 1013I ..........................................ad. No. 122, 2001
s. 1013J..........................................ad. No. 122, 2001
s. 1013K.........................................ad. No. 122, 2001
s. 1013L .........................................ad. No. 122, 2001
s. 1013M........................................ad. No. 141, 2003
s. 1014 ...........................................rep. No. 122, 2001
Subdivision D
s. 1014A.........................................ad. No. 122, 2001
am. No. 101, 2007
s. 1014B.........................................ad. No. 122, 2001
s. 1014C.........................................ad. No. 122, 2001
s. 1014D.........................................ad. No. 122, 2001
s. 1014E .........................................ad. No. 122, 2001
s. 1014F .........................................ad. No. 122, 2001
Subdivision DA
Subdivision DA .............................ad. No. 101, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 561
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1014G.........................................ad. No. 101, 2007
s. 1014H.........................................ad. No. 101, 2007
s. 1014J..........................................ad. No. 101, 2007
s. 1014K.........................................ad. No. 101, 2007
s. 1014L .........................................ad. No. 101, 2007
s. 1015 ...........................................rep. No. 122, 2001
Subdivision E
s. 1015A.........................................ad. No. 122, 2001
s. 1015B.........................................ad. No. 122, 2001
s. 1015C.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1015D.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 1015E .........................................ad. No. 122, 2001
Subdivision F
s 1016A..........................................ad No 122, 2001
am No 141, 2003; No 45, 2008; No 108, 2009; No 70, 2015
s. 1016B.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1016C.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1016D.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 1016E .........................................ad. No. 122, 2001
am. No. 141, 2003; No. 101, 2007
s. 1016F .........................................ad. No. 122, 2001
Division 3
s. 1017A.........................................ad. No. 122, 2001
s. 1017B.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 162, 2012; No 61, 2013
s 1017BA.......................................ad No 171, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
562 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am No 61, 2013
s 1017BB .......................................ad No 171, 2012
s 1017BC .......................................ad No 171, 2012
s 1017BD.......................................ad No 171, 2012
s 1017BE .......................................ad No 171, 2012
s. 1017C.........................................ad. No. 122, 2001
am. No. 141, 2003
s 1017D..........................................ad No 122, 2001
am No 141, 2003; No 45, 2008; No 108, 2009; No 70, 2015
s. 1017DA......................................ad. No. 122, 2001
s. 1017E .........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1017F .........................................ad. No. 122, 2001
s. 1017G.........................................ad. No. 122, 2001
Division 4
s 1018A..........................................ad No 122, 2001
am No 85, 2007; No 5, 2011; No 17, 2017
s. 1018B.........................................ad. No. 122, 2001
Division 5
s. 1019A.........................................ad. No. 122, 2001
am. No. 45, 2008
s. 1019B.........................................ad. No. 122, 2001
Division 5A
Division 5A....................................ad. No. 141, 2003
s. 1019C.........................................ad. No. 141, 2003
s. 1019D.........................................ad. No. 141, 2003
s. 1019E .........................................ad. No. 141, 2003
s. 1019F .........................................ad. No. 141, 2003
s. 1019G.........................................ad. No. 141, 2003
am. No. 131, 2010
s. 1019H.........................................ad. No. 141, 2003
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 563
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1019I ..........................................ad. No. 141, 2003
s. 1019J..........................................ad. No. 141, 2003
s. 1019K.........................................ad. No. 141, 2003
am. No. 131, 2010
Division 5B
Division 5B....................................ad. No. 146, 2008
s. 1020AA......................................ad. No. 146, 2008
s. 1020AB ......................................ad. No. 146, 2008
s. 1020AC ......................................ad. No. 146, 2008
s. 1020AD......................................ad. No. 146, 2008
s. 1020AE ......................................ad. No. 146, 2008
s. 1020AF ......................................ad. No. 146, 2008
Division 5C
Division 5C....................................ad. No. 155, 2012
s. 1020AG......................................ad. No. 155, 2012
s. 1020AH......................................ad. No. 155, 2012
s. 1020AI .......................................ad. No. 155, 2012
s. 1020AJ .......................................ad. No. 155, 2012
s. 1020AK......................................ad. No. 155, 2012
s. 1020AL ......................................ad. No. 155, 2012
Division 6
s. 1020A.........................................ad. No. 122, 2001
s. 1020B.........................................ad. No. 122, 2001
am. No. 146, 2008; No. 96, 2010
s. 1020C.........................................ad. No. 122, 2001
rep. No. 146, 2008
s. 1020D.........................................ad. No. 122, 2001
s. 1020E .........................................ad. No. 122, 2001
am. No. 141, 2003; No 171, 2012
s. 1020F .........................................ad. No. 122, 2001
am. No. 141, 2003; No. 146, 2008; No. 5, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
564 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1020G.........................................ad. No. 122, 2001
am. No. 141, 2003
Division 7
Subdivision A
s. 1021A.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1021B.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1021C.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021D.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021E .........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021F .........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021FA ......................................ad. No. 141, 2003
s. 1021FB.......................................ad. No. 141, 2003
s. 1021G.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1021H.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021I ..........................................ad. No. 122, 2001
am. No. 141, 2003; No. 103, 2004; No. 101, 2007
s. 1021J..........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1021K.........................................ad. No. 122, 2001
s. 1021L .........................................ad. No. 122, 2001
s. 1021M........................................ad. No. 122, 2001
s. 1021N.........................................ad. No. 122, 2001
s 1021NA.......................................ad No 171, 2012
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 565
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 1021NB.......................................ad No 171, 2012
s 1021NC.......................................ad No 171, 2012
s. 1021O.........................................ad. No. 122, 2001
s. 1021P .........................................ad. No. 141, 2003
am. No. 131, 2010
Subdivision B
s. 1022A.........................................ad. No. 122, 2001
am. No. 141, 2003
s. 1022B.........................................ad. No. 122, 2001
am. No. 141, 2003; No 171, 2012
s. 1022C.........................................ad. No. 122, 2001
Part 7.10
Division 1
s. 1040A.........................................ad. No. 122, 2001
Division 2
s. 1041A.........................................ad. No. 122, 2001
s. 1041B.........................................ad. No. 122, 2001
am. No. 131, 2010
s. 1041C.........................................ad. No. 122, 2001
s. 1041D.........................................ad. No. 122, 2001
s. 1041E .........................................ad. No. 122, 2001
s. 1041F .........................................ad. No. 122, 2001
s. 1041G.........................................ad. No. 122, 2001
s 1041H..........................................ad No 122, 2001
am No 118, 2004; No 171, 2012; No 17, 2017
s. 1041I ..........................................ad. No. 122, 2001
am. Nos. 103 and 118, 2004
s. 1041J..........................................ad. No. 122, 2001
s 1041K..........................................ad No 122, 2001
am No 171, 2012; No 17, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
566 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 2A
Division 2A....................................ad. No. 103, 2004
s. 1041L .........................................ad. No. 103, 2004
s. 1041M........................................ad. No. 103, 2004
s. 1041N.........................................ad. No. 103, 2004
s. 1041O.........................................ad. No. 103, 2004
s. 1041P .........................................ad. No. 103, 2004
s. 1041Q.........................................ad. No. 103, 2004
s. 1041R.........................................ad. No. 103, 2004
s. 1041S .........................................ad. No. 103, 2004
Division 3
Subdivision A
s. 1042A.........................................ad. No. 122, 2001
am. No. 29, 2002
s. 1042B.........................................ad. No. 122, 2001
s. 1042C.........................................ad. No. 122, 2001
s. 1042D.........................................ad. No. 122, 2001
s. 1042E .........................................ad. No. 122, 2001
am. No. 26, 2010
s. 1042F .........................................ad. No. 122, 2001
am. No. 4, 2010
s. 1042G.........................................ad. No. 122, 2001
s. 1042H.........................................ad. No. 122, 2001
Subdivision B
s. 1043A.........................................ad. No. 122, 2001
s. 1043B.........................................ad. No. 122, 2001
s. 1043C.........................................ad. No. 122, 2001
s. 1043D.........................................ad. No. 122, 2001
s. 1043E .........................................ad. No. 122, 2001
s. 1043F .........................................ad. No. 122, 2001
am. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 567
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1043G.........................................ad. No. 122, 2001
s. 1043H.........................................ad. No. 122, 2001
am. No. 29, 2002
s. 1043I ..........................................ad. No. 122, 2001
am. No. 29, 2002; No. 103, 2004
s. 1043J..........................................ad. No. 122, 2001
am. No. 29, 2002 (as am. by No. 100, 2005); No. 103, 2004
s. 1043K.........................................ad. No. 122, 2001
s. 1043L .........................................ad. No. 122, 2001
s. 1043M........................................ad. No. 122, 2001
s. 1043N.........................................ad. No. 122, 2001
s. 1043O.........................................ad. No. 122, 2001
Division 4
Division 4 heading.........................rs. No. 118, 2004
s. 1044A.........................................ad. No. 122, 2001
am. No. 103, 2004
s. 1044B.........................................ad. No. 118, 2004
Division 5
Division 5 ......................................ad. No. 141, 2003
s. 1045A.........................................ad. No. 141, 2003
Part 7.11
Division 1
s. 1070A.........................................ad. No. 122, 2001
s. 1070B.........................................ad. No. 122, 2001
s. 1070C.........................................ad. No. 122, 2001
s. 1070D.........................................ad. No. 122, 2001
Division 2
Subdivision A
s. 1071A.........................................ad. No. 122, 2001
s. 1071B.........................................ad. No. 122, 2001
s. 1071C.........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
568 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1071D.........................................ad. No. 122, 2001
s. 1071E .........................................ad. No. 122, 2001
s. 1071F .........................................ad. No. 122, 2001
s. 1071G.........................................ad. No. 122, 2001
am. No. 103, 2004
s. 1071H.........................................ad. No. 122, 2001
am. No. 103, 2004
Subdivision B
s. 1072A.........................................ad. No. 122, 2001
s. 1072B.........................................ad. No. 122, 2001
s. 1072C.........................................ad. No. 122, 2001
s. 1072D.........................................ad. No. 122, 2001
s. 1072E .........................................ad. No. 122, 2001
s. 1072F .........................................ad. No. 122, 2001
s. 1072G.........................................ad. No. 122, 2001
s. 1072H.........................................ad. No. 122, 2001
Division 3
s 1073A..........................................ad No 122, 2001
am No 155, 2012; No 100, 2014
s. 1073B.........................................ad. No. 122, 2001
s. 1073C.........................................ad. No. 122, 2001
s. 1073D.........................................ad. No. 122, 2001
s 1073E ..........................................ad No 122, 2001
am No 5, 2011; am No 155, 2012; No 100, 2014
s. 1073F .........................................ad. No. 122, 2001
Division 4
s. 1074A.........................................ad. No. 122, 2001
s. 1074B.........................................ad. No. 122, 2001
s. 1074C.........................................ad. No. 122, 2001
s. 1074D.........................................ad. No. 122, 2001
s. 1074E .........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 569
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1074F .........................................ad. No. 122, 2001
s. 1074G.........................................ad. No. 122, 2001
Division 5
s. 1075A.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 5, 2011
ss. 1085–1087 ................................rep. No. 122, 2001
ss. 1089–1091 ................................rep. No. 122, 2001
ss. 1091AA, 1091AB .....................rep. No. 122, 2001
ss. 1091A–1091E...........................rep. No. 122, 2001
ss. 1092–1096 ................................rep. No. 122, 2001
s. 1096A.........................................rep. No. 122, 2001
s. 1097 ...........................................rep. No. 122, 2001
ss. 1097A–1097D ..........................rep. No. 122, 2001
ss. 1098, 1099 ................................rep. No. 122, 2001
s. 1099A.........................................rep. No. 122, 2001
s. 1100 ...........................................rep. No. 122, 2001
Part 7.12
Division 1
s. 1100A.........................................ad. No. 122, 2001
am. No. 26, 2010; No 25, 2017
s. 1100B.........................................ad. No. 122, 2001
s. 1100C.........................................ad. No. 122, 2001
am. No. 26, 2010
s. 1100D.........................................ad. No. 122, 2001
s. 1101 ...........................................rep. No. 122, 2001
Division 2
s. 1101A.........................................ad. No. 122, 2001
s. 1101B.........................................ad. No. 122, 2001
am. No. 141, 2003; No. 26, 2010; No. 178, 2012; No 25, 2017
s. 1101C.........................................ad. No. 122, 2001
s. 1101D.........................................ad. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
570 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1101E .........................................ad. No. 122, 2001
s. 1101F .........................................ad. No. 122, 2001
s. 1101G.........................................ad. No. 122, 2001
s. 1101GA......................................ad. No. 122, 2001
s. 1101H.........................................ad. No. 122, 2001
s. 1101I ..........................................ad. No. 122, 2001
s. 1101J..........................................ad. No. 122, 2001
ss. 1102–1109 ................................rep. No. 122, 2001
ss. 1109A–1109G ..........................rep. No. 122, 2001
ss. 1109J–1109N............................rep. No. 122, 2001
s. 1109P .........................................rep. No. 122, 2001
ss. 1110–1112 ................................rep. No. 122, 2001
ss. 1112A–1112D ..........................rep. No. 122, 2001
s. 1113 ...........................................rep. No. 122, 2001
s. 1113A.........................................rep. No. 122, 2001
ss. 1114–1119 ................................rep. No. 122, 2001
s. 1119A.........................................ad. No. 146, 2001
rep. No. 122, 2001
Chapter 8
Chapter 8 .......................................rep. No. 122, 2001
ad. No. 85, 2007
ss. 1120–1123 ................................rep. No. 122, 2001
ss. 1126–1128 ................................rep. No. 122, 2001
ss. 1131–1141 ................................rep. No. 122, 2001
s. 1141A.........................................rep. No. 122, 2001
ss. 1142–1144 ................................rep. No. 122, 2001
s. 1144A.........................................rep. No. 122, 2001
s. 1145 ...........................................rep. No. 122, 2001
s. 1145A.........................................rep. No. 122, 2001
ss. 1147–1161 ................................rep. No. 122, 2001
ss. 1164, 1165 ................................rep. No. 122, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 571
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1165A.........................................rep. No. 122, 2001
ss. 1166–1178 ................................rep. No. 122, 2001
ss. 1180–1188 ................................rep. No. 122, 2001
s. 1189A.........................................rep. No. 122, 2001
ss. 1190–1192 ................................rep. No. 122, 2001
s. 1192A.........................................rep. No. 122, 2001
ss. 1193–1199 ................................rep. No. 122, 2001
s. 1199A.........................................rep. No. 122, 2001
s. 1200 ...........................................rep. No. 122, 2001
Part 8.1
s. 1200A.........................................ad. No. 85, 2007
Part 8.2
Division 1
s. 1200B.........................................ad. No. 85, 2007
s. 1200C.........................................ad. No. 85, 2007
s. 1200D.........................................ad. No. 85, 2007
s. 1200E .........................................ad. No. 85, 2007
Division 2
s. 1200F .........................................ad. No. 85, 2007
am. No. 146, 2008
Division 3
s. 1200G.........................................ad. No. 85, 2007
s. 1200H.........................................ad. No. 85, 2007
s. 1200J..........................................ad. No. 85, 2007
Division 4
s. 1200K.........................................ad. No. 85, 2007
s. 1200L .........................................ad. No. 85, 2007
s. 1200M........................................ad. No. 85, 2007
Division 5
s. 1200N.........................................ad. No. 85, 2007
s. 1200P .........................................ad. No. 85, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
572 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1200Q.........................................ad. No. 85, 2007
Division 6
s. 1200R.........................................ad. No. 85, 2007
Part 8.3
s. 1200S .........................................ad. No. 85, 2007
s. 1200T .........................................ad. No. 85, 2007
s. 1200U.........................................ad. No. 85, 2007
ss. 1201, 1202 ................................rep. No. 122, 2001
ss. 1204, 1205 ................................rep. No. 122, 2001
s. 1205A.........................................rep. No. 122, 2001
ss. 1206–1273 ................................rep. No. 122, 2001
s. 1273A.........................................ad. No. 146, 2001
rep. No. 122, 2001
Chapter 9
Part 9.1
s 1274 ............................................am No 117, 2001; No 122, 2001; No 24, 2003; No 141, 2003; No 103,
2004; No 85, 2007; No 154, 2007; No 11, 2016; No 25, 2017; No 55,
2017
s 1274AA.......................................rs No 103, 2004
am No 131, 2006; No 9, 2009; No 44, 2010
s 1274A..........................................am No 7, 2017
Part 9.2
Part 9.2 heading .............................rs No 11, 2016
Division 2
s 1279 ............................................am No 103, 2004; No 11, 2016
s. 1280 ...........................................am. No. 116, 2003; No. 103, 2004
s. 1280A.........................................ad. No. 103, 2004
am No 58, 2016
s. 1281 ...........................................am. No. 103, 2004
s 1282 ............................................am No 116, 2003; No 132, 2007
rep No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 573
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 1283 ............................................rep No 11, 2016
s 1284 ............................................rs No 132, 2007
rep No 11, 2016
s 1286 ............................................rep No 11, 2016
s 1287 ............................................am No 11, 2016
s. 1287A.........................................ad. No. 103, 2004
s 1288 ............................................am No 103, 2004; No 132, 2007
rep No 11, 2016
s. 1289 ...........................................rs. No. 103, 2004
am. No. 1, 2007
Division 2A
Division 2A....................................ad. No. 103, 2004
s. 1289A.........................................ad. No. 103, 2004
Division 3
s 1290 ............................................am No 11, 2016
s 1290A..........................................ad No 132, 2007
rep No 11, 2016
s 1291 ............................................rep No 11, 2016
ad No 45, 2017
s 1291A..........................................ad No 45, 2017
s 1291B..........................................ad No 45, 2017
s 1292 ............................................am No 119, 2001; No 103, 2004; No 105, 2008; No 11, 2016
s 1294 ............................................am No 119, 2001; No 11, 2016
s. 1294A.........................................ad. No. 132, 2007
s 1295 ............................................am No 11, 2016; No 45, 2017
s. 1296 ...........................................am. No. 103, 2004; No. 132, 2007; No. 5, 2011
s 1297 ............................................am No 132, 2007; No 11, 2016
s 1298 ............................................am No 103, 2004
rs No 11, 2016
s 1298A..........................................ad No 132, 2007
rep No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
574 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 4
Division 4 ......................................ad No 58, 2016
s 1298P ..........................................ad No 58, 2016
s 1298Q..........................................ad No 58, 2016
Part 9.2A
Part 9.2A........................................ad. No. 103, 2004
Division 1
s. 1299A.........................................ad. No. 103, 2004
s 1299B..........................................ad No 103, 2004
am No 11, 2016
s. 1299C.........................................ad. No. 103, 2004
s. 1299D.........................................ad. No. 103, 2004
s. 1299E .........................................ad. No. 103, 2004
s. 1299F .........................................ad. No. 103, 2004
s. 1299G.........................................ad. No. 103, 2004
Division 2
s. 1299H.........................................ad. No. 103, 2004
s 1299I ...........................................ad No 103, 2004
am No 45, 2017
s. 1299J..........................................ad. No. 103, 2004
s. 1299K.........................................ad. No. 103, 2004
s. 1299L .........................................ad. No. 103, 2004
s. 1299M........................................ad. No. 103, 2004
Part 9.3
s 1300 ............................................am No 117, 2001; No 11, 2016
s. 1302 ...........................................am. No. 117, 2001; No. 103, 2004
rep. No. 96, 2010
s. 1306 ...........................................am. No. 116, 2003
s. 1307 ...........................................am. No. 117, 2001; No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 575
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 9.4
Division 1A
Division 1A....................................ad. No. 117, 2001
s. 1308A.........................................ad. No. 117, 2001
Division 1
s 1308 ............................................am No 117 and 122, 2001; No 141, 2003; No 103, 2004; No 101, 2007;
No 100 2014
s 1309 ............................................am No 122, 2001; No 103, 2004; No 126, 2006; No 101, 2007; No 100,
2014; No 17, 2017
Division 2
s 1311 ............................................am No 117, 2001; No 122, 2001; No 24, 2003; No 85, 2007; No 108,
2009; No 17, 2017
s. 1312 ...........................................am. No. 131, 2010
s. 1314 ...........................................am. No. 103, 2004
Part 9.4AAA
Part 9.4AAA ..................................ad. No. 103, 2004
s. 1317AA......................................ad. No. 103, 2004
s. 1317AB ......................................ad. No. 103, 2004
s. 1317AC ......................................ad. No. 103, 2004
s. 1317AD......................................ad. No. 103, 2004
s. 1317AE ......................................ad. No. 103, 2004
Part 9.4A
s 1317B..........................................am No 103, 2004; No 11, 2016
s 1317C..........................................am No 122, 2001; No 103, 2004; No 26, 2010; No 48, 2012; No 118,
2012; No 178, 2012; No 11, 2016; No 25, 2017
s 1317D..........................................am No 11, 2016
Part 9.4AA
Part 9.4AA.....................................ad. No. 103, 2004
s. 1317DAA...................................ad. No. 103, 2004
s. 1317DAB ...................................ad. No. 103, 2004
s. 1317DAC ...................................ad. No. 103, 2004
s. 1317DAD...................................ad. No. 103, 2004
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
576 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1317DAE ...................................ad. No. 103, 2004
s. 1317DAF....................................ad. No. 103, 2004
s 1317DAG....................................ad No 103, 2004
am No 101, 2007; No 100, 2014
s. 1317DAH...................................ad. No. 103, 2004
s. 1317DAI.....................................ad. No. 103, 2004
s. 1317DAJ ....................................ad. No. 103, 2004
Part 9.4B
s. 1317DA......................................ad. No. 122, 2001
am. No. 29, 2002; No. 26, 2010; No. 68, 2012
rs No 59, 2013
am No 25, 2017
s. 1317E .........................................am. Nos. 55 and 122, 2001; No. 103, 2004; No. 108, 2009; No. 26,
2010; Nos. 67, 68, 178 and 180, 2012; No 59, 2013; No 25, 2017
s. 1317G.........................................am. No. 122, 2001; No. 103, 2004; No. 26, 2010; Nos. 67, 68, 178 and
180, 2012; No 25, 2017
s. 1317GA......................................ad. No. 67, 2012
s. 1317H.........................................am. No. 122, 2001
am. No. 103, 2004
s. 1317HA......................................ad. No. 122, 2001
am. No. 103, 2004
s. 1317HB ......................................ad. No. 26, 2010
am No 25, 2017
s. 1317J..........................................am. No. 122, 2001; No. 103, 2004; No. 178, 2012
s. 1317P .........................................am. No. 122, 2001; No. 103, 2004; No. 68, 2012
s. 1317R.........................................am. No. 103, 2004
s. 1317S .........................................am. No. 103, 2004; Nos. 68 and 178, 2012
Part 9.5
s. 1318 ...........................................am. No. 103, 2004; No. 126, 2006
s 1321 ............................................am No 126, 2006
rep No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 577
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1322 ...........................................am. No. 103, 2004
s. 1323 ...........................................am. Nos. 117 and 122, 2001
s. 1324A.........................................am. No. 122, 2001
s. 1324B.........................................am. No. 122, 2001; No. 26, 2010; No. 178, 2012; No 25, 2017
s. 1325 ...........................................am. No. 122, 2001; No. 118, 2004; No. 26, 2010; No. 42, 2011; No 25,
2017
s. 1325A.........................................am. No. 122, 2001
s. 1325B.........................................am. No. 122, 2001
Part 9.6
s. 1335 ...........................................am. No. 116, 2003; No. 126, 2006
Part 9.6A
Division 2
Division 2 heading.........................rs. No. 116, 2003
s. 1338B.........................................am. No. 108, 2009
Part 9.7
s. 1339 ...........................................rs. No. 74, 2007
am. No. 176, 2012
s. 1340 ...........................................am. No. 74, 2007
s. 1341 ...........................................am. No. 8, 2005; No. 74, 2007; No. 176, 2012
Part 9.9
s. 1344 ...........................................ad. No. 24, 2003
s. 1345A.........................................am. No. 101, 2007
s 1349 ............................................ad No 132, 2007
am No 103, 2010; No 11, 2016
Part 9.10
Part 9.10 heading ...........................rs. No. 24, 2003
s 1351 ............................................rs No 24, 2003
am No 101, 2007; No 48, 2012; No 11, 2016
s. 1359 ...........................................am. No. 24, 2003
Part 9.12
s. 1364 ...........................................am. No. 122, 2001; No. 24, 2003; No. 132, 2007; No. 24, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
578 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s. 1367A.........................................ad. No. 48, 2012
s. 1368 ...........................................am. No. 122, 2001
Chapter 10
Part 10.1
Division 1
s. 1372 ...........................................am. No. 55, 2001
Division 4
s. 1382 ...........................................am. No. 55, 2001
s. 1384A.........................................ad. No. 55, 2001
s. 1384B.........................................ad. No. 55, 2001
Division 5
s. 1390 ...........................................am. No. 5, 2011
Division 6
s 1400 ............................................am No 75, 2017
s 1401 ............................................am No 75, 2017
s. 1408 ...........................................am. No. 116, 2003
Division 7
s. 1409 ...........................................am. No. 154, 2007
Part 10.2
Part 10.2.........................................ad. No. 123, 2001
Division 1
Subdivision A
s. 1410 ...........................................ad. No. 123, 2001
Subdivision B
s. 1411 ...........................................ad. No. 123, 2001
s. 1412 ...........................................ad. No. 123, 2001
s. 1413 ...........................................ad. No. 123, 2001
s. 1414 ...........................................ad. No. 123, 2001
am. No. 141, 2003
s. 1415 ...........................................ad. No. 123, 2001
s. 1416 ...........................................ad. No. 123, 2001
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 579
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
am. No. 141, 2003
s. 1417 ...........................................ad. No. 123, 2001
am. No. 5, 2011
s. 1418 ...........................................ad. No. 123, 2001
s. 1419 ...........................................ad. No. 123, 2001
s. 1420 ...........................................ad. No. 123, 2001
s. 1421 ...........................................ad. No. 123, 2001
s. 1422 ...........................................ad. No. 123, 2001
Subdivision C
s. 1423 ...........................................ad. No. 123, 2001
s. 1424 ...........................................ad. No. 123, 2001
s. 1424A.........................................ad. No. 123, 2001
s. 1425 ...........................................ad. No. 123, 2001
s. 1426 ...........................................ad. No. 123, 2001
am. No. 141, 2003
s. 1427 ...........................................ad. No. 123, 2001
s. 1428 ...........................................ad. No. 123, 2001
am. No. 141, 2003
s. 1429 ...........................................ad. No. 123, 2001
Subdivision D
s. 1430 ...........................................ad. No. 123, 2001
s. 1431 ...........................................ad. No. 123, 2001
am. No. 141, 2003
s. 1432 ...........................................ad. No. 123, 2001
s. 1433 ...........................................ad. No. 123, 2001
s. 1434 ...........................................ad. No. 123, 2001
s. 1435 ...........................................ad. No. 123, 2001
s. 1436 ...........................................ad. No. 123, 2001
s. 1436A.........................................ad. No. 123, 2001
s. 1437 ...........................................ad. No. 123, 2001
am. No. 141, 2003; No. 5, 2011
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
580 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision E
s. 1438 ...........................................ad. No. 123, 2001
am. No. 141, 2003; No. 154, 2007; No. 5, 2011
s. 1439 ...........................................ad. No. 123, 2001
s. 1440 ...........................................ad. No. 123, 2001
s. 1441 ...........................................ad. No. 123, 2001
s. 1442 ...........................................ad. No. 123, 2001
am. No. 141, 2003; No. 5, 2011
Subdivision F
s. 1442A.........................................ad. No. 123, 2001
s. 1442B.........................................ad. No. 123, 2001
Division 2
s. 1443 ...........................................ad. No. 123, 2001
s. 1444 ...........................................ad. No. 123, 2001
am. No. 154, 2007
s. 1445 ...........................................ad. No. 123, 2001
am. No. 154, 2007
Part 10.3
Part 10.3.........................................ad No 24, 2003
s 1446 ............................................ad No 24, 2003
rep No 96, 2010
s 1447 ............................................ad No 24, 2003
s.1448 ............................................ad No 24, 2003
am No 103, 2004
Part 10.4
Part 10.4.........................................ad No 141, 2003
s 1449 ............................................ad No 141, 2003
s 1450 ............................................ad No 141, 2003
s 1451 ............................................ad No 141, 2003
s 1452 ............................................ad No 141, 2003
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 581
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 10.5
Part 10.5.........................................ad No 103, 2004
s 1453 ............................................ad No 103, 2004
s 1454 ............................................ad No 103, 2004
s 1455 ............................................ad No 103, 2004
am No 1, 2007
s 1456 ............................................ad No 103, 2004
s 1457 ............................................ad No 103, 2004
s 1458 ............................................ad No 103, 2004
s 1459 ............................................ad No 103, 2004
s 1460 ............................................ad No 103, 2004
s 1461 ............................................ad No 103, 2004
s 1462 ............................................ad No 103, 2004
am No 138, 2005
s 1463 ............................................ad No 103, 2004
s 1464 ............................................ad No 103, 2004
s 1465 ............................................ad No 103, 2004
s 1466A..........................................ad No 103, 2004
s 1466 ............................................ad No 103, 2004
s 1467 ............................................ad No 103, 2004
s 1468 ............................................ad No 103, 2004
s 1469 ............................................ad No 103, 2004
s 1470 ............................................ad No 103, 2004
s 1471 ............................................ad No 103, 2004
Part 10.8
Part 10.8.........................................ad No 64, 2007
s 1478 ............................................ad No 64, 2007
Part 10.9
Part 10.9.........................................ad No 132, 2007
s 1479 ............................................ad No 132, 2007
s 1480 ............................................ad No 132, 2007
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
582 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 1481 ............................................ad No 132, 2007
s 1482 ............................................ad No 132, 2007
s 1483 ............................................ad No 132, 2007
am No 96, 2010; No 35, 2011
Part 10.10
Part 10.10.......................................ad No 146, 2008
s 1484 ............................................ad No 146, 2008
Part 10.11
Part 10.11.......................................ad No 9, 2009
s 1485 ............................................ad No 9, 2009
s 1486 ............................................ad No 9, 2009
Part 10.12
Part 10.12.......................................ad No 108, 2009
Division 1
s 1487 ............................................ad No 108, 2009
s 1488 ............................................ad No 108, 2009
s 1489 ............................................ad No 108, 2009
s 1490 ............................................ad No 108, 2009
s 1491 ............................................ad No 108, 2009
s 1492 ............................................ad No 108, 2009
Division 2
s 1493 ............................................ad No 108, 2009
s 1494 ............................................ad No 108, 2009
s 1495 ............................................ad No 108, 2009
s 1496 ............................................ad No 108, 2009
Division 3
s 1497 ............................................ad No 108, 2009
s 1498 ............................................ad No 108, 2009
Part 10.13
Part 10.13.......................................ad No 96, 2010
s 1498A..........................................ad No 96, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 583
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
rep No 96, 2010
s 1499 ............................................ad No 96, 2010
s 1500 ............................................ad No 96, 2010
s 1501 ............................................ad No 96, 2010
am No 35, 2011
s 1501A..........................................ad No 35, 2011
s 1501B..........................................ad No 35, 2011
s 1502 ............................................ad No 96, 2010
s 1503 ............................................ad No 96, 2010
s 1504 ............................................ad No 96, 2010
s 1505 ............................................ad No 96, 2010
s 1506 ............................................ad No 96, 2010
s 1507 ............................................ad No 96, 2010
s 1508 ............................................ad No 96, 2010
s 1509 ............................................ad No 96, 2010
s 1510 ............................................ad No 96, 2010
am No 35, 2011
Part 10.14
Part 10.14.......................................ad No 66, 2010
s 1510A..........................................ad No 66, 2010
s 1510B..........................................ad No 66, 2010
Part 10.15
Part 10.15.......................................ad No 26, 2010 (as am by No 66, 2010)
s 1511 ............................................ad No 26, 2010
s 1512 ............................................ad No 26, 2010
s 1513 ............................................ad No 26, 2010
Part 10.16
Part 10.16.......................................ad No 131, 2010
s 1516 ............................................ad No 131, 2010
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
584 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 10.17
Part 10.17.......................................ad No 42, 2011
s 1517 ............................................ad No 42, 2011
s 1518 ............................................ad No 42, 2011
s 1519 ............................................ad No 42, 2011
s 1520 ............................................ad No 42, 2011
s 1521 ............................................ad No 42, 2011
s 1522 ............................................ad No 42, 2011
s 1523 ............................................ad No 42, 2011
s 1524 ............................................ad No 42, 2011
s 1525 ............................................ad No 42, 2011
Part 10.18
Part 10.18 heading .........................rs No 22, 2016
Part 10.18.......................................ad No 68, 2012
Division 1
Division 1 heading.........................ad No 22, 2016
s 1526 ............................................ad No 68, 2012
am No 61, 2013
s 1527 ............................................ad No 68, 2012
s 1528 ............................................ad No 68, 2012
s 1529 ............................................ad No 68, 2012
s 1530 ............................................ad No 68, 2012
s 1531 ............................................ad No 68, 2012
Division 2
Division 2 ......................................ad No 22, 2016
s 1531A..........................................ad No 22, 2016
s 1521B..........................................ad No 22, 2016
s 1531C..........................................ad No 22, 2016
s 1531D..........................................ad No 22, 2016
s 1532E ..........................................ad No 22, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 585
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 10.19
Part 10.19.......................................ad No 48, 2012
s 1532 ............................................ad No 48, 2012
s 1533 ............................................ad No 48, 2012
s 1534 ............................................ad No 48, 2012
s 1535 ............................................ad No 48, 2012
Part 10.20
Part 10.20.......................................ad No 72, 2012
s 1536 ............................................ad No 72, 2012
s 1537 ............................................ad No 72, 2012
Part 10.21
Part 10.21.......................................ad No 118, 2012
s 1538 ............................................ad No 118, 2012
Part 10.21A
Part 10.21A....................................ad No 61, 2013
s 1538A..........................................ad No 61, 2013
s 1538B..........................................ad No 61, 2013
Part 10.22
Part 10.22.......................................ad No 171, 2012
s 1539 ............................................ad No 171, 2012
s 1540 ............................................ad No 171, 2012
am No 61, 2013
s 1541 ............................................ad No 171, 2012
Part 10.23
Part 10.23.......................................ad No 83, 2014
s 1542 ............................................ad No 83, 2014
s 1543 ............................................ad No 83, 2014
s 1544 ............................................ad No 83, 2014
s 1545 ............................................ad No 83, 2014
s 1546 ............................................ad No 83, 2014
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
586 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Part 10.23A
Part 10.23A....................................ad No 7, 2017
Division 1
s 1546A..........................................ad No 7, 2017
Division 2
s 1546B..........................................ad No 7, 2017
s 1546C..........................................ad No 7, 2017
s 1546D..........................................ad No 7, 2017
s 1546E ..........................................ad No 7, 2017
s 1546F ..........................................ad No 7, 2017
s 1546G..........................................ad No 7, 2017
s 1546H..........................................ad No 7, 2017
s 1546J...........................................ad No 7, 2017
s 1546K..........................................ad No 7, 2017
s 1546L ..........................................ad No 7, 2017
s 1546M.........................................ad No 7, 2017
s 1546N..........................................ad No 7, 2017
s 1546P ..........................................ad No 7, 2017
s 1546Q..........................................ad No 7, 2017
s 1546R..........................................ad No 7, 2017
s 1546S ..........................................ad No 7, 2017
s 1546T ..........................................ad No 7, 2017
s 1546U..........................................ad No 7, 2017
s 1546V..........................................ad No 7, 2017
Division 3
s 1546W.........................................ad No 7, 2017
s 1546X..........................................ad No 7, 2017
s 1546Y..........................................ad No 7, 2017
s 1546Z ..........................................ad No 7, 2017
s 1546ZA .......................................ad No 7, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 587
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 4
s 1546ZB .......................................ad No 7, 2017
Part 10.24
Part 10.24.......................................ad No 19, 2015
s 1547 ............................................ad No 19, 2015
s 1548 ............................................ad No 19, 2015
s 1549 ............................................ad No 19, 2015
Part 10.24A
Part 10.24A....................................ad No 6, 2017
s 1549A..........................................ad No 6, 2017
s 1549B..........................................ad No 6, 2017
Part 10.25
Part 10.25.......................................ad No 11, 2016
Division 1
s 1550 ............................................ad No 11, 2016
s 1551 ............................................ad No 11, 2016
Division 2
Subdivision A
s 1552 ............................................ad No 11, 2016
s 1553 ............................................ad No 11, 2016
s 1554 ............................................ad No 11, 2016
s 1555 ............................................ad No 11, 2016
s 1556 ............................................ad No 11, 2016
s 1557 ............................................ad No 11, 2016
s 1558 ............................................ad No 11, 2016
s 1559 ............................................ad No 11, 2016
s 1560 ............................................ad No 11, 2016
Subdivision B
s 1561 ............................................ad No 11, 2016
Subdivision C
s 1562 ............................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
588 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision D
s 1563 ............................................ad No 11, 2016
s 1564 ............................................ad No 11, 2016
Subdivision E
s 1565 ............................................ad No 11, 2016
s 1566 ............................................ad No 11, 2016
s 1567 ............................................ad No 11, 2016
s 1568 ............................................ad No 11, 2016
s 1569 ............................................ad No 11, 2016
Subdivision F
s 1570 ............................................ad No 11, 2016
s 1571 ............................................ad No 11, 2016
s 1572 ............................................ad No 11, 2016
s 1573 ............................................ad No 11, 2016
s 1574 ............................................ad No 11, 2016
s 1575 ............................................ad No 11, 2016
Subdivision G
s 1576 ............................................ad No 11, 2016
s 1577 ............................................ad No 11, 2016
Division 3
Subdivision A
s 1578 ............................................ad No 11, 2016
Subdivision B
s 1579 ............................................ad No 11, 2016
Subdivision C
s 1580 ............................................ad No 11, 2016
s 1581 ............................................ad No 11, 2016
s 1582 ............................................ad No 11, 2016
s 1583 ............................................ad No 11, 2016
s 1584 ............................................ad No 11, 2016
s 1585 ............................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 589
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision D
s 1586 ............................................ad No 11, 2016
s 1587 ............................................ad No 11, 2016
s 1588 ............................................ad No 11, 2016
s 1589 ............................................ad No 11, 2016
s 1590 ............................................ad No 11, 2016
Subdivision E
s 1591 ............................................ad No 11, 2016
s 1592 ............................................ad No 11, 2016
s 1593 ............................................ad No 11, 2016
s 1594 ............................................ad No 11, 2016
s 1595 ............................................ad No 11, 2016
s 1596 ............................................ad No 11, 2016
s 1597 ............................................ad No 11, 2016
s 1598 ............................................ad No 11, 2016
s 1599 ............................................ad No 11, 2016
s 1600 ............................................ad No 11, 2016
Subdivision F
s 1601 ............................................ad No 11, 2016
s 1602 ............................................ad No 11, 2016
s 1603 ............................................ad No 11, 2016
s 1604 ............................................ad No 11, 2016
s 1605 ............................................ad No 11, 2016
s 1606 ............................................ad No 11, 2016
Subdivision G
s 1607 ............................................ad No 11, 2016
s 1608 ............................................ad No 11, 2016
s 1609 ............................................ad No 11, 2016
s 1610 ............................................ad No 11, 2016
s 1611 ............................................ad No 11, 2016
s 1612 ............................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
590 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 1613 ............................................ad No 11, 2016
s 1614 ............................................ad No 11, 2016
Subdivision H
s 1615 ............................................ad No 11, 2016
s 1616 ............................................ad No 11, 2016
s 1617 ............................................ad No 11, 2016
s 1618 ............................................ad No 11, 2016
s 1619 ............................................ad No 11, 2016
s 1620 ............................................ad No 11, 2016
Division 4
s 1621 ............................................ad No 11, 2016
Division 5
s 1622 ............................................ad No 11, 2016
s 1623 ............................................ad No 11, 2016
s 1624 ............................................ad No 11, 2016
s 1625 ............................................ad No 11, 2016
s 1626 ............................................ad No 11, 2016
s 1627 ............................................ad No 11, 2016
s 1628 ............................................ad No 11, 2016
s 1629 ............................................ad No 11, 2016
s 1630 ............................................ad No 11, 2016
s 1631 ............................................ad No 11, 2016
s 1632 ............................................ad No 11, 2016
s 1633 ............................................ad No 11, 2016
Division 6
s 1634 ............................................ad No 11, 2016
Part 10.26
Part 10.26.......................................ad No 11, 2016
s 1635 ............................................ad No 11, 2016
Part 10.28
Part 10.28.......................................ad No 25, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 591
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 1636A..........................................ad No 25, 2017
s 1637 ............................................ad No 25, 2017
Schedule 2
Schedule 2......................................rep No 122, 2001
ad No 11, 2016
Part 1
Division 1
s 1-1 ...............................................ad No 11, 2016
s 1-5 ...............................................ad No 11, 2016
Division 5
Subdivision A
s 5-1 ...............................................ad No 11, 2016
Subdivision B
s 5-5 ...............................................ad No 11, 2016
Subdivision C
s 5-10 .............................................ad No 11, 2016
s 5-15 .............................................ad No 11, 2016
s 5-20 .............................................ad No 11, 2016
s 5-25 .............................................ad No 11, 2016
s 5-26 .............................................ad No 11, 2016
s 5-27 .............................................ad No 11, 2016
s 5-30 .............................................ad No 11, 2016
Part 2
Division 10
s 10-1 .............................................ad No 11, 2016
s 10-5 .............................................ad No 11, 2016
Division 15
s 15-1 .............................................ad No 11, 2016
Division 20
Subdivision A
s 20-1 .............................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
592 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision B
s 20-5 .............................................ad No 11, 2016
s 20-10 ...........................................ad No 11, 2016
s 20-15 ...........................................ad No 11, 2016
s 20-20 ...........................................ad No 11, 2016
s 20-25 ...........................................ad No 11, 2016
s 20-30 ...........................................ad No 11, 2016
s 20-35 ...........................................ad No 11, 2016
Subdivision C
s 20-40 ...........................................ad No 11, 2016
s 20-45 ...........................................ad No 11, 2016
s 20-50 ...........................................ad No 11, 2016
s 20-55 ...........................................ad No 11, 2016
s 20-60 ...........................................ad No 11, 2016
s 20-65 ...........................................ad No 11, 2016
Subdivision D
s 20-70 ...........................................ad No 11, 2016
s 20-75 ...........................................ad No 11, 2016
Subdivision E
s 20-80 ...........................................ad No 11, 2016
Division 25
s 25-1 .............................................ad No 11, 2016
Division 30
s 30-1 .............................................ad No 11, 2016
Division 35
s 35-1 .............................................ad No 11, 2016
s 35-5 .............................................ad No 11, 2016
Division 40
Subdivision A
s 40-1 .............................................ad No 11, 2016
Subdivision B
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 593
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 40-5 .............................................ad No 11, 2016
s 40-10 ...........................................ad No 11, 2016
s 40-15 ...........................................ad No 11, 2016
Subdivision C
s 40-20 ...........................................ad No 11, 2016
Subdivision D
s 40-25 ...........................................ad No 11, 2016
am No 45, 2017
s 40-30 ...........................................ad No 11, 2016
am No 45, 2017
s 40-35 ...........................................ad No 11, 2016
Subdivision E
s 40-40 ...........................................ad No 11, 2016
s 40-45 ...........................................ad No 11, 2016
s 40-50 ...........................................ad No 11, 2016
s 40-55 ...........................................ad No 11, 2016
s 40-60 ...........................................ad No 11, 2016
s 40-65 ...........................................ad No 11, 2016
Subdivision F
s 40-70 ...........................................ad No 11, 2016
s 40-75 ...........................................ad No 11, 2016
s 40-80 ...........................................ad No 11, 2016
s 40-85 ...........................................ad No 11, 2016
s 40-90 ...........................................ad No 11, 2016
s 40-95 ...........................................ad No 11, 2016
Subdivision G
s 40-100 .........................................ad No 11, 2016
s 40-105 .........................................ad No 11, 2016
s 40-110 .........................................ad No 11, 2016
am No 55, 2017
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
594 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision H
s 40-111 .........................................ad No 11, 2016
Division 45
s 45-1 .............................................ad No 11, 2016
s 45-5 .............................................ad No 11, 2016
Division 50
s 50-1 .............................................ad No 11, 2016
s 50-5 .............................................ad No 11, 2016
s 50-10 ...........................................ad No 11, 2016
s 50-15 ...........................................ad No 11, 2016
s 50-20 ...........................................ad No 11, 2016
s 50-25 ...........................................ad No 11, 2016
s 50-30 ...........................................ad No 11, 2016
s 50-35 ...........................................ad No 11, 2016
Part 3
Division 55
s 55-1 .............................................ad No 11, 2016
Division 60
Subdivision A
s 60-1 .............................................ad No 11, 2016
Subdivision B
s 60-2 .............................................ad No 11, 2016
s 60-5 .............................................ad No 11, 2016
s 60-10 ...........................................ad No 11, 2016
s 60-11 ...........................................ad No 11, 2016
s 60-12 ...........................................ad No 11, 2016
s 60-15 ...........................................ad No 11, 2016
Subdivision C
s 60-16 ...........................................ad No 11, 2016
Subdivision D
s 60-17 ...........................................ad No 11, 2016
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Endnotes
Endnote 4—Amendment history
Corporations Act 2001 595
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Subdivision E
s 60-20 ...........................................ad No 11, 2016
am No 55, 2017
Division 65
s 65-1 .............................................ad No 11, 2016
s 65-5 .............................................ad No 11, 2016
s 65-10 ...........................................ad No 11, 2016
s 65-15 ...........................................ad No 11, 2016
s 65-20 ...........................................ad No 11, 2016
s 65-25 ...........................................ad No 11, 2016
s 65-40 ...........................................ad No 11, 2016
s 65-45 ...........................................ad No 11, 2016
s 65-50 ...........................................ad No 11, 2016
Division 70
Subdivision A
s 70-1 .............................................ad No 11, 2016
Subdivision B
s 70-5 .............................................ad No 11, 2016
s 70-6 .............................................ad No 11, 2016
am No 55, 2017
Subdivision C
s 70-10 ...........................................ad No 11, 2016
s 70-15 ...........................................ad No 11, 2016
s 70-20 ...........................................ad No 11, 2016
s 70-25 ...........................................ad No 11, 2016
s 70-30 ...........................................ad No 11, 2016
s 70-31 ...........................................ad No 11, 2016
s 70-35 ...........................................ad No 11, 2016
s 70-36 ...........................................ad No 11, 2016
Subdivision D
s 70-40 ...........................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
596 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 70-45 ...........................................ad No 11, 2016
s 70-46 ...........................................ad No 11, 2016
s 70-47 ...........................................ad No 11, 2016
s 70-50 ...........................................ad No 11, 2016
Subdivision E
s 70-55 ...........................................ad No 11, 2016
Subdivision F
s 70-60 ...........................................ad No 11, 2016
Subdivision G
s 70-65 ...........................................ad No 11, 2016
s 70-70 ...........................................ad No 11, 2016
s 70-75 ...........................................ad No 11, 2016
s 70-80 ...........................................ad No 11, 2016
s 70-85 ...........................................ad No 11, 2016
s 70-90 ...........................................ad No 11, 2016
Division 75
s 75-1 .............................................ad No 11, 2016
s 75-5 .............................................ad No 11, 2016
s 75-10 ...........................................ad No 11, 2016
s 75-15 ...........................................ad No 11, 2016
s 75-20 ...........................................ad No 11, 2016
s 75-25 ...........................................ad No 11, 2016
s 75-30 ...........................................ad No 11, 2016
s 75-35 ...........................................ad No 11, 2016
s 75-40 ...........................................ad No 11, 2016
s 75-41 ...........................................ad No 11, 2016
s 75-42 ...........................................ad No 11, 2016
s 75-43 ...........................................ad No 11, 2016
s 75-44 ...........................................ad No 11, 2016
s 75-45 ...........................................ad No 11, 2016
s 75-50 ...........................................ad No 11, 2016
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 597
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
Division 80
s 80-1 .............................................ad No 11, 2016
s 80-5 .............................................ad No 11, 2016
s 80-10 ...........................................ad No 11, 2016
s 80-15 ...........................................ad No 11, 2016
s 80-20 ...........................................ad No 11, 2016
s 80-25 ...........................................ad No 11, 2016
s 80-26 ...........................................ad No 11, 2016
s 80-27 ...........................................ad No 11, 2016
s 80-30 ...........................................ad No 11, 2016
s 80-35 ...........................................ad No 11, 2016
s 80-40 ...........................................ad No 11, 2016
s 80-45 ...........................................ad No 11, 2016
s 80-50 ...........................................ad No 11, 2016
s 80-55 ...........................................ad No 11, 2016
s 80-60 ...........................................ad No 11, 2016
s 80-65 ...........................................ad No 11, 2016
s 80-70 ...........................................ad No 11, 2016
Division 85
s 85-1 .............................................ad No 11, 2016
s 85-5 .............................................ad No 11, 2016
Division 90
Subdivision A
s 90-1 .............................................ad No 11, 2016
Subdivision B
s 90-5 .............................................ad No 11, 2016
s 90-10 ...........................................ad No 11, 2016
s 90-15 ...........................................ad No 11, 2016
s 90-20 ...........................................ad No 11, 2016
s 90-21 ...........................................ad No 11, 2016
Subdivision C
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
598 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
s 90-22 ...........................................ad No 11, 2016
s 90-23 ...........................................ad No 11, 2016
s 90-24 ...........................................ad No 11, 2016
s 90-25 ...........................................ad No 11, 2016
s 90-26 ...........................................ad No 11, 2016
s 90-27 ...........................................ad No 11, 2016
s 90-28 ...........................................ad No 11, 2016
s 90-29 ...........................................ad No 11, 2016
Subdivision D
s 90-30 ...........................................ad No 11, 2016
s 90-35 ...........................................ad No 11, 2016
Part 4
Division 95
s 95-1 .............................................ad No 11, 2016
Division 100
s 100-5 ...........................................ad No 11, 2016
s 100-6 ...........................................ad No 11, 2016
Division 105
s 105-1 ...........................................ad No 11, 2016
Schedule 3
Schedule 3......................................am No 55, 2001; No 117, 2001; No 122, 2001; No 123, 2001; No 24,
2003; No 116, 2003; No 141, 2003; No 103, 2004; No 85, 2007; No
101, 2007; No 132, 2007; No 149, 2007; No 154, 2007; No. 146, 2008;
No 108, 2009; No 115, 2009; No 66, 2010; No 131, 2010; No 24, 2011;
No 42, 2011; No 68, 2012; No 72, 2012; No 118, 2012; No 155, 2012;
No 171, 2012; No 178, 2012; No 180, 2012; No 11, 2016; No 7, 2017;
No 17, 2017
Schedule 4
Part 5
c 29 ................................................am No 122, 2001
c 32 ................................................am No 122, 2001
Part 6
Authorised Version C2017C00210 registered 06/07/2017
Endnotes
Endnote 4—Amendment history
Corporations Act 2001 599
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provision affected How affected
c 36 ................................................am No 116, 2003
Authorised Version C2017C00210 registered 06/07/2017
Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
Authorised Version C2017C00210 registered 06/07/2017
About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
Authorised Version C2017C00210 registered 06/07/2017
Corporations Act 2001 i
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Contents
Chapter 1—Introductory 1
Part 1.1—Preliminary 1 1 Short title...........................................................................1
2 Commencement.................................................................1
3 Constitutional basis for this Act ........................................1
4 Referring States .................................................................2
5 General territorial application of Act.................................5
5A Application to the Crown ..................................................7
5B ASIC has general administration of this Act .....................8
5C Application of the Acts Interpretation Act 1901................8
Part 1.1A—Interaction between Corporations legislation and
State and Territory laws 9 5D Coverage of Part................................................................9
5E Concurrent operation intended ..........................................9
5F Corporations legislation does not apply to matters
declared by State or Territory law to be an
excluded matter ...............................................................11
5G Avoiding direct inconsistency arising between the
Corporations legislation and State and Territory
laws .................................................................................12
5H Registration of body as company on basis of State
or Territory law ...............................................................19
5I Regulations may modify operation of the
Corporations legislation to deal with interaction
between that legislation and State and Territory
laws .................................................................................21
Part 1.2—Interpretation 23
Division 1—General 23
6 Effect of this Part.............................................................23
7 Location of other interpretation provisions .....................23
9 Dictionary........................................................................24
9AA Certain family relationships ............................................96
9A Meaning of rights issue ...................................................96
9B Meaning of remuneration recommendation ....................98
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ii Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Associates 100
10 Effect of Division ..........................................................100
11 Associates of bodies corporate ......................................100
12 References in Chapters 6 to 6C, and other
references relating to voting power and takeovers
etc. .................................................................................100
13 References in Chapter 7 ................................................102
15 General ..........................................................................103
16 Exclusions .....................................................................103
17 Associates of composite person that carries on a
financial services business.............................................104
Division 3—Carrying on business 105
18 Carrying on business: otherwise than for profit.............105
19 Businesses of a particular kind ......................................105
20 Carrying on a business: alone or together with
others.............................................................................105
21 Carrying on business in Australia or a State or
Territory ........................................................................105
Division 5A—Types of company 107
45A Proprietary companies ...................................................107
45B Small companies limited by guarantee ..........................109
Division 6—Subsidiaries and related bodies corporate 111
46 What is a subsidiary ......................................................111
47 Control of a body corporate’s board ..............................111
48 Matters to be disregarded ..............................................112
49 References in this Division to a subsidiary....................112
50 Related bodies corporate ...............................................113
50AAA Associated entities.........................................................113
50AA Control ..........................................................................114
Division 6A—Security interests 116
51 Meaning of PPSA security interest................................116
51A Meaning of security interest ..........................................116
51B Meaning of secured party..............................................116
51C Meaning of circulating security interest........................117
51D Meaning of possessory security interest ........................117
51E Meaning of secured creditor ..........................................117
51F Meaning of PPSA retention of title property .................118
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Division 7—Interpretation of other expressions 120
52 Doing acts......................................................................120
52A Signing ..........................................................................120
53 Affairs of a body corporate............................................120
53AA Business affairs of a body corporate..............................122
53AB Business affairs of a natural person ...............................122
53AC Business affairs of a partnership....................................123
53AD Business affairs of a trust ..............................................123
57 Classes of shares or interests in managed
investment schemes.......................................................124
57A Meaning of corporation ................................................124
58AA Meaning of court and Court ..........................................125
58B Discharge of obligations under this Act ........................125
59 Debentures as consideration for acquisition of
shares.............................................................................126
60 Declaration of relevant relationships .............................126
64 Entering into a transaction in relation to shares or
securities........................................................................127
64A Entities ..........................................................................128
64B Entities connected with a corporation............................128
65 Eligible money market dealer........................................130
66A Exempt bodies ...............................................................130
70 Extension of period for doing an act..............................130
73A When a court is taken to find a person guilty of an
offence...........................................................................130
75 Inclusion in official list..................................................130
79 Involvement in contraventions ......................................131
80 Jervis Bay Territory taken to be part of the
Australian Capital Territory ..........................................131
82 Offers and invitations to the public ...............................131
83 Officers, and other persons, in default...........................132
86 Possession .....................................................................132
88A Public document of a body corporate ............................132
88B Qualified accountants ....................................................133
89 Qualified privilege.........................................................134
90 Receivers and managers ................................................134
91 Relation-back day..........................................................134
92 Securities .......................................................................142
95A Solvency and insolvency ...............................................143
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iv Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—Miscellaneous interpretation rules 144
100 Address of registered office etc. ....................................144
100A Operation of certain laws relating to instruments
on which stamp duty has not been paid .........................144
101 Amount of stock representing a number of shares.........145
102 Applications to be in writing .........................................145
102B In Australia or elsewhere, in this jurisdiction or
elsewhere etc. ................................................................145
102C In Australia....................................................................145
103 Effect of certain contraventions of this Act ...................145
104 Effect of provisions empowering a person to
require or prohibit conduct ............................................146
105 Calculation of time ........................................................146
106 Performance of functions by Commission delegate ......146
107 Notice in relation to top 20 members of a class.............147
108 Parts of dollar to be disregarded in determining
majority in value of creditors etc. ..................................147
109 References to persons, things and matters .....................147
109X Service of documents ....................................................148
Part 1.2A—Disclosing entities 149
Division 1—Object of Part 149
111AA Object of Part ................................................................149
Division 2—Definitions 150
111AB Terms defined in Division .............................................150
111AC Disclosing entity............................................................150
111AD ED securities .................................................................150
111AE Securities of body or undertaking that is included
in a licensed market’s official list..................................151
111AF Securities (except debentures and managed
investment products) held by 100 or more persons .......152
111AFA Managed investment products held by 100 or more
persons ..........................................................................152
111AG Securities issued as consideration for an
acquisition under an off-market takeover bid or
Part 5.1 compromise or arrangement.............................153
111AH When a person holds securities for the purposes of
sections 111AF, 111AFA and 111AG...........................154
111AI Debentures.....................................................................154
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111AJ Regulations may declare securities not to be ED
securities........................................................................154
111AK ED securities of a disclosing entity ...............................154
111AL Listed or unlisted disclosing entity ................................155
111AM Quoted ED securities.....................................................155
Division 3—Significance of being a disclosing entity 156
111AN Division contains outline of significance of being a
disclosing entity.............................................................156
111ANA Requirements relating to remuneration
recommendations in relation to key management
personnel .......................................................................156
111AO Accounting requirements...............................................156
111AP Continuous disclosure requirements..............................156
111AQ Prospectus relief ............................................................156
111AQA Product Disclosure Statement relief ..............................157
Division 4—Exemptions and modifications 158
111AR Meaning of disclosing entity provisions ........................158
111AS Exemptions by regulations ............................................158
111AT Exemptions by ASIC.....................................................158
111AU Enforcing conditions of exemptions..............................159
111AV Modifications by regulations.........................................159
111AW Exemptions and modifications have effect ....................159
111AX Effect of Division ..........................................................159
Part 1.4—Technical provisions about aids for readers 160 111J Small business guide .....................................................160
Part 1.5—Small business guide 161 1 What registration means ................................................161
2 The company structure for small business.....................166
3 Setting up a new company.............................................166
4 Continuing obligations after the company is set up.......170
5 Company directors and company secretaries.................172
6 Shares and shareholders ................................................176
7 Signing company documents.........................................178
8 Funding the company’s operations ................................178
9 Returns to shareholders .................................................179
10 Annual financial reports and audit.................................180
11 Disagreements within the company...............................182
12 Companies in financial trouble......................................183
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vi Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 1.6—Interaction with Australian Charities and
Not-for-profits Commission Act 2012 185 111K Bodies corporate registered under the Australian
Charities and Not-for-profits Commission Act
2012...............................................................................185
111L Provisions not applicable to the body corporate ............185
111M Member approval ..........................................................187
111N Notices ..........................................................................188
111P Annual general meetings ...............................................189
111Q Presumptions to be made in recovery proceedings........189
Chapter 2A—Registering a company 190
Part 2A.1—What companies can be registered 190 112 Types of companies.......................................................190
113 Proprietary companies ...................................................191
114 Minimum of 1 member..................................................192
115 Restrictions on size of partnerships and
associations ...................................................................192
116 Trade unions cannot be registered .................................193
Part 2A.2—How a company is registered 194 117 Applying for registration ...............................................194
118 ASIC gives company ACN, registers company and
issues certificate ............................................................196
119 Company comes into existence on registration .............197
119A Jurisdiction of incorporation and jurisdiction of
registration.....................................................................197
120 Members, directors and company secretary of a
company ........................................................................198
121 Registered office ...........................................................199
122 Expenses incurred in promoting and setting up
company ........................................................................199
123 Company may have common seal .................................199
Chapter 2B—Basic features of a company 201
Part 2B.1—Company powers and how they are exercised 201 124 Legal capacity and powers of a company......................201
125 Constitution may limit powers and set out objects ........202
126 Agent exercising a company’s power to make
contracts ........................................................................202
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127 Execution of documents (including deeds) by the
company itself ...............................................................202
Part 2B.2—Assumptions people dealing with companies are
entitled to make 204 128 Entitlement to make assumptions ..................................204
129 Assumptions that can be made under section 128 .........204
130 Information available to the public from ASIC
does not constitute constructive notice ..........................206
Part 2B.3—Contracts before registration 207 131 Contracts before registration .........................................207
132 Person may be released from liability but is not
entitled to indemnity......................................................208
133 This Part replaces other rights and liabilities.................208
Part 2B.4—Replaceable rules and constitution 209 134 Internal management of companies ...............................209
135 Replaceable rules...........................................................209
136 Constitution of a company.............................................210
137 Date of effect of adoption, modification or repeal
of constitution................................................................211
138 ASIC may direct company to lodge consolidated
constitution....................................................................212
139 Company must send copy of constitution to
member..........................................................................212
140 Effect of constitution and replaceable rules...................212
141 Table of replaceable rules..............................................213
Part 2B.5—Registered office and places of business 216 142 Registered office ...........................................................216
143 ASIC may change address of registered office to a
director’s address...........................................................216
144 Company’s name must be displayed at registered
office etc........................................................................217
145 Opening hours of registered office of public
company ........................................................................217
146 Change of address of principal place of business ..........218
146A Contact address .............................................................219
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Part 2B.6—Names 220
Division 1—Selecting and using a name 220
147 When a name is available ..............................................220
148 A company’s name ........................................................221
149 Acceptable abbreviations...............................................222
150 Exception to requirement for using “Limited” in
name ..............................................................................223
151 Exception to requirement for using “Limited” in
name—pre-existing licences .........................................224
152 Reserving a name ..........................................................225
153 Using a name and ACN on documents..........................226
154 Exception to requirement to have ACN on receipts ......226
155 Regulations may exempt from requirement to set
out information on documents.......................................227
156 Carrying on business using “Limited”, “No
Liability” or “Proprietary” in name ...............................227
Division 2—Changing a company’s name 228
157 Company changing its name .........................................228
157A Change of name of company under external
administration................................................................228
158 ASIC’s power to direct company to change its
name ..............................................................................230
159 ASIC’s power to include “Limited” in company’s
name ..............................................................................231
160 ASIC must issue new certificate if company’s
name changes ................................................................231
161 Effect of name change ...................................................231
161A Company under external administration—former
name to be used on documents ......................................232
Part 2B.7—Changing company type 234 162 Changing company type ................................................234
163 Applying for change of type..........................................236
164 ASIC changes type of company ....................................239
165 ASIC may direct a proprietary company to change
to a public company in certain circumstances ...............241
166 Effect of change of type ................................................241
167 Issue of shares by company or holding company—
company limited by guarantee changing to
company limited by shares ............................................242
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167AA Application of Part to company limited both by
shares and by guarantee.................................................243
Chapter 2C—Registers 244
Part 2C.1—Registers generally 244 167A Who is covered by this Chapter.....................................244
168 Registers to be maintained.............................................244
169 Register of members......................................................245
170 Register of option holders and copies of options
documents .....................................................................247
171 Register of debenture holders ........................................249
172 Location of registers ......................................................249
173 Right to inspect and get copies ......................................250
174 Agent’s obligations .......................................................252
175 Correction of registers ...................................................252
176 Evidentiary value of registers ........................................253
177 Use of information on registers .....................................253
178 Overseas branch registers ..............................................254
Part 2C.2—Notice by proprietary companies of changes to
member register 256 178A Notice of change to member register.............................256
178B Top 20 only ...................................................................257
178C Notice of change to share structure ...............................257
178D Time within which ASIC must be notified....................257
Chapter 2D—Officers and employees 259
Part 2D.1—Duties and powers 259 179 Background to duties of directors, other officers
and employees ...............................................................259
Division 1—General duties 260
180 Care and diligence—civil obligation only.....................260
181 Good faith—civil obligations ........................................261
182 Use of position—civil obligations.................................261
183 Use of information—civil obligations ...........................262
184 Good faith, use of position and use of
information—criminal offences ....................................262
185 Interaction of sections 180 to 184 with other laws
etc. .................................................................................263
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186 Territorial application of sections 180 to 184................263
187 Directors of wholly-owned subsidiaries ........................264
188 Responsibility of secretaries etc. for certain
corporate contraventions ...............................................264
189 Reliance on information or advice provided by
others.............................................................................265
190 Responsibility for actions of delegate............................266
190A Limited application of Division to registrable
Australian bodies...........................................................267
190B Division does not apply to Aboriginal and Torres
Strait Islander corporations............................................267
Division 2—Disclosure of, and voting on matters involving,
material personal interests 268
191 Material personal interest—director’s duty to
disclose..........................................................................268
192 Director may give other directors standing notice
about an interest ............................................................270
193 Interaction of sections 191 and 192 with other
laws etc..........................................................................272
194 Voting and completion of transactions—directors
of proprietary companies (replaceable rule—see
section 135) ...................................................................272
195 Restrictions on voting—directors of public
companies only..............................................................273
196 ASIC power to make declarations and class orders .......274
Division 3—Duty to discharge certain trust liabilities 276
197 Directors liable for debts and other obligations
incurred by corporation as trustee .................................276
Division 4—Powers 278
198A Powers of directors (replaceable rule—see
section 135) ...................................................................278
198B Negotiable instruments (replaceable rule—see
section 135) ...................................................................278
198C Managing director (replaceable rule—see
section 135) ...................................................................278
198D Delegation .....................................................................278
198E Single director/shareholder proprietary companies .......279
198F Right of access to company books ................................280
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Division 5—Exercise of powers while company under external
administration 282
198G Exercise of powers while company under external
administration................................................................282
Part 2D.2—Restrictions on indemnities, insurance and
termination payments 284
Division 1—Indemnities and insurance for officers and auditors 284
199A Indemnification and exemption of officer or
auditor ...........................................................................284
199B Insurance premiums for certain liabilities of
director, secretary, other officer or auditor ....................285
199C Certain indemnities, exemptions, payments and
agreements not authorised and certain documents
void................................................................................286
Division 2—Termination payments 287
200 Interpreting this Division...............................................287
200AA Meaning of managerial or executive office ...................287
200AB Meaning of benefit ........................................................288
200A When benefit given in connection with retirement
from an office or position ..............................................288
200B Retirement benefits generally need membership
approval.........................................................................290
200C Benefits on transfer of undertaking or property
need membership approval............................................292
200D Contravention to receive benefit without member
approval.........................................................................292
200E Approval by members ...................................................293
200F Exempt benefits and benefits given in certain
circumstances ................................................................295
200G Genuine payments of pension and lump sum ................297
200H Benefits required by law................................................300
200J Benefits to be held on trust and repaid ..........................300
Part 2D.3—Appointment, remuneration and cessation of
appointment of directors 301
Division 1—Appointment of directors 301
Subdivision A—General rules 301
201A Minimum number of directors.......................................301
201B Who can be a director....................................................301
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201D Consent to act as director ..............................................301
201E Special rules for the appointment of public
company directors .........................................................302
201F Special rules for the appointment of directors for
single director/single shareholder proprietary
companies......................................................................302
201G Company may appoint a director (replaceable
rule—see section 135) ...................................................303
201H Directors may appoint other directors (replaceable
rule—see section 135) ...................................................303
201J Appointment of managing directors (replaceable
rule—see section 135) ...................................................304
201K Alternate directors (replaceable rule—see
section 135) ...................................................................304
201L Signpost—ASIC to be notified of appointment.............305
201M Effectiveness of acts by directors ..................................305
Subdivision B—Limits on numbers of directors of public
companies 305
201N Application of Subdivision............................................305
201P Directors must not set board limit unless proposed
limit has been approved by general meeting .................306
201Q Requirements for explanatory statement to
members ........................................................................307
201R Records of voting on board limit resolution if poll
demanded ......................................................................307
201S Notice of resolution to be lodged ..................................308
201T Declaration by court of substantial compliance.............308
201U Consequences of setting board limit in breach of
section 201P ..................................................................308
Division 2—Remuneration of directors 311
202A Remuneration of directors (replaceable rule—see
section 135) ...................................................................311
202B Members may obtain information about directors’
remuneration .................................................................311
202C Special rule for single director/single shareholder
proprietary companies ...................................................312
Division 3—Resignation, retirement or removal of directors 313
203A Director may resign by giving written notice to
company (replaceable rule—see section 135)...............313
203B Signpost to consequences of disqualification from
managing corporations ..................................................313
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203C Removal by members—proprietary companies
(replaceable rule—see section 135) ..............................313
203D Removal by members—public companies ....................313
203E Director cannot be removed by other directors—
public companies...........................................................315
203F Termination of appointment of managing director
(replaceable rule—see section 135) ..............................315
Part 2D.4—Appointment of secretaries 316 204A Minimum number of secretaries....................................316
204B Who can be a secretary..................................................316
204C Consent to act as secretary ............................................316
204D How a secretary is appointed.........................................317
204E Effectiveness of acts by secretaries ...............................317
204F Terms and conditions of office for secretaries
(replaceable rule—see section 135) ..............................317
204G Signpost to consequences of disqualification from
managing corporations ..................................................318
Part 2D.5—Public information about directors and secretaries 319 205A Director, secretary or alternate director may notify
ASIC of resignation or retirement .................................319
205B Notice of name and address of directors and
secretaries to ASIC........................................................319
205C Director and secretary must give information to
company ........................................................................321
205D Address for officers .......................................................321
205E ASIC’s power to ask for information about
person’s position as director or secretary ......................322
205F Director must give information to company..................323
205G Listed company—director to notify market
operator of shareholdings etc.........................................323
Part 2D.6—Disqualification from managing corporations 326 206A Disqualified person not to manage corporations ...........326
206B Automatic disqualification—convictions,
bankruptcy and foreign court orders etc. .......................327
206BA Extension of period of automatic disqualification
under section 206B........................................................329
206C Court power of disqualification—contravention of
civil penalty provision ...................................................329
206D Court power of disqualification—insolvency and
non-payment of debts ....................................................330
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206E Court power of disqualification—repeated
contraventions of Act ....................................................332
206EAA Court power of disqualification—disqualification
under a law of a foreign jurisdiction..............................333
206EA Disqualification under the Competition and
Consumer Act 2010 etc..................................................334
206EB Disqualification under the ASIC Act.............................334
206F ASIC’s power of disqualification ..................................334
206G Court power to grant leave ............................................336
206GA Involvement of ACCC—leave orders under
section 206G..................................................................337
206H Territorial application of this Part .................................337
206HA Limited application of Part to registrable
Australian bodies...........................................................338
206HB Part does not apply to Aboriginal and Torres Strait
Islander corporations .....................................................338
Part 2D.7—Ban on hedging remuneration of key management
personnel 339 206J No hedging of remuneration of key management
personnel .......................................................................339
Part 2D.8—Remuneration recommendations in relation to key
management personnel for disclosing entities 341 206K Board to approve remuneration consultants ..................341
206L Remuneration recommendation by remuneration
consultants.....................................................................342
206M Declaration by remuneration consultant ........................342
Chapter 2E—Related party transactions 344 207 Purpose..........................................................................344
Part 2E.1—Member approval needed for related party benefit 345
Division 1—Need for member approval 345
208 Need for member approval for financial benefit............345
209 Consequences of breach ................................................346
Division 2—Exceptions to the requirement for member approval 347
210 Arm’s length terms........................................................347
211 Remuneration and reimbursement for officer or
employee .......................................................................347
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212 Indemnities, exemptions, insurance premiums and
payment for legal costs for officers ...............................348
213 Small amounts given to related entity ...........................350
214 Benefit to or by closely-held subsidiary ........................350
215 Benefits to members that do not discriminate
unfairly ..........................................................................351
216 Court order ....................................................................351
Division 3—Procedure for obtaining member approval 352
217 Resolution may specify matters by class or kind...........352
218 Company must lodge material that will be put to
members with ASIC ......................................................352
219 Requirements for explanatory statement to
members ........................................................................353
220 ASIC may comment on proposed resolution .................354
221 Requirements for notice of meeting ..............................354
222 Other material put to members ......................................355
223 Proposed resolution cannot be varied ............................355
224 Voting by or on behalf of related party interested
in proposed resolution ...................................................355
225 Voting on the resolution ................................................357
226 Notice of resolution to be lodged ..................................358
227 Declaration by court of substantial compliance.............358
Part 2E.2—Related parties and financial benefits 359 228 Related parties ...............................................................359
229 Giving a financial benefit ..............................................360
Part 2E.3—Interaction with other rules 362 230 General duties still apply ...............................................362
Chapter 2F—Members’ rights and remedies 363 231 Membership of a company ............................................363
Part 2F.1—Oppressive conduct of affairs 364 232 Grounds for Court order ................................................364
233 Orders the Court can make ............................................364
234 Who can apply for order................................................365
235 Requirement for person to lodge order ..........................366
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Part 2F.1A—Proceedings on behalf of a company by members
and others 367 236 Bringing, or intervening in, proceedings on behalf
of a company .................................................................367
237 Applying for and granting leave....................................367
238 Substitution of another person for the person
granted leave .................................................................369
239 Effect of ratification by members ..................................370
240 Leave to discontinue, compromise or settle
proceedings brought, or intervened in, with leave .........370
241 General powers of the Court..........................................370
242 Power of the Court to make costs orders .......................371
Part 2F.2—Class rights 373 246B Varying and cancelling class rights ...............................373
246C Certain actions taken to vary rights etc..........................374
246D Variation, cancellation or modification without
unanimous support of class ...........................................375
246E Variation, cancellation or modification with
unanimous support of class ...........................................376
246F Company must lodge documents and resolutions
with ASIC......................................................................377
246G Member’s copies of documents and resolutions............378
Part 2F.3—Inspection of books 379 247A Order for inspection of books of company or
registered managed investment scheme.........................379
247B Ancillary orders.............................................................380
247C Disclosure of information acquired in inspection ..........380
247D Company or directors may allow member to
inspect books (replaceable rule see section 135) ..........380
Part 2F.4—Proceedings against a company by members and
others 381 247E Shareholding does not prevent compensation claim......381
Chapter 2G—Meetings 382
Part 2G.1—Directors’ meetings 382
Division 1—Resolutions and declarations without meetings 382
248A Circulating resolutions of companies with more
than 1 director (replaceable rule see section 135).........382
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248B Resolutions and declarations of 1 director
proprietary companies ...................................................382
Division 2—Directors’ meetings 384
248C Calling directors’ meetings (replaceable rule see
section 135) ...................................................................384
248D Use of technology..........................................................384
248E Chairing directors’ meetings (replaceable rule see
section 135) ...................................................................384
248F Quorum at directors’ meetings (replaceable rule
see section 135) .............................................................384
248G Passing of directors’ resolutions (replaceable rule
see section 135) .............................................................385
Part 2G.2—Meetings of members of companies 386
Division 1—Resolutions without meetings 386
249A Circulating resolutions of proprietary companies
with more than 1 member..............................................386
249B Resolutions of 1 member companies .............................387
Division 2—Who may call meetings of members 388
249C Calling of meetings of members by a director
(replaceable rule—see section 135) ..............................388
249CA Calling of meetings of members of a listed
company by a director ...................................................388
249D Calling of general meeting by directors when
requested by members ...................................................388
249E Failure of directors to call general meeting ...................389
249F Calling of general meetings by members ......................390
249G Calling of meetings of members by the Court ...............390
Division 3—How to call meetings of members 391
249H Amount of notice of meetings .......................................391
249HA Amount of notice of meetings of listed company..........392
249J Notice of meetings of members to members and
directors.........................................................................392
249K Auditor entitled to notice and other
communications ............................................................393
249L Contents of notice of meetings of members ..................394
249LA Notice of meeting not required to contain certain
information....................................................................395
249M Notice of adjourned meetings (replaceable rule—
see section 135) .............................................................395
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Division 4—Members’ rights to put resolutions etc. at general
meetings 396
249N Members’ resolutions ....................................................396
249O Company giving notice of members’ resolutions ..........396
249P Members’ statements to be distributed ..........................397
Division 5—Holding meetings of members 399
249Q Purpose..........................................................................399
249R Time and place for meetings of members......................399
249S Technology....................................................................399
249T Quorum (replaceable rule—see section 135) ................399
249U Chairing meetings of members (replaceable rule—
see section 135) .............................................................400
249V Auditor’s right to be heard at general meetings .............400
249W Adjourned meetings ......................................................401
Division 6—Proxies and body corporate representatives 402
249X Who can appoint a proxy (replaceable rule for
proprietary companies and mandatory rule for
public companies—see section 135) ..............................402
249Y Rights of proxies ...........................................................402
249Z Company sending appointment forms or lists of
proxies must send to all members..................................403
250A Appointing a proxy........................................................403
250B Proxy documents ...........................................................404
250BA Proxy documents—listed companies.............................405
250BB Proxy vote if appointment specifies way to vote ...........406
250BC Transfer of non-chair proxy to chair in certain
circumstances ................................................................407
250BD Proxy voting by key management personnel or
closely related parties ....................................................408
250C Validity of proxy vote ...................................................410
250D Body corporate representative .......................................410
Division 7—Voting at meetings of members 412
250E How many votes a member has (replaceable
rule—see section 135) ...................................................412
250F Jointly held shares (replaceable rule—see
section 135) ...................................................................412
250G Objections to right to vote (replaceable rule—see
section 135) ...................................................................413
250H Votes need not all be cast in the same way....................413
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250J How voting is carried out (replaceable rule—see
section 135) ...................................................................413
250K Matters on which a poll may be demanded ...................413
250L When a poll is effectively demanded.............................414
250M When and how polls must be taken (replaceable
rule—see section 135) ...................................................414
Division 8—AGMs of public companies 415
250N Public company must hold AGM ..................................415
250P Extension of time for holding AGM..............................415
250PAA Exemptions by ASIC—class orders relating to
externally-administered companies ...............................416
250PAB Exemptions by ASIC—individual
externally-administered companies ...............................416
250PA Written questions to auditor submitted by
members of listed company before AGM......................417
250R Business of AGM ..........................................................419
250RA Auditor required to attend listed company’s AGM .......421
250S Questions and comments by members on company
management at AGM ....................................................422
250SA Listed company—remuneration report..........................423
250T Questions by members of auditors at AGM ..................423
Division 9—Meetings arising from concerns about remuneration
reports 425
250U Application....................................................................425
250V Resolution to hold fresh elections for directors at
special meeting to be put to vote at AGM .....................425
250W Consequences of spill resolution being passed..............426
250X Ensuring there are at least 3 directors after spill
meeting..........................................................................428
250Y Term of office of director reappointed at spill
meeting..........................................................................429
Part 2G.3—Minutes and members’ access to minutes 430 251A Minutes..........................................................................430
251AA Disclosure of proxy votes—listed companies ...............431
251B Members’ access to minutes..........................................432
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Part 2G.4—Meetings of members of registered managed
investment schemes 433
Division 1—Who may call meetings of members 433
252A Calling of meetings of members by responsible
entity..............................................................................433
252B Calling of meetings of members by responsible
entity when requested by members................................433
252C Failure of responsible entity to call meeting of the
scheme’s members ........................................................434
252D Calling of meetings of members by members ...............435
252E Calling of meetings of members by the Court ...............436
Division 2—How to call meetings of members 437
252F Amount of notice of meetings .......................................437
252G Notice of meetings of members to members,
directors and auditors ....................................................437
252H Auditors entitled to other communications....................438
252J Contents of notice of meetings of members ..................438
252K Notice of adjourned meetings........................................439
Division 3—Members’ rights to put resolutions etc. at meetings
of members 440
252L Members’ resolutions ....................................................440
252M Responsible entity giving notice of members’
resolutions .....................................................................441
252N Members’ statements to be distributed ..........................441
Division 4—Holding meetings of members 444
252P Time and place for meetings of members......................444
252Q Technology....................................................................444
252R Quorum .........................................................................444
252S Chairing meetings of members......................................445
252T Auditors’ right to be heard at meetings of
members ........................................................................445
252U Adjourned meetings ......................................................446
Division 5—Proxies and body corporate representatives 447
252V Who can appoint a proxy...............................................447
252W Rights of proxies ...........................................................447
252X Responsible entity sending appointment forms or
lists of proxies must send to all members ......................448
252Y Appointing a proxy........................................................448
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252Z Proxy documents ...........................................................450
253A Validity of proxy vote ...................................................451
253B Body corporate representative .......................................452
Division 6—Voting at meetings of members 453
253C How many votes a member has .....................................453
253D Jointly held interests......................................................453
253E Responsible entity and associates cannot vote if
interested in resolution ..................................................453
253F How to work out the value of an interest.......................454
253G Objections to a right to vote ..........................................454
253H Votes need not all be cast in the same way....................454
253J How voting is carried out ..............................................454
253K Matters on which a poll may be demanded ...................455
253L When a poll is effectively demanded.............................455
Division 7—Minutes and members’ access to minutes 457
253M Minutes..........................................................................457
253N Members’ access to minutes..........................................457
Chapter 2H—Shares 459
Part 2H.1—Issuing and converting shares 459 254A Power to issue bonus, partly-paid, preference and
redeemable preference shares ........................................459
254B Terms of issue ...............................................................460
254C No par value shares .......................................................461
254D Pre-emption for existing shareholders on issue of
shares in proprietary company (replaceable rule—
see section 135) .............................................................461
254E Court validation of issue................................................462
254F Bearer shares and stock must not be issued...................462
254G Conversion of shares .....................................................463
254H Resolution to convert shares into larger or smaller
number ..........................................................................463
Part 2H.2—Redemption of redeemable preference shares 465 254J Redemption must be in accordance with terms of
issue...............................................................................465
254K Other requirements about redemption ...........................465
254L Consequences of contravening section 254J or
254K..............................................................................465
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Part 2H.3—Partly-paid shares 467 254M Liability on partly-paid shares.......................................467
254N Calls may be limited to when company is
externally-administered .................................................467
254P No liability companies—calls on shares........................468
254Q No liability companies—forfeiture and sale of
shares for failure to meet call ........................................468
254R No liability companies—redemption of forfeited
shares.............................................................................471
Part 2H.4—Capitalisation of profits 472 254S Capitalisation of profits .................................................472
Part 2H.5—Dividends 473 254SA Companies limited by guarantee not to pay
dividends .......................................................................473
254T Circumstances in which a dividend may be paid...........473
254U Other provisions about paying dividends
(replaceable rule—see section 135) ..............................473
254V When does the company incur a debt? ..........................474
254W Dividend rights..............................................................474
Part 2H.6—Notice requirements 476 254X Notice to ASIC of share issue .......................................476
254Y Notice to ASIC of share cancellation ............................477
Chapter 2J—Transactions affecting share capital 478
Part 2J.1—Share capital reductions and share buy-backs 478 256A Purpose..........................................................................478
Division 1—Reductions in share capital not otherwise authorised
by law 479
256B Company may make reduction not otherwise
authorised ......................................................................479
256C Shareholder approval.....................................................480
256D Consequences of failing to comply with
section 256B..................................................................481
256E Signposts to other relevant provisions...........................482
Division 2—Share buy-backs 483
257A The company’s power to buy back its own shares ........483
257B Buy-back procedure—general.......................................483
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257C Buy-back procedure—shareholder approval if the
10/12 limit exceeded .....................................................486
257D Buy-back procedure—special shareholder
approval for selective buy-back.....................................487
257E Buy-back procedure—lodgment of offer
documents with ASIC ...................................................488
257F Notice of intended buy-back .........................................488
257G Buy-back procedure—disclosure of relevant
information when offer made ........................................489
257H Acceptance of offer and transfer of shares to the
company ........................................................................489
257J Signposts to other relevant provisions...........................489
Division 3—Other share capital reductions 492
258A Unlimited companies.....................................................492
258B Right to occupy or use real property..............................492
258C Brokerage or commission..............................................492
258D Cancellation of forfeited shares .....................................492
258E Other share cancellations...............................................493
258F Reductions because of lost capital.................................493
Part 2J.2—Self-acquisition and control of shares 494 259A Directly acquiring own shares .......................................494
259B Taking security over own shares or shares in
holding company ...........................................................494
259C Issuing or transferring shares to controlled entity..........495
259D Company controlling entity that holds shares in it ........496
259E When a company controls an entity...............................498
259F Consequences of failing to comply with
section 259A or 259B....................................................498
Part 2J.3—Financial assistance 500 260A Financial assistance by a company for acquiring
shares in the company or a holding company................500
260B Shareholder approval.....................................................501
260C Exempted financial assistance .......................................502
260D Consequences of failing to comply with
section 260A..................................................................504
Part 2J.4—Interaction with general directors’ duties 505 260E General duties still apply ...............................................505
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An Act to make provision in relation to
corporations and financial products and services,
and for other purposes
Chapter 1—Introductory
Part 1.1—Preliminary
1 Short title
This Act may be cited as the Corporations Act 2001.
2 Commencement
This Act commences on a day to be fixed by Proclamation.
3 Constitutional basis for this Act
(1) The operation of this Act in the referring States is based on:
(a) the legislative powers that the Commonwealth Parliament
has under section 51 of the Constitution (other than
paragraph 51(xxxvii)); and
(b) the legislative powers that the Commonwealth Parliament
has in respect of matters to which this Act relates because
those matters are referred to it by the Parliaments of the
referring States under paragraph 51(xxxvii) of the
Constitution.
Note: The State referrals fully supplement the Commonwealth Parliament’s
other powers by referring the matters to the Commonwealth
Parliament to the extent to which they are not otherwise included in
the legislative powers of the Commonwealth Parliament.
(2) The operation of this Act in the Northern Territory and the Capital
Territory is based on:
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(a) the legislative powers that the Commonwealth Parliament
has under section 122 of the Constitution to make laws for
the government of those Territories; and
(b) the legislative powers that the Commonwealth Parliament
has under section 51 of the Constitution.
Despite subsection 22(3) of the Acts Interpretation Act 1901, this
Act as applying in those territories is a law of the Commonwealth.
(3) The operation of this Act outside Australia is based on:
(a) the legislative power the Commonwealth Parliament has
under paragraph 51(xxix) of the Constitution; and
(b) the other legislative powers that the Commonwealth
Parliament has under section 51 of the Constitution; and
(c) the legislative powers that the Commonwealth Parliament
has under section 122 of the Constitution to make laws for
the government of those Territories.
(4) The operation of this Act in a State that is not a referring State is
based on:
(a) the legislative powers that the Commonwealth Parliament
has under section 51 (other than paragraph 51(xxxvii)) and
section 122 of the Constitution; and
(b) the legislative powers that the Commonwealth Parliament
has in respect of matters to which this Act relates because
those matters are referred to it by the Parliaments of the
referring States under paragraph 51(xxxvii) of the
Constitution.
4 Referring States
Reference of matters by State Parliament to Commonwealth
Parliament
(1) A State is a referring State if the Parliament of the State has
referred the matters covered by subsections (4) and (5) to the
Parliament of the Commonwealth for the purposes of
paragraph 51(xxxvii) of the Constitution:
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(a) if and to the extent that the matters are not otherwise
included in the legislative powers of the Parliament of the
Commonwealth (otherwise than by a reference under
paragraph 51(xxxvii) of the Constitution); and
(b) if and to the extent to which the matters are included in the
legislative powers of the Parliament of the State.
This subsection has effect subject to subsections (6) and (7).
(2) A State is a referring State even if the State reference Act includes
a provision to the effect that nothing in the State reference Act is
intended to enable the making of laws pursuant to the amendment
reference with the sole or main underlying purpose or object of
regulating industrial relations matters even if, but for that provision
in the State reference Act, the law would be a law with respect to a
matter referred to the Parliament of the Commonwealth by the
amendment reference.
(3) A State is a referring State even if a law of the State provides that
the reference to the Commonwealth Parliament of either or both of
the matters covered by subsections (4) and (5) is to terminate in
particular circumstances.
Reference covering initial Corporations Act and ASIC Act
(4) This subsection covers the matters to which the referred provisions
relate to the extent of making laws with respect to those matters by
including the referred provisions in the initial Corporations Act and
the initial ASIC Act.
Reference covering amendments of this Act and ASIC Act
(5) This subsection covers the matters of the formation of
corporations, corporate regulation and the regulation of financial
products and services to the extent of the making of laws with
respect to those matters by making express amendments of this Act
or the ASIC Act.
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Effect of termination of reference
(6) A State ceases to be a referring State if the State’s initial reference
terminates.
(7) A State ceases to be a referring State if:
(a) the State’s amendment reference terminates; and
(b) subsection (8) does not apply to the termination.
(8) A State does not cease to be a referring State because of the
termination of its amendment reference if:
(a) the termination is effected by the Governor of that State
fixing a day by proclamation as the day on which the
reference terminates; and
(b) the day fixed is no earlier than the first day after the end of
the period of 6 months beginning on the day on which the
proclamation is published; and
(c) that State’s amendment reference, and the amendment
reference of every other State, terminates on the same day.
Definitions
(9) In this section:
amendment reference of a State means the reference by the
Parliament of the State to the Parliament of the Commonwealth of
the matters covered by subsection (5).
express amendment of this Act or the ASIC Act means the direct
amendment of the text of this Act or the ASIC Act (whether by the
insertion, omission, repeal, substitution or relocation of words or
matter) by Commonwealth Acts, but does not include the
enactment by a Commonwealth Act of a provision that has, or will
have, substantive effect otherwise than as part of the text of this
Act or the ASIC Act.
initial ASIC Act means the ASIC Act as originally enacted.
initial Corporations Act means this Act as originally enacted.
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initial reference of a State means the reference by the Parliament
of the State to the Parliament of the Commonwealth of the matters
covered by subsection (4).
referred provisions means:
(a) the initial Corporations Act; and
(b) the initial ASIC Act;
to the extent to which they deal with matters that are included in
the legislative powers of the Parliaments of the States.
State reference Act for a State is the law under which the initial
reference and the amendment reference are given.
5 General territorial application of Act
Geographical coverage of “this jurisdiction”
(1) Section 9 defines this jurisdiction as the area that includes:
(a) each referring State (including its coastal sea); and
(b) the Capital Territory (including the coastal sea of the Jervis
Bay Territory); and
(c) the Northern Territory (including its coastal sea); and
(d) also, for the purposes of the application of a provision of
Chapter 7 or an associated provision (see subsection (10))—
any external Territory in which the provision applies because
of subsection (9) (but only to the extent provided for in that
subsection).
(2) Throughout this Act, this jurisdiction therefore consists of:
(a) either:
(i) the whole of Australia (if all the States are referring
States); or
(ii) Australia (other than any State that is not a referring
State) if one or more States are not referring States; and
(b) also, when used in or in relation to a provision of Chapter 7
or an associated provision (see subsection (10))—any
external Territory in which the provision applies because of
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subsection (9) (but only to the extent provided for in that
subsection).
Operation in this jurisdiction
(3) Each provision of this Act applies in this jurisdiction.
Operation outside this jurisdiction
(4) Subject to subsection (8), each provision of this Act also applies,
according to its tenor, in relation to acts and omissions outside this
jurisdiction.
Residence, place of formation etc.
(7) Each provision of this Act applies according to its tenor to:
(a) natural persons whether:
(i) resident in this jurisdiction or not; and
(ii) resident in Australia or not; and
(iii) Australian citizens or not; and
(b) all bodies corporate and unincorporated bodies whether:
(i) formed or carrying on business in this jurisdiction or
not; and
(ii) formed or carrying on business in Australia or not.
Note: Paragraph (b)—many of the provisions in this Act apply only in
relation to companies (that is, to companies that are registered under
this Act).
Operation in non-referring States
(8) This Act does not apply to an act or omission in a State that is not a
referring State to the extent to which that application would be
beyond the legislative powers of the Parliament (including powers
it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).
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Expanded application of provisions of Chapter 7 and associated
provisions
(9) The regulations may provide that, in specified circumstances, a
specified external Territory is included in this jurisdiction for the
purposes of a specified provision of Chapter 7 (the applicable
provision). If the regulations do so:
(a) the applicable provision applies in that external Territory in
those circumstances; and
(b) the associated provisions (see subsection (10)) in relation to
the applicable provision apply in that external Territory in
relation to the applicable provision as so applying.
Meaning of associated provisions
(10) For the purposes of this section, the associated provisions in
relation to a provision of Chapter 7 are:
(a) the provisions of Chapters 1, 9 (including the provisions of
Division 2 of Part 9.4 that create offences and of Part 9.4B
that allow for pecuniary penalty orders) and 10 as they apply
or have effect in relation to, or for the purposes of, the
provision; and
(b) any regulations or other instruments (including any that
create offences or allow for pecuniary penalty orders) made
under this Act for the purposes of any of the provisions
covered by paragraph (a); and
(c) if regulations made for the purposes of subsection (9) have
been made in relation to the provision—any other provisions
of this Act, or any regulations or other instruments made
under this Act (including any that create offences or allow for
pecuniary penalty orders), specified in those regulations.
5A Application to the Crown
(1) To avoid doubt, a reference in this section to the Crown in a
particular right includes a reference to an instrumentality or agency
(whether a body corporate or not) of the Crown in that right.
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(2) Chapter 5 (except Part 5.8) binds the Crown in right of the
Commonwealth, of each of the States, of the Capital Territory, of
the Northern Territory and of Norfolk Island.
(3) Chapters 6, 6A, 6B, 6C and 6D:
(a) bind the Crown in right of the Commonwealth; and
(b) do not bind the Crown in right of any State, of the Capital
Territory, of the Northern Territory or of Norfolk Island.
(4) A provision of Chapter 5D, 6CA or 7 only binds the Crown in a
particular capacity in circumstances (if any) specified in the
regulations.
(5) Nothing in this Act makes the Crown in any right liable to a
pecuniary penalty or to be prosecuted for an offence.
5B ASIC has general administration of this Act
Subject to the ASIC Act, ASIC has the general administration of
this Act.
5C Application of the Acts Interpretation Act 1901
(1) Until the date of commencement of section 4 of the Legislative
Instruments (Transitional and Consequential Amendments) Act
2003 (the Legislative Instruments commencement day), the Acts
Interpretation Act 1901 as in force on 1 November 2000 applies to
this Act.
(2) On and after the Legislative Instruments commencement day, the
Acts Interpretation Act 1901 as in force on that day applies to this
Act.
(3) Amendments of the Acts Interpretation Act 1901 made after the
Legislative Instruments commencement day do not apply to this
Act.
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Part 1.1A—Interaction between Corporations
legislation and State and Territory laws
5D Coverage of Part
(1) This Part applies only to laws of a State or Territory that is in this
jurisdiction.
(2) This Part applies only to the following Corporations legislation:
(a) this Act (including the regulations made under this Act); and
(b) Part 3 of the ASIC Act; and
(c) regulations made under the ASIC Act for the purposes of
Part 3 of that Act.
Note: This Part does not apply in relation to the trustee company provisions:
see section 601RAE.
(3) This Part does not apply to Part 3 of the ASIC Act, or regulations
made under that Act for the purposes of Part 3 of that Act, to the
extent to which they operate in relation to a contravention of
Division 2 of Part 2 of that Act.
5E Concurrent operation intended
(1) The Corporations legislation is not intended to exclude or limit the
concurrent operation of any law of a State or Territory.
(2) Without limiting subsection (1), the Corporations legislation is not
intended to exclude or limit the concurrent operation of a law of a
State or Territory that:
(a) imposes additional obligations or liabilities (whether criminal
or civil) on:
(i) a director or other officer of a company or other
corporation; or
(ii) a company or other body; or
(b) confers additional powers on:
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(i) a director or other officer of a company or other
corporation; or
(ii) a company or other body; or
(c) provides for the formation of a body corporate; or
(d) imposes additional limits on the interests a person may hold
or acquire in a company or other body; or
(e) prevents a person from:
(i) being a director of; or
(ii) being involved in the management or control of;
a company or other body; or
(f) requires a company:
(i) to have a constitution; or
(ii) to have particular rules in its constitution.
Note: Paragraph (a)—this includes imposing additional reporting obligations
on a company or other body.
(3) Without limiting subsection (2), a reference in that subsection to a
law of a State or Territory imposing obligations or liabilities, or
conferring powers, includes a reference to a law of a State or
Territory imposing obligations or liabilities, or conferring powers,
by reference to the State or Territory in which a company is taken
to be registered.
(4) This section does not apply to the law of the State or Territory if
there is a direct inconsistency between the Corporations legislation
and that law.
Note: Section 5G prevents direct inconsistencies arising in some cases by
limiting the operation of the Corporations legislation.
(5) If:
(a) an act or omission of a person is both an offence against the
Corporations legislation 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.
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5F Corporations legislation does not apply to matters declared by
State or Territory law to be an excluded matter
(1) Subsection (2) applies if a provision of a law of a State or Territory
declares a matter to be an excluded matter for the purposes of this
section in relation to:
(a) the whole of the Corporations legislation; or
(b) a specified provision of the Corporations legislation; or
(c) the Corporations legislation other than a specified provision;
or
(d) the Corporations legislation otherwise than to a specified
extent.
(2) By force of this subsection:
(a) none of the provisions of the Corporations legislation (other
than this section) applies in the State or Territory in relation
to the matter if the declaration is one to which
paragraph (1)(a) applies; and
(b) the specified provision of the Corporations legislation does
not apply in the State or Territory in relation to the matter if
the declaration is one to which paragraph (1)(b) applies; and
(c) the provisions of the Corporations legislation (other than this
section and the specified provisions) do not apply in the State
or Territory in relation to the matter if the declaration is one
to which paragraph (1)(c) applies; and
(d) the provisions of the Corporations legislation (other than this
section and otherwise than to the specified extent) do not
apply in the State or Territory in relation to the matter if the
declaration is one to which paragraph (1)(d) applies.
(3) Subsection (2) does not apply to the declaration to the extent to
which the regulations provide that that subsection does not apply to
that declaration.
(4) By force of this subsection, if:
(a) the Corporations Law, ASC Law or ASIC Law of a State or
Territory; or
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(b) a provision of that Law;
did not apply to a matter immediately before this Act commenced
because a provision of a law of the State or Territory provided that
that Law, or that provision, did not apply to the matter, the
Corporations legislation, or the provision of the Corporations
legislation that corresponds to that provision of that Law, does not
apply in the State or Territory to the matter until that law of the
State or Territory is omitted or repealed.
(5) Subsection (4) does not apply to the application of the provisions
of the Corporations legislation to the matter to the extent to which
the regulations provide that that subsection does not apply to the
matter.
(6) In this section:
matter includes act, omission, body, person or thing.
5G Avoiding direct inconsistency arising between the Corporations
legislation and State and Territory laws
Section overrides other provisions of the Corporations legislation
(1) This section has effect despite anything else in the Corporations
legislation.
Section does not deal with provisions capable of concurrent
operation
(2) This section does not apply to a provision of a law of a State or
Territory that is capable of concurrent operation with the
Corporations legislation.
Note: This kind of provision is dealt with by section 5E.
When this section applies to a provision of a State or Territory law
(3) This section applies to the interaction between:
(a) a provision of a law of a State or Territory (the State
provision); and
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(b) a provision of the Corporations legislation (the
Commonwealth provision);
only if the State provision meets the conditions set out in the
following table:
Conditions to be met before section applies [operative]
Item Kind of provision Conditions to be met
1 a pre-commencement
(commenced) provision
(a) the State provision operated, immediately
before this Act commenced, despite the
provision of:
(i) the Corporations Law of the State or
Territory (as in force at that time); or
(ii) the ASC or ASIC Law of the State or
Territory (as in force at that time);
that corresponds to the Commonwealth
provision; and
(b) the State provision is not declared to be one
that this section does not apply to (either
generally or specifically in relation to the
Commonwealth provision) by:
(i) regulations made under this Act; or
(ii) a law of the State or Territory.
2 a pre-commencement
(enacted) provision
(a) the State provision would have operated,
immediately before this Act commenced,
despite the provision of:
(i) the Corporations Law of the State or
Territory (as in force at that time); or
(ii) the ASC or ASIC Law of the State or
Territory (as in force at that time);
that corresponds to the Commonwealth
provision if the State provision had
commenced before the commencement of
this Act; and
(b) the State provision is not declared to be one
that this section does not apply to (either
generally or specifically in relation to the
Commonwealth provision) by:
(i) regulations made under this Act; or
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Conditions to be met before section applies [operative]
Item Kind of provision Conditions to be met
(ii) a law of the State or Territory.
3 a post-commencement
provision
the State provision is declared by a law of the
State or Territory to be a Corporations
legislation displacement provision for the
purposes of this section (either generally or
specifically in relation to the Commonwealth
provision)
4 a provision that is
materially amended on
or after this Act
commenced if the
amendment was
enacted before this Act
commenced
(a) the State provision as amended would have
operated, immediately before this Act
commenced, despite the provision of:
(i) the Corporations Law of the State or
Territory (as in force at that time); or
(ii) the ASC or ASIC Law of the State or
Territory (as in force at that time);
that corresponds to the Commonwealth
provision if the amendment had commenced
before the commencement of this Act; and
(b) the State provision is not declared to be one
that this section does not apply to (either
generally or specifically in relation to the
Commonwealth provision) by:
(i) regulations made under this Act; or
(ii) a law of the State or Territory.
5 a provision that is
materially amended on
or after this Act
commenced if the
amendment is enacted
on or after this Act
commenced
the State provision as amended is declared by a
law of the State or Territory to be a
Corporations legislation displacement provision
for the purposes of this section (either generally
or specifically in relation to the Commonwealth
provision)
Note 1: Item 1—subsection (12) tells you when a provision is a
pre-commencement (commenced) provision.
Note 2: Item 1 paragraph (a)—For example, a State or Territory provision
enacted after the commencement of the Corporations Law might not
have operated despite the Corporations Law if it was not expressly
provided that the provision was to operate despite a specified
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provision, or despite any provision, of the Corporations Law (see, for
example, section 5 of the Corporations (New South Wales) Act 1990).
Note 3: Item 2—subsection (13) tells you when a provision is a
pre-commencement (enacted) provision.
Note 4: Item 3—subsection (14) tells you when a provision is a
post-commencement provision.
Note 5: Subsections (15) to (17) tell you when a provision is materially
amended after commencement.
State and Territory laws specifically authorising or requiring act
or thing to be done
(4) A provision of the Corporations legislation does not:
(a) prohibit the doing of an act; or
(b) impose a liability (whether civil or criminal) for doing an act;
if a provision of a law of a State or Territory specifically authorises
or requires the doing of that act.
Instructions given to directors under State and Territory laws
(5) If a provision of a law of a State or Territory specifically:
(a) authorises a person to give instructions to the directors or
other officers of a company or body; or
(b) requires the directors of a company or body to:
(i) comply with instructions given by a person; or
(ii) have regard to matters communicated to the company or
body by a person; or
(c) provides that a company or body is subject to the control or
direction of a person;
a provision of the Corporations legislation does not:
(d) prevent the person from giving an instruction to the directors
or exercising control or direction over the company or body;
or
(e) without limiting subsection (4):
(i) prohibit a director from complying with the instruction
or direction; or
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(ii) impose a liability (whether civil or criminal) on a
director for complying with the instruction or direction.
The person is not taken to be a director of a company or body for
the purposes of the Corporations legislation merely because the
directors of the company or body are accustomed to act in
accordance with the person’s instructions.
Use of names authorised by State and Territory laws
(6) The provisions of Part 2B.6 and Part 5B.3 of this Act do not:
(a) prohibit a company or other body from using a name if the
use of the name is expressly provided for, or authorised by, a
provision of a law of a State or Territory; or
(b) require a company or other body to use a word as part of its
name if the company or body is expressly authorised not to
use that word by a provision of a law of a State or Territory.
Meetings held in accordance with requirements of State and
Territory laws
(7) The provisions of Chapter 2G of this Act do not apply to the
calling or conduct of a meeting of a company to the extent to
which the meeting is called or conducted in accordance with a
provision of a law of a State or Territory. Any resolutions passed at
the meeting are as valid as if the meeting had been called and
conducted in accordance with this Act.
External administration under State and Territory laws
(8) The provisions of Chapter 5 of this Act do not apply to a scheme of
arrangement, receivership, winding up or other external
administration of a company to the extent to which the scheme,
receivership, winding up or administration is carried out in
accordance with a provision of a law of a State or Territory.
State and Territory laws dealing with company constitutions
(9) If a provision of a law of a State or Territory provides that a
provision is included, or taken to be included, in a company’s
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constitution, the provision is included in the company’s
constitution even though the procedures and other requirements of
this Act are not complied with in relation to the provision.
(10) If a provision of a law of a State or Territory provides that
additional requirements must be met for an alteration of a
company’s constitution to take effect, the alteration does not take
effect unless those requirements are met.
Other cases
(11) A provision of the Corporations legislation does not operate in a
State or Territory to the extent necessary to ensure that no
inconsistency arises between:
(a) the provision of the Corporations legislation; and
(b) a provision of a law of the State or Territory that would, but
for this subsection, be inconsistent with the provision of the
Corporations legislation.
Note 1: A provision of the State or Territory law is not covered by this
subsection if one of the earlier subsections in this section applies to
the provision: if one of those subsections applies there would be no
potential inconsistency to be dealt with by this subsection.
Note 2: The operation of the provision of the State or Territory law will be
supported by section 5E to the extent to which it can operate
concurrently with the provision of the Corporations legislation.
Pre-commencement (commenced) provision
(12) A provision of a law of a State or Territory is a
pre-commencement (commenced) provision if it:
(a) is enacted, and comes into force, before the commencement
of this Act; and
(b) is not a provision that has been materially amended after
commencement (see subsections (15) to (17)).
Pre-commencement (enacted) provision
(13) A provision of a law of a State or Territory is a
pre-commencement (enacted) provision if it:
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(a) is enacted before, but comes into force on or after, the
commencement of this Act; and
(b) is not a provision that has been materially amended after
commencement (see subsections (15) to (17)).
Post-commencement provision
(14) A provision of a law of a State or Territory is a
post-commencement provision if it:
(a) is enacted, and comes into force, on or after the
commencement of this Act; and
(b) is not a provision that has been materially amended after
commencement (see subsections (15) to (17)).
Provision materially amended after commencement
(15) A provision of a law of a State or Territory is materially amended
after commencement if:
(a) an amendment of the provision commences on or after the
commencement of this Act; and
(b) neither subsection (16) nor subsection (17) applies to the
amendment.
(16) A provision of a law of a State or Territory is not materially
amended after commencement under subsection (15) if the
amendment merely:
(a) changes:
(i) a reference to the Corporations Law or the ASC or
ASIC Law, or the Corporations Law or the ASC or
ASIC Law of a State or Territory, to a reference to the
Corporations Act or the ASIC Act; or
(ii) a reference to a provision of the Corporations Law or
the ASC or ASIC Law, or the Corporations Law or ASC
or ASIC Law of a State or Territory, to a reference to a
provision of the Corporations Act or the ASIC Act; or
(iii) a penalty for a contravention of a provision of a law of a
State or Territory; or
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(iv) a reference to a particular person or body to a reference
to another person or body; or
(b) adds a condition that must be met before a right is conferred,
an obligation imposed or a power conferred; or
(c) adds criteria to be taken into account before a power is
exercised; or
(d) amends the provision in way declared by the regulations to
not constitute a material amendment for the purposes of this
subsection.
(17) A provision of a law of a State or Territory is not materially
amended after commencement under subsection (15) if:
(a) the provision as amended would be inconsistent with a
provision of the Corporations legislation but for this section;
and
(b) the amendment would not materially reduce the range of
persons, acts and circumstances to which the provision of the
Corporations legislation applies if this section applied to the
provision of the State or Territory law as amended.
5H Registration of body as company on basis of State or Territory
law
(1) A body is taken to be registered under this Act as a company of a
particular type under section 118 if a law of a State or Territory in
this jurisdiction:
(a) provides that the body is a deemed registration company for
the purposes of this section; and
(b) specifies:
(i) the day on which the body is to be taken to be registered
(the registration day) or the manner in which that day is
to be fixed; and
(ii) the type of company the body is to be registered as
under this Act;
(iii) the company’s proposed name (unless the ACN is to be
used in its name);
and subsections (2) and (3) are satisfied.
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(2) A notice setting out the following details must be lodged before the
registration day:
(a) the name and address of each person who is to be a member
on registration;
(b) the present given and family name, all former given and
family names and the date and place of birth of each person
who is to be a director on registration;
(c) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a company secretary;
(d) the address of each person who is to be a director or company
secretary on registration;
(e) the address of the company’s proposed registered office;
(f) for a public company—the proposed opening hours of its
registered office (if they are not the standard opening hours);
(g) the address of the company’s proposed principal place of
business (if it is not the address of the proposed registered
office);
(h) for a company limited by shares or an unlimited company—
the following:
(i) the number and class of shares each member agrees in
writing to take up;
(ii) the amount (if any) each member agrees in writing to
pay for each share;
(iii) if that amount is not to be paid in full on registration—
the amount (if any) each member agrees in writing to be
unpaid on each share;
(i) for a public company that is limited by shares or is an
unlimited company, if shares will be issued for non-cash
consideration—the prescribed particulars about the issue of
the shares, unless the shares will be issued under a written
contract and a copy of the contract is lodged with the
application;
(j) for a company limited by guarantee—the proposed amount of
the guarantee that each member agrees to in writing.
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(3) If the company:
(a) is to be a public company; and
(b) is to have a constitution on registration;
a copy of the constitution must be lodged before the registration
day.
(4) On the registration day, the body is taken:
(a) to be registered as a company under this Act; and
(b) to be registered in the State or Territory referred to in
subsection (1).
(5) The regulations may modify the operation of this Act to facilitate
the registration of the company.
(6) Without limiting subsection (5), the regulations may make
provision in relation to:
(a) the share capital of the company on registration; and
(b) the issue of a certificate of registration on the basis of the
company’s registration.
5I Regulations may modify operation of the Corporations legislation
to deal with interaction between that legislation and State
and Territory laws
(1) The regulations may modify the operation of the Corporations
legislation so that:
(a) provisions of the Corporations legislation do not apply to a
matter that is dealt with by a law of a State or Territory
specified in the regulations; or
(b) no inconsistency arises between the operation of a provision
of the Corporations legislation and the operation of a
provision of a State or Territory law specified in the
regulations.
(2) Without limiting subsection (1), regulations made for the purposes
of that subsection may provide that the provision of the
Corporations legislation:
(a) does not apply to:
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(i) a person specified in the regulations; or
(ii) a body specified in the regulations; or
(iii) circumstances specified in the regulations; or
(iv) a person or body specified in the regulations in the
circumstances specified in the regulations; or
(b) does not prohibit an act to the extent to which the prohibition
would otherwise give rise to an inconsistency with the State
or Territory law; or
(c) does not require a person to do an act to the extent to which
the requirement would otherwise give rise to an
inconsistency with the State or Territory law; or
(d) does not authorise a person to do an act to the extent to which
the conferral of that authority on the person would otherwise
give rise to an inconsistency with the State or Territory law;
or
(e) does not impose an obligation on a person to the extent to
which complying with that obligation would require the
person to not comply with an obligation imposed on the
person under the State or Territory law; or
(f) authorises a person to do something for the purposes of the
Corporations legislation that the person:
(i) is authorised to do under the State or Territory law; and
(ii) would not otherwise be authorised to do under the
Corporations legislation; or
(g) will be taken to be satisfied if the State or Territory law is
satisfied.
(3) In this section:
matter includes act, omission, body, person or thing.
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Part 1.2—Interpretation
Division 1—General
6 Effect of this Part
(1) The provisions of this Part have effect for the purposes of this Act,
except so far as the contrary intention appears in this Act.
(2) This Part applies for the purposes of:
(a) Part 5.7; and
(b) Chapter 5 as applying by virtue of Part 5.7; and
(c) Part 9.2;
as if a reference in this Part to a person or to a body corporate
included a reference to a Part 5.7 body.
(4) Where, because of Part 11.2, provisions of this Act, as in force at a
particular time, continue to apply:
(a) in relation to someone or something; or
(b) for particular purposes;
then, for the purposes of those provisions as so applying:
(c) this Part as in force at that time continues to have effect; and
(d) this Part as in force at a later time does not have effect.
7 Location of other interpretation provisions
(1) Most of the interpretation provisions for this Act are in this Part.
(2) However, interpretation provisions relevant only to Chapter 7 are
to be found at the beginning of that Chapter.
(3) Also, interpretation provisions relevant to a particular Part,
Division or Subdivision may be found at the beginning of that Part,
Division or Subdivision.
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(4) Occasionally, an individual section contains its own interpretation
provisions, not necessarily at the beginning.
9 Dictionary
Unless the contrary intention appears:
2-part simple corporate bonds prospectus has the meaning given
by section 713B.
AASB means the Australian Accounting Standards Board.
ABN (short for “Australian Business Number”) has the meaning
given by section 41 of the A New Tax System (Australian Business
Number) Act 1999.
Aboriginal and Torres Strait Islander corporation means a
corporation registered under the Corporations (Aboriginal and
Torres Strait Islander) Act 2006.
accounting standard means:
(a) an instrument in force under section 334; or
(b) a provision of such an instrument as it so has effect.
ACN (short for “Australian Company Number”) is the number
given by ASIC to a company on registration (see sections 118 and
601BD).
acquire, in relation to financial products, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
act includes thing.
administration, in relation to a company, has the meaning given by
section 435C.
administrator:
(a) in relation to a body corporate but not in relation to a deed of
company arrangement:
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(i) means an administrator of the body or entity appointed
under Part 5.3A; and
(iii) if 2 or more persons are appointed under that Part as
administrators of the body or entity—has a meaning
affected by paragraph 451A(2)(b); or
(b) in relation to a deed of company arrangement:
(i) means an administrator of the deed appointed under
Part 5.3A; and
(ii) if 2 or more persons are appointed under that Part as
administrators of the deed—has a meaning affected by
paragraph 451B(2)(b).
admit to quotation: financial products are admitted to quotation on
a market if the market operator has given unconditional permission
for quotation of the financial products on the market.
affairs, in relation to a body corporate, has, in the provisions
referred to in section 53, a meaning affected by that section.
affidavit includes affirmation.
agency means an agency, authority, body or person.
aggregated turnover has the same meaning as in the Income Tax
Assessment Act 1997.
AGM means an annual general meeting of a company that
section 250N requires to be held.
agreement, in Chapter 6 or 7, means a relevant agreement.
amount includes a nil amount and zero.
ancillary offence, in relation to another offence, means an offence
against:
(a) section 5, 6, 7 or 7A of the Crimes Act 1914; or
(b) subsection 86(1) of that Act by virtue of paragraph 86(1)(a)
of that Act;
being an offence that is related to that other offence.
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annual transparency report has the meaning given by
subsection 332A(2).
approved stock exchange has the same meaning as in the Income
Tax Assessment Act 1997.
APRA means the Australian Prudential Regulation Authority.
arbitrage transaction means a purchase or sale of financial
products effected in the ordinary course of trading on a financial
market together with an offsetting sale or purchase of those
financial products effected at the same time, or at as nearly the
same time as practicable, in the ordinary course of trading on
another financial market for the purpose of obtaining a profit from
the difference between the prices of those financial products in the
2 financial markets.
ARBN (short for “Australian Registered Body Number”) is the
number given by ASIC to a registrable body on registration under
Part 5B.2.
arrangement, in Part 5.1, includes a reorganisation of the share
capital of a body corporate by the consolidation of shares of
different classes, by the division of shares into shares of different
classes, or by both of those methods.
ARSN (short for “Australian Registered Scheme Number”) is the
number given by ASIC to a registered scheme on registration (see
section 601EB).
ASIC means the Australian Securities and Investments
Commission.
ASIC Act means the Australian Securities and Investments
Commission Act 2001 and includes the regulations made under that
Act.
ASIC database means so much of the national companies database
kept by ASIC as consists of:
(a) some or all of a register kept by ASIC under this Act; or
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(b) information set out in a document lodged under this Act;
but does not include ASIC’s document imaging system.
assets, in relation to a financial services licensee, means all the
licensee’s assets (whether or not used in connection with the
licensee’s Australian financial services licence).
associate has the meaning given by sections 10 to 17.
associated entity has the meaning given by section 50AAA.
AUASB means the Auditing and Assurance Standards Board.
audit means an audit conducted for the purposes of this Act and
includes a review of a financial report for a financial year or a
half-year conducted for the purposes of this Act.
audit activity: see the definition of engage in audit activity.
audit company means a company that consents to be appointed, or
is appointed, as auditor of a company or registered scheme.
audit-critical employee, in relation to a company, or the
responsible entity for a registered scheme, that is the audited body
for an audit, means a person who:
(a) is an employee of the company or of the responsible entity
for the registered scheme; and
(b) is able, because of the position in which the person is
employed, to exercise significant influence over:
(i) a material aspect of the contents of the financial report
being audited; or
(ii) the conduct or efficacy of the audit.
audited body, in relation to an audit of a company or registered
scheme, means the company or registered scheme in relation to
which the audit is, or is to be, conducted.
audit firm means a firm that consents to be appointed, or is
appointed, as auditor of a company or registered scheme.
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auditing standard means:
(a) a standard in force under section 336; or
(b) a provision of such a standard as it so has effect.
auditor independence requirements of this Act means the
requirements of Divisions 3, 4 and 5 of Part 2M.4.
Australia, when used in a geographical sense, does not include an
external Territory.
Note: Paragraph 17(a) of the Acts Interpretation Act 1901 would otherwise
provide that Australia included the Territory of Christmas Island and
the Territory of Cocos (Keeling) Islands.
Australian ADI means:
(a) an ADI (authorised deposit-taking institution) within the
meaning of the Banking Act 1959; and
(b) a person who carries on State banking within the meaning of
paragraph 51(xiii) of the Constitution.
Australian bank means an Australian ADI that is permitted under
section 66 of the Banking Act 1959 to assume or use:
(a) the word bank, banker or banking; or
(b) any other word (whether or not in English) that is of like
import to a word referred to in paragraph (a).
Australian carbon credit unit has the same meaning as in the
Carbon Credits (Carbon Farming Initiative) Act 2011.
Australian court means a federal court or a court of a State or
Territory.
Australian CS facility licence, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
Australian derivative trade repository licence, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
Australian financial services licence, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
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Australian law means a law of the Commonwealth or of a State or
Territory.
Australian market licence, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
Australian register of a foreign company means a branch register
of members kept under section 601CM.
authorised audit company means a company registered under
Part 9.2A.
bank or banker includes, but is not limited to, a body corporate
that is an ADI (authorised deposit-taking institution) for the
purposes of the Banking Act 1959.
banking corporation means a body corporate that carries on, as its
sole or principal business, the business of banking (other than State
banking not extending beyond the limits of the State concerned).
base prospectus has the meaning given by subsection 713C(1).
base salary has the meaning specified in regulations made for the
purposes of this definition.
begin, in relation to a winding up, has the meaning given by
Division 1A of Part 5.6.
benefit:
(a) means any benefit, whether by way of payment of cash or
otherwise; and
(b) when used in Division 2 of Part 2D.2 (sections 200 to
200J)—has the meaning given by section 200AB.
bid class of securities for a takeover bid is the class of securities to
which the securities being bid for belong.
bidder for a takeover bid means the person who makes or proposes
to make, or each of the people who make or propose to make, the
offers under the bid (whether personally or by an agent or
nominee).
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Note: A person who announces a bid on behalf of another person is not
making the bid, the other person is making the bid.
bidder’s statement means a bidder’s statement under sections 636
and 637 as supplemented.
bid period:
(a) for an off-market bid—starts when the bidder’s statement is
given to the target and ends:
(i) 1 month later if no offers are made under the bid; or
(ii) at the end of the offer period; and
(b) for a market bid—starts when the bid is announced to the
relevant financial market and ends at the end of the offer
period.
Board, when used in Part 9.2, means the Companies Auditors
Disciplinary Board.
board limit means a limit described in section 201N.
board limit resolution means a resolution described in
paragraph 201P(1)(a).
body means a body corporate or an unincorporated body and
includes, for example, a society or association.
body corporate:
(a) includes a body corporate that is being wound up or has been
dissolved; and
(b) in this Chapter (except section 66A) and section 206E
includes an unincorporated registrable body.
body regulated by APRA has the meaning given by subsection 3(2)
of the Australian Prudential Regulation Authority Act 1998.
books includes:
(a) a register; and
(b) any other record of information; and
(c) financial reports or financial records, however compiled,
recorded or stored; and
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(d) a document;
but does not include an index or recording made under Subdivision
D of Division 5 of Part 6.5.
borrower, in relation to a debenture, means the body that is or will
be liable to repay money under the debenture.
business affairs, in relation to an entity, has a meaning affected by
sections 53AA, 53AB, 53AC and 53AD.
business day means a day that is not a Saturday, a Sunday or a
public holiday or bank holiday in the place concerned.
Business Names Register means the Register established and
maintained under section 22 of the Business Names Registration
Act 2011.
buy-back by a company means the acquisition by the company of
shares in itself.
buy-back agreement by a company means an agreement by the
company to buy back its own shares (whether the agreement is
conditional or not).
Capital Territory means the Australian Capital Territory and the
Jervis Bay Territory.
carry on has a meaning affected by Division 3.
cash management trust interest means an interest that:
(a) is an interest in a registered scheme; and
(b) relates to an undertaking of the kind commonly known as a
cash management trust.
cause includes procure.
certified means:
(a) in relation to a copy of, or extract from, a document—
certified by a statement in writing to be a true copy of, or
extract from, the document; or
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(b) in relation to a translation of a document—certified by a
statement in writing to be a correct translation of the
document into English.
Chapter 5 body corporate means a body corporate:
(a) that is being wound up; or
(b) in respect of property of which a receiver, or a receiver and
manager, has been appointed (whether or not by a court) and
is acting; or
(c) that is under administration; or
(d) that has executed a deed of company arrangement that has
not yet terminated; or
(e) that has entered into a compromise or arrangement with
another person the administration of which has not been
concluded.
charge means a charge created in any way and includes a mortgage
and an agreement to give or execute a charge or mortgage, whether
on demand or otherwise.
chargeable matter has the same meaning as in the Corporations
(Fees) Act 2001.
chargee means the holder of a charge and includes a person in
whose favour a charge is to be given or executed, whether on
demand or otherwise, under an agreement.
child: without limiting who is a child of a person for the purposes
of this Act, someone is the child of a person if he or she is a child
of the person within the meaning of the Family Law Act 1975.
circulating security interest has the meaning given by section 51C.
civil matter means a matter other than a criminal matter.
civil penalty order means any of the following:
(a) a declaration of contravention under section 1317E;
(b) a pecuniary penalty order under section 1317G;
(ba) a refund order under section 1317GA;
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(c) a compensation order under section 961M, 1317H, 1317HA
or 1317HB;
(d) an order under section 206C disqualifying a person from
managing corporations.
civil penalty provision has the meaning given in
subsection 1317E(1).
class has:
(b) in relation to shares or interests in a managed investment
scheme—a meaning affected by section 57; and
(c) when used in relation to securities for the purposes of
Chapter 6, 6A or 6C—a meaning affected by
subsection 605(2).
clearing and settlement facility, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
close associate of a director means:
(a) a relative of the director; or
(b) a relative of a spouse of the director.
closely related party of a member of the key management
personnel for an entity means:
(a) a spouse or child of the member; or
(b) a child of the member’s spouse; or
(c) a dependant of the member or of the member’s spouse; or
(d) anyone else who is one of the member’s family and may be
expected to influence the member, or be influenced by the
member, in the member’s dealings with the entity; or
(e) a company the member controls; or
(f) a person prescribed by the regulations for the purposes of this
paragraph.
coastal sea:
(a) in relation to Australia—means:
(i) the territorial sea of Australia; and
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(ii) the sea on the landward side of the territorial sea of
Australia and not within the limits of a State or internal
Territory;
and includes the airspace over, and the sea-bed and subsoil
beneath, any such sea; and
(b) in relation to a State or Territory—means so much of the
coastal sea of Australia as is within the area described in
Schedule 1 to the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 under the heading that refers to that State
or Territory.
commence, in relation to a winding up, has the meaning given by
Division 1A of Part 5.6.
commencement, in relation to an accounting standard, means:
(a) in the case of an accounting standard as originally in effect—
the time when the accounting standard took effect; or
(b) in the case of an accounting standard as varied by a particular
provision of an instrument made under section 334—the time
when that provision took effect.
Commission delegate has the same meaning as in the ASIC Act.
Commonwealth authority means an authority or other body
(whether incorporated or not) that is established or continued in
existence by or under an Act.
company means a company registered under this Act and:
(c) in Parts 5.7B and 5.8 (except sections 595 and 596), includes
a Part 5.7 body; and
(d) in Part 5B.1, includes an unincorporated registrable body.
company limited by guarantee means a company formed on the
principle of having the liability of its members limited to the
respective amounts that the members undertake to contribute to the
property of the company if it is wound up.
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company limited by shares means a company formed on the
principle of having the liability of its members limited to the
amount (if any) unpaid on the shares respectively held by them.
compliance period for an infringement notice has the meaning
given by section 1317DAA.
condition, in relation to a licence, means a condition or restriction
to which the licence is subject, or will be subject, as the case
requires.
connected entity, in relation to a corporation, means:
(a) a body corporate that is, or has been, related to the
corporation; or
(b) an entity that is, or has been, connected (as defined by
section 64B) with the corporation.
consolidated entity means a company, registered managed
investment scheme or disclosing entity together with all the entities
it is required by the accounting standards to include in consolidated
financial statements.
constitution means (depending on the context):
(a) a company’s constitution, which (where relevant) includes
rules and consequential amendments that are part of the
company’s constitution because of the Life Insurance Act
1995; or
(b) a managed investment scheme’s constitution; or
(c) in relation to any other kind of body:
(i) the body’s charter or memorandum; or
(ii) any instrument or law (other than this Act) constituting,
or defining the constitution of, the body or governing
the activities of the body or its members.
Note: The Life Insurance Act 1995 has rules about how benefit fund rules
become part of a company’s constitution. They override this Act. See
Subdivision 2 of Division 4 of Part 2A of that Act.
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continuous disclosure notice means:
(a) a document used to notify a market operator of information
relating to a body under provisions of the market’s listing
rules referred to in subsection 674(1); or
(b) a document under section 675 lodged in relation to the body.
continuously quoted securities are securities that:
(a) are in a class of securities that were quoted ED securities at
all times in the 3 months before the date of the prospectus or
Product Disclosure Statement; and
(b) are securities of an entity in relation to which the following
subparagraphs are satisfied during the shorter of the period
during which the class of securities were quoted, and the
period of 12 months before the date of the prospectus or
Product Disclosure Statement:
(i) no exemption under section 111AS or 111AT, or
modification under section 111AV, covered the entity,
or any person as director or auditor of the entity;
(ii) no exemption under paragraph 741(1)(a), or declaration
under paragraph 741(1)(b), relating to a provision that is
a disclosing entity provision for the purposes of
Division 4 of Part 1.2A covered the entity, or any
person as director or auditor of the entity;
(iii) no order under section 340 or 341 covered the entity, or
any person as director or auditor of the entity;
and, for these purposes, securities are not in different classes
merely because of a temporary difference in the dividend, or
distribution rights, attaching to the securities or because different
amounts have been paid up on the securities.
contribution plan means a plan in respect of which the following
conditions are met:
(a) regular deductions are made from the wages or salary of an
employee or director (the contributor) to acquire financial
products that are offered for issue or sale to the contributor
under an eligible employee share scheme;
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(b) the deductions are authorised by the contributor in a form
which is included in, or accompanies, the disclosure
document or the Product Disclosure Statement for the
scheme;
(c) before acquiring the financial products under the scheme, the
deductions are held on trust in an account with an Australian
ADI that is kept solely for that purpose;
(d) the contributor may elect to discontinue the deductions at any
time;
(e) if the contributor so elects, the amount of the deductions
standing, at that time, to the credit of the account for the
contributor, and any interest on that amount, is repaid to the
contributor;
(f) the scheme does not involve the offer to the contributor of a
loan or similar financial assistance for the purpose of, or in
connection with, the acquisition of the financial products that
are offered under the scheme.
contributory means:
(a) in relation to a company (other than a no liability company):
(i) a person liable as a member or past member to
contribute to the property of the company if it is wound
up; and
(ii) for a company with share capital—a holder of fully paid
shares in the company; and
(iii) before the final determination of the persons who are
contributories because of subparagraphs (i) and (ii)—a
person alleged to be such a contributory; and
(b) in relation to a Part 5.7 body:
(i) a person who is a contributory by virtue of section 586;
and
(ii) before the final determination of the persons who are
contributories by virtue of that section—a person
alleged to be such a contributory; and
(c) in relation to a no liability company—subject to
subsection 254M(2), a member of the company.
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control has the meaning given by section 50AA.
control day, in relation to a controller of property of a corporation,
means:
(a) unless paragraph (b) applies:
(i) in the case of a receiver, or receiver and manager, of
that property—the day when the receiver, or receiver
and manager, was appointed; or
(ii) in the case of any other person who is in possession, or
has control, of that property for the purpose of enforcing
a security interest—the day when the person entered
into possession, or took control, of property of the
corporation for the purpose of enforcing that security
interest; or
(b) if the controller became a controller of property of the
corporation:
(i) to act with an existing controller of such property; or
(ii) in place of a controller of such property who has died or
ceased to be a controller of such property;
the day that is, because of any other application or
applications of this definition, the control day in relation to
the controller referred to in subparagraph (i) or (ii).
controller, in relation to property of a corporation, means:
(a) a receiver, or receiver and manager, of that property; or
(b) anyone else who (whether or not as agent for the corporation)
is in possession, or has control, of that property for the
purpose of enforcing a security interest;
and has a meaning affected by paragraph 434F(b) (which deals
with 2 or more persons appointed as controllers).
convertible note has the same meaning as in Division 3A of
Part III of the Income Tax Assessment Act 1936.
convertible securities: securities are convertible into another class
of securities if the holder may have the other class of securities
issued to them by the exercise of rights attached to those securities.
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An option may be a convertible security even if it is
non-renounceable.
corporation has the meaning given by section 57A.
corporation/scheme civil penalty provision has the meaning given
by section 1317DA.
Corporations legislation means:
(a) this Act; and
(b) the ASIC Act; and
(c) rules of court made by the Federal Court, the Supreme Court
of the Capital Territory, or the Family Court, because of a
provision of this Act; and
(d) rules of court applied by the Supreme Court, or a State
Family Court, of a State, or by the Supreme Court of the
Northern Territory when exercising jurisdiction conferred by
Division 1 of Part 9.6A (including jurisdiction conferred by
virtue of any previous application or applications of this
paragraph).
court has the meaning given by section 58AA.
Court has the meaning given by section 58AA.
court of summary jurisdiction means any justice or justices of the
peace or other magistrate sitting as a court for the making of
summary orders or the summary punishment of offences:
(a) under a law of the Commonwealth or of a State or Territory;
or
(b) by virtue of his or her commission or their commissions.
creditors’ voluntary winding up means a winding up under
Part 5.5, other than a members’ voluntary winding up.
current market bid price for securities covered by a market bid is
the price specified in the announcement of the bid as increased or
decreased during the offer period.
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daily newspaper means a newspaper that is ordinarily published on
each day that is a business day in the place where the newspaper is
published, whether or not the newspaper is ordinarily published on
other days.
date of a takeover bid is:
(a) for an off-market bid—the date on which offers are first
made under the bid; or
(b) for a market bid—the date on which the bid is announced to
the relevant financial market.
deal:
(a) in relation to a futures contract—has the meaning given by
Division 4; and
(b) in relation to securities—subject to subsection 93(4), means
(whether as principal or agent) acquire, dispose of, subscribe
for or underwrite the securities, or make or offer to make, or
induce or attempt to induce a person to make or to offer to
make, an agreement:
(i) for or with respect to acquiring, disposing of,
subscribing for or underwriting the securities; or
(ii) the purpose or purported purpose of which is to secure a
profit or gain to a person who acquires, disposes of,
subscribes for or underwrites the securities or to any of
the parties to the agreement in relation to the securities.
dealing, in relation to financial products, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
debenture of a body means a chose in action that includes an
undertaking by the body to repay as a debt money deposited with
or lent to the body. The chose in action may (but need not) include
a security interest over property of the body to secure repayment of
the money. However, a debenture does not include:
(a) an undertaking to repay money deposited with or lent to the
body by a person if:
(i) the person deposits or lends the money in the ordinary
course of a business carried on by the person; and
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(ii) the body receives the money in the ordinary course of
carrying on a business that neither comprises nor forms
part of a business of borrowing money and providing
finance; or
(b) an undertaking by an Australian ADI to repay money
deposited with it, or lent to it, in the ordinary course of its
banking business; or
Note: This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(2)).
(c) an undertaking to pay money under:
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange; or
(e) an undertaking by a body corporate to pay money to a related
body corporate; or
(f) an undertaking to repay money that is prescribed by the
regulations.
For the purposes of this definition, if a chose in action that includes
an undertaking by a body to pay money as a debt is offered as
consideration for the acquisition of securities under an off-market
takeover bid, or is issued under a compromise or arrangement
under Part 5.1, the undertaking is taken to be an undertaking to
repay as a debt money deposited with or lent to the body.
decision period, for a secured party in relation to a security interest
in property (including PPSA retention of title property) of a
company under administration, means the period beginning on the
day when:
(a) if notice of the appointment of the administrator must be
given to the secured party under subsection 450A(3)—such
notice is so given; or
(b) otherwise—the administration begins;
and ending at the end of the thirteenth business day after that day.
declaration of indemnities, in relation to an administrator of a
company under administration, means a written declaration:
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(a) stating whether the administrator has, to any extent, been
indemnified (otherwise than under section 443D), in relation
to that administration, for:
(i) any debts for which the administrator is, or may
become, liable under Subdivision A of Division 9 of
Part 5.3A; or
(ii) any debts for which the administrator is, or may
become, liable under a remittance provision as defined
in section 443BA; or
(iii) the remuneration to which he or she is entitled under
section 60-5 of Schedule 2 (external administrator’s
remuneration); and
(b) if so, stating:
(i) the identity of each indemnifier; and
(ii) the extent and nature of each indemnity.
declaration of relevant relationships has the meaning given by
section 60.
deductible gift recipient has the same meaning as in the Income
Tax Assessment Act 1997.
deed includes a document having the effect of a deed.
deed of company arrangement means a deed of company
arrangement executed under Part 5.3A or such a deed as varied and
in force from time to time.
defeating condition for a takeover bid means a condition that:
(a) will, in circumstances referred to in the condition, result in
the rescission of, or entitle the bidder to rescind, a takeover
contract; or
(b) prevents a binding takeover contract from resulting from an
acceptance of the offer unless or until the condition is
fulfilled.
defect, in relation to a statutory demand, includes:
(a) an irregularity; and
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(b) a misstatement of an amount or total; and
(c) a misdescription of a debt or other matter; and
(d) a misdescription of a person or entity.
deregistered means:
(a) in relation to a company—deregistered under Chapter 5A;
and
(b) in relation to any other body corporate—deregistered in a
way that results in the body corporate ceasing to exist.
derivative, when used in a provision outside Chapter 7, has the
same meaning as it has in Chapter 7.
derivative trade repository rules, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
derivative transaction rules, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
director of a company or other body means:
(a) a person who:
(i) is appointed to the position of a director; or
(ii) is appointed to the position of an alternate director and
is acting in that capacity;
regardless of the name that is given to their position; and
(b) unless the contrary intention appears, a person who is not
validly appointed as a director if:
(i) they act in the position of a director; or
(ii) the directors of the company or body are accustomed to
act in accordance with the person’s instructions or
wishes.
Subparagraph (b)(ii) does not apply merely because the directors
act on advice given by the person in the proper performance of
functions attaching to the person’s professional capacity, or the
person’s business relationship with the directors or the company or
body.
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Note: Paragraph (b)—Contrary intention—Examples of provisions for
which a person referred to in paragraph (b) would not be included in
the term “director” are:
section 249C (power to call meetings of a company’s members)
subsection 251A(3) (signing minutes of meetings)
section 205B (notice to ASIC of change of address).
disclosing entity has the meaning given by section 111AC.
disclosure document for an offer of securities means:
(a) a prospectus for the offer; or
(b) a profile statement for the offer; or
(c) an offer information statement for the offer.
dispose has a meaning affected by the following paragraphs:
(a) when used in relation to financial products in a provision
outside Chapter 7, otherwise than in a situation to which
paragraph (b) applies, dispose has the same meaning as it has
in Chapter 7;
(b) for the purposes of Chapter 6, a person who has a relevant
interest in securities disposes of the securities if, and only if,
they cease to have a relevant interest in the securities.
domestic corporation means a corporation that is incorporated or
formed in Australia or an external Territory.
ED securities has the meaning given by section 111AD.
eligible applicant, in relation to a corporation, means:
(a) ASIC; or
(b) a liquidator or provisional liquidator of the corporation; or
(c) an administrator of the corporation; or
(d) an administrator of a deed of company arrangement executed
by the corporation; or
(e) a person authorised in writing by ASIC to make:
(i) applications under the Division of Part 5.9 in which the
expression occurs; or
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(ii) such an application in relation to the corporation.
eligible employee creditor, in relation to a company, means a
creditor whose debt or claim would, in a winding up of the
company, be payable in priority to other unsecured debts and
claims in accordance with paragraph 556(1)(e), (g) or (h) or
section 560 or 561.
eligible employee share scheme means an employee share scheme
for a body corporate in respect of which the following conditions
are met:
(a) the scheme is offered only to employees or directors
mentioned in paragraph (a) of the definition of employee
share scheme;
(b) the financial products that are offered under the scheme are
offered:
(i) under a disclosure document or Product Disclosure
Statement; or
(ii) without disclosure under Part 6D.2 in accordance with
subsection 708(12);
(c) the financial products which may be acquired under the
scheme are the following:
(i) fully paid ordinary shares;
(ii) options, offered for no more than nominal
consideration, for the issue or transfer of fully paid
ordinary shares;
(iii) units in fully paid ordinary shares.
eligible international emissions unit has the same meaning as in
the Australian National Registry of Emissions Units Act 2011.
eligible money market dealer means a body corporate in respect of
which a declaration is in force under section 65.
emoluments means the amount or value of any money,
consideration or benefit given, directly or indirectly, to a director
of a body corporate in connection with the management of affairs
of the body or of any holding company or subsidiary of the body,
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whether as a director or otherwise, but does not include amounts in
payment or reimbursement of out-of-pocket expenses incurred for
the benefit of the body.
employee share scheme for a company means a scheme under
which shares (or units in shares or options to acquire unissued
shares) in the company or a holding company may be acquired:
(a) by, or for the benefit of:
(i) employees of the company, or of a related body
corporate; or
(ii) directors of the company, or of a related body corporate,
who hold a salaried employment or office in the
company or in a related body corporate; or
(b) by a corporation all of whose members are:
(i) employees of the company, or of a related body
corporate; or
(ii) directors of the company, or of a related body corporate,
who hold a salaried employment or office in the
company or in a related body corporate.
employee share scheme buy-back means a buy-back under a
scheme that:
(a) has as its purpose the acquisition of shares in a company by,
or on behalf of:
(i) employees of the company, or of a related body
corporate; or
(ii) directors of the company, or a related body corporate,
who hold a salaried employment or office in the
company or in a related body corporate; and
(b) has been approved by the company in general meeting.
enforce, in relation to a security interest in property of a company
under administration, includes:
(a) appoint a receiver of property of the company under a power
contained in an instrument relating to the security interest; or
(b) obtain an order for the appointment of a receiver of such
property for the purpose of enforcing the security interest; or
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(c) enter into possession, or assume control, of such property for
that purpose; or
(d) appoint a person so to enter into possession or assume control
(whether as agent for the secured party or for the company);
or
(e) exercise, in relation to property including PPSA retention of
title property, as the secured party or as a receiver or person
so appointed, a right, power or remedy existing because of
the security interest, arising:
(i) under an agreement or instrument relating to the
security interest; or
(ii) in the case of a PPSA security interest—under an
agreement or instrument relating to a transaction or
dealing giving rise to the security interest; or
(iii) under a written or unwritten law; or
(iv) in any other way.
enforcement process, in relation to property, means:
(a) execution against that property; or
(b) any other enforcement process in relation to that property
that involves a court or a sheriff.
engage in audit activity: an individual auditor, audit firm or audit
company engages in audit activity in relation to an audited body
for an audit if the individual auditor, audit firm or audit company:
(a) consents to be appointed as auditor of the audited body for a
financial year; or
(b) acts as the auditor of the audited body for a financial year; or
(c) prepares a report in relation to the audited body that is
required by this Act to be prepared by:
(i) a registered company auditor; or
(ii) an auditor of the audited body in relation to a financial
year or half-year.
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
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enter into: a person who:
(a) enters into, or becomes a party to, a relevant agreement in
relation to voting shares or other securities; or
(b) exercises an option to have voting shares or other securities
issued or granted;
is taken to enter into a transaction in relation to the shares or
securities.
entitlements of an employee of a company has the meaning given
by subsections 596AA(2) and (3).
entity: for the purposes of Chapter 2E an entity is any of the
following:
(a) a body corporate;
(b) a partnership;
(c) an unincorporated body;
(d) an individual;
(e) for a trust that has only 1 trustee—the trustee;
(f) for a trust that has more than 1 trustee—the trustees together.
Otherwise, entity has the meaning given by section 64A.
equal access scheme has the meaning given by
subsections 257B(2) and (3).
equity interest has the same meaning as in the Income Tax
Assessment Act 1997.
ESS interest has the same meaning as in the Income Tax
Assessment Act 1997.
event includes any happening, circumstance or state of affairs.
examinable affairs, in relation to a corporation means:
(a) the promotion, formation, management, administration or
winding up of the corporation; or
(b) any other affairs of the corporation (including anything that
is included in the corporation’s affairs because of section 53);
or
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(c) the business affairs of a connected entity of the corporation,
in so far as they are, or appear to be, relevant to the
corporation or to anything that is included in the
corporation’s examinable affairs because of paragraph (a) or
(b).
examinable assets and liabilities, in relation to an entity, means all
of the following:
(a) the entity’s property and assets:
(i) whether present or future; and
(ii) whether held alone or jointly with any other person or
persons; and
(iii) whether or not held as agent, bailee or trustee;
(b) the entity’s liabilities:
(i) whether present or future; and
(ii) whether actual or contingent; and
(iii) whether owed alone or jointly with any other person or
persons; and
(iv) whether or not owed as trustee.
examinable operations, in relation to an entity, means all of the
following:
(a) the entity’s business, trading, transactions and dealings:
(i) whether alone or jointly with any other entity or entities;
and
(ii) whether or not as agent, bailee or trustee;
(b) the entity’s profits, income and receipts;
(c) the entity’s losses, outgoings and expenditure.
excluded security means:
(a) where:
(i) there is attached to a share or debenture a right to
participate in a retirement village scheme; and
(ii) each of the other rights, and each interest (if any),
attached to the share or debenture is a right or interest
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that is merely incidental to the right referred to in
subparagraph (i);
the share or debenture or a unit in the share or debenture; or
(b) an interest in a managed investment scheme constituted by a
right to participate in a retirement village scheme.
exempt body has the meaning given by section 66A.
exempt foreign company means a foreign company of a kind
referred to in subsection 601CK(8), whether or not Division 2 of
Part 5B.2 applies to it.
exempt public authority means a body corporate that is
incorporated within Australia or an external Territory and is:
(a) a public authority; or
(b) an instrumentality or agency of the Crown in right of the
Commonwealth, in right of a State or in right of a Territory.
expert, in relation to a matter, means a person whose profession or
reputation gives authority to a statement made by him or her in
relation to that matter.
extend, in relation to a period:
(a) includes further extend; and
(b) has a meaning affected by section 70.
extract of particulars for a company or a registered scheme means
a statement given by ASIC that contains either or both of the
following:
(a) some or all of the particulars in relation to the company or
scheme that are recorded in the register or registers
maintained by ASIC under subsection 1274(1);
(b) a requirement to provide a particular under section 346B.
extraordinary resolution, in relation to a registered scheme, means
a resolution:
(a) of which notice as set out in paragraph 252J(c) has been
given; and
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(b) that has been passed by at least 50% of the total votes that
may be cast by members entitled to vote on the resolution
(including members who are not present in person or by
proxy).
Family Court means the Family Court of Australia.
Federal Court means the Federal Court of Australia.
financial benefit (when used in Chapter 2E) has a meaning that is
affected by section 229.
financial corporation means a financial corporation within the
meaning of paragraph 51(20) of the Constitution.
financial market, when used in a provision outside Chapter 7, has
the same meaning as it has in Chapter 7.
financial product, when used in a provision outside Chapter 7, has
the same meaning as it has in Chapter 7.
financial records includes:
(a) invoices, receipts, orders for the payment of money, bills of
exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) working papers and other documents needed to explain:
(i) the methods by which financial statements are made up;
and
(ii) adjustments to be made in preparing financial
statements.
financial report means an annual financial report or a half-year
financial report prepared under Chapter 2M.
Note: Section 295 deals with the contents of annual financial reports and
section 302 deals with the contents of half-year financial reports.
financial reporting requirements for a financial report means the
requirements imposed under:
(a) section 296 or 297 if the financial report is an annual
financial report; or
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(b) section 304 or 305 if the financial report is a half-year
financial report.
financial service, when used in a provision outside Chapter 7, has
the same meaning as it has in Chapter 7.
financial services business, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
financial services civil penalty provision has the meaning given by
section 1317DA.
financial services licensee, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
financial statements means annual financial statements under
section 295 or half-year financial statements under section 303.
financial year, when used in a provision outside Schedule 2, has
the meaning given by section 323D.
find, in the case of a reference to a court finding a person guilty of
an offence, has a meaning affected by section 73A.
firm, in relation to an administrator or liquidator, means:
(a) if the administrator or liquidator is a partner or employee of a
partnership (the partnership firm) that provides advice or
other services in relation to Chapter 5 bodies corporate—the
partnership firm; or
(b) if the administrator or liquidator is an officer or employee of
a body corporate (the body corporate firm) that provides
advice or other services in relation to Chapter 5 bodies
corporate—the body corporate firm.
floating charge includes a charge that conferred a floating security
at the time of its creation but has since become a fixed or specific
charge.
for, in relation to a fee or tax, includes in respect of.
foreign company means:
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(a) a body corporate that is incorporated in an external Territory,
or outside Australia and the external Territories, and is not:
(i) a corporation sole; or
(ii) an exempt public authority; or
(b) an unincorporated body that:
(i) is formed in an external Territory or outside Australia
and the external Territories; and
(ii) under the law of its place of formation, may sue or be
sued, or may hold property in the name of its secretary
or of an officer of the body duly appointed for that
purpose; and
(iii) does not have its head office or principal place of
business in Australia.
foreign holder of securities means a holder of the securities whose
address, as shown in the register in which details of their holding is
recorded, is a place outside Australia and the external Territories.
foreign law has the same meaning as in the Income Tax
Assessment Act 1997.
franchise means an arrangement under which a person earns
profits or income by exploiting a right, conferred by the owner of
the right, to use a trade mark or design or other intellectual
property or the goodwill attached to it in connection with the
supply of goods or services. An arrangement is not a franchise if
the person engages the owner of the right, or an associate of the
owner, to exploit the right on the person’s behalf.
Full Court, in relation to a Supreme Court of a State or Territory,
includes any court of the State or Territory to which appeals lie
from a single judge of that Supreme Court.
fully paid share means a share on which no amount remains
unpaid.
function includes a duty.
Gazette notice means a notice published in the Gazette.
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general law means the principles and rules of the common law and
equity.
group executives for a consolidated entity means:
(a) the directors of the companies or bodies within the
consolidated entity; and
(b) the secretaries of the companies or bodies within the
consolidated entity; and
(c) the senior managers of any corporation within the
consolidated entity; and
(d) the partners, and senior managers, of any partnership within
the consolidated entity; and
(e) the trustees, and senior managers, of any trusts within the
consolidated entity; and
(f) the senior managers of any joint venture within the
consolidated entity.
guarantor, in relation to a debenture, means a body that has
guaranteed, or has agreed to guarantee, the repayment of any
money deposited or lent to the borrower under the debenture.
guilty, in the case of a reference to a court finding a person guilty
of an offence, has a meaning affected by section 73A.
half-year has the meaning given by subsection 323D(5).
have, in relation to information, includes be in possession of the
information.
highest outside purchase price for a takeover bid is the highest
amount paid or payable by the bidder for a security in the bid class
under a purchase made outside the bid and during the bid period.
hold, in relation to a person, in relation to a document that is, or
purports to be, a copy of a licence, means have in the person’s
possession.
holding company, in relation to a body corporate, means a body
corporate of which the first body corporate is a subsidiary.
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immediate family member for a person means:
(a) the person’s spouse; or
(b) a person who is wholly or partly dependent on the person for
financial support.
in Australia has the meaning given by section 102C.
included, in relation to an official list, has the meaning given by
section 75.
income year has the same meaning as in the Income Tax
Assessment Act 1997.
incorporated in Australia, in relation to a body corporate, includes
incorporated by or under a law of:
(a) the Commonwealth; or
(b) a State; or
(c) an internal Territory.
incorporation:
(a) of a company—means the company’s first registration under
this Act; and
(b) of any other incorporated body—means the body’s
incorporation by or under a law (other than this Act).
individual auditor means an individual who consents to be
appointed, or is appointed, as auditor of a company or registered
scheme.
industrial instrument means:
(a) a contract of employment; or
(b) a law, award, determination or agreement relating to terms or
conditions of employment.
information includes complaint.
infringement notice has the meaning given by section 1317DAA.
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injury compensation means compensation payable under any law
relating to workers compensation.
Insolvency Practice Rules means the rules made by the Minister
under section 105-1 of Schedule 2.
insolvent has the meaning given by subsection 95A(2).
insolvent transaction has the meaning given by section 588FC.
insolvent under administration means:
(a) a person who, under the Bankruptcy Act 1966 or the law of
an external Territory, is a bankrupt in respect of a bankruptcy
from which the person has not been discharged; or
(b) a person who, under the law of an external Territory or the
law of a foreign country, has the status of an undischarged
bankrupt; or
(c) a person any of whose property is subject to control under:
(i) section 50 or Division 2 of Part X of the Bankruptcy Act
1966; or
(ii) a corresponding provision of the law of an external
Territory or the law of a foreign country; or
(d) a person who has executed a personal insolvency agreement
under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of an external
Territory or the law of a foreign country;
where the terms of the agreement have not been fully
complied with; or
(e) a person who is a party (as a debtor) to a debt agreement
under:
(i) Part IX of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of an external
Territory or the law of a foreign country.
interest in a managed investment scheme means a right to benefits
produced by the scheme (whether the right is actual, prospective or
contingent and whether it is enforceable or not).
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investment in a company, disclosing entity or other body means:
(a) a share in the company, disclosing entity or body; or
(b) a debenture of the company, disclosing entity or body; or
(c) a legal or equitable interest in:
(i) a share in the company, disclosing entity or body; or
(ii) a debenture of the company, disclosing entity or body;
or
(d) an option to acquire (whether by way of issue or transfer) an
investment in the company, disclosing entity or body covered
by paragraph (a), (b) or (c); or
(e) an option to dispose of an investment in the company,
disclosing entity or body covered by paragraph (a), (b) or (c);
or
(f) an interest a person holds under an arrangement that is a
derivative if:
(i) the consideration to be provided under the arrangement;
or
(ii) the value of the arrangement;
is ultimately determined, derived from or varies by reference
to an investment in the company, disclosing entity or body
covered by paragraph (a), (b), (c), (d) or (e).
To avoid doubt, the consideration to be provided under, or the
value of, an arrangement in relation to an index is not ultimately
determined, derived from or varies by reference to an investment in
the company merely because the investment is taken into account
in determining the value of the index.
investment in a registered scheme means:
(a) an interest in the scheme; or
(b) a legal or equitable interest in an interest in the scheme; or
(c) an option to acquire (whether by way of issue or transfer) an
investment in the scheme covered by paragraph (a) or (b); or
(d) an option to dispose of an investment in the scheme covered
by paragraph (a) or (b); or
(e) an interest a person holds under an arrangement that is a
derivative if:
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(i) the consideration to be provided under the arrangement;
or
(ii) the value of the arrangement;
is ultimately determined, derived from or varies by reference
to an investment in the scheme covered by paragraph (a), (b),
(c) or (d); or
(f) an investment in the responsible entity of the scheme.
To avoid doubt, the consideration to be provided under, or the
value of, an arrangement in relation to an index is taken not to be
ultimately determined, derived from or vary by reference to an
investment in the scheme merely because the investment is taken
into account in determining the value of the index.
investment contract means any contract, scheme or arrangement
that, in substance and irrespective of its form, involves the
investment of money in or under such circumstances that the
investor acquires or may acquire an interest in, or right in respect
of, property, whether in this jurisdiction or elsewhere, that, under,
or in accordance with, the terms of investment will, or may at the
option of the investor, be used or employed in common with any
other interest in, or right in respect of, property, whether in this
jurisdiction or elsewhere, acquired in or under like circumstances.
involved, in relation to a contravention, has the meaning given by
section 79.
issue includes:
(a) in relation to interests in a managed investment scheme—
make available; and
(b) otherwise—circulate, distribute and disseminate.
Note: When issue is used in Chapter 7 in relation to a financial product it
has a meaning affected by section 761E.
Judge means a judge of the Court.
judgment means a judgment, decree or order, whether final or
interlocutory.
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key management personnel for an entity has the same meaning as
in the accounting standards.
large proprietary company has the meaning given by
subsection 45A(3).
law of a State or Territory means a law of, or in force in, the State
or Territory.
Note: This definition does not affect the meaning of law when used
otherwise than in a phrase such as “law of a State or Territory”.
Examples of such a use is in the phrase “any provision of any law” in
section 100A and the phrase “law of the Commonwealth” in
section 156.
lawyer means a duly qualified legal practitioner and, in relation to
a person, means such a practitioner acting for the person.
lead auditor has the meaning given by section 324AF.
lease does not include a lease of goods that gives rise to a PPSA
security interest in the goods.
Note: An interest that arises under a lease of goods that in substance secures
the payment or performance of an obligation, or that arises under a
PPS lease within the meaning of the Personal Property Securities Act
2009, may be a PPSA security interest (see sections 12 and 13 of that
Act and the definition of PPSA security interest in section 51 of this
Act).
leave of absence means long service leave, extended leave,
recreation leave, annual leave, sick leave or any other form of
leave of absence from employment.
limited company means:
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) a company limited both by shares and guarantee;
but does not include a no liability company.
linked: the incurring of a debt and a contravention of
section 596AB are linked if they are linked under
subsection 596AB(4).
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liquidator:
(a) has a meaning affected by paragraph 530(b) (which deals
with 2 or more persons appointed as liquidators); and
(b) in Chapter 7, includes a provisional liquidator.
listed: a company, managed investment scheme or other body is
listed if it is included in the official list of a prescribed financial
market operated in this jurisdiction.
listed corporation means a body corporate that is included in an
official list of a prescribed financial market.
listed disclosing entity has the meaning given by
subsection 111AL(1).
listing market, in relation to a listed disclosing entity, has the
meaning given by subsection 111AE(1) or (1A).
listing rules of a financial market, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
local agent, in relation to a foreign company, means a person who
is a local agent of the foreign company by virtue of
subsection 601CG(5).
lodge means lodge with ASIC in this jurisdiction.
lower court means a court of a State or Territory that is not a
superior court.
machine-copy, in relation to a document, means a copy made of
the document by any machine in which, or process by which, an
image of the contents of the document is reproduced.
managed investment product, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
managed investment scheme means:
(a) a scheme that has the following features:
(i) people contribute money or money’s worth as
consideration to acquire rights (interests) to benefits
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produced by the scheme (whether the rights are actual,
prospective or contingent and whether they are
enforceable or not);
(ii) any of the contributions are to be pooled, or used in a
common enterprise, to produce financial benefits, or
benefits consisting of rights or interests in property, for
the people (the members) who hold interests in the
scheme (whether as contributors to the scheme or as
people who have acquired interests from holders);
(iii) the members do not have day-to-day control over the
operation of the scheme (whether or not they have the
right to be consulted or to give directions); or
(b) a time-sharing scheme;
but does not include the following:
(c) a partnership that has more than 20 members but does not
need to be incorporated or formed under an Australian law
because of regulations made for the purposes of
subsection 115(2);
Note: This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(3)).
(d) a body corporate (other than a body corporate that operates as
a time sharing scheme);
(e) a scheme in which all the members are bodies corporate that
are related to each other and to the body corporate that
promotes the scheme;
(f) a franchise;
(g) a statutory fund maintained under the Life Insurance Act
1995;
(h) a regulated superannuation fund, an approved deposit fund, a
pooled superannuation trust, or a public sector
superannuation scheme, within the meaning of the
Superannuation Industry (Supervision) Act 1993;
(i) a scheme operated by an Australian ADI in the ordinary
course of its banking business;
Note: This paragraph has an extended meaning in relation to Chapter 8 (see subsection 1200A(3)).
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(j) the issue of debentures or convertible notes by a body
corporate;
(k) a barter scheme under which each participant may obtain
goods or services from another participant for consideration
that is wholly or substantially in kind rather than in cash;
(l) a retirement village scheme operating within or outside
Australia:
(i) under which the participants, or a majority of them, are
provided, or are to be provided, with residential
accommodation within a retirement village (whether or
not the entitlement of a participant to be provided with
accommodation derives from a proprietary interest held
by the participant in the premises where the
accommodation is, or is to be, provided); and
(ii) which is not a time-sharing scheme;
(m) a scheme that is operated by a co-operative company
registered under Part VI of the Companies (Co-operative) Act
1943 of Western Australia or under a previous law of
Western Australia that corresponds to that Part;
(ma) a contribution plan;
(n) a scheme of a kind declared by the regulations not to be a
managed investment scheme.
Note: Paragraph (c)—A partnership with less than 20 members will usually
not require registration because of paragraph 601ED(1)(a) and under
section 115 a partnership with more than 20 members can only
operate if covered by regulations made for the purposes of
subsection 115(2).
manager has a meaning affected by section 90.
managerial or executive office has the meaning given by
section 200AA.
managing controller, in relation to property of a corporation,
means:
(a) a receiver and manager of that property; or
(b) any other controller of that property who has functions or
powers in connection with managing the corporation;
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and has a meaning affected by paragraph 434G(b) (which deals
with 2 or more persons appointed as managing controllers).
marketable securities means debentures, stocks, shares or bonds of
any Government, of any local government authority or of any body
corporate, association or society, and includes any right or option
in respect of shares in any body corporate and any interest in a
managed investment scheme.
market bid means a takeover bid made under Chapter 6 as a market
bid (see section 616).
market integrity rules, when used in a provision outside Chapter 7,
has the same meaning as it has in Chapter 7.
market traded option means an option declared by an operator of a
prescribed financial market to be a market traded option.
member:
(a) in relation to a managed investment schememeans a person
who holds an interest in the scheme; or
(e) in relation to a company—a person who is a member under
section 231.
members’ voluntary winding up means a winding up under
Part 5.5 where a declaration has been made and lodged pursuant to
section 494.
minerals means minerals in any form, whether solid, liquefied or
gaseous and whether organic or inorganic.
minimum holding buy-back means a buy-back of all of a holder’s
shares in a listed corporation if the shares are less than a
marketable parcel within the meaning of the rules of the relevant
financial market.
mining purposes means any or all of the following purposes:
(a) prospecting for ores, metals or minerals;
(b) obtaining, by any mode or method, ores, metals or minerals;
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(c) the sale or other disposal of ores, metals, minerals or other
products of mining;
(d) the carrying on of any business or activity necessary for, or
incidental to, any of the foregoing purposes;
whether in Australia or elsewhere, but does not include quarrying
operations for the sole purpose of obtaining stone for building,
roadmaking or similar purposes.
misconduct includes fraud, negligence, default, breach of trust and
breach of duty.
modifications includes additions, omissions and substitutions.
money includes a payment order.
national newspaper means a daily newspaper that circulates
generally in each State and each internal Territory.
NCSC means the National Companies and Securities Commission.
necessary transfer documents for the transfer of securities to a
person means the documents that are sufficient to enable the person
to become the holder of the securities.
negative, in relation to a document, means a transparent negative
photograph used, or intended to be used, as a medium for
reproducing the contents of the document, and includes a
transparent photograph made from surface contact with the original
negative photograph.
negative solvency resolution means a resolution by the directors of
a company that, in their opinion, there are not reasonable grounds
to believe that the company will be able to pay its debts as and
when they become due and payable.
negotiable instrument, in relation to a body corporate, means:
(a) a bill of exchange, promissory note, cheque or other
negotiable instrument; or
(b) an indorsement on, or order in, a bill of exchange,
promissory note, cheque or other negotiable instrument; or
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(c) a letter of credit;
of, or purporting to be issued or signed by or on behalf of, the
body.
no liability company means a company that is registered as, or
converts to, a no liability company under this Act.
Note 1: A no liability company can be registered under section 118 or
601BD. A company can convert to a no liability company under
Part 2B.7.
Note 2: A no liability company must have solely mining purposes and
have no contractual right to recover unpaid calls (see
subsection 112(2)).
non-audit services provider for an auditor conducting an audit
means a person who:
(a) is not a professional member of the audit team conducting the
audit of the audited body; and
(b) is either:
(i) if the auditor is an individual auditor—an employee of
the individual auditor (or of an entity acting for, or on
behalf of, the individual auditor); or
(ii) if the auditor is an audit firm—a member of the audit
firm or senior manager of the audit firm (or of an entity
acting for, or on behalf of, the audit firm); or
(iii) if the auditor is an audit company—a director of the
audit company or a senior manager of the audit
company (or of an entity acting for, or on behalf of, the
audit company); and
(c) provides, or has provided, services (other than services
related to the conduct of an audit) to the audited body.
non-voting share, in relation to a body corporate, means an issued
share in the body that is not a voting share in the body.
notice includes a circular and an advertisement.
of, in relation to financial products, means, in the case of interests
in a managed investment scheme, made available by.
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offence means an offence against a law of the Commonwealth or a
State or Territory.
offence based on a particular provision of this Act means, unless a
contrary intention appears:
(a) if that provision creates an offence—an offence against that
provision, or an offence against section 1314 that relates to
that provision; or
(b) if section 1311 creates an offence relating to that provision—
an offence against section 1311 or 1314 that relates to that
provision.
offer information statement means an offer information statement
that is lodged with ASIC.
offer of simple corporate bonds has the meaning given by
section 713A.
offer-specific prospectus, in relation to an offer of simple
corporate bonds, has the meaning given by subsection 713D(1).
offer period for a takeover bid is the period for which offers under
the bid remain open.
officer of a corporation means:
(a) a director or secretary of the corporation; or
(b) a person:
(i) who makes, or participates in making, decisions that
affect the whole, or a substantial part, of the business of
the corporation; or
(ii) who has the capacity to affect significantly the
corporation’s financial standing; or
(iii) in accordance with whose instructions or wishes the
directors of the corporation are accustomed to act
(excluding advice given by the person in the proper
performance of functions attaching to the person’s
professional capacity or their business relationship with
the directors or the corporation); or
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(c) a receiver, or receiver and manager, of the property of the
corporation; or
(d) an administrator of the corporation; or
(e) an administrator of a deed of company arrangement executed
by the corporation; or
(f) a liquidator of the corporation; or
(g) a trustee or other person administering a compromise or
arrangement made between the corporation and someone
else.
Note: Section 201B contains rules about who is a director of a corporation.
officer of an entity that is neither an individual nor a corporation
means:
(a) a partner in the partnership if the entity is a partnership; or
(b) an office holder of the unincorporated association if the
entity is an unincorporated association; or
(c) a person:
(i) who makes, or participates in making, decisions that
affect the whole, or a substantial part, of the business of
the entity; or
(ii) who has the capacity to affect significantly the entity’s
financial standing.
officer of the Commonwealth has the same meaning as in
paragraph 75(v) of the Constitution.
off-market bid means a takeover bid made under Chapter 6 as an
off-market bid (see section 616).
old Corporations Law, in relation to a State or Territory, has the
same meaning as it has in Part 10.1.
old Division 11 of Part 11.2 transitionals means the following:
(a) the provisions of Division 11 of Part 11.2 of the old
Corporations Law of each State or Territory in this
jurisdiction, to the extent they continue to have effect
because of section 1408 of this Act; and
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(b) if regulations for the purposes of subsection 1408(3) deal
with a matter or matters dealt with in those provisions—the
regulations that so deal with the matter or matters.
old Division 12 of Part 11.2 transitionals means the following:
(a) the provisions of Division 12 of Part 11.2 of the old
Corporations Law of each State or Territory in this
jurisdiction, to the extent they continue to have effect
because of section 1408 of this Act; and
(b) if regulations for the purposes of subsection 1408(3) deal
with a matter or matters dealt with in those provisions—the
regulations that so deal with the matter or matters.
on, in relation to a financial market, includes at or by means of.
on behalf of includes on the instructions of.
on-market: a transaction of any kind is an on-market transaction if
it is effected on a prescribed financial market and is:
(a) an on-market transaction as defined in the rules governing
the operation of the market; or
(b) if those rules do not define on-market transactions—effected
in the ordinary course of trading on the market.
on-market buy-back means a buy-back by a listed corporation on a
prescribed financial market in the ordinary course of trading on
that market.
operated in this jurisdiction, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
operating rules, when used in a provision outside Chapter 7, has
the same meaning as it has in Chapter 7.
outside this jurisdiction has a meaning affected by
subsection 102B(2).
outstanding property, in relation to a body corporate that has been
dissolved or deregistered, means outstanding property (other than
unpaid capital, whether called or uncalled) that was vested in the
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body, to which it was entitled, or over which it had a disposing
power, when it was dissolved or deregistered, but that neither the
body nor its liquidator got in, realised on or otherwise disposed of
or dealt with.
paid parental leave employer has the meaning given by
subsection 600AA(2).
Panel means the Takeovers Panel.
parent: without limiting who is a parent of a person for the
purposes of this Act, someone is the parent of a person if the
person is his or her child because of the definition of child in this
section.
Part 5.1 body means:
(a) a company; or
(b) a registrable body that is registered under Division 1 or 2 of
Part 5B.2.
Part 5.7 body means:
(a) a registrable body that is a registrable Australian body and:
(i) is registered under Division 1 of Part 5B.2; or
(ii) is not registered under that Division but carries on
business in this jurisdiction and outside its place of
origin; or
(b) a registrable body that is a foreign company and:
(i) is registered under Division 2 of Part 5B.2; or
(ii) is not registered under that Division but carries on
business in Australia; or
(c) a partnership, association or other body (whether a body
corporate or not) that consists of more than 5 members and
that is not a registrable body;
but does not include an Aboriginal and Torres Strait Islander
corporation.
Note: The winding up of Aboriginal and Torres Strait Islander corporations
is dealt with in Part 11-5 of the Corporations (Aboriginal and Torres
Strait Islander) Act 2006.
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Part 10.1 transitionals means the provisions of Part 10.1 and of
regulations for the purposes of those provisions.
participant, when used in a provision (the relevant provision)
outside Chapter 7 in relation to a clearing and settlement facility or
a financial market, has the same meaning as it has in Chapter 7 in
relation to a clearing and settlement facility or a financial market,
except that it does not include a reference to a recognised affiliate
(within the meaning of that Chapter) in relation to such a facility or
market unless regulations for the purposes of this definition
provide that, in the relevant provision, it does include a recognised
affiliate.
party, in relation to a transaction that has been completed, given
effect to, or terminated, includes a person who was a party to the
transaction.
payment (when used in Division 2 of Part 2D.2 (sections 200 to
200J) includes a payment by way of damages for breach of
contract.
payment order means a cheque (including a cheque that a bank or
other institution draws on itself), bank draft, money order or postal
order.
person, when used in Division 2 of Part 2D.2 (sections 200 to
200J), includes a superannuation fund.
place of origin:
(a) in relation to a body corporate at a particular time, means:
(i) in the case of a body incorporated at that time in a State
or Territory—that State or Territory; or
(ii) otherwise—the place of the body’s incorporation at that
time; or
(b) in relation to an unincorporated body—the State or Territory,
or other place, in which the body is formed.
play a significant role: a person plays a significant role in the
audit of a company or a registered scheme for a financial year if:
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(a) the person is appointed as an individual auditor of the
company or scheme for that financial year and:
(i) acts as an auditor for the company or scheme for that
financial year; or
(ii) prepares an audit report for the company or the scheme
in relation to a financial report of the company or
scheme for that financial year or for a half-year falling
within that financial year; or
(b) a firm or company is appointed as an auditor of the company
or scheme for that financial year and the person:
(i) is a registered company auditor; and
(ii) acts, on behalf of the firm or company, as a lead auditor,
or review auditor, in relation to an audit of the company
or scheme for that financial year or for a half-year
falling within that financial year.
pooling determination means a determination under
subsection 571(1).
pooling order means an order under subsection 579E(1).
positive solvency resolution means a resolution by the directors of
a company that, in their opinion, there are reasonable grounds to
believe that the company will be able to pay its debts as and when
they become due and payable.
possession has a meaning affected by section 86.
power includes an authority.
PPSA retention of title property (short for Personal Property
Security Act retention of title property) has the meaning given by
section 51F.
PPSA security interest (short for Personal Property Security Act
security interest) has the meaning given by section 51.
premises includes:
(a) a structure, building, aircraft, vehicle or vessel; and
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(b) any land or place (whether enclosed or built on or not); and
(c) a part of a structure, building, aircraft, vehicle or vessel or of
such a place.
prescribed derivative trade repository, when used in a provision
outside Chapter 7, has the same meaning as it has in Chapter 7.
prescribed financial market means a financial market that is
prescribed by regulations made for the purposes of this definition.
printed includes type-written, lithographed or reproduced by any
mechanical means.
procure includes cause.
Product Disclosure Statement, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
Note: For the effect of the lodgment of a Replacement Product Disclosure
Statement, see section 1014J.
professional accounting body has the same meaning as in the
ASIC Act.
professional employee of an individual auditor, audit firm or audit
company means an employee of the auditor, firm or company who
participates in the conduct of the audits on behalf of the auditor,
firm or company and, in the course of doing so, exercises
professional judgment in relation to the application of or
compliance with:
(a) accounting standards; or
(b) auditing standards; or
(c) the provisions of this Act dealing with financial reporting and
the conduct of audits.
professional investor means a person in relation to whom one or
more of the following paragraphs apply:
(a) the person is a financial services licensee;
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(b) the person is a body regulated by APRA, other than a trustee
of any of the following (within the meaning of the
Superannuation Industry (Supervision) Act 1993):
(i) a superannuation fund;
(ii) an approved deposit fund;
(iii) a pooled superannuation trust;
(iv) a public sector superannuation scheme;
(c) the person is a body registered under the Financial
Corporations Act 1974;
(d) the person is the trustee of:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a pooled superannuation trust; or
(iv) a public sector superannuation scheme;
within the meaning of the Superannuation Industry
(Supervision) Act 1993 and the fund, trust or scheme has net
assets of at least $10 million;
(e) the person controls at least $10 million (including any
amount held by an associate or under a trust that the person
manages);
(f) the person is a listed entity, or a related body corporate of a
listed entity;
(g) the person is an exempt public authority;
(h) the person is a body corporate, or an unincorporated body,
that:
(i) carries on a business of investment in financial
products, interests in land or other investments; and
(ii) for those purposes, invests funds received (directly or
indirectly) following an offer or invitation to the public,
within the meaning of section 82, the terms of which
provided for the funds subscribed to be invested for
those purposes;
(i) the person is a foreign entity that, if established or
incorporated in Australia, would be covered by one of the
preceding paragraphs.
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professional member of an audit team has the meaning given by
section 324AE.
profile statement means a profile statement that is lodged with
ASIC.
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:
(a) in Part 5.3A (administration)—has a meaning affected by
section 435B; and
(b) in Part 5.4B (winding up in insolvency or by the Court)—has
a meaning affected by section 465; and
(c) in Part 5.5 (voluntary winding up)—has a meaning affected
by section 489F; and
(d) in Part 5.6 (winding up generally)—has a meaning affected
by section 513AA; and
(e) in Part 5.7B (recovering property or compensation for
creditors of insolvent company)—has a meaning affected by
section 588C; and
(f) in Part 5.8 (offences relating to external administration)—has
a meaning affected by subsection 589(5); and
(g) in Part 5A.1 (deregistration, and transfer of registration, of
companies)—has a meaning affected by section 601; and
(h) in Part 5B.2 (registrable bodies)—has a meaning affected by
section 601C; and
(i) in Schedule 2 (the Insolvency Practice Schedule)—has a
meaning affected by section 5-26 of that Schedule.
Note: A reference in this Act to the property of a corporation does not
include a reference to any PPSA retention of title property of the
corporation, unless provided otherwise expressly or by necessary
implication (see section 51F). The sections mentioned in
paragraphs (a) to (h) extend references to property of a corporation in
Parts of this Act to PPSA retention of title property (or to certain
PPSA retention of title property).
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proportional takeover approval provisions, in relation to a
company, means provisions of the kind referred to in
subsection 648D(1) that are contained in, or that it is proposed to
insert in, the constitution of the company.
proportional takeover bid means an off-market bid for a specified
proportion of the securities in the bid class (see
paragraph 618(1)(b)).
proprietary company has the meaning given by subsection 45A(1).
prospectus means a prospectus that is lodged with ASIC.
prove includes establish in any way (for example, but without
limitation, through the operation of a presumption for which this
Act or a law of a State or Territory provides).
providing finance means:
(a) lending money; or
(b) giving guarantees or security for loans made by someone
else; or
(c) drawing, accepting, indorsing, negotiating or discounting a
bill of exchange, cheque, payment order or promissory note
so that someone can obtain funds.
provision of a law includes:
(a) a subsection, section, Subdivision, Division, Part or Chapter
of the law; and
(b) a Schedule, or an item in a Schedule, to the law.
provisional liquidator has a meaning affected by
paragraph 530AA(b) (which deals with 2 or more persons
appointed as provisional liquidators).
public company means a company other than a proprietary
company and:
(a) in section 195 and Chapter 2E, includes a body corporate
(other than a prescribed body corporate) that:
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(i) is incorporated in a State or an internal Territory, but
not under this Act; and
(ii) is included in the official list of a prescribed financial
market; and
(b) in Chapter 2E does not include a company that is not
required to have “Limited” in its name because of
section 150 or 151.
public document, in relation to a body corporate, has the meaning
given by section 88A.
publish:
(a) in relation to a notice—means, in Chapter 7, publish by any
means, including in a newspaper or periodical, on the
internet, by broadcasting or televising or in a cinematograph
film; and
(b) in any case—includes issue.
qualified accountant has the meaning given by section 88B.
qualified privilege has the meaning given by section 89.
quarter day means 31 March, 30 June, 30 September or
31 December.
quotation, in relation to financial products or in relation to a
financial market, includes the displaying or providing, on a
financial market, of information concerning:
(a) if offers to dispose of, purchase or exchange the financial
product at particular prices, or for particular consideration,
are made or accepted on that financial market—those prices
or that consideration; or
(b) if offers or invitations are made on that financial market,
being offers or invitations that are intended, or may
reasonably be expected, to result in the making or acceptance
of offers to dispose of, purchase or exchange the financial
products at particular prices, or for particular consideration—
those prices or that consideration; or
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(c) in any case—the price at which, or the consideration for
which, particular persons, or particular classes of persons,
propose, or may reasonably be expected, to dispose of,
purchase or exchange the financial products.
quoted ED securities has the meaning given by section 111AM.
quoted security means a security that is quoted on a prescribed
financial market.
receiver has a meaning affected by paragraph 434D(b) (which
deals with 2 or more persons appointed as receivers).
receiver and manager has a meaning affected by section 90 and
has a meaning affected by paragraph 434E(b) (which deals with 2
or more persons appointed as receivers and managers).
recognised offer has the meaning given by section 1200B.
redeemable preference share means a preference share in a body
corporate that is, or at the body’s option is to be, liable to be
redeemed.
referring State has the meaning given by section 4.
register means register under this Act.
registered Australian body means a registrable Australian body
that is registered under Division 1 of Part 5B.2.
registered body mean a registered Australian body or a registered
foreign company.
registered company auditor:
(a) means a person registered as an auditor under Part 9.2; and
(b) in relation to a body corporate that is not a company—
includes a person qualified to act as the body’s auditor under
the law of the body’s incorporation.
registered foreign company means a foreign company that is
registered under Division 2 of Part 5B.2.
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registered liquidator has the same meaning as in section 5-5 of
Schedule 2.
registered office, in relation to a body corporate, means the body’s
registered office under section 142 or 601CT, as the case requires.
registered scheme means a managed investment scheme that is
registered under section 601EB.
registrable Australian body means:
(a) a body corporate, not being:
(i) a company; or
(ii) an exempt public authority; or
(iii) a corporation sole; or
(b) an unincorporated body that, under the law of its place of
formation:
(i) may sue or be sued; or
(ii) may hold property;
in the name of its secretary or of an officer of the body duly
appointed for that purpose;
but does not include a foreign company.
registrable body means a registrable Australian body or a foreign
company.
related body corporate, in relation to a body corporate, means a
body corporate that is related to the first-mentioned body by virtue
of section 50.
related entity, in relation to a body corporate, means any of the
following:
(a) a promoter of the body;
(b) a relative of such a promoter;
(c) a relative of a spouse of such a promoter;
(d) a director or member of the body or of a related body
corporate;
(e) a relative of such a director or member;
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(f) a relative of a spouse of such a director or member;
(g) a body corporate that is related to the first-mentioned body;
(h) a beneficiary under a trust of which the first-mentioned body
is or has at any time been a trustee;
(i) a relative of such a beneficiary;
(j) a relative of a spouse of such a beneficiary;
(k) a body corporate one of whose directors is also a director of
the first-mentioned body;
(l) a trustee of a trust under which a person is a beneficiary,
where the person is a related entity of the first-mentioned
body because of any other application or applications of this
definition.
related party (when used in Chapter 2E) has the meaning given by
section 228.
relation-back day has the meaning given by section 91.
relative, in relation to a person, means the spouse, parent or
remoter lineal ancestor, child or remoter issue, or brother or sister
of the person.
relevant agreement means an agreement, arrangement or
understanding:
(a) whether formal or informal or partly formal and partly
informal; and
(b) whether written or oral or partly written and partly oral; and
(c) whether or not having legal or equitable force and whether or
not based on legal or equitable rights.
relevant date, in relation to a winding up, means the day on which
the winding up is taken because of Division 1A of Part 5.6 to have
begun.
Note: Subsection 553(1B) modifies the operation of this definition for debts
and claims that arise while a company is under a deed of company
arrangement if the deed terminates immediately before the winding
up.
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relevant financial market, for a listed company, or listed
registered scheme, means:
(a) the prescribed financial market on which the company or
scheme is listed; or
(b) if the company or scheme is listed on 2 or more prescribed
financial markets—each of those markets.
relevant interest, in relation to securities, has a meaning given by
sections 608 and 609.
relevant market operator, for a listed company, or listed registered
scheme, means:
(a) if there is only one relevant financial market for the company
or scheme—the operator of that relevant financial market; or
(b) if there is 2 or more relevant financial markets for the
company or scheme—each of the operators of each of those
relevant financial markets.
remedial order means an order that:
(a) restrains a person from exercising any voting or other rights
attached to securities; or
(b) directs a body corporate not to make or to defer payment of
an amount due from the body corporate in respect of
securities; or
(c) restrains a person from acquiring securities or an interest in
securities; or
(d) directs a person to dispose of, or not to dispose of, securities
or interests in securities; or
(e) directs the disposal referred to in paragraph (d):
(i) to be made within a specified time; or
(ii) to be made subject to specified conditions; or
(iii) not to be made to a specified person or persons or to a
specified class or classes of persons;
(f) directs a specified person to pay to the body corporate an
amount equal to any profit or benefit that the person obtains
because of the disposal referred to in paragraph (d); or
(g) vests securities, or an interest in securities, in ASIC; or
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(h) directs a body corporate not to register the transfer or
transmission of securities; or
(i) cancels securities issued as consideration for offers under a
takeover bid; or
(j) declares that an exercise of the voting or other rights attached
to securities be disregarded; or
(k) cancels or declares voidable:
(i) an agreement or offer relating to a takeover bid, or a
proposed takeover bid; or
(ii) any other agreement or offer in connection with the
acquisition of securities or relevant interests in
securities;
(l) directs a person to give specified information to the holders
of securities of a body corporate; or
(m) directs a body corporate not to issue securities to a person; or
(n) if an order of a kind referred to in paragraphs (a) to (m) is in
force in respect of securities—directs the registered holder of
the securities to give written notice of the order to any person
whom the holder knows to be entitled to exercise a right to
vote attached to those securities; or
(o) directs a body corporate to repeal or modify its existing
constitution or adopt a particular constitution; or
(p) if a person has failed to comply with a requirement of
Chapter 6, 6A, 6B or 6C—directs that person to comply with
that requirement.
remuneration of an officer or employee of a corporation. A benefit
given to an officer or employee of a corporation is remuneration if
and only if the benefit, were it received by a director of the
corporation, would be remuneration of the director for the purposes
of an accounting standard that deals with disclosure in companies’
financial reports of information about directors’ remuneration. For
the purposes of this definition, the following are not officers of a
corporation:
(a) a receiver, or receiver and manager, of the property of the
corporation;
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(b) an administrator of the corporation;
(c) an administrator of a deed of company arrangement executed
by the corporation;
(d) a liquidator of the corporation;
(e) a trustee or other person administering a compromise or
arrangement made between the corporation and someone
else.
remuneration committee has the meaning given by
paragraph 206K(2)(b).
remuneration consultant means a person:
(a) who makes a remuneration recommendation under a contract
for services with the company to whose key management
personnel the recommendation relates; and
(b) who is not an officer or employee of the company.
remuneration recommendation has the meaning given by
section 9B.
remuneration report means the section of the directors’ report for
a financial year for a listed public company that is included under
subsection 300A(1).
renounceable option means an assignable option to have an
allotment of shares in a body corporate made to the holder of the
option.
Replacement Product Disclosure Statement, when used in a
provision outside Chapter 7, has the same meaning it has in
Chapter 7.
reproduction, in relation to a document, means a machine-copy of
the document or a print made from a negative of the document.
resolution, when used in a provision outside Schedule 2 in relation
to creditors or contributories, means a resolution passed at a
meeting of the creditors or contributories.
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resolution for voluntary winding up means the special resolution
referred to in section 491.
responsible entity of a registered scheme means the company
named in ASIC’s record of the scheme’s registration as the
responsible entity or temporary responsible entity of the scheme.
responsible officer, in relation to a body corporate that applies for
an Australian financial services licence, means an officer of the
body who would perform duties in connection with the holding of
the licence.
result includes:
(a) when used as a verb—result indirectly; and
(b) when used as a noun—an indirect result.
retention of title clause: property is subject to a retention of title
clause under a contract for the sale of property:
(a) if the contract contains a provision the effect of which is that
the seller retains title in the property until the purchase price,
or another amount, has been paid in full; and
(b) if the purchase price, or the other amount, as the case may be,
has not been paid in full; and
(c) to the extent that the contract does not give rise to a PPSA
security interest in the property.
Note: See also the definitions of PPSA security interest in section 51 and
PPSA retention of title property in section 51F.
retirement village scheme means a scheme, undertaking or
enterprise (in this definition called the relevant scheme), whether
in Australia or elsewhere, that is being, or is proposed to be,
carried out or undertaken with the intention that the participants, or
a majority of the participants, in the relevant scheme be provided,
in connection with the relevant scheme, with residential
accommodation within a retirement community, whether or not the
entitlement of a participant to be provided with such
accommodation derives from a proprietary interest held by the
participant in the premises where the accommodation is provided,
but does not include a time-sharing scheme.
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return of particulars for a company or a registered scheme means
a statement given by ASIC that contains any or all of the
following:
(a) some or all of the particulars in relation to the company or
scheme that are recorded in the register or registers
maintained by ASIC under subsection 1274(1);
(b) a requirement to provide a particular under section 348B;
(c) a requirement to comply with a subsection of section 348C
(and, if applicable, pass a resolution).
review auditor has the meaning given by section 324AF.
review date has the meaning given by section 345A.
review fee has the meaning given by section 5 of the Corporations
(Review Fees) Act 2003.
revoke, in relation to an accounting standard, means, in the case of
a provision of an accounting standard, vary the last-mentioned
accounting standard by omitting the provision.
rights issue has the meaning given by subsections 9A(1) and (2).
rules means:
(a) rules of the Federal Court; or
(b) rules of the Supreme Court of a State or internal Territory;
as the case requires.
scheme property of a registered scheme means:
(a) contributions of money or money’s worth to the scheme; and
(b) money that forms part of the scheme property under
provisions of this Act or the ASIC Act; and
(c) money borrowed or raised by the responsible entity for the
purposes of the scheme; and
(d) property acquired, directly or indirectly, with, or with the
proceeds of, contributions or money referred to in
paragraph (a), (b) or (c); and
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(e) income and property derived, directly or indirectly, from
contributions, money or property referred to in paragraph (a),
(b), (c) or (d).
Note 1: Paragraph (a)—if what a member contributes to a scheme is rights
over property, the rights in the property that the member retains do
not form part of the scheme property.
Note 2: For provisions that are relevant to paragraph (b), see
subsections 177(4), 1317HA(1A), 1317HB(3) and 1317HD(3) of
this Act and subsection 93A(5) of the ASIC Act.
scrip means documents that are, or are documents of title to,
securities.
section 513C day, in relation to the administration of a company,
has the meaning given by section 513C.
secured creditor has the meaning given by section 51E.
secured party has the meaning given by section 51B.
securities has the meaning given by section 92.
security interest has the meaning given by section 51A.
selective buy-back means a buy-back that is none of the following:
(a) a buy-back under an equal access scheme within the meaning
of subsections 257B(2) and (3);
(b) a minimum holding buy-back;
(c) an on-market buy-back;
(d) an employee share scheme buy-back.
senior manager:
(a) in relation to a corporation—means a person (other than a
director or secretary of the corporation) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
corporation; or
(ii) has the capacity to affect significantly the corporation’s
financial standing; and
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(b) in relation to a partnership—means a person (other than a
partner) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
partnership; or
(ii) has the capacity to affect significantly the partnership’s
financial standing; and
(c) in relation to a trust—means a person (other than a trustee)
who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business or affairs
of the trust; or
(ii) has the capacity to affect significantly the financial
standing of the trust; and
(d) in relation to a joint venture—means a person (other than a
director or secretary of a corporation participating in the joint
venture) who:
(i) makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
joint venture; or
(ii) has the capacity to affect significantly the financial
standing of the joint venture.
serious fraud means an offence involving fraud or dishonesty,
being an offence:
(a) against an Australian law or any other law; and
(b) punishable by imprisonment for life or for a period, or
maximum period, of at least 3 months.
sheriff includes a person charged with the execution of a writ or
other process.
simple corporate bonds has the meaning given by section 713A.
simple corporate bonds depository interest means a beneficial
interest in simple corporate bonds, where the interest is or was
issued by a simple corporate bonds depository nominee (as a
simple corporate bonds depository nominee).
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simple corporate bonds depository nominee means a person who:
(a) issues to someone else one or more beneficial interests in
simple corporate bonds that the person:
(i) owns legally; or
(ii) would own beneficially, apart from the issue of those
interests; or
(iii) has a beneficial interest in; and
(b) does so with the agreement of the body that issued the bonds.
small company limited by guarantee has the meaning given by
section 45B.
small proprietary company has the meaning given by
subsection 45A(2).
solvency resolution means a resolution by the directors of a
company as to whether or not, in their opinion, there are reasonable
grounds to believe that the company will be able to pay its debts as
and when they become due and payable.
solvent has the meaning given by subsection 95A(1).
special resolution, when used in a provision outside Schedule 2
means:
(a) in relation to a company, a resolution:
(i) of which notice as set out in paragraph 249L(1)(c) has
been given; and
(ii) that has been passed by at least 75% of the votes cast by
members entitled to vote on the resolution; or
(b) in relation to a registered scheme, a resolution:
(i) of which notice as set out in paragraph 252J(c) has been
given; and
(ii) that has been passed by at least 75% of the votes cast by
members entitled to vote on the resolution.
spouse of a person includes a de facto partner of the person within
the meaning of the Acts Interpretation Act 1901.
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staff member, in relation to ASIC, means a person who is a staff
member for the purposes of the ASIC Act.
standard opening hours means 10 am to 12 noon and 2 pm to 4
pm each business day.
State, when used in a geographical sense, includes the coastal sea
of the State.
State Fair Trading Act means the following Acts for each State
and Territory:
State Fair Trading Acts
State or Territory Act
1 New South Wales Fair Trading Act 1987
2 Victoria Fair Trading Act 1999
3 Queensland Fair Trading Act 1989
4 South Australia Fair Trading Act 1987
5 Western Australia Fair Trading Act 1987
6 Tasmania Fair Trading Act 1990
7 Northern Territory Consumer Affairs and Fair
Trading Act 1990
8 Australian Capital Territory Fair Trading Act 1992
State Family Court, in relation to a State, means a court of that
State to which section 41 of the Family Law Act 1975 applies
because of a Proclamation made under subsection 41(2) of that
Act.
statement, in Chapter 7, includes matter that is not written but
conveys a message.
State or Territory court means a court of a State, the Capital
Territory or the Northern Territory.
State or Territory Supreme Court means the Supreme Court of:
(a) a State; or
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(b) the Capital Territory; or
(c) the Northern Territory.
statutory demand means:
(a) a document that is, or purports to be, a demand served under
section 459E; or
(b) such a document as varied by an order under
subsection 459H(4).
statutory minimum means:
(a) if an amount greater than $2,000 is prescribed—the
prescribed amount; or
(b) otherwise—$2,000.
subsection 1337B(3) proceeding means a proceeding with respect
to a matter referred to in subsection 1337B(3).
subsidiary, in relation to a body corporate, means a body corporate
that is a subsidiary of the first-mentioned body by virtue of
Division 6.
substantial holding: A person has a substantial holding in a body
corporate, or listed registered managed investment scheme, if:
(a) the total votes attached to voting shares in the body, or voting
interests in the scheme, in which they or their associates:
(i) have relevant interests; and
(ii) would have a relevant interest but for subsection 609(6)
(market traded options) or 609(7) (conditional
agreements);
is 5% or more of the total number of votes attached to voting
shares in the body, or interests in the scheme; or
(b) the person has made a takeover bid for voting shares in the
body, or voting interests in the scheme, and the bid period
has started and not yet ended.
Note: For relevant interest, see section 608.
substantial interest has a meaning affected by section 602A.
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substantial part, in relation to activities, includes the whole of
those activities.
superannuation guarantee charge has the same meaning as in the
Superannuation Guarantee (Administration) Act 1992.
superannuation guarantee shortfall has the same meaning as in
the Superannuation Guarantee (Administration) Act 1992.
superior court means the Federal Court of Australia, the Supreme
Court of a State or Territory, the Family Court or a State Family
Court.
superior court matter means a civil matter that this Act clearly
intends (for example, by use of the expression the Court) to be
dealt with only by a superior court.
Supplementary Product Disclosure Statement, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
takeover bid means an off-market bid or market bid made under
Chapter 6.
takeover contract means a contract that results from the acceptance
of an offer made under a takeover bid.
target for a takeover bid means the company, listed body or
managed investment scheme whose securities are to be acquired
under the bid.
target’s statement means a target’s statement under sections 638 to
640 as supplemented.
territorial sea has the same meaning as in the Seas and Submerged
Lands Act 1973.
Territory means:
(a) the Capital Territory; or
(b) the Northern Territory; or
(c) an external Territory;
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and, when used in a geographical sense, includes the coastal sea of
the Territory.
this Act includes the regulations and the Insolvency Practice Rules.
this jurisdiction means the geographical area that consists of:
(a) each referring State (including its coastal sea); and
(b) the Capital Territory (including the coastal sea of the Jervis
Bay Territory); and
(c) the Northern Territory (including its coastal sea); and
(d) also, for the purposes of the application of a provision of
Chapter 7 or an associated provision (as defined in
section 5)—any external Territory in which the provision
applies because of subsection 5(9) (but only to the extent
provided for in that subsection).
time-sharing scheme means a scheme, undertaking or enterprise,
whether in Australia or elsewhere:
(a) participants in which are, or may become, entitled to use,
occupy or possess, for 2 or more periods during the period
for which the scheme, undertaking or enterprise is to operate,
property to which the scheme, undertaking or enterprise
relates; and
(b) that is to operate for a period of not less than 3 years.
trade, in relation to financial products, in relation to a financial
market, includes:
(a) make or accept on that financial market an offer to dispose
of, acquire or exchange the financial products; and
(b) make on that financial market an offer or invitation that is
intended, or may reasonably be expected, to result in the
making or acceptance of an offer to dispose of, acquire or
exchange the financial products.
trading day of a financial market means a day on which the market
is open for trading in financial products.
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transaction, in Part 5.7B, in relation to a body corporate or Part 5.7
body, means a transaction to which the body is a party, for example
(but without limitation):
(a) a conveyance, transfer or other disposition by the body of
property of the body; and
(b) a security interest granted by the body in its property
(including a security interest in the body’s PPSA retention of
title property); and
(c) a guarantee given by the body; and
(d) a payment made by the body; and
(e) an obligation incurred by the body; and
(f) a release or waiver by the body; and
(g) a loan to the body;
and includes such a transaction that has been completed or given
effect to, or that has terminated.
transmission means a transmission, by means of electric or
electromagnetic energy, of:
(a) sounds, including speech and music; or
(b) visual images; or
(c) signals for the communication, whether as between persons
and persons, persons and things or things and things, of any
matter otherwise than in the form of sounds or visual images;
or
(d) signals for the actuation or control of machinery or apparatus.
transparency, in relation to a document, means:
(a) a developed negative or positive photograph of that
document (in this definition called an original photograph)
made, on a transparent base, by means of light reflected from,
or transmitted through, the document; or
(b) a copy of an original photograph made by the use of
photo-sensitive material (being photo-sensitive material on a
transparent base) placed in surface contact with the original
photograph; or
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(c) any one of a series of copies of an original photograph, the
first of the series being made by the use of photo-sensitive
material (being photo-sensitive material on a transparent
base) placed in surface contact with a copy referred to in
paragraph (b), and each succeeding copy in the series being
made, in the same manner, from any preceding copy in the
series.
transparency reporting auditor has the meaning given by
subsection 332(1).
transparency reporting year has the meaning given by
subsection 332(2).
Tribunal means the Administrative Appeals Tribunal.
ultimate holding company, in relation to a body corporate, means
a body corporate that:
(a) is a holding company of the first-mentioned body; and
(b) is itself a subsidiary of no body corporate.
unclaimed property means:
(a) property paid or transferred to ASIC under a provision of this
Act that provides for property to be transferred, or for the
Court to direct that property be transferred, to ASIC to be
dealt with under Part 9.7; or
(b) any other property that a provision of this Act provides for
ASIC to deal with under Part 9.7; or
(c) property that vests in ASIC under section 1404; or
(d) an accretion to, or substitution for, property that is unclaimed
property because of any other application or applications of
this definition.
uncommercial transaction has the meaning given by
section 588FB.
underlying securities means:
(a) in relation to an option over securities—those securities; and
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(b) in relation to scrip that is constituted by documents that are,
or are documents of title to, securities—those securities.
undertaking, in relation to a managed investment scheme, means
the undertaking, scheme, enterprise, contract or arrangement to
which the scheme relates.
underwrite includes sub-underwrite.
unfair loan has the meaning given by section 588FD.
unfair preference has the meaning given by section 588FA.
unit, in relation to a share, debenture or other interest, means a
right or interest, whether legal or equitable, in the share, debenture
or other interest, by whatever term called, and includes an option to
acquire such a right or interest in the share, debenture or other
interest.
unlimited company means a company whose members have no
limit placed on their liability.
unlisted disclosing entity has the meaning given by
subsection 111AL(2).
unreasonable director-related transaction has the meaning given
by section 588FDA.
unsecured, in relation to a debt, has in Part 5.7B a meaning
affected by section 588D.
value, in relation to an asset, includes amount.
voting interest, in relation to a managed investment scheme, means
an issued interest in the scheme that confers a right to vote, not
being a right to vote that is exercisable only in one or more of the
following circumstances:
(a) on a proposal that affects rights attached to the interests;
(b) on a proposal to wind up the scheme;
(c) on a proposal for the disposal of the whole of the scheme
property, business and undertaking;
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(d) during the winding up of the scheme.
voting power in a body or managed investment scheme has the
meaning given by section 610.
voting share in a body corporate means an issued share in the body
that carries any voting rights beyond the following:
(a) a right to vote while a dividend (or part of a dividend) in
respect of the share is unpaid;
(b) a right to vote on a proposal to reduce the body’s share
capital;
(c) a right to vote on a resolution to approve the terms of a
buy-back agreement;
(d) a right to vote on a proposal that affects the rights attached to
the share;
(e) a right to vote on a proposal to wind the body up;
(f) a right to vote on a proposal for the disposal of the whole of
the body’s property, business and undertaking;
(g) a right to vote during the body’s winding up.
wages, in relation to a company, means amounts payable to or in
respect of an employee of the company (whether the employee is
remunerated by salary, wages, commission or otherwise) under an
industrial instrument, including amounts payable by way of
allowance or reimbursement but excluding amounts payable in
respect of leave of absence.
wholly-owned subsidiary, in relation to a body corporate, means a
body corporate none of whose members is a person other than:
(a) the first-mentioned body; or
(b) a nominee of the first-mentioned body; or
(c) a subsidiary of the first-mentioned body, being a subsidiary
none of whose members is a person other than:
(i) the first-mentioned body; or
(ii) a nominee of the first-mentioned body; or
(d) a nominee of such a subsidiary.
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winding up by the Court includes winding up in insolvency.
wound up by the Court includes wound up in insolvency.
9AA Certain family relationships
For the purposes of this Act, relationships (including the
relationship of being family) are taken to include:
(a) relationships between de facto partners (within the meaning
of the Acts Interpretation Act 1901); and
(b) relationships of child and parent that arise:
(i) if someone is an exnuptial or adoptive child of a person;
or
(ii) if someone is the child of a person because of the
definition of child in this Act; and
(c) relationships traced through relationships referred to in
paragraphs (a) and (b).
9A Meaning of rights issue
(1) A rights issue is an offer of a body’s securities for issue in respect
of which the following conditions are met:
(a) the securities being offered for issue are in a particular class;
(b) either:
(i) the offer is made to every person who holds securities in
that class to issue them, or their assignee, with the
percentage of the securities to be issued that is the same
as the percentage of the securities in that class that they
hold before the offer; or
(ii) if the conditions in subsection (3) are met—such an
offer is made to every person with a registered address
in Australia or New Zealand who holds securities in that
class;
(c) the terms of each offer are the same.
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(2) A rights issue is an offer of interests in a managed investment
scheme for issue in respect of which the following conditions are
met:
(a) the interests being offered for issue are in a particular class;
(b) either:
(i) the offer is made to every person who holds interests in
that class to issue them, or their assignee, with the
percentage of the interests to be issued that is the same
as the percentage of the interests in that class that they
hold before the offer; or
(ii) if the conditions in subsection (3) are met—such an
offer is made to every person with a registered address
in Australia or New Zealand who holds interests in that
class;
(c) the terms of each offer are the same.
(3) The conditions in this subsection are met if:
(a) the body or responsible entity (as the case requires) decides
that it is unreasonable to offer securities or interests (as the
case requires) for issue to persons (the non-residents) with a
registered address in a place outside Australia or New
Zealand, after taking into account the following matters:
(i) the number of non-residents, in that place, to whom
offers would otherwise be made;
(ii) the number and value of the securities or interests that
would otherwise be offered for issue;
(iii) the cost of complying with the laws, and any
requirements of any regulatory authority, of the place
where the securities or interests would otherwise be
offered for issue; and
(b) the body or responsible entity:
(i) sends details of the offer to each non-resident in that
place; and
(ii) advises each non-resident in that place that the
non-resident will not be offered the securities or
interests; and
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(c) if the invitation to apply for, or the right to be issued with,
the securities or interests is able to be assigned—the body or
responsible entity:
(i) advises each non-resident in that place that a nominee
will be appointed to sell the invitation or right that
would otherwise have been offered to the non-resident;
and
(ii) advises each non-resident that the nominee will send the
non-resident any net proceeds from the sale of that
invitation or those rights; and
(iii) appoints a nominee in Australia to carry out the
obligations referred to in subparagraphs (i) and (ii).
(4) For the purposes of this section, a reference to an offer of securities
includes a reference to an invitation to apply for the issue of
securities.
9B Meaning of remuneration recommendation
(1) A remuneration recommendation is:
(a) a recommendation about either or both of the following:
(i) how much the remuneration should be;
(ii) what elements the remuneration should have;
for one or more members of the key management personnel
for a company; or
(b) a recommendation or advice about a matter or of a kind
prescribed by the regulations.
(2) None of the following is a remuneration recommendation (even if
it would otherwise be covered by subsection (1)):
(a) advice about the operation of the law (including tax law);
(b) advice about the operation of accounting principles (for
example, about how options should be valued);
(c) advice about the operation of actuarial principles and
practice;
(d) the provision of facts;
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(e) the provision of information of a general nature relevant to
all employees of the company;
(f) a recommendation, or advice or information, of a kind
prescribed by the regulations.
(3) Subsection (2) does not limit the things that are not remuneration
recommendations, nor does it mean that something specified in that
subsection would otherwise be a remuneration recommendation
within the meaning of subsection (1).
(4) ASIC may by writing declare that subsection (1) does not apply to
a specified recommendation or specified advice, but may do so
only if ASIC is satisfied that it would be unreasonable in the
circumstances for the advice or recommendation to be a
remuneration recommendation. The declaration has effect
accordingly. The declaration is not a legislative instrument.
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Division 2—Associates
10 Effect of Division
(1) This Division has effect for the purposes of interpreting a reference
(in this Division called the associate reference), in relation to a
person (in this Division called the primary person), to an associate.
(2) A person is not an associate of the primary person except as
provided in this Division.
(3) Nothing in this Division limits the generality of anything else in it.
11 Associates of bodies corporate
If the primary person is a body corporate, the associate reference
includes a reference to:
(a) a director or secretary of the body; and
(b) a related body corporate; and
(c) a director or secretary of a related body corporate.
12 References in Chapters 6 to 6C, and other references relating to
voting power and takeovers etc.
(1) Subject to subsection 16(1), but despite anything else in this Part,
this section applies for the purposes of interpreting a reference to
an associate (the associate reference), in relation to a designated
body, if:
(a) the reference occurs in a provision of Chapter 6, 6A, 6B or
6C; or
(b) the reference occurs in a provision outside those Chapters
that relates to any of the following matters:
(i) the extent, or restriction, of a power to exercise, or to
control the exercise of, the votes attached to voting
shares in the designated body;
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(ii) the primary person’s voting power in the designated
body;
(iii) relevant interests in securities in the designated body;
(iv) a substantial holding in the designated body;
(v) a takeover bid for securities in the designated body;
(vi) the compulsory acquisition, or compulsory buy-out, of
securities in the designated body.
(2) For the purposes of the application of the associate reference in
relation to the designated body, a person (the second person) is an
associate of the primary person if, and only if, one or more of the
following paragraphs applies:
(a) the primary person is a body corporate and the second person
is:
(i) a body corporate the primary person controls; or
(ii) a body corporate that controls the primary person; or
(iii) a body corporate that is controlled by an entity that
controls the primary person;
(b) the second person is a person with whom the primary person
has, or proposes to enter into, a relevant agreement for the
purpose of controlling or influencing the composition of the
designated body’s board or the conduct of the designated
body’s affairs;
(c) the second person is a person with whom the primary person
is acting, or proposing to act, in concert in relation to the
designated body’s affairs.
(3) For the purposes of the application of this section in relation to a
designated body that is a managed investment scheme:
(a) a reference to controlling or influencing the composition of
the designated body’s board is taken to be a reference to
controlling or influencing:
(i) if the scheme is a registered scheme—whether a
particular company becomes or remains the scheme’s
responsible entity; or
(ii) if the scheme is not a registered scheme—whether a
particular person is appointed, or remains appointed, to
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the office (by whatever name it is known) in relation to
the scheme that corresponds most closely to the office
of responsible entity of a registered scheme; and
(b) a reference to voting shares in the designated body is taken to
be a reference to voting interests in the managed investment
scheme.
(4) In relation to a matter relating to securities in a designated body, a
person may be an associate of the body and the body may be an
associate of the person.
(5) In this section:
designated body means:
(a) a body; or
(b) a managed investment scheme.
13 References in Chapter 7
If the associate reference occurs in Chapter 7, it includes a
reference to:
(a) a person in partnership with whom the primary person carries
on a financial services business; and
(b) subject to subsection 16(2), a person who is a partner of the
primary person otherwise than because of carrying on a
financial services business in partnership with the primary
person; and
(c) a trustee of a trust in relation to which the primary person
benefits, or is capable of benefiting, otherwise than because
of transactions entered into in the ordinary course of business
in connection with the lending of money; and
(d) a director of a body corporate of which the primary person is
also a director and that carries on a financial services
business; and
(e) subject to subsection 16(2), a director of a body corporate of
which the primary person is also a director and that does not
carry on a financial services business.
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15 General
(1) The associate reference includes a reference to:
(a) a person in concert with whom the primary person is acting,
or proposes to act; and
(b) a person who, under the regulations, is, for the purposes of
the provision in which the associate reference occurs, an
associate of the primary person; and
(c) a person with whom the primary person is, or proposes to
become, associated, whether formally or informally, in any
other way;
in respect of the matter to which the associate reference relates.
(2) If the primary person has entered, or proposes to enter, into a
transaction, or has done, or proposes to do, any act or thing, in
order to become associated with another person as mentioned in an
applicable provision of this Division, the associate reference
includes a reference to that other person.
16 Exclusions
(1) A person is not an associate of another person by virtue of
section 12 or subsection 15(1), or by virtue of subsection 15(2) as
it applies in relation to section 12 or subsection 15(1), merely
because of one or more of the following:
(a) one gives advice to the other, or acts on the other’s behalf, in
the proper performance of the functions attaching to a
professional capacity or a business relationship;
(b) one, a client, gives specific instructions to the other, whose
ordinary business includes dealing in financial products, to
acquire financial products on the client’s behalf in the
ordinary course of that business;
(c) one had sent, or proposes to send, to the other an offer under
a takeover bid for shares held by the other;
(d) one has appointed the other, otherwise than for valuable
consideration given by the other or by an associate of the
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other, to vote as a proxy or representative at a meeting of
members, or of a class of members, of a body corporate.
(2) For the purposes of proceedings under this Act in which it is
alleged that a person was an associate of another person by virtue
of paragraph 13(b) or (e), the first-mentioned person is not taken to
have been an associate of the other person in relation to a matter by
virtue of that paragraph unless it is proved that the first-mentioned
person knew, or ought to have known, at that time, the material
particulars of that matter.
17 Associates of composite person that carries on a financial services
business
A reference to an associate, in relation to an entity (other than a
body corporate) that carries on a financial services business, is, if 2
or more persons constitute the entity, a reference to an associate of
any of those persons.
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Section 18
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Division 3—Carrying on business
18 Carrying on business: otherwise than for profit
A reference to a person carrying on business, carrying on a
business, or carrying on a business of a particular kind, includes a
reference to the person carrying on business, carrying on a
business, or carrying on a business of that kind, as the case may be:
(a) in any case—otherwise than for profit; or
(b) in the case of a body corporate—otherwise than for the profit
of the members or corporators of the body.
19 Businesses of a particular kind
A reference to a business of a particular kind includes a reference
to a business of that kind that is part of, or is carried on in
conjunction with, any other business.
20 Carrying on a business: alone or together with others
A reference in this Act to a person carrying on a business, or a
business of a particular kind, is a reference to the person carrying
on a business, or a business of that kind, whether alone or together
with any other person or persons.
21 Carrying on business in Australia or a State or Territory
(1) A body corporate that has a place of business in Australia, or in a
State or Territory, carries on business in Australia, or in that State
or Territory, as the case may be.
(2) A reference to a body corporate carrying on business in Australia,
or in a State or Territory, includes a reference to the body:
(a) establishing or using a share transfer office or share
registration office in Australia, or in the State or Territory, as
the case may be; or
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Section 21
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(b) administering, managing, or otherwise dealing with, property
situated in Australia, or in the State or Territory, as the case
may be, as an agent, legal personal representative or trustee,
whether by employees or agents or otherwise.
(3) Despite subsection (2), a body corporate does not carry on business
in Australia, or in a State or Territory, merely because, in
Australia, or in the State or Territory, as the case may be, the body:
(a) is or becomes a party to a proceeding or effects settlement of
a proceeding or of a claim or dispute; or
(b) holds meetings of its directors or shareholders or carries on
other activities concerning its internal affairs; or
(c) maintains a bank account; or
(d) effects a sale through an independent contractor; or
(e) solicits or procures an order that becomes a binding contract
only if the order is accepted outside Australia, or the State or
Territory, as the case may be; or
(f) creates evidence of a debt, or creates a security interest in
property, including PPSA retention of title property of the
body; or
(g) secures or collects any of its debts or enforces its rights in
regard to any securities relating to such debts; or
(h) conducts an isolated transaction that is completed within a
period of 31 days, not being one of a number of similar
transactions repeated from time to time; or
(j) invests any of its funds or holds any property.
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Division 5A—Types of company
45A Proprietary companies
(1) A proprietary company is a company that is registered as, or
converts to, a proprietary company under this Act.
Note 1: A proprietary company can be registered under section 118 or 601BD.
A company can convert to a proprietary company under Part 2B.7.
Note 2: A proprietary company must:
be limited by shares or be an unlimited company with a share capital
have no more than 50 non-employee shareholders
not do anything that would require disclosure to investors under Chapter 6D (except in limited circumstances).
(see section 113).
Small proprietary company
(2) A proprietary company is a small proprietary company for a
financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated revenue for the financial year of the
company and the entities it controls (if any) is less than $25
million, or any other amount prescribed by the regulations for
the purposes of this paragraph;
(b) the value of the consolidated gross assets at the end of the
financial year of the company and the entities it controls (if
any) is less than $12.5 million, or any other amount
prescribed by the regulations for the purposes of this
paragraph;
(c) the company and the entities it controls (if any) have fewer
than 50, or any other number prescribed by the regulations
for the purposes of this paragraph, employees at the end of
the financial year.
Note: A small proprietary company generally has reduced financial
reporting requirements (see subsection 292(2)).
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Large proprietary company
(3) A proprietary company is a large proprietary company for a
financial year if it satisfies at least 2 of the following paragraphs:
(a) the consolidated revenue for the financial year of the
company and the entities it controls (if any) is $25 million, or
any other amount prescribed by the regulations for the
purposes of paragraph (2)(a), or more;
(b) the value of the consolidated gross assets at the end of the
financial year of the company and the entities it controls (if
any) is $12.5 million, or any other amount prescribed by the
regulations for the purposes of paragraph (2)(b), or more;
(c) the company and the entities it controls (if any) have 50, or
any other number prescribed by the regulations for the
purposes of paragraph (2)(c), or more employees at the end
of the financial year.
When a company controls an entity
(4) For the purposes of this section, the question whether a proprietary
company controls an entity is to be decided in accordance with the
accounting standards made for the purposes of paragraph 295(2)(b)
(even if the standards do not otherwise apply to the company).
Counting employees
(5) In counting employees for the purposes of subsections (2) and (3),
take part-time employees into account as an appropriate fraction of
a full-time equivalent.
Accounting standards
(6) Consolidated revenue and the value of consolidated gross assets
are to be calculated for the purposes of this section in accordance
with accounting standards in force at the relevant time (even if the
standard does not otherwise apply to the financial year of some or
all of the companies concerned).
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45B Small companies limited by guarantee
(1) A company is a small company limited by guarantee in a
particular financial year if:
(a) it is a company limited by guarantee for the whole of the
financial year; and
(b) it is not a deductible gift recipient at any time during the
financial year; and
(c) either:
(i) where the company is not required by the accounting
standards to be included in consolidated financial
statements—the revenue of the company for the
financial year is less than the threshold amount; or
(ii) where the company is required by the accounting
standards to be included in consolidated financial
statements—the consolidated revenue of the
consolidated entity for the financial year is less than the
threshold amount; and
(d) it is not one of the following:
(i) a Commonwealth company for the purposes of the
Public Governance, Performance and Accountability
Act 2013;
(ii) a subsidiary of a Commonwealth company for the
purposes of that Act;
(iii) a subsidiary of a corporate Commonwealth entity for the
purposes of that Act; and
(e) it has not been a transferring financial institution of a State or
Territory within the meaning of clause 1 of Schedule 4 to this
Act; and
(f) it is not a company that is permitted to use the expression
building society, credit society or credit union under
section 66 of the Banking Act 1959 at any time during the
financial year.
(2) The threshold amount, for the purposes of subparagraphs (1)(c)(i)
and (ii), is $250,000, or any other amount prescribed by the
regulations for the purposes of this subsection.
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Section 45B
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(3) Revenue and consolidated revenue are to be calculated for the
purposes of this section in accordance with accounting standards in
force at the relevant time (even if the standard does not otherwise
apply to the financial year of some or all of the companies
concerned).
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Section 46
Corporations Act 2001 111
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Division 6—Subsidiaries and related bodies corporate
46 What is a subsidiary
A body corporate (in this section called the first body) is a
subsidiary of another body corporate if, and only if:
(a) the other body:
(i) controls the composition of the first body’s board; or
(ii) is in a position to cast, or control the casting of, more
than one-half of the maximum number of votes that
might be cast at a general meeting of the first body; or
(iii) holds more than one-half of the issued share capital of
the first body (excluding any part of that issued share
capital that carries no right to participate beyond a
specified amount in a distribution of either profits or
capitan( � or
(b) the first body is a subsidiary of a subsidiary of the other
body.
47 Control of a body corporate’s board
Without limiting by implication the circumstances in which the
composition of a body corporate’s board is taken to be controlled
by another body corporate, the composition of the board is taken to
be so controlled if the other body, by exercising a power
exercisable (whether with or without the consent or concurrence of
any other person) by it, can appoint or remove all, or the majority,
of the directors of the first-mentioned body, and, for the purposes
of this Division, the other body is taken to have power to make
such an appointment if:
(a) a person cannot be appointed as a director of the
first-mentioned body without the exercise by the other body
of such a power in the person’s favour; or
(b) a person’s appointment as a director of the first-mentioned
body follows necessarily from the person being a director or
other officer of the other body.
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Section 48
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48 Matters to be disregarded
(1) This section applies for the purposes of determining whether a
body corporate (in this section called the first body) is a subsidiary
of another body corporate.
(2) Any shares held, or power exercisable, by the other body in a
fiduciary capacity are treated as not held or exercisable by it.
(3) Subject to subsections (4) and (5), any shares held, or power
exercisable:
(a) by a person as a nominee for the other body (except where
the other body is concerned only in a fiduciary capacity); or
(b) by, or by a nominee for, a subsidiary of the other body (not
being a subsidiary that is concerned only in a fiduciary
capacity);
are treated as held or exercisable by the other body.
(4) Any shares held, or power exercisable, by a person by virtue of the
provisions of debentures of the first body, or of a trust deed for
securing an issue of such debentures, are to be disregarded.
(5) Any shares held, or power exercisable, otherwise than as
mentioned in subsection (4), by, or by a nominee for, the other
body or a subsidiary of it are to be treated as not held or
exercisable by the other body if:
(a) the ordinary business of the other body or that subsidiary, as
the case may be, includes lending money; and
(b) the shares are held, or the power is exercisable, only by way
of security given for the purposes of a transaction entered
into in the ordinary course of business in connection with
lending money, not being a transaction entered into with an
associate of the other body, or of that subsidiary, as the case
may be.
49 References in this Division to a subsidiary
A reference in paragraph 46(b) or 48(3)(b) or subsection 48(5) to
being a subsidiary, or to a subsidiary, of a body corporate includes
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a reference to being a subsidiary, or to a body corporate that is a
subsidiary, as the case may be, of the first-mentioned body by
virtue of any other application or applications of this Division.
50 Related bodies corporate
Where a body corporate is:
(a) a holding company of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of a holding company of another body corporate;
the first-mentioned body and the other body are related to each
other.
50AAA Associated entities
(1) One entity (the associate) is an associated entity of another entity
(the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2) This subsection is satisfied if the associate and the principal are
related bodies corporate.
(3) This subsection is satisfied if the principal controls the associate.
(4) This subsection is satisfied if:
(a) the associate controls the principal; and
(b) the operations, resources or affairs of the principal are
material to the associate.
(5) This subsection is satisfied if:
(a) the associate has a qualifying investment (see subsection (8))
in the principal; and
(b) the associate has significant influence over the principal; and
(c) the interest is material to the associate.
(6) This subsection is satisfied if:
(a) the principal has a qualifying investment (see subsection (8))
in the associate; and
(b) the principal has significant influence over the associate; and
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(c) the interest is material to the principal.
(7) This subsection is satisfied if:
(a) an entity (the third entity) controls both the principal and the
associate; and
(b) the operations, resources or affairs of the principal and the
associate are both material to the third entity.
(8) For the purposes of this section, one entity (the first entity) has a
qualifying investment in another entity (the second entity) if the
first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in
the second entity and has control over that asset.
50AA Control
(1) For the purposes of this Act, an entity controls a second entity if
the first entity has the capacity to determine the outcome of
decisions about the second entity’s financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than
the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second
entity’s financial or operating policies is to be taken into
account (even if it involves a breach of an agreement or a
breach of trust).
(3) The first entity does not control the second entity merely because
the first entity and a third entity jointly have the capacity to
determine the outcome of decisions about the second entity’s
financial and operating policies.
(4) If the first entity:
(a) has the capacity to influence decisions about the second
entity’s financial and operating policies; and
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(b) is under a legal obligation to exercise that capacity for the
benefit of someone other than the first entity’s members;
the first entity is taken not to control the second entity.
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Division 6A Security interests
Section 51
116 Corporations Act 2001
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Division 6A—Security interests
51 Meaning of PPSA security interest
In this Act:
PPSA security interest (short for Personal Property Securities Act
security interest) means a security interest within the meaning of
the Personal Property Securities Act 2009 and to which that Act
applies, other than a transitional security interest within the
meaning of that Act.
Note 1: The Personal Property Securities Act 2009 applies to certain security
interests in personal property. See the following provisions of that
Act:
(a) section 8 (interests to which the Act does not apply);
(b) section 12 (meaning of security interest);
(c) Chapter 9 (transitional provisions).
Note 2: For the meaning of transitional security interest, see section 308 of
the Personal Property Securities Act 2009.
51A Meaning of security interest
In this Act:
security interest means:
(a) a PPSA security interest; or
(b) a charge, lien or pledge.
51B Meaning of secured party
In this Act:
secured party, in relation to a security interest, means:
(a) if the security interest is a PPSA security interest—a secured
party within the meaning of the Personal Property Securities
Act 2009; or
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(b) if the security interest is not a PPSA security interest, but
consists of a charge, lien or pledge in relation to the
property—a chargee, lienee or pledgee in relation to the
charge, lien or pledge.
Note: Security interests are either PPSA security interests, or charges, liens
or pledges (see section 51A).
51C Meaning of circulating security interest
In this Act:
circulating security interest means a security interest that is:
(a) a PPSA security interest, if:
(i) the security interest has attached to a circulating asset
within the meaning of the Personal Property Securities
Act 2009; and
(ii) the grantor (within the meaning of that Act) has title to
the asset; or
(b) a floating charge.
Note: Security interests are either PPSA security interests, or charges, liens
or pledges (see section 51A).
51D Meaning of possessory security interest
In this Act:
possessory security interest, in relation to property, means a
security interest that is:
(a) a PPSA security interest in the property that is perfected by
possession or control, within the meaning of the Personal
Property Securities Act 2009; or
(b) a lien or a pledge in relation to the property.
Note: Security interests are either PPSA security interests, or charges, liens
or pledges (see section 51A).
51E Meaning of secured creditor
In this Act:
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secured creditor of a corporation means a creditor of the
corporation, if the debt owing to the creditor is secured by a
security interest.
51F Meaning of PPSA retention of title property
Definition
(1) Property is PPSA retention of title property (short for Personal
Property Securities Act retention of title property) of a corporation
if:
(a) the property is personal property; and
(b) the property is used or occupied by, or is in the possession of,
the corporation; and
(c) the corporation does not have title to the property; and
(d) a PPSA security interest is attached to the property, within
the meaning of the Personal Property Securities Act 2009;
and
(e) the corporation is the grantor in relation to the PPSA security
interest, within the meaning of that Act.
Examples: The following personal property is PPSA retention of title property if
a PPSA security interest attaches to the property by virtue of the
transaction concerned, and the grantor is a corporation:
(a) property that is the subject of an agreement to sell subject to retention of title, or a hire purchase agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009);
(b) property that is the subject of a lease, or a consignment agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009);
(c) goods that are the subject of a commercial consignment (see subsection 12(3) of the Personal Property Securities Act 2009);
(d) goods that are leased or bailed under a PPS lease (see subsection 12(3) of the Personal Property Securities Act 2009).
References to property of a corporation
(2) A reference in this Act to the property of a corporation does not
include a reference to any PPSA retention of title property of the
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corporation, unless provided otherwise expressly or by necessary
implication.
Note: See also the definition of property in section 9.
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Division 7—Interpretation of other expressions
52 Doing acts
A reference to doing an act or thing includes a reference to causing
or authorising the act or thing to be done.
52A Signing
Without affecting the law on agency, if this Act requires that
something be signed, it can be signed by an individual using a
power of attorney from the person required to sign.
53 Affairs of a body corporate
For the purposes of the definition of examinable affairs in
section 9, section 53AA, 232, 233 or 234, paragraph 461(1)(e),
section 487, subsection 1307(1) or section 1309, or of a prescribed
provision of this Act, the affairs of a body corporate include:
(a) the promotion, formation, membership, control, business,
trading, transactions and dealings (whether alone or jointly
with any other person or persons and including transactions
and dealings as agent, bailee or trustee), property (whether
held alone or jointly with any other person or persons and
including property held as agent, bailee or trustee), liabilities
(including liabilities owed jointly with any other person or
persons and liabilities as trustee), profits and other income,
receipts, losses, outgoings and expenditure of the body; and
(b) in the case of a body corporate (not being a licensed trustee
company within the meaning of Chapter 5D or the Public
Trustee of a State or Territory) that is a trustee (but without
limiting the generality of paragraph (a))—matters concerned
with the ascertainment of the identity of the persons who are
beneficiaries under the trust, their rights under the trust and
any payments that they have received, or are entitled to
receive, under the terms of the trust; and
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(c) the internal management and proceedings of the body; and
(d) any act or thing done (including any contract made and any
transaction entered into) by or on behalf of the body, or to or
in relation to the body or its business or property, at a time
when:
(i) a receiver, or a receiver and manager, is in possession
of, or has control over, property of the body; or
(ii) the body is under administration; or
(iia) a deed of company arrangement executed by the body
has not yet terminated; or
(iii) a compromise or arrangement made between the body
and any other person or persons is being administered;
or
(iv) the body is being wound up;
and, without limiting the generality of the foregoing, any
conduct of such a receiver or such a receiver and manager, of
an administrator of the body, of an administrator of such a
deed of company arrangement, of a person administering
such a compromise or arrangement or of a liquidator or
provisional liquidator of the body; and
(e) the ownership of shares in, debentures of, and interests in a
managed investment scheme made available by, the body;
and
(f) the power of persons to exercise, or to control the exercise of,
the rights to vote attached to shares in the body or to dispose
of, or to exercise control over the disposal of, such shares;
and
(g) matters concerned with the ascertainment of the persons who
are or have been financially interested in the success or
failure, or apparent success or failure, of the body or are or
have been able to control or materially to influence the policy
of the body; and
(h) the circumstances under which a person acquired or disposed
of, or became entitled to acquire or dispose of, shares in,
debentures of, or interests in a managed investment scheme
made available by, the body; and
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(j) where the body has made available interests in a managed
investment scheme—any matters concerning the financial or
business undertaking, scheme, common enterprise or
investment contract to which the interests relate; and
(k) matters relating to or arising out of the audit of, or working
papers or reports of an auditor concerning, any matters
referred to in a preceding paragraph.
53AA Business affairs of a body corporate
A body corporate’s business affairs include (without limitation):
(a) any of the body’s affairs (including anything that is included
in the body’s affairs because of section 53); and
(b) matters concerned with ascertaining the corporations with
which the body is or has been connected.
53AB Business affairs of a natural person
A natural person’s business affairs include (without limitation):
(a) the person’s examinable operations and examinable assets
and liabilities; and
(b) any act done (including any contract made and any
transaction entered into) by or on behalf of the person, or to
or in relation to the person or his or her business or property,
at a time when:
(i) the person was, under the Bankruptcy Act 1966 or the
law of an external Territory, a bankrupt in respect of a
bankruptcy from which the person had not been
discharged; or
(ii) the person had, under a law of an external Territory or
of a foreign country, the status of an undischarged
bankrupt; or
(iii) the person’s property was subject to control under
Division 2 of Part X of the Bankruptcy Act 1966
because of an authority given by the person under
section 188 of that Act; or
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(iv) a personal insolvency agreement under Part X of the
Bankruptcy Act 1966 or under the corresponding
provisions of the law of an external Territory or of a
foreign country was in effect in relation to the person or
the person’s property; and
(c) without limiting the generality of paragraph (b), any conduct
of the trustee of such a bankrupt estate or of such a personal
insolvency agreement or a person acting under such an
authority; and
(d) matters concerned with ascertaining the corporations with
which the person is or has been connected.
53AC Business affairs of a partnership
A partnership’s business affairs include (without limitation):
(a) the partnership’s promotion, formation, membership, control,
examinable operations and examinable assets and liabilities;
and
(b) the partnership’s management and proceedings; and
(c) any act done (including any contract made and any
transaction entered into) by or on behalf of the partnership, or
to or in relation to the partnership, at a time when the
partnership is being wound up; and
(d) matters concerned with ascertaining the corporations with
which the partnership is or has been connected.
53AD Business affairs of a trust
A trust’s business affairs include (without limitation):
(a) the creation of the trust; and
(b) matters arising under, or otherwise relating to, the terms of
the trust; and
(c) the appointment and removal of a trustee of the trust; and
(d) the business, trading, transactions and dealings of the trustee
of the trust; and
(e) the profits, income and receipts of the trustee of the trust; and
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(f) the losses, outgoings and expenditure of the trustee of the
trust; and
(g) the trust property, including transactions and dealings in, and
the income arising from, the trust property; and
(h) the liabilities of the trustee of the trust; and
(j) the management of the trust; and
(k) any act done (including any contract made and any
transaction entered into) by or on behalf of the trustee of the
trust, or to or in relation to the trust, at a time when the trust
is being wound up; and
(l) matters concerned with ascertaining the corporations with
which the trust is or has been connected.
57 Classes of shares or interests in managed investment schemes
(1) The shares in a body corporate, if not divided into 2 or more
classes, constitute a class.
(2) If the interests in a managed investment scheme to which an
undertaking relates are not divided into 2 or more classes, they
constitute a class.
57A Meaning of corporation
(1) Subject to this section, in this Act, corporation includes:
(a) a company; and
(b) any body corporate (whether incorporated in this jurisdiction
or elsewhere); and
(c) an unincorporated body that under the law of its place of
origin, may sue or be sued, or may hold property in the name
of its secretary or of an office holder of the body duly
appointed for that purpose.
(2) Neither of the following is a corporation:
(a) an exempt public authority;
(b) a corporation sole.
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(3) To avoid doubt, an Aboriginal and Torres Strait Islander
corporation is taken to be a corporation for the purposes of this
Act.
Note: Various provisions of this Act that generally apply to corporations do
not apply to Aboriginal and Torres Strait Islander corporations
because of express provisions to that effect: see section 190B,
subsection 197(5), section 206HB and subsections 599(2), 1309(6),
1318(5) and 1335(3).
58AA Meaning of court and Court
(1) Subject to subsection (2), in this Act:
court means any court.
Court means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act 1975
applies because of a Proclamation made under
subsection 41(2) of that Act.
(2) Except where there is a clear expression of a contrary intention (for
example, by use of the expression “the Court”), proceedings in
relation to a matter under this Act may, subject to Part 9.6A, be
brought in any court.
Note: The matters dealt with in Part 9.6A include the applicability of limits
on the jurisdictional competence of courts.
58B Discharge of obligations under this Act
(2) Subject to subsection (3), an act required to be done under this Act
may, for the purposes of this Act, be done anywhere in Australia,
whether in or outside this jurisdiction.
(3) Nothing in subsection (2) affects the operation of any provision of
this Act that:
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(a) expressly requires a particular act to be done in this
jurisdiction; or
(b) expressly or by implication permits a particular act to be
done outside Australia.
59 Debentures as consideration for acquisition of shares
A reference to a body corporate that offers debentures as
consideration for the acquisition of shares in a body corporate
includes a reference to a body corporate that offers a cash sum as
consideration for the acquisition of shares where it is to be a term
of the contract for the acquisition of those shares that the offeree
makes, or that the sum is applied in whole or in part in making, a
payment by way of deposit with, or loan to, the body corporate that
offers the sum.
60 Declaration of relevant relationships
Administrator
(1) In this Act, a declaration of relevant relationships, in relation to
an administrator of a company under administration, means a
written declaration:
(a) stating whether any of the following:
(i) the administrator;
(ii) if the administrator’s firm (if any) is a partnership—a
partner in that partnership;
(iii) if the administrator’s firm (if any) is a body corporate—
that body corporate or an associate of that body
corporate;
has, or has had within the preceding 24 months, a
relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of
the company; or
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(vii) a person who is entitled to enforce a security interest in
the whole, or substantially the whole, of the company’s
property (including any PPSA retention of title
property); and
(b) if so, stating the administrator’s reasons for believing that
none of the relevant relationships result in the administrator
having a conflict of interest or duty.
Liquidator
(2) In this Act, a declaration of relevant relationships, in relation to a
liquidator of a company, means a written declaration:
(a) stating whether any of the following:
(i) the liquidator;
(ii) if the liquidator’s firm (if any) is a partnership—a
partner in that partnership;
(iii) if the liquidator’s firm (if any) is a body corporate—that
body corporate or an associate of that body corporate;
has, or has had within the preceding 24 months, a
relationship with:
(iv) the company; or
(v) an associate of the company; or
(vi) a former liquidator, or former provisional liquidator, of
the company; or
(vii) a former administrator of the company; or
(viii) a former administrator of a deed of company
arrangement executed by the company; and
(b) if so, stating the liquidator’s reasons for believing that none
of the relevant relationships result in the liquidator having a
conflict of interest or duty.
64 Entering into a transaction in relation to shares or securities
A reference in Chapter 6 to entering into a transaction in relation to
shares or securities includes a reference to:
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(a) entering into, or becoming a party to, a relevant agreement in
relation to the shares or securities; and
(b) exercising an option to have the shares or securities allotted.
64A Entities
Except in Chapter 2E, a reference to an entity:
(a) is a reference to a natural person, a body corporate (other
than an exempt public authority), a partnership or a trust; and
(b) includes, in the case of a trust, a reference to the trustee of the
trust.
64B Entities connected with a corporation
Body corporate
(1) A body corporate is connected with a corporation if, and only if,
the corporation:
(a) can control, or influence materially, the body’s activities or
internal affairs; or
(b) is a member of the body; or
(c) is in a position to cast, or to control the casting of, a vote at a
general meeting of the body; or
(d) has power to dispose of, or to exercise control over the
disposal of, a share in the body; or
(e) is financially interested in the body’s success or failure or
apparent success or failure; or
(f) is owed a debt by the body; or
(g) is engaged by the body under a contract for services; or
(h) acts as agent for the body in any transaction or dealing.
Natural person
(2) A natural person is connected with a corporation if, and only if, the
corporation:
(a) is a trustee of a trust under which the person is capable of
benefiting; or
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(b) is engaged by the person under a contract for services; or
(c) acts as agent for the person in any transaction or dealing; or
(d) is an attorney of the person under a power of attorney; or
(e) has appointed the person as the corporation’s attorney under
a power of attorney; or
(f) is given financial, business or legal advice by the person in
the performance of the functions attaching to the person’s
professional capacity.
Partnership
(3) A partnership is connected with a corporation if, and only if, the
corporation:
(a) is a partner in the partnership; or
(b) can control, or influence materially, the partnership’s
activities or internal affairs; or
(c) is financially interested in the partnership’s success or failure
or apparent success or failure; or
(d) is a creditor of the partnership; or
(e) is engaged by the partnership under a contract for services; or
(f) acts as agent for the partnership in any transaction or dealing.
Trust
(4) A trust is connected with a corporation if, and only if, the
corporation:
(a) is the settlor, or one of the settlors, of the trust; or
(b) has power under the terms of the trust to appoint or remove a
trustee of the trust or to vary, or cause to be varied, any of the
terms of the trust; or
(c) is a trustee of the trust; or
(d) can control, or influence materially, the activities of the trust;
or
(e) is capable of benefiting under the trust; or
(f) is a creditor of the trustee of the trust; or
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(g) is engaged by the trustee of the trust under a contract for
services; or
(h) acts as agent for the trustee of the trust in any transaction or
dealing.
65 Eligible money market dealer
ASIC may declare a body corporate to be an authorised dealer in
the short term money market by notice published in the Gazette.
66A Exempt bodies
A body corporate is an exempt body of a State or Territory if, and
only if, it:
(a) is not a company; and
(b) is incorporated by or under a law of the State or Territory.
70 Extension of period for doing an act
Where this Act confers power to extend the period for doing an act,
an application for the exercise of the power may be made, and the
power may be exercised, even if the period, or the period as last
extended, as the case requires, has ended.
73A When a court is taken to find a person guilty of an offence
An Australian court finds a person guilty of an offence if, and only
if:
(a) the court convicts the person of the offence; or
(b) the person is charged before the court with the offence and is
found in the court to have committed the offence, but the
court does not proceed to convict the person of the offence.
75 Inclusion in official list
A reference to a body corporate or other person included in an
official list of a body corporate is a reference to:
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(a) a body corporate or other person whose name is included in
that official list; or
(b) a body corporate or other person whose name has been
changed but whose previous name was included in that
official list immediately before the change and is still so
included.
79 Involvement in contraventions
A person is involved in a contravention if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention;
or
(b) has induced, whether by threats or promises or otherwise, the
contravention; or
(c) has been in any way, by act or omission, directly or
indirectly, knowingly concerned in, or party to, the
contravention; or
(d) has conspired with others to effect the contravention.
80 Jervis Bay Territory taken to be part of the Australian Capital
Territory
The Jervis Bay Territory is taken to be part of the Australian
Capital Territory.
82 Offers and invitations to the public
A reference in this Act to, or to the making of, an offer to the
public or to, or to the issuing of, an invitation to the public is,
unless the contrary intention appears, to be construed as including
a reference to, or to the making of, an offer to any section of the
public or to, or to the issuing of, an invitation to any section of the
public, as the case may be, whether selected as clients of the person
making the offer or issuing the invitation or in any other manner
and notwithstanding that the offer is capable of acceptance only by
each person to whom it is made or that an offer or application may
be made pursuant to the invitation only by a person to whom the
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invitation is issued, but a bona fide offer or invitation is not taken
to be an offer or invitation to the public if it:
(a) is an offer or invitation to enter into an underwriting
agreement; or
(b) is made or issued to a person whose ordinary business is to
buy or sell shares, debentures or interests in managed
investment schemes, whether as principal or agent; or
(c) is made or issued to existing members or debenture holders
of a corporation and relates to shares in, or debentures of,
that corporation; or
(d) is made or issued to existing members of a company in
connection with a proposal referred to in section 507 and
relates to shares in that company.
83 Officers, and other persons, in default
A reference, in relation to a contravention, to an officer of a body
corporate, or to a person, who is in default is a reference to an
officer of the body (including a person who later ceases to be such
an officer), or to a person, as the case may be, who is involved in
the contravention.
86 Possession
A thing that is in a person’s custody or under a person’s control is
in the person’s possession.
88A Public document of a body corporate
(1) Subject to this section, public document, in relation to a body,
means:
(a) an instrument of, or purporting to be signed, issued or
published by or on behalf of, the body that:
(i) when signed, issued or published, is intended to be
lodged or is required by or under this Act or the ASIC
Act to be lodged; or
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(ii) is signed, issued or published under or for the purposes
of this Act, the ASIC Act or any other Australian law;
or
(b) an instrument of, or purporting to be signed or issued by or
on behalf of, the body that is signed or issued in the course
of, or for the purposes of, a particular transaction or dealing;
or
(c) without limiting paragraph (a) or (b), a business letter,
statement of account, invoice, receipt, order for goods, order
for services or official notice of, or purporting to be signed or
issued by or on behalf of, the body.
(2) A thing is not a public document of a body if it:
(a) is applied, or is intended or required to be applied:
(i) to goods; or
(ii) to a package, label, reel or thing in or with which goods
are, or are to be, supplied; and
(b) is so applied, or is intended or required to be so applied, for a
purpose connected with the supply of the goods.
(3) In subsection (2):
apply to includes print on, weave in, impress on, work into, or
annex, affix or attach to.
label includes a band or ticket.
package includes:
(a) a covering, stopper, glass, bottle, vessel, box, capsule, case,
frame or wrapper; or
(b) any other container or thing in which goods are, or are to be,
packed.
88B Qualified accountants
(1) For the purposes of this Act, a qualified accountant is a person
covered by a declaration in force under subsection (2).
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(2) ASIC may, in writing, declare that all members of a specified
professional body, or all persons in a specified class of members of
a specified professional body, are qualified accountants for the
purposes of this Act.
(3) ASIC may, in writing, vary or revoke a declaration made under
subsection (2).
89 Qualified privilege
(1) Where this Act provides that a person has qualified privilege in
respect of an act, matter or thing, the person:
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person’s part, liable to
an action for defamation at the suit of a person;
as the case requires, in respect of that act, matter or thing.
(2) In subsection (1):
malice includes ill will to the person concerned or any other
improper motive.
(3) Neither this section nor a provision of this Act that provides as
mentioned in subsection (1) limits or affects any right, privilege or
immunity that a person has, apart from this section or such a
provision, as defendant in proceedings, or an action, for
defamation.
90 Receivers and managers
A receiver of property of a body corporate is also a manager if the
receiver manages, or has under the terms of the receiver’s
appointment power to manage, affairs of the body.
91 Relation-back day
For the purposes of this Act, the following table sets out the
meaning of relation-back day in relation to a winding up of a
company or Part 5.7 body.
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Relation-back day
Item If: the relation-back day is:
1 in the case of a company:
(a) the Court orders under
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, the company was
under administration; and
(c) the order was made in response
to an application filed at or after
the beginning of the
administration;
the section 513C day in relation to
the administration.
2 in the case of a company:
(a) the Court orders under
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, the company was
under administration; and
(c) the order was made in response
to an application filed before the
beginning of the administration;
the day on which that application
was filed.
3 in the case of a company:
(a) the Court orders under
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, a deed of company
arrangement had been executed
by the company and had not yet
terminated; and
(c) the order was made in response
to an application filed at or after
the section 513C day in relation to
that administration.
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Relation-back day
Item If: the relation-back day is:
the beginning of the
administration that ended when
the deed was executed;
4 in the case of a company:
(a) the Court orders under
section 233, 459A, 459B or 461
that the company be wound up;
and
(b) immediately before the order
was made, a deed of company
arrangement had been executed
by the company and had not yet
terminated; and
(c) the order was made in response
to an application filed before the
beginning of the administration
that ended when the deed was
executed;
the day on which that application
was filed.
5 in the case of a company:
(a) the company resolves by special
resolution that it be wound up
voluntarily; and
(b) immediately before the
resolution was passed, the
company was under
administration; and
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration;
the section 513C day in relation to
the administration.
6 in the case of a company:
(a) the company resolves by special
resolution that it be wound up
voluntarily; and
(b) immediately before the
the section 513C day in relation to
the administration.
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Relation-back day
Item If: the relation-back day is:
resolution was passed, the
company was under
administration; and
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration, but that
application was dismissed or
withdrawn before the
administration commenced;
7 in the case of a company:
(a) the company resolves by special
resolution that it be wound up
voluntarily; and
(b) immediately before the
resolution was passed, the
company was under
administration; and
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration; and
(d) that application had not been
dismissed or withdrawn before
the administration commenced;
the day on which that application
was filed.
8 in the case of a company, the
company is taken to have passed a
special resolution that it be wound
up voluntarily because, at a meeting
convened by the administrator of a
deed of company arrangement
executed by the company, the
company’s creditors:
(a) passed a resolution terminating
the section 513C day in relation to
the administration that ended when
the deed was executed.
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Relation-back day
Item If: the relation-back day is:
the deed of company
arrangement; and
(b) also resolved under section 445E
that the company be wound up;
and either:
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(d) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
that application was dismissed or
withdrawn before the
administration commenced;
9 in the case of a company, the
company is taken to have passed a
special resolution that it be wound
up voluntarily because, at a meeting
convened by the administrator of a
deed of company arrangement
executed by the company, the
company’s creditors:
(a) passed a resolution terminating
the deed of company
arrangement; and
(b) also resolved under section 445E
that the company be wound up;
and both:
(c) an application for an order under
section 233, 459A, 459B or 461
the day on which that application
was filed.
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Relation-back day
Item If: the relation-back day is:
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(d) that application has not been
dismissed or withdrawn before
the first-mentioned resolution is
taken to have been passed;
10 in the case of a company, the
company is taken to have passed a
special resolution that it be wound
up voluntarily because the Court
made an order under section 445D
terminating a deed of company
arrangement executed by the
company, and either:
(a) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(b) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
that application was dismissed or
withdrawn before the
administration commenced;
the section 513C day in relation to
the administration that ended when
the deed was executed.
11 in the case of a company:
(a) the company is taken to have
passed a special resolution that it
be wound up voluntarily because
the Court made an order under
section 445D terminating a deed
the day on which that application
was filed.
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Relation-back day
Item If: the relation-back day is:
of company arrangement
executed by the company; and
(b) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(c) that application has not been
dismissed or withdrawn before
the resolution is taken to have
been passed;
12 in the case of a company, the
company is taken to have passed a
special resolution that it be wound
up voluntarily because:
(a) a deed of company arrangement
executed by the company
specifies particular
circumstances in which the deed
is to terminate and the company
is to be wound up; and
(b) those circumstances exist at a
particular time;
and either:
(c) no application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; or
(d) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed, but
the section 513C day in relation to
the administration that ended when
the deed was executed.
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Relation-back day
Item If: the relation-back day is:
that application was dismissed or
withdrawn before the
administration commenced;
13 in the case of a company, the
company is taken to have passed a
special resolution that it be wound
up voluntarily because:
(a) a deed of company arrangement
executed by the company
specifies particular
circumstances in which the deed
is to terminate and the company
is to be wound up; and
(b) those circumstances exist at a
particular time;
and both:
(c) an application for an order under
section 233, 459A, 459B or 461
that the company be wound up
was filed before the beginning of
the administration that ended
when the deed was executed; and
(d) that application had not been
dismissed or withdrawn before
the resolution is taken to have
been passed;
the day on which that application
was filed.
14 because of Division 1A of Part 5.6,
the winding up is taken to have
begun on the day when an order that
the company or body be wound up
was made;
the day on which the application for
the order was filed.
15 any other case applies; the day on which the winding up is
taken, because of Division 1A of
Part 5.6, to have begun.
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Division 7 Interpretation of other expressions
Section 92
142 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
92 Securities
(1) Subject to this section, securities means:
(a) debentures, stocks or bonds issued or proposed to be issued
by a government; or
(b) shares in, or debentures of, a body; or
(c) interests in a managed investment scheme; or
(d) units of such shares;
but does not include:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by
paragraph (a), (b), (c) or (d); or
(g) an excluded security.
Note: A derivative does not include an option to acquire a security by way
of issue (see the combined effect of paragraph 761D(3)(c),
paragraph 764A(1)(a) and paragraph (d) of the definition of security
in section 761A).
(2) The expression securities, when used in relation to a body, means:
(a) shares in the body; or
(b) debentures of the body; or
(c) interests in a managed investment scheme made available by
the body; or
(d) units of such shares;
but does not include:
(e) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by
paragraph (a), (b), (c) or (d); or
(f) an excluded security.
Note: A derivative does not include an option to acquire a security by way
of issue (see the note to subsection (1)).
(3) In Chapters 6 to 6CA (inclusive) and Part 1.2A:
securities means:
(a) shares in a body; or
(b) debentures of a body; or
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Corporations Act 2001 143
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(c) interests in a registered managed investment scheme; or
(d) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered managed investment scheme;
(e) options to acquire (whether by way of issue or transfer) a
security covered by paragraph (a), (b), (c) or (d).
It does not cover:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by
paragraph (a), (b), (c) or (d); or
(g) a market traded option.
Note: A derivative does not include an option to acquire a security by way
of issue (see the note to subsection (1)).
Note: Section 9 defines body.
(4) In Chapter 6D securities has the meaning given by section 700 and
in Chapter 7 security has the meaning given by section 761A.
95A Solvency and insolvency
(1) A person is solvent if, and only if, the person is able to pay all the
person’s debts, as and when they become due and payable.
(2) A person who is not solvent is insolvent.
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Part 1.2 Interpretation
Division 8 Miscellaneous interpretation rules
Section 100
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—Miscellaneous interpretation rules
100 Address of registered office etc.
(1) Where a provision of this Act requires a notice to be lodged of, or
information in an application to specify:
(a) the address of an office, or of a proposed office, of a body
corporate or other person; or
(b) a change in the situation of an office of a body corporate or
other person;
the notice:
(c) must specify the full address, or the full new address, as the
case requires, of the relevant office including, where
applicable, the number of the room and of the floor or level
of the building on which the office is situated; and
(d) where the notice or application relates to the address or
situation of an office of a body corporate and the address
specified in accordance with paragraph (a) is the address of
premises that are not to be occupied by the body corporate—
must include a written statement to the effect that the person
who occupies those premises has consented in writing to the
address being specified in the notice or application and has
not withdrawn that consent.
(2) ASIC may require a person who has lodged a notice or application
that includes a statement under paragraph (1)(d) to produce to
ASIC the consent referred to in the statement.
100A Operation of certain laws relating to instruments on which
stamp duty has not been paid
Nothing in this Act affects the operation of any provision of any
law:
(a) relating to the admissibility in evidence, or any other use, in
any proceedings, of a document in respect of which any
applicable stamp duty has not been paid; or
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(b) prohibiting the registration by a company of a transfer of
securities if any stamp duty applicable in respect of the
transfer has not been paid.
101 Amount of stock representing a number of shares
In relation to a body corporate the whole or a portion of whose
share capital consists of stock, a reference to a number of shares
(including a number expressed as a percentage) is, in relation to an
amount of stock, a reference to the amount of stock that represents
that number of shares.
102 Applications to be in writing
An application to ASIC for the issuing of a document or the doing
of any other act or thing by ASIC under this Act must be in
writing.
Note: For electronic lodgment of documents with ASIC, see section 352.
102B In Australia or elsewhere, in this jurisdiction or elsewhere etc.
(1) The expression in Australia or elsewhere, or a similar expression,
does not limit the generality of the expression in this jurisdiction
or elsewhere or a similar expression.
(2) The expression outside this jurisdiction includes places outside
Australia.
102C In Australia
In Australia means in Australia (whether in this jurisdiction or
not).
Note: This definition is needed if there is a State that is not a referring State.
If all the States are referring States, every place in Australia will also
be in this jurisdiction.
103 Effect of certain contraventions of this Act
(1) This section has effect except so far as this Act otherwise provides.
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Section 104
146 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) An act, transaction, agreement, instrument, matter or thing is not
invalid merely because of:
(a) a contravention of section 115, 208, 209, 601CA or 601CD;
or
(b) a failure to comply with a requirement of this Act that a
person cause a notice, or a copy of a document, to be
published in the Gazette or in a newspaper.
Note: Section 1101H provides that a failure to comply with requirements of
Chapter 7 generally does not affect the validity or enforceability of
any transaction, contract or other arrangement.
(4) In this section:
invalid includes void, voidable and unenforceable.
(5) Nothing in this section limits the generality of anything else in it.
104 Effect of provisions empowering a person to require or prohibit
conduct
Where, in accordance with a provision of this Act other than the
replaceable rules, a person requires another person to do, or
prohibits another person from doing, a particular act, that provision
is taken to require the other person to comply with the requirement
or prohibition, as the case may be.
105 Calculation of time
Without limiting subsection 36(1) of the Acts Interpretation Act
1901, in calculating how many days a particular day, act or event is
before or after another day, act or event, the first-mentioned day, or
the day of the first-mentioned act or event, is to be counted but not
the other day, or the day of the other act or event.
106 Performance of functions by Commission delegate
For the purpose of the performance of a function, or the exercise of
a power, under this Act by a Commission delegate, a reference to
ASIC in a provision of this Act relating to the performance of the
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Corporations Act 2001 147
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function, or the exercise of the power, includes a reference to the
Commission delegate.
107 Notice in relation to top 20 members of a class
For the purposes of subsection 163(3B), section 178B and
paragraph 601BC(2)(lc), if 2 or more members in the top 20
members of a class of shares each hold the same number of shares,
details of each of those members must be included in any notice
given in relation to those provisions.
108 Parts of dollar to be disregarded in determining majority in
value of creditors etc.
In determining whether a majority in value of creditors, or a
particular proportion in value of creditors, has passed a resolution
or done any other act or thing, if a creditor’s debt consists of a
number of whole dollars and a part of a dollar, the part of the dollar
is to be disregarded.
109 References to persons, things and matters
(1) Except so far as the contrary intention appears, a provision of this
Act is to be interpreted in such a manner that any 2 or more
references in the provision are capable of having the same referent
or referents, or of having a referent or referents in common, as the
case requires.
(2) In subsection (1), referent, in relation to a reference in a provision,
means:
(a) in so far as the reference is interpreted as being in the
singular number—a person to whom, or a thing or matter to
which; or
(b) in so far as the reference is interpreted as being in the plural
number—any one or 2 or more persons to whom, or of 2 or
more things or matters to which;
the reference is taken, in the application of the provision, to refer.
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Section 109X
148 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
109X Service of documents
(1) For the purposes of any law, a document may be served on a
company by:
(a) leaving it at, or posting it to, the company’s registered office;
or
(b) delivering a copy of the document personally to a director of
the company who resides in Australia or in an external
Territory; or
(c) if a liquidator of the company has been appointed—leaving it
at, or posting it to, the address of the liquidator’s office in the
most recent notice of that address lodged with ASIC; or
(d) if an administrator of the company has been appointed—
leaving it at, or posting it to, the address of the administrator
in the most recent notice of that address lodged with ASIC.
(2) For the purposes of any law, a document may be served on a
director or company secretary by leaving it at, or posting it to, the
alternative address notified to ASIC under subsection 5H(2),
117(2), 205B(1) or (4) or 601BC(2). However, this only applies to
service on the director or company secretary:
(a) in their capacity as a director or company secretary; or
(b) for the purposes of a proceeding in respect of conduct they
engaged in as a director or company secretary.
(3) Subsections (1) and (2) do not apply to a process, order or
document that may be served under section 9 of the Service and
Execution of Process Act 1992.
(6) This section does not affect:
(a) any other provision of this Act, or any provision of another
law, that permits; or
(b) the power of a court to authorise;
a document to be served in a different way.
(7) This section applies to provisions of a law dealing with service
whether it uses the expression “serve” or uses any other similar
expression such as “give” or “send”.
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Disclosing entities Part 1.2A
Object of Part Division 1
Section 111AA
Corporations Act 2001 149
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 1.2A—Disclosing entities
Division 1—Object of Part
111AA Object of Part
The object of this Part is:
(a) to define disclosing entity and other key terms relevant to
disclosing entities (this is done in Division 2); and
(b) to outline the significance for this Act of being a disclosing
entity (this is done in Division 3); and
(c) to provide for exemptions from, and modifications of, the
special requirements imposed by this Act in relation to
disclosing entities (this is done in Division 4).
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Division 2 Definitions
Section 111AB
150 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Definitions
111AB Terms defined in Division
This Division contains definitions of the following terms:
(a) disclosing entity (section 111AC);
(b) ED securities (section 111AD);
(c) ED securities of a disclosing entity (section 111AK);
(d) listed disclosing entity (subsection 111AL(1));
(e) quoted ED securities (section 111AM);
(f) unlisted disclosing entity (subsection 111AL(2)).
111AC Disclosing entity
(1) If any securities of a body (except interests in a managed
investment scheme) are ED securities, the body is a disclosing
entity for the purposes of this Act.
(2) If any interests in a managed investment scheme are ED securities,
the undertaking to which the interests relate is a disclosing entity
for the purposes of this Act.
111AD ED securities
(1) Securities of a body are ED securities (short for “enhanced
disclosure securities”) for the purposes of this Act if, and only if:
(a) they are ED securities under section 111AE, 111AF,
111AFA, 111AG or 111AI; and
(b) they are not declared under section 111AJ not to be ED
securities.
(2) For the purposes of sections 111AE, 111AF, 111AG and 111AI, a
class of shares or debentures is taken to include units of shares or
debentures in that class.
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Section 111AE
Corporations Act 2001 151
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
111AE Securities of body or undertaking that is included in a
licensed market’s official list
(1) If:
(a) a body corporate is, with its agreement, consent or
acquiescence, included in the official list of a prescribed
financial market; and
(b) the market’s listing rules (according to their terms) apply to
the body in relation to a class (which may be some or all) of
securities issued by the body;
securities issued by the body in that class are ED securities, and
that market is a listing market in relation to that body.
(1A) If:
(a) an undertaking to which interests in a registered scheme
relates is, with the agreement, consent or acquiescence of the
responsible entity, included in the official list of a prescribed
financial market; and
(b) the market’s listing rules (according to their terms) apply to
the undertaking in relation to a class (which may be some or
all) of managed investment products that relate to the
scheme;
managed investment products in that class that relate to the scheme
are ED securities, and that market is a listing market in relation to
the undertaking.
(2) Subsections (1) and (1A) do not apply to securities of a body if:
(a) the body is a public authority of the Commonwealth or an
instrumentality or agency of the Crown in right of the
Commonwealth; and
(b) the only securities issued by the body that would otherwise
be ED securities because of subsection (1) or (1A) are
debentures; and
(c) both the repayment of principal, and the payment of interest,
in respect of those debentures is guaranteed by the
Commonwealth.
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Division 2 Definitions
Section 111AF
152 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Subsections (1) and (1A) do not apply to securities of a body that
is:
(a) a public authority of a State or Territory; or
(b) an instrumentality or agency of the Crown in right of a State
or Territory.
111AF Securities (except debentures and managed investment
products) held by 100 or more persons
(1) Securities (except debentures or managed investment products) in a
class of securities of a body are ED securities if:
(a) a disclosure document in relation to securities in that class
has been lodged with ASIC under Chapter 6D; and
(b) securities in that class have been issued pursuant to the
disclosure document; and
(c) after an issue of securities in that class pursuant to the
disclosure document, 100 or more persons held securities in
that class; and
(d) securities in that class have been held by 100 or more persons
at all times since the issue of securities referred to in
paragraph (c).
(2) Securities (except debentures and managed investment products) in
a class of securities of a body are ED securities if securities in that
class have been issued under a recognised offer and the offeror’s
records indicate that 100 or more people who reside in this
jurisdiction have held securities in that class (whether or not as a
result of the recognised offer) at all times since the issue.
111AFA Managed investment products held by 100 or more persons
(1) Managed investment products in a class of managed investment
products issued by a body are ED securities if 100 or more people
hold managed investment products in that class as a result of offers
that gave rise to obligations to give Product Disclosure Statements
(whether or not all in the same terms) under Chapter 7.
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Section 111AG
Corporations Act 2001 153
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Interests in a class of interests in a managed investment scheme
issued by a body are ED securities if interests in that class have
been issued under a recognised offer and the offeror’s records
indicate that 100 or more people who reside in this jurisdiction
have held interests in that class (whether or not as a result of the
recognised offer) at all times since the issue.
111AG Securities issued as consideration for an acquisition under
an off-market takeover bid or Part 5.1 compromise or
arrangement
(1) Securities (except debentures) in a class of securities of a body are
ED securities if:
(a) securities in that class have been issued by the body as
consideration for offers under an off-market bid; and
(b) after an issue of securities in that class under the off-market
bid, 100 or more persons held securities in that class; and
(c) securities in that class have been held by 100 or more persons
at all times since the issue of securities referred to in
paragraph (b).
(2) Securities in a class of securities of a body are ED securities if:
(a) securities in that class have been issued as consideration for
the acquisition or cancellation of securities of another body
pursuant to a compromise or arrangement under Part 5.1; and
(b) securities in that class, or those or any other securities of the
other body, were ED securities immediately before securities
in that class were first issued pursuant to the compromise or
arrangement; and
(c) after an issue of securities in that class pursuant to the
compromise or arrangement, 100 or more persons held
securities in that class; and
(d) securities in that class have been held by 100 or more persons
at all times since the issue of securities referred to in
paragraph (c).
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Division 2 Definitions
Section 111AH
154 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
111AH When a person holds securities for the purposes of
sections 111AF, 111AFA and 111AG
(1) For the purposes of sections 111AF, 111AFA and 111AG, a person
holds securities if, and only if:
(a) the person is registered as the holder of the securities in a
register under section 169, 170, 171 or 601CZB; or
(b) the person is entitled to be so registered.
(2) For the purposes of sections 111AF, 111AFA and 111AG, joint
holders of securities count as one person.
111AI Debentures
Debentures of a borrower are ED securities if:
(a) section 283AA requires the borrower to appoint a trustee; or
(b) section 283AA does not apply to the borrower only because
the offer of the debentures to which section 283AA would
otherwise have applied is a recognised offer.
111AJ Regulations may declare securities not to be ED securities
(1) The regulations may declare specified securities of bodies not to be
ED securities.
(2) Regulations in force for the purposes of subsection (1) have effect
accordingly, despite anything else in this Division.
111AK ED securities of a disclosing entity
For the purposes of this Act, ED securities because of which
(having regard to section 111AC) a disclosing entity is such an
entity are ED securities of the entity.
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Section 111AL
Corporations Act 2001 155
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
111AL Listed or unlisted disclosing entity
(1) For the purposes of this Act, a disclosing entity is a listed
disclosing entity if all or any ED securities of the entity are quoted
ED securities.
(2) For the purposes of this Act, a disclosing entity that is not a listed
disclosing entity is an unlisted disclosing entity.
111AM Quoted ED securities
For the purposes of this Act, ED securities are quoted ED
securities if they are ED securities because of section 111AE.
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Division 3 Significance of being a disclosing entity
Section 111AN
156 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Significance of being a disclosing entity
111AN Division contains outline of significance of being a disclosing
entity
This Division outlines the significance for this Act of being a
disclosing entity.
111ANA Requirements relating to remuneration recommendations
in relation to key management personnel
There are special requirements in Part 2D.8 for remuneration
recommendations in relation to key management personnel for
disclosing entities that are companies.
111AO Accounting requirements
A disclosing entity incorporated or formed in Australia has to
prepare financial statements and reports for half-years as well as
full financial years. These requirements are set out in Chapter 2M.
111AP Continuous disclosure requirements
(1) A disclosing entity is subject to the continuous disclosure
requirements of sections 674 and 675.
111AQ Prospectus relief
Section 713 applies (subject to certain qualifications) to
prospectuses for quoted ED securities of disclosing entities. The
section’s requirements for the content of prospectuses are less
comprehensive than those that apply to other prospectuses under
section 710.
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Significance of being a disclosing entity Division 3
Section 111AQA
Corporations Act 2001 157
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
111AQA Product Disclosure Statement relief
Obligations that apply to disclosing entities can be taken into
account in deciding what information should be included in a
Product Disclosure Statement—see section 1013FA and
paragraph 1013F(2)(d).
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Part 1.2A Disclosing entities
Division 4 Exemptions and modifications
Section 111AR
158 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Exemptions and modifications
111AR Meaning of disclosing entity provisions
(1) For the purposes of this Division, the disclosing entity provisions
are the provisions of the following:
(a) Chapter 2M as it applies to disclosing entities;
(d) sections 674 and 675.
(2) A reference in subsection (1) to a Part, Division or section includes
a reference to regulations in force for the purposes of the Part,
Division or section.
111AS Exemptions by regulations
(1) The regulations may exempt specified persons from all or specified
disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to
specified securities.
111AT Exemptions by ASIC
(1) ASIC may, by writing, exempt specified persons from all or
specified disclosing entity provisions:
(a) either generally or as otherwise specified; and
(b) either unconditionally or subject to specified conditions.
(2) Without limiting subsection (1), an exemption may relate to
specified securities.
(3) ASIC must cause a copy of an exemption to be published in the
Gazette.
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Exemptions and modifications Division 4
Section 111AU
Corporations Act 2001 159
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
111AU Enforcing conditions of exemptions
(1) A person must not intentionally or recklessly contravene a
condition to which an exemption under section 111AS or 111AT is
subject.
(2) If a person contravenes such a condition, the Court may, on the
application of ASIC, order the person to comply with the
condition.
111AV Modifications by regulations
(1) The regulations may make modifications of all or specified
disclosing entity provisions.
(2) Without limiting subsection (1), a modification may relate to
specified securities.
111AW Exemptions and modifications have effect
Exemptions and modifications under this Division have effect
accordingly.
111AX Effect of Division
Nothing in this Division limits, or is limited by, any other
exemption or modification power (for example, section 340, 341 or
741).
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Part 1.4 Technical provisions about aids for readers
Section 111J
160 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 1.4—Technical provisions about aids for
readers
111J Small business guide
(1) If, because of:
(a) regulations made under this Act; or
(b) instruments issued by ASIC under this Act;
the small business guide as set out in Part 1.5 has become out of
date, the regulations may set out modifications of the guide that
would bring it up to date. The guide then is to be read as if it were
so modified.
(2) The small business guide is divided into sections (numbered 1, 2,
3…) and the sections are divided into paragraphs (numbered 1.1, 1.2, 1.3…). For example, a reference in the guide to 3.1 is a
reference to paragraph 3.1 of the guide.
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Section 1
Corporations Act 2001 161
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 1.5—Small business guide
This guide summarises the main rules in the Corporations Act (the
Corporations Act 2001) that apply to proprietary companies
limited by shares—the most common type of company used by
small business. The guide gives a general overview of the
Corporations Act as it applies to those companies and directs
readers to the operative provisions in the Corporations Act.
The notes in square brackets at the end of paragraphs in the guide
indicate the main provisions of the Corporations Act, the
regulations made under the Corporations Act, and ASIC Practice
Notes that are relevant to the information in the paragraphs.
Other Commonwealth, State and Territory laws also impose
obligations on proprietary companies and their operators.
1 What registration means
1.1 Separate legal entity that has its own powers
As far as the law is concerned, a company has a separate legal
existence that is distinct from that of its owners, managers,
operators, employees and agents. A company has its own property,
its own rights and its own obligations. A company’s money and
other assets belong to the company and must be used for the
company’s purposes.
A company has the powers of an individual, including the powers
to:
• own and dispose of property and other assets
• enter into contracts
• sue and be sued.
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Section 1
162 Corporations Act 2001
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Once a company is registered, its separate legal status, property,
rights and liabilities continue until ASIC (Australian Securities and
Investments Commission) deregisters the company.
[sections 119, 124—125, 601AA—601AD]
1.2 Limited liability of shareholders
Shareholders of a company are not liable (in their capacity as
shareholders) for the company’s debts. As shareholders, their only
obligation is to pay the company any amount unpaid on their
shares if they are called upon to do so. However, particularly if a
shareholder is also a director, this limitation may be affected by
other laws and the commercial practices discussed in 1.3 and 1.4.
[section 516]
1.3 Director’s liability for company’s debts
A director of a company may be liable for debts incurred by the
company at a time when the company itself is unable to pay those
debts as they fall due.
A director of a company may be liable to compensate the company
for any losses the company suffers from a breach of certain of the
director’s duties to the company (see 5.3).
In addition to having liability for the company’s debts or to pay
compensation to the company, a director may also be subject to a
civil penalty.
If a company holds property on trust, a director of the company
may be liable in some circumstances for liabilities incurred by the
company as trustee.
[sections 197, 344, 588G, 588J, 588M, 1317H]
1.4 Director’s liability as guarantor/security over personal assets
As a matter of commercial practice, a bank, trade creditor or
anyone else providing finance or credit to a company may ask a
director of the company:
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• for a personal guarantee of the company’s liabilities; and
• for some form of security over their house or personal
assets to secure the performance by the company of its
obligations.
The director of a company may, for example, be asked by a bank to
give a mortgage over their house to secure the company’s
repayment of a loan. If the company does not repay the loan as
agreed with the bank, the director may lose the house.
1.5 Continuous existence
A company continues to exist even if 1 or more of its shareholders
or directors sells their shares, dies or leaves the company. If a
company has only 1 shareholder who is also the only director of
the company and that person dies, their personal representative is
able to ensure that the company continues to operate.
[sections 119, 224A]
1.6 Rules for the internal management of a company
The Corporations Act contains a basic set of rules for the internal
management of a company (appointments, meetings etc.).
Some of these rules are mandatory for all companies. There are a
few special rules for single shareholder/single director companies.
Other internal management rules in the Corporations Act are
replaceable rules. The replaceable rules do not apply to:
• a single shareholder/single director company; or
• a company that had a constitution before the introduction
of the replaceable rules regime and has not repealed it.
A company does not need to have a separate constitution of its
own; it can simply take advantage of the rules in the Corporations
Act. The company will need a constitution only if it wants to
displace, modify or add to the replaceable rules.
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[sections 134-141 and 198E]
1.7 How a company acts
A company does not have a physical existence. It must act through
other people.
Individual directors, the company secretary, company employees
or agents may be authorised to enter into contracts that bind the
company (see 7).
In some circumstances, a company will be bound by something
done by another person (see 1.8).
1.8 Directors
The directors of a company are responsible for managing the
company’s business. It is a replaceable rule (see 1.6) that generally
the directors may exercise all the powers of the company except a
power that the Corporations Act, a replaceable rule or a provision
of the company’s constitution (if any) requires the company to
exercise in general meeting.
The only director of a company who is also the only shareholder is
responsible for managing the company’s business and may
exercise all of the company’s powers.
The Corporations Act sets out rules dealing with the calling and
conduct of directors’ meetings. Directors must keep a written
record (minutes) of their resolutions and meetings.
There are 2 ways that directors may pass resolutions:
• at a meeting; or
• by having all of the directors record and sign their
decision.
If a company has only 1 director, the sole director may also pass a
resolution by recording and signing their decision.
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[sections 198A, 198E, 202C, subsection 202F(1), sections 248A-248G, 251A]
1.9 Shareholders
The shareholders of a company own the company, but the
company has a separate legal existence and the company’s assets
belong to the company.
Shareholders can make decisions about the company by passing a
resolution, usually at a meeting. A “special resolution” usually
involves more important questions affecting the company as a
whole or the rights of some or all of its shareholders.
There are 2 ways that shareholders may pass a resolution:
• at a meeting; or
• by having all of the shareholders record and sign their
decision.
If a meeting is held, an ordinary resolution must be passed by a
majority of the votes cast by shareholders of the company entitled
to vote on the resolution at the meeting in person or by proxy (if
proxies are allowed). A special resolution must be passed by at
least 75% of the votes cast by shareholders of the company entitled
to vote on the resolution and who vote at the meeting in person or
by proxy (if proxies are allowed).
The sole shareholder of a company may pass a resolution by
recording and signing their decision.
A company must keep a written record (minutes) of the members’
resolutions and meetings.
[sections 9 (special resolution), 249A, 249B, 249L, 251A]
1.10 What others can assume about the company
Anyone who does any business with the company is entitled to
assume that the company has a legal right to conduct that business
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unless the person knows, or suspects, otherwise. For example, an
outsider dealing with the company is entitled to assume:
• that a person who is shown in a notice lodged with ASIC
as being the director or company secretary of a company
has been properly appointed and is authorised to act for the
company; and
• that a person who is held out by the company to be a
director, company secretary or agent of the company has
been properly appointed and is authorised to act for the
company.
[sections 128—130]
2 The company structure for small business
2.1 Proprietary company for small business
Generally, a proprietary company limited by shares is the most
suitable company for use by small business. Such a proprietary
company must have a least 1 shareholder but no more than 50
shareholders (not counting employee shareholders). It may have 1
or more directors.
[sections 112—113]
3 Setting up a new company
The operators of small businesses can either buy “shelf” companies
or set up new companies themselves.
3.1 “Shelf” companies
The operator of a small business may find it more convenient to
buy a “shelf” company (a company that has already been registered
but has not traded) from businesses which set up companies for
this purpose or from some legal or accounting firms.
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3.2 Setting up a company
To set up a new company themselves, the operator must apply to
ASIC for registration of the company.
A proprietary company limited by shares must have at least 1
shareholder.
To obtain registration, a person must lodge a properly completed
application form with ASIC. The form must set out certain
information including details of every person who has consented to
be a shareholder, director or company secretary of the company.
The company comes into existence when ASIC registers it.
[sections 117—119, 135—136, 140]
3.3 ACN and name
When a company is registered, ASIC allocates to it a unique 9 digit
number called the Australian Company Number (ACN). (For use
of the ACN see 4.1).
In practice, a new company must have a name that is different from
the name of a company that is already registered. A proprietary
company limited by shares must have the words “Proprietary
Limited” as part of its name. Those words can be abbreviated to
“Pty Ltd”.
A proprietary company may adopt its ACN as its name. If it does
so, its name must also contain the words “Australian Company
Number” (which can be abbreviated to “ACN”). For example, the
company’s name might be “ACN 123 456 789 Pty Ltd”.
[sections 119, 147—161]
3.4 Contracts entered into before the company is registered
A company can ratify a contract entered into by someone on its
behalf or for its benefit before it was registered. If the company
does not ratify the contract, the person who entered into the
contract may be personally liable.
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[sections 131—133]
3.5 First shareholders, directors and company secretary
A person listed with their consent as a shareholder, director or
company secretary in the application for registration of the
company becomes a shareholder, director or company secretary of
the company on its registration.
The same person may be both a director of the company and the
company secretary.
See 5.1 and 5.2 for directors and 5.4 for company secretaries. See
6.1 for shareholders.
[section 120]
3.6 Issuing shares
It is a replaceable rule (see 1.6) that, before issuing new shares, a
company must first offer them to the existing shareholders in the
proportions that the shareholders already hold. A company may
issue shares at a price it determines.
[sections 254B, 254D]
3.7 Registered office
A company must have a registered office in Australia and must
inform ASIC of the location of the office. A post office box cannot
be the registered office of a company. The purpose of the
registered office is to have a place where all communications and
notices to the company may be sent.
If the company does not occupy the premises where its registered
office is located, the occupier of the premises must agree in writing
to having the company’s registered office located there.
A proprietary company is not required to open its registered office
to the public but this does not affect its obligation to make
documents available for inspection.
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The company must notify ASIC of any change of address of its
registered office.
[sections 100, 142, 143, 173, 1300]
3.8 Principal place of business
If a company has a principal place of business that is different from
its registered office, it must notify ASIC of the address of its
principal place of business and of any changes to that address.
[sections 117, 146]
3.9 Registers kept by the company
A company must keep registers, including a register of
shareholders. A company must keep its registers at:
• the company’s registered office; or
• the company’s principal place of business; or
• a place (whether on premises of the company or of
someone else) where the work in maintaining the register
is done; or
• another place approved by ASIC.
A register may be kept either in a bound or looseleaf book or on
computer.
If a register is kept on computer, its contents must be capable of
being printed out in hard copy.
[sections 172, 1300, 1301, 1306]
3.10 Register of shareholders
A company must keep in its register of shareholders such
information as:
• the names and addresses of its shareholders; and
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• details of shares held by individual shareholders.
[sections 168—169]
4 Continuing obligations after the company is set up
The Corporations Act and other laws impose obligations on
companies themselves and on their directors and company
secretaries. Some of the more important obligations imposed under
the Corporations Act are discussed below.
4.1 Use of company name and ACN
The name of a company must be shown at all the company’s
business premises (including its registered office) that are open to
the public. The company’s name and its ACN or ABN (if the last 9
digits are the same, and in the same order, as the last 9 digits of its
ACN) must appear:
• on some of its public documents; and
• on its cheques and negotiable instruments; and
• on all documents lodged with ASIC; and
• if it has one, on its common seal.
[sections 123, 144, 147—156, ASIC Practice Note 47]
4.2 Extract of particulars
Each year, ASIC issues each company with an extract of
particulars within 2 weeks of the company’s review date (which is
generally the anniversary of the company’s registration). The
extract includes details recorded on ASIC’s database such as:
• names and addresses of each director and company
secretary;
• issued shares and options granted;
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• details of its shareholders;
• address of its registered office;
• address of its principal place of business.
If any of the details are not correct as at the date the extract is
received, the company must correct those details.
The correction may be lodged with ASIC on a printed form or, if
an agreement is in place to lodge electronically, in accordance with
the agreement.
[Sections 346A and 346C, 352]
4.3 Review fee
A company must pay a review fee to ASIC each year.
[Corporations (Review Fees) Act 2003]
4.4 Notification to ASIC of changes
The company must notify ASIC if certain basic changes to the
company occur. The following table sets out these notification
requirements.
Notification requirements
If... the company must
notify ASIC of the
change...
see section...
1 a company issues shares within 28 days after the
issue
254X
2 a company changes the location
of a register
within 7 days after the
change
172
3 a company changes the address of
its registered office or principal
place of business
within 28 days after the
change
142, 146
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Notification requirements
If... the company must
notify ASIC of the
change...
see section...
4 a company changes its directors
or company secretary
within 28 days after the
change (unless the
director or company
secretary has notified
ASIC of the change)
205B
5 there is a change in the name or
address of the company’s
directors or secretary
within 28 days after the
change
205B
7 a company has a new ultimate
holding company, or details about
the ultimate holding company
change
within 28 days after the
change happens
349A
8 any of the changes in items 1 to 7
means that:
(a) the company must add or alter
particulars in its member
register kept under
section 169; or
(b) the company must add or alter
particulars in its member
register kept under
section 169, and as a result,
details about the number and
class of shares on issue, or the
amount paid and unpaid on
the shares, alter.
within the time
determined under the
table in section 178D
178A
178C
5 Company directors and company secretaries
5.1 Who can be a director
Only an individual who is at least 18 years old can be a director. If
a company has only 1 director, they must ordinarily reside in
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Australia. If a company has more than 1 director, at least 1 of the
directors must ordinarily reside in Australia.
A director must consent in writing to holding the position of
director. The company must keep the consent and must notify
ASIC of the appointment.
In some circumstances, the Corporations Act imposes the duties
and obligations of a director on a person who, although not
formally appointed as a director of a company, nevertheless acts as
a director or gives instructions to the formally appointed directors
as to how they should act.
The Court or ASIC may prohibit a person from being a director or
from otherwise being involved in the management of a company if,
for example, the person has breached the Corporations Act.
A person needs the Court’s permission to be a director if the person
has been convicted of certain offences or is, in some
circumstances, unable to pay their debts as they fall due.
Generally, a director may resign by giving notice of the resignation
to the company. A director who resigns may notify ASIC of the
resignation. If the director does not do so, the company must notify
ASIC of the director’s resignation.
[sections 9, 201A, 201B, 201D, 205A, 205B and 206A-206G, 228-230 and 242 and subsection 1317EA(3)]
5.2 Appointment of new directors
It is a replaceable rule (see 1.6) that shareholders may appoint
directors by resolution at a general meeting.
[section 201G]
5.3 Duties and liabilities of directors
In managing the business of a company (see 1.7), each of its
directors is subject to a wide range of duties under the
Corporations Act and other laws. Some of the more important
duties are:
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• to act in good faith
• to act in the best interests of the company
• to avoid conflicts between the interests of the company and
the director’s interests
• to act honestly
• to exercise care and diligence
• to prevent the company trading while it is unable to pay its
debts
• if the company is being wound up—to report to the
liquidator on the affairs of the company
• if the company is being wound up—to help the liquidator
(by, for example, giving to the liquidator any records of the
company that the director has).
A director who fails to perform their duties:
• may be guilty of a criminal offence with a penalty of
$200,000 or imprisonment for up to 5 years, or both; and
• may contravene a civil penalty provision (and the Court
may order the person to pay to the Commonwealth an
amount of up to $200,000); and
• may be personally liable to compensate the company or
others for any loss or damage they suffer; and
• may be prohibited from managing a company.
A director’s obligations may continue even after the company has
been deregistered.
[Sections 180, 181, 182, 183, 184, 475, 530A, 588G, 596, 601AE, 601AH, 1317H]
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5.4 Company secretaries
A company other than a proprietary company must have a
company secretary. However, a proprietary company may choose
to have a company secretary. The directors appoint the company
secretary. A company secretary must be at least 18 years old. If a
company has only 1 company secretary, they must ordinarily reside
in Australia. If a company has more than 1 company secretary, at
least 1 of them must ordinarily reside in Australia.
A company secretary must consent in writing to holding the
position of company secretary. The company must keep the
consent and must notify ASIC of the appointment.
The same person may be both a director of a company and the
company secretary.
Generally, a company secretary may resign by giving written
notice of the resignation to the company. A company secretary
who resigns may notify ASIC of the resignation. If the company
secretary does not do so, the company must notify ASIC of the
company secretary’s resignation.
The company secretary is an officer of the company and, in that
capacity, may be subject to the requirements imposed by the
Corporations Act on company officers.
The company secretary has specific responsibilities under the
Corporations Act, including responsibility for ensuring that the
company:
• notifies ASIC about changes to the identities, names and
addresses of the company’s directors and company
secretaries; and
• notifies ASIC about changes to the register of members;
and
• notifies ASIC about changes to any ultimate holding
company; and
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• responds, if necessary, to an extract of particulars that it
receives and that it responds to any return of particulars
that it receives.
A company secretary’s obligations may continue even after the
company has been deregistered.
[sections 83, 142, 178A, 178C, 188, 204A-204G, 205A, 205B, 346C, 348D, 349A, 601AD, 601AH]
6 Shares and shareholders
A proprietary company limited by shares must have a share capital
and at least 1 shareholder. ASIC may apply to a Court to have a
company wound up if it does not have any shareholders.
[sections 461—462]
6.1 Becoming a shareholder and ceasing to be a shareholder
A person may become a shareholder of a company in several ways,
including the following:
• the person being listed as a shareholder of the company in
the application for registration of the company
• the company issuing shares to the person
• the person buying shares in the company from an existing
shareholder and the company registering the transfer.
Some of the ways in which a person ceases to be a shareholder are:
• the person sells all of their shares in the company and the
company registers the transfer of the shares
• the company buys back all the person’s shares
• ASIC cancels the company’s registration.
[sections 117, 120, 601AA—601AD]
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6.2 Classes of shares
A company may have different classes of shares. The rights and
restrictions attached to the shares in a class distinguish it from
other classes of shares.
[sections 254A—254B]
6.3 Meetings of shareholders
Directors have the power to call meetings of all shareholders or
meetings of only those shareholders who hold a particular class of
shares.
Shareholders who hold at least 5% of the votes which may be cast
at a general meeting of a company have the power to call and hold
a meeting themselves or to require the directors to call and hold a
meeting. Meetings may be held regularly or to resolve specific
questions about the management or business of the company.
The Corporations Act sets out rules dealing with shareholders’
meetings.
A shareholder of a company may ask the company for a copy of
the record of a meeting or of a decision of shareholders taken
without a meeting.
[sections 249A—251B]
6.4 Voting rights
Different rights to vote at meetings of shareholders may attach to
different classes of shares. It is a replaceable rule (see 1.6) that,
subject to those different rights, each shareholder has 1 vote on a
show of hands and, on a poll, 1 vote for each share held.
[sections 250E, 254A—254B]
6.5 Buying and selling shares
A shareholder may sell their shares but only if the sale would not
breach the company’s constitution (if any). It is a replaceable rule
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(see 1.6) that the directors have a discretion to refuse to register a
transfer of shares.
[sections 1091D—1091E]
7 Signing company documents
A company’s power to sign, discharge and otherwise deal with
contracts can be exercised by an individual acting with the
company’s authority and on its behalf. A company can deal with
contracts without using a common seal.
A company may execute a document by having it signed by:
• 2 directors of the company; or
• a director and the company secretary; or
• for a company with a sole director who is also the sole
secretary—that director.
If the document is to have effect as a deed, it should be expressed
to be a deed.
[sections 126—127]
A company is not required to have a common seal. If it does, the
seal must show the company’s name and its ACN or ABN (if the
last 9 digits are the same, and in the same order, as the last 9 digits
of its ACN). The seal is equivalent to the company’s signature and
may be used on important company documents such as mortgages.
[sections 123, 127(2)]
8 Funding the company’s operations
The shareholders may fund the company’s operations by lending
money to the company or by taking up other shares in the
company. Except if it is raising funds from its own employees or
shareholders, a proprietary company must not engage in any
fundraising activity that would require disclosure to investors
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under Chapter 6D (for example, advertising in a newspaper
inviting people to invest in the company).
The company may also borrow money from banks and other
financial organisations.
Anyone who has lent money, or provided credit, to the company
may ask for a security interest in the company’s assets to secure the
performance by the company of its obligations.
[sections 113, 124]
9 Returns to shareholders
Shareholders can take money out of the company in a number of
ways, but only if the company complies with its constitution (if
any), the Corporations Act and all other relevant laws. If a
company pays out money in a way that results in the company
being unable to pay its debts as they fall due, its directors may be
liable:
• to pay compensation; and
• for criminal and civil penalties.
[sections 588G, 1317E, 1317G, 1317H, 1317P]
9.1 Dividends
Dividends are payments to shareholders. They can only be paid if:
• the company’s assets are sufficiently in excess of its
liabilities immediately before the dividend is declared; and
• the payment of the dividend is fair and reasonable to the
company’s shareholders as a whole and does not materially
prejudice the company’s ability to pay its creditors.
It is a replaceable rule (see 1.6) that the directors decide whether
the company should pay a dividend.
[sections 254T, 254U]
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9.2 Buy-back of shares
A company can buy back shares from shareholders.
[sections 257A—257J]
9.4 Distribution of surplus assets on winding up
If a company is wound up and there are any assets left over after all
the company’s debts have been paid, the surplus is distributed to
shareholders in accordance with the rights attaching to their shares.
10 Annual financial reports and audit
10.1 The small/large distinction
The accounting requirements imposed on a proprietary company
under the Corporations Act depend on whether the company is
classified as small or large. A company’s classification can change
from 1 financial year to another as its circumstances change.
A company is classified as small for a financial year if it satisfies at
least 2 of the following tests:
• gross operating revenue of less than $10 million for the
year
• gross assets of less than $5 million at the end of the year
• fewer than 50 employees at the end of the year.
A company that does not satisfy at least 2 of these tests is classified
as large.
[section 45A]
As the great majority of proprietary companies are small under
these tests, the discussion below deals mainly with the accounting
requirements for small proprietary companies.
[sections 286—301]
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10.2 Financial records
Under the Corporations Act, all proprietary companies must keep
sufficient financial records to record and explain their transactions
and financial position and to allow true and fair financial
statements to be prepared and audited. Financial record here
means some kind of systematic record of the company’s financial
transactions—not merely a collection of receipts, invoices, bank
statements and cheque butts. Financial records may be kept on
computer.
[sections 286—289]
10.3 Preparing annual financial reports and directors’ reports
The Corporations Act requires a small proprietary company to
prepare an annual financial report (an annual profit and loss
statement, a balance sheet and a statement of cash flows) and a
directors’ report (about the company’s operations, dividends paid
or recommended, options issued etc.) if:
• the shareholders with at least 5% of the votes in the
company direct it to do so; or
• ASIC directs it to do so.
Unless the shareholders’ direction specifies otherwise, the
company must prepare the annual financial report in accordance
with the applicable accounting standards.
Although the Corporations Act itself may not require a small
proprietary company to prepare a financial report except in the
circumstances mentioned, the company may need to prepare the
annual financial reports for the purposes of other laws (for
example, income tax laws). Moreover, good business practice may
also make it advisable for the company to prepare the financial
reports so that it can monitor and better manage its financial
position.
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Large proprietary companies must prepare annual financial reports
and a directors’ report, have the financial report audited and send
both reports to shareholders. They must also lodge the annual
financial reports with ASIC unless exempted.
[sections 286—301, 319—320]
11 Disagreements within the company
11.1 Special problems faced by minority shareholders
There are remedies available to a shareholder of a company if:
• the affairs of the company are being conducted in a way
that is unfair to that shareholder or to other shareholders of
the company; or
• the affairs of the company are being conducted in a way
that is against the interests of the company as a whole.
A Court may, for example, order the winding up of a company or
the appointment of a receiver.
[sections 232-235, 461]
11.2 Buy—back of shares
A company may buy back the shares of a shareholder who wants to
sever their relationship with the company.
[sections 257A—257J]
11.3 Selling shares
A shareholder in a company who wants to sever their relationship
with the company may decide to sell their shares. However, the
shareholder may not be able to sell their shares readily—
particularly if they want to sell their shares to someone who is not
an existing shareholder. Some of the difficulties they may face in
that case are:
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• under the replaceable rules the directors have a discretion
to refuse to transfer the shares; and
• restrictions in the company’s constitution (if any) on
transferring shares.
[sections 707, 1041H, 1091D-1091E]
12 Companies in financial trouble
12.1 Voluntary administration
If a company experiences financial problems, the directors may
appoint an administrator to take over the operations of the
company to see if the company’s creditors and the company can
work out a solution to the company’s problems.
If the company’s creditors and the company cannot agree, the
company may be wound up (see 12.3).
[Part 5.3A]
12.2 Receivers
A receiver, or receiver and manager, may be appointed by order of
a Court or under an agreement with a secured creditor to take over
some or all of the assets of a company. Generally this would occur
if the company is in financial difficulty. A receiver may be
appointed, for example, because an amount owed to a secured
creditor is overdue.
[Part 5.2]
12.3 Winding up and distribution
A company may be wound up by order of a Court, or voluntarily if
the shareholders of the company pass a special resolution to do so.
A liquidator is appointed:
• when a Court orders a company to be wound up; or
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• the shareholders of a company pass a resolution to wind up
the company.
[Parts 5.4, 5.4B, 5.5].
12.4 Liquidators
A liquidator is appointed to administer the winding up of a
company. The liquidator’s main functions are:
• to take possession of the company’s assets; and
• to determine debts owed by the company and pay the
company’s creditors; and
• to distribute to shareholders any assets of the company left
over after paying creditors (any distribution to shareholders
is made according to the rights attaching to their shares);
and
• finally, to have the company deregistered.
[Parts 5.4B, 5.6]
12.5 Order of payment of debts
Generally, creditors who hold security interests in company assets
are paid first.
[Division 6 of Part 5.6]
12.6 Cancellation of registration
If a company has ceased trading or has been wound up, it remains
on the register until ASIC cancels the company’s registration. Once
a company is deregistered, it ceases to exist.
[sections 601AA—601AB, 601AH]
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Corporations Act 2001 185
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Part 1.6—Interaction with Australian Charities and
Not-for-profits Commission Act 2012
111K Bodies corporate registered under the Australian Charities and
Not-for-profits Commission Act 2012
This Part applies to a body corporate that:
(a) is registered under the Australian Charities and
Not-for-profits Commission Act 2012; and
(b) is none of the following:
(i) a Commonwealth company for the purposes of the
Public Governance, Performance and Accountability
Act 2013;
(ii) a subsidiary of a Commonwealth company for the
purposes of that Act;
(iii) a subsidiary of a corporate Commonwealth entity for the
purposes of that Act.
111L Provisions not applicable to the body corporate
(1) A provision of this Act mentioned in the following table does not
apply to the body corporate, subject to any conditions prescribed
by the regulations for the purposes of this subsection in relation to
the provision:
Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1
Provision(s)
Column 2
Topic
1 subsection 136(5) Public company must lodge with
ASIC a copy of a special resolution
adopting, modifying or repealing its
constitution
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Section 111L
186 Corporations Act 2001
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Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1
Provision(s)
Column 2
Topic
2 section 138 ASIC may direct company to lodge
consolidated constitution
3 section 139 Company must send copy of
constitution to member
4 subsection 142(2), section 146 and
subsection 146A(2)
Company must notify ASIC of
changes of address
5 (a) sections 180 to 183; and
(b) section 185, to the extent that it
relates to sections 180 to 183
Duties of directors etc.
6 section 188, to the extent it relates to
a provision mentioned in another
item of this table
Responsibility of secretaries and
directors for certain contraventions
7 sections 191 to 194 Interests of directors
8 (a) sections 201L and 205A to 205C;
and
(b) section 205D, to the extent it
relates to section 205B; and
(c) section 205E
Public information about directors
etc.
9 (a) Part 2G.2 (other than
sections 250PAA and 250PAB);
and
(b) Part 2G.3, to the extent that it
relates to meetings of the body
corporate’s members
Meetings of members
10 (a) Parts 2M.1 and 2M.2; and
(b) Part 2M.3
Financial reports and audit
11 Chapter 2N Updating ASIC information about
companies and registered schemes
12 sections 601CDA, 601CK and
601CTA
Foreign companies
13 subsection 601CT(3), Registered body must notify ASIC
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Corporations Act 2001 187
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Provisions of this Act that do not apply to bodies corporate registered under the
ACNC Act
Item Column 1
Provision(s)
Column 2
Topic
section 601CV and
subsections 601DH(1) and (1A)
of certain changes
(2) Regulations made for the purposes of subsection (1) may be
indefinite or limited to a specified period.
Reporting by debenture issuers
(3) Item 10 of the table in subsection (1) does not apply in relation to a
financial year if the body corporate was a borrower in relation to
debentures at the end of the year.
Prescribed provisions
(4) A provision of this Act prescribed by the regulations for the
purposes of this subsection does not apply to the body corporate.
(5) Regulations made for the purposes of subsection (4) may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period; and
(c) specify a provision even if the provision is mentioned in
another section of this Part.
111M Member approval
(1) This section applies if:
(a) a provision of this Act provides that one or more conditions
must be satisfied for there to be member approval (however
described) in relation to the body corporate; and
Example:Division 3 of Part 2E.1.
(b) the governance standards (within the meaning of the
Australian Charities and Not-for-profits Commission Act
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188 Corporations Act 2001
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2012) provide that one or more conditions must be satisfied
for there to be such member approval.
(2) Paragraph (1)(a) does not apply to a condition that a person give to
another person particular information that relates to the matter that
is the subject of the member approval.
Example: Paragraph 218(1)(b).
(3) The provision mentioned in paragraph (1)(a) has effect, in relation
to the body corporate, as if it, instead of providing for the
conditions mentioned in that paragraph, provided for the conditions
mentioned in paragraph (1)(b).
111N Notices
Notice of change of address
(1) For the purposes of subsection 142(3), the body corporate is treated
as having lodged with ASIC on a day a notice that the address of
its registered office has changed to a new address, if, on that day,
the body corporate notifies the Commissioner of the ACNC, in
accordance with the Australian Charities and Not-for-profits
Commission Act 2012, that the body corporate’s address for service
has changed to that new address.
(2) The Commissioner must give a copy of the notice to ASIC.
Notice of change of name—registered Australian bodies and
registered foreign companies
(3) For the purpose of subsection 601DH(2), the body corporate is
treated as having given ASIC on a day written notice of a change
to its name if, on that day, the body corporate gives the
Commissioner of the ACNC, in accordance with the Australian
Charities and Not-for-profits Commission Act 2012, notice of the
change.
(4) The Commissioner must give a copy of the notice to ASIC.
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111P Annual general meetings
(1) An order made under section 250PAA applies to a requirement in
the governance standards (within the meaning of the Australian
Charities and Not-for-profits Commission Act 2012) for the
holding of an annual general meeting in the same way as the order
applies to the requirement in section 250N.
(2) An exemption under section 250PAB applies to a provision of the
governance standards (within the meaning of the Australian
Charities and Not-for-profits Commission Act 2012) that requires
the holding of an annual general meeting in the same way as the
exemption applies to section 250N.
111Q Presumptions to be made in recovery proceedings
(1) Paragraph 588E(4)(a) and subsection 588E(5) apply to the body
corporate as if the references in those provisions to
subsection 286(1) were references to subsections 55-5(1) to (3) of
the Australian Charities and Not-for-profits Commission Act 2012.
(2) Paragraph 588E(4)(b) and subsection 588E(6) apply to the body
corporate as if the references in those provisions to
subsection 286(2) were references to subsections 55-5(4) and (5) of
the Australian Charities and Not-for-profits Commission Act 2012.
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Chapter 2A Registering a company
Part 2A.1 What companies can be registered
Section 112
190 Corporations Act 2001
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Chapter 2A—Registering a company
Part 2A.1—What companies can be registered
112 Types of companies
Types of companies
(1) The following types of companies can be registered under this Act:
Proprietary companies Limited by shares
Unlimited with share capital
Public companies Limited by shares
Limited by guarantee
Unlimited with share capital
No liability company
Note: Other types of companies that were previously allowed continue to
exist under the Part 10.1 transitionals.
No liability companies
(2) A company may be registered as a no liability company only if:
(a) the company has a share capital; and
(b) the company’s constitution states that its sole objects are
mining purposes; and
(c) the company has no contractual right under its constitution to
recover calls made on its shares from a shareholder who fails
to pay them.
Note 1: Section 9 defines mining purposes and minerals.
Note 2: Special provisions on no liability companies are found in the
provisions referred to in the following table:
No liability company provisions
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Section 113
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item topic provisions
1 names 148, 156, 162
2 terms of issue of shares 254B
3 liability on partly-paid shares 254M
4 calls 254P-254R
5 winding up 477-478, 483, 514
6 registering a body as a company 601BA
7 transitional the Part 10.1
transitionals
(3) A no liability company must not engage in activities that are
outside its mining purposes objects.
(4) The directors of a no liability company must not:
(a) let the whole or proportion of a mine or claim on tribute; or
(b) make any contract for working any land on tribute;
unless:
(c) the letting or contract is approved by a special resolution; or
(d) no such letting or contract has been made within the period
of 2 years immediately preceding the proposed letting or
contract.
(5) An act or transaction is not invalid merely because of a
contravention of subsection (3) or (4).
113 Proprietary companies
(1) A company must have no more than 50 non—employee
shareholders if it is to:
(a) be registered as a proprietary company; or
(b) change to a proprietary company; or
(c) remain registered as a proprietary company.
Note: Proprietary companies have different financial reporting obligations
depending on whether they are small proprietary companies or large
proprietary companies (see section 45A and Part 2M.3).
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192 Corporations Act 2001
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(2) In applying subsection (1):
(a) count joint holders of a particular parcel of shares as 1
person; and
(b) an employee shareholder is:
(i) a shareholder who is an employee of the company or of
a subsidiary of the company; or
(ii) a shareholder who was an employee of the company, or
of a subsidiary of the company, when they became a
shareholder.
(3) A proprietary company must not engage in any activity that would
require disclosure to investors under Chapter 6D, except for an
offer of its shares to:
(a) existing shareholders of the company; or
(b) employees of the company or of a subsidiary of the company.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) An act or transaction is not invalid merely because of a
contravention of subsection (3).
Note: If a proprietary company contravenes this section, ASIC may require
it to change to a public company (see section 165).
114 Minimum of 1 member
A company needs to have at least 1 member.
115 Restrictions on size of partnerships and associations
(1) A person must not participate in the formation of a partnership or
association that:
(a) has as an object gain for itself or for any of its members; and
(b) has more than 20 members;
unless the partnership or association is incorporated or formed
under an Australian law.
Note: For the effect of a contravention of this section, see section 103.
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Section 116
Corporations Act 2001 193
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(2) The regulations may specify a higher number that is higher than
the number specified in paragraph (1)(b) for the purposes of the
application of that paragraph to a particular kind of partnership or
association.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
116 Trade unions cannot be registered
A trade union cannot be registered under this Act.
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Part 2A.2 How a company is registered
Section 117
194 Corporations Act 2001
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Part 2A.2—How a company is registered
117 Applying for registration
Lodging application
(1) To register a company, a person must lodge an application with
ASIC.
Note: For the types of companies that can be registered, see section 112.
Contents of the application
(2) The application must state the following:
(a) the type of company that is proposed to be registered under
this Act;
(b) the company’s proposed name (unless the ACN is to be used
in its name);
(c) the name and address of each person who consents to become
a member;
(d) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a director;
(e) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a company secretary;
(f) the address of each person who consents in writing to
become a director or company secretary;
(g) the address of the company’s proposed registered office;
(h) for a public company—the proposed opening hours of its
registered office (if they are not the standard opening hours);
(j) the address of the company’s proposed principal place of
business (if it is not the address of the proposed registered
office);
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Section 117
Corporations Act 2001 195
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(k) for a company limited by shares or an unlimited company—
the following:
(i) the number and class of shares each member agrees in
writing to take up;
(ii) the amount (if any) each member agrees in writing to
pay for each share;
(iia) whether the shares each member agrees in writing to
take up will be fully paid on registration;
(iii) if that amount is not to be paid in full on registration—
the amount (if any) each member agrees in writing to be
unpaid on each share;
(iv) whether or not the shares each member agrees in writing
to take up will be beneficially owned by the member on
registration;
(l) for a public company that is limited by shares or is an
unlimited company, if shares will be issued for non-cash
consideration—the prescribed particulars about the issue of
the shares, unless the shares will be issued under a written
contract and a copy of the contract is lodged with the
application;
(m) for a company limited by guarantee—the proposed amount of
the guarantee that each member agrees to in writing;
(ma) whether or not, on registration, the company will have an
ultimate holding company;
(mb) if, on registration, the company will have an ultimate holding
company—the following:
(i) the name of the ultimate holding company;
(ii) if the ultimate holding company is registered in
Australia—its ABN, ACN or ARBN;
(iii) if the ultimate holding company is not registered in
Australia—the place at which it was incorporated or
formed;
(n) the State or Territory in this jurisdiction in which the
company is to be taken to be registered.
Note 1: Paragraph (b)—sections 147 and 152 deal with the availability and
reservation of names.
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196 Corporations Act 2001
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Note 2: Paragraph (f)—the address that must be stated is usually the
residential address, although an alternative address can sometimes be
stated instead (see section 205D).
Note 3: Paragraph (g)—if the company is not to be the occupier of premises at
the address of its registered office, the application must state that the
occupier has consented to the address being specified in the
application and has not withdrawn that consent (see section 100).
Note 4: Paragraph (h)—for standard opening hours, see section 9.
(3) If the company is to be a public company and is to have a
constitution on registration, a copy of the constitution must be
lodged with the application.
(4) The application must be in the prescribed form.
(5) An applicant must have the consents and agreements referred to in
subsection (2) when the application is lodged. After the company is
registered, the applicant must give the consents and agreements to
the company. The company must keep the consents and
agreements.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
118 ASIC gives company ACN, registers company and issues
certificate
Registration
(1) If an application is lodged under section 117, ASIC may:
(a) give the company an ACN; and
(b) register the company; and
(c) issue a certificate that states:
(i) the company’s name; and
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under this
Act; and
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Section 119
Corporations Act 2001 197
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(v) the State or Territory in this jurisdiction in which the
company is taken to be registered; and
(vi) the date of registration.
Note: For the evidentiary value of a certificate of registration, see
subsection 1274(7A).
ASIC must keep record of registration
(2) ASIC must keep a record of the registration. Subsections 1274(2)
and (5) apply to the record as if it were a document lodged with
ASIC.
119 Company comes into existence on registration
A company comes into existence as a body corporate at the
beginning of the day on which it is registered. The company’s
name is the name specified in the certificate of registration.
Note: The company remains in existence until it is deregistered (see
Chapter 5A).
119A Jurisdiction of incorporation and jurisdiction of registration
Jurisdiction in which company incorporated
(1) A company is incorporated in this jurisdiction.
Jurisdiction of registration
(2) A company is taken to be registered in:
(a) the State or Territory specified:
(i) in the application for the company’s registration under
paragraph 117(2)(n) (registration of company under this
Part); or
(ii) in the application for the company’s registration under
paragraph 601BC(2)(o) (registration of registrable body
as company under Part 5B.1); or
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Section 120
198 Corporations Act 2001
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(b) the State or Territory in which the company is taken to be
registered under paragraph 5H(4)(b) (registration of body as
company on basis of State or Territory law).
This subsection has effect subject to subsection (3).
Note 1: ASIC must specify the State or Territory in which the company is
taken to be registered in the company’s certificate of registration (see
paragraph 118(1)(c)(v) and 601BD(1)(c)(v)).
Note 2: The company’s legal capacity and powers do not depend in any way
on the particular State or Territory it is taken to be registered in (see
section 124).
Note 3: A law of a State or Territory may impose obligations, or confer rights
or powers, on a person by reference to the State or Territory in which
a company is taken to be registered for the purposes of this Act. For
example, a State or Territory law dealing with stamp duty on share
transfers might impose duty on transfers of shares in companies that
are taken to be registered in that State or Territory for the purposes of
this Act.
(3) The State or Territory in which a company is taken to be registered
changes to the State or Territory in this jurisdiction nominated by
the company if:
(a) either:
(i) the relevant Minister of the State or Territory in which
the company is taken to be registered before the change
approves the change; or
(ii) the State in which the company is taken to be registered
ceases to be a referring State; and
(b) the procedural requirements specified in the regulations are
satisfied.
(4) A company continues to be registered under this Act even if the
State in which the company is taken to be registered ceases to be a
referring State.
120 Members, directors and company secretary of a company
(1) A person becomes a member, director or company secretary of a
company on registration if the person is specified in the application
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Section 121
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with their consent as a proposed member, director or company
secretary of the company.
(2) The shares to be taken up by the members as specified in the
application are taken to be issued to the members on registration of
the company.
Note: A member’s name must be entered in the register of members (see
section 169).
121 Registered office
The address specified in the application for registration for the
company’s proposed registered office becomes the address of the
company’s registered office on registration.
122 Expenses incurred in promoting and setting up company
The expenses incurred before registration in promoting and setting
up a company may be paid out of the company’s assets.
123 Company may have common seal
(1) A company may have a common seal. If a company does have a
common seal, the company must set out on it:
(a) for a company that has its ACN in its name—the company’s
name; or
(b) otherwise—the company’s name and either:
(i) the expression “Australian Company Number” and the
company’s ACN; or
(ii) if the last 9 digits of the company’s ABN are the same,
and in the same order, as the last 9 digits of its ACN—
the expression “Australian Business Number” and the
company’s ABN.
Note 1: A company may make contracts and execute documents without using
a seal (see sections 126 and 127).
Note 2: For abbreviations that can be used on a seal, see section 149.
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200 Corporations Act 2001
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(2) A company may have a duplicate common seal. The duplicate
must be a copy of the common seal with the words “duplicate
seal”, “share seal” or “certificate seal” added.
(3) A person must not use, or authorise the use of, a seal that purports
to be the common seal of a company or a duplicate if the seal does
not comply with the requirements set out in subsection (1) or (2).
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Company powers and how they are exercised Part 2B.1
Section 124
Corporations Act 2001 201
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Chapter 2B—Basic features of a company
Part 2B.1—Company powers and how they are
exercised
124 Legal capacity and powers of a company
(1) A company has the legal capacity and powers of an individual both
in and outside this jurisdiction. A company also has all the powers
of a body corporate, including the power to:
(a) issue and cancel shares in the company;
(b) issue debentures (despite any rule of law or equity to the
contrary, this power includes a power to issue debentures that
are irredeemable, redeemable only if a contingency, however
remote, occurs, or redeemable only at the end of a period,
however long);
(c) grant options over unissued shares in the company;
(d) distribute any of the company’s property among the
members, in kind or otherwise;
(e) grant a security interest in uncalled capital;
(f) grant a circulating security interest over the company’s
property;
(g) arrange for the company to be registered or recognised as a
body corporate in any place outside this jurisdiction;
(h) do anything that it is authorised to do by any other law
(including a law of a foreign country).
A company limited by guarantee does not have the power to issue
shares.
Note: For a company’s power to issue bonus, partly—paid, preference and
redeemable preference shares, see section 254A.
(2) A company’s legal capacity to do something is not affected by the
fact that the company’s interests are not, or would not be, served
by doing it.
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Part 2B.1 Company powers and how they are exercised
Section 125
202 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) For the avoidance of doubt, this section does not:
(a) authorise a company to do an act that is prohibited by a law
of a State or Territory; or
(b) give a company a right that a law of a State or Territory
denies to the company.
125 Constitution may limit powers and set out objects
(1) If a company has a constitution, it may contain an express
restriction on, or a prohibition of, the company’s exercise of any of
its powers. The exercise of a power by the company is not invalid
merely because it is contrary to an express restriction or prohibition
in the company’s constitution.
(2) If a company has a constitution, it may set out the company’s
objects. An act of the company is not invalid merely because it is
contrary to or beyond any objects in the company’s constitution.
126 Agent exercising a company’s power to make contracts
(1) A company’s power to make, vary, ratify or discharge a contract
may be exercised by an individual acting with the company’s
express or implied authority and on behalf of the company. The
power may be exercised without using a common seal.
(2) This section does not affect the operation of a law that requires a
particular procedure to be complied with in relation to the contract.
127 Execution of documents (including deeds) by the company itself
(1) A company may execute a document without using a common seal
if the document is signed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director who is also
the sole company secretary—that director.
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Company powers and how they are exercised Part 2B.1
Section 127
Corporations Act 2001 203
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Note: If a company executes a document in this way, people will be able to
rely on the assumptions in subsection 129(5) for dealings in relation to
the company.
(2) A company with a common seal may execute a document if the
seal is fixed to the document and the fixing of the seal is witnessed
by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director who is also
the sole company secretary—that director.
Note: If a company executes a document in this way, people will be able to
rely on the assumptions in subsection 129(6) for dealings in relation to
the company.
(3) A company may execute a document as a deed if the document is
expressed to be executed as a deed and is executed in accordance
with subsection (1) or (2).
(4) This section does not limit the ways in which a company may
execute a document (including a deed).
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Chapter 2B Basic features of a company
Part 2B.2 Assumptions people dealing with companies are entitled to make
Section 128
204 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2B.2—Assumptions people dealing with
companies are entitled to make
128 Entitlement to make assumptions
(1) A person is entitled to make the assumptions in section 129 in
relation to dealings with a company. The company is not entitled to
assert in proceedings in relation to the dealings that any of the
assumptions are incorrect.
(2) A person is entitled to make the assumptions in section 129 in
relation to dealings with another person who has, or purports to
have, directly or indirectly acquired title to property from a
company. The company and the other person are not entitled to
assert in proceedings in relation to the dealings that any of the
assumptions are incorrect.
(3) The assumptions may be made even if an officer or agent of the
company acts fraudulently, or forges a document, in connection
with the dealings.
(4) A person is not entitled to make an assumption in section 129 if at
the time of the dealings they knew or suspected that the assumption
was incorrect.
129 Assumptions that can be made under section 128
Constitution and replaceable rules complied with
(1) A person may assume that the company’s constitution (if any), and
any provisions of this Act that apply to the company as replaceable
rules, have been complied with.
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Assumptions people dealing with companies are entitled to make Part 2B.2
Section 129
Corporations Act 2001 205
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Director or company secretary
(2) A person may assume that anyone who appears, from information
provided by the company that is available to the public from ASIC,
to be a director or a company secretary of the company:
(a) has been duly appointed; and
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by a director or company
secretary of a similar company.
Officer or agent
(3) A person may assume that anyone who is held out by the company
to be an officer or agent of the company:
(a) has been duly appointed; and
(b) has authority to exercise the powers and perform the duties
customarily exercised or performed by that kind of officer or
agent of a similar company.
Proper performance of duties
(4) A person may assume that the officers and agents of the company
properly perform their duties to the company.
Document duly executed without seal
(5) A person may assume that a document has been duly executed by
the company if the document appears to have been signed in
accordance with subsection 127(1). For the purposes of making the
assumption, a person may also assume that anyone who signs the
document and states next to their signature that they are the sole
director and sole company secretary of the company occupies both
offices.
Document duly executed with seal
(6) A person may assume that a document has been duly executed by
the company if:
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Part 2B.2 Assumptions people dealing with companies are entitled to make
Section 130
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the company’s common seal appears to have been fixed to
the document in accordance with subsection 127(2); and
(b) the fixing of the common seal appears to have been
witnessed in accordance with that subsection.
For the purposes of making the assumption, a person may also
assume that anyone who witnesses the fixing of the common seal
and states next to their signature that they are the sole director and
sole company secretary of the company occupies both offices.
Officer or agent with authority to warrant that document is
genuine or true copy
(7) A person may assume that an officer or agent of the company who
has authority to issue a document or a certified copy of a document
on its behalf also has authority to warrant that the document is
genuine or is a true copy.
(8) Without limiting the generality of this section, the assumptions that
may be made under this section apply for the purposes of this
section.
130 Information available to the public from ASIC does not
constitute constructive notice
A person is not taken to have information about a company merely
because the information is available to the public from ASIC.
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Contracts before registration Part 2B.3
Section 131
Corporations Act 2001 207
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Part 2B.3—Contracts before registration
131 Contracts before registration
(1) If a person enters into, or purports to enter into, a contract on
behalf of, or for the benefit of, a company before it is registered,
the company becomes bound by the contract and entitled to its
benefit if the company, or a company that is reasonably identifiable
with it, is registered and ratifies the contract:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the
contract is entered into.
(2) The person is liable to pay damages to each other party to the
pre-registration contract if the company is not registered, or the
company is registered but does not ratify the contract or enter into
a substitute for it:
(a) within the time agreed to by the parties to the contract; or
(b) if there is no agreed time—within a reasonable time after the
contract is entered into.
The amount that the person is liable to pay to a party is the amount
the company would be liable to pay to the party if the company had
ratified the contract and then did not perform it at all.
(3) If proceedings are brought to recover damages under subsection (2)
because the company is registered but does not ratify the
pre-registration contract or enter into a substitute for it, the court
may do anything that it considers appropriate in the circumstances,
including ordering the company to do 1 or more of the following:
(a) pay all or part of the damages that the person is liable to pay;
(b) transfer property that the company received because of the
contract to a party to the contract;
(c) pay an amount to a party to the contract.
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Part 2B.3 Contracts before registration
Section 132
208 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If the company ratifies the pre—registration contract but fails to
perform all or part of it, the court may order the person to pay all or
part of the damages that the company is ordered to pay.
132 Person may be released from liability but is not entitled to
indemnity
(1) A party to the pre—registration contract may release the person
from all or part of their liability under section 131 to the party by
signing a release.
(2) Despite any rule of law or equity, the person does not have any
right of indemnity against the company in respect of the person’s
liability under this Part. This is so even if the person was acting, or
purporting to act, as trustee for the company.
133 This Part replaces other rights and liabilities
This Part replaces any rights or liabilities anyone would otherwise
have on the pre—registration contract.
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Replaceable rules and constitution Part 2B.4
Section 134
Corporations Act 2001 209
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Part 2B.4—Replaceable rules and constitution
134 Internal management of companies
A company’s internal management may be governed by provisions
of this Act that apply to the company as replaceable rules, by a
constitution or by a combination of both.
Note: There are additional rules about internal management in ordinary
provisions of this Act and also in the common law.
135 Replaceable rules
Companies to which replaceable rules apply
(1) A section or subsection (except subsection 129(1), this section and
sections 140 and 141) whose heading contains the words:
(a) replaceable rule—applies as a replaceable rule to:
(i) each company that is or was registered after 1 July
1998; and
(ii) any company registered before 1 July 1998 that repeals
or repealed its constitution after that day; and
(b) replaceable rule for proprietary companies and mandatory
rule for public companies—applies:
(i) as a replaceable rule to any proprietary company that is
or was registered after 1 July 1998; and
(ii) as a replaceable rule to any company that is or eas
registered after 1 July 1998 and that changes or changed
to a proprietary company (but only while it is a
proprietary company); and
(iii) as a replaceable rule to any proprietary company that is
or was registered before 1 July 1998 that repeals or
repealed its constitution after that day; and
(iv) as an ordinary provision of this Act to any public
company whenever registered.
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Part 2B.4 Replaceable rules and constitution
Section 136
210 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The section or subsection does not apply to a proprietary company
while the same person is both its sole director and sole shareholder.
Note 1: See sections 198E, 201F and 202C for the special provisions that
apply to a proprietary company while the same person is both its sole
director and sole shareholder.
Note 2: A company may include in its constitution (by reference or otherwise)
a replaceable rule that does not otherwise apply to it.
Company’s constitution can displace or modify replaceable rules
(2) A provision of a section or subsection that applies to a company as
a replaceable rule can be displaced or modified by the company’s
constitution.
Failure to comply with replaceable rules
(3) A failure to comply with the replaceable rules as they apply to a
company is not of itself a contravention of this Act (so the
provisions about criminal liability, civil liability and injunctions do
not apply).
Note: Replaceable rules that apply to a company have effect as a contract
(see section 140).
136 Constitution of a company
(1) A company adopts a constitution:
(a) on registration—if each person specified in the application
for the company’s registration as a person who consents to
become a member agrees in writing to the terms of a
constitution before the application is lodged; or
(b) after registration—if the company passes a special resolution
adopting a constitution or a court order is made under
section 233 that requires the company to adopt the
constitution.
Note: The Life Insurance Act 1995 has rules about how benefit fund rules
become part of a company’s constitution and about amending those
rules. They override this Act (see section 1348 of this Act).
Consequential amendments to the rest of the company’s constitution
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Replaceable rules and constitution Part 2B.4
Section 137
Corporations Act 2001 211
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can be made under that Act or this Act (see Subdivision 2 of
Division 4 of Part 2A of that Act).
(2) The company may modify or repeal its constitution, or a provision
of its constitution, by special resolution.
Note: The company may need leave of the Court to modify or repeal its
constitution if it was adopted as the result of a Court order (see
subsection 233(3)).
(3) The company’s constitution may provide that the special resolution
does not have any effect unless a further requirement specified in
the constitution relating to that modification or repeal has been
complied with.
(4) Unless the constitution provides otherwise, the company may
modify or repeal a further requirement described in subsection (3)
only if the further requirement is itself complied with.
(5) A public company must lodge with ASIC a copy of a special
resolution adopting, modifying or repealing its constitution within
14 days after it is passed. The company must also lodge with ASIC
within that period:
(a) if the company adopts a constitution—a copy of that
constitution; or
(b) if the company modifies its constitution—a copy of that
modification.
This also applies to a proprietary company that has applied under
Part 2B.7 to change to a public company, while its application has
not yet been determined.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
137 Date of effect of adoption, modification or repeal of constitution
If a new constitution is adopted or an existing constitution is
modified or repealed, that adoption, modification or repeal takes
effect:
(a) if it is the result of a special resolution:
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Part 2B.4 Replaceable rules and constitution
Section 138
212 Corporations Act 2001
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(i) on the date on which the resolution is passed if it
specified no later date; or
(ii) on a date specified in, or determined in accordance with,
the resolution if the relevant date is later than the date
on which the resolution is passed; or
(b) if it is the result of a Court order made under section 233:
(i) on the date on which the order is made if it specifies no
later date; or
(ii) on a date specified by the order.
138 ASIC may direct company to lodge consolidated constitution
ASIC may direct a company to lodge a consolidated copy of its
constitution with ASIC.
139 Company must send copy of constitution to member
(1) A company must send a copy of its constitution to a member of the
company within 7 days if the member:
(a) asks the company, in writing, for the copy; and
(b) pays any fee (up to the prescribed amount) required by the
company.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
140 Effect of constitution and replaceable rules
(1) A company’s constitution (if any) and any replaceable rules that
apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company
secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the
constitution and rules so far as they apply to that person.
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Replaceable rules and constitution Part 2B.4
Section 141
Corporations Act 2001 213
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(2) Unless a member of a company agrees in writing to be bound, they
are not bound by a modification of the constitution made after the
date on which they became a member so far as the modification:
(a) requires the member to take up additional shares; or
(b) increases the member’s liability to contribute to the share
capital of, or otherwise to pay money to, the company; or
(c) imposes or increases restrictions on the right to transfer the
shares already held by the member, unless the modification is
made:
(i) in connection with the company’s change from a public
company to a proprietary company under Part 2B.7; or
(ii) to insert proportional takeover approval provisions into
the company’s constitution.
141 Table of replaceable rules
The following table sets out the provisions of this Act that apply as
replaceable rules.
Provisions that apply as replaceable rules
Officers and Employees
1 Voting and completion of transactions—directors of
proprietary companies
194
2 Powers of directors 198A
3 Negotiable instruments 198B
4 Managing director 198C
5 Company may appoint a director 201G
6 Directors may appoint other directors 201H
7 Appointment of managing directors 201J
8 Alternate directors 201K
9 Remuneration of directors 202A
10 Director may resign by giving written notice to company 203A
11 Removal by members—proprietary company 203C
12 Termination of appointment of managing director 203F
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Part 2B.4 Replaceable rules and constitution
Section 141
214 Corporations Act 2001
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Provisions that apply as replaceable rules
13 Terms and conditions of office for secretaries 204F
Inspection of books
14 Company or directors may allow member to inspect books 247D
Director’s Meetings
15 Circulating resolutions of companies with more than 1 director 248A
16 Calling directors’ meetings 248C
17 Chairing directors’ meetings 248E
18 Quorum at directors’ meetings 248F
19 Passing of directors’ resolutions 248G
Meetings of members
20 Calling of meetings of members by a director 249C
21 Notice to joint members 249J(2)
22 When notice by post or fax is given 249J(4)
22A When notice under paragraph 249J(3)(cb) is given 249J(5)
23 Notice of adjourned meetings 249M
24 Quorum 249T
25 Chairing meetings of members 249U
26 Business at adjourned meetings 249W(2)
27 Who can appoint a proxy
[replaceable rule for proprietary companies only]
249X
28 Proxy vote valid even if member dies, revokes appointment
etc.
250C(2)
29 How many votes a member has 250E
30 Jointly held shares 250F
31 Objections to right to vote 250G
32 How voting is carried out 250J
33 When and how polls must be taken 250M
Shares
33A Pre-emption for existing shareholders on issue of shares
in proprietary company
254D
33B Other provisions about paying dividends 254U
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Section 141
Corporations Act 2001 215
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Provisions that apply as replaceable rules
34 Dividend rights for shares in proprietary companies 254W(2)
Transfer of shares
35 Transmission of shares on death 1072A
36 Transmission of shares on bankruptcy 1072B
37 Transmission of shares on mental incapacity 1072D
38 Registration of transfers 1072F
39 Additional general discretion for directors of proprietary
companies to refuse to register transfers
1072G
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Chapter 2B Basic features of a company
Part 2B.5 Registered office and places of business
Section 142
216 Corporations Act 2001
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Part 2B.5—Registered office and places of business
142 Registered office
(1) A company must have a registered office in this jurisdiction.
Communications and notices to the company may be addressed to
its registered office.
Note 1: A document may be served on a company by leaving it at, or posting
it to, the company’s registered office (see subsection 109X(1)).
Note 2: Communications and notices from ASIC may also be addressed to the
company’s contact address (see section 146A).
(2) A company must lodge notice of a change of address of its
registered office with ASIC not later than 28 days after the date on
which the change occurs. The notice must be in the prescribed
form.
Note: If the company is not to be the occupier of premises at the address of
its new registered office, the notice must state that the occupier has
consented to the address being specified in the notice and has not
withdrawn that consent (see section 100).
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A notice of change of address takes effect from the later of:
(a) the seventh day after the notice was lodged; or
(b) a later day specified in the notice as the date from which the
change is to take effect.
143 ASIC may change address of registered office to a director’s
address
(1) A company that does not occupy the premises at the address of its
registered office must be able to show to ASIC the occupier’s
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Registered office and places of business Part 2B.5
Section 144
Corporations Act 2001 217
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written consent to the company’s use of those premises as its
registered office.
Note: ASIC can require the company to produce the consent (see
section 100).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If ASIC becomes aware that the occupier of those premises:
(a) has not consented to the use of the premises as the address of
the company’s registered office; or
(b) has withdrawn the consent;
ASIC may give written notice to a director of the company who
resides in this jurisdiction that ASIC intends to change the address
of the company’s registered office to the director’s address.
(3) If ASIC is not notified of the address of the company’s proposed
new registered office under subsection 142(2) within 28 days after
the notice under subsection (2) is sent, ASIC may change the
address of the company’s registered office to the director’s address.
144 Company’s name must be displayed at registered office etc.
(1) A company must display its name prominently at every place at
which the company carries on business and that is open to the
public.
(2) A public company must also display its name and the words
“Registered Office” prominently at its registered office.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
145 Opening hours of registered office of public company
(1) The registered office of a public company must be open to the
public:
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Part 2B.5 Registered office and places of business
Section 146
218 Corporations Act 2001
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(a) each business day from at least 10 am to 12 noon and from at
least 2 pm to 4 pm; or
(b) at least 3 hours chosen by the company between 9 am and 5
pm each business day.
(2) If the company chooses its own opening hours, the hours must be
specified:
(a) if the company is to have its own opening hours from its
registration—in the application for registration of the
company under section 117 (normal registration process) or
the notice lodged under section 5H (registration of body as
company on basis of State or Territory law); or
(b) if the company changes its opening hours after its
registration—in the most recent notice of change of opening
hours lodged with ASIC under subsection (3).
(3) The company must lodge notice of a change in the opening hours
of its registered office with ASIC before the day on which a change
occurs. The notice must be in the prescribed form.
(4) An offence based on subsection (1) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
146 Change of address of principal place of business
(1) A company must lodge with ASIC notice of a change of the
address of its principal place of business not later than 28 days
after the date on which the change occurs. The notice must be in
the prescribed form.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Registered office and places of business Part 2B.5
Section 146A
Corporations Act 2001 219
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146A Contact address
(1) A company may have a contact address (whether or not in this
jurisdiction). Communications and notices from ASIC to the
company may be addressed to its contact address.
(2) If a company is to have a contact address, the company must lodge
notice of the address in the prescribed form.
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Chapter 2B Basic features of a company
Part 2B.6 Names
Division 1 Selecting and using a name
Section 147
220 Corporations Act 2001
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Part 2B.6—Names
Division 1—Selecting and using a name
147 When a name is available
Name is available unless identical or unacceptable
(1) A name is available to a company unless the name is:
(a) identical (under rules set out in the regulations) to a name
that is reserved or registered under this Act for another body;
or
(b) identical (under rules set out in the regulations) to a name
that is held or registered on the Business Names Register in
respect of another individual or body who is not the person
applying to have the name; or
(c) unacceptable for registration under the regulations.
Minister may consent to a name being available to a company
(2) The Minister may consent in writing to a name being available to a
company even if the name is:
(a) identical to a name that is reserved or registered under this
Act for another body; or
(b) unacceptable for registration under the regulations.
(3) The Minister’s consent may be given subject to conditions.
Note: If the company breaches a condition, ASIC may direct it to change its
name under section 158.
(4) The regulations may specify that a particular unacceptable name is
available to a company if:
(a) a specified public authority, or an instrumentality or agency
of the Crown in right of the Commonwealth, a State or an
internal Territory has consented to the company using or
assuming the name; or
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Names Part 2B.6
Selecting and using a name Division 1
Section 148
Corporations Act 2001 221
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(b) the company is otherwise permitted to use or assume the
name by or under:
(i) an Act of the Commonwealth, a State or an internal
Territory; or
(ii) a specified provision of an Act of the Commonwealth, a
State or an internal Territory.
The consent of the authority, instrumentality or agency may be
given subject to conditions.
Note: If the consent is withdrawn, the company ceases to be permitted or the
company breaches a condition, ASIC may direct it to change its name
under section 158.
148 A company’s name
Company may use available name or ACN
(1) A company may have as its name:
(a) an available name; or
(b) the expression “Australian Company Number” followed by
the company’s ACN.
The name must also include the words required by subsection (2)
or (3).
Limited companies
(2) A limited public company must have the word “Limited” at the end
of its name unless section 150 or 151 applies. A limited proprietary
company must have the words “Proprietary Limited” at the end of
its name.
Unlimited proprietary companies
(3) An unlimited proprietary company must have the word
“Proprietary” at the end of its name.
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Part 2B.6 Names
Division 1 Selecting and using a name
Section 149
222 Corporations Act 2001
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No liability companies
(4) A no liability company must have the words “No Liability” at the
end of its name.
Public companies with “Proprietary” included in their name
(5) A public company must not include the word “Proprietary” (or an
abbreviation of it) in its name unless:
(a) it was a public company before 1 July 1998; and
(b) the word “Proprietary” (or an abbreviation of it) was
included in its name before 1 July 1998.
(6) An offence based on subsection (2), (3), (4) or (5) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
149 Acceptable abbreviations
(1) The abbreviations set out in the following table may be used:
(a) instead of words that this Act requires to be part of a
company’s name or to be included in a document or on a
company’s common seal; and
(b) instead of words that are part of a company’s name; and
(c) with or without full stops.
Acceptable abbreviations [operative table]
Word Abbreviation
1 Company Co or Coy
2 Proprietary Pty
3 Limited Ltd
4 No Liability NL
5 Australian Aust
6 Number No
7 and &
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Acceptable abbreviations [operative table]
Word Abbreviation
8 Australian Company Number ACN
9 Australian Business Number ABN
(2) If a company’s name includes any of these abbreviations, the word
corresponding to the abbreviation may be used instead.
150 Exception to requirement for using “Limited” in name
Name
(1) A company is not required to have the word “Limited” at the end
of its name if:
(a) the company is registered under the Australian Charities and
Not-for-profits Commission Act 2012 as the type of entity
mentioned in column 1 of item 1 of the table in
subsection 25-5(5) of that Act (charity); and
(b) the company’s constitution:
(i) prohibits the company paying fees to its directors; and
(ii) requires the directors to approve all other payments the
company makes to directors.
(2) A company that, in accordance with subsection (1), does not have
“Limited” at the end of its name must notify ASIC as soon as
practicable if:
(a) the company ceases to be registered as mentioned in
paragraph (1)(a); or
(b) any of the prohibitions or requirements mentioned in
paragraph (1)(b) are not complied with or the company’s
constitution is modified to remove any of those prohibitions
or requirements.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Division 1 Selecting and using a name
Section 151
224 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) Paragraph 157(1)(a) (company must pass special resolution to
change name) does not apply to a change of the name of a
company to omit the word “Limited” in accordance with this
section.
Name may be stated without “Limited”
(5) If a company:
(a) has the word “Limited” at the end of its name; but
(b) under subsection (1), is not required to do so;
the word “Limited” may be omitted anywhere that the name of the
company is required to be used (including on the company’s
common seal).
151 Exception to requirement for using “Limited” in name—
pre-existing licences
(1) A licence that:
(a) allowed a company to omit “Limited” from its name; and
(b) was in force immediately before 1 July 1998; and
(c) was in force immediately before the commencement of this
section;
continues in force subject to subsection (3).
(2) The company must notify ASIC as soon as practicable if it:
(a) breaches a condition of the licence; or
(b) pursues objects or purposes that would have prevented it
being granted the licence; or
(c) applies its profits or other income to promote objects or
purposes that would have prevented it being granted the
licence; or
(d) pays a dividend to its members; or
(e) modifies its constitution to allow it to do anything set out in
paragraphs (a) to (d).
(2AA) If:
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(a) a company holds a licence that is in force under this section;
and
(b) either the licence or the company’s constitution requires a
modification to the constitution to have previously been
submitted to, and approved by:
(i) the Minister; or
(ii) another Minister of the Commonwealth, a State or a
Territory; or
(iii) an officer, instrumentality or agency of the
Commonwealth, a State or a Territory;
then the licence or constitution (as the case requires) is taken
instead to require the company to notify ASIC as soon as
practicable of the modification.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) ASIC may revoke the company’s licence if:
(a) the company does anything set out in paragraphs (2)(a) to (e);
or
(b) the company fails to notify ASIC in accordance with
subsection (2AA).
152 Reserving a name
(1) A person may lodge an application in the prescribed form with
ASIC to reserve a name for a company. If the name is available,
ASIC must reserve it.
Note: For available names, see section 147.
(2) The reservation lasts for 2 months from the date when the
application was lodged. An applicant may ask ASIC in writing for
an extension of the reservation during a period that the name is
reserved, and ASIC may extend the reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in
writing to do so.
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Section 153
226 Corporations Act 2001
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153 Using a name and ACN on documents
(1) A company must set out its name on all its public documents and
negotiable instruments.
(2) Subject to sections 154 and 155, if the company’s ACN is not used
in its name, the company must also set out with its name, or with 1
of the references to its name, either:
(a) the expression “Australian Company Number” followed by
the company’s ACN; or
(b) if the last 9 digits of the company’s ABN are the same, and in
the same order, as the last 9 digits of its ACN—the words
“Australian Business Number” followed by the company’s
ABN.
If the company’s name appears on 2 or more pages of the
document or instrument, this must be done on the first of those
pages.
Note 1: If a company has a common seal, its name and ACN or ABN must be
set out on the seal (see section 123).
Note 2: A public company must display its name at its registered office. Every
company must display its name at places at which the company carries
on business and that are open to the public (see section 144).
Note 3: Section 149 provides that “ACN” is an acceptable abbreviation of
“Australian Company Number”, and that “ABN” is an acceptable
abbreviation of “Australian Business Number”.
Note 4: In any case where the company’s ACN would be used, the company’s
ABN may be used instead if section 1344 is satisfied.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
154 Exception to requirement to have ACN on receipts
A company does not have to set out the expression “Australian
Company Number” followed by its ACN on a receipt (for example,
a cash register receipt) that sets out information recorded in the
machine that produced the receipt.
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Section 155
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155 Regulations may exempt from requirement to set out
information on documents
The regulations may exempt a specified company, or a class of
companies, from the requirement in subsection 153(2) to set out
information on its public documents and negotiable instruments.
The exemption may relate to specified documents or instruments,
or a class of documents or instruments.
156 Carrying on business using “Limited”, “No Liability” or
“Proprietary” in name
(1) A person must not carry on business in this jurisdiction under a
name or title that:
(a) has the words “Limited” or “No Liability” (or an
abbreviation of those words) at the end; or
(b) includes the word “Proprietary” (or an abbreviation of it).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) Subsection (1) does not apply to the extent that the person is
allowed or required to carry on business in this jurisdiction under
the name or title under a law of the Commonwealth or a law of a
State or Territory in this jurisdiction.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3), see subsection 13.3(3) of the Criminal Code.
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Division 2 Changing a company’s name
Section 157
228 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Changing a company’s name
157 Company changing its name
(1) If a company wants to change its name, it must:
(a) pass a special resolution adopting a new name; and
(b) lodge an application in the prescribed form with ASIC.
Note: The company may reserve a name before the resolution is passed or
the application is lodged (see section 152).
(2) The company must lodge a copy of the special resolution with
ASIC within 14 days after it is passed.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If the proposed name is available, ASIC must change the
company’s name by altering the details of the company’s
registration to reflect the change. The change of name takes effect
when ASIC alters the details of the company’s registration.
Note: For available names, see section 147.
157A Change of name of company under external administration
Application by liquidator
(1) The liquidator of a company that is being wound up may lodge an
application with ASIC to change the name of the company if the
liquidator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
(2) Subsection (1) does not apply to a members’ voluntary winding up.
Application by administrator
(3) The administrator of a company under administration may lodge an
application with ASIC to change the name of the company if the
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administrator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
Application by deed administrator
(4) The administrator of a deed of company arrangement may lodge an
application with ASIC to change the name of the company if the
administrator is satisfied that the proposed change of name is in the
interests of the creditors of the company as a whole.
Application by managing controller
(5) If:
(a) a person is the managing controller of property of a
company; and
(b) the person is entitled to enforce a security interest in the
whole, or substantially the whole, of the company’s property;
the person may lodge an application with ASIC to change the name
of the company if the person is satisfied that the proposed change
of name is in the interests of the creditors of the company as a
whole.
Application by receiver
(6) If:
(a) a person is a receiver of property of a company; and
(b) the property subject to the receivership consists of, or
includes, goodwill in relation to the name of the company;
the person may lodge an application with ASIC to change the name
of the company if the person is satisfied that the proposed change
of name is in the interests of the creditors of the company as a
whole.
Change of name
(7) If:
(a) an application is lodged under subsection (1), (3), (4), (5) or
(6); and
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Section 158
230 Corporations Act 2001
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(b) the proposed name is available;
ASIC must change the company’s name by altering the details of
the company’s registration to reflect the change. The change of
name takes effect when ASIC alters the details of the company’s
registration.
Note: For available names, see section 147.
158 ASIC’s power to direct company to change its name
(1) ASIC may direct a company in writing to change its name within 2
months if:
(a) the name should not have been registered; or
(b) the company has breached a condition under
subsection 147(3) on the availability of the name; or
(c) a consent given under subsection 147(4) to use or assume the
name has been withdrawn; or
(d) the company has breached a condition on a consent given
under subsection 147(4); or
(e) the company ceases to be permitted to use or assume the
name (as referred to in paragraph 147(4)(b)).
(2) The company must comply with the direction within 2 months after
being given it by doing everything necessary to change its name
under section 157.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If the company does not comply with subsection (2), ASIC may
change the company’s name to its ACN and any other words that
section 148 requires, by altering the details of the company’s
registration to reflect the change.
(4) A change of name under subsection (3) takes effect when ASIC
alters the details of the company’s registration.
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159 ASIC’s power to include “Limited” in company’s name
(1) ASIC may change a company’s name so that it includes the word
“Limited” by altering the details of the company’s registration to
reflect the change if:
(a) the company contravenes any of the requirements or
prohibitions in its constitution referred to in
subsection 150(1); or
(b) the company modifies its constitution to remove any of those
requirements or prohibitions; or
(c) ASIC revokes a licence referred to in section 151 that applies
to the company.
(2) The change of name takes effect when ASIC alters the details of
the company’s registration.
160 ASIC must issue new certificate if company’s name changes
If ASIC changes a company’s name, it must give the company a
new certificate of registration. The company’s new name is the
name specified in the certificate of registration issued under this
section.
Note: For the evidentiary value of a certificate of registration, see
subsection 1274(7A).
161 Effect of name change
(1) A change of company name does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations;
or
(c) render defective any legal proceedings by or against the
company.
(2) Any legal proceedings that could have been continued or begun by
or against the company in its former name may be continued or
begun by or against it in its new name.
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Section 161A
232 Corporations Act 2001
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161A Company under external administration—former name to be
used on documents
(1) This section applies to a company if:
(a) any of the following conditions is satisfied:
(i) the company is being wound up;
(ii) the company is under administration;
(iii) the company has executed a deed of company
arrangement that has not yet terminated;
(iv) there is a managing controller of property of the
company;
(v) there is a receiver of property of the company; and
(b) any of the following conditions is satisfied:
(i) a change of the company’s name takes effect;
(ii) in the case of a company that is being wound up—a
change of the company’s name took effect during the
6-month period ending immediately before the relevant
date;
(iii) in the case of a company under administration—a
change of the company’s name took effect during the
6-month period ending immediately before the
administration began;
(iv) in the case of a company that has executed a deed of
company arrangement—a change of the company’s
name took effect during the 6-month period ending
immediately before the beginning of the administration
that ended when the deed was executed;
(v) in the case of a company where there is a managing
controller—a change in the company’s name took effect
during the 6-month period ending immediately before
the appointment of the managing controller;
(vi) in the case of a company where there is a receiver—a
change in the company’s name took effect during the
6-month period ending immediately before the
appointment of the receiver.
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(2) If subparagraph (1)(b)(i) applies, the company must set out its
former name on all its public documents and negotiable
instruments.
(3) If subparagraph (1)(b)(ii), (iii), (iv), (v) or (vi) applies, then, except
with the leave of the Court, the company must set out its former
name on all its public documents and negotiable instruments.
(4) An offence based on subsection (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) The regulations may exempt a specified company, or a class of
companies, from the requirement in subsection (2) or (3). The
exemption may relate to specified documents or instruments, or a
specified class of documents or instruments.
(6) The Court may only grant leave under subsection (3) on the
application of:
(a) if subparagraph (1)(b)(ii) applies—the liquidator of the
company; or
(b) if subparagraph (1)(b)(iii) applies—the administrator of the
company; or
(c) if subparagraph (1)(b)(iv) applies—the administrator of the
deed of company arrangement; or
(d) if subparagraph (1)(b)(v) applies—the managing controller;
or
(e) if subparagraph (1)(b)(vi) applies—the receiver.
(6A) As soon as practicable after applying for leave under
subsection (3), the applicant must lodge with ASIC a notice stating
that the application has been made. The notice must be in the
prescribed form.
(7) The Court may only grant leave under subsection (3) if it is
satisfied that the granting of leave will not result in any significant
risk to the interests of the company’s creditors (including
contingent or prospective creditors) as a whole.
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Section 162
234 Corporations Act 2001
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Part 2B.7—Changing company type
162 Changing company type
(1) A company may change to a company of a different type as set out
in the following table by:
(a) passing a special resolution resolving to change its type; and
(b) complying with sections 163 and 164.
Allowed conversions [operative table]
This type of company may change… …to this type of company
1 proprietary company limited by shares unlimited proprietary company
unlimited public company
public company limited by shares
2 unlimited proprietary company proprietary company limited by
shares (but only if, within the last 3
years, it was not a limited company
that became an unlimited company)
public company limited by shares
(but only if, within the last 3 years, it
was not a limited company that
became an unlimited company)
unlimited public company
3 public company limited by shares unlimited public company
unlimited proprietary company
proprietary company limited by
shares
no liability company (see
subsection (2))
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Allowed conversions [operative table]
This type of company may change… …to this type of company
4 company limited by guarantee public company limited by shares
unlimited public company
proprietary company limited by
shares
unlimited proprietary company
5 unlimited public company public company limited by shares
(but only if, within the last 3 years, it
was not a limited company that
became an unlimited company)
proprietary company limited by
shares (but only if, within the last 3
years, it was not a limited company
that became an unlimited company)
unlimited proprietary company
6 public no liability company public company limited by shares
(but only if all the issued shares are
fully paid up)
proprietary company limited by
shares (but only if all the issued
shares are fully paid up)
Note 1: A public company seeking to change to a proprietary company must
comply with the requirements for proprietary companies set out in
section 113.
Note 2: Other types of companies that were previously allowed can change
type under the Part 10.1 transitionals.
(2) A public company limited by shares may only convert to a no
liability company if:
(a) the company’s constitution states that its sole objects are
mining purposes; and
(b) under the constitution the company has no contractual right
to recover calls made on its shares from a shareholder who
fails to pay them; and
(c) all the company’s issued shares are fully paid up.
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Note: Section 9 defines mining purposes and minerals.
(3) The company must lodge a copy of the special resolution with
ASIC within 14 days after it is passed.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A special resolution to change an unlimited company that has share
capital to a company limited by shares may also provide that a
specified portion of its uncalled share capital may only be called up
if the company becomes a Chapter 5 body corporate.
163 Applying for change of type
Lodging application
(1) To change its type, a company must lodge an application with
ASIC.
Contents of the application
(2) The application must be accompanied by the following:
(a) a copy of:
(i) the special resolution that resolves to change the type of
the company, specifies the new type and the company’s
new name (if a change of name is necessary); and
(ii) any other special resolution passed in connection with
the change of type;
(b) for a company limited by guarantee changing to a company
limited by shares:
(i) a statement signed by the directors of the company that
in their opinion the company’s creditors are not likely to
be materially prejudiced by the change of type and that
sets out their reasons for that opinion; and
(ii) any special resolution dealing with an issue of shares
according to section 167;
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(c) for a company limited by shares or a company limited by
guarantee changing to an unlimited company:
(i) an assent to the change of type in the prescribed form
signed by all the members of the company; and
(ii) a statement signed by a director or a company secretary
of the company that all the members of the company
have signed the assent;
(d) for a proprietary company changing to a public company:
(i) a consolidated copy of the company’s constitution (if
any) as at the date of lodgment; and
(ii) a copy of each document (including an agreement or
consent) or resolution that is necessary to ascertain the
rights attached to issued or unissued shares of the
company.
Note 1: The company must lodge a copy of any special resolution modifying
its constitution passed after the application is lodged (see
subsection 136(5)).
Note 2: The company must lodge information relating to any change of rights
attached to its shares, or any division or conversion of its shares into
new classes, occurring after the application is lodged (see
section 246F).
Company limited by guarantee to company limited by shares
(3) If shares will be issued to persons under paragraph 166(2)(c) on the
change of type from a company limited by guarantee to a company
limited by shares, the application must state:
(a) that the company has prepared a list that sets out the
following details about each person to whom the shares will
be issued:
(i) name and address;
(ii) the number and class of shares the person will take up;
(iii) the amount (if any) the person will pay for the shares;
(iv) the amount (if any) that will be unpaid on the shares;
and
(b) the number and class of shares those persons will take up;
and
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(c) the amount (if any) those persons will pay for the shares; and
(ca) the amount (if any) that will be unpaid on the shares; and
(d) if the shares will be issued for non-cash consideration—the
prescribed particulars about the issue of the shares, unless the
shares will be issued under a written contract and a copy of
the contract is lodged with the application; and
(e) that each of those persons who is not a member of the
company when the application is made consents in writing to
the inclusion in the list of the details about them that are
referred to in paragraph (a).
The shares may be issued to existing members only, to new
members only or to existing and new members.
Note: An offer of shares associated with a proposed change of type may
need disclosure to investors under Part 6D.2 (see sections 706, 707,
708, 708AA and 708A).
(3A) For a company changing to a proprietary company, if any of the
particulars in the register kept by the company under section 169
and mentioned in paragraph 178A(1)(b) are different from the
particulars set out:
(a) in the latest extract of particulars received by the company;
or
(b) if the company responded to the latest extract it received—in
the company’s extract taken together with the company’s
response to the extract;
the application must set out those different particulars in addition
to the other information required by this section.
(3B) If the company has more than 20 members, the company is only
required to set out the different particulars under subsection (3A)
that relate to a person who is a top 20 member of a class of the
company.
Note: See also section 107.
(3C) If subsection (3A) applies and any details mentioned in
subsection 178C(1) are different from the details set out:
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(a) in the latest extract of particulars received by the company;
or
(b) if the company responded to the latest extract it received—in
the company’s extract taken together with the company’s
response to the extract;
the application must set out those different details as well.
(4) The application must be in the prescribed form.
(5) The company must have the consents referred to in
paragraph (3)(e) (if any) when the application is lodged. The
company must keep the consents.
(6) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
164 ASIC changes type of company
(1) ASIC must give notice under subsection (3) that it intends to alter
the details of the company’s registration if:
(a) ASIC is satisfied that:
(i) the application complies with section 163; and
(ii) for an application by a company limited by guarantee to
change to a company limited by shares—the company’s
creditors are not likely to be materially prejudiced by
the change; and
(b) for an application by a company limited by guarantee to
change to a company limited by shares that is accompanied
by a copy of a special resolution dealing with an issue of
shares according to section 167—ASIC is not of the opinion
that the obligations that would attach to the shares are
unreasonable compared with the obligations that attach to
membership of the company limited by guarantee.
(2) To make a decision under subparagraph (1)(a)(ii), ASIC may direct
the company in writing to:
(a) notify some or all of its creditors of the proposed change in
the way ASIC specifies; and
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(b) invite those creditors to make submissions to ASIC.
(3) The notice that ASIC intends to alter the details of the company’s
registration must be:
(a) included on ASIC database; and
(b) published in the Gazette.
The notice must also state that ASIC will alter the details of the
company’s registration 1 month after the notice has been published
in the Gazette unless an order by a court or the Administrative
Appeals Tribunal prevents it from doing so.
(4) Subject to an order made by a court or the Administrative Appeals
Tribunal within that month, after that month has passed ASIC must
alter the details of the company’s registration to reflect the
company’s new type.
(5) A change of type under this section takes effect when ASIC alters
the details of the company’s registration. Despite
subsection 246D(3) and section 246E, a special resolution passed
in connection with the change of type also takes effect when ASIC
alters the details of the company’s registration.
(6) ASIC must give the company a new certificate of registration after
it alters the details of the company’s registration. The company’s
name is the name specified in the certificate of registration issued
under this section.
Note: For the evidentiary value of a certificate of registration, see
subsection 1274(7A).
(7) If ASIC alters the details of a company’s registration under
subsection (4), a court is not to make an order reversing the
alteration of the details of the company’s registration.
Note: The Administrative Appeals Tribunal cannot review the change of the
company’s type once ASIC has issued a new certificate of registration
to the company (see subsection 1274(7A) and paragraph 1317C(b)).
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165 ASIC may direct a proprietary company to change to a public
company in certain circumstances
(1) ASIC may direct a proprietary company in writing to change to a
public company within 2 months if it is satisfied that the company
has contravened section 113 (requirements for proprietary
companies).
(2) The company must comply with the direction within 2 months after
being given it by doing everything necessary to change to a public
company under section 164.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If a proprietary company does not comply with subsection (2),
ASIC may change the company from a proprietary to a public
company by altering the details of the company’s registration to
reflect the company’s new type.
(4) A change of type under this section takes effect when ASIC alters
the details of the company’s registration.
(5) ASIC must give the company a new certificate of registration after
it alters the details of the company’s registration under
subsection (3). The company’s name is the name specified in the
certificate of registration issued under this section.
Note: For the evidentiary value of a certificate of registration, see
subsection 1274(7A).
166 Effect of change of type
(1) A change of type does not:
(a) create a new legal entity; or
(b) affect the company’s existing property, rights or obligations
(except as against the members of the company in their
capacity as members); or
(c) render defective any legal proceedings by or against the
company or its members.
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(2) On the change of type of a company from a company limited by
guarantee to a company limited by shares:
(a) the liability of each member and past member as a guarantor
on the winding up of the company is extinguished; and
(b) the members cease to be members of the company; and
(c) if shares are to be issued to a person as specified in the list
referred to in subsection 163(3):
(i) the shares are taken to be issued to that person; and
(ii) the person is taken to have consented to be a member of
the company; and
(iii) the person becomes a member of the company.
Note: The company must maintain a register of members that complies with
subsection 169(3).
167 Issue of shares by company or holding company—company
limited by guarantee changing to company limited by
shares
(1) If:
(a) a company limited by guarantee changes type under this Part
to a company limited by shares; and
(b) that company, or another company that beneficially owns all
the shares in that company, issues shares to a person who was
a member of that company immediately before the change of
type took effect;
the person becomes a member of the company issuing the shares if:
(c) the issue of the shares is in accordance with the special
resolution that accompanied the application to change type
under subparagraph 163(2)(a)(ii); and
(d) the shares are fully paid up; and
(e) the business, assets and liabilities of the issuing company
(together with its subsidiaries) when the shares are issued are
substantially the same as the business, assets and liabilities of
the company changing type (together with its subsidiaries)
immediately before the change of type took effect.
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(2) If shares are issued according to this section, a court is not to make
an order reversing the issue of the shares.
167AA Application of Part to company limited both by shares and
by guarantee
(1) A company limited both by shares and by guarantee may change to
one of the following types of companies under this Part:
(a) a proprietary company limited by shares;
(b) a public company limited by shares;
(c) a company limited by guarantee.
(2) This Part applies to the change with any modifications that are
necessary.
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Chapter 2C—Registers
Part 2C.1—Registers generally
167A Who is covered by this Chapter
(1) This Chapter covers:
(a) all companies; and
(b) all registered schemes.
(2) A registered scheme’s responsible entity:
(a) must perform the obligations imposed under this Chapter in
respect of the scheme; and
(b) may exercise the powers given by this Chapter in respect of
the scheme.
168 Registers to be maintained
(1) A company or registered scheme must set up and maintain:
(a) a register of members (see section 169); and
(b) if the company or scheme grants options over unissued
shares or interests—a register of option holders and copies of
options documents (see section 170); and
(c) if the company issues debentures—a register of debenture
holders (see section 171).
Note 1A: See also section 672DA (register of relevant interests in listed
company or registered scheme).
Note 2: The registers may be kept on computer (see section 1306).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) For the purposes of this Chapter, choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a),
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(b), (e) and (f) of the definition of debenture in section 9 must also
be entered into the register of debenture holders.
169 Register of members
General requirements
(1) The register of members must contain the following information
about each member:
(a) the member’s name and address;
(b) the date on which the entry of the member’s name in the
register is made.
Index to register
(2) If the company or scheme has more than 50 members, the company
or scheme must include in the register an up-to-date index of
members’ names. The index must be convenient to use and allow a
member’s entry in the register to be readily found. A separate
index need not be included if the register itself is kept in a form
that operates effectively as an index.
Companies with share capital
(3) If the company has a share capital, the register must also show:
(a) the date on which every allotment of shares takes place; and
(b) the number of shares in each allotment; and
(c) the shares held by each member; and
(d) the class of shares; and
(e) the share numbers (if any), or share certificate numbers (if
any), of the shares; and
(ea) the amount paid on the shares; and
(eb) whether or not the shares are fully paid; and
(f) the amount unpaid on the shares (if any).
Note 1: Transfers of shares are entered in the register under section 1071D.
Section 1072E deals with the registration of trustees etc. on the death,
incapacity or bankruptcy of the shareholder.
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Note 2: For the treatment of joint holders see subsection (8).
(4) The register does not have to show the amount unpaid on the
shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998;
and
(b) the register continues to show the par values of the shares as
they were immediately before 1 July 1998.
(5) The register does not have to show the amount unpaid on the
shares (see paragraph (1)(f)) if:
(a) all of the company’s shares were issued before 1 July 1998;
and
(b) the company is not a listed company.
Non-beneficial ownership—companies other than listed companies
(5A) The register of a company that:
(a) has a share capital; and
(b) is neither a listed company (within the meaning of
section 603) nor a company covered by an order under
section 707;
must indicate any shares that a member does not hold beneficially.
Note: See also section 1072H (in particular, subsection 1072H(8) which
contains relevant presumptions about beneficial ownership).
(6) In deciding for the purposes of subsection (5A) whether a member
holds shares beneficially or non-beneficially, the company is to
have regard only to information in notices given to the company
under section 1072H, 672B or 672C.
Registered schemes
(6A) The register of a registered scheme must also show:
(a) the date on which every issue of interests takes place; and
(b) the number of interests in each issue; and
(c) the interests held by each member; and
(d) the class of interests; and
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(e) the amount paid, or agreed to be considered as paid, on the
interests.
Former members
(7) A register of members must also show:
(a) the name and details of each person who stopped being a
member of the company or scheme within the last 7 years;
and
(b) the date on which the person stopped being a member.
The company or scheme may keep these entries separately from
the rest of the register.
Joint holders
(8) For the purposes of this section:
(a) 2 or more persons who jointly hold shares in the company or
interests in the scheme are taken to be a single member of the
company or scheme in relation to those shares or interests;
and
(b) 2 or more persons who have given a guarantee jointly are
taken to be a single member of the company.
They may also be members of the company or scheme because of
shares or interests that they hold, or a guarantee that they have
given, in their own right or jointly with others.
170 Register of option holders and copies of options documents
(1) The register of option holders must contain the following
information about each holder of options over unissued shares in
the company or unissued interests in the scheme:
(a) the option holder’s name and address;
(b) the date on which the entry of the option holder’s name in the
register is made;
(c) the date of grant of the options;
(d) the number and description of the shares or interests over
which the options were granted;
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(e) either:
(i) the period during which the options may be exercised;
or
(ii) the time at which the options may be exercised;
(f) any event that must happen before the options can be
exercised;
(g) any consideration for the grant of the options;
(h) any consideration for the exercise of the options or the
method by which that consideration is to be determined.
Because it is a register of the holders of options that are still
exercisable, the register must be updated whenever options are
exercised or expire.
(2) Information about the grant of an option must be entered in the
register within 14 days after the grant of the option.
Copies of options documents
(3) The company or scheme must keep with the register a copy of
every document that grants an option over unissued shares or
interests.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3B) Subsection (3) does not apply if the option is listed for quotation on
a prescribed financial market.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3B), see subsection 13.3(3) of the Criminal Code.
(4) The company or scheme must change the register to reflect the
transfer of an option only if the person transferring the option gives
the company or scheme written notice of the transfer.
(5) A failure to comply with this section in relation to an option does
not affect the option itself.
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171 Register of debenture holders
(1) The register of debenture holders must contain the following
information about each holder of a debenture:
(a) the debenture holder’s name and address;
(b) the amount of the debentures held.
Note: See subsection 168(2) for the coverage of debenture.
(2) A company’s failure to comply with this section in relation to a
debenture does not affect the debenture itself.
172 Location of registers
(1) A register kept under this Chapter that relates to a company must
be kept at:
(a) the company’s registered office; or
(b) the company’s principal place of business in this jurisdiction;
or
(c) a place in this jurisdiction (whether of the company or of
someone else) where the work involved in maintaining the
register is done; or
(d) another place in this jurisdiction approved by ASIC.
(1A) A register kept under this Chapter that relates to a registered
scheme must be kept at:
(a) the responsible entity’s registered office; or
(b) an office at the responsible entity’s principal place of
business in this jurisdiction; or
(c) an office in this jurisdiction (whether of the responsible
entity or of someone else) where the work involved in
maintaining the register is done; or
(d) another office in this jurisdiction approved by ASIC.
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250 Corporations Act 2001
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Notice to ASIC
(2) The company or scheme must lodge with ASIC a notice of the
address at which the register is kept within 7 days after the register
is:
(a) established at an office that:
(i) is not the registered office of the company or
responsible entity; and
(ii) is not at the principal place of business of the company
or responsible entity in this jurisdiction; or
(b) moved from one place to another.
Notice is not required for moving the register between the
registered office and the principal place of business in this
jurisdiction.
(3) An offence based on subsection (1), (1A) or (2) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
173 Right to inspect and get copies
Right to inspect
(1) A company or registered scheme must allow anyone to inspect a
register kept under this Chapter. If the register is not kept on a
computer, the person inspects the register itself. If the register is
kept on a computer, the person inspects the register by computer.
Note: Other provisions that are relevant to the inspection of registers are:
section 1300 (place and times for inspection)
section 1301 (the location of documents that are kept on computers)
section 1306 (form and evidentiary value).
Inspection fees
(2) A member of a company or a registered scheme, a registered
option holder or a registered debenture holder may inspect a
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register kept under this Chapter without charge. Other people may
inspect the register only on payment of any fee (up to the
prescribed amount) required by the company or scheme.
Right to get copies
(3) The company or scheme must give a person a copy of the register
(or a part of the register) within 7 days if the person:
(a) makes an application to the company or registered scheme in
accordance with subsection (3A); and
(b) pays any fee (up to the prescribed amount) required by the
company or scheme.
ASIC may allow a longer period to comply with the request. If the
register is kept on a computer, the company or registered scheme
must give the copy to the person in the prescribed form.
(3A) An application is in accordance with this subsection if:
(a) the application states each purpose for which the person is
accessing the copy; and
(b) none of those purposes is a prescribed purpose; and
(c) the application is in the prescribed form.
Note: Sections 137.1 and 137.2 of the Criminal Code create offences for
providing false or misleading information or documents.
(4) A person has the same rights to inspect, and obtain copies of, the
documents kept under subsection 170(3) as the person has in
respect of the register of option holders itself.
(5) The company is not required under subsection (1) or (3) to allow a
person to see, or to give a person a copy that contains, share
certificate numbers.
ASIC power in relation to register of debenture holders
(6) ASIC may exempt a company from complying with
subsections (1) and (3) in relation to information in a register of
debenture holders about debentures that are not convertible into
shares or options over unissued shares.
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252 Corporations Act 2001
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(7) The exemption:
(a) must be in writing; and
(b) may be general or limited; and
(c) may be subject to conditions specified in the exemption.
(8) ASIC must publish a copy of the exemption in the Gazette.
(9) A person must not contravene a condition of the exemption.
(9A) An offence based on subsection (1), (3) or (9) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(10) On application by ASIC, the Court may order a person who
contravenes a condition of the exemption to comply with the
condition.
174 Agent’s obligations
(1) A person who agrees to maintain a register on behalf of a company
or registered scheme for the purposes of this Chapter must:
(a) make the register available for inspection under this Chapter;
and
(b) provide the copies required by this Chapter.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
175 Correction of registers
(1) A company or registered scheme or a person aggrieved may apply
to the Court to have a register kept by the company or scheme
under this Part corrected.
(2) If the Court orders the company or scheme to correct the register, it
may also order the company or scheme to compensate a party to
the application for loss or damage suffered.
(3) If:
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(a) the Court orders a company or scheme to correct its register
of members; and
(b) the company or scheme has lodged a list of its members with
ASIC;
the company or scheme must lodge notice of the correction with
ASIC.
Note: A proprietary company may also have to notify certain particulars
under Part 2C.2 of this Chapter.
176 Evidentiary value of registers
In the absence of evidence to the contrary, a register kept under
this Chapter is proof of the matters shown in the register under this
Chapter.
177 Use of information on registers
(1) A person must not:
(a) use information about a person obtained from a register kept
under this Chapter to contact or send material to the person;
or
(b) disclose information of that kind knowing that the
information is likely to be used to contact or send material to
the person.
Note: An example of using information to send material to a person is
putting a person’s name and address on a mailing list for advertising
material.
(1AA) A person must not:
(a) use information obtained from a register kept under this
Chapter for any purpose prescribed by regulations made for
the purposes of paragraph 173(3A)(b); or
(b) disclose information of that kind knowing that the
information is likely to be used for any such purpose.
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(1A) Subsection (1) does not apply if the use or disclosure of the
information is:
(a) relevant to the holding of the interests recorded in the register
or the exercise of the rights attaching to them; or
(b) approved by the company or scheme.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) or (1AA) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) A person who contravenes subsection (1) or (1AA) is liable to
compensate anyone else who suffers loss or damage because of the
contravention.
(3) A person who makes a profit from a contravention of
subsection (1) or (1AA) owes a debt to the company or the scheme.
The amount of the debt is the amount of the profit.
(4) If a person owes a debt under subsection (3) to the scheme:
(a) the debt may be recovered by the responsible entity as a debt
due to it; and
(b) any amount paid or recovered in respect of the debt forms
part of the scheme property.
178 Overseas branch registers
(1) A company may keep a branch register of members at a place
outside Australia.
(2) If a company keeps an overseas branch register under
subsection (1):
(a) the company must keep the branch register in the same
manner as this Act requires the company to keep the register
kept under section 169 (the principal register); and
(b) the company must enter in the principal register the details
contained in the branch register; and
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(c) the company must distinguish shares that are registered in the
branch register from the shares registered in the principal
register.
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Section 178A
256 Corporations Act 2001
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Part 2C.2—Notice by proprietary companies of
changes to member register
178A Notice of change to member register
(1) A proprietary company must notify ASIC within the time
determined under section 178D and in the prescribed form, if:
(a) it is required to add or alter a particular in the register it
maintains under section 169; and
(b) the particular is one required to be kept under any of the
following:
(i) subsection 169(1) (name and address and date of entry
of member’s name into register);
(ii) paragraph 169(3)(b) (number of shares in each
allotment to the member);
(iii) paragraph 169(3)(c) (the number of shares held by the
member);
(iv) paragraph 169(3)(d) (the class of shares held by the
member);
(v) paragraph 169(3)(ea) (the amount paid on the member’s
shares);
(vi) paragraph 169(3)(eb) (whether the member’s shares are
fully paid);
(vii) paragraph 169(3)(f) (the amount unpaid, if any, on the
member’s shares);
(viii) subsection 169(5A) (statement whether any of the
member’s shares are held beneficially).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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178B Top 20 only
If a proprietary company has more than 20 members, the company
is only required to notify additions or alterations of particulars
under section 178A that relate to a person who is, or as a result of
the addition or alteration will become, a top 20 member of a class
of the company.
Note: See also section 107.
178C Notice of change to share structure
(1) A proprietary company that is required to notify ASIC under
section 178A of an addition or alteration must also notify ASIC, at
the same time, of any of the following details in relation to the
company that are different from the details previously notified to
ASIC:
(a) the total number of the company’s shares on issue;
(b) the classes into which the shares are divided;
(c) for each class issued:
(i) the total number of shares for the class;
(ii) the total amount paid up for the class;
(iii) the total amount unpaid for the class.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
178D Time within which ASIC must be notified
A proprietary company must notify ASIC under section 178A
within the time determined by this table.
Time within which the company must notify ASIC
Item If the need to add or alter a
particular arises in connection
with this event...
The company must notify ASIC
within this time...
1 the Court orders the company to at the same time that it notifies ASIC
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258 Corporations Act 2001
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Time within which the company must notify ASIC
Item If the need to add or alter a
particular arises in connection
with this event...
The company must notify ASIC
within this time...
correct its member register kept
under section 169
of the correction under
subsection 175(3)
2 the company divides shares into
classes, or converts shares of a class
into shares of another class
within the time within which it must
notify ASIC of the particulars of the
division or conversion under
subsection 246F(1)
3 the company issues shares within the time within which it must
notify ASIC of the particulars of the
issue under subsection 254X(1)
4 the company reduces its share
capital
within the time within which it must
notify ASIC of shareholder approval
of the reduction under
subsection 256C(3)
5 an event not covered by items 1 to 4 within 28 days after the day on
which it adds or alters the particular
in the register
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Section 179
Corporations Act 2001 259
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Chapter 2D—Officers and employees
Part 2D.1—Duties and powers
179 Background to duties of directors, other officers and employees
(1) This Part sets out some of the most significant duties of directors,
secretaries, other officers and employees of corporations. Other
duties are imposed by other provisions of this Act and other laws
(including the general law).
(2) Section 9 defines both director and officer. Officer includes, as
well as directors and secretaries, some other people who manage
the corporation or its property (such as receivers and liquidators).
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Division 1 General duties
Section 180
260 Corporations Act 2001
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Division 1—General duties
180 Care and diligence—civil obligation only
Care and diligence—directors and other officers
(1) A director or other officer of a corporation must exercise their
powers and discharge their duties with the degree of care and
diligence that a reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation’s
circumstances; and
(b) occupied the office held by, and had the same responsibilities
within the corporation as, the director or officer.
Note: This subsection is a civil penalty provision (see section 1317E).
Business judgment rule
(2) A director or other officer of a corporation who makes a business
judgment is taken to meet the requirements of subsection (1), and
their equivalent duties at common law and in equity, in respect of
the judgment if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter
of the judgment; and
(c) inform themselves about the subject matter of the judgment
to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of
the corporation.
The director’s or officer’s belief that the judgment is in the best
interests of the corporation is a rational one unless the belief is one
that no reasonable person in their position would hold.
Note: This subsection only operates in relation to duties under this section
and their equivalent duties at common law or in equity (including the
duty of care that arises under the common law principles governing
liability for negligence)—it does not operate in relation to duties under
any other provision of this Act or under any other laws.
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Section 181
Corporations Act 2001 261
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(3) In this section:
business judgment means any decision to take or not take action in
respect of a matter relevant to the business operations of the
corporation.
181 Good faith—civil obligations
Good faith—directors and other officers
(1) A director or other officer of a corporation must exercise their
powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
Note 1: This subsection is a civil penalty provision (see section 1317E).
Note 2: Section 187 deals with the situation of directors of wholly-owned
subsidiaries.
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
182 Use of position—civil obligations
Use of position—directors, other officers and employees
(1) A director, secretary, other officer or employee of a corporation
must not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
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Section 183
262 Corporations Act 2001
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183 Use of information—civil obligations
Use of information—directors, other officers and employees
(1) A person who obtains information because they are, or have been,
a director or other officer or employee of a corporation must not
improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an officer or
employee of the corporation.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
184 Good faith, use of position and use of information—criminal
offences
Good faith—directors and other officers
(1) A director or other officer of a corporation commits an offence if
they:
(a) are reckless; or
(b) are intentionally dishonest;
and fail to exercise their powers and discharge their duties:
(c) in good faith in the best interests of the corporation; or
(d) for a proper purpose.
Note: Section 187 deals with the situation of directors of wholly-owned
subsidiaries.
Use of position—directors, other officers and employees
(2) A director, other officer or employee of a corporation commits an
offence if they use their position dishonestly:
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Section 185
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(a) with the intention of directly or indirectly gaining an
advantage for themselves, or someone else, or causing
detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or
someone else directly or indirectly gaining an advantage, or
in causing detriment to the corporation.
Use of information—directors, other officers and employees
(3) A person who obtains information because they are, or have been,
a director or other officer or employee of a corporation commits an
offence if they use the information dishonestly:
(a) with the intention of directly or indirectly gaining an
advantage for themselves, or someone else, or causing
detriment to the corporation; or
(b) recklessly as to whether the use may result in themselves or
someone else directly or indirectly gaining an advantage, or
in causing detriment to the corporation.
185 Interaction of sections 180 to 184 with other laws etc.
Sections 180 to 184:
(a) have effect in addition to, and not in derogation of, any rule
of law relating to the duty or liability of a person because of
their office or employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a
breach of a duty or in respect of a liability referred to in
paragraph (a).
This section does not apply to subsections 180(2) and (3) to the
extent to which they operate on the duties at common law and in
equity that are equivalent to the requirements of subsection 180(1).
186 Territorial application of sections 180 to 184
Sections 180 to 184 do not apply to an act or omission by a director
or other officer or employee of a foreign company unless the act or
omission occurred in connection with:
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Section 187
264 Corporations Act 2001
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(a) the foreign company carrying on business in this jurisdiction;
or
(b) an act that the foreign company does, or proposes to do, in
this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or
refrain from doing, an act in this jurisdiction.
187 Directors of wholly-owned subsidiaries
A director of a corporation that is a wholly-owned subsidiary of a
body corporate is taken to act in good faith in the best interests of
the subsidiary if:
(a) the constitution of the subsidiary expressly authorises the
director to act in the best interests of the holding company;
and
(b) the director acts in good faith in the best interests of the
holding company; and
(c) the subsidiary is not insolvent at the time the director acts
and does not become insolvent because of the director’s act.
188 Responsibility of secretaries etc. for certain corporate
contraventions
Responsibility of company secretaries
(1) A secretary of a company contravenes this subsection if the
company contravenes any of the following provisions (each of
which is a corporate responsibility provision):
(a) section 142 (registered office);
(b) section 145 (public company’s registered office to be open to
public);
(c) section 146 (change of principal place of business);
(d) section 178A (change to proprietary company’s member
register);
(e) section 178C (change to proprietary company’s share
structure);
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Section 189
Corporations Act 2001 265
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(f) section 205B (lodgement of notices with ASIC);
(g) section 254X (issue of shares);
(h) section 319 (lodgement of annual reports with ASIC);
(i) section 320 (lodgement of half-year reports with ASIC);
(j) section 346C (response to extract of particulars);
(k) section 348D (response to return of particulars);
(l) section 349A (change to proprietary company’s ultimate
holding company).
Note 1: See section 204A for the circumstances in which a company must
have a secretary.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Responsibility of directors of proprietary companies
(2) Each director of a proprietary company contravenes this subsection
if:
(a) the proprietary company contravenes a corporate
responsibility provision; and
(b) the proprietary company does not have a secretary when it
contravenes that provision.
Note 1: See section 204A for the circumstances in which a company must
have a secretary.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Defence of reasonable steps
(3) A person does not contravene subsection (1) or (2) in relation to a
company’s contravention of a corporate responsibility provision if
the person shows that he or she took reasonable steps to ensure that
the company complied with the provision.
189 Reliance on information or advice provided by others
If:
(a) a director relies on information, or professional or expert
advice, given or prepared by:
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266 Corporations Act 2001
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(i) an employee of the corporation whom the director
believes on reasonable grounds to be reliable and
competent in relation to the matters concerned; or
(ii) a professional adviser or expert in relation to matters
that the director believes on reasonable grounds to be
within the person’s professional or expert competence;
or
(iii) another director or officer in relation to matters within
the director’s or officer’s authority; or
(iv) a committee of directors on which the director did not
serve in relation to matters within the committee’s
authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making an independent assessment of the
information or advice, having regard to the director’s
knowledge of the corporation and the complexity of the
structure and operations of the corporation; and
(c) the reasonableness of the director’s reliance on the
information or advice arises in proceedings brought to
determine whether a director has performed a duty under this
Part or an equivalent general law duty;
the director’s reliance on the information or advice is taken to be
reasonable unless the contrary is proved.
190 Responsibility for actions of delegate
(1) If the directors delegate a power under section 198D, a director is
responsible for the exercise of the power by the delegate as if the
power had been exercised by the directors themselves.
(2) A director is not responsible under subsection (1) if:
(a) the director believed on reasonable grounds at all times that
the delegate would exercise the power in conformity with the
duties imposed on directors of the company by this Act and
the company’s constitution (if any); and
(b) the director believed:
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(i) on reasonable grounds; and
(ii) in good faith; and
(iii) after making proper inquiry if the circumstances
indicated the need for inquiry;
that the delegate was reliable and competent in relation to the
power delegated.
190A Limited application of Division to registrable Australian
bodies
This Division does not apply to an act or omission by a director or
other officer or employee of a corporation that is a registrable
Australian body unless the act or omission occurred in connection
with:
(a) the body carrying on business outside its place of origin; or
(b) an act that the body does or proposed to do outside its place
of origin; or
(c) a decision by the body whether or not to do or refrain from
doing outside its place of origin.
190B Division does not apply to Aboriginal and Torres Strait
Islander corporations
This Division does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Division 265 of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006 deals with the general duties of directors,
secretaries, officers and employees of Aboriginal and Torres Strait
Islander corporations.
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Part 2D.1 Duties and powers
Division 2 Disclosure of, and voting on matters involving, material personal interests
Section 191
268 Corporations Act 2001
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Division 2—Disclosure of, and voting on matters involving,
material personal interests
191 Material personal interest—director’s duty to disclose
Director’s duty to notify other directors of material personal
interest when conflict arises
(1) A director of a company who has a material personal interest in a
matter that relates to the affairs of the company must give the other
directors notice of the interest unless subsection (2) says otherwise.
(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the director of a company has a material
personal interest in a matter that relates to the affairs of the
company.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The director does not need to give notice of an interest under
subsection (1) if:
(a) the interest:
(i) arises because the director is a member of the company
and is held in common with the other members of the
company; or
(ii) arises in relation to the director’s remuneration as a
director of the company; or
(iii) relates to a contract the company is proposing to enter
into that is subject to approval by the members and will
not impose any obligation on the company if it is not
approved by the members; or
(iv) arises merely because the director is a guarantor or has
given an indemnity or security for all or part of a loan
(or proposed loan) to the company; or
(v) arises merely because the director has a right of
subrogation in relation to a guarantee or indemnity
referred to in subparagraph (iv); or
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Section 191
Corporations Act 2001 269
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(vi) relates to a contract that insures, or would insure, the
director against liabilities the director incurs as an
officer of the company (but only if the contract does not
make the company or a related body corporate the
insurer); or
(vii) relates to any payment by the company or a related body
corporate in respect of an indemnity permitted under
section 199A or any contract relating to such an
indemnity; or
(viii) is in a contract, or proposed contract, with, or for the
benefit of, or on behalf of, a related body corporate and
arises merely because the director is a director of the
related body corporate; or
(b) the company is a proprietary company and the other directors
are aware of the nature and extent of the interest and its
relation to the affairs of the company; or
(c) all the following conditions are satisfied:
(i) the director has already given notice of the nature and
extent of the interest and its relation to the affairs of the
company under subsection (1);
(ii) if a person who was not a director of the company at the
time when the notice under subsection (1) was given is
appointed as a director of the company—the notice is
given to that person;
(iii) the nature or extent of the interest has not materially
increased above that disclosed in the notice; or
(d) the director has given a standing notice of the nature and
extent of the interest under section 192 and the notice is still
effective in relation to the interest.
Note: Subparagraph (c)(ii)—the notice may be given to the person referred
to in this subparagraph by someone other than the director to whose
interests it relates (for example, by the secretary).
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
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Section 192
270 Corporations Act 2001
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(ii) the relation of the interest to the affairs of the company;
and
(b) be given at a directors’ meeting as soon as practicable after
the director becomes aware of their interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution
or other thing.
Section does not apply to single director proprietary company
(5) This section does not apply to a proprietary company that has only
1 director.
192 Director may give other directors standing notice about an
interest
Power to give notice
(1) A director of a company who has an interest in a matter may give
the other directors standing notice of the nature and extent of the
interest in the matter in accordance with subsection (2). The notice
may be given at any time and whether or not the matter relates to
the affairs of the company at the time the notice is given.
Note: The standing notice may be given to the other directors before the
interest becomes a material personal interest.
(2) The notice under subsection (1) must:
(a) give details of the nature and extent of the interest; and
(b) be given:
(i) at a directors’ meeting (either orally or in writing); or
(ii) to the other directors individually in writing.
The standing notice is given under subparagraph (b)(ii) when it has
been given to every director.
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Section 192
Corporations Act 2001 271
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Standing notice must be tabled at meeting if given to directors
individually
(3) If the standing notice is given to the other directors individually in
writing, it must be tabled at the next directors’ meeting after it is
given.
Nature and extent of interest must be recorded in minutes
(4) The director must ensure that the nature and extent of the interest
disclosed in the standing notice is recorded in the minutes of the
meeting at which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is given; and
(b) ceases to have effect if a person who was not a director of the
company at the time when the notice was given is appointed
as a director of the company.
A standing notice that ceases to have effect under paragraph (b)
commences to have effect again if it is given to the person referred
to in that paragraph.
Note: The notice may be given to the person referred to in paragraph (b) by
someone other than the director to whose interests it relates (for
example, by the secretary).
Effect of material increase in nature or extent of interest
(6) The standing notice ceases to have effect in relation to a particular
interest if the nature or extent of the interest materially increases
above that disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution
or other thing.
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Division 2 Disclosure of, and voting on matters involving, material personal interests
Section 193
272 Corporations Act 2001
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193 Interaction of sections 191 and 192 with other laws etc.
Sections 191 and 192 have effect in addition to, and not in
derogation of:
(a) any general law rule about conflicts of interest; and
(b) any provision in a company’s constitution (if any) that
restricts a director from:
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or
interests as a director.
194 Voting and completion of transactions—directors of proprietary
companies (replaceable rule—see section 135)
If a director of a proprietary company has a material personal
interest in a matter that relates to the affairs of the company and:
(a) under section 191 the director discloses the nature and extent
of the interest and its relation to the affairs of the company at
a meeting of the directors; or
(b) the interest is one that does not need to be disclosed under
section 191;
then:
(c) the director may vote on matters that relate to the interest;
and
(d) any transactions that relate to the interest may proceed; and
(e) the director may retain benefits under the transaction even
though the director has the interest; and
(f) the company cannot avoid the transaction merely because of
the existence of the interest.
If disclosure is required under section 191, paragraphs (e) and (f)
apply only if the disclosure is made before the transaction is
entered into.
Note: A director may need to give notice to the other directors if the director
has a material personal interest in a matter relating to the affairs of the
company (see section 191).
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Section 195
Corporations Act 2001 273
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195 Restrictions on voting—directors of public companies only
Restrictions on voting and being present
(1) A director of a public company who has a material personal
interest in a matter that is being considered at a directors’ meeting
must not:
(a) be present while the matter is being considered at the
meeting; or
(b) vote on the matter.
(1A) Subsection (1) does not apply if:
(a) subsection (2) or (3) allows the director to be present; or
(b) the interest does not need to be disclosed under section 191.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Participation with approval of other directors
(2) The director may be present and vote if directors who do not have
a material personal interest in the matter have passed a resolution
that:
(a) identifies the director, the nature and extent of the director’s
interest in the matter and its relation to the affairs of the
company; and
(b) states that those directors are satisfied that the interest should
not disqualify the director from voting or being present.
Participation with ASIC approval
(3) The director may be present and vote if they are so entitled under a
declaration or order made by ASIC under section 196.
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Division 2 Disclosure of, and voting on matters involving, material personal interests
Section 196
274 Corporations Act 2001
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Director may consider or vote on resolution to deal with matter at
general meeting
(4) If there are not enough directors to form a quorum for a directors’
meeting because of subsection (1), 1 or more of the directors
(including those who have a material personal interest in that
matter) may call a general meeting and the general meeting may
pass a resolution to deal with the matter.
Effect of contravention by director
(5) A contravention by a director of:
(a) this section; or
(b) a condition attached to a declaration or order made by ASIC
under section 196;
does not affect the validity of any resolution.
196 ASIC power to make declarations and class orders
ASIC’s power to make specific declarations
(1) ASIC may declare in writing that a director of a public company
who has a material personal interest in a matter that is being, or is
to be, considered at a directors’ meeting may, despite the director’s
interest, be present while the matter is being considered at the
meeting, vote on the matter, or both be present and vote. However,
ASIC may only make the declaration if:
(a) the number of directors entitled to be present and vote on the
matter would be less than the quorum for a directors’ meeting
if the director were not allowed to vote on the matter at the
meeting; and
(b) the matter needs to be dealt with urgently, or there is some
other compelling reason for the matter being dealt with at the
directors’ meeting, rather than by a general meeting called
under subsection 195(4).
(2) The declaration may:
(a) apply to all or only some of the directors; or
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(b) specify conditions that the company or director must comply
with.
ASIC’s power to make class orders
(3) ASIC may make an order in writing that enables directors who
have a material personal interest in a matter to be present while the
matter is being considered at a directors’ meeting, vote on that
matter, or both be present and vote. The order may be made in
respect of a specified class of public companies, directors,
resolutions or interests.
(4) The order may be expressed to be subject to conditions.
(5) Notice of the making, revocation or suspension of the order must
be published in the Gazette.
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Division 3 Duty to discharge certain trust liabilities
Section 197
276 Corporations Act 2001
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Division 3—Duty to discharge certain trust liabilities
197 Directors liable for debts and other obligations incurred by
corporation as trustee
(1) A person who is a director of a corporation when it incurs a
liability while acting, or purporting to act, as trustee, is liable to
discharge the whole or a part of the liability if the corporation:
(a) has not discharged, and cannot discharge, the liability or that
part of it; and
(b) is not entitled to be fully indemnified against the liability out
of trust assets solely because of one or more of the following:
(i) a breach of trust by the corporation;
(ii) the corporation’s acting outside the scope of its powers
as trustee;
(iii) a term of the trust denying, or limiting, the corporation’s
right to be indemnified against the liability.
The person is liable both individually and jointly with the
corporation and anyone else who is liable under this subsection.
Note: The person will not be liable under this subsection merely because
there are insufficient trust assets out of which the corporation can be
indemnified.
(2) The person is not liable under subsection (1) if the person would be
entitled to have been fully indemnified by 1 of the other directors
against the liability had all the directors of the corporation been
trustees when the liability was incurred.
(3) This section does not apply to a liability incurred outside Australia
by a foreign company.
(4) This section does not apply to a liability incurred by a registrable
Australian body outside its place of origin.
(5) This section does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
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Section 197
Corporations Act 2001 277
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Note: Section 271-1 of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006 deals with the liability of directors of Aboriginal
and Torres Strait Islander corporations for debts and other liabilities
incurred by those corporations as trustee.
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Chapter 2D Officers and employees
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Division 4 Powers
Section 198A
278 Corporations Act 2001
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Division 4—Powers
198A Powers of directors (replaceable rule—see section 135)
(1) The business of a company is to be managed by or under the
direction of the directors.
Note: See section 198E for special rules about the powers of directors who
are the single director/shareholder of proprietary companies.
(2) The directors may exercise all the powers of the company except
any powers that this Act or the company’s constitution (if any)
requires the company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow money and issue
debentures.
198B Negotiable instruments (replaceable rule—see section 135)
(1) Any 2 directors of a company that has 2 or more directors, or the
director of a proprietary company that has only 1 director, may
sign, draw, accept, endorse or otherwise execute a negotiable
instrument.
(2) The directors may determine that a negotiable instrument may be
signed, drawn, accepted, endorsed or otherwise executed in a
different way.
198C Managing director (replaceable rule—see section 135)
(1) The directors of a company may confer on a managing director any
of the powers that the directors can exercise.
(2) The directors may revoke or vary a conferral of powers on the
managing director.
198D Delegation
(1) Unless the company’s constitution provides otherwise, the
directors of a company may delegate any of their powers to:
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(a) a committee of directors; or
(b) a director; or
(c) an employee of the company; or
(d) any other person.
Note: The delegation must be recorded in the company’s minute book (see
section 251A).
(2) The delegate must exercise the powers delegated in accordance
with any directions of the directors.
(3) The exercise of the power by the delegate is as effective as if the
directors had exercised it.
198E Single director/shareholder proprietary companies
Powers of director
(1) The director of a proprietary company who is its only director and
only shareholder may exercise all the powers of the company
except any powers that this Act or the company’s constitution (if
any) requires the company to exercise in general meeting. The
business of the company is to be managed by or under the direction
of the director.
Note: For example, the director may issue shares, borrow money and issue
debentures.
Negotiable instruments
(2) The director of a proprietary company who is its only director and
only shareholder may sign, draw, accept, endorse or otherwise
execute a negotiable instrument. The director may determine that a
negotiable instrument may be signed, drawn, accepted, endorsed or
otherwise executed in a different way.
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Division 4 Powers
Section 198F
280 Corporations Act 2001
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198F Right of access to company books
Right while director
(1) A director of a company may inspect the books of the company
(other than its financial records) at all reasonable times for the
purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against
them.
Note: Section 290 gives the director a right of access to financial records.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director of a company may
inspect the books of the company (including its financial records)
at all reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against
them.
This right continues for 7 years after the person ceased to be a
director of the company.
Right to take copies
(3) A person authorised to inspect books under this section for the
purposes of a legal proceeding may make copies of the books for
the purposes of those proceedings.
Company not to refuse access
(4) A company must allow a person to exercise their rights to inspect
or take copies of the books under this section.
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Corporations Act 2001 281
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Interaction with other rules
(5) This section does not limit any right of access to company books
that a person has apart from this section.
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Division 5 Exercise of powers while company under external administration
Section 198G
282 Corporations Act 2001
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Division 5—Exercise of powers while company under
external administration
198G Exercise of powers while company under external
administration
Powers of officers while company under external administration
(1) While a company is under external administration, an officer of the
company must not perform or exercise a function or power of that
office.
Offence
(2) A person commits an offence if:
(a) the person is an officer of a company; and
(b) the company is under external administration; and
(c) the person purports to perform or exercise a function or
power of that office.
Penalty: 25 penalty units.
Exceptions
(3) Subsections (1) and (2) do not apply to the extent that the officer of
the company is acting:
(a) as the external administrator of the company; or
(b) with the written approval of the external administrator of the
company or the Court; or
(c) in circumstances in which, despite the fact that the company
is under external administration, the officer is permitted by
this Act to act.
Note: In proceedings to determine whether a person has committed an
offence under subsection (2), a defendant bears an evidential burden
in relation to the matters in subsection (3), see subsection 13.3(3) of
the Criminal Code.
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Section 198G
Corporations Act 2001 283
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(4) Subsections (1) and (2) do not apply if the company has executed a
deed of company arrangement and the deed has not yet terminated.
Note 1: Section 444G deals with the effect of a deed of company arrangement
on various persons.
Note 2: In proceedings to determine whether a person has committed an
offence under subsection (2), a defendant bears an evidential burden
in relation to the matters in subsection (4), see subsection 13.3(3) of
the Criminal Code.
Functions and powers of liquidator or provisional liquidator
prevail in case of conflict
(5) If subsection (3) applies and there is a conflict between a function
or power of the external administrator of the company and a
function or power of the officer in relation to the company, the
external administrator’s function or power prevails.
Effect of section
(6) This section does not remove an officer of a company from office.
(7) For the purposes of this section, a person is not an officer of a
company merely because he or she is a managing controller,
appointed under a power contained in an instrument, of property of
the company.
(8) Nothing in this section affects a secured creditor’s right to realise
or otherwise deal with the security interest.
Definitions
(9) In this section:
external administration of a company has the same meaning as in
Schedule 2.
external administrator of a company has the same meaning as in
Schedule 2.
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Division 1 Indemnities and insurance for officers and auditors
Section 199A
284 Corporations Act 2001
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Part 2D.2—Restrictions on indemnities, insurance
and termination payments
Division 1—Indemnities and insurance for officers and
auditors
199A Indemnification and exemption of officer or auditor
Exemptions not allowed
(1) A company or a related body corporate must not exempt a person
(whether directly or through an interposed entity) from a liability to
the company incurred as an officer or auditor of the company.
When indemnity for liability (other than for legal costs) not
allowed
(2) A company or a related body corporate 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 or auditor of the
company:
(a) a liability owed to the company or a related body corporate;
(b) a liability for a pecuniary penalty order under section 1317G
or a compensation order under section 961M, 1317H,
1317HA or 1317HB;
(c) a liability that is owed to someone other than the company or
a related body corporate and did not arise out of conduct in
good faith.
This subsection does not apply to a liability for legal costs.
When indemnity for legal costs not allowed
(3) A company or related body corporate must not indemnify a person
(whether by agreement or by making a payment and whether
directly or through an interposed entity) against legal costs
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Indemnities and insurance for officers and auditors Division 1
Section 199B
Corporations Act 2001 285
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incurred in defending an action for a liability incurred as an officer
or auditor of the company if the costs are incurred:
(a) in defending or resisting proceedings in which the person is
found to have a liability for which they could not be
indemnified under subsection (2); or
(b) in defending or resisting criminal proceedings in which the
person is found guilty; or
(c) in defending or resisting proceedings brought by ASIC or a
liquidator for a court order if the grounds for making the
order are found by the court to have been established; or
(d) in connection with proceedings for relief to the person under
this Act in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in responding to
actions taken by ASIC or a liquidator as part of an investigation
before commencing proceedings for the court order.
Note 1: Paragraph (c)—This includes proceedings by ASIC for an order under
section 206C, 206D, 206E or 206EAA (disqualification), section 232
(oppression), section 961M, 1317E, 1317G, 1317H, 1317HA or
1317HB (civil penalties) or section 1324 (injunction).
Note 2: The company may be able to give the person a loan or advance in
respect of the legal costs (see section 212).
(4) For the purposes of subsection (3), the outcome of proceedings is
the outcome of the proceedings and any appeal in relation to the
proceedings.
199B Insurance premiums for certain liabilities of director,
secretary, other officer or auditor
(1) A company or a related body corporate must not pay, or agree to
pay, a premium for a contract insuring a person who is or has been
an officer or auditor of the company against a liability (other than
one for legal costs) arising out of:
(a) conduct involving a wilful breach of duty in relation to the
company; or
(b) a contravention of section 182 or 183.
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Section 199C
286 Corporations Act 2001
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This section applies to a premium whether it is paid directly or
through an interposed entity.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
199C Certain indemnities, exemptions, payments and agreements
not authorised and certain documents void
(1) Sections 199A and 199B do not authorise anything that would
otherwise be unlawful.
(2) Anything that purports to indemnify or insure a person against a
liability, or exempt them from a liability, is void to the extent that
it contravenes section 199A or 199B.
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Termination payments Division 2
Section 200
Corporations Act 2001 287
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Division 2—Termination payments
200 Interpreting this Division
For the purposes of this Division, in determining whether a benefit
is given:
(a) give a broad interpretation to benefits being given, even if
criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to
prevail over its legal form.
200AA Meaning of managerial or executive office
If the company is a disclosing entity
(1) For a company to which section 300A applies for the previous
financial year for the company, a person holds a managerial or
executive office in the company during the current financial year if
the person’s details were included in the directors’ report for that
previous financial year for the company in accordance with
paragraph 300A(1)(c).
Note: A person holding a managerial or executive office ceases to do so if
the person’s details are not included in the next directors’ report.
However, this is not relevant to whether the person has retired from an
office or position in the company (see paragraph 200A(1)(f)).
(2) The person is taken to hold the managerial or executive office for
the whole of the current financial year unless and until the person
retires from an office or position in the company before the end of
that year.
Note: Retires has an extended meaning (see section 200A).
Otherwise
(3) For a body corporate not covered by subsection (1), a managerial
or executive office for the body corporate is:
(a) an office of director of the body corporate; or
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288 Corporations Act 2001
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(b) any other office or position in connection with the
management of the body corporate’s affairs that is held by a
person who also holds an office of director of the body
corporate or a related body corporate.
200AB Meaning of benefit
(1) For the purposes of this Division, a benefit includes any of the
following:
(a) a payment or other valuable consideration;
(b) any kind of real or personal property;
(c) any legal or equitable estate or interest in real or personal
property;
(d) any legal or equitable right;
(e) a thing specified in regulations made for the purposes of this
paragraph.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
(2) However, for the purposes of this Division, a benefit does not
include a thing specified in regulations made for the purposes of
this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
200A When benefit given in connection with retirement from an
office or position
General rules
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement
from an office or position if the benefit is given:
(i) by way of compensation for, or otherwise in connection
with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the
office or position; and
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(b) giving a benefit includes:
(i) if the benefit is a payment—making the payment; and
(ii) if the benefit is an interest in property—transferring the
interest; and
(c) a person gives a benefit even if the person is obliged to give
the benefit under a contract; and
(d) a pension or lump sum is paid or payable in connection with
the person’s retirement from an office or position if the
pension or lump sum is paid or payable:
(i) by way of compensation for, or otherwise in connection
with, the loss by the person of the office or position; or
(ii) in connection with the person’s retirement from the
office or position; and
(e) retirement from an office or position includes:
(i) loss of the office or position; and
(ii) resignation from the office or position; and
(iii) death of a person at a time when they hold the office or
position; and
(f) when working out whether a person has retired from an
office or position, disregard whether or not the person’s
details are included in a directors’ report in accordance with
paragraph 300A(1)(c).
Rules in regulations
(1A) Without limiting subsection (1), a benefit is given in connection
with a person’s retirement from an office or position if the benefit
is given in circumstances specified in regulations made for the
purposes of this subsection.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
Related benefits
(2) For the purposes of this Division, if:
(a) a person (person A) gives another person a benefit (benefit
A); and
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Section 200B
290 Corporations Act 2001
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(b) person A gives benefit A for the purpose, or for purposes
including the purpose, of enabling or assisting someone to
give a person a benefit in connection with the retirement of a
person (person B) from an office or position;
person A is taken to give benefit A in connection with the person
B’s retirement from that office or position.
200B Retirement benefits generally need membership approval
Benefits in connection with retirement if person has held a
managerial or executive office
(1) An entity mentioned in subsection (1AA) must not give a person a
benefit in connection with a person’s (the retiree’s) retirement
from an office, or position of employment, in a company or a
related body corporate if:
(a) the office or position is a managerial or executive office; or
(b) the retiree has, at any time during the last 3 years before his
or her retirement, held a managerial or executive office in the
company or a related body corporate;
unless there is member approval under section 200E for the giving
of the benefit.
Note 1: This subsection extends to benefits given by way of compensation for,
or otherwise in connection with, a person’s loss of an office or
position (see subsections 200A(1) and (3)).
Note 2: Sections 200F, 200G and 200H provide for exceptions to this
subsection.
Note 3: The recipient of the benefit need not be the retiree.
(1AA) The entities are as follows:
(a) the company;
(b) an associate of the company (other than a body corporate that
is related to the company and is itself a company);
(c) a prescribed superannuation fund in relation to the company.
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Section 200B
Corporations Act 2001 291
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(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the benefit is in connection with the retiree’s, or
someone else’s, retirement.
Note: For strict liability, see section 6.1 of the Criminal Code.
Prescribed superannuation funds
(2) For the purposes of this section:
(a) a superannuation fund is taken to be a prescribed
superannuation fund in relation to a company if the company,
or an associate of the company, gives a benefit to the
superannuation fund in prescribed circumstances; and
(b) if a prescribed superannuation fund in relation to a company
gives a benefit to another superannuation fund in prescribed
circumstances, the other superannuation fund is taken to be a
prescribed superannuation fund in relation to the company.
Prescribed circumstances
(3) For the purposes of this section, if:
(a) a company, or an associate of a company, gives a benefit to a
superannuation fund solely for the purpose of enabling or
assisting the superannuation fund to give to a person a benefit
in connection with the retiree’s retirement from an office or
position in the company or a related body corporate; or
(b) a superannuation fund gives a benefit to another
superannuation fund solely for the purpose of enabling or
assisting the other superannuation fund to give to a person a
benefit in connection with the retiree’s retirement from an
office or position in a company or a related body corporate;
the benefit first referred to in paragraph (a) or (b) is taken to be
given in prescribed circumstances.
(4) In this section:
superannuation fund means a provident, benefit, superannuation
or retirement fund.
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Section 200C
292 Corporations Act 2001
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200C Benefits on transfer of undertaking or property need
membership approval
(1) A person must not give a benefit to a person who:
(a) holds, or has at any previous time held, a managerial or
executive office in a company or a related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the
spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the
spouse of an associate of such a person;
in connection with the transfer of the whole or any part of the
undertaking or property of the company.
(2) For an offence based on subsection (1), strict liability applies to the
circumstance, that the transfer is in connection with the transfer of
the whole or any part of the undertaking or property of the
company.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) Subsection (1) does not apply to the extent that there is member
approval under section 200E.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3), see subsection 13.3(3) of the Criminal Code.
200D Contravention to receive benefit without member approval
(1) A person who:
(a) holds, or has at any previous time held, a managerial or
executive office in a company or related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the
spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the
spouse of an associate of such a person;
must not receive a benefit if the giving of the benefit contravenes
section 200B or 200C.
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Section 200E
Corporations Act 2001 293
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(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
200E Approval by members
Conditions for member approval
(1) For the purposes of section 200B, the conditions set out in
subsections (1B), (2) and (2A) must be satisfied for there to be
member approval under this section for the giving of the benefit to
the person in connection with the retiree’s retirement from the
office or position.
(1A) For the purposes of section 200C, the conditions set out in
subsections (1B) and (2) must be satisfied for there to be member
approval under this section for the giving of the benefit.
First condition
(1B) The first condition is that the giving of the benefit be approved by
a resolution passed at a general meeting of:
(a) the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—the listed corporation; and
(c) if the company has a holding company that:
(i) is a domestic corporation that is not listed; and
(ii) is not itself a subsidiary of a domestic corporation;
the holding company.
Second condition
(2) The second condition is that details of the benefit must be set out
in, or accompany, the notice of the general meeting that is to
consider the resolution. The details must include:
(a) if the proposed benefit is a payment:
(i) the amount of the payment; or
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(ii) if that amount cannot be ascertained at the time of the
disclosure—the manner in which that amount is to be
calculated and any matter, event or circumstance that
will, or is likely to, affect the calculation of that amount;
and
(b) otherwise:
(i) the money value of the proposed benefit; or
(ii) if that value cannot be ascertained at the time of the
disclosure—the manner in which that value is to be
calculated and any matter, event or circumstance that
will, or is likely to, affect the calculation of that value.
These requirements are in addition to, and not in derogation of, any
other law that requires disclosure to be made with respect to giving
or receiving a benefit.
Third condition—for approvals relating to section 200B
(2A) The third condition is that at the general meeting, a vote on the
resolution must not be cast (in any capacity) by or on behalf of:
(a) the retiree; or
(b) an associate of the retiree.
(2B) Subsection (2A) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the resolution; and
(b) it is not cast on behalf of the retiree or an associate of the
retiree.
(2C) The regulations may prescribe cases where subsection (2A) does
not apply.
Meeting may approve a lesser benefit
(3) For the purposes of subsection (1B), the resolution may give
approval by approving the giving of another benefit to the person
if:
(a) the other benefit is given to the person instead of the
proposed benefit; and
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Section 200F
Corporations Act 2001 295
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(b) the amount or money value of the benefit is less than the
amount or money value of the proposed benefit.
Effect of approval on directors’ duties
(4) Member approval under this section does not relieve a director of a
body corporate from any duty to the body corporate (whether under
section 180, 181, 182, 183 or 184 or otherwise and whether of a
fiduciary nature or not) in connection with the giving of the
benefit.
200F Exempt benefits and benefits given in certain circumstances
(1) Subsection 200B(1) does not apply to:
(a) a benefit that is a payment made in respect of leave of
absence to which the person is entitled under an industrial
instrument; or
(aa) a benefit given under an order of a court; or
(b) a benefit given in prescribed circumstances.
(2) Subsection 200B(1) does not apply to a benefit given in connection
with a person’s retirement from an office or position in relation to a
company if:
(a) the benefit is:
(i) a genuine payment by way of damages for breach of
contract; or
(ii) given to the person under an agreement made between
the company and the person before the person became
the holder of the office or position as the consideration,
or part of the consideration, for the person agreeing to
hold the office or position; and
(b) the value of the benefit, when added to the value of all other
benefits (if any) already given in connection with the
person’s retirement from offices or positions in the company
and related bodies corporate, does not exceed the amount
worked out under whichever of subsections (3) and (4) is
applicable.
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Section 200F
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(3) This subsection applies if the relevant period for the person is less
than 1 year. The amount worked out under this subsection is:
where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (5).
(4) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base
salary that the person received from the company and related
bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
Estimated Number of days in annual base salary relevant period
365
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Officers and employees Chapter 2D
Restrictions on indemnities, insurance and termination payments Part 2D.2
Termination payments Division 2
Section 200G
Corporations Act 2001 297
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) the person’s annual base salary for the third year were a
reasonable estimate of what the person would have
received as base salary after the second year of the
relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual
base salary that the person received from the company and
related bodies corporate during the last 3 years of the relevant
period.
(5) For the purposes of this section, if a person has held a managerial
or executive office in relation to a company:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period
consisting of those periods.
200G Genuine payments of pension and lump sum
(1) Subsection 200B(1) does not apply to a benefit if:
(a) the benefit is a payment in connection with a person’s
retirement from an office or position in a company or a
related body corporate; and
(b) the payment is for past services the person rendered to:
(i) the company; or
(ii) a related body corporate; or
(iii) a body that was a related body corporate of the company
when the past services were rendered; and
(c) the value of the benefit, when added to the value of all other
benefits (if any) already given in connection with the
person’s retirement from offices or positions in the company
and related bodies corporate does not exceed the amount
worked out under whichever of subsections (2) and (3) is
applicable.
In applying paragraph (c), disregard any pensions or lump sums
that section 200F applies to.
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Chapter 2D Officers and employees
Part 2D.2 Restrictions on indemnities, insurance and termination payments
Division 2 Termination payments
Section 200G
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) This subsection applies if the relevant period for the person is less
than 1 year. The amount worked out under this subsection is:
where:
estimated annual base salary is a reasonable estimate of the base
salary that the person would have received from the company and
related bodies corporate during the relevant period if the relevant
period had been 1 year.
Note: The relevant period for the person is defined in subsection (6).
(3) This subsection applies in every other case. The amount worked
out under this subsection is:
(a) if the relevant period is 1 year—the base salary that the
person received from the company and related bodies
corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual base salary for the second year were
a reasonable estimate of what the person would have
received as base salary after the first year of the relevant
period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual base
salary that the person received from the company and related
bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3
years—the average annual base salary that the person
received from the company and related bodies corporate
during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
Estimated Number of days in annual base salary relevant period
365
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Officers and employees Chapter 2D
Restrictions on indemnities, insurance and termination payments Part 2D.2
Termination payments Division 2
Section 200G
Corporations Act 2001 299
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) the person’s annual base salary for the third year were a
reasonable estimate of what the person would have
received as base salary after the second year of the
relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual
base salary that the person received from the company and
related bodies corporate during the last 3 years of the relevant
period.
(4) In determining for the purposes of paragraph (1)(c) the value of a
pension or lump sum payment, disregard any part of the pension or
lump sum payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a
related body corporate of the company, or that was,
when the contribution was made, such a related body
corporate; or
(iii) an associate of the company, or of a relevant body
corporate, in respect of:
(A) the payment of the pension, or the making of
the lump sum payment, as the case may be; or
(B) the making of the contribution.
(6) In this section:
payment means a payment by way of pension or lump sum and
includes a superannuation, retiring allowance, superannuation
gratuity or similar payment.
relevant period: if a person has held a managerial or executive
office in the company or a related body corporate:
(a) throughout a period; or
(b) throughout a number of periods;
the relevant period for that person is that period or the period
consisting of those periods.
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Chapter 2D Officers and employees
Part 2D.2 Restrictions on indemnities, insurance and termination payments
Division 2 Termination payments
Section 200H
300 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
200H Benefits required by law
Subsection 200B(1) does not apply to a benefit given by a person if
failure to give the benefit would constitute a contravention of a law
in force in Australia or elsewhere (otherwise than because of
breach of contract or breach of trust).
200J Benefits to be held on trust and repaid
(1) If an entity (the giver) contravenes section 200B by giving a
benefit to a person (the recipient), then the amount of the benefit,
or the money value of the benefit if it is not a payment:
(a) is taken to be received by the recipient on trust for the giver;
and
(b) must be immediately repaid by the recipient to the giver.
(1A) An amount repayable under subsection (1) to the giver:
(a) is a debt due to the giver; and
(b) may be recovered by the giver in a court of competent
jurisdiction.
(2) Subsection (1) applies to the whole of the amount of a payment or
of the money value of the benefit even though giving the benefit
would not have contravened section 200B if that amount or value
of the benefit had been less.
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Officers and employees Chapter 2D
Appointment, remuneration and cessation of appointment of directors Part 2D.3
Appointment of directors Division 1
Section 201A
Corporations Act 2001 301
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2D.3—Appointment, remuneration and
cessation of appointment of directors
Division 1—Appointment of directors
Subdivision A—General rules
201A Minimum number of directors
Proprietary companies
(1) A proprietary company must have at least 1 director. That director
must ordinarily reside in Australia.
Public companies
(2) A public company must have at least 3 directors (not counting
alternate directors). At least 2 directors must ordinarily reside in
Australia.
201B Who can be a director
(1) Only an individual who is at least 18 may be appointed as a
director of a company.
(2) A person who is disqualified from managing corporations under
Part 2D.6 may only be appointed as director of a company if the
appointment is made with permission granted by ASIC under
section 206F or leave granted by the Court under section 206G.
201D Consent to act as director
(1) A company contravenes this subsection if a person does not give
the company a signed consent to act as a director of the company
before being appointed.
(2) The company must keep the consent.
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Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 1 Appointment of directors
Section 201E
302 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
201E Special rules for the appointment of public company directors
(1) A resolution passed at a general meeting of a public company
appointing or confirming the appointment of 2 or more directors is
void unless:
(a) the meeting has resolved that the appointments or
confirmations may be voted on together; and
(b) no votes were cast against the resolution.
(2) This section does not affect:
(a) a resolution to appoint directors by an amendment to the
company’s constitution (if any); or
(b) a ballot or poll to elect 2 or more directors if the ballot or poll
does not require members voting for 1 candidate to vote for
another candidate.
(3) For the purposes of paragraph (2)(b), a ballot or poll does not
require a member to vote for a candidate merely because the
member is required to express a preference among individual
candidates in order to cast a valid vote.
201F Special rules for the appointment of directors for single
director/single shareholder proprietary companies
(1) The director of a proprietary company who is its only director and
only shareholder may appoint another director by recording the
appointment and signing the record.
Appointment of new director on death, mental incapacity or
bankruptcy
(2) If a person who is the only director and the only shareholder of a
proprietary company:
(a) dies; or
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Officers and employees Chapter 2D
Appointment, remuneration and cessation of appointment of directors Part 2D.3
Appointment of directors Division 1
Section 201G
Corporations Act 2001 303
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) cannot manage the company because of the person’s mental
incapacity;
and a personal representative or trustee is appointed to administer
the person’s estate or property, the personal representative or
trustee may appoint a person as the director of the company.
(3) If:
(a) the office of the director of a proprietary company is vacated
under subsection 206B(3) or (4) because of the bankruptcy of
the director; and
(b) the person is the only director and the only shareholder of the
company; and
(c) a trustee in bankruptcy is appointed to the person’s property;
the trustee may appoint a person as the director of the company.
(4) A person who has a power of appointment under subsection (2) or
(3) may appoint themselves as director.
(5) A person appointed as a director of a company under
subsection (2), (3) or (4) holds office as if they had been appointed
in the usual way.
201G Company may appoint a director (replaceable rule—see
section 135)
A company may appoint a person as a director by resolution passed
in general meeting.
201H Directors may appoint other directors (replaceable rule—see
section 135)
Appointment by other directors
(1) The directors of a company may appoint a person as a director. A
person can be appointed as a director in order to make up a quorum
for a directors’ meeting even if the total number of directors of the
company is not enough to make up that quorum.
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Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 1 Appointment of directors
Section 201J
304 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Proprietary company—confirmation by meeting within 2 months
(2) If a person is appointed under this section as a director of a
proprietary company, the company must confirm the appointment
by resolution within 2 months after the appointment is made. If the
appointment is not confirmed, the person ceases to be a director of
the company at the end of those 2 months.
Public company—confirmation by next AGM
(3) If a person is appointed by the other directors as a director of a
public company, the company must confirm the appointment by
resolution at the company’s next AGM. If the appointment is not
confirmed, the person ceases to be a director of the company at the
end of the AGM.
201J Appointment of managing directors (replaceable rule—see
section 135)
The directors of a company may appoint 1 or more of themselves
to the office of managing director of the company for the period,
and on the terms (including as to remuneration), as the directors
see fit.
201K Alternate directors (replaceable rule—see section 135)
(1) With the other directors’ approval, a director may appoint an
alternate to exercise some or all of the director’s powers for a
specified period.
(2) If the appointing director requests the company to give the
alternate notice of directors’ meetings, the company must do so.
(3) When an alternate exercises the director’s powers, the exercise of
the powers is just as effective as if the powers were exercised by
the director.
(4) The appointing director may terminate the alternate’s appointment
at any time.
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Officers and employees Chapter 2D
Appointment, remuneration and cessation of appointment of directors Part 2D.3
Appointment of directors Division 1
Section 201L
Corporations Act 2001 305
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) An appointment or its termination must be in writing. A copy must
be given to the company.
Note: ASIC must be given notice of the appointment and termination of
appointment of an alternate (see subsections 205B(2) and (5)).
201L Signpost—ASIC to be notified of appointment
Under section 205B, a company must notify ASIC within 28 days
if a person is appointed as a director or as an alternate director.
201M Effectiveness of acts by directors
(1) An act done by a director is effective even if their appointment, or
the continuance of their appointment, is invalid because the
company or director did not comply with the company’s
constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective
act by a director:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only
legally effective if the person doing them is a director (for example,
calling a meeting of the company’s members or signing a document to
be lodged with ASIC or minutes of a meeting). Sections 128-130
contain rules about the assumptions people are entitled to make when
dealing with a company and its officers.
Subdivision B—Limits on numbers of directors of public
companies
201N Application of Subdivision
(1) This Subdivision applies in relation to a public company if its
constitution allows its directors to set a limit (a board limit) whose
effect is to restrict the number of directors of the company to a
number less than the maximum number of directors specified in the
constitution.
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Chapter 2D Officers and employees
Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 1 Appointment of directors
Section 201P
306 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: This Subdivision applies however the constitution or board limit is
expressed.
(2) If a company’s constitution provides that the maximum number of
directors is either a specified number or another number
determined by the directors:
(a) any number determined by the directors that is lower than the
specified number is a board limit; and
(b) any lowering by the directors of that lower number is also a
board limit.
(3) Subsection (2) does not limit, and is not limited by, subsection (1).
201P Directors must not set board limit unless proposed limit has
been approved by general meeting
(1) The directors must not set a board limit unless:
(a) a resolution (a board limit resolution) approving the proposal
to set the limit specified in the resolution has been passed by
a general meeting of the company; and
(b) the notice of the meeting set out an intention to propose the
board limit resolution and stated the resolution; and
(c) the notice was accompanied by a statement explaining the
resolution and meeting the requirements in section 201Q.
Note 1: Subsection 249L(3) requires information in the notice of meeting to be
presented clearly, concisely and effectively.
Note 2: Section 201U specifies the consequences of a contravention of
subsection (1) of this section. Also, section 1324 provides for
injunctions to enforce subsection (1) of this section.
(2) A board limit resolution has effect until immediately before the
start of the first AGM of the company after the general meeting by
which the resolution was passed.
(3) A board limit resolution does not prevent the appointment of a
person as a director of the company by the other directors of the
company between general meetings of the company.
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Appointment of directors Division 1
Section 201Q
Corporations Act 2001 307
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) However, if a person is appointed by the other directors as a
director of the company while a board limit resolution has effect,
the company must confirm the appointment by resolution at the
company’s next AGM. If the appointment is not confirmed, the
person ceases to be a director of the company at the end of the
AGM.
(5) Subsections (1), (2) and (4) have effect despite the company’s
constitution.
Note: Although subsection (4) is like subsection 201H(3) in many ways, it is
not a replaceable rule like subsection 201H(3).
201Q Requirements for explanatory statement to members
The statement accompanying the notice of a general meeting
stating an intention to propose the board limit resolution must be in
writing and set out clearly, concisely and effectively:
(a) the directors’ reasons for proposing the board limit
resolution; and
(b) all other information that:
(i) is reasonably required by members in order to decide
whether or not it is in the company’s interests to pass
the proposed board limit resolution; and
(ii) is known to the company or to any of its directors.
Note: Section 1309 creates offences where false and misleading material
relating to a corporation’s affairs is made available or furnished to
members.
201R Records of voting on board limit resolution if poll demanded
(1) This section applies if a poll is duly demanded on the question that
the board limit resolution be passed.
(2) For each member of the company who votes on the poll in person,
the company must record in writing:
(a) the member’s name; and
(b) how many votes the member casts for the resolution and how
many against.
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Chapter 2D Officers and employees
Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 1 Appointment of directors
Section 201S
308 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Failure to comply with this subsection is an offence: see
subsection 1311(1).
(3) For each member of the company who votes on the poll by proxy,
or by a representative authorised under section 250D, the company
must record in writing:
(a) the member’s name; and
(b) in relation to each person who votes as proxy, or as such a
representative, for the member:
(i) the person’s name; and
(ii) how many votes the person casts on the resolution as
proxy, or as such a representative, for the member; and
(iii) how many of those votes the person casts for the
resolution and how many against.
Note: Failure to comply with this subsection is an offence: see
subsection 1311(1).
201S Notice of resolution to be lodged
The company must lodge a notice setting out the text of the board
limit resolution within 14 days after the resolution is passed.
201T Declaration by court of substantial compliance
(1) The Court may declare that a requirement set by section 201Q,
201R or 201S has been satisfied if the Court finds that it has been
substantially satisfied.
(2) A declaration may be made only on the application of an interested
person.
201U Consequences of setting board limit in breach of section 201P
Application
(1) This section applies if the directors of the company set a board
limit in contravention of subsection 201P(1).
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Officers and employees Chapter 2D
Appointment, remuneration and cessation of appointment of directors Part 2D.3
Appointment of directors Division 1
Section 201U
Corporations Act 2001 309
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Board limit etc. ineffective
(2) The board limit and anything done in reliance on it have no effect
for the purposes of:
(a) the company’s constitution; or
(b) this Act, except this section.
Note: If a board limit resolution is not passed, the number of directors of a
company that can be appointed (for example by a general meeting)
depends on the maximum number of directors specified by the
company’s constitution. This is so even if the directors purport to set a
board limit despite the fact the board limit resolution was not passed.
(3) If:
(a) one or more directors are appointed by one or more
resolutions passed at a particular general meeting of the
company; and
(b) because of the board limit, the general meeting was not given
the opportunity to pass one or more resolutions appointing a
number of directors such that the number of directors of the
company would (if those resolutions had been passed) have
exceeded the board limit;
every appointment of director made by a resolution passed at the
general meeting is invalid.
Note: This subsection does not apply if a shortage of persons consenting to
be appointed director was the reason the general meeting was not
given the opportunity to pass one or more resolutions appointing a
number of directors such that the number of directors of the company
would (if those resolutions had been passed) have exceeded the board
limit.
(4) Subsections (2) and (3) have effect despite anything else in the
company’s constitution or in this Act, except sections 128, 129 and
201M.
Note: Sections 128 and 129 deal with assumptions a person dealing with the
company may make, including assumptions about the due
appointment of directors. Section 201M deals with effectiveness of
acts by a director in circumstances where the director’s appointment is
invalid for certain reasons.
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Chapter 2D Officers and employees
Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 1 Appointment of directors
Section 201U
310 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Company and candidates for directors may seek compensation
(5) Subsection (6) applies if either of the following (the suffering
party) suffers loss or damage because of the setting of the board
limit in contravention of subsection 201P(1):
(a) the company;
(b) a person for whom both the following conditions are met:
(i) the person had given the company a written indication
that he or she would be a candidate to be appointed
director at a general meeting;
(ii) because of the board limit, the general meeting was not
given the opportunity to consider passing a resolution to
appoint the person as director.
(6) The suffering party may institute a proceeding in the Court for the
contravention.
Note: Section 1325 deals with the orders the Court may make to compensate
the suffering party for the loss.
Contravention does not give rise to an offence
(7) A person is not guilty of an offence because of the contravention.
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Appointment, remuneration and cessation of appointment of directors Part 2D.3
Remuneration of directors Division 2
Section 202A
Corporations Act 2001 311
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Remuneration of directors
202A Remuneration of directors (replaceable rule—see section 135)
(1) The directors of a company are to be paid the remuneration that the
company determines by resolution.
Note: Chapter 2E makes special provision for the payment of remuneration
to the directors of public companies.
(2) The company may also pay the directors’ travelling and other
expenses that they properly incur:
(a) in attending directors’ meetings or any meetings of
committees of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company’s business.
202B Members may obtain information about directors’
remuneration
(1) A company must disclose the remuneration paid to each director of
the company or a subsidiary (if any) by the company or by an
entity controlled by the company if the company is directed to
disclose the information by:
(a) members with at least 5% of the votes that may be cast at a
general meeting of the company; or
(b) at least 100 members who are entitled to vote at a general
meeting of the company.
The company must disclose all remuneration paid to the director,
regardless of whether it is paid to the director in relation to their
capacity as director or another capacity.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The company must comply with the direction as soon as
practicable by:
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Division 2 Remuneration of directors
Section 202C
312 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) preparing a statement of the remuneration of each director of
the company or subsidiary for the last financial year before
the direction was given; and
(b) having the statement audited; and
(c) sending a copy of the audited statement to each person
entitled to receive notice of general meetings of the company.
202C Special rule for single director/single shareholder proprietary
companies
A person who is the only director and the only shareholder of a
proprietary company is to be paid any remuneration for being a
director that the company determines by resolution. The company
may also pay the director’s travelling and other expenses properly
incurred by the director in connection with the company’s
business.
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Officers and employees Chapter 2D
Appointment, remuneration and cessation of appointment of directors Part 2D.3
Resignation, retirement or removal of directors Division 3
Section 203A
Corporations Act 2001 313
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Resignation, retirement or removal of
directors
203A Director may resign by giving written notice to company
(replaceable rule—see section 135)
A director of a company may resign as a director of the company
by giving a written notice of resignation to the company at its
registered office.
203B Signpost to consequences of disqualification from managing
corporations
A person ceases to be a director of a company if the person
becomes disqualified from managing corporations under Part 2D.6
(see subsection 206A(2)) unless ASIC or the Court allows them to
manage the company (see sections 206F and 206G).
203C Removal by members—proprietary companies (replaceable
rule—see section 135)
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director
instead.
203D Removal by members—public companies
Resolution for removal of director
(1) A public company may by resolution remove a director from office
despite anything in:
(a) the company’s constitution (if any); or
(b) an agreement between the company and the director; or
(c) an agreement between any or all members of the company
and the director.
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Chapter 2D Officers and employees
Part 2D.3 Appointment, remuneration and cessation of appointment of directors
Division 3 Resignation, retirement or removal of directors
Section 203D
314 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
If the director was appointed to represent the interests of particular
shareholders or debenture holders, the resolution to remove the
director does not take effect until a replacement to represent their
interests has been appointed.
Note: See sections 249C to 249G for the rules on who may call meetings,
sections 249H to 249M on how to call meetings and sections 249N to
249Q for rules on members’ resolutions.
Notice of intention to move resolution for removal of director
(2) Notice of intention to move the resolution must be given to the
company at least 2 months before the meeting is to be held.
However, if the company calls a meeting after the notice of
intention is given under this subsection, the meeting may pass the
resolution even though the meeting is held less than 2 months after
the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see
subsection 249H(3)).
Director to be informed
(3) The company must give the director a copy of the notice as soon as
practicable after it is received.
Director’s right to put case to members
(4) The director is entitled to put their case to members by:
(a) giving the company a written statement for circulation to
members (see subsections (5) and (6)); and
(b) speaking to the motion at the meeting (whether or not the
director is a member of the company).
(5) The written statement is to be circulated by the company to
members by:
(a) sending a copy to everyone to whom notice of the meeting is
sent if there is time to do so; or
(b) if there is not time to comply with paragraph (a)—having the
statement distributed to members attending the meeting and
read out at the meeting before the resolution is voted on.
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(6) The director’s statement does not have to be circulated to members
if it is more than 1,000 words long or defamatory.
Time of retirement
(7) If a person is appointed to replace a director removed under this
section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had
become director on the day on which the replaced director was last
appointed a director.
Strict liability offences
(8) An offence based on subsection (3) or (5) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
203E Director cannot be removed by other directors—public
companies
A resolution, request or notice of any or all of the directors of a
public company is void to the extent that it purports to:
(a) remove a director from their office; or
(b) require a director to vacate their office.
203F Termination of appointment of managing director (replaceable
rule—see section 135)
(1) A person ceases to be managing director if they cease to be a
director.
(2) The directors may revoke or vary an appointment of a managing
director.
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Part 2D.4 Appointment of secretaries
Section 204A
316 Corporations Act 2001
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Part 2D.4—Appointment of secretaries
204A Minimum number of secretaries
Proprietary companies
(1) A proprietary company is not required to have a secretary but, if it
does have 1 or more secretaries, at least 1 of them must ordinarily
reside in Australia.
Public companies
(2) A public company must have at least 1 secretary. At least 1 of them
must ordinarily reside in Australia.
Strict liability offences
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
204B Who can be a secretary
(1) Only an individual who is at least 18 may be appointed as a
secretary of a company.
(2) A person who is disqualified from managing corporations under
Part 2D.6 may only be appointed as a secretary of a company if the
appointment is made with permission granted by ASIC under
section 206F or leave granted by the Court under section 206G.
204C Consent to act as secretary
(1) A company contravenes this subsection if a person does not give
the company a signed consent to act as secretary of the company
before being appointed.
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(2) The company must keep the consent.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
204D How a secretary is appointed
A secretary is to be appointed by the directors.
Note 1: The company must notify ASIC of the appointment within 28 days
(see subsection 205B(1)).
Note 2: Section 188 deals with the responsibilities of secretaries for
contraventions by the company.
204E Effectiveness of acts by secretaries
(1) An act done by a secretary is effective even if their appointment, or
the continuance of their appointment, is invalid because the
company or secretary did not comply with the company’s
constitution (if any) or any provision of this Act.
(2) Subsection (1) does not deal with the question whether an effective
act by a secretary:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only
legally effective if the person doing them is a secretary (for example,
signing and sending out a notice of a meeting of directors if the
company’s constitution authorises the secretary to do so or signing a
document to be lodged with ASIC). Sections 128-130 contain rules
about the assumptions people are entitled to make when dealing with a
company and its officers.
204F Terms and conditions of office for secretaries (replaceable
rule—see section 135)
A secretary holds office on the terms and conditions (including as
to remuneration) that the directors determine.
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Section 204G
318 Corporations Act 2001
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204G Signpost to consequences of disqualification from managing
corporations
A person ceases to be a secretary of a company if the person
becomes disqualified from managing corporations under Part 2D.6
(see subsection 206A(2)) unless ASIC or the Court allows them to
manage the company (see sections 206F and 206G).
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Section 205A
Corporations Act 2001 319
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Part 2D.5—Public information about directors and
secretaries
205A Director, secretary or alternate director may notify ASIC of
resignation or retirement
(1) If a director, secretary or alternate director retires or resigns, they
may give ASIC written notice of the retirement or resignation. The
notice must be in the prescribed form.
(2) To be effective, a notice of resignation must be accompanied by a
copy of the letter of resignation given to the company.
Note: If a director, secretary or alternative director of a company gives a
written notice in accordance with this section, the company is not
required to lodge a notice with ASIC under subsection 205B(5) (see
subsection 205B(6)).
205B Notice of name and address of directors and secretaries to
ASIC
New directors or secretaries
(1) A company must lodge with ASIC a notice of the personal details
of a director or secretary within 28 days after they are appointed.
The notice must be in the prescribed form.
Note 1: If a person becomes a director under subsection 120(1) there is no
appointment and no notice is required under this subsection.
Note 2: If a person who was appointed as an alternate director becomes a
director under the terms of their appointment as an alternate director,
there is no appointment as a director and no notice is required under
this subsection.
New alternate directors
(2) A company must lodge with ASIC a notice of:
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(a) the personal details of a person who is appointed as an
alternate director; and
(b) the terms of their appointment (including terms about when
the alternate director is to act as a director);
within 28 days after their appointment as an alternate director. The
notice must be in the prescribed form.
Personal details
(3) The personal details of a director, alternate director, or secretary
are:
(a) their given and family names; and
(b) all of their former given and family names; and
(c) their date and place of birth; and
(d) their address.
Note: For address see section 205D.
Changes in details
(4) The company must lodge with ASIC notice of any change in the
personal details of a director, alternate director or secretary within
28 days after the change. The notice must be in the prescribed
form.
Notice required if person stops being a director or secretary
(5) If a person stops being a director, alternate director or secretary of
the company, the company must lodge with ASIC notice of the fact
within 28 days. The notice must be in the prescribed form.
(6) Subsection (5) does not apply if:
(a) the person was an alternate director who stopped being a
director in accordance with the terms of their appointment as
an alternate director; or
(b) the person gives ASIC a written notice of the person’s
retirement or resignation as a director, alternate director or
secretary of the company in accordance with section 205A.
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Section 205C
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Note: A defendant bears an evidential burden in relation to the matter in
subsection (6), see subsection 13.3(3) of the Criminal Code.
(7) An offence based on subsection (1), (2), (4) or (5) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205C Director and secretary must give information to company
(1) A director, alternate director or secretary must give the company
any information the company needs to comply with
subsection 205B(1) or (2) within 7 days after their initial
appointment unless they have previously given the information to
the company.
(2) A director, alternate director or secretary must give the company
any information the company needs to comply with
subsection 205B(4) within 7 days after any change in their personal
details.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205D Address for officers
Address is normally residential address
(1) A person’s address for the purposes of a notice or application
under subsection 5H(2), 117(2), 205B(1), (2) or (4) or 601BC(2)
must be their usual residential address unless they are entitled to
have an alternative address substituted for their usual residential
address under subsection (2).
Entitlement to have alternative address
(2) The person is entitled to have an alternative address substituted for
their usual residential address if:
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(a) their name, but not their residential address, is on an electoral
roll under the Commonwealth Electoral Act 1918 because of
section 104 of that Act; or
(b) their name is not on an electoral roll under that Act and ASIC
determines, in writing, that including their residential address
in the notice or application would put at risk their personal
safety or the personal safety of members of their family.
This alternative address must be in Australia and be one at which
documents can be served on the person. At any particular time, a
person is entitled to have only 1 alternative address under this
section.
Note: See subsection 109X(2) on the status of the alternative address as an
address for service.
(3) A person who takes advantage of subsection (2) must:
(a) before or at the same time as the alternative address is first
included in a notice or application, lodge with ASIC notice of
the person’s usual residential address; and
(b) lodge with ASIC notice of any change in the person’s usual
residential address within 14 days after the change.
A notice under this subsection must be in the prescribed form.
(4) If a court gives a judgment for payment of a sum of money against
a person who is taking advantage of subsection (2), ASIC may give
details of the person’s usual residential address to an officer of the
court for the purposes of enforcing the judgment debt.
205E ASIC’s power to ask for information about person’s position
as director or secretary
(1) ASIC may ask a person, in writing, to inform ASIC:
(a) whether the person is a director or secretary of a particular
company; and
(b) if the person is no longer a director or secretary of the
company—the date on which the person stopped being a
director or secretary.
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Section 205F
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(2) The person must give the information to ASIC in writing by the
date specified in the request.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205F Director must give information to company
(1) A director must give the company any information affecting or
relating to the director that the company needs, or will need, to
comply with Chapter 6. The director must give the information to
the company as soon as practicable after becoming aware that the
company needs, or will need, the information. The company must
give the information to each of the other directors of the company
within 7 days of receiving it.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
205G Listed company—director to notify market operator of
shareholdings etc.
Notifiable interests
(1) A director of a listed public company must notify the relevant
market operator under subsections (3) and (4) of the following
interests of the director:
(a) relevant interests in securities of the company or a related
body corporate;
(b) contracts:
(i) to which the director is a party or under which the
director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in,
debentures of, or interests in a managed investment
scheme made available by, the company or a related
body corporate.
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Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
(2) A notice of a relevant interest in securities under paragraph (1)(a)
must give details of:
(a) the number of securities; and
(b) the circumstances giving rise to the relevant interest.
Occasions for initial notification
(3) The director must notify the relevant market operator within 14
days after each of the following occasions:
(a) appointment as a director of the company;
(b) the listing of the company.
Paragraph (a) does not apply to a director who retires and is then
reappointed at the same meeting.
Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
Updating notices
(4) The director must notify the relevant market operator within 14
days after any change in the director’s interests.
Note: Under section 353, ASIC may determine conditions that must be
complied with when lodging documents electronically under this
subsection.
(5) The director need not give the information to the relevant market
operator under this section if the director has already given the
information to the relevant market operator.
ASIC’s power to make class orders
(6) ASIC may make an order in writing relieving a director of the
obligation to notify the relevant market operator of an interest in a
security or contract. The order may be made in respect of a
specified class of companies, directors, securities or contracts.
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(7) The order may be expressed to be subject to conditions.
(8) Notice of the making, revocation or suspension of the order must
be published in the Gazette.
Strict liability offences
(9) An offence based on subsection (1), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 2D.6 Disqualification from managing corporations
Section 206A
326 Corporations Act 2001
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Part 2D.6—Disqualification from managing
corporations
206A Disqualified person not to manage corporations
(1) A person who is disqualified from managing corporations under
this Part commits an offence if:
(a) they make, or participate in making, decisions that affect the
whole, or a substantial part, of the business of the
corporation; or
(b) they exercise the capacity to affect significantly the
corporation’s financial standing; or
(c) they communicate instructions or wishes (other than advice
given by the person in the proper performance of functions
attaching to the person’s professional capacity or their
business relationship with the directors or the corporation) to
the directors of the corporation:
(i) knowing that the directors are accustomed to act in
accordance with the person’s instructions or wishes; or
(ii) intending that the directors will act in accordance with
those instructions or wishes.
Note: Under section 1274AA, ASIC is required to keep a record of persons
disqualified from managing corporations.
(1A) For an offence based on subsection (1), strict liability applies to the
circumstance, that the person is disqualified from managing
corporations under this Part.
Note: For strict liability, see section 6.1 of the Criminal Code.
(1B) It is a defence to a contravention of subsection (1) if the person had
permission to manage the corporation under either section 206F or
206G and their conduct was within the terms of that permission.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (1B), see subsection 13.3(3) of the Criminal Code.
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Section 206B
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(2) A person ceases to be a director, alternate director or a secretary of
a company if:
(a) the person becomes disqualified from managing corporations
under this Part; and
(b) they are not given permission to manage the corporation
under section 206F or 206G.
Note: If a person ceases to be a director, alternate director or a secretary
under subsection (2) the company must notify ASIC (see
subsection 205B(5)).
206B Automatic disqualification—convictions, bankruptcy and
foreign court orders etc.
Convictions
(1) A person becomes disqualified from managing corporations if the
person:
(a) is convicted on indictment of an offence that:
(i) concerns the making, or participation in making, of
decisions that affect the whole or a substantial part of
the business of the corporation; or
(ii) concerns an act that has the capacity to affect
significantly the corporation’s financial standing; or
(b) is convicted of an offence that:
(i) is a contravention of this Act and is punishable by
imprisonment for a period greater than 12 months; or
(ii) involves dishonesty and is punishable by imprisonment
for at least 3 months; or
(c) is convicted of an offence against the law of a foreign
country that is punishable by imprisonment for a period
greater than 12 months.
The offences covered by paragraph (a) and subparagraph (b)(ii)
include offences against the law of a foreign country.
(2) The period of disqualification under subsection (1) starts on the
day the person is convicted and lasts for:
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(a) if the person does not serve a term of imprisonment—5 years
after the day on which they are convicted; or
(b) if the person serves a term of imprisonment—5 years after
the day on which they are released from prison.
Bankruptcy or personal insolvency agreement
(3) A person is disqualified from managing corporations if the person
is an undischarged bankrupt under the law of Australia, its external
territories or another country.
(4) A person is disqualified from managing corporations if:
(a) the person has executed a personal insolvency agreement
under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) a similar law of an external Territory or a foreign
country; and
(b) the terms of the agreement have not been fully complied
with.
(5) A person is disqualified from managing corporations at a particular
time if the person is, at that time, disqualified from managing
Aboriginal and Torres Strait Islander corporations under Part 6-5
of the Corporations (Aboriginal and Torres Strait Islander) Act
2006.
Foreign court orders
(6) A person is disqualified from managing corporations if the person
is disqualified, under an order made by a court of a foreign
jurisdiction that is in force, from:
(a) being a director of a foreign company; or
(b) being concerned in the management of a foreign company.
Definitions
(7) In this section:
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Section 206BA
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foreign jurisdiction means a foreign country, or part of a foreign
country, prescribed by the regulations as a foreign jurisdiction for
the purposes of this section.
206BA Extension of period of automatic disqualification under
section 206B
(1) This section applies if:
(a) under subsection 206B(1); or
(b) as a result of the operation of subsection 279-5(1) of the
Corporations (Aboriginal and Torres Strait Islander) Act
2006 and subsection 206B(5) of this Act;
a person is disqualified from managing corporations on being
convicted of an offence.
(2) On application by ASIC, the Court may extend by up to an
additional 15 years the period of disqualification.
(3) ASIC must apply:
(a) before the period of disqualification begins; or
(b) before the end of the first year of the disqualification.
(4) ASIC may apply only once in relation to the disqualification.
(5) In determining whether an extension is justified (and if so, for how
long), the Court may have regard to any matters that the Court
considers appropriate.
206C Court power of disqualification—contravention of civil
penalty provision
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for a period that the Court considers
appropriate if:
(a) a declaration is made under:
(i) section 1317E (civil penalty provision) that the person
has contravened a corporation/scheme civil penalty
provision; or
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(ii) section 386-1 (civil penalty provision) of the
Corporations (Aboriginal and Torres Strait Islander)
Act 2006 that the person has contravened a civil penalty
provision (within the meaning of that Act); and
(b) the Court is satisfied that the disqualification is justified.
(2) In determining 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.
(3) To avoid doubt, the reference in paragraph (2)(a) to a corporation
includes a reference to an Aboriginal and Torres Strait Islander
corporation.
206D Court power of disqualification—insolvency and non-payment
of debts
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for up to 20 years if:
(a) within the last 7 years, the person has been an officer of 2 or
more corporations when they have failed; and
(b) the Court is satisfied that:
(i) the manner in which the corporation was managed was
wholly or partly responsible for the corporation failing;
and
(ii) the disqualification is justified.
(1A) To avoid doubt, the references in paragraphs (1)(a) and (b) to a
corporation include references to an Aboriginal and Torres Strait
Islander corporation.
(2) For the purposes of subsection (1), a corporation fails if:
(a) a Court orders the corporation to be wound up under:
(i) section 459B of this Act; or
(ii) section 526-1 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006;
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because the Court is satisfied that the corporation is
insolvent; or
(b) the corporation enters into voluntary liquidation and creditors
are not fully paid or are unlikely to be fully paid; or
(c) the corporation executes a deed of company arrangement and
creditors are not fully paid or are unlikely to be fully paid; or
(d) the corporation ceases to carry on business and creditors are
not fully paid or are unlikely to be fully paid; or
(e) a levy of execution against the corporation is not satisfied; or
(f) a receiver, receiver and manager, or provisional liquidator is
appointed in relation to the corporation; or
(g) the corporation enters into a compromise or arrangement
with its creditors under Part 5.1 (including that Part as
applied by section 45-1 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006); or
(h) the corporation is wound up and a liquidator lodges a report
under subsection 533(1) (including that subsection as applied
by section 526-35 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006) about the corporation’s
inability to pay its debts.
Note: To satisfy paragraph (h), a corporation must begin to be wound up
while the person is an officer or within 12 months after the person
ceases to be an officer. However, the report under subsection 533(1)
may be lodged by the liquidator at a time that is more than 12 months
after the person ceases to be an officer. Sections 513A to 513D
contain rules about when a company begins to be wound up.
(2A) The reference in paragraph (2)(c) to a deed of company
arrangement includes a reference to a deed of corporation
arrangement (within the meaning of the Corporations (Aboriginal
and Torres Strait Islander) Act 2006.
(2B) For the purposes of subsection (1), a person is an officer of an
Aboriginal and Torres Strait Islander corporation if the person is an
officer of that corporation within the meaning of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
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(3) In determining 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.
(4) To avoid doubt, the reference in paragraph (3)(a) to a corporation
includes a reference to an Aboriginal and Torres Strait Islander
corporation.
206E Court power of disqualification—repeated contraventions of
Act
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for the period that the Court considers
appropriate if:
(a) the person:
(i) has at least twice been an officer of a body corporate
that has contravened this Act or the Corporations
(Aboriginal and Torres Strait Islander) Act 2006 while
they were an officer of the body corporate and each time
the person has failed to take reasonable steps to prevent
the contravention; or
(ii) has at least twice contravened this Act or the
Corporations (Aboriginal and Torres Strait Islander)
Act 2006 while they were an officer of a body corporate;
or
(iii) has been an officer of a body corporate and has done
something that would have contravened
subsection 180(1) or section 181 if the body corporate
had been a corporation; and
(b) the Court is satisfied that the disqualification is justified.
(1A) For the purposes of subsection (1), a person is an officer of an
Aboriginal and Torres Strait Islander corporation if the person is an
officer of that corporation within the meaning of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
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(2) In determining 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.
(3) To avoid doubt, the reference in paragraph (2)(a) to a corporation
includes a reference to an Aboriginal and Torres Strait Islander
corporation.
206EAA Court power of disqualification—disqualification under a
law of a foreign jurisdiction
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for the period that the Court considers
appropriate if:
(a) the person is disqualified under the law of a foreign
jurisdiction from:
(i) being a director of, or being concerned in the
management of, a foreign company; or
(ii) carrying on activities that the Court is satisfied are
substantially similar to being a director of, or being
concerned in the management of, a foreign company;
and
(b) the Court is satisfied that the disqualification under this
subsection is justified.
(2) In determining what is an appropriate period for which to
disqualify the person, the Court may have regard to the period for
which the person is disqualified under the law of the foreign
jurisdiction.
(3) In determining 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 a foreign company; and
(b) any other matters that the Court considers appropriate.
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Chapter 2D Officers and employees
Part 2D.6 Disqualification from managing corporations
Section 206EA
334 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) In this section:
foreign jurisdiction has the same meaning as in section 206B.
206EA Disqualification under the Competition and Consumer Act
2010 etc.
A person is disqualified from managing corporations if a court
order disqualifying the person from managing corporations is in
force under:
(a) section 86E of the Competition and Consumer Act 2010; or
(b) section 248 of Schedule 2 to that Act, as that section applies
as a law of the Commonwealth, a State or a Territory.
206EB Disqualification under the ASIC Act
A person is disqualified from managing corporations if a court
order disqualifying the person from managing corporations is in
force under section 12GLD of the ASIC Act.
206F ASIC’s power of disqualification
Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up
to 5 years if:
(a) within 7 years immediately before ASIC gives a notice under
paragraph (b)(i):
(i) the person has been an officer of 2 or more
corporations; and
(ii) while the person was an officer, or within 12 months
after the person ceased to be an officer of those
corporations, each of the corporations was wound up
and a liquidator lodged a report under subsection 533(1)
(including that subsection as applied by section 526-35
of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006) about the corporation’s inability to
pay its debts; and
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Disqualification from managing corporations Part 2D.6
Section 206F
Corporations Act 2001 335
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) ASIC has given the person:
(i) a notice in the prescribed form requiring them to
demonstrate why they should not be disqualified; and
(ii) an opportunity to be heard on the question; and
(c) ASIC is satisfied that the disqualification is justified.
(1A) To avoid doubt, the references in paragraph (1)(a) to corporations
include references to Aboriginal and Torres Strait Islander
corporations.
Grounds for disqualification
(2) In determining whether disqualification is justified, ASIC:
(a) must have regard to whether any of the corporations
mentioned in subsection (1) were related to one another; and
(b) may have regard to:
(i) the person’s conduct in relation to the management,
business or property of any corporation; and
(ii) whether the disqualification would be in the public
interest; and
(iii) any other matters that ASIC considers appropriate.
(2A) To avoid doubt, the references in subsection (2) to a corporation
includes a reference to an Aboriginal and Torres Strait Islander
corporation.
Notice of disqualification
(3) If ASIC disqualifies a person from managing corporations under
this section, ASIC must serve a notice on the person advising them
of the disqualification. The notice must be in the prescribed form.
Start of disqualification
(4) The disqualification takes effect from the time when a notice
referred to in subsection (3) is served on the person.
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Part 2D.6 Disqualification from managing corporations
Section 206G
336 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
ASIC power to grant leave
(5) ASIC may give a person who it has disqualified from managing
corporations under this Part written permission to manage a
particular corporation or corporations. The permission may be
expressed to be subject to conditions and exceptions determined by
ASIC.
206G Court power to grant leave
(1) A person who is disqualified from managing corporations may
apply to the Court for leave to manage:
(a) corporations; or
(b) a particular class of corporations; or
(c) a particular corporation;
if the person was not disqualified by ASIC.
(2) The person must lodge a notice with ASIC at least 21 days before
commencing the proceedings. The notice must be in the prescribed
form.
(3) The order granting leave may be expressed to be subject to
exceptions and conditions determined by the Court.
Note: If the Court grants the person leave to manage the corporation, the
person may be appointed as a director (see section 201B) or secretary
(see section 204B) of a company.
(4) The person must lodge with ASIC a copy of any order granting
leave within 14 days after the order is made.
(5) On application by ASIC, the Court may revoke the leave. The
order revoking leave does not take effect until it is served on the
person.
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Disqualification from managing corporations Part 2D.6
Section 206GA
Corporations Act 2001 337
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
206GA Involvement of ACCC—leave orders under section 206G
Scope of section
(1) This section applies in relation to a person who is disqualified from
managing corporations under section 206EA.
Notice lodged with ASIC before leave application
(2) If the person lodges a notice with ASIC under subsection 206G(2),
ASIC must give the ACCC a copy of the notice.
Leave orders
(3) If the person lodges a copy of an order with ASIC under
subsection 206G(4), ASIC must give the ACCC a copy of the
order.
Revoking leave
(4) If ASIC decides to apply for an order under subsection 206G(5) in
relation to the person, it must consult the ACCC before making the
application.
Definition
(5) In this section:
ACCC means the Australian Competition and Consumer
Commission.
206H Territorial application of this Part
This Part (except for subsection 206B(6) and section 206EAA)
does not apply in respect of an act or omission by a person while
they are managing a corporation that is a foreign company unless
the act or omission occurred in connection with:
(a) the foreign company carrying on business in this jurisdiction;
or
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Part 2D.6 Disqualification from managing corporations
Section 206HA
338 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) an act that the foreign company does, or proposes to do, in
this jurisdiction; or
(c) a decision by the foreign company whether or not to do, or
refrain from doing, an act in this jurisdiction.
206HA Limited application of Part to registrable Australian bodies
This Part does not apply in respect of an act or omission by a
person while they are managing a corporation that is a registrable
Australian body unless the act or omission occurred in connection
with:
(a) the body carrying on business outside its place of origin; or
(b) an act that the body does or proposes to do outside its place
of origin; or
(c) a decision by the body whether or not to do, or refrain from
doing, an act outside its place of origin.
206HB Part does not apply to Aboriginal and Torres Strait Islander
corporations
This Part does not apply, of its own force, to disqualify a person
from managing a corporation that is an Aboriginal and Torres
Strait Islander corporation.
Note 1: Subsection 279-5(5) of the Corporations (Aboriginal and Torres
Strait Islander) Act 2006 provides that a person who is disqualified
from managing corporations under this Part will be automatically
disqualified under Part 6-5 of that Act from managing Aboriginal and
Torres Strait Islander corporations.
Note 2: Similarly, subsection 206B(5) of this Act provides that a person who
is disqualified from managing Aboriginal and Torres Strait Islander
corporations under Part 6-5 of the Corporations (Aboriginal and
Torres Strait Islander) Act 2006 will be automatically disqualified
under this Part from managing corporations.
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Officers and employees Chapter 2D
Ban on hedging remuneration of key management personnel Part 2D.7
Section 206J
Corporations Act 2001 339
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2D.7—Ban on hedging remuneration of key
management personnel
206J No hedging of remuneration of key management personnel
(1) A member of the key management personnel for a company that is
a disclosing entity, or a closely related party of such a member,
must not enter into an arrangement (with anyone) if the
arrangement would have the effect of limiting the exposure of the
member to risk relating to an element of the member’s
remuneration that:
(a) has not vested in the member; or
(b) has vested in the member but remains subject to a holding
lock.
(2) Without limiting paragraph (1)(a), remuneration that is not payable
to a member until a particular day is, until that day, remuneration
that has not vested in the member.
(3) In determining whether an arrangement has the effect described in
subsection (1) in relation to an element of remuneration described
in that subsection, regard is to be had to the regulations (if any)
made for the purposes of this subsection.
(4) A member of the key management personnel for a company who
contravenes subsection (1) commits an offence.
(5) An offence against subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) A person commits an offence if:
(a) the person is a member of the key management personnel for
a company; and
(b) a closely related party of the member contravenes
subsection (1) in relation to the member; and
(c) the person is reckless as to the contravention.
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Part 2D.7 Ban on hedging remuneration of key management personnel
Section 206J
340 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(7) A closely related party of a member of the key management
personnel for a company commits an offence if the party
intentionally contravenes subsection (1) in relation to the member.
(8) ASIC may by writing declare that subsection (1) does not apply to
a specified arrangement, but may do so only if ASIC is satisfied
that the operation of that subsection would be unreasonable in the
circumstances. The declaration has effect accordingly. The
declaration is not a legislative instrument.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (8): see subsection 13.3(3) of the Criminal Code.
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Officers and employees Chapter 2D
Remuneration recommendations in relation to key management personnel for disclosing
entities Part 2D.8
Section 206K
Corporations Act 2001 341
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2D.8—Remuneration recommendations in
relation to key management personnel for
disclosing entities
206K Board to approve remuneration consultants
(1) This section applies to a contract (a remuneration consultancy
contract):
(a) that is for services that include making a remuneration
recommendation in relation to one or more members of the
key management personnel for a company that is a disclosing
entity; and
(b) that is between the company and a person (the proposed
consultant) who, by making the recommendation under the
contract, will be a remuneration consultant.
(2) Before a company enters into a remuneration consultancy contract,
the proposed consultant must be approved by:
(a) the directors of the company; or
(b) the members of a committee (the remuneration committee)
that:
(i) is a committee of the board of directors of the company;
and
(ii) has functions relating to the remuneration of key
management personnel for the company.
(3) A contravention of subsection (2):
(a) is not an offence except as provided by subsection (4); and
(b) does not affect the validity of the contract.
(4) The company commits an offence if, at the time the company
enters into the contract, the proposed consultant has not been
approved in accordance with subsection (2).
(5) An offence against subsection (4) is an offence of strict liability.
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Chapter 2D Officers and employees
Part 2D.8 Remuneration recommendations in relation to key management personnel
for disclosing entities
Section 206L
342 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For strict liability, see section 6.1 of the Criminal Code.
206L Remuneration recommendation by remuneration consultants
(1) This section applies to a remuneration recommendation made by a
remuneration consultant in relation to one or more members of the
key management personnel for a company that is a disclosing
entity.
(2) The remuneration consultant must provide the recommendation
directly to either or both of the following:
(a) the directors of the company;
(b) the members of the remuneration committee (if any).
(3) However, the remuneration consultant must not provide the
recommendation to a person who is an executive director of the
company unless all the directors of the company are executive
directors of the company.
(4) The remuneration consultant must not provide the recommendation
to a person who is neither a director of the company nor a member
of the remuneration committee.
(5) If the remuneration consultant contravenes subsection (2) the
remuneration consultant is not guilty of an offence. This does not
prevent the remuneration consultant from being guilty of an
offence for contravening subsection (3) or (4).
Note: Subsection 1311(1) makes it an offence for the remuneration
consultant to contravene subsection (3) or (4).
(6) This section does not prevent someone other than the remuneration
consultant from providing the recommendation to a person who is
neither a director of the company nor a member of the
remuneration committee.
206M Declaration by remuneration consultant
(1) This section applies to a remuneration consultant who makes a
remuneration recommendation in relation to one or more members
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Remuneration recommendations in relation to key management personnel for disclosing
entities Part 2D.8
Section 206M
Corporations Act 2001 343
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
of the key management personnel for a company that is a
disclosing entity.
(2) The remuneration consultant must include with the
recommendation a declaration about whether the consultant’s
recommendation is made free from undue influence by the member
or members of the key management personnel to whom the
recommendation relates.
Note: Failure to comply with this subsection is an offence: see
subsection 1311(1).
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 2E Related party transactions
Section 207
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2E—Related party transactions
207 Purpose
The rules in this Chapter are designed to protect the interests of a
public company’s members as a whole, by requiring member
approval for giving financial benefits to related parties that could
endanger those interests.
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Related party transactions Chapter 2E
Member approval needed for related party benefit Part 2E.1
Need for member approval Division 1
Section 208
Corporations Act 2001 345
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2E.1—Member approval needed for related
party benefit
Division 1—Need for member approval
208 Need for member approval for financial benefit
(1) For a public company, or an entity that the public company
controls, to give a financial benefit to a related party of the public
company:
(a) the public company or entity must:
(i) obtain the approval of the public company’s members in
the way set out in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(b) the giving of the benefit must fall within an exception set out
in sections 210 to 216.
Note 1: Section 228 defines related party, section 9 defines entity,
section 50AA defines control and section 229 affects the meaning of
giving a financial benefit.
Note 2: For the criminal liability of a person dishonestly involved in a
contravention of this subsection, see subsection 209(3). Section 79
defines involved.
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with
subparagraph (1)(a)(i) as a financial benefit given to the
related party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on
the approval being obtained;
member approval for the giving of the benefit is taken to have been
given and the benefit need not be given within the 15 months.
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Chapter 2E Related party transactions
Part 2E.1 Member approval needed for related party benefit
Division 1 Need for member approval
Section 209
346 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
209 Consequences of breach
(1) If the public company or entity contravenes section 208:
(a) the contravention does not affect the validity of any contract
or transaction connected with the giving of the benefit; and
(b) the public company or entity is not guilty of an offence.
Note: A Court may order an injunction to stop the company or entity giving
the benefit to the related party (see section 1324).
(2) A person contravenes this subsection if they are involved in a
contravention of section 208 by a public company or entity.
Note 1: This subsection is a civil penalty provision.
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a
contravention of section 208 by a public company or entity and the
involvement is dishonest.
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Member approval needed for related party benefit Part 2E.1
Exceptions to the requirement for member approval Division 2
Section 210
Corporations Act 2001 347
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Exceptions to the requirement for member
approval
210 Arm’s length terms
Member approval is not needed to give a financial benefit on terms
that:
(a) would be reasonable in the circumstances if the public
company or entity and the related party were dealing at arm’s
length; or
(b) are less favourable to the related party than the terms referred
to in paragraph (a).
211 Remuneration and reimbursement for officer or employee
Benefits that are reasonable remuneration
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is remuneration to a related party as an officer or
employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the
public company; and
(b) to give the remuneration would be reasonable given:
(i) the circumstances of the public company or entity
giving the remuneration; and
(ii) the related party’s circumstances (including the
responsibilities involved in the office or employment).
Benefits that are payments of expenses incurred
(2) Member approval is not needed to give a financial benefit if:
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Chapter 2E Related party transactions
Part 2E.1 Member approval needed for related party benefit
Division 2 Exceptions to the requirement for member approval
Section 212
348 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the benefit is payment of expenses incurred or to be incurred,
or reimbursement for expenses incurred, by a related party in
performing duties as an officer or employee of the following:
(i) the public company;
(ii) an entity that the public company controls;
(iii) an entity that controls the public company;
(iv) an entity that is controlled by an entity that controls the
public company; and
(b) to give the benefit would be reasonable in the circumstances
of the public company or entity giving the remuneration.
(3) For the purposes of this section:
(a) a contribution made by a body corporate to a fund or scheme
for the purposes of making provision for, or obtaining,
superannuation benefits (including defined benefits) for an
officer of the body, or for dependants of an officer of the
body, is remuneration provided by the body to the officer of
the body; and
(b) a financial benefit given to a person because of the person
ceasing to hold an office or employment as an officer or
employee of a body corporate is remuneration paid or
provided to the person in a capacity as an officer of the body.
212 Indemnities, exemptions, insurance premiums and payment for
legal costs for officers
Indemnities, exemptions and insurance premiums
(1) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the
public company or entity; and
(b) the benefit is:
(i) an indemnity, exemption or insurance premium in
respect of a liability incurred as an officer of the public
company or entity; or
(ii) an agreement to give an indemnity or exemption, or to
pay an insurance premium, of that kind; and
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Member approval needed for related party benefit Part 2E.1
Exceptions to the requirement for member approval Division 2
Section 212
Corporations Act 2001 349
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) to give the benefit would be reasonable in the circumstances
of the public company or entity giving the benefit.
Note: Sections 199A to 199C may prohibit giving an indemnity or
exemption or paying an insurance premium for an officer.
Payments in respect of legal costs
(2) Member approval is not needed to give a financial benefit if:
(a) the benefit is for a related party who is an officer of the
public company or entity; and
(b) the benefit is the making of, or an agreement to make, a
payment (whether by way of advance, loan or otherwise) in
respect of legal costs incurred by the officer in defending an
action for a liability incurred as an officer of the public
company or entity; and
(c) either:
(i) section 199A does not apply to the costs; or
(ii) if section 199A applies to the costs—the officer must
repay the amount paid if the costs become costs for
which the company must not give the officer an
indemnity under that section; and
(d) to give the benefit would be reasonable in the circumstances
of the public company or entity giving the benefit.
(3) In working out for the purposes of subsection (1) or (2) whether
giving the benefit is reasonable in the circumstances:
(a) assess whether it would be reasonable on the basis of the
circumstances existing:
(i) if the benefit is given under an agreement—at the time
when the agreement is or was made; or
(ii) if the benefit is not given under an agreement—at the
time when the benefit is or was given; and
(b) disregard any other financial benefit given or payable to the
officer by the public company or entity.
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Chapter 2E Related party transactions
Part 2E.1 Member approval needed for related party benefit
Division 2 Exceptions to the requirement for member approval
Section 213
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
213 Small amounts given to related entity
(1) Member approval is not needed to give a financial benefit to a
related party in a financial year if the total of the following
amounts or values is less than or equal to the amount prescribed by
the regulations for the purposes of this section:
(a) the amount or value of the financial benefit;
(b) the total of all other amounts or values of financial benefits
given to the related party, in the financial year, for which
member approval was not needed because of this section.
(2) In working out the total of the amounts or values referred to in
paragraphs (1)(a) and (b):
(a) add in all amounts or values of financial benefits given to the
related party in the financial year by:
(i) the public company or entity; and
(ii) any entities controlled by the public company or entity;
and
(b) disregard:
(i) amounts that have been repaid; and
(ii) amounts that fall under any other exception in this Part.
For the purposes of this subsection, the time at which the entity
must be controlled by the public company is the time at which the
financial benefit is given.
214 Benefit to or by closely-held subsidiary
(1) Member approval is not needed to give a financial benefit if the
benefit is given:
(a) by a body corporate to a closely-held subsidiary of the body;
or
(b) by a closely-held subsidiary of a body corporate to the body
or an entity it controls.
(2) For the purposes of this section, a body corporate is a closely-held
subsidiary of another body corporate if, and only if, no member of
the first-mentioned body is a person other than:
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Exceptions to the requirement for member approval Division 2
Section 215
Corporations Act 2001 351
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the other body; or
(b) a nominee of the other body; or
(c) a body corporate that is a closely-held subsidiary of the other
body because of any other application or applications of this
subsection; or
(d) a nominee of a body referred to in paragraph (c).
(3) For the purposes of subsection (2), disregard shares that are not
voting shares.
215 Benefits to members that do not discriminate unfairly
Member approval is not needed to give a financial benefit if:
(a) the benefit is given to the related party in their capacity as a
member of the public company; and
(b) giving the benefit does not discriminate unfairly against the
other members of the public company.
216 Court order
Member approval is not needed to give a financial benefit under an
order of a court.
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Chapter 2E Related party transactions
Part 2E.1 Member approval needed for related party benefit
Division 3 Procedure for obtaining member approval
Section 217
352 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Procedure for obtaining member approval
217 Resolution may specify matters by class or kind
A resolution under this Division may specify anything either in
particular or by reference to class or kind.
218 Company must lodge material that will be put to members with
ASIC
(1) At least 14 days before the notice convening the relevant meeting
is given, the public company must lodge:
(a) a proposed notice of meeting setting out the text of the
proposed resolution; and
(b) a proposed explanatory statement satisfying section 219; and
(c) any other document that is proposed to accompany the notice
convening the meeting and that relates to the proposed
resolution; and
(d) any other document that any of the following proposes to
give to members of the public company before or at the
meeting:
(i) the company;
(ii) a related party of the company to whom the proposed
resolution would permit a financial benefit to be given;
(iii) an associate of the company or of such a related party;
and can reasonably be expected to be material to a member in
deciding how to vote on the proposed resolution.
(2) If, when the notice convening the meeting is given, ASIC:
(a) has approved in writing a period of less than 14 days for the
purposes of subsection (1); and
(b) has not revoked the approval by written notice to the public
company;
subsection (1) applies as if the reference to 14 days were a
reference to the approved period.
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Related party transactions Chapter 2E
Member approval needed for related party benefit Part 2E.1
Procedure for obtaining member approval Division 3
Section 219
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) ASIC may give and revoke approvals for the purposes of
subsection (2).
219 Requirements for explanatory statement to members
(1) The proposed explanatory statement lodged under section 218 must
be in writing and set out:
(a) the related parties to whom the proposed resolution would
permit financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to
members about the proposed resolution—the
recommendation and his or her reasons for it; or
(ii) if not—why not; or
(iii) if the director was not available to consider the
proposed resolution—why not; and
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of
the proposed resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide
whether or not it is in the company’s interests to pass
the proposed resolution; and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in
paragraph (1)(e) is information about what, from an economic and
commercial point of view, are the true potential costs and
detriments of, or resulting from, giving financial benefits as
permitted by the proposed resolution, including (without
limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits
tax); and
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Part 2E.1 Member approval needed for related party benefit
Division 3 Procedure for obtaining member approval
Section 220
354 Corporations Act 2001
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(c) benefits forgone by whoever would give the benefits.
Note: Sections 180 and 181 require an officer of a corporation to act
honestly and to exercise care and diligence. These duties extend to
preparing an explanatory statement under this section. Section 1309
creates offences where false and misleading material relating to a
corporation’s affairs is made available or furnished to members.
220 ASIC may comment on proposed resolution
(1) Within 14 days after a public company lodges documents under
section 218, ASIC may give to the company written comments on
those documents (other than comments about whether the proposed
resolution is in the company’s best interests).
(2) If the company is listed, ASIC may consult with the relevant
market operator for the purposes of giving comments to the
company.
(3) Subsection (2) does not limit the persons with whom ASIC may
consult.
(4) ASIC must keep a copy of the written comments it gives to a
company under subsection (1), and subsections 1274(2) and (5)
apply to the copy as if it were a document lodged with ASIC.
(5) The fact that ASIC has given particular comments, or has declined
to give comments, under subsection (1) does not in any way affect
the performance or exercise of any of ASIC’s functions and
powers.
221 Requirements for notice of meeting
The notice convening the meeting:
(a) must be the same, in all material respects, as the proposed
notice lodged under section 218; and
(b) must be accompanied by an explanatory statement that is the
same, in all material respects, as the proposed explanatory
statement lodged under that section; and
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Procedure for obtaining member approval Division 3
Section 222
Corporations Act 2001 355
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(c) must be accompanied by a document that is, or documents
that are, the same, in all material respects, as the document or
documents (if any) lodged under paragraph 218(1)(c); and
(d) if ASIC has given to the public company, under section 220,
comments on the documents lodged under section 218—must
be accompanied by a copy of those comments; and
(e) must not be accompanied by any other documents.
222 Other material put to members
Each document (if any) that:
(a) did not accompany the notice convening the meeting; and
(b) was given to members of the public company before or at the
meeting by:
(i) the public company; or
(ii) a related party of the public company to whom the
proposed resolution would permit a financial benefit to
be given; or
(iii) an associate of the public company or of such a related
party; and
(c) can reasonably be expected to have been material to a
member in deciding how to vote on the proposed resolution;
must be the same, in all material respects, as a document lodged
under paragraph 218(1)(d).
223 Proposed resolution cannot be varied
The resolution must be the same as the proposed resolution set out
in the proposed notice lodged under section 218.
224 Voting by or on behalf of related party interested in proposed
resolution
(1) At a general meeting, a vote on a proposed resolution under this
Division must not be cast (in any capacity) by or on behalf of:
(a) a related party of the public company to whom the resolution
would permit a financial benefit to be given; or
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Division 3 Procedure for obtaining member approval
Section 224
356 Corporations Act 2001
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(b) an associate of such a related party.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of a related party or associate of a kind
referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not
apply.
(4) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified proposed
resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a
specified proposed resolution, by a specified entity, or on
behalf of a specified entity;
but may only do so if satisfied that the declaration will not cause
unfair prejudice to the interests of any member of the public
company.
(5) A declaration in force under subsection (4) has effect accordingly.
(6) If a vote is cast in contravention of subsection (1), the related party
or associate, as the case may be, contravenes this subsection,
whether or not the proposed resolution is passed.
(7) For the purposes of this section, a vote is cast on behalf of an entity
if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to
vote.
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Member approval needed for related party benefit Part 2E.1
Procedure for obtaining member approval Division 3
Section 225
Corporations Act 2001 357
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(8) Subject to subsection 225(1), a contravention of this section does
not affect the validity of a resolution.
(9) Subject to Part 1.1A, this section has effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or
Territory; or
(b) anything in a body corporate’s constitution.
225 Voting on the resolution
(1) If any votes on the resolution are cast in contravention of
subsection 224(1), it must be the case that the resolution would still
be passed even if those votes were disregarded.
(2) If a poll was duly demanded on the question that the resolution be
passed, subsections (3) and (4) apply in relation to voting on the
poll.
(3) In relation to each member of the public company who voted on
the resolution in person, the public company must record in
writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how
many against.
(4) In relation to each member of the public company who voted on
the resolution by proxy, or by a representative authorised under
section 250D, the public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a
representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as
proxy, or as such a representative, for the member; and
(iii) how many of those votes the person cast for the
resolution and how many against.
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Part 2E.1 Member approval needed for related party benefit
Division 3 Procedure for obtaining member approval
Section 226
358 Corporations Act 2001
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(5) For 7 years after the day when a resolution under this Division is
passed, the public company must retain the records it made under
this section in relation to the resolution.
(6) An offence based on subsection (3), (4) or (5) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
226 Notice of resolution to be lodged
The public company must lodge a notice setting out the text of the
resolution within 14 days after the resolution is passed.
227 Declaration by court of substantial compliance
(1) The Court may declare that the conditions prescribed by this
Division have been satisfied if it finds that they have been
substantially satisfied.
(2) A declaration may be made only on the application of an interested
person.
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Related party transactions Chapter 2E
Related parties and financial benefits Part 2E.2
Section 228
Corporations Act 2001 359
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2E.2—Related parties and financial benefits
228 Related parties
Controlling entities
(1) An entity that controls a public company is a related party of the
public company.
Directors and their spouses
(2) The following persons are related parties of a public company:
(a) directors of the public company;
(b) directors (if any) of an entity that controls the public
company;
(c) if the public company is controlled by an entity that is not a
body corporate—each of the persons making up the
controlling entity;
(d) spouses of the persons referred to in paragraphs (a), (b) and
(c).
Relatives of directors and spouses
(3) The following relatives of persons referred to in subsection (2) are
related parties of the public company:
(a) parents;
(b) children.
Entities controlled by other related parties
(4) An entity controlled by a related party referred to in subsection (1),
(2) or (3) is a related party of the public company unless the entity
is also controlled by the public company.
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Part 2E.2 Related parties and financial benefits
Section 229
360 Corporations Act 2001
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Related party in previous 6 months
(5) An entity is a related party of a public company at a particular time
if the entity was a related party of the public company of a kind
referred to in subsection (1), (2), (3) or (4) at any time within the
previous 6 months.
Entity has reasonable grounds to believe it will become related
party in future
(6) An entity is a related party of a public company at a particular time
if the entity believes or has reasonable grounds to believe that it is
likely to become a related party of the public company of a kind
referred to in subsection (1), (2), (3) or (4) at any time in the future.
Acting in concert with related party
(7) An entity is a related party of a public company if the entity acts in
concert with a related party of the public company on the
understanding that the related party will receive a financial benefit
if the public company gives the entity a financial benefit.
229 Giving a financial benefit
(1) In determining whether a financial benefit is given for the purposes
of this Chapter:
(a) give a broad interpretation to financial benefits being given,
even if criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to
prevail over its legal form; and
(c) disregard any consideration that is or may be given for the
benefit, even if the consideration is adequate.
(2) Giving a financial benefit includes the following:
(a) giving a financial benefit indirectly, for example, through 1
or more interposed entities;
(b) giving a financial benefit by making an informal agreement,
oral agreement or an agreement that has no binding force;
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Related parties and financial benefits Part 2E.2
Section 229
Corporations Act 2001 361
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(c) giving a financial benefit that does not involve paying money
(for example by conferring a financial advantage).
(3) The following are examples of giving a financial benefit to a
related party:
(a) giving or providing the related party finance or property;
(b) buying an asset from or selling an asset to the related party;
(c) leasing an asset from or to the related party;
(d) supplying services to or receiving services from the related
party;
(e) issuing securities or granting an option to the related party;
(f) taking up or releasing an obligation of the related party.
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Chapter 2E Related party transactions
Part 2E.3 Interaction with other rules
Section 230
362 Corporations Act 2001
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Part 2E.3—Interaction with other rules
230 General duties still apply
A director is not relieved from any of their duties under this Act
(including sections 180 and 184), or their fiduciary duties, in
connection with a transaction merely because the transaction is
authorised by a provision of this Chapter or is approved by a
resolution of members under a provision of this Chapter.
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Members’ rights and remedies Chapter 2F
Section 231
Corporations Act 2001 363
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Chapter 2F—Members’ rights and remedies
231 Membership of a company
A person is a member of a company if they:
(a) are a member of the company on its registration; or
(b) agree to become a member of the company after its
registration and their name is entered on the register of
members; or
(c) become a member of the company under section 167
(membership arising from conversion of a company from one
limited by guarantee to one limited by shares).
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Chapter 2F Members’ rights and remedies
Part 2F.1 Oppressive conduct of affairs
Section 232
364 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2F.1—Oppressive conduct of affairs
232 Grounds for Court order
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a
company; or
(c) a resolution, or a proposed resolution, of members or a class
of members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly
discriminatory against, a member or members whether in that
capacity or in any other capacity.
For the purposes of this Part, a person to whom a share in the
company has been transmitted by will or by operation of law is
taken to be a member of the company.
Note: For affairs, see section 53.
233 Orders the Court can make
(1) The Court can make any order under this section that it considers
appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or
repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to
whom a share in the company has been transmitted by will or
by operation of law;
(e) for the purchase of shares with an appropriate reduction of
the company’s share capital;
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Oppressive conduct of affairs Part 2F.1
Section 234
Corporations Act 2001 365
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(f) for the company to institute, prosecute, defend or discontinue
specified proceedings;
(g) authorising a member, or a person to whom a share in the
company has been transmitted by will or by operation of law,
to institute, prosecute, defend or discontinue specified
proceedings in the name and on behalf of the company;
(h) appointing a receiver or a receiver and manager of any or all
of the company’s property;
(i) restraining a person from engaging in specified conduct or
from doing a specified act;
(j) requiring a person to do a specified act.
Order that the company be wound up
(2) If an order that a company be wound up is made under this section,
the provisions of this Act relating to the winding up of companies
apply:
(a) as if the order were made under section 461; and
(b) with such changes as are necessary.
Order altering constitution
(3) If an order made under this section repeals or modifies a
company’s constitution, or requires the company to adopt a
constitution, the company does not have the power under
section 136 to change or repeal the constitution if that change or
repeal would be inconsistent with the provisions of the order,
unless:
(a) the order states that the company does have the power to
make such a change or repeal; or
(b) the company first obtains the leave of the Court.
234 Who can apply for order
An application for an order under section 233 in relation to a
company may be made by:
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Section 235
366 Corporations Act 2001
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(a) a member of the company, even if the application relates to
an act or omission that is against:
(i) the member in a capacity other than as a member; or
(ii) another member in their capacity as a member; or
(b) a person who has been removed from the register of members
because of a selective reduction; or
(c) a person who has ceased to be a member of the company if
the application relates to the circumstances in which they
ceased to be a member; or
(d) a person to whom a share in the company has been
transmitted by will or by operation of law; or
(e) a person whom ASIC thinks appropriate having regard to
investigations it is conducting or has conducted into:
(i) the company’s affairs; or
(ii) matters connected with the company’s affairs.
Note 1: If an application is made under this section, in certain cases the court
may order that the company be wound up in insolvency (see
section 459B).
Note 2: For selective reduction, see subsection 256B(2).
235 Requirement for person to lodge order
(1) If an order is made under section 233, the applicant must lodge a
copy of the order with ASIC within 14 days after it is made.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Members’ rights and remedies Chapter 2F
Proceedings on behalf of a company by members and others Part 2F.1A
Section 236
Corporations Act 2001 367
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Part 2F.1A—Proceedings on behalf of a company
by members and others
236 Bringing, or intervening in, proceedings on behalf of a company
(1) A person may bring proceedings on behalf of a company, or
intervene in any proceedings to which the company is a party for
the purpose of taking responsibility on behalf of the company for
those proceedings, or for a particular step in those proceedings (for
example, compromising or settling them), if:
(a) the person is:
(i) a member, former member, or person entitled to be
registered as a member, of the company or of a related
body corporate; or
(ii) an officer or former officer of the company; and
(b) the person is acting with leave granted under section 237.
(2) Proceedings brought on behalf of a company must be brought in
the company’s name.
(3) The right of a person at general law to bring, or intervene in,
proceedings on behalf of a company is abolished.
Note 1: For the right to inspect company books, see subsections 247A(3) to
(6).
Note 2: For the requirements to disclose proceedings and leave applications in
the annual directors’ report, see subsections 300(14) and (15).
Note 3: This section does not prevent a person bringing, or intervening in,
proceedings on their own behalf in respect of a personal right.
237 Applying for and granting leave
(1) A person referred to in paragraph 236(1)(a) may apply to the Court
for leave to bring, or to intervene in, proceedings.
(2) The Court must grant the application if it is satisfied that:
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Section 237
368 Corporations Act 2001
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(a) it is probable that the company will not itself bring the
proceedings, or properly take responsibility for them, or for
the steps in them; and
(b) the applicant is acting in good faith; and
(c) it is in the best interests of the company that the applicant be
granted leave; and
(d) if the applicant is applying for leave to bring proceedings—
there is a serious question to be tried; and
(e) either:
(i) at least 14 days before making the application, the
applicant gave written notice to the company of the
intention to apply for leave and of the reasons for
applying; or
(ii) it is appropriate to grant leave even though
subparagraph (i) is not satisfied.
(3) A rebuttable presumption that granting leave is not in the best
interests of the company arises if it is established that:
(a) the proceedings are:
(i) by the company against a third party; or
(ii) by a third party against the company; and
(b) the company has decided:
(i) not to bring the proceedings; or
(ii) not to defend the proceedings; or
(iii) to discontinue, settle or compromise the proceedings;
and
(c) all of the directors who participated in that decision:
(i) acted in good faith for a proper purpose; and
(ii) did not have a material personal interest in the decision;
and
(iii) informed themselves about the subject matter of the
decision to the extent they reasonably believed to be
appropriate; and
(iv) rationally believed that the decision was in the best
interests of the company.
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Proceedings on behalf of a company by members and others Part 2F.1A
Section 238
Corporations Act 2001 369
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The director’s belief that the decision was in the best interests of
the company is a rational one unless the belief is one that no
reasonable person in their position would hold.
(4) For the purposes of subsection (3):
(a) a person is a third party if:
(i) the company is a public company and the person is not a
related party of the company; or
(ii) the company is not a public company and the person
would not be a related party of the company if the
company were a public company; and
(b) proceedings by or against the company include any appeal
from a decision made in proceedings by or against the
company.
Note: Related party is defined in section 228.
238 Substitution of another person for the person granted leave
(1) Any of the following persons may apply to the Court for an order
that they be substituted for a person to whom leave has been
granted under section 237:
(a) a member, former member, or a person entitled to be
registered as a member, of the company or of a related body
corporate;
(b) an officer, or former officer, of the company.
(2) The Court may make the order if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) it is appropriate to make the order in all the circumstances.
(3) An order substituting one person for another has the effect that:
(a) the grant of leave is taken to have been made in favour of the
substituted person; and
(b) if the other person has already brought the proceedings or
intervened—the substituted person is taken to have brought
those proceedings or to have made that intervention.
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Part 2F.1A Proceedings on behalf of a company by members and others
Section 239
370 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
239 Effect of ratification by members
(1) If the members of a company ratify or approve conduct, the
ratification or approval:
(a) does not prevent a person from bringing or intervening in
proceedings with leave under section 237 or from applying
for leave under that section; and
(b) does not have the effect that proceedings brought or
intervened in with leave under section 237 must be
determined in favour of the defendant, or that an application
for leave under that section must be refused.
(2) If members of a company ratify or approve conduct, the Court may
take the ratification or approval into account in deciding what order
or judgment (including as to damages) to make in proceedings
brought or intervened in with leave under section 237 or in relation
to an application for leave under that section. In doing this, it must
have regard to:
(a) how well-informed about the conduct the members were
when deciding whether to ratify or approve the conduct; and
(b) whether the members who ratified or approved the conduct
were acting for proper purposes.
240 Leave to discontinue, compromise or settle proceedings brought,
or intervened in, with leave
Proceedings brought or intervened in with leave must not be
discontinued, compromised or settled without the leave of the
Court.
241 General powers of the Court
(1) The Court may make any orders, and give any directions, that it
considers appropriate in relation to proceedings brought or
intervened in with leave, or an application for leave, including:
(a) interim orders; and
(b) directions about the conduct of the proceedings, including
requiring mediation; and
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Section 242
Corporations Act 2001 371
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(c) an order directing the company, or an officer of the company,
to do, or not to do, any act; and
(d) an order appointing an independent person to investigate, and
report to the Court on:
(i) the financial affairs of the company; or
(ii) the facts or circumstances which gave rise to the cause
of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings by the parties to
the proceedings and the person granted leave.
(2) A person appointed by the Court under paragraph (1)(d) is entitled,
on giving reasonable notice to the company, to inspect any books
of the company for any purpose connected with their appointment.
(3) If the Court appoints a person under paragraph (1)(d):
(a) the Court must also make an order stating who is liable for
the remuneration and expenses of the person appointed; and
(b) the Court may vary the order at any time; and
(c) the persons who may be made liable under the order, or the
order as varied, are:
(i) all or any of the parties to the proceedings or
application; and
(ii) the company; and
(d) if the order, or the order as varied, makes 2 or more persons
liable, the order may also determine the nature and extent of
the liability of each of those persons.
(4) Subsection (3) does not affect the powers of the Court as to costs.
242 Power of the Court to make costs orders
The Court may at any time make any orders it considers
appropriate about the costs of the following persons in relation to
proceedings brought or intervened in with leave under section 237
or an application for leave under that section:
(a) the person who applied for or was granted leave;
(b) the company;
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Part 2F.1A Proceedings on behalf of a company by members and others
Section 242
372 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) any other party to the proceedings or application.
An order under this section may require indemnification for costs.
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Members’ rights and remedies Chapter 2F
Class rights Part 2F.2
Section 246B
Corporations Act 2001 373
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2F.2—Class rights
Note: This Part does not apply to the adoption or amendment of benefit fund rules or to consequential amendments to the rest of the company’s constitution made under the Life Insurance Act 1995, see Subdivision 2 of Division 4 of Part 2A of that Act.
246B Varying and cancelling class rights
If constitution sets out procedure
(1) If a company has a constitution that sets out the procedure for
varying or cancelling:
(a) for a company with a share capital—rights attached to shares
in a class of shares; or
(b) for a company without a share capital—rights of members in
a class of members;
those rights may be varied or cancelled only in accordance with the
procedure. The procedure may be changed only if the procedure
itself is complied with.
If constitution does not set out procedure
(2) If a company does not have a constitution, or has a constitution that
does not set out the procedure for varying or cancelling:
(a) for a company with a share capital—rights attached to shares
in a class of shares; or
(b) for a company without a share capital—rights of members in
a class of members;
those rights may be varied or cancelled only by special resolution
of the company and:
(c) by special resolution passed at a meeting:
(i) for a company with a share capital of the class of
members holding shares in the class; or
(ii) for a company without a share capital of the class of
members whose rights are being varied or cancelled; or
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Chapter 2F Members’ rights and remedies
Part 2F.2 Class rights
Section 246C
374 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) with the written consent of members with at least 75% of the
votes in the class.
(3) The company must give written notice of the variation or
cancellation to the members of the class within 7 days after the
variation or cancellation is made.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
246C Certain actions taken to vary rights etc.
Company with share capital
(1) If the shares in a class of shares in a company are divided into
further classes, and after the division the rights attached to all of
those shares are not the same:
(a) the division is taken to vary the rights attached to every share
that was in the class existing before the division; and
(b) members who hold shares to which the same rights are
attached after the division form a separate class.
(2) If the rights attached to some of the shares in a class of shares in a
company are varied:
(a) the variation is taken to vary the rights attached to every
other share that was in the class existing before the variation;
and
(b) members who hold shares to which the same rights are
attached after the variation form a separate class.
Company without share capital
(3) If the members in a class of members in a company without share
capital are divided into further classes of members, and after the
division the rights of all of those members are not the same:
(a) the division is taken to vary the rights of every member who
was in the class existing before the division; and
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Class rights Part 2F.2
Section 246D
Corporations Act 2001 375
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(b) members who have the same rights after the division form a
separate class.
(4) If the rights of some of the members in a class of members in a
company without a share capital are varied:
(a) the variation is taken to vary the rights of every other
member who was in the class existing before the variation;
and
(b) members who have the same rights after the variation form a
separate class.
Company with 1 class of shares issuing new class of shares
(5) If a company with 1 class of shares issues new shares, the issue is
taken to vary the rights attached to shares already issued if:
(a) the rights attaching to the new shares are not the same as the
rights attached to shares already issued; and
(b) those rights are not provided for in:
(i) the company’s constitution (if any); or
(ii) a notice, document or resolution that is lodged with
ASIC.
(6) If a company issues new preference shares that rank equally with
existing preference shares, the issue is taken to vary the rights
attached to the existing preference shares unless the issue is
authorised by:
(a) the terms of issue of the existing preference shares; or
(b) the company’s constitution (if any) as in force when the
existing preference shares were issued.
246D Variation, cancellation or modification without unanimous
support of class
(1) If members in a class do not all agree (whether by resolution or
written consent) to:
(a) a variation or cancellation of their rights; or
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Part 2F.2 Class rights
Section 246E
376 Corporations Act 2001
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(b) a modification of the company’s constitution (if any) to allow
their rights to be varied or cancelled;
members with at least 10% of the votes in the class may apply to
the Court to have the variation, cancellation or modification set
aside.
(2) An application may only be made within 1 month after the
variation, cancellation or modification is made.
(3) The variation, cancellation or modification takes effect:
(a) if no application is made to the Court to have it set aside—1
month after the variation, cancellation or modification is
made; or
(b) if an application is made to the Court to have it set aside—
when the application is withdrawn or finally determined.
(4) The members of the class who want to have the variation,
cancellation or modification set aside may appoint 1 or more of
themselves to make the application on their behalf. The
appointment must be in writing.
(5) The Court may set aside the variation, cancellation or modification
if it is satisfied that it would unfairly prejudice the applicants.
However, the Court must confirm the variation, cancellation or
modification if the Court is not satisfied of unfair prejudice.
(6) Within 14 days after the Court makes an order, the company must
lodge a copy of it with ASIC.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
246E Variation, cancellation or modification with unanimous
support of class
If the members in a class all agree (whether by resolution or
written consent) to the variation, cancellation or modification, it
takes effect:
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Section 246F
Corporations Act 2001 377
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(a) if no later date is specified in the resolution or consent—on
the date of the resolution or consent; or
(b) on a later date specified in the resolution or consent.
246F Company must lodge documents and resolutions with ASIC
(1) A company must lodge with ASIC a notice in the prescribed form
setting out particulars of any of the following:
(a) a division of shares in the company into classes if the shares
were not previously so divided;
(b) a conversion of shares in a class of shares in the company
into shares in another class.
Note: A proprietary company may also have to notify certain particulars
under Part 2C.2.
(2) The notice must be lodged within 14 days after the division or
conversion.
(3) A public company must lodge with ASIC a copy of each document
(including an agreement or consent) or resolution that:
(a) does any of the following:
(i) attaches rights to issued or unissued shares;
(ii) varies or cancels rights attaching to issued or unissued
shares;
(iii) varies or cancels rights of members in a class of
members of a company that does not have a share
capital;
(iv) binds a class of members; and
(b) is not already lodged with ASIC.
This also applies to a proprietary company that has applied under
Part 2B.7 to change to a public company, while its application has
not yet been determined.
(3A) An offence based on subsection (1) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 2F.2 Class rights
Section 246G
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The document must be lodged within 14 days after it is made. The
resolution must be lodged within 14 days after it is passed.
246G Member’s copies of documents and resolutions
(1) A member of a company may ask the company in writing for a
copy of a document or resolution referred to in section 246F. The
company must send the copy to the member.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If the company requires the member to pay for the copy, the
company must send it:
(a) within 7 days after the company receives the payment; or
(b) within any longer period approved by ASIC.
(3) The amount of any payment the company requires cannot exceed
the prescribed amount.
(4) If the company does not require payment for the copy, the
company must send it:
(a) within 7 days after the member asks for it; or
(b) within any longer period approved by ASIC.
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Members’ rights and remedies Chapter 2F
Inspection of books Part 2F.3
Section 247A
Corporations Act 2001 379
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2F.3—Inspection of books
247A Order for inspection of books of company or registered
managed investment scheme
(1) On application by a member of a company or registered managed
investment scheme, the Court may make an order:
(a) authorising the applicant to inspect books of the company or
scheme; or
(b) authorising another person (whether a member or not) to
inspect books of the company or scheme on the applicant’s
behalf.
The Court may only make the order if it is satisfied that the
applicant is acting in good faith and that the inspection is to be
made for a proper purpose.
(2) A person authorised to inspect books may make copies of the
books unless the Court orders otherwise.
(3) A person who:
(a) is granted leave under section 237; or
(b) applies for leave under that section; or
(c) is eligible to apply for leave under that section;
may apply to the Court for an order under this section.
(4) On application, the Court may make an order authorising:
(a) the applicant to inspect books of the company; or
(b) another person to inspect books of the company on the
applicant’s behalf.
(5) The Court may make the order only if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) the inspection is to be made for a purpose connected with:
(i) applying for leave under section 237; or
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Chapter 2F Members’ rights and remedies
Part 2F.3 Inspection of books
Section 247B
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) bringing or intervening in proceedings with leave under
that section.
(6) A person authorised to inspect books may make copies of the
books unless the Court orders otherwise.
247B Ancillary orders
If the Court makes an order under section 247A, the Court may
make any other orders it considers appropriate, including either or
both of the following:
(a) an order limiting the use that a person who inspects books
may make of information obtained during the inspection;
(b) an order limiting the right of a person who inspects books to
make copies in accordance with subsection 247A(2).
247C Disclosure of information acquired in inspection
(1) A person who inspects books on behalf of an applicant under
section 247A must not disclose information obtained during the
inspection.
(2) Subsection (1) does not apply to the extent that the disclosure is to:
(a) ASIC; or
(b) the applicant.
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) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
247D Company or directors may allow member to inspect books
(replaceable rule see section 135)
The directors of a company, or the company by a resolution passed
at a general meeting, may authorise a member to inspect books of
the company.
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Members’ rights and remedies Chapter 2F
Proceedings against a company by members and others Part 2F.4
Section 247E
Corporations Act 2001 381
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2F.4—Proceedings against a company by
members and others
247E Shareholding does not prevent compensation claim
A person is not prevented from obtaining damages or other
compensation from a company only because the person:
(a) holds, or has held, shares in the company; or
(b) has subscribed for shares in the company; or
(c) has a right to be included in the register that the company
maintains under section 169.
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Chapter 2G Meetings
Part 2G.1 Directors’ meetings
Division 1 Resolutions and declarations without meetings
Section 248A
382 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2G—Meetings
Part 2G.1—Directors’ meetings
Division 1—Resolutions and declarations without meetings
248A Circulating resolutions of companies with more than 1
director (replaceable rule see section 135)
Resolutions
(1) The directors of a company may pass a resolution without a
directors’ meeting being held if all the directors entitled to vote on
the resolution sign a document containing a statement that they are
in favour of the resolution set out in the document.
Copies
(2) Separate copies of a document may be used for signing by
directors if the wording of the resolution and statement is identical
in each copy.
When the resolution is passed
(3) The resolution is passed when the last director signs.
Note: Passage of a resolution under this section must be recorded in the
company’s minute books (see section 251A).
248B Resolutions and declarations of 1 director proprietary
companies
Resolutions
(1) The director of a proprietary company that has only 1 director may
pass a resolution by recording it and signing the record.
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Directors’ meetings Part 2G.1
Resolutions and declarations without meetings Division 1
Section 248B
Corporations Act 2001 383
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Declarations
(2) The director of a proprietary company that has only 1 director may
make a declaration by recording it and signing the record.
Recording and signing the declaration satisfies any requirement in
this Act that the declaration be made at a directors’ meeting.
Note 1: For directors’ declarations, see sections 295 and 494.
Note 2: Passage of a resolution or the making of a declaration under this
section must be recorded in the company’s minute books (see
section 251A).
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Chapter 2G Meetings
Part 2G.1 Directors’ meetings
Division 2 Directors’ meetings
Section 248C
384 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Directors’ meetings
248C Calling directors’ meetings (replaceable rule see section 135)
A directors’ meeting may be called by a director giving reasonable
notice individually to every other director.
Note: A director who has appointed an alternate director may ask for the
notice to be sent to the alternate director (see subsection 201K(2)).
248D Use of technology
A directors’ meeting may be called or held using any technology
consented to by all the directors. The consent may be a standing
one. A director may only withdraw their consent within a
reasonable period before the meeting.
248E Chairing directors’ meetings (replaceable rule see section 135)
(1) The directors may elect a director to chair their meetings. The
directors may determine the period for which the director is to be
the chair.
(2) The directors must elect a director present to chair a meeting, or
part of it, if:
(a) a director has not already been elected to chair the meeting;
or
(b) a previously elected chair is not available or declines to act,
for the meeting or the part of the meeting.
248F Quorum at directors’ meetings (replaceable rule see
section 135)
Unless the directors determine otherwise, the quorum for a
directors’ meeting is 2 directors and the quorum must be present at
all times during the meeting.
Note 1: For special quorum rules for public companies, see section 195.
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Meetings Chapter 2G
Directors’ meetings Part 2G.1
Directors’ meetings Division 2
Section 248G
Corporations Act 2001 385
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: For resolutions of 1 director proprietary companies without meetings,
see section 248B.
248G Passing of directors’ resolutions (replaceable rule see
section 135)
(1) A resolution of the directors must be passed by a majority of the
votes cast by directors entitled to vote on the resolution.
(2) The chair has a casting vote if necessary in addition to any vote
they have in their capacity as a director.
Note: The chair may be precluded from voting, for example, by a conflict of
interest.
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Chapter 2G Meetings
Part 2G.2 Meetings of members of companies
Division 1 Resolutions without meetings
Section 249A
386 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2G.2—Meetings of members of companies
Division 1—Resolutions without meetings
249A Circulating resolutions of proprietary companies with more
than 1 member
(1) This section applies to resolutions of the members of proprietary
companies that this Act or, if a company has a constitution, the
company’s constitution requires or permits to be passed at a
general meeting. It does not apply to a resolution under section 329
to remove an auditor.
(2) A company may pass a resolution without a general meeting being
held if all the members entitled to vote on the resolution sign a
document containing a statement that they are in favour of the
resolution set out in the document. Each member of a joint
membership must sign.
(3) Separate copies of a document may be used for signing by
members if the wording of the resolution and statement is identical
in each copy.
(4) The resolution is passed when the last member signs.
(5) A company that passes a resolution under this section without
holding a meeting satisfies any requirement in this Act:
(a) to give members information or a document relating to the
resolution—by giving members that information or document
with the document to be signed; and
(b) to lodge with ASIC a copy of a notice of meeting to consider
the resolution—by lodging a copy of the document to be
signed by members; and
(c) to lodge a copy of a document that accompanies a notice of
meeting to consider the resolution—by lodging a copy of the
information or documents referred to in paragraph (a).
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Meetings Chapter 2G
Meetings of members of companies Part 2G.2
Resolutions without meetings Division 1
Section 249B
Corporations Act 2001 387
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) The passage of the resolution satisfies any requirement in this Act,
or a company’s constitution (if any), that the resolution be passed
at a general meeting.
(7) This section does not affect any rule of law relating to the assent of
members not given at a general meeting.
Note 1: A body corporate representative may sign a circulating resolution (see
section 250D).
Note 2: Passage of a resolution under this section must be recorded in the
company’s minute books (see section 251A).
249B Resolutions of 1 member companies
(1) A company that has only 1 member may pass a resolution by the
member recording it and signing the record.
(2) If this Act requires information or a document relating to the
resolution to be lodged with ASIC, that requirement is satisfied by
lodging the information or document with the resolution that is
passed.
Note 1: A body corporate representative may sign such a resolution (see
section 250D).
Note 2: Passage of a resolution under this section must be recorded in the
company’s minute books (see section 251A).
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Chapter 2G Meetings
Part 2G.2 Meetings of members of companies
Division 2 Who may call meetings of members
Section 249C
388 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Who may call meetings of members
249C Calling of meetings of members by a director (replaceable
rule—see section 135)
A director may call a meeting of the company’s members.
249CA Calling of meetings of members of a listed company by a
director
(1) A director may call a meeting of the company’s members.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s
constitution.
249D Calling of general meeting by directors when requested by
members
(1) The directors of a company must call and arrange to hold a general
meeting on the request of members with at least 5% of the votes
that may be cast at the general meeting.
(2) The request must:
(a) be in writing; and
(b) state any resolution to be proposed at the meeting; and
(c) be signed by the members making the request; and
(d) be given to the company.
(3) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request is identical in
each copy.
(4) The percentage of votes that members have is to be worked out as
at the midnight before the request is given to the company.
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Meetings of members of companies Part 2G.2
Who may call meetings of members Division 2
Section 249E
Corporations Act 2001 389
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) The directors must call the meeting within 21 days after the request
is given to the company. The meeting is to be held not later than 2
months after the request is given to the company.
249E Failure of directors to call general meeting
(1) Members with more than 50% of the votes of all of the members
who make a request under section 249D may call and arrange to
hold a general meeting if the directors do not do so within 21 days
after the request is given to the company.
(2) The meeting must be called in the same way—so far as is
possible—in which general meetings of the company may be
called. The meeting must be held not later than 3 months after the
request is given to the company.
(3) To call the meeting the members requesting the meeting may ask
the company under section 173 for a copy of the register of
members. Despite paragraph 173(3)(b), the company must give the
members the copy of the register without charge.
(4) The company must pay the reasonable expenses the members
incurred because the directors failed to call and arrange to hold the
meeting.
(4A) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) The company may recover the amount of the expenses from the
directors. However, a director is not liable for the amount if they
prove that they took all reasonable steps to cause the directors to
comply with section 249D. The directors who are liable are jointly
and individually liable for the amount. If a director who is liable
for the amount does not reimburse the company, the company must
deduct the amount from any sum payable as fees to, or
remuneration of, the director.
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Chapter 2G Meetings
Part 2G.2 Meetings of members of companies
Division 2 Who may call meetings of members
Section 249F
390 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
249F Calling of general meetings by members
(1) Members with at least 5% of the votes that may be cast at a general
meeting of the company may call, and arrange to hold, a general
meeting. The members calling the meeting must pay the expenses
of calling and holding the meeting.
(2) The meeting must be called in the same way—so far as is
possible—in which general meetings of the company may be
called.
(3) The percentage of votes that members have is to be worked out as
at the midnight before the meeting is called.
249G Calling of meetings of members by the Court
(1) The Court may order a meeting of the company’s members to be
called if it is impracticable to call the meeting in any other way.
(2) The Court may make the order on application by:
(a) any director; or
(b) any member who would be entitled to vote at the meeting.
Note: For the directions the Court may give for calling, holding or
conducting a meeting it has ordered be called, see section 1319.
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Meetings Chapter 2G
Meetings of members of companies Part 2G.2
How to call meetings of members Division 3
Section 249H
Corporations Act 2001 391
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—How to call meetings of members
249H Amount of notice of meetings
General rule
(1) Subject to subsection (2), at least 21 days notice must be given of a
meeting of a company’s members. However, if a company has a
constitution, it may specify a longer minimum period of notice.
Calling meetings on shorter notice
(2) A company may call on shorter notice:
(a) an AGM, if all the members entitled to attend and vote at the
AGM agree beforehand; and
(b) any other general meeting, if members with at least 95% of
the votes that may be cast at the meeting agree beforehand.
A company cannot call an AGM or other general meeting on
shorter notice if it is a meeting of the kind referred to in
subsection (3) or (4).
Shorter notice not allowed—removing or appointing director
(3) At least 21 days notice must be given of a meeting of the members
of a public company at which a resolution will be moved to:
(a) remove a director under section 203D; or
(b) appoint a director in place of a director removed under that
section.
Shorter notice not allowed—removing auditor
(4) At least 21 days notice must be given of a meeting of a company at
which a resolution will be moved to remove an auditor under
section 329.
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Chapter 2G Meetings
Part 2G.2 Meetings of members of companies
Division 3 How to call meetings of members
Section 249HA
392 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
249HA Amount of notice of meetings of listed company
(1) Despite section 249H, at least 28 days notice must be given of a
meeting of a company’s members.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s
constitution.
249J Notice of meetings of members to members and directors
Notice to members and directors individually
(1) Written notice of a meeting of a company’s members must be
given individually to each member entitled to vote at the meeting
and to each director. Notice need only be given to 1 member of a
joint membership.
Notice to joint members (replaceable rule—see section 135)
(2) Notice to joint members must be given to the joint member named
first in the register of members.
How notice is given
(3) A company may give the notice of meeting to a member:
(a) personally; or
(b) by sending it by post to the address for the member in the
register of members or the alternative address (if any)
nominated by the member; or
(c) by sending it to the fax number or electronic address (if any)
nominated by the member; or
(ca) by sending it to the member by other electronic means (if
any) nominated by the member; or
(cb) by notifying the member in accordance with subsection (3A);
or
(d) by any other means that the company’s constitution (if any)
permits.
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Meetings Chapter 2G
Meetings of members of companies Part 2G.2
How to call meetings of members Division 3
Section 249K
Corporations Act 2001 393
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defect in the notice given may not invalidate a meeting (see
section 1322).
(3A) If the member nominates:
(a) an electronic means (the nominated notification means) by
which the member may be notified that notices of meeting
are available; and
(b) an electronic means (the nominated access means) the
member may use to access notices of meeting;
the company may give the member notice of the meeting by
notifying the member (using the nominated notification means):
(c) that the notice of meeting is available; and
(d) how the member may use the nominated access means to
access the notice of meeting.
This subsection does not limit subsection (3).
When notice by post or fax is given (replaceable rule—see
section 135)
(4) A notice of meeting sent by post is taken to be given 3 days after it
is posted. A notice of meeting sent by fax, or other electronic
means, is taken to be given on the business day after it is sent.
When notice under paragraph (3)(cb) is given (replaceable rule—
see section 135)
(5) A notice of meeting given to a member under paragraph (3)(cb) is
taken to be given on the business day after the day on which the
member is notified that the notice of meeting is available.
249K Auditor entitled to notice and other communications
(1) A company must give its auditor:
(a) notice of a general meeting in the same way that a member of
the company is entitled to receive notice; and
(b) any other communications relating to the general meeting
that a member of the company is entitled to receive.
Note 1: For when a company must have an auditor, see Part 2M.3.
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Chapter 2G Meetings
Part 2G.2 Meetings of members of companies
Division 3 How to call meetings of members
Section 249L
394 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: An auditor may appoint a representative to attend a meeting (see
subsection 249V(4)).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
249L Contents of notice of meetings of members
(1) A notice of a meeting of a company’s members must:
(a) set out the place, date and time for the meeting (and, if the
meeting is to be held in 2 or more places, the technology that
will be used to facilitate this); and
(b) state the general nature of the meeting’s business; and
(c) if a special resolution is to be proposed at the meeting—set
out an intention to propose the special resolution and state the
resolution; and
(d) if a member is entitled to appoint a proxy—contain a
statement setting out the following information:
(i) that the member has a right to appoint a proxy;
(ii) whether or not the proxy needs to be a member of the
company;
(iii) that a member who is entitled to cast 2 or more votes
may appoint 2 proxies and may specify the proportion
or number of votes each proxy is appointed to exercise.
Note: There may be other requirements for disclosure to members.
(2) The notice of the AGM of a listed company must also:
(a) inform members that the resolution referred to in
subsection 250R(2) (resolution on remuneration report) will
be put at the AGM; and
(b) if at the previous AGM at least 25% of the votes cast on a
resolution that the remuneration report be adopted were
against adoption of the report (but the same was not the case
at the AGM before that):
(i) explain the circumstances in which subsection 250V(1)
would apply; and
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Section 249LA
Corporations Act 2001 395
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(ii) inform members that the resolution described in
subsection 250V(1) as the spill resolution will be put at
the AGM if that subsection applies.
Note: Subsection 250R(2) requires a resolution to adopt a remuneration
report for a listed company to be put to the vote at the company’s
AGM.
(3) The information included in the notice of meeting must be worded
and presented in a clear, concise and effective manner.
249LA Notice of meeting not required to contain certain
information
(1) The regulations may provide that a notice of a meeting of a
company’s members is not required by section 249L or otherwise
to include information specified in the regulations if any conditions
specified in the regulations are satisfied.
(2) Without limiting subsection (1), the regulations may specify
different conditions for:
(a) different kinds of information; and
(b) a notice of meeting given by a company or a class of
companies.
(3) If:
(a) regulations are made for the purposes of subsection (1); and
(b) a notice of meeting does not include particular information in
accordance with those regulations;
the information is taken to be included in the notice of meeting.
249M Notice of adjourned meetings (replaceable rule—see
section 135)
When a meeting is adjourned, new notice of the resumed meeting
must be given if the meeting is adjourned for 1 month or more.
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Division 4 Members’ rights to put resolutions etc. at general meetings
Section 249N
396 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Members’ rights to put resolutions etc. at
general meetings
249N Members’ resolutions
(1) The following members may give a company notice of a resolution
that they propose to move at a general meeting:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote at a general
meeting.
(1A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (1)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
(2) The notice must:
(a) be in writing; and:
(b) set out the wording of the proposed resolution; and
(c) be signed by the members proposing to move the resolution.
(3) Separate copies of a document setting out the notice may be used
for signing by members if the wording of the notice is identical in
each copy.
(4) The percentage of votes that members have is to be worked out as
at the midnight before the members give the notice.
249O Company giving notice of members’ resolutions
(1) If a company has been given notice of a resolution under
section 249N, the resolution is to be considered at the next general
meeting that occurs more than 2 months after the notice is given.
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Section 249P
Corporations Act 2001 397
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The company must give all its members notice of the resolution at
the same time, or as soon as practicable afterwards, and in the same
way, as it gives notice of a meeting.
(3) The company is responsible for the cost of giving members notice
of the resolution if the company receives the notice in time to send
it out to members with the notice of meeting.
(4) The members requesting the meeting are jointly and individually
liable for the expenses reasonably incurred by the company in
giving members notice of the resolution if the company does not
receive the members’ notice in time to send it out with the notice
of meeting. At a general meeting, the company may resolve to
meet the expenses itself.
(5) The company need not give notice of the resolution:
(a) if it is more than 1,000 words long or defamatory; or
(b) if the members making the request are to bear the expenses of
sending the notice out—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in giving the notice.
249P Members’ statements to be distributed
(1) Members may request a company to give to all its members a
statement provided by the members making the request about:
(a) a resolution that is proposed to be moved at a general
meeting; or
(b) any other matter that may be properly considered at a general
meeting.
(2) The request must be made by:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote at the meeting.
(2A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (2)(b) to:
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Division 4 Members’ rights to put resolutions etc. at general meetings
Section 249P
398 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
(3) The request must be:
(a) in writing; and
(b) signed by the members making the request; and
(c) given to the company.
(4) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request is identical in
each copy.
(5) The percentage of votes that members have is to be worked out as
at the midnight before the request is given to the company.
(6) After receiving the request, the company must distribute to all its
members a copy of the statement at the same time, or as soon as
practicable afterwards, and in the same way, as it gives notice of a
general meeting.
(7) The company is responsible for the cost of making the distribution
if the company receives the statement in time to send it out to
members with the notice of meeting.
(8) The members making the request are jointly and individually liable
for the expenses reasonably incurred by the company in making the
distribution if the company does not receive the statement in time
to send it out with the notice of meeting. At a general meeting, the
company may resolve to meet the expenses itself.
(9) The company need not comply with the request:
(a) if the statement is more than 1,000 words long or
defamatory; or
(b) if the members making the request are responsible for the
expenses of the distribution—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in making the distribution.
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Meetings of members of companies Part 2G.2
Holding meetings of members Division 5
Section 249Q
Corporations Act 2001 399
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Holding meetings of members
249Q Purpose
A meeting of a company’s members must be held for a proper
purpose.
249R Time and place for meetings of members
A meeting of a company’s members must be held at a reasonable
time and place.
249S Technology
A company may hold a meeting of its members at 2 or more
venues using any technology that gives the members as a whole a
reasonable opportunity to participate.
Note: See section 1322 for the consequences of a member not being given a
reasonable opportunity to participate.
249T Quorum (replaceable rule—see section 135)
(1) The quorum for a meeting of a company’s members is 2 members
and the quorum must be present at all times during the meeting.
Note: For single member companies, see section 249B.
(2) In determining whether a quorum is present, count individuals
attending as proxies or body corporate representatives. However, if
a member has appointed more than 1 proxy or representative, count
only 1 of them. If an individual is attending both as a member and
as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 249X.
Note 2: For body corporate representatives, see section 250D.
(3) A meeting of the company’s members that does not have a quorum
present within 30 minutes after the time for the meeting set out in
the notice of meeting is adjourned to the date, time and place the
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Division 5 Holding meetings of members
Section 249U
400 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
directors specify. If the directors do not specify 1 or more of those
things, the meeting is adjourned to:
(a) if the date is not specified—the same day in the next week;
and
(b) if the time is not specified—the same time; and
(c) if the place is not specified—the same place.
(4) If no quorum is present at the resumed meeting within 30 minutes
after the time for the meeting, the meeting is dissolved.
249U Chairing meetings of members (replaceable rule—see
section 135)
(1) The directors may elect an individual to chair meetings of the
company’s members.
(2) The directors at a meeting of the company’s members must elect
an individual present to chair the meeting (or part of it) if an
individual has not already been elected by the directors to chair it
or, having been elected, is not available to chair it, or declines to
act, for the meeting (or part of the meeting).
(3) The members at a meeting of the company’s members must elect a
member present to chair the meeting (or part of it) if:
(a) a chair has not previously been elected by the directors to
chair the meeting; or
(b) a previously elected chair is not available, or declines to act,
for the meeting (or part of the meeting).
(4) The chair must adjourn a meeting of the company’s members if the
members present with a majority of votes at the meeting agree or
direct that the chair must do so.
249V Auditor’s right to be heard at general meetings
(1) A company’s auditor is entitled to attend any general meeting of
the company.
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Section 249W
Corporations Act 2001 401
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Section 250RA imposes on the auditor of a listed public company an
obligation to attend or be represented at the AGM.
(2) The auditor is entitled to be heard at the meeting on any part of the
business of the meeting that concerns the auditor in their capacity
as auditor.
(3) The auditor is entitled to be heard even if:
(a) the auditor retires at the meeting; or
(b) the meeting passes a resolution to remove the auditor from
office.
(4) The auditor may authorise a person in writing as their
representative for the purpose of attending and speaking at any
general meeting.
Note 1: At an AGM, members may ask the auditor questions (see
section 250T).
Note 2: For when a company must have an auditor, see Part 2M.3.
249W Adjourned meetings
When resolution passed
(1) A resolution passed at a meeting resumed after an adjournment is
passed on the day it was passed.
Business at adjourned meetings (replaceable rule—see
section 135)
(2) Only unfinished business is to be transacted at a meeting resumed
after an adjournment
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Division 6 Proxies and body corporate representatives
Section 249X
402 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Proxies and body corporate representatives
249X Who can appoint a proxy (replaceable rule for proprietary
companies and mandatory rule for public companies—see
section 135)
(1) A member of a company who is entitled to attend and cast a vote at
a meeting of the company’s members may appoint a person as the
member’s proxy to attend and vote for the member at the meeting.
(1A) The person appointed as the member’s proxy may be an individual
or a body corporate.
Note: A body corporate may appoint a representative to exercise the powers
that the body corporate may exercise as the member’s proxy, see
section 250D.
(2) The appointment may specify the proportion or number of votes
that the proxy may exercise.
(3) Each member may appoint a proxy. If the member is entitled to
cast 2 or more votes at the meeting, they may appoint 2 proxies. If
the member appoints 2 proxies and the appointment does not
specify the proportion or number of the member’s votes each proxy
may exercise, each proxy may exercise half of the votes.
(4) Disregard any fractions of votes resulting from the application of
subsection (2) or (3).
249Y Rights of proxies
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same
rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment);
and
(c) join in a demand for a poll.
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Section 249Z
Corporations Act 2001 403
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Proxy’s right to vote
(2) If a company has a constitution, the constitution may provide that a
proxy is not entitled to vote on a show of hands.
Note: Even if the proxy is not entitled to vote on a show of hands, they may
make or join in the demand for a poll.
Effect of member’s presence on proxy’s authority
(3) A company’s constitution (if any) may provide for the effect that a
member’s presence at a meeting has on the authority of a proxy
appointed to attend and vote for the member. However, if the
constitution does not deal with this, a proxy’s authority to speak
and vote for a member at a meeting is suspended while the member
is present at the meeting.
249Z Company sending appointment forms or lists of proxies must
send to all members
(1) If a company sends a member a proxy appointment form for a
meeting or a list of persons willing to act as proxies at a meeting:
(a) if the member requested the form or list—the company must
send the form or list to all members who ask for it and who
are entitled to appoint a proxy to attend and vote at the
meeting; or
(b) otherwise—the company must send the form or list to all its
members entitled to appoint a proxy to attend and vote at the
meeting.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250A Appointing a proxy
(1) An appointment of a proxy is valid if it is signed, or otherwise
authenticated in a manner prescribed by the regulations, by the
member of the company making the appointment and contains the
following information:
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Section 250B
404 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the member’s name and address;
(b) the company’s name;
(c) the proxy’s name or the name of the office held by the proxy;
(d) the meetings at which the appointment may be used.
An appointment may be a standing one.
(1A) The regulations made for the purposes of subsection (1) may
prescribe different requirements for the authentication of an
appointment given to the company by different means (electronic
or otherwise).
(2) If a company has a constitution, the constitution may provide that
an appointment is valid even if it contains only some of the
information required by subsection (1).
(3) An undated appointment is taken to have been dated on the day it
is given to the company.
(6) An appointment does not have to be witnessed.
(7) A later appointment revokes an earlier one if both appointments
could not be validly exercised at the meeting.
250B Proxy documents
Documents to be received by company before meeting
(1) For an appointment of a proxy for a meeting of a company’s
members to be effective, the following documents must be
received by the company at least 48 hours before the meeting:
(a) the proxy’s appointment;
(b) if the appointment is signed, or otherwise authenticated in a
manner prescribed by regulations made for the purposes of
subsection 250A(1), by the appointor’s attorney—the
authority under which the appointment was signed or
authenticated or a certified copy of the authority.
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Section 250BA
Corporations Act 2001 405
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Documents received following adjournment of meeting
(2) If a meeting of a company’s members has been adjourned, an
appointment and any authority received by the company at least 48
hours before the resumption of the meeting are effective for the
resumed part of the meeting.
Receipt of documents
(3) A company receives a document referred to in subsection (1):
(a) when the document is received at any of the following:
(i) the company’s registered office;
(ii) a fax number at the company’s registered office;
(iii) a place, fax number or electronic address specified for
the purpose in the notice of meeting; and
(b) if the notice of meeting specifies other electronic means by
which a member may give the document—when the
document given by those means is received by the company
as prescribed by the regulations.
Constitution or notice of meeting may provide for different
notification period
(5) The company’s constitution (if any) or the notice of meeting may
reduce the period of 48 hours referred to in subsection (1) or (2).
250BA Proxy documents—listed companies
(1) In a notice of meeting for a meeting of the members of the
company, the company:
(a) must specify a place and a fax number for the purposes of
receipt of proxy appointments and proxy appointment
authorities; and
(b) may specify:
(i) an electronic address for the purposes of receipt of
proxy appointments and proxy appointment authorities;
and
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Division 6 Proxies and body corporate representatives
Section 250BB
406 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) other electronic means by which a member may give the
company a proxy appointment or proxy appointment
authority.
(2) This section only applies to a company that is listed.
(3) This section applies despite anything in the company’s
constitution.
250BB Proxy vote if appointment specifies way to vote
(1) An appointment of a proxy may specify the way the proxy is to
vote on a particular resolution. If it does:
(a) the proxy need not vote on a show of hands, but if the proxy
does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different
ways to vote on the resolution—the proxy must not vote on a
show of hands; and
(c) if the proxy is the chair of the meeting at which the resolution
is voted on—the proxy must vote on a poll, and must vote
that way; and
(d) if the proxy is not the chair—the proxy need not vote on the
poll, but if the proxy does so, the proxy must vote that way.
If a proxy is also a member, this subsection does not affect the way
that the person can cast any votes they hold as a member.
Note: A company’s constitution may provide that a proxy is not entitled to
vote on a show of hands (see subsection 249Y(2)).
(2) If the chair contravenes subsection (1), the chair commits an
offence if the appointment as a proxy resulted from:
(a) the company sending to members:
(i) a list of persons willing to act as proxies; or
(ii) a proxy appointment form holding the chair out as being
willing to act as a proxy; or
(b) the operation of section 250BC.
(3) If a person other than the chair contravenes paragraph (1)(a) or (d),
the person commits an offence if the person:
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Section 250BC
Corporations Act 2001 407
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) agreed to the appointment; or
(b) held himself or herself out, or caused another person to hold
him or her out, as being willing to act as a proxy in relation
to the appointment.
(4) If a person other than the chair contravenes paragraph (1)(b), the
person commits an offence if, in relation to at least 2 of the
different ways of voting specified by the appointments, the person:
(a) agreed to at least one of the appointments specifying that way
of voting; or
(b) held himself or herself out, or caused another person to hold
him or her out, as being willing to act as a proxy in relation
to at least one of the appointments specifying that way of
voting.
(5) An offence against subsection (2), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250BC Transfer of non-chair proxy to chair in certain
circumstances
If:
(a) an appointment of a proxy specifies the way the proxy is to
vote on a particular resolution at a meeting of the company’s
members; and
(b) the appointed proxy is not the chair of the meeting; and
(c) at the meeting, a poll is duly demanded on the question that
the resolution be passed; and
(d) either of the following apply:
(i) if a record of attendance is made for the meeting—the
proxy is not recorded as attending;
(ii) the proxy does not vote on the resolution;
the chair of the meeting is taken, before voting on the resolution
closes, to have been appointed as the proxy for the purposes of
voting on the resolution at that meeting.
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Division 6 Proxies and body corporate representatives
Section 250BD
408 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
250BD Proxy voting by key management personnel or closely
related parties
(1) A person appointed as a proxy must not vote, on the basis of that
appointment, on a resolution connected directly or indirectly with
the remuneration of a member of the key management personnel
for the company or, if the company is part of a consolidated entity,
for the entity if:
(a) the person is either:
(i) a member of the key management personnel for the
company or, if the company is part of a consolidated
entity, for the entity; or
(ii) a closely related party of a member of the key
management personnel for the company or, if the
company is part of a consolidated entity, for the entity;
and
(b) the appointment does not specify the way the proxy is to vote
on the resolution.
Note 1: Examples of resolutions connected directly or indirectly with the
remuneration of a member of the key management personnel for the
company or entity include:
(a) resolutions that must be put to the vote under subsection 250R(2) (about a resolution that the remuneration report for a listed company be adopted); and
(b) resolutions that must be put to the vote under subsection 250V(1) (about fresh elections for directors at meetings arising from concerns about remuneration reports); and
(c) resolutions determining directors’ remuneration as mentioned in section 202A; and
(d) resolutions for the purposes of Chapter 2E (about public companies and entities they control giving financial benefits to related parties of public companies) affecting directors’ remuneration.
Note 2: Subsections 250R(4) and 250V(2) also prevent the person from voting
on the resolution if it is a resolution that must be put to the vote under
subsection 250R(2) or 250V(1).
Note 3: Section 224 may also prohibit the person from voting on the
resolution if it is a resolution for the purposes of Chapter 2E.
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Section 250BD
Corporations Act 2001 409
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 4: Failure to comply with this subsection is an offence: see
subsection 1311(1).
(2) Subsection (1) does not apply if:
(a) the person is the chair of the meeting at which the resolution
is voted on; and
(b) the appointment expressly authorises the chair to exercise the
proxy even if the resolution is connected directly or
indirectly with the remuneration of a member of the key
management personnel for the company or, if the company is
part of a consolidated entity, for the entity.
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) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified resolution; or
(b) subsection (1) does not prevent the casting of a vote, on a
specified resolution, by or on behalf of a specified entity;
but may do so only if satisfied that the declaration will not cause
unfair prejudice to the interests of any member of the company.
The declaration has effect accordingly. The declaration is not a
legislative instrument.
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 vote cast in contravention of subsection (1) is taken not to have
been cast. This subsection has effect for the purposes of this Act
except subsection (1) and subsections 250R(4) and (7), and
section 1311 and Schedule 3 so far as they relate to any of those
subsections.
Note: This means the vote is not counted in working out a percentage of
votes cast or whether the resolution is passed, and does not affect the
validity of the resolution.
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Division 6 Proxies and body corporate representatives
Section 250C
410 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
250C Validity of proxy vote
Proxy vote valid even if proxy cannot vote as member
(1) A proxy who is not entitled to vote on a resolution as a member
may vote as a proxy for another member who can vote if their
appointment specifies the way they are to vote on the resolution
and they vote that way.
Proxy vote valid even if member dies, revokes appointment etc.
(replaceable rule—see section 135)
(2) Unless the company has received written notice of the matter
before the start or resumption of the meeting at which a proxy
votes, a vote cast by the proxy will be valid even if, before the
proxy votes:
(a) the appointing member dies; or
(b) the member is mentally incapacitated; or
(c) the member revokes the proxy’s appointment; or
(d) the member revokes the authority under which the proxy was
appointed by a third party; or
(e) the member transfers the share in respect of which the proxy
was given.
Note: A proxy’s authority to vote is suspended while the member is present
at the meeting (see subsection 249Y(3)).
250D Body corporate representative
(1) A body corporate may appoint an individual as a representative to
exercise all or any of the powers the body corporate may exercise:
(a) at meetings of a company’s members; or
(b) at meetings of creditors or debenture holders; or
(c) relating to resolutions to be passed without meetings; or
(d) in the capacity of a member’s proxy appointed under
subsection 249X(1).
The appointment may be a standing one.
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Section 250D
Corporations Act 2001 411
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The appointment may set out restrictions on the representative’s
powers. If the appointment is to be by reference to a position held,
the appointment must identify the position.
(3) A body corporate may appoint more than 1 representative but only
1 representative may exercise the body’s powers at any one time.
(4) Unless otherwise specified in the appointment, the representative
may exercise, on the body corporate’s behalf, all of the powers that
the body could exercise at a meeting or in voting on a resolution.
Note: For resolutions of members without meetings, see sections 249A and
249B.
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Division 7 Voting at meetings of members
Section 250E
412 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Voting at meetings of members
250E How many votes a member has (replaceable rule—see
section 135)
Company with share capital
(1) Subject to any rights or restrictions attached to any class of shares,
at a meeting of members of a company with a share capital:
(a) on a show of hands, each member has 1 vote; and
(b) on a poll, each member has 1 vote for each share they hold.
Note: Unless otherwise specified in the appointment, a body corporate
representative has all the powers that a body corporate has as a
member (including the power to vote on a show of hands).
Company without share capital
(2) Each member of a company that does not have a share capital has 1
vote, both on a show of hands and a poll.
Chair’s casting vote
(3) The chair has a casting vote, and also, if they are a member, any
vote they have in their capacity as a member.
Note 1: The chair may be precluded from voting, for example, by a conflict of
interest.
Note 2: For rights to appoint proxies, see section 249X.
250F Jointly held shares (replaceable rule—see section 135)
If a share is held jointly and more than 1 member votes in respect
of that share, only the vote of the member whose name appears
first in the register of members counts.
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Meetings of members of companies Part 2G.2
Voting at meetings of members Division 7
Section 250G
Corporations Act 2001 413
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
250G Objections to right to vote (replaceable rule—see section 135)
A challenge to a right to vote at a meeting of a company’s
members:
(a) may only be made at the meeting; and
(b) must be determined by the chair, whose decision is final.
250H Votes need not all be cast in the same way
On a poll a person voting who is entitled to 2 or more votes:
(a) need not cast all their votes; and
(b) may cast their votes in different ways.
Note: For proxy appointments that specify the way the proxy is to vote on a
particular resolution, see subsection 250BB(1).
250J How voting is carried out (replaceable rule—see section 135)
(1) A resolution put to the vote at a meeting of a company’s members
must be decided on a show of hands unless a poll is demanded.
(1A) Before a vote is taken the chair must inform the meeting whether
any proxy votes have been received and how the proxy votes are to
be cast.
(2) On a show of hands, a declaration by the chair is conclusive
evidence of the result, provided that the declaration reflects the
show of hands and the votes of the proxies received. Neither the
chair nor the minutes need to state the number or proportion of the
votes recorded in favour or against.
Note: Even though the chair’s declaration is conclusive of the voting results,
the members present may demand a poll (see paragraph 250L(3)(c)).
250K Matters on which a poll may be demanded
(1) A poll may be demanded on any resolution.
(2) If a company has a constitution, the constitution may provide that a
poll cannot be demanded on any resolution concerning:
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Division 7 Voting at meetings of members
Section 250L
414 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the election of the chair of a meeting; or
(b) the adjournment of a meeting.
(3) A demand for a poll may be withdrawn.
250L When a poll is effectively demanded
(1) At a meeting of a company’s members, a poll may be demanded
by:
(a) at least 5 members entitled to vote on the resolution; or
(b) members with at least 5% of the votes that may be cast on the
resolution on a poll; or
(c) the chair.
Note: A proxy may join in the demand for a poll (see
paragraph 249Y(1)(c)).
(2) If a company has a constitution, the constitution may provide that
fewer members or members with a lesser percentage of votes may
demand a poll.
(3) The poll may be demanded:
(a) before a vote is taken; or
(b) before the voting results on a show of hands are declared; or
(c) immediately after the voting results on a show of hands are
declared.
(4) The percentage of votes that members have is to be worked out as
at the midnight before the poll is demanded.
250M When and how polls must be taken (replaceable rule—see
section 135)
(1) A poll demanded on a matter other than the election of a chair or
the question of an adjournment must be taken when and in the
manner the chair directs.
(2) A poll on the election of a chair or on the question of an
adjournment must be taken immediately.
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Meetings Chapter 2G
Meetings of members of companies Part 2G.2
AGMs of public companies Division 8
Section 250N
Corporations Act 2001 415
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—AGMs of public companies
250N Public company must hold AGM
(1) A public company must hold an annual general meeting (AGM)
within 18 months after its registration.
(2) A public company must hold an AGM at least once in each
calendar year and within 5 months after the end of its financial
year.
Note: An AGM held to satisfy this subsection may also satisfy
subsection (1).
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An AGM is to be held in addition to any other meetings held by a
public company in the year.
Note 1: The company’s annual financial report, directors’ report and auditor’s
report must be laid before the AGM (see section 317).
Note 2: The rules in sections 249C-250M apply to an AGM.
(4) A public company that has only 1 member is not required to hold
an AGM under this section.
250P Extension of time for holding AGM
(1) A public company may lodge an application with ASIC to extend
the period within which section 250N requires the company to hold
an AGM.
(2) If the company applies before the end of the period within which
the company would otherwise be required to hold an AGM, ASIC
may extend the period in writing. ASIC must specify the period of
the extension.
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Division 8 AGMs of public companies
Section 250PAA
416 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) A company granted an extension under subsection (2) must hold its
AGM within the extended period.
(4) ASIC may impose conditions on the extension and the company
must comply with those conditions.
(5) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250PAA Exemptions by ASIC—class orders relating to
externally-administered companies
(1) ASIC may, by legislative instrument, make an order exempting any
of the following from section 250N:
(a) a specified class of companies that are being wound up;
(b) a specified class of companies under administration;
(c) a specified class of companies subject to deeds of company
arrangement.
(2) The order may be:
(a) unconditional; or
(b) subject to one or more specified conditions.
(3) ASIC must cause a copy of the order to be published in the
Gazette.
250PAB Exemptions by ASIC—individual externally-administered
companies
(1) The liquidator of a company that is being wound up may lodge an
application with ASIC to exempt the company from section 250N.
(2) The administrator of a company under administration may lodge an
application with ASIC to exempt the company from section 250N.
(3) The administrator of a deed of company arrangement may lodge an
application with ASIC to exempt the company from section 250N.
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Section 250PA
Corporations Act 2001 417
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If an application is lodged under subsection (1), (2) or (3), ASIC
may, by writing, exempt the company from section 250N.
(5) The exemption may be:
(a) unconditional; or
(b) subject to one or more specified conditions.
(6) ASIC must cause a copy of the exemption to be published in the
Gazette.
250PA Written questions to auditor submitted by members of listed
company before AGM
Member may submit question
(1) A member of a listed company who is entitled to cast a vote at the
AGM may submit a written question to the auditor under this
section if the question is relevant to:
(a) the content of the auditor’s report to be considered at the
AGM; or
(b) the conduct of the audit of the annual financial report to be
considered at the AGM.
The member submits the question to the auditor under this
subsection by giving the question to the listed company no later
than the fifth business day before the day on which the AGM is
held.
(2) Despite the question being one that is addressed to the auditor, the
listed company may:
(a) examine the contents of the question; and
(b) make a copy of the question.
Company to pass question on to auditor
(3) The listed company must, as soon as practicable after the question
is received by the company, pass the question on to the auditor.
The company must pass the question on to the auditor even if the
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Section 250PA
418 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
company believes the question is not relevant to the matters
specified in paragraph (1)(a) and (b).
Contravention by individual auditor
(4) If the auditor is an individual auditor, the auditor contravenes this
subsection if the auditor does not prepare, and give to the listed
company, a document (the question list) that sets out the questions
that:
(a) the listed company has passed on to the auditor; and
(b) the auditor considers to be relevant to the matters specified in
paragraphs (1)(a) and (b);
as soon as practicable after the end of the time for submitting
questions under subsection (1) and a reasonable time before the
AGM.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Contravention by lead auditor
(6) A person contravenes this subsection if:
(a) the auditor is an audit firm or audit company; and
(b) the person is the lead auditor for the audit; and
(c) the person does not prepare, and give to the listed company, a
document (the question list) that sets out the questions that:
(i) the listed company has passed on to the auditor; and
(ii) the person considers to be relevant to the matters
specified in paragraphs (1)(a) or (b);
as soon as practicable after the end of the time for submitting
questions under subsection (1) and a reasonable time before
the AGM.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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AGMs of public companies Division 8
Section 250R
Corporations Act 2001 419
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Certain questions do not need to be included in question list
(8) A question need not be included in the question list under
subsection (4) or (6) if:
(a) the question list includes a question that is the same in
substance as that question (even if it is differently expressed);
or
(b) it is not practicable to include the question in the question
list, or to decide whether to include the question in the
question list, because of the time when the question is passed
on to the auditor.
Listed company to make question list available at AGM
(9) The listed company must, at or before the start of the AGM, make
copies of the question list reasonably available to the members
attending the AGM.
250R Business of AGM
(1) The business of an AGM may include any of the following, even if
not referred to in the notice of meeting:
(a) the consideration of the annual financial report, directors’
report and auditor’s report;
(b) the election of directors;
(c) the appointment of the auditor;
(d) the fixing of the auditor’s remuneration.
Advisory resolution for adoption of remuneration report
(2) At a listed company’s AGM, a resolution that the remuneration
report be adopted must be put to the vote.
Note: Under paragraph 249L(2)(a), the notice of the AGM must inform
members that this resolution will be put at the AGM.
(3) The vote on the resolution is advisory only and does not bind the
directors or the company.
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Section 250R
420 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Voting on advisory resolution by key management personnel or
closely related parties
(4) A vote on the resolution must not be cast (in any capacity) by or on
behalf of either of the following persons:
(a) a member of the key management personnel details of whose
remuneration are included in the remuneration report;
(b) a closely related party of such a member.
(5) However, a person (the voter) described in subsection (4) may cast
a vote on the resolution as a proxy if the vote is not cast on behalf
of a person described in subsection (4) and either:
(a) the voter is appointed as a proxy by writing that specifies the
way the proxy is to vote on the resolution; or
(b) the voter is the chair of the meeting and the appointment of
the chair as proxy:
(i) does not specify the way the proxy is to vote on the
resolution; and
(ii) expressly authorises the chair to exercise the proxy even
if the resolution is connected directly or indirectly with
the remuneration of a member of the key management
personnel for the company or, if the company is part of
a consolidated entity, for the entity.
(6) ASIC may by writing declare that:
(a) subsection (4) does not apply to a specified resolution; or
(b) subsection (4) does not prevent the casting of a vote, on a
specified resolution, by or on behalf of a specified entity;
but may do so only if satisfied that the declaration will not cause
unfair prejudice to the interests of any member of the listed
company. The declaration has effect accordingly. The declaration
is not a legislative instrument.
(7) A person described in subsection (4) contravenes this subsection if
a vote on the resolution is cast by or on behalf of the person in
contravention of that subsection (whether or not the resolution is
passed).
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Section 250RA
Corporations Act 2001 421
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A contravention of this subsection is an offence: see
subsection 1311(1).
(8) A vote cast in contravention of subsection (4) is taken not to have
been cast. This subsection has effect for the purposes of this Act
except subsections (4) and (7) and subsection 250BD(1), and
section 1311 and Schedule 3 so far as they relate to any of those
subsections.
Note: This means the vote is not counted in working out a percentage of
votes cast or whether the resolution is passed, and does not affect the
validity of the resolution.
(9) For the purposes of this section, a vote is cast on behalf of a person
if, and only if, it is cast:
(a) as proxy for the person; or
(b) otherwise on behalf of the person; or
(c) in respect of a share in respect of which the person has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to
vote.
(10) Subject to Part 1.1A, subsections (4), (5), (6), (7), (8) and (9) have
effect despite:
(a) anything else in:
(i) this Act; or
(ii) any other law (including the general law) of a State or
Territory; and
(b) anything in the company’s constitution.
250RA Auditor required to attend listed company’s AGM
Contravention by individual auditor
(1) If a listed company’s auditor for a financial year is an individual
auditor, the auditor contravenes this subsection if:
(a) the auditor does not attend the company’s AGM at which the
audit report for that financial year is considered; and
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Section 250S
422 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the auditor does not arrange to be represented, at that AGM,
by a person who:
(i) is a suitably qualified member of the audit team that
conducted the audit; and
(ii) is in a position to answer questions about the audit.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Contravention by lead auditor
(3) A person contravenes this subsection if:
(a) a listed company’s auditor for a financial year is an audit
firm or an audit company; and
(b) the person is the lead auditor for the audit; and
(c) the person is not represented, at the AGM at which the audit
report for that financial year is considered, by a person who:
(i) is a suitably qualified member of the audit team that
conducted the audit; and
(ii) is in a position to answer questions about the audit.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
250S Questions and comments by members on company
management at AGM
(1) The chair of an AGM must allow a reasonable opportunity for the
members as a whole at the meeting to ask questions about or make
comments on the management of the company.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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AGMs of public companies Division 8
Section 250SA
Corporations Act 2001 423
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
250SA Listed company—remuneration report
At a listed company’s AGM, the chair must allow a reasonable
opportunity for the members as a whole to ask questions about, or
make comments on, the remuneration report. This section does not
limit section 250S.
250T Questions by members of auditors at AGM
(1) If the company’s auditor or their representative is at the meeting,
the chair of an AGM must:
(a) allow a reasonable opportunity for the members as a whole at
the meeting to ask the auditor or the auditor’s representative
questions relevant to:
(i) the conduct of the audit; and
(ii) the preparation and content of the auditor’s report; and
(iii) the accounting policies adopted by the company in
relation to the preparation of the financial statements;
and
(iv) the independence of the auditor in relation to the
conduct of the audit; and
(b) allow a reasonable opportunity for the auditor or their
representative to answer written questions submitted to the
auditor under section 250PA.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If :
(a) the company’s auditor or their representative is at the
meeting; and
(b) the auditor has prepared a written answer to a written
question submitted to the auditor under section 250PA;
the Chair of the AGM may permit the auditor or their
representative to table the written answer to the written question.
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Division 8 AGMs of public companies
Section 250T
424 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The listed company must make the written answer tabled under
subsection (3) reasonably available to members as soon as
practicable after the AGM.
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Meetings of members of companies Part 2G.2
Meetings arising from concerns about remuneration reports Division 9
Section 250U
Corporations Act 2001 425
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 9—Meetings arising from concerns about
remuneration reports
250U Application
This Division applies in relation to a listed company if:
(a) at an AGM (the later AGM) of the company, at least 25% of
the votes cast on a resolution that the remuneration report be
adopted were against adoption of the report; and
(b) at the immediately preceding AGM (the earlier AGM) of the
company, at least 25% of the votes cast on a resolution that
the remuneration report be adopted were against adoption of
the report; and
(c) a resolution was not put to the vote at the earlier AGM under
an earlier application of section 250V.
Note: Subsection 250R(2) requires a resolution to adopt a remuneration
report for a listed company to be put to the vote at the company’s
AGM.
250V Resolution to hold fresh elections for directors at special
meeting to be put to vote at AGM
(1) At the later AGM, there must be put to the vote a resolution (the
spill resolution) that:
(a) another meeting (the spill meeting) of the company’s
members be held within 90 days; and
(b) all the company’s directors who:
(i) were directors of the company when the resolution to
make the directors’ report considered at the later AGM
was passed; and
(ii) are not a managing director of the company who may,
in accordance with the listing rules for a prescribed
financial market in whose official list the company is
included, continue to hold office indefinitely without
being re-elected to the office;
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Division 9 Meetings arising from concerns about remuneration reports
Section 250W
426 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
cease to hold office immediately before the end of the spill
meeting; and
(c) resolutions to appoint persons to offices that will be vacated
immediately before the end of the spill meeting be put to the
vote at the spill meeting.
(2) Subsections 250R(4), (5), (6), (7), (8), (9) and (10), and other
provisions of this Act so far as they relate to any of those
subsections, apply in relation to the spill resolution in the same
way as they apply in relation to a resolution that a remuneration
report be adopted.
(3) To avoid doubt, section 203D does not apply in relation to the spill
resolution.
250W Consequences of spill resolution being passed
(1) This section applies if the spill resolution is passed.
Deadline for holding spill meeting
(2) The company must hold the spill meeting within 90 days after the
spill resolution was passed.
(3) Nothing in subsection (2) authorises any person to disregard:
(a) section 249HA (Amount of notice of meetings of listed
company); or
(b) if a person intends to move a resolution relating to the
appointment of a director of the company—any provision of
the company’s constitution that requires a minimum period
of notice for such a resolution.
Note: Division 3 (which includes section 249HA) deals with giving notice of
the spill meeting. Division 5 contains rules relevant to holding the
spill meeting.
If relevant directors cease to hold office before deadline
(4) The company need not hold the spill meeting within 90 days after
the spill resolution was passed if, before the end of that period,
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Section 250W
Corporations Act 2001 427
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
none of the company’s directors described in paragraph 250V(1)(b)
remain as directors of the company.
Consequences of failure to hold spill meeting in time
(5) If the company does not hold the spill meeting within 90 days after
the spill resolution was passed, each person who is a director of the
company at the end of those 90 days commits an offence.
Note: A person who is a director at the end of those 90 days may commit an
offence even if he or she was not a director when the spill resolution
was passed.
(6) An offence against subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(7) Subsection (5) does not apply if the company need not hold the
spill meeting because of subsection (4).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (7): see subsection 13.3(3) of the Criminal Code.
(8) Subsection (5) does not apply to a person who was not a director of
the company at any time during the period:
(a) starting when the spill resolution was passed; and
(b) ending at the last time notice of the spill meeting could have
been given to hold the spill meeting within 90 days after the
spill resolution was passed and comply with section 249HA
(Amount of notice of meetings of listed company).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (8): see subsection 13.3(3) of the Criminal Code.
Cessation of relevant directors and commencement of
newly-appointed directors
(9) All the company’s directors described in paragraph 250V(1)(b)
cease to hold office immediately before the end of the spill meeting
and the directors appointed by the meeting commence to hold
office at the end of that meeting. This subsection has effect despite
anything else in this Act and the company’s constitution.
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Division 9 Meetings arising from concerns about remuneration reports
Section 250X
428 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
250X Ensuring there are at least 3 directors after spill meeting
(1) This section applies if there would be fewer than 3 directors of the
company immediately after the spill meeting apart from this
section.
Note: Subsection 201A(2) requires the company to have at least 3 directors.
(2) Enough directors to ensure that the company has 3 directors
immediately after the spill meeting are taken to have been
appointed, by resolution passed at the spill meeting, from the
persons who:
(a) gave the company signed consents to act as directors of the
company in anticipation of being appointed by such a
resolution; and
(b) were not appointed as directors by such a resolution apart
from this section.
Note: The number of directors taken under subsection (2) to have been
appointed is the difference between 3 and the number of directors
holding office immediately after the spill meeting apart from this
section.
(3) The persons taken to have been appointed are those with the
highest percentages of votes favouring their appointment cast at the
spill meeting on the resolution for their appointment (even if less
than half the votes cast on the resolution were in favour of their
appointment).
Example: Suppose that, under subsection (2), 2 directors are taken to have been
appointed, and the percentages of votes favouring appointment were
50% for Jean, 40% for Karl and 30% for Lionel. Jean and Karl would
both be taken to have been appointed directors, but Lionel would not.
(4) For the purposes of this section, if 2 or more persons have the same
percentage of votes favouring their appointment, the one of those
persons chosen by the director or directors who hold office apart
from this subsection is taken to have a higher percentage than the
rest of those persons.
Note: A director who holds office apart from subsection (4) could make a
series of choices if 3 or more persons all have the same percentage of
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Meetings arising from concerns about remuneration reports Division 9
Section 250Y
Corporations Act 2001 429
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
votes favouring their appointment and it is necessary to work out
which 2 of those persons are taken to be appointed as directors.
(5) If a person is taken to have been appointed because of a choice
under subsection (4), the company must confirm the appointment
by resolution at the company’s next AGM. If the appointment is
not confirmed, the person ceases to be a director of the company at
the end of the AGM.
(6) This section has effect despite anything else in this Act and the
company’s constitution.
250Y Term of office of director reappointed at spill meeting
If a director who ceased to hold office immediately before the end
of the spill meeting is appointed as director by resolution passed at
the spill meeting, his or her term of office runs as if the cessation
and appointment had not happened.
Note: This section is subject to subsection 250X(5).
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Chapter 2G Meetings
Part 2G.3 Minutes and members’ access to minutes
Section 251A
430 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2G.3—Minutes and members’ access to
minutes
251A Minutes
(1) A company must keep minute books in which it records within 1
month:
(a) proceedings and resolutions of meetings of the company’s
members; and
(b) proceedings and resolutions of directors’ meetings (including
meetings of a committee of directors); and
(c) resolutions passed by members without a meeting; and
(d) resolutions passed by directors without a meeting; and
(e) if the company is a proprietary company with only 1
director—the making of declarations by the director.
Note: For resolutions and declarations without meetings, see sections 248A,
248B, 249A and 249B.
(2) The company must ensure that minutes of a meeting are signed
within a reasonable time after the meeting by 1 of the following:
(a) the chair of the meeting;
(b) the chair of the next meeting.
(3) The company must ensure that minutes of the passing of a
resolution without a meeting are signed by a director within a
reasonable time after the resolution is passed.
(4) The director of a proprietary company with only 1 director must
sign the minutes of the making of a declaration by the director
within a reasonable time after the declaration is made.
(5) A company must keep its minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
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Minutes and members’ access to minutes Part 2G.3
Section 251AA
Corporations Act 2001 431
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5A) An offence based on subsection (1), (2), (3), (4) or (5) is an offence
of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) A minute that is so recorded and signed is evidence of the
proceeding, resolution or declaration to which it relates, unless the
contrary is proved.
251AA Disclosure of proxy votes—listed companies
(1) A company must record in the minutes of a meeting, in respect of
each resolution in the notice of meeting, the total number of proxy
votes exercisable by all proxies validly appointed and:
(a) if the resolution is decided by a show of hands—the total
number of proxy votes in respect of which the appointments
specified that:
(i) the proxy is to vote for the resolution; and
(ii) the proxy is to vote against the resolution; and
(iii) the proxy is to abstain on the resolution; and
(iv) the proxy may vote at the proxy’s discretion; and
(b) if the resolution is decided on a poll—the information
specified in paragraph (a) and the total number of votes cast
on the poll:
(i) in favour of the resolution; and
(ii) against the resolution; and
(iii) abstaining on the resolution.
(2) A company that must notify the operator of each market on which
financial products of the company are listed of a resolution passed
by members at a meeting of the company must, at the same time,
give the relevant market operator the information specified in
subsection (1).
(3) This section only applies to a company that is listed.
(4) This section applies despite anything in the company’s
constitution.
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Chapter 2G Meetings
Part 2G.3 Minutes and members’ access to minutes
Section 251B
432 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
251B Members’ access to minutes
(1) A company must ensure that the minute books for the meetings of
its members and for resolutions of members passed without
meetings are open for inspection by members free of charge.
(2) A member of a company may ask the company in writing for a
copy of:
(a) any minutes of a meeting of the company’s members or an
extract of the minutes; or
(b) any minutes of a resolution passed by members without a
meeting.
(3) If the company does not require the member to pay for the copy,
the company must send it:
(a) within 14 days after the member asks for it; or
(b) within any longer period that ASIC approves.
(4) If the company requires payment for the copy, the company must
send it:
(a) within 14 days after the company receives the payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the company requires cannot exceed
the prescribed amount.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Meetings of members of registered managed investment schemes Part 2G.4
Who may call meetings of members Division 1
Section 252A
Corporations Act 2001 433
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2G.4—Meetings of members of registered
managed investment schemes
Division 1—Who may call meetings of members
252A Calling of meetings of members by responsible entity
The responsible entity of a registered scheme may call a meeting of
the scheme’s members.
252B Calling of meetings of members by responsible entity when
requested by members
(1) The responsible entity of a registered scheme must call and arrange
to hold a meeting of the scheme’s members to consider and vote on
a proposed special or extraordinary resolution on the request of:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote on the
resolution.
(1A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
(2) The request must:
(a) be in writing; and
(b) state any resolution to be proposed at the meeting; and
(c) be signed by the members proposing to move the resolution.
(3) The request may be accompanied by a statement about the
proposed resolution provided by the members making the request.
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Part 2G.4 Meetings of members of registered managed investment schemes
Division 1 Who may call meetings of members
Section 252C
434 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) Separate copies of a document setting out the request and statement
(if any) may be used for signing by members if the wording of the
request and statement (if any) is identical in each copy.
(5) The percentage of the votes that members have is to be worked out
as at the midnight before the request is given to the responsible
entity.
(6) The responsible entity must call the meeting within 21 days after
the request is given to it. The meeting is to be held not later than 2
months after the request is given to the responsible entity.
(7) The responsible entity must give to each of the members a copy of
the proposed resolution and statement (if any) at the same time, or
as soon as practicable afterwards, as it gives notice of the meeting.
The responsible entity must distribute the copies in the same way
in which it gives notice of the meeting.
(8) The responsible entity does not have to distribute a copy of the
resolution or statement if either is more than 1,000 words long or
defamatory.
(9) The responsible entity is responsible for the expenses of calling
and holding the meeting and making the distribution. The
responsible entity may meet those expenses from the scheme’s
assets.
252C Failure of responsible entity to call meeting of the scheme’s
members
(1) Members with more than 50% of the votes carried by interests held
by the members who make a request under section 252B may call
and arrange to hold a meeting of the scheme’s members and
distribute the statement (if any) if the responsible entity does not
do so within 21 days after the request is given to the responsible
entity.
(2) The meeting must be called and the statement is to be distributed in
the same way—so far as is possible—in which meetings of the
scheme’s members may be called by the responsible entity and
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Meetings of members of registered managed investment schemes Part 2G.4
Who may call meetings of members Division 1
Section 252D
Corporations Act 2001 435
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
information is distributed to members by the responsible entity.
The meeting must be held not later than 3 months after the request
is given to the responsible entity.
(3) To call the meeting the members requesting the meeting may ask
the responsible entity under section 173 for a copy of the register
of members. Despite paragraph 173(3)(b), the responsible entity
must give the members requesting the meeting the copy of the
register without charge.
(4) The responsible entity must pay the reasonable expenses the
members incurred because the responsible entity failed to call and
arrange to hold the meeting and to make the distribution (if any).
The responsible entity must not pay those expenses from the
scheme’s assets.
(5) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252D Calling of meetings of members by members
(1) Members of a registered scheme who hold interests carrying at
least 5% of the votes that may be cast at a meeting of the scheme’s
members may call and arrange to hold a meeting of the scheme’s
members to consider and vote on a proposed special resolution or a
proposed extraordinary resolution. The members calling the
meeting must pay the expenses of calling and holding the meeting.
(2) The meeting must be called in the same way—so far as is
possible—in which meetings of the scheme’s members may be
called by the responsible entity.
(3) The percentage of the votes carried by interests that members hold
is to be worked out as at the midnight before the meeting is called.
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 1 Who may call meetings of members
Section 252E
436 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
252E Calling of meetings of members by the Court
(1) The Court may order a meeting of a registered scheme’s members
to be called to consider and vote on a proposed special or
extraordinary resolution if it is impracticable to call the meeting in
any other way.
(2) The Court may make the order on application by:
(a) the responsible entity; or
(b) any member of the scheme who would be entitled to vote at
the meeting.
Note: For the directions the Court may give for calling, holding or
conducting a meeting it has ordered be called, see section 1319.
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Meetings of members of registered managed investment schemes Part 2G.4
How to call meetings of members Division 2
Section 252F
Corporations Act 2001 437
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—How to call meetings of members
252F Amount of notice of meetings
At least 21 days notice must be given of a meeting of the members
of a registered scheme. However, the scheme’s constitution may
specify a longer minimum period of notice.
252G Notice of meetings of members to members, directors and
auditors
Notice to members, directors and auditors individually
(1) Written notice of a meeting of a registered scheme’s members must
be given to:
(a) each member of the scheme entitled to vote at the meeting;
and
(b) each director of the responsible entity; and
(c) the auditor of the scheme; and
(d) the auditor of the scheme compliance plan.
If an interest is held jointly, notice need only be given to 1 of the
members.
Notice to joint members
(2) Unless the scheme’s constitution provides otherwise, notice to joint
members must be given to the joint member named first in the
register of members.
How notice is given
(3) Unless the scheme’s constitution provides otherwise, the
responsible entity may give notice of the meeting to a member:
(a) personally; or
(b) by sending it by post to the address for the member in the
register of members or an alternative address (if any)
nominated by the member; or
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 2 How to call meetings of members
Section 252H
438 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) by sending it to the fax number or electronic address (if any)
nominated by the member.
Note: A defect in the notice given may not invalidate a meeting (see
section 1322).
When notice by post or fax is given
(4) Unless the scheme’s constitution provides otherwise, a notice of
meeting sent by post is taken to be given 3 days after it is posted. A
notice of meeting sent by fax, or other electronic means, is taken to
be given on the business day after it is sent.
252H Auditors entitled to other communications
(1) The responsible entity of a registered scheme must give the auditor
of the scheme and the auditor of the scheme compliance plan any
other communications relating to the meeting that a member of the
scheme is entitled to receive.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252J Contents of notice of meetings of members
A notice of a meeting of a registered scheme’s members must:
(a) set out the place, date and time for the meeting (and, if the
meeting is to be held in 2 or more places, the technology that
will be used to facilitate this); and
(b) state the general nature of the meeting’s business; and
(c) if a special or extraordinary resolution is to be proposed at
the meeting—set out an intention to propose the special or
extraordinary resolution and state the resolution; and
(d) contain a statement setting out the following information:
(i) that the member has a right to appoint a proxy;
(ii) that the proxy does not need to be a member of the
registered scheme;
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Meetings of members of registered managed investment schemes Part 2G.4
How to call meetings of members Division 2
Section 252K
Corporations Act 2001 439
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) that if the member appoints 2 proxies the member may
specify the proportion or number of votes the proxy is
appointed to exercise.
Note: There may be other requirements for disclosure to members.
252K Notice of adjourned meetings
When a meeting is adjourned, new notice of the adjourned meeting
must be given if the meeting is adjourned for 1 month or more.
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 3 Members’ rights to put resolutions etc. at meetings of members
Section 252L
440 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Members’ rights to put resolutions etc. at
meetings of members
252L Members’ resolutions
(1) The following members of a registered scheme may give the
responsible entity notice of a resolution that they propose to move
at a meeting of the scheme’s members:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote at a meeting of
the scheme’s members.
(1A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
(1B) The resolution must be:
(a) a special resolution; or
(b) an extraordinary resolution; or
(c) a resolution to remove the responsible entity of a scheme that
is listed and choose a new responsible entity.
(2) The notice must:
(a) be in writing; and
(b) set out the wording of the proposed resolution; and
(c) be signed by the members giving the notice.
(3) Separate copies of a document setting out the notice may be used
for signing by members if the wording of the notice is identical in
each copy.
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Meetings of members of registered managed investment schemes Part 2G.4
Members’ rights to put resolutions etc. at meetings of members Division 3
Section 252M
Corporations Act 2001 441
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The percentage of the votes that members have is to be worked out
as at the midnight before the members give the notice.
252M Responsible entity giving notice of members’ resolutions
(1) If a responsible entity has been given notice of a resolution under
section 252L, the resolution is to be considered at the next meeting
of the scheme’s members that occurs more than 2 months after the
notice is given.
(2) The responsible entity must give all the members of the scheme
notice of the resolution at the same time, or as soon as practicable
afterwards, and in the same way, as it gives notice of a meeting.
(3) The responsible entity is responsible for the cost of giving
members notice of the resolution if the responsible entity receives
the notice in time to send it out to members with the notice of
meeting.
(4) The members requesting the meeting are jointly and individually
liable for the expenses reasonably incurred by the responsible
entity in giving members notice of the resolution if the responsible
entity does not receive the members’ notice in time to send it out
with the notice of meeting. A resolution may be passed at a
meeting of the scheme’s members that the responsible entity is to
meet the expenses out of the scheme’s assets.
(5) The responsible entity need not give notice of the resolution:
(a) if it is more than 1,000 words long or defamatory; or
(b) if the members making the request are to bear the expenses of
sending the notice out—unless the members give the
responsible entity a sum reasonably sufficient to meet the
expenses that it will reasonably incur in giving the notice.
252N Members’ statements to be distributed
(1) Members may request a responsible entity to give to all its
members a statement provided by the members making the request
about:
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 3 Members’ rights to put resolutions etc. at meetings of members
Section 252N
442 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a resolution that is proposed to be moved at a meeting of the
scheme’s members; or
(b) any other matter that may be properly considered at a
meeting of the scheme’s members.
(2) The request must be made by:
(a) members with at least 5% of the votes that may be cast on the
resolution; or
(b) at least 100 members who are entitled to vote at the meeting.
(2A) The regulations may prescribe a different number of members for
the purposes of the application of paragraph (2)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
(3) The request must be:
(a) in writing; and
(b) signed by the members making the request; and
(c) given to the responsible entity.
(4) Separate copies of a document setting out the request may be used
for signing by members if the wording of the request is identical in
each copy.
(5) The percentage of the votes that members have is to be worked out
as at the midnight before the request is given to the responsible
entity.
(6) After receiving the request, the responsible entity must distribute to
all the members of the scheme a copy of the statement at the same
time, or as soon as practicable afterwards, and in the same way, as
it gives notice of a meeting.
(7) The responsible entity is responsible for the cost of making the
distribution if the responsible entity receives the statement in time
to send it out to members with the notice of meeting.
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Meetings of members of registered managed investment schemes Part 2G.4
Members’ rights to put resolutions etc. at meetings of members Division 3
Section 252N
Corporations Act 2001 443
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) The members making the request are jointly and individually liable
for the expenses reasonably incurred by the responsible entity in
making the distribution if the responsible entity does not receive
the statement in time to send it out with the notice of meeting. A
resolution may be passed at a meeting of the scheme’s members
that the responsible entity is to meet the expenses out of the
scheme’s assets.
(9) The responsible entity need not comply with the request:
(a) if the statement is more than 1,000 words long or
defamatory; or
(b) if the members making the request are responsible for the
expenses of the distribution—unless the members give the
company a sum reasonably sufficient to meet the expenses
that it will reasonably incur in making the distribution.
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 4 Holding meetings of members
Section 252P
444 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Holding meetings of members
252P Time and place for meetings of members
A meeting of a registered scheme’s members must be held at a
reasonable time and place.
252Q Technology
A responsible entity of a registered scheme may hold a meeting of
the scheme’s members at 2 or more venues using any technology
that gives the members as a whole a reasonable opportunity to
participate.
Note: See section 1322 for the consequences of members not being given a
reasonable opportunity to participate.
252R Quorum
(1) This section applies to a registered scheme subject to the
provisions of the scheme’s constitution.
(2) The quorum for a meeting of a registered scheme’s members is 2
members and the quorum must be present at all times during the
meeting.
(3) In determining whether a quorum is present, count individuals
attending as proxies or body corporate representatives. However, if
a member has appointed more than 1 proxy or representative, count
only 1 of them. If an individual is attending both as a member and
as a proxy or body corporate representative, count them only once.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: For body corporate representatives, see section 253B.
(4) A meeting of the scheme’s members that does not have a quorum
present within 30 minutes after the time for the start of the meeting
set out in the notice of meeting is adjourned to the date, time and
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Meetings of members of registered managed investment schemes Part 2G.4
Holding meetings of members Division 4
Section 252S
Corporations Act 2001 445
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
place the responsible entity specifies. If the responsible entity does
not specify 1 or more of those things, the meeting is adjourned to:
(a) if the date is not specified—the same day in the next week;
and
(b) if the time is not specified—the same time; and
(c) if the place is not specified—the same place.
(5) If no quorum is present at the resumed meeting within 30 minutes
after the time for the start of the meeting, the meeting is dissolved.
252S Chairing meetings of members
(1) The responsible entity may, in writing, appoint an individual to
chair a meeting called under section 252A or 252B.
(2) The members present at a meeting called under section 252A or
252B must elect a member present to chair the meeting (or part of
it) if:
(a) a chair has not previously been appointed to chair the
meeting; or
(b) a previously appointed chair is not available, or declines to
act, for the meeting (or part of the meeting).
(3) The members present at a meeting called under section 252C,
252D or 252E must elect a member present to chair the meeting.
This is not so if the meeting is called under section 252E and the
Court has directed otherwise under section 1319.
252T Auditors’ right to be heard at meetings of members
(1) The auditor of a registered scheme and the auditor of the scheme
compliance plan are entitled to attend any meeting of the scheme’s
members.
(2) An auditor is entitled to be heard at the meeting on any part of the
business of the meeting that concerns the auditor in their capacity
as auditor.
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 4 Holding meetings of members
Section 252U
446 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) An auditor may authorise a person in writing as their representative
for the purpose of attending and speaking at any meeting of the
scheme’s members.
252U Adjourned meetings
(1) A resolution passed at a meeting resumed after an adjournment is
passed on the day it was passed.
(2) Only unfinished business is to be transacted at a meeting resumed
after an adjournment.
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Meetings Chapter 2G
Meetings of members of registered managed investment schemes Part 2G.4
Proxies and body corporate representatives Division 5
Section 252V
Corporations Act 2001 447
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Proxies and body corporate representatives
252V Who can appoint a proxy
(1) A member of a registered scheme who is entitled to attend and cast
a vote at a meeting of the scheme’s members may appoint a person
as the member’s proxy to attend and vote for the member at the
meeting.
(2) The appointment may specify the proportion or number of votes
that the proxy may exercise.
(3) A member may appoint 1 or 2 proxies. If the member appoints 2
proxies and the appointment does not specify the proportion or
number of the member’s votes each proxy may exercise, each
proxy may exercise half of the votes.
(4) Disregard any fractions of votes resulting from the application of
subsection (2) or (3).
252W Rights of proxies
Rights of proxies
(1) A proxy appointed to attend and vote for a member has the same
rights as the member:
(a) to speak at the meeting; and
(b) to vote (but only to the extent allowed by the appointment).
Proxy’s right to vote
(2) A registered scheme’s constitution (if any) may provide that a
proxy is not entitled to vote on a show of hands.
Note: Even if the proxy is not entitled to vote on a show of hands, they may
make or join in the demand for a poll (see section 253L).
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 5 Proxies and body corporate representatives
Section 252X
448 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Effect of member’s presence on proxy’s authority
(3) A registered scheme’s constitution (if any) may provide for the
effect that a member’s presence at a meeting has on the authority
of a proxy appointed to attend and vote for the member. However,
if the constitution does not make such provision, a proxy’s
authority to speak and vote for a member at a meeting is suspended
while the member is present at the meeting.
252X Responsible entity sending appointment forms or lists of
proxies must send to all members
(1) If the responsible entity of a registered scheme sends a member a
proxy appointment form for a meeting or a list of persons willing
to act as proxies at a meeting:
(a) if the member requested the form or list—the responsible
entity must send the form or list to all members who ask for
it and who are entitled to appoint a proxy to attend and vote
at the meeting; or
(b) otherwise—the responsible entity must send the form or list
to all its members entitled to appoint a proxy to attend and
vote at the meeting.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
252Y Appointing a proxy
(1) An appointment of a proxy is valid if it is signed by the member of
the registered scheme making the appointment and contains the
following information:
(a) the member’s name and address;
(b) the scheme’s name;
(c) the proxy’s name or the name of the office held by the proxy;
(d) the meetings at which the appointment may be used.
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Meetings of members of registered managed investment schemes Part 2G.4
Proxies and body corporate representatives Division 5
Section 252Y
Corporations Act 2001 449
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
An appointment may be a standing one
(2) A registered scheme’s constitution may provide that an
appointment is valid even if it contains only some of the
information required by subsection (1).
(3) An undated appointment is taken to have been dated on the day it
is given to the responsible entity.
(4) An appointment may specify the way the proxy is to vote on a
particular resolution. If it does:
(a) the proxy need not vote on a show of hands, but if the proxy
does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different
ways to vote on the resolution—the proxy must not vote on a
show of hands; and
(c) if the proxy is the chair—the proxy must vote on a poll, and
must vote that way; and
(d) if the proxy is not the chair—the proxy need not vote on a
poll, but if the proxy does so, the proxy must vote that way.
If a proxy is also a member, this subsection does not affect the way
that the person can cast any votes they hold as a member.
Note: The scheme’s constitution may provide that a proxy is not entitled to
vote on a show of hands (see subsection 252W(2)).
(5) A person who contravenes subsection (4) is guilty of an offence,
but only if their appointment as a proxy resulted from the
responsible entity sending to members:
(a) a list of persons willing to act as proxies; or
(b) a proxy appointment form holding the person out as being
willing to act as a proxy.
(5A) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) An appointment does not have to be witnessed.
(7) A later appointment revokes an earlier one if both appointments
could not be validly exercised at the meeting.
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 5 Proxies and body corporate representatives
Section 252Z
450 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
252Z Proxy documents
Section applies subject to scheme’s constitution
(1) Subsections (2), (3) and (4) apply to a registered scheme subject to
the provisions of the scheme’s constitution.
Documents to be received by responsible entity before meeting
(2) For an appointment of a proxy for a meeting of the scheme’s
members to be effective, the following documents must be
received by the responsible entity at least 48 hours before the
meeting:
(a) the proxy’s appointment
(b) if the appointment is signed by the appointor’s attorney—the
authority under which the appointment was signed or a
certified copy of the authority.
Documents received following adjournment of meeting
(3) If a meeting of the scheme’s members has been adjourned, an
appointment and any authority received by the responsible entity at
least 48 hours before the resumption of the meeting are effective
for the resumed part of the meeting.
Receipt of documents
(3A) A responsible entity receives an appointment authority when it is
received at any of the following:
(a) the responsible entity’s registered office;
(b) a fax number at the responsible entity’s registered office;
(c) a place, fax number or electronic address specified for the
purpose in the notice of meeting.
Ineffective appointments of fax or electronic notification
(4) An appointment of a proxy is ineffective if:
(a) the responsible entity receives either or both the appointment
or authority at a fax number or electronic address; and
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Meetings Chapter 2G
Meetings of members of registered managed investment schemes Part 2G.4
Proxies and body corporate representatives Division 5
Section 253A
Corporations Act 2001 451
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a requirement (if any) in the notice of meeting that:
(i) the transmission be verified in a way specified in the
notice; or
(ii) the proxy produce the appointment and authority (if
any) at the meeting;
is not complied with.
Constitution or notice of meeting may provide for different
notification period
(5) The scheme’s constitution or the notice of meeting may reduce the
period of 48 hours referred to in subsection (2) or (3).
253A Validity of proxy vote
Proxy vote valid even if member dies, revokes appointment etc.
(1) Unless the responsible entity has received written notice of the
matter before the start or resumption of the meeting at which a
proxy votes, a vote cast by the proxy will be valid even if, before
the proxy votes:
(a) the appointing member dies; or
(b) the member is mentally incapacitated; or
(c) the member revokes the proxy’s appointment; or
(d) the member revokes the authority under which the proxy was
appointed by a third party; or
(e) the member transfers the interest in respect of which the
proxy was given.
This subsection applies to a registered scheme subject to the
provisions of the scheme’s constitution.
Note: A proxy’s authority to vote is suspended while the member is present
at the meeting (see subsection 252W(3)).
Proxy vote valid even if proxy cannot vote as member
(2) A proxy who is not entitled to vote on a resolution as a member
may vote as a proxy for another member who can vote if their
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 5 Proxies and body corporate representatives
Section 253B
452 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
appointment specifies the way they are to vote on the resolution
and they vote that way.
253B Body corporate representative
(1) A body corporate may appoint an individual as a representative to
exercise all or any of its powers at a meeting of a registered
scheme’s members. The appointment may be a standing one.
(2) The appointment must set out what the representative is appointed
to do and may set out restrictions on the representative’s powers. If
the appointment is to be by reference to a position held, the
appointment must identify the position.
(3) A body corporate may appoint more than 1 representative but only
1 representative may exercise the body’s powers at any one time.
(4) Unless otherwise specified in the appointment, the representative
may exercise, on the body corporate’s behalf, all of the powers that
the body could exercise at a meeting or in voting on a resolution.
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Meetings Chapter 2G
Meetings of members of registered managed investment schemes Part 2G.4
Voting at meetings of members Division 6
Section 253C
Corporations Act 2001 453
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Voting at meetings of members
253C How many votes a member has
(1) On a show of hands, each member of a registered scheme has 1
vote.
(2) On a poll, each member of the scheme has 1 vote for each dollar of
the value of the total interests they have in the scheme.
Note 1: For rights to appoint proxies, see section 252V.
Note 2: Unless otherwise specified in the appointment, a body corporate
representative has all the powers that a body corporate has as a
member (including the power to vote on a show of hands).
253D Jointly held interests
If an interest in a registered scheme is held jointly and more than 1
member votes in respect of that interest, only the vote of the
member whose name appears first in the register of members
counts.
253E Responsible entity and associates cannot vote if interested in
resolution
The responsible entity of a registered scheme and its associates are
not entitled to vote their interest on a resolution at a meeting of the
scheme’s members if they have an interest in the resolution or
matter other than as a member. However, if the scheme is listed,
the responsible entity and its associates are entitled to vote their
interest on resolutions to remove the responsible entity and choose
a new responsible entity.
Note: The responsible entity and its associates may vote as proxies if their
appointments specify the way they are to vote and they vote that way
(see subsection 253A(2)).
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 6 Voting at meetings of members
Section 253F
454 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
253F How to work out the value of an interest
The value of an interest in a registered scheme is:
(a) if it is quoted on a prescribed financial market—the last sale
price on that market on the trading day immediately before
the day on which the poll is taken; or
(b) if it is not quoted on a prescribed financial market and the
scheme is liquid and has a withdrawal provision in its
constitution—the amount that would be paid for the interest
under that provision on the business day immediately before
the day on which the poll is taken; or
(c) in any other case—the amount that the responsible entity
determines in writing to be the price that a willing but not
anxious buyer would pay for the interest if it was sold on the
business day immediately before the day on which the poll is
taken.
253G Objections to a right to vote
A challenge to a right to vote at a meeting of members of a
registered scheme:
(a) may only be made at the meeting; and
(b) must be determined by the chair, whose decision is final.
253H Votes need not all be cast in the same way
On a poll a person voting who is entitled to 2 or more votes:
(a) need not cast all their votes; and
(b) may cast their votes in different ways.
Note: For proxy appointments that specify the proxy is to vote on a
particular resolution, see subsection 252Y(4).
253J How voting is carried out
(1) A special or extraordinary resolution put to the vote at a meeting of
a registered scheme’s members must be decided on a poll.
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Meetings Chapter 2G
Meetings of members of registered managed investment schemes Part 2G.4
Voting at meetings of members Division 6
Section 253K
Corporations Act 2001 455
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Any other resolution put to the vote at a meeting of the scheme’s
members must be decided on a show of hands unless a poll is
demanded. The resolution is passed on a poll if it has been passed
by at least 50% of the votes cast by members entitled to vote on the
resolution.
(3) On a show of hands, a declaration by the chair is conclusive
evidence of the result. Neither the chair nor the minutes need to
state the number or proportion of the votes recorded in favour or
against.
Note: Even though the chair’s declaration is conclusive of the voting results,
the members present may demand a poll (see paragraph 253L(3)(c)).
253K Matters on which a poll may be demanded
(1) A poll may be demanded on any resolution.
(2) A registered scheme’s constitution may provide that a poll cannot
be demanded on any resolution concerning:
(a) the election of the chair of a meeting; or
(b) the adjournment of a meeting.
(3) A demand for a poll may be withdrawn.
253L When a poll is effectively demanded
(1) At a meeting of a registered scheme’s members, a poll may be
demanded by:
(a) at least 5 members present entitled to vote on the resolution;
or
(b) members present with at least 5% of the votes that may be
cast on the resolution on a poll; or
(c) the chair.
(2) A registered scheme’s constitution may provide that fewer
members or members with a lesser percentage of votes may
demand a poll.
(3) The poll may be demanded:
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 6 Voting at meetings of members
Section 253L
456 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) before a vote is taken; or
(b) before the voting results on a show of hands are declared; or
(c) immediately after the voting results on a show of hands are
declared.
(4) The percentage of votes that members have is to be worked out as
at close of business on the day before the poll is demanded.
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Meetings Chapter 2G
Meetings of members of registered managed investment schemes Part 2G.4
Minutes and members’ access to minutes Division 7
Section 253M
Corporations Act 2001 457
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Minutes and members’ access to minutes
253M Minutes
(1) A responsible entity of a registered scheme must keep minute
books in which it records within 1 month:
(a) proceedings of meetings of the scheme’s members; and
(b) resolutions of meetings of the scheme’s members.
(2) The responsible entity must ensure that minutes of a meeting are
signed within a reasonable time after the meeting by the chair of
the meeting or the chair of the next meeting.
(3) The responsible entity must keep the minute books at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3A) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A minute that is so recorded and signed is evidence of the
proceeding or resolution to which it relates, unless the contrary is
proved.
253N Members’ access to minutes
(1) The responsible entity of a registered scheme must ensure that the
minute books for the meetings of the scheme’s members are open
for inspection by members free of charge.
(2) A member of a registered scheme may ask the responsible entity in
writing for a copy of any minutes of a meeting of the scheme’s
members or an extract of the minutes.
(3) If the responsible entity does not require the member to pay for the
copy, the responsible entity must send it:
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Chapter 2G Meetings
Part 2G.4 Meetings of members of registered managed investment schemes
Division 7 Minutes and members’ access to minutes
Section 253N
458 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) within 14 days after the member asks for it; or
(b) within any longer period that ASIC approves.
(4) If the responsible entity requires payment for the copy, the
responsible entity must send it:
(a) within 14 days after the responsible entity receives the
payment; or
(b) within any longer period that ASIC approves.
The amount of any payment the responsible entity requires cannot
exceed the prescribed amount.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Shares Chapter 2H
Issuing and converting shares Part 2H.1
Section 254A
Corporations Act 2001 459
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2H—Shares
Part 2H.1—Issuing and converting shares
254A Power to issue bonus, partly-paid, preference and redeemable
preference shares
(1) A company’s power under section 124 to issue shares includes the
power to issue:
(a) bonus shares (shares for whose issue no consideration is
payable to the issuing company); and
(b) preference shares (including redeemable preference shares);
and
(c) partly-paid shares (whether or not on the same terms for the
amount of calls to be paid or the time for paying calls).
Note 1: Subsections 246C(5) and (6) provide that in certain circumstances the
issue of preference shares is taken to be a variation of class rights.
Note 2: Partly-paid shares are dealt with in sections 254M-254N.
Note 3: On the issue of a bonus share there need not be any increase in the
company’s share capital.
(2) A company can issue preference shares only if the rights attached
to the preference shares with respect to the following matters are
set out in the company’s constitution (if any) or have been
otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to
other shares or classes of preference shares.
(3) Redeemable preference shares are preference shares that are issued
on the terms that they are liable to be redeemed. They may be
redeemable:
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Part 2H.1 Issuing and converting shares
Section 254B
460 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) at a fixed time or on the happening of a particular event; or
(b) at the company’s option; or
(c) at the shareholder’s option.
Note: Redeemable preference shares are dealt with in sections 254J-254L.
254B Terms of issue
(1) A company may determine:
(a) the terms on which its shares are issued; and
(b) the rights and restrictions attaching to the shares.
Note 1: Details of any division of shares into classes or conversion of classes
of shares must be given to ASIC by a notice in the prescribed form
(see subsection 246F(1)).
Note 2: For public companies, any document or resolution that attaches rights
to shares or varies or cancels rights attaching to shares must be lodged
with ASIC (see subsection 246F(3)).
Note 3: Sections 246B-246G provide safeguards in cases where class rights
are cancelled or varied.
Note 4: The company cannot issue par value shares (see section 254C) or
bearer shares (see section 254F).
No liability companies—special terms of issue
(2) A share in a no liability company is issued on the following terms:
(a) if a no liability company is wound up and a surplus remains,
it must be distributed among the parties entitled to it in
proportion to the number of shares held by them, irrespective
of the amounts paid up on the shares; and
(b) a member who is in arrears in payment of a call on a share,
but whose share has not been forfeited, is not entitled to
participate in the distribution on the basis of holding that
share until the amount owing in respect of the call has been
fully paid and satisfied.
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Shares Chapter 2H
Issuing and converting shares Part 2H.1
Section 254C
Corporations Act 2001 461
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Companies incorporated as no liability companies—special terms
of issue
(3) If a company:
(a) either:
(i) is a no liability company; or
(ii) was initially registered as a no liability company and
has changed its status under section 162 to another type
of company; and
(b) ceases to carry on business within 12 months after its
registration and is wound up;
shares issued for cash rank (to the extent of the capital contributed
by subscribing shareholders) in the winding up in priority to shares
issued to vendors or promoters, or both, for consideration other
than cash.
(4) The holders of shares issued to vendors or promoters are not
entitled to preference on the winding up of a company that:
(a) is a no liability company; or
(b) was initially registered as a no liability company and has
changed its status under section 162 to another type of
company.
This is so despite anything in the company’s constitution or the
terms on which the shares are on issue.
254C No par value shares
Shares of a company have no par value.
Note: The Part 10.1 transitional provisions contain provisions that deal with
the introduction of no par value shares. See also subsection 169(4).
254D Pre-emption for existing shareholders on issue of shares in
proprietary company (replaceable rule—see section 135)
(1) Before issuing shares of a particular class, the directors of a
proprietary company must offer them to the existing holders of
shares of that class. As far as practicable, the number of shares
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Chapter 2H Shares
Part 2H.1 Issuing and converting shares
Section 254E
462 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
offered to each shareholder must be in proportion to the number of
shares of that class that they already hold.
(2) To make the offer, the directors must give the shareholders a
statement setting out the terms of the offer, including:
(a) the number of shares offered; and
(b) the period for which it will remain open.
(3) The directors may issue any shares not taken up under the offer
under subsection (1) as they see fit.
(4) The company may by resolution passed at a general meeting
authorise the directors to make a particular issue of shares without
complying with subsection (1).
254E Court validation of issue
(1) On application by a company, a shareholder, a creditor or any other
person whose interests have been or may be affected, the Court
may make an order validating, or confirming the terms of, a
purported issue of shares if:
(a) the issue is or may be invalid for any reason; or
(b) the terms of the issue are inconsistent with or not authorised
by:
(i) this Act; or
(ii) another law of a State or Territory; or
(iii) the company’s constitution (if any).
(2) On lodgment of a copy of the order with ASIC, the order has effect
from the time of the purported issue.
254F Bearer shares and stock must not be issued
A company does not have the power to:
(a) issue bearer shares; or
(b) issue stock or convert shares into stock.
Note: The Part 10.1 transitionals contain provisions for the conversion of
existing stock into shares.
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Issuing and converting shares Part 2H.1
Section 254G
Corporations Act 2001 463
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
254G Conversion of shares
(1) A company may:
(a) convert an ordinary share into a preference share; and
(b) convert a preference share into an ordinary share.
Note: The variation of class rights provisions (sections 246B-246G) will
apply to the conversion.
(2) A company can convert ordinary shares into preference shares only
if the holders’ rights with respect to the following matters are set
out in the company’s constitution (if any) or have been otherwise
approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(d) voting;
(e) priority of payment of capital and dividends in relation to
other shares or classes of preference shares.
(3) A share that is not a redeemable preference share when issued
cannot afterwards be converted into a redeemable preference share.
254H Resolution to convert shares into larger or smaller number
(1) A company may convert all or any of its shares into a larger or
smaller number of shares by resolution passed at a general
meeting.
Note: The variation of class rights provisions (sections 246B-246G) may
apply to the conversion.
(2) The conversion takes effect on:
(a) the day the resolution is passed; or
(b) a later date specified in the resolution.
(3) Any amount unpaid on shares being converted is to be divided
equally among the replacement shares.
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Chapter 2H Shares
Part 2H.1 Issuing and converting shares
Section 254H
464 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The company must lodge a copy of the resolution with ASIC
within 1 month after it is passed.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Shares Chapter 2H
Redemption of redeemable preference shares Part 2H.2
Section 254J
Corporations Act 2001 465
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2H.2—Redemption of redeemable preference
shares
254J Redemption must be in accordance with terms of issue
(1) A company may redeem redeemable preference shares only on the
terms on which they are on issue. On redemption, the shares are
cancelled.
Note 1: For the power to issue redeemable preference shares see
paragraph 254A(1)(b) and subsections 254A(2) and (3).
Note 2: For the criminal liability of a person dishonestly involved in a
contravention of this section, see subsection 254L(3). Section 79
defines involved.
(2) This section does not affect the terms on which redeemable
preference shares may be cancelled under a reduction of capital or
a share buy-back under Part 2J.1.
254K Other requirements about redemption
A company may only redeem redeemable preference shares:
(a) if the shares are fully paid-up; and
(b) out of profits or the proceeds of a new issue of shares made
for the purpose of the redemption.
Note 1: For a director’s duty to prevent insolvent trading on redeeming
redeemable preference shares, see section 588G.
Note 2: For the criminal liability of a person dishonestly involved in a
contravention of this section, see subsection 254L(3). Section 79
defines involved.
254L Consequences of contravening section 254J or 254K
(1) If a company redeems shares in contravention of section 254J or
254K:
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Chapter 2H Shares
Part 2H.2 Redemption of redeemable preference shares
Section 254L
466 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the contravention does not affect the validity of the
redemption or of any contract or transaction connected with
it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of
section 254J or 254K contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a company’s
contravention of section 254J or 254K and the involvement is
dishonest.
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Shares Chapter 2H
Partly-paid shares Part 2H.3
Section 254M
Corporations Act 2001 467
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2H.3—Partly-paid shares
254M Liability on partly-paid shares
General rule about shareholder’s liability for calls
(1) If shares in a company are partly-paid, the shareholder is liable to
pay calls on the shares in accordance with the terms on which the
shares are on issue. This subsection does not apply to a no liability
company.
Note: The shareholder may also be liable as a contributory under
sections 514-529 if the company is wound up.
No liability companies
(2) The acceptance by a person of a share in a no liability company,
whether by issue or transfer, does not constitute a contract by the
person to pay:
(a) calls in respect of the share; or
(b) any contribution to the debts and liabilities of the company.
254N Calls may be limited to when company is
externally-administered
(1) A limited company may provide by special resolution that the
whole or a part of its unpaid share capital may be called up only if
the company becomes a Chapter 5 body corporate.
(2) The company must lodge with ASIC a copy of the special
resolution within 14 days after it is passed.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 2H Shares
Part 2H.3 Partly-paid shares
Section 254P
468 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
254P No liability companies—calls on shares
Making calls
(1) A call on a share in a no liability company is not effective unless it
is made payable at least 14 days after the call is made.
Notice of call
(2) At least 7 days before a call on shares in a no liability company
becomes payable, the company must give the holders of the shares
notice of:
(a) the amount of the call; and
(b) the day when it is payable; and
(c) the place for payment.
The notice must be sent by post. If the notice is not given, the call
is not payable.
(3) A call does not have any effect on a forfeited share that is held by
or in trust for the company under subsection 254Q(6). However,
when the share is re-issued or sold by the company, the share may
be credited as paid up to the amount determined by the company in
accordance with its constitution or by resolution.
254Q No liability companies—forfeiture and sale of shares for
failure to meet call
Forfeiture and sale of shares
(1) A share in a no liability company is immediately forfeited if:
(a) a call is made on the share; and
(b) the call is unpaid at the end of 14 days after it became
payable.
Note: The holder of the share may redeem it under section 254R.
(2) The forfeited share must then be offered for sale by public auction
within 6 weeks after the call became payable.
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Shares Chapter 2H
Partly-paid shares Part 2H.3
Section 254Q
Corporations Act 2001 469
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Advertisement of sale
(3) At least 14 days, and not more than 21 days, before the day of the
sale, the sale must be advertised in a daily newspaper circulating
generally throughout Australia. The specific number of shares to be
offered need not be specified in the advertisement and it is
sufficient to give notice of the sale by advertising to the effect that
all shares on which a call remains unpaid will be sold.
Postponement of sale
(4) An intended sale of forfeited shares that has been duly advertised
may be postponed for not more than 21 days from the advertised
date of sale. The date to which the sale is postponed must be
advertised in a daily newspaper circulating generally in Australia.
(5) There may be more than 1 postponement but the sale cannot be
postponed to a date more than 90 days from the first date fixed for
the intended sale.
Shares may be offered as credited to a particular amount
(6) The share may be sold credited as paid up to the sum of:
(a) the amount paid upon the share at the time of forfeiture; and
(b) the amount of the call; and
(c) the amount of any other calls becoming payable on or before
the day of the sale;
if the company in accordance with its constitution or by ordinary
resolution so determines.
Reserve price
(7) The directors may fix a reserve price for the share that does not
exceed the sum of:
(a) the amount of the call due and unpaid on the share at the time
of forfeiture; and
(b) the amount of any other calls that become payable on or
before the date of the sale.
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Chapter 2H Shares
Part 2H.3 Partly-paid shares
Section 254Q
470 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Withdrawal from sale
(8) The share may be withdrawn from sale if no bid at least equal to
the reserve price is made at the sale.
Disposal of shares withdrawn from sale
(9) If:
(a) no bid for the share is received at the sale; or
(b) the share is withdrawn from sale;
the share must be held by the directors in trust for the company. It
must be then disposed of in the manner determined by the
company in accordance with its constitution or by resolution.
Unless otherwise specifically provided by resolution, the share
must first be offered to shareholders for a period of 14 days before
being disposed of in any other manner.
Suspension of voting rights attached to share held in trust
(10) At any meeting of the company, no person is entitled to any vote in
respect of the shares held by the directors in trust under
subsection (9).
Application of proceeds of sale
(11) The proceeds of the sale under subsection (2) or the disposal under
subsection (9) must be applied to pay:
(a) first, the expenses of the sale; and
(b) then, any expenses necessarily incurred in respect of the
forfeiture; and
(c) then, the calls on the share that are due and unpaid.
The balance (if any) must be paid to the member whose share has
been sold. If there is a share certificate that relates to the share, the
balance does not have to be paid until the member delivers the
certificate to the company.
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Shares Chapter 2H
Partly-paid shares Part 2H.3
Section 254R
Corporations Act 2001 471
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Validity of sale
(12) If a sale is not held in time because of error or inadvertence, a late
sale is not invalid if it is held as soon as practicable after the
discovery of the error or inadvertence.
Failure to comply an offence
(13) If there is failure to comply with subsection (2) or (3), the company
is guilty of an offence.
Strict liability offences
(14) An offence by the company based on subsection (13) is an offence
of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
254R No liability companies—redemption of forfeited shares
(1) Despite section 254Q, if a person’s share has been forfeited, the
person may redeem the share, at any time up to or on the last
business day before the proposed sale, by paying the company:
(a) all calls due on the share; and
(b) if the company so requires:
(i) a portion, calculated on a pro rata basis, of all expenses
incurred by the company in respect of the forfeiture; and
(ii) a portion, calculated on a pro rata basis, of all costs and
expenses of any proceeding that has been taken in
respect of the forfeiture.
On payment, the person is entitled to the share as if the forfeiture
had not occurred.
(2) On the last business day before the proposed sale, the registered
office of the company must be open during the hours for which it is
by this Act required to be open and accessible to the public.
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Chapter 2H Shares
Part 2H.4 Capitalisation of profits
Section 254S
472 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2H.4—Capitalisation of profits
254S Capitalisation of profits
A company may capitalise profits. The capitalisation need not be
accompanied by the issue of shares.
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Shares Chapter 2H
Dividends Part 2H.5
Section 254SA
Corporations Act 2001 473
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2H.5—Dividends
254SA Companies limited by guarantee not to pay dividends
A company limited by guarantee must not pay a dividend to its
members.
254T Circumstances in which a dividend may be paid
(1) A company must not pay a dividend unless:
(a) the company’s assets exceed its liabilities immediately before
the dividend is declared and the excess is sufficient for the
payment of the dividend; and
(b) the payment of the dividend is fair and reasonable to the
company’s shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the
company’s ability to pay its creditors.
Note 1: As an example, the payment of a dividend would materially prejudice
the company’s ability to pay its creditors if the company would
become insolvent as a result of the payment.
Note 2: For a director’s duty to prevent insolvent trading on payment of
dividends, see section 588G.
(2) Assets and liabilities are to be calculated for the purposes of this
section in accordance with accounting standards in force at the
relevant time (even if the standard does not otherwise apply to the
financial year of some or all of the companies concerned).
254U Other provisions about paying dividends (replaceable rule—see
section 135)
(1) The directors may determine that a dividend is payable and fix:
(a) the amount; and
(b) the time for payment; and
(c) the method of payment.
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Chapter 2H Shares
Part 2H.5 Dividends
Section 254V
474 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The methods of payment may include the payment of cash, the
issue of shares, the grant of options and the transfer of assets.
(2) Interest is not payable on a dividend.
254V When does the company incur a debt?
(1) A company does not incur a debt merely by fixing the amount or
time for payment of a dividend. The debt arises only when the time
fixed for payment arrives and the decision to pay the dividend may
be revoked at any time before then.
(2) However, if the company has a constitution and it provides for the
declaration of dividends, the company incurs a debt when the
dividend is declared.
254W Dividend rights
Shares in public companies
(1) Each share in a class of shares in a public company has the same
dividend rights unless:
(a) the company has a constitution and it provides for the shares
to have different dividend rights; or
(b) different dividend rights are provided for by special
resolution of the company.
Shares in proprietary companies (replaceable rule—see
section 135)
(2) Subject to the terms on which shares in a proprietary company are
on issue, the directors may pay dividends as they see fit.
No liability companies
(3) A person is not entitled to a dividend on a share in a no liability
company if a call:
(a) has been made on the share; and
(b) is due and unpaid.
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Shares Chapter 2H
Dividends Part 2H.5
Section 254W
Corporations Act 2001 475
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) Dividends are payable to the shareholders in a no liability company
in proportion to the number of shares held by them, irrespective of
the amount paid up, or credited as paid up, on the shares. This
subsection has effect subject to any provisions in the company’s
constitution relating to shares that are not ordinary shares.
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Chapter 2H Shares
Part 2H.6 Notice requirements
Section 254X
476 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2H.6—Notice requirements
254X Notice to ASIC of share issue
(1) Within 28 days after issuing shares, a company must lodge with
ASIC a notice in the prescribed form that sets out:
(a) the number of shares that were issued; and
(b) if the company has different classes of shares—the class to
which each of those shares belongs; and
(c) the amount (if any) paid, or agreed to be considered as paid,
on each of those shares; and
(d) the amount unpaid (if any) on each of those shares; and
(e) if the company is a public company and the shares were
issued for non-cash consideration—the prescribed particulars
about the issue of the shares, unless the shares were issued
under a written contract and a copy of the contract is lodged
with the notice.
Note 1: The company must lodge information when rights attached to the
shares change, or when the shares are divided or converted into new
classes (see section 246F).
Note 2: A proprietary company may also have to notify certain particulars
under Part 2C.2.
(2) If the shares were issued for non-cash consideration under a
contract, the company must also lodge with ASIC a certificate
stating that all stamp duty payable on the contract under any
applicable law relating to stamp duty has been paid. This certificate
must be lodged with the subsection (1) notice or at a later time
permitted by the regulations or by ASIC.
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) The company does not have to lodge a subsection (1) notice about
the issue of shares to a person on the registration of the company or
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Notice requirements Part 2H.6
Section 254Y
Corporations Act 2001 477
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
on the company changing its type from a company limited by
guarantee to a company limited by shares.
Note: Information about shares issued in these situations will come to ASIC
under subsections 5H(2), 117(2), 163(3) and 601BC(2).
254Y Notice to ASIC of share cancellation
(1) Within 1 month after shares are cancelled, the company must lodge
with ASIC a notice in the prescribed form that sets out:
(a) the number of shares cancelled; and
(b) any amount paid by the company (in cash or otherwise) on
the cancellation of the shares; and
(c) if the shares are cancelled following a share buy-back—the
amount paid by the company (in cash or otherwise) on the
buy-back; and
(d) if the company has different classes of shares—the class to
which each cancelled share belonged.
Note: Provisions under which shares are cancelled include section 254J
(redeemable preference shares), section 256B (capital reductions),
subsection 257H(3) (shares a company has bought back),
section 258D (forfeited shares), and subsections 258E(2) and (3)
(shares returned to a company).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Section 256A
478 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2J—Transactions affecting share
capital
Part 2J.1—Share capital reductions and share
buy-backs
256A Purpose
This Part states the rules to be followed by a company for
reductions in share capital and for share buy-backs. The rules are
designed to protect the interests of shareholders and creditors by:
(a) addressing the risk of these transactions leading to the
company’s insolvency
(b) seeking to ensure fairness between the company’s
shareholders
(c) requiring the company to disclose all material information.
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Transactions affecting share capital Chapter 2J
Share capital reductions and share buy-backs Part 2J.1
Reductions in share capital not otherwise authorised by law Division 1
Section 256B
Corporations Act 2001 479
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 1—Reductions in share capital not otherwise
authorised by law
256B Company may make reduction not otherwise authorised
(1) A company may reduce its share capital in a way that is not
otherwise authorised by law if the reduction:
(a) is fair and reasonable to the company’s shareholders as a
whole; and
(b) does not materially prejudice the company’s ability to pay its
creditors; and
(c) is approved by shareholders under section 256C.
A cancellation of a share for no consideration is a reduction of
share capital, but paragraph (b) does not apply to this kind of
reduction.
Note 1: One of the ways in which a company might reduce its share capital is
cancelling uncalled capital.
Note 2: Sections 258A-258F deal with some of the other situations in which
reductions of share capital are authorised. Subsection 254K(2)
authorises capital reductions involved in the redemption of
redeemable preference shares and subsection 257A(2) authorises
reductions involved in share buy-backs.
Note 3: For a director’s duty to prevent insolvent trading on reductions of
share capital, see section 588G.
Note 4: For the criminal liability of a person dishonestly involved in a
contravention of subsection 256D(1) based on this subsection, see
subsection 256D(4). Section 79 defines involved.
(1A) To avoid doubt, a cancellation of a partly-paid share is taken to be
for consideration.
(2) The reduction is either an equal reduction or a selective reduction.
The reduction is an equal reduction if:
(a) it relates only to ordinary shares; and
(b) it applies to each holder of ordinary shares in proportion to
the number of ordinary shares they hold; and
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 1 Reductions in share capital not otherwise authorised by law
Section 256C
480 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the terms of the reduction are the same for each holder of
ordinary shares.
Otherwise, the reduction is a selective reduction.
(3) In applying subsection (2), ignore differences in the terms of the
reduction that are:
(a) attributable to the fact that shares have different accrued
dividend entitlements; or
(b) attributable to the fact that shares have different amounts
unpaid on them; or
(c) introduced solely to ensure that each shareholder is left with
a whole number of shares.
256C Shareholder approval
Ordinary resolution required for equal reduction
(1) If the reduction is an equal reduction, it must be approved by a
resolution passed at a general meeting of the company.
Special shareholder approval for selective reduction
(2) If the reduction is a selective reduction, it must be approved by
either:
(a) a special resolution passed at a general meeting of the
company, with no votes being cast in favour of the resolution
by any person who is to receive consideration as part of the
reduction or whose liability to pay amounts unpaid on shares
is to be reduced, or by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary
shareholders.
If the reduction involves the cancellation of shares, the reduction
must also be approved by a special resolution passed at a meeting
of the shareholders whose shares are to be cancelled.
(3) The company must lodge with ASIC a copy of any resolution
under subsection (2) within 14 days after it is passed. The company
must not make the reduction until 14 days after lodgment.
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Transactions affecting share capital Chapter 2J
Share capital reductions and share buy-backs Part 2J.1
Reductions in share capital not otherwise authorised by law Division 1
Section 256D
Corporations Act 2001 481
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A proprietary company may also have to notify certain particulars
under Part 2C.2.
Information to accompany the notice of meeting
(4) The company must include with the notice of the meeting a
statement setting out all information known to the company that is
material to the decision on how to vote on the resolution. However,
the company does not have to disclose information if it would be
unreasonable to require the company to do so because the company
had previously disclosed the information to its shareholders.
Documents to be lodged with ASIC
(5) Before the notice of the meeting is sent to shareholders, the
company must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the reduction that will accompany
the notice of the meeting sent to shareholders.
256D Consequences of failing to comply with section 256B
(1) The company must not make the reduction unless it complies with
subsection 256B(1).
(2) If the company contravenes subsection (1):
(a) the contravention does not affect the validity of the reduction
or of any contract or transaction connected with it; and
(b) the company is not guilty of an offence.
(3) Any person who is involved in a company’s contravention of
subsection (1) contravenes this subsection.
Note 1: Subsection (3) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(4) A person commits an offence if they are involved in a company’s
contravention of subsection (1) and the involvement is dishonest.
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 1 Reductions in share capital not otherwise authorised by law
Section 256E
482 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
256E Signposts to other relevant provisions
The following table lists other provisions of this Act that are
relevant to reductions in share capital.
Other provisions relevant to reductions in share capital
1 section 588G
section 1317H
liability of directors on insolvency
Under the combined operation of these sections the directors
may have to compensate the company if the company is, or
becomes, insolvent when the company reduces its share
capital.
2 section 1324 injunctions to restrain contravention
Under this section the Court may grant an injunction against
conduct that constitutes or would constitute a contravention
of this Act.
4 Chapter 6CA continuous disclosure provisions
Under this Chapter a disclosing entity is required to disclose
information about its securities that is material and not
generally available.
5 Chapter 2E benefits to related parties to be disclosed
Under this Chapter a financial benefit to a director or other
related party that could adversely affect the interests of a
public company’s members as a whole must be approved at a
general meeting before it can be given.
6 section 125 provisions in constitution
This section deals with the way in which a company’s
constitution may restrict the exercise of the company’s
powers and the consequences of a failure to observe these
restrictions.
7 sections 246B-2
46G
variation of class rights
These sections deal with the variation of rights attached to a
class of shares. This variation may be governed by the
provisions of the company’s constitution.
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Transactions affecting share capital Chapter 2J
Share capital reductions and share buy-backs Part 2J.1
Share buy-backs Division 2
Section 257A
Corporations Act 2001 483
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Share buy-backs
257A The company’s power to buy back its own shares
A company may buy back its own shares if:
(a) the buy-back does not materially prejudice the company’s
ability to pay its creditors; and
(b) the company follows the procedures laid down in this
Division.
Note 1: If a company has a constitution, it may include provisions in the
constitution that preclude the company buying back its own shares or
impose restrictions on the exercise of the company’s power to buy
back its own shares.
Note 2: A company may buy-back redeemable preference shares and may do
so on terms other than the terms on which they could be redeemed.
For the redemption of redeemable preference shares, see
sections 254J-254L.
257B Buy-back procedure—general
(1) The following table specifies the steps required for, and the
sections that apply to, the different types of buy-back.
Procedures
[and sections applied]
minimum
holding
employee share
scheme
on-market equal access
scheme
selective
buy-back
within
10/12
limit
over
10/12
limit
within
10/12
limit
over
10/12
limit
within
10/12
limit
over
10/12
limit
ordinary resolution
[257C]
— — yes — yes — yes —
special/unanimous
resolution [257D]
— — — — — — — yes
lodge offer documents
with ASIC [257E]
— — — — — yes yes yes
14 days notice [257F] — yes yes yes yes yes yes yes
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 2 Share buy-backs
Section 257B
484 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Procedures
[and sections applied]
minimum
holding
employee share
scheme
on-market equal access
scheme
selective
buy-back
within
10/12
limit
over
10/12
limit
within
10/12
limit
over
10/12
limit
within
10/12
limit
over
10/12
limit
disclose relevant
information when offer
made [257G]
— — — — — yes yes yes
cancel shares [257H] yes yes yes yes yes yes yes yes
notify cancellation to
ASIC [254Y]
yes yes yes yes yes yes yes yes
Note: Subsections (2) and (3) of this section explain what an equal access
scheme is. The 10/12 limit is the 10% in 12 months limit laid down in
subsections (4) and (5). Subsections (6) and (7) of this section explain
what an on-market buy-back is. See section 9 for definitions of minimum
holding buy-back, employee share scheme buy-back and selective
buy-back.
Equal access scheme
(2) An equal access scheme is a scheme that satisfies all the following
conditions:
(a) the offers under the scheme relate only to ordinary shares;
(b) the offers are to be made to every person who holds ordinary
shares to buy back the same percentage of their ordinary
shares;
(c) all of those persons have a reasonable opportunity to accept
the offers made to them;
(d) buy-back agreements are not entered into until a specified
time for acceptances of offers has closed;
(e) the terms of all the offers are the same.
(3) In applying subsection (2), ignore:
(a) differences in consideration attributable to the fact that the
offers relate to shares having different accrued dividend
entitlements;
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Share capital reductions and share buy-backs Part 2J.1
Share buy-backs Division 2
Section 257B
Corporations Act 2001 485
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) differences in consideration attributable to the fact that the
offers relate to shares on which different amounts remain
unpaid;
(c) differences in the offers introduced solely to ensure that each
shareholder is left with a whole number of shares.
10/12 limit
(4) The 10/12 limit for a company proposing to make a buy-back is
10% of the smallest number, at any time during the last 12 months,
of votes attaching to voting shares of the company.
Exceeding the 10/12 limit
(5) A proposed buy-back would exceed the 10/12 limit if the number
of votes attaching to:
(a) all the voting shares in the company that have been bought
back during the last 12 months; and
(b) the voting shares that will be bought back if the proposed
buy-back is made;
would exceed the 10/12 limit.
On-market buy-backs
(6) A buy-back is an on-market buy-back if it results from an offer
made by a listed corporation on a prescribed financial market in the
ordinary course of trading on that market.
(7) A buy-back by a company (whether listed or not) is also an
on-market buy-back if it results from an offer made in the ordinary
course of trading in a financial market outside Australia which
ASIC declares in writing to be an approved overseas financial
market for the purposes of this subsection. A buy-back by a listed
company is an on-market buy-back under this subsection only if an
offer to buy-back those shares is also made on a prescribed
financial market at the same time.
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 2 Share buy-backs
Section 257C
486 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) A declaration under subsection (7) may be subject to conditions.
Notice of the making of the declaration must be published in the
Gazette.
257C Buy-back procedure—shareholder approval if the 10/12 limit
exceeded
Ordinary resolution required
(1) If section 257B applies this section to a buy-back, the terms of the
buy-back agreement must be approved before it is entered into by a
resolution passed at a general meeting of the company, or the
agreement must be conditional on such an approval.
Information to accompany the notice of meeting
(2) The company must include with the notice of the meeting a
statement setting out all information known to the company that is
material to the decision how to vote on the resolution. However,
the company does not have to disclose information if it would be
unreasonable to require the company to do so because the company
had previously disclosed the information to its shareholders.
Documents to be lodged with the ASIC
(3) Before the notice of the meeting is sent to shareholders, the
company must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the buy-back that will accompany
the notice of the meeting sent to shareholders.
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Transactions affecting share capital Chapter 2J
Share capital reductions and share buy-backs Part 2J.1
Share buy-backs Division 2
Section 257D
Corporations Act 2001 487
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
257D Buy-back procedure—special shareholder approval for
selective buy-back
Selective buy-back requires special or unanimous resolution
(1) If section 257B applies this section to a buy-back, the terms of the
buy-back agreement must be approved before it is entered into by
either:
(a) a special resolution passed at a general meeting of the
company, with no votes being cast in favour of the resolution
by any person whose shares are proposed to be bought back
or by their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary
shareholders;
or the agreement must be conditional on such an approval.
Information to accompany the notice of meeting
(2) The company must include with the notice of the meeting a
statement setting out all information known to the company that is
material to the decision how to vote on the resolution. However,
the company does not have to disclose information if it would be
unreasonable to require the company to do so because the company
had previously disclosed the information to its shareholders.
Documents to be lodged with the ASIC
(3) Before the notice of the meeting is sent to shareholders, the
company must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the buy-back that will accompany
the notice of the meeting sent to shareholders.
(4) ASIC may exempt a company from the operation of this section.
The exemption:
(a) must be in writing; and
(b) must be granted before the buy-back agreement is entered
into; and
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 2 Share buy-backs
Section 257E
488 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) may be granted subject to conditions.
257E Buy-back procedure—lodgment of offer documents with ASIC
If section 257B applies this section to a buy-back, the company
must lodge with ASIC, before the buy-back agreement is entered
into, a copy of:
(a) a document setting out the terms of the offer; and
(b) any document that is to accompany the offer.
257F Notice of intended buy-back
(1) If section 257B applies this section to a buy-back, the company
must satisfy the lodgment requirement in subsection (2) at least 14
days before:
(a) if the buy-back agreement is conditional on the passing of a
resolution under subsection 257C(1) or 257D(1)—the
resolution is passed; or
(b) if it is not—the agreement is entered into.
(2) The company satisfies the lodgment requirement when it lodges
with ASIC:
(a) documents under subsection 257C(3) or 257D(3) or
section 257E; or
(b) a notice that the company intends to carry out the buy-back.
Note 1: A company that has to lodge documents under section 257C, 257D or
257E needs to lodge a notice under paragraph (2)(b) of this section
only if it wants for some reason to enter into the agreement or pass the
resolution less than 14 days after lodging the section 257C, 257D or
257E documents.
Note 2: The company may specify a buy-back under paragraph (2)(b) in any
way. It may, for instance, choose to lodge a notice covering buy-backs
to be carried out:
under a particular scheme; or
as part of particular on-market buy-back activity.
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Transactions affecting share capital Chapter 2J
Share capital reductions and share buy-backs Part 2J.1
Share buy-backs Division 2
Section 257G
Corporations Act 2001 489
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
257G Buy-back procedure—disclosure of relevant information when
offer made
If section 257B applies this section to a buy-back, the company
must include with the offer to buy back shares a statement setting
out all information known to the company that is material to the
decision whether to accept the offer.
257H Acceptance of offer and transfer of shares to the company
Effect of acceptance of the buy-back offer on share rights
(1) Once a company has entered into an agreement to buy back shares,
all rights attaching to the shares are suspended. The suspension is
lifted if the agreement is terminated.
Shares transferred to the company and cancelled
(2) A company must not dispose of shares it buys back. An agreement
entered into in contravention of this subsection is void.
(3) Immediately after the registration of the transfer to the company of
the shares bought back, the shares are cancelled.
Note: ASIC must be notified of the cancellation under section 254Y.
257J Signposts to other relevant provisions
The following table sets out other provisions of this Act that are
relevant to buy-backs.
Other provisions relevant to buy-backs
provision comment
1 section 588G
section 1317H
liability of directors on insolvency
The directors may have to compensate the company if the
company is, or becomes, insolvent when the company
enters into the buy-back agreement.
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 2 Share buy-backs
Section 257J
490 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Other provisions relevant to buy-backs
provision comment
2 section 1324 injunctions to restrain contravention
The Court may grant an injunction against conduct that
constitutes, or would constitute, a contravention of this Act.
4 subsection 609(4
) section 611
(item 19 of the
table)
application of takeover provisions
These sections deal with the application of Chapter 6 to
buy-backs.
5 section 259A consequences of failure to follow procedures—the
company and the officers
If a company fails to follow the procedure in this Division,
the company contravenes this section and the officers who
are involved in the contravention are liable to a civil
penalty under Part 9.4B and may commit an offence.
6 section 256D consequences of failure to follow procedures if reduction
in share capital involved—the company and the officers
If the buy-back involves a reduction in share capital and the
company fails to follow the procedures in this Division, the
company contravenes this section and the officers who are
involved in the contravention are liable to a civil penalty
under Part 9.4B and may commit an offence.
7 section 256D consequences of failure to follow procedures if reduction
in share capital involved—the transaction
This section provides that a failure to follow the procedures
for share capital reductions does not affect the validity of
the buy-back transaction itself.
8 Chapter 6CA continuous disclosure provisions
Under this Chapter a disclosing entity is required to
disclose information about its securities that is material and
not generally available.
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Share capital reductions and share buy-backs Part 2J.1
Share buy-backs Division 2
Section 257J
Corporations Act 2001 491
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Other provisions relevant to buy-backs
provision comment
9 Chapter 2E benefits to related parties to be disclosed
Under this Chapter, a financial benefit to a director or other
related party may need to be approved at a general meeting
before it is given.
10 section 125 provisions in constitution
This section deals with the way in which a company’s
constitution may restrict the exercise of the company’s
powers and the consequences of a failure to observe these
restrictions.
11 sections 246B-24
6G
variation of class rights
These sections deal with the variation of rights attached to a
class of shares. This variation may be governed by the
provisions of a company’s constitution.
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Chapter 2J Transactions affecting share capital
Part 2J.1 Share capital reductions and share buy-backs
Division 3 Other share capital reductions
Section 258A
492 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Other share capital reductions
258A Unlimited companies
An unlimited company may reduce its share capital in any way.
258B Right to occupy or use real property
(1) If a company has a constitution, under it the company may grant to
a shareholder, as a shareholder, a right to occupy or use real
property that the company owns or holds under lease, whether the
right is a lease or licence or a contractual right.
Note: Before the introduction of strata or unit titles systems, rights to occupy
real property were sometimes based on a holding of shares in a
company.
(2) A company may transfer to a person an interest in land in exchange
for, or in satisfaction of, a right to occupy or use the land of the
kind referred to in subsection (1).
Example: A person has a right to occupy an apartment in a block of units
because they hold shares in a company. As part of converting the
block of units to strata title, the person surrenders the shares in return
for a transfer of strata title over the apartment. The capital reduction
involved in the transfer is authorised under this subsection.
258C Brokerage or commission
A company may pay brokerage or commission to a person in
respect of that person or another person agreeing to take up shares
in the company.
258D Cancellation of forfeited shares
A company may, by resolution passed at a general meeting, cancel
shares that have been forfeited under the terms on which the shares
are on issue.
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Other share capital reductions Division 3
Section 258E
Corporations Act 2001 493
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258E Other share cancellations
(1) Any reduction in share capital involved in:
(a) the redemption of redeemable preference shares out of the
proceeds of a new issue of shares made for the purpose of the
redemption (see section 254K); or
(b) a company’s buying-back of its own shares under
sections 257A to 257J if the shares are paid for out of share
capital.
is authorised by this section.
(2) A company may cancel shares returned to it under section 651C,
724(2), 737 or 738 and any reduction in the company’s share
capital that is involved is authorised by this subsection.
(3) Any reduction in a company’s share capital because of an order
under section 1325A is authorised by this subsection.
258F Reductions because of lost capital
(1) A company may reduce its share capital by cancelling any paid-up
share capital that is lost or is not represented by available assets.
(2) This power does not apply if:
(a) the company also cancels shares; or
(b) the cancellation of paid-up share capital is inconsistent with
the requirements of any accounting standard.
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Chapter 2J Transactions affecting share capital
Part 2J.2 Self-acquisition and control of shares
Section 259A
494 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2J.2—Self-acquisition and control of shares
259A Directly acquiring own shares
A company must not acquire shares (or units of shares) in itself
except:
(a) in buying back shares under section 257A; or
(b) in acquiring an interest (other than a legal interest) in
fully-paid shares in the company if no consideration is given
for the acquisition by the company or an entity it controls; or
(c) under a court order; or
(d) in circumstances covered by subsection 259B(2) or (3).
Note: For the criminal liability of a person dishonestly involved in a
contravention of this section, see subsection 259F(3). Section 79
defines involved.
259B Taking security over own shares or shares in holding company
(1) A company must not take security over shares (or units of shares)
in itself or in a company that controls it, except as permitted by
subsection (2) or (3).
Note: For the criminal liability of a person dishonestly involved in a
contravention of this subsection, see subsection 259F(3). Section 79
defines involved.
(2) A company may take security over shares in itself under an
employee share scheme that has been approved by:
(a) a resolution passed at a general meeting of the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—a resolution passed at a general meeting of the
listed domestic corporation; and
(c) if paragraph (b) does not apply but the company has a
holding company that is a domestic corporation and that is
not itself a subsidiary of a domestic corporation—a
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Section 259C
Corporations Act 2001 495
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resolution passed at a general meeting of that holding
company.
Special exemptions for financial institutions
(3) A company’s taking security over shares (or units of shares) in
itself or in a company that controls it is exempted from
subsection (1) if:
(a) the company’s ordinary business includes providing finance;
and
(b) the security is taken in the ordinary course of that business
and on ordinary commercial terms.
(4) If a company acquires shares (or units of shares) in itself because it
exercises rights under a security permitted by subsection (2) or (3),
then, within the following 12 months, the company must cease to
hold those shares (or units of shares). ASIC may extend this period
of 12 months if the company applies for the extension before the
end of the period.
(5) Any voting rights attached to the shares (or units of shares) cannot
be exercised while the company continues to hold them.
(6) If, at the end of the 12 months (or extended period), the company
still holds any of the shares (or units of shares), the company
commits an offence for each day while that situation continues.
(7) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
259C Issuing or transferring shares to controlled entity
(1) The issue or transfer of shares (or units of shares) of a company to
an entity it controls is void unless:
(a) the issue or transfer is to the entity as a personal
representative; or
(b) the issue or transfer is to the entity as trustee and neither the
company nor any entity it controls has a beneficial interest in
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Part 2J.2 Self-acquisition and control of shares
Section 259D
496 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the trust, other than a beneficial interest that satisfies these
conditions:
(i) the interest arises from a security given for the purposes
of a transaction entered into in the ordinary course of
business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of
the company or an entity it controls; or
(c) the issue to the entity is made as a result of an offer to all the
members of the company who hold shares of the class being
issued and is made on a basis that does not discriminate
unfairly, either directly or indirectly, in favour of the entity;
or
(d) the transfer to the entity is by a wholly-owned subsidiary of a
body corporate and the entity is also a wholly-owned
subsidiary of that body corporate.
(2) ASIC may exempt a company from the operation of this section.
The exemption:
(a) must be in writing; and
(b) may be granted subject to conditions.
(3) If paragraph (1)(c) or (d) applies to an issue or transfer of shares
(or units of shares), section 259D applies.
259D Company controlling entity that holds shares in it
(1) If any of the following occur:
(a) a company obtains control of an entity that holds shares (or
units of shares) in the company;
(b) a company’s control over an entity that holds shares (or units
of shares) in the company increases;
(c) a company issues shares (or units of shares) to an entity it
controls in the situation covered by paragraph 259C(1)(c);
(d) shares (or units of shares) in the company are transferred to
an entity it controls in the situation covered by
paragraph 259C(1)(d);
then, within 12 months after it occurs either:
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Section 259D
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(e) the entity must cease to hold the shares (or units); or
(f) the company must cease to control the entity.
ASIC may extend this period of 12 months if the company applies
for the extension before the end of the period.
(2) If this section applies to shares (or units of shares), it also applies
to bonus shares issued in respect of those shares (or units of
shares). Within the same period that applies to the shares
themselves under subsection (1), either:
(a) the entity must cease to hold the bonus shares; or
(b) the company must cease to control the entity.
(3) Any voting rights attached to the shares (or units of shares) cannot
be exercised while the company continues to control the entity.
(4) If, at the end of the 12 months (or extended period), the company
still controls the entity and the entity still holds the shares (or units
of shares), the company commits an offence for each day while
that situation continues.
(4A) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) This section does not apply to shares (or units of shares) if:
(a) they are held by the entity as a personal representative; or
(b) they are held by the entity as trustee and neither the company
nor any entity it controls has a beneficial interest in the trust,
other than a beneficial interest that satisfies these conditions:
(i) the interest arises from a security given for the purposes
of a transaction entered into in the ordinary course of
business in connection with providing finance; and
(ii) that transaction was not entered into with an associate of
the company or an entity it controls.
(6) A contravention of this section does not affect the validity of any
transaction.
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Chapter 2J Transactions affecting share capital
Part 2J.2 Self-acquisition and control of shares
Section 259E
498 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
259E When a company controls an entity
(1) For the purposes of this Part, a company controls an entity if the
company has the capacity to determine the outcome of decisions
about the entity’s financial and operating policies.
(2) In determining whether a company has this capacity:
(a) the practical influence the company can exert (rather than the
rights it can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the entity’s
financial or operating policies is to be taken into account
(even if it involves a breach of an agreement or a breach of
trust).
(3) Merely because the company and an unrelated entity jointly have
the capacity to determine the outcome of decisions about another
entity’s financial and operating policies, the company does not
control the other entity.
(4) A company is not taken to control an entity merely because of a
capacity that it is under a legal obligation to exercise for the benefit
of someone other than its shareholders.
Note: This situation could arise, for example, if the company holds shares as
a trustee or is performing duties as a liquidator.
259F Consequences of failing to comply with section 259A or 259B
(1) If a company contravenes section 259A or subsection 259B(1):
(a) the contravention does not affect the validity of the
acquisition or security or of any contract or transaction
connected with it; and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of
section 259A or subsection 259B(1) contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
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Section 259F
Corporations Act 2001 499
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(3) A person commits an offence if they are involved in a company’s
contravention of section 259A or subsection 259B(1) and the
involvement is dishonest.
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Chapter 2J Transactions affecting share capital
Part 2J.3 Financial assistance
Section 260A
500 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2J.3—Financial assistance
260A Financial assistance by a company for acquiring shares in the
company or a holding company
(1) A company may financially assist a person to acquire shares (or
units of shares) in the company or a holding company of the
company only if:
(a) giving the assistance does not materially prejudice:
(i) the interests of the company or its shareholders; or
(ii) the company’s ability to pay its creditors; or
(b) the assistance is approved by shareholders under
section 260B (that section also requires advance notice to
ASIC); or
(c) the assistance is exempted under section 260C.
Note: For the criminal liability of a person dishonestly involved in a
contravention of this section, see subsection 260D(3). Section 79
defines involved.
(2) Without limiting subsection (1), financial assistance may:
(a) be given before or after the acquisition of shares (or units of
shares); and
(b) take the form of paying a dividend.
(3) Subsection (1) extends to the acquisition of shares (or units of
shares) by:
(a) issue; or
(b) transfer; or
(c) any other means.
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Financial assistance Part 2J.3
Section 260B
Corporations Act 2001 501
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260B Shareholder approval
Approval by company’s own shareholders
(1) Shareholder approval for financial assistance by a company must
be given by:
(a) a special resolution passed at a general meeting of the
company, with no votes being cast in favour of the resolution
by the person acquiring the shares (or units of shares) or by
their associates; or
(b) a resolution agreed to, at a general meeting, by all ordinary
shareholders.
Approval by shareholders of listed holding corporation
(2) If the company will be a subsidiary of a listed domestic corporation
immediately after the acquisition referred to in section 260A
occurs, the financial assistance must also be approved by a special
resolution passed at a general meeting of that corporation.
Approval by shareholders in ultimate Australian holding company
(3) If, immediately after the acquisition, the company will have a
holding company that:
(a) is a domestic corporation but not listed; and
(b) is not itself a subsidiary of a domestic corporation;
the financial assistance must also be approved by a special
resolution passed at a general meeting of the body corporate that
will be the holding company.
Information to accompany the notice of meeting
(4) A company or other body that calls a meeting for the purpose of
subsection (1), (2) or (3) must include with the notice of the
meeting a statement setting out all the information known to the
company or body that is material to the decision on how to vote on
the resolution. However, the company or body does not have to
disclose information if it would be unreasonable to require the
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Part 2J.3 Financial assistance
Section 260C
502 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
company or body to do so because the company or body had
previously disclosed the information to its members.
Documents to be lodged with the ASIC before notice of meeting is
sent out
(5) Before the notice of a meeting for the purpose of subsection (1),
(2) or (3) is sent to members of a company or other body, the
company or body must lodge with ASIC a copy of:
(a) the notice of the meeting; and
(b) any document relating to the financial assistance that will
accompany the notice of the meeting sent to the members.
(6) The company must lodge with ASIC, at least 14 days before giving
the financial assistance, a notice in the prescribed form stating that
the assistance has been approved under this section.
Lodgment of special resolutions
(7) A special resolution passed for the purpose of subsection (1), (2) or
(3) must be lodged with ASIC by the company, listed domestic
corporation or holding company within 14 days after it is passed.
260C Exempted financial assistance
General exemptions based on ordinary course of commercial
dealing
(1) Financial assistance is exempted from section 260A if it is given in
the ordinary course of commercial dealing and consists of:
(a) acquiring or creating a lien on partly-paid shares in the
company for amounts payable to the company on the shares;
or
(b) entering into an agreement with a person under which the
person may make payments to the company on shares by
instalments.
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Financial assistance Part 2J.3
Section 260C
Corporations Act 2001 503
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Special exemptions for financial institutions
(2) Financial assistance is exempted from section 260A if:
(a) the company’s ordinary business includes providing finance;
and
(b) the financial assistance is given in the ordinary course of that
business and on ordinary commercial terms.
Special exemptions for subsidiaries of debenture issuers
(3) Financial assistance is exempted from section 260A if:
(a) the company is a subsidiary of a borrower in relation to
debentures; and
(b) the financial assistance is a guarantee or other security given
by the company for the repayment by the borrower of money
that it is or will be liable to repay; and
(c) the borrower is a borrower in relation to the debentures
because it is or will be liable to repay the money; and
(d) the guarantee or security is given by the company in the
ordinary course of commercial dealing.
Special exemption for approved employee share schemes
(4) Financial assistance is exempted from section 260A if it is given
under an employee share scheme that has been approved by:
(a) a resolution passed at a general meeting of the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—a resolution passed at a general meeting of the
listed domestic corporation; and
(c) if paragraph (b) does not apply but the company has a
holding company that is a domestic corporation and that is
not itself a subsidiary of a domestic corporation—a
resolution passed at a general meeting of that holding
company.
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Chapter 2J Transactions affecting share capital
Part 2J.3 Financial assistance
Section 260D
504 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Other exemptions
(5) The following types of financial assistance are exempted from
section 260A:
(a) a reduction of share capital in accordance with Division 1 of
Part 2J.1;
(b) a share buy-back in accordance with Division 2 of Part 2J.1;
(c) assistance given under a court order;
(d) a discharge on ordinary commercial terms of a liability that
the company incurred as a result of a transaction entered into
on ordinary commercial terms.
260D Consequences of failing to comply with section 260A
(1) If a company provides financial assistance in contravention of
section 260A:
(a) the contravention does not affect the validity of the financial
assistance or of any contract or transaction connected with it;
and
(b) the company is not guilty of an offence.
(2) Any person who is involved in a company’s contravention of
section 260A contravenes this subsection.
Note 1: Subsection (2) is a civil penalty provision (see section 1317E).
Note 2: Section 79 defines involved.
(3) A person commits an offence if they are involved in a company’s
contravention of section 260A and the involvement is dishonest.
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Interaction with general directors’ duties Part 2J.4
Section 260E
Corporations Act 2001 505
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Part 2J.4—Interaction with general directors’
duties
260E General duties still apply
A director is not relieved from any of their duties under this Act
(including sections 180, 181, 182, 183 and 184), or their fiduciary
duties, in connection with a transaction merely because the
transaction is authorised by a provision of this Chapter or is
approved by a resolution of members under a provision of this
Chapter.
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Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
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About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Corporations Act 2001 i
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Contents
Chapter 2L—Debentures 1
Part 2L.1—Requirement for trust deed and trustee 1 283AA Requirement for trust deed and trustee ..............................1
283AB Trust deed..........................................................................2
283AC Who can be a trustee .........................................................2
283AD Existing trustee continues to act until new trustee
takes office ........................................................................3
283AE Replacement of trustee ......................................................3
Part 2L.2—Duties of borrower 5 283BA Duties of borrower ............................................................5
283BB General duties....................................................................5
283BC Duty to notify ASIC of information related to
trustee ................................................................................5
283BCA Register relating to trustees for debenture holders ............6
283BD Duty to replace trustee.......................................................6
283BE Duty to inform trustee about security interests ..................7
283BF Duty to give trustee and ASIC quarterly reports ...............7
283BG Exceptions to borrower’s duty to report to trustee
and ASIC.........................................................................10
283BH How debentures may be described ..................................10
283BI Offences for failure to comply with statutory
duties ...............................................................................11
Part 2L.3—Duties of guarantor 12 283CA Duties of guarantor..........................................................12
283CB General duties..................................................................12
283CC Duty to inform trustee about security interests ................12
283CD Exceptions to guarantor’s duty to inform trustee.............13
283CE Offences for failure to comply with statutory
duties ...............................................................................13
Part 2L.4—Trustee 14 283DA Trustee’s duties ...............................................................14
283DB Exemptions and indemnifications of trustee from
liability ............................................................................15
283DC Indemnity ........................................................................16
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Part 2L.5—Meetings of debenture holders 17 283EA Borrower’s duty to call meeting ......................................17
283EB Trustee’s power to call meeting.......................................18
283EC Court may order meeting.................................................19
Part 2L.6—Civil liability 20 283F Civil liability for contravening this Chapter ....................20
Part 2L.7—ASIC powers 21 283GA ASIC’s power to exempt and modify ..............................21
283GB ASIC may approve body corporate to be trustee .............22
Part 2L.8—Court 23 283HA General Court power to give directions and
determine questions.........................................................23
283HB Specific Court powers .....................................................23
Part 2L.9—Location of other debenture provisions 25 283I Signpost to other debenture provisions............................25
Chapter 2M—Financial reports and audit 26
Part 2M.1—Overview 26 285 Overview of obligations under this Chapter ....................26
285A Overview of obligations of companies limited by
guarantee .........................................................................28
Part 2M.2—Financial records 31 286 Obligation to keep financial records................................31
287 Language requirements ...................................................31
288 Physical format................................................................32
289 Place where records are kept ...........................................32
290 Director access ................................................................33
291 Signposts to other relevant provisions.............................33
Part 2M.3—Financial reporting 35
Division 1—Annual financial reports and directors’ reports 35
292 Who has to prepare annual financial reports and
directors’ reports .............................................................35
293 Small proprietary company—shareholder direction ........36
294 Small proprietary company—ASIC direction .................36
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294A Small company limited by guarantee—member
direction ..........................................................................37
294B Small company limited by guarantee—ASIC
direction ..........................................................................37
295 Contents of annual financial report .................................38
295A Declaration in relation to listed entity’s financial
statements by chief executive officer and chief
financial officer ...............................................................40
296 Compliance with accounting standards and
regulations .......................................................................42
297 True and fair view ...........................................................42
298 Annual directors’ report ..................................................43
299 Annual directors’ report—general information ...............44
299A Annual directors’ report—additional general
requirements for listed entities ........................................46
300 Annual directors’ report—specific information...............46
300A Annual directors’ report—specific information to
be provided by listed companies .....................................54
300B Annual directors’ report—companies limited by
guarantee .........................................................................59
301 Audit of annual financial report.......................................60
Division 2—Half-year financial report and directors’ report 62
302 Disclosing entity must prepare half-year financial
report and directors’ report ..............................................62
303 Contents of half-year financial report..............................62
304 Compliance with accounting standards and
regulations .......................................................................64
305 True and fair view ...........................................................64
306 Half-year directors’ report ...............................................64
Division 3—Audit and auditor’s report 66
307 Audit................................................................................66
307A Audit to be conducted in accordance with auditing
standards..........................................................................66
307B Audit working papers to be retained for 7 years..............67
307C Auditor’s independence declaration ................................70
308 Auditor’s report on annual financial report .....................73
309 Auditor’s report on half-year financial report..................74
310 Auditor’s power to obtain information ............................76
311 Reporting to ASIC...........................................................76
312 Assisting auditor..............................................................79
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313 Special provisions on audit of debenture issuers
and guarantors .................................................................79
Division 4—Annual financial reporting to members 81
314 Annual financial reporting to members ...........................81
315 Deadline for reporting to members..................................83
316 Member’s choices for annual financial information ........84
316A Annual financial reporting to members of
companies limited by guarantee ......................................85
317 Consideration of reports at AGM ....................................86
318 Additional reporting by debenture issuers .......................87
Division 5—Lodging reports with ASIC 88
319 Lodgment of annual reports with ASIC...........................88
320 Lodgment of half-year reports with ASIC.......................88
321 ASIC power to require lodgment.....................................89
322 Relodgment if financial statements or directors’
reports amended after lodgment ......................................89
Division 6—Special provisions about consolidated financial
statements 91
323 Directors and officers of controlled entity to give
information......................................................................91
323A Auditor’s power to obtain information from
controlled entity...............................................................91
323B Controlled entity to assist auditor ....................................91
323C Application of Division to entity that has ceased to
be controlled....................................................................92
Division 7—Financial years and half-years 93
323D Financial years and half-years .........................................93
Division 8—Disclosure by listed companies of information filed
overseas 95
323DA Listed companies to disclose information filed
overseas ...........................................................................95
Part 2M.4—Appointment and removal of auditors 96
Division 1—Entities that may be appointed as an auditor for a
company or registered scheme 96
324AA Individual auditors, audit firms and authorised
audit companies...............................................................96
324AB Effect of appointing firm as auditor—general .................96
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324AC Effect of appointing firm as auditor—
reconstitution of firm.......................................................97
324AD Effect of appointing company as auditor.........................98
324AE Professional members of the audit team..........................99
324AF Lead and review auditors.................................................99
Division 2—Registration requirements 101
324BA Registration requirements for appointment of
individual as auditor ......................................................101
324BB Registration requirements for appointment of firm
as auditor .......................................................................101
324BC Registration requirements for appointment of
company as auditor........................................................103
324BD Exception from registration requirement for
proprietary company......................................................105
324BE Exception from registration requirement—
reviewing financial reports of companies limited
by guarantee ..................................................................106
Division 3—Auditor independence 107
Subdivision A—General requirement 107
324CA General requirement for auditor independence—
auditors..........................................................................107
324CB General requirement for auditor independence—
member of audit firm.....................................................111
324CC General requirement for auditor independence—
director of audit company..............................................114
324CD Conflict of interest situation ..........................................118
Subdivision B—Specific requirements 120
324CE Auditor independence—specific requirements for
individual auditor ..........................................................120
324CF Auditor independence—specific requirements for
audit firm.......................................................................125
324CG Auditor independence—specific requirements for
audit company ...............................................................131
324CH Relevant relationships ...................................................139
324CI Special rule for retiring partners of audit firms and
retiring directors of authorised audit companies............146
324CJ Special rule for retiring professional member of
audit company ...............................................................147
324CK Multiple former audit firm partners or audit
company directors .........................................................147
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Subdivision C—Common provisions 148
324CL People who are regarded as officers of a company
for the purposes of this Division....................................148
Division 4—Deliberately disqualifying auditor 150
324CM Deliberately disqualifying auditor .................................150
Division 5—Auditor rotation for listed companies 152
324DA Limited term for eligibility to play significant role
in audit of a listed company or listed registered
scheme...........................................................................152
324DAA Directors may extend eligibility term............................153
324DAB Requirements for directors to approve extension of
eligibility term...............................................................154
324DAC Notifications about approval to extend eligibility
term ...............................................................................155
324DAD Approval ineffective unless it complies with
requirements ..................................................................156
324DB Individual’s rotation obligation .....................................156
324DC Audit firm’s rotation obligation.....................................156
324DD Audit company’s rotation obligation .............................158
Division 6—Appointment, removal and fees of auditors for
companies 161
Subdivision A—Appointment of company auditors 161
325 Appointment of auditor by proprietary company ..........161
327A Public company auditor (initial appointment of
auditor) ..........................................................................161
327B Public company auditor (annual appointments at
AGMs to fill vacancies) ................................................161
327C Public company auditor (appointment to fill casual
vacancy) ........................................................................164
327D Appointment to replace auditor removed from
office .............................................................................164
327E ASIC may appoint public company auditor if
auditor removed but not replaced ..................................165
327F ASIC’s general power to appoint public company
auditor ...........................................................................166
327G Restrictions on ASIC’s powers to appoint public
company auditor............................................................166
327H Effect on appointment of public company auditor
of company beginning to be controlled by a
corporation ....................................................................167
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327I Remaining auditors may act during vacancy .................167
328A Auditor’s consent to appointment..................................167
328B Nomination of auditor ...................................................168
Subdivision B—Removal and resignation of company auditors 169
329 Removal and resignation of auditors .............................169
330 Effect of winding up on office of auditor ......................172
Subdivision C—Company auditors’ fees and expenses 172
331 Fees and expenses of auditors .......................................172
Division 7—Appointment, removal and fees of auditors for
registered schemes 173
Subdivision A—Appointment of registered scheme auditors 173
331AAA Registered scheme auditor (initial appointment of
auditor) ..........................................................................173
331AAB Registered scheme auditor (appointment to fill
vacancy) ........................................................................175
331AAC ASIC’s power to appoint registered scheme
auditor ...........................................................................175
331AAD Remaining auditors may act during vacancy.................175
Subdivision B—Removal and resignation of registered scheme
auditors 176
331AC Removal and resignation of auditors .............................176
331AD Effect of winding up on office of auditor ......................177
Subdivision C—Fees and expenses of auditors 178
331AE Fees and expenses of auditors .......................................178
Part 2M.4A—Annual transparency reports for auditors 179 332 Meaning of transparency reporting auditor and
transparency reporting year..........................................179
332A Transparency reporting auditors must publish
annual transparency reports ...........................................179
332B Content of annual transparency report...........................180
332C Extension of period for publication of annual
transparency report ........................................................180
332D Exemption orders—applications by transparency
reporting auditors ..........................................................181
332E Exemption orders—class orders for transparency
reporting auditors ..........................................................182
332F Exemption orders—criteria for orders...........................182
332G Offences by members of audit firm...............................183
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Part 2M.5—Accounting and auditing standards 184 334 Accounting standards ....................................................184
335 Equity accounting..........................................................184
336 Auditing standards.........................................................184
337 Interpretation of accounting and auditing standards ......185
338 Evidence of text of accounting standard or
auditing standard ...........................................................185
Part 2M.6—Exemptions and modifications 187 340 Exemption orders—companies, registered
schemes and disclosing entities .....................................187
341 Exemption orders—class orders for companies,
registered schemes and disclosing entities.....................187
342 Exemption orders—criteria for orders for
companies, registered schemes and disclosing
entities ...........................................................................188
342AA Exemption orders—non-auditor members and
former members of audit firms; former employees
of audit companies ........................................................189
342AB Exemption orders—class orders for non-auditor
members etc. .................................................................190
342AC Exemption orders—criteria for orders for
non-auditor members etc. ..............................................190
342A ASIC’s power to modify the operation of
section 324DA...............................................................191
342B Auditor to notify company or registered scheme of
section 342A declaration ...............................................192
343 Modification by regulations ..........................................193
Part 2M.7—Sanctions for contraventions of Chapter 194 344 Contravention of Part 2M.2 or 2M.3, or of certain
provisions of Part 2M.4 .................................................194
Chapter 2N—Updating ASIC information about
companies and registered schemes 195
Part 2N.1—Review date 195 345A Review date ...................................................................195
345B Company or responsible entity may change review
date ................................................................................196
345C When choice has effect..................................................196
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Part 2N.2—Extract of particulars 197 346A ASIC must give an extract of particulars each year.......197
346B ASIC may ask questions................................................197
346C Requirements in relation to an extract of
particulars......................................................................197
Part 2N.3—Solvency resolution 199 347A Directors must pass a solvency resolution after
each review date ............................................................199
347B Notice to ASIC..............................................................199
347C Payment of review fee is taken to be a
representation by the directors that the company is
solvent ...........................................................................200
Part 2N.4—Return of particulars 201 348A ASIC may give a return of particulars ...........................201
348B ASIC may ask questions................................................201
348C ASIC may require a solvency resolution and
statement .......................................................................201
348D General requirements in relation to a return of
particulars......................................................................202
Part 2N.5—Notice by proprietary companies of changes to
ultimate holding company 204 349A Proprietary companies must notify ASIC of
changes to ultimate holding company ...........................204
349B Another company becomes an ultimate holding
company ........................................................................204
349C A company ceases to be an ultimate holding
company ........................................................................204
349D Ultimate holding company changes its name ................205
Chapter 2P—Lodgments with ASIC 206 350 Forms for documents to be lodged with ASIC ..............206
351 Signing documents lodged with ASIC ..........................207
352 Documents lodged with ASIC electronically ................207
353 Electronic lodgment of certain documents ....................208
354 Telephone notice of certain changes..............................208
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Chapter 5—External administration 209
Part 5.1—Arrangements and reconstructions 209 410 Interpretation .................................................................209
411 Administration of compromises etc...............................209
412 Information as to compromise with creditors ................217
413 Provisions for facilitating reconstruction and
amalgamation of Part 5.1 bodies ...................................219
414 Acquisition of shares of shareholders dissenting
from scheme or contract approved by majority .............221
415 Notification of appointment of scheme manager
and power of Court to require report .............................225
415A Outcome of voting at creditors’ meeting
determined by related entity—Court powers.................225
415B Interim order on application under section 415A ..........227
415C Order under section 415A does not affect act
already done pursuant to resolution...............................227
Part 5.2—Receivers, and other controllers, of property of
corporations 228 416 Definitions.....................................................................228
417 Application of Part ........................................................228
418 Persons not to act as receivers .......................................229
418A Court may declare whether controller is validly
acting.............................................................................229
419 Liability of controller ....................................................230
419A Liability of controller under pre-existing
agreement about property used by corporation..............231
420 Powers of receiver .........................................................233
420A Controller’s duty of care in exercising power of
sale ................................................................................235
420B Court may authorise managing controller to
dispose of property despite prior security interest .........235
420C Receiver’s power to carry on corporation’s
business during winding up ...........................................237
421 Managing controller’s duties in relation to bank
accounts and financial records.......................................238
421A Managing controller to report within 2 months
about corporation’s affairs.............................................239
422 Reports by receiver or managing controller ..................239
422A Annual return by controller ...........................................241
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422B End of control return .....................................................242
422C Transfer of books to new controller...............................243
422D Transfer of books to ASIC etc. ......................................244
423 Supervision of controller ...............................................247
424 Controller may apply to Court.......................................248
425 Court’s power to fix receiver’s remuneration ................248
426 Controller has qualified privilege in certain cases .........250
427 Notification of matters relating to controller .................250
428 Statement that receiver appointed or other
controller acting.............................................................251
429 Officers to report to controller about corporation’s
affairs ............................................................................252
430 Controller may require reports ......................................254
431 Controller may inspect books ........................................255
432 Auditing returns by controllers......................................255
433 Property subject to circulating security interest—
payment of certain debts to have priority ......................256
434 Enforcing controller’s duty to make returns ..................258
434A Court may remove controller for misconduct................259
434B Court may remove redundant controller........................259
434C Effect of sections 434A and 434B.................................260
434D Appointment of 2 or more receivers of property of
a corporation..................................................................260
434E Appointment of 2 or more receivers and managers
of property of a corporation...........................................261
434F Appointment of 2 or more controllers of property
of a corporation .............................................................261
434G Appointment of 2 or more managing controllers of
property of a corporation ...............................................262
434H Regulations may provide for reporting to ASIC............262
Part 5.3A—Administration of a company’s affairs with a view
to executing a deed of company arrangement 263
Division 1—Preliminary 263
435A Object of Part ................................................................263
435B Definitions.....................................................................263
435C When administration begins and ends ...........................264
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Division 2—Appointment of administrator and first meeting of
creditors 266
436A Company may appoint administrator if board
thinks it is or will become insolvent ..............................266
436B Liquidator may appoint administrator ...........................266
436C Secured party may appoint administrator ......................267
436D Company already under administration.........................267
436DA Declarations by administrator—indemnities and
relevant relationships.....................................................267
436E Purpose and timing of first meeting of creditors ...........270
Division 3—Administrator assumes control of company’s affairs 271
437A Role of administrator.....................................................271
437B Administrator acts as company’s agent .........................271
437D Only administrator can deal with company’s
property .........................................................................271
437E Order for compensation where officer involved in
void transaction .............................................................273
437F Effect of administration on company’s members ..........273
Division 4—Administrator investigates company’s affairs 277
438A Administrator to investigate affairs and consider
possible courses of action..............................................277
438B Directors to help administrator ......................................277
438C Administrator’s rights to company’s books...................278
438D Reports by administrator ...............................................279
Division 5—Meeting of creditors decides company’s future 281
439A Administrator to convene meeting and inform
creditors.........................................................................281
439C What creditors may decide ............................................282
Division 6—Protection of company’s property during
administration 283
440A Winding up company ....................................................283
440B Restrictions on exercise of third party property
rights..............................................................................283
440D Stay of proceedings .......................................................285
440E Administrator not liable in damages for refusing
consent ..........................................................................285
440F Suspension of enforcement process...............................285
440G Duties of court officer in relation to property of
company ........................................................................285
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440H Lis pendens taken to exist..............................................287
440J Administration not to trigger liability of director or
relative under guarantee of company’s liability.............287
440JA Property subject to a banker’s lien—exemption
from this Division..........................................................288
Division 7—Rights of secured party, owner or lessor 290
Subdivision A—General 290
441 Application of Division .................................................290
Subdivision B—Property subject to security interests 290
441AA Application of Subdivision—PPSA security
interests .........................................................................290
441A Secured party acts before or during decision period......290
441B Where enforcement of security interest begins
before administration.....................................................292
441C Security interest in perishable property .........................293
441D Court may limit powers of secured party etc. in
relation to secured property ...........................................293
441E Giving a notice under a security agreement etc. ............294
441EA Sale of property subject to a possessory security
interest ...........................................................................294
Subdivision C—Property not subject to security interests 295
441EB Scope of Subdivision.....................................................295
441F Where recovery of property begins before
administration................................................................296
441G Recovering perishable property.....................................296
441H Court may limit powers of receiver etc. in relation
to property used by company ........................................296
441J Giving a notice under an agreement about property ......297
Division 8—Powers of administrator 298
442A Additional powers of administrator ...............................298
442B Dealing with property subject to circulating
security interests ............................................................298
442C When administrator may dispose of encumbered
property .........................................................................299
442CA Property subject to a possessory security interest—
inspection or examination by potential purchasers
etc. .................................................................................301
442CB Property subject to a security interest or to a
retention of title clause—administrator’s duty of
care in exercising power of sale ....................................301
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442CC Proceeds of sale of property ..........................................302
442D Administrator’s powers subject to powers of
secured party, receiver or controller ..............................304
442E Administrator has qualified privilege ............................305
442F Protection of persons dealing with administrator ..........305
Division 9—Administrator’s liability and indemnity for debts of
administration 307
Subdivision A—Liability 307
443A General debts.................................................................307
443B Payments for property used or occupied by, or in
the possession of, the company .....................................307
443BA Certain taxation liabilities..............................................309
443C Administrator not otherwise liable for company’s
debts ..............................................................................310
Subdivision B—Indemnity 310
443D Right of indemnity ........................................................310
443E Right of indemnity has priority over other debts ...........311
443F Lien to secure indemnity ...............................................313
Division 10—Execution and effect of deed of company
arrangement 314
444A Effect of creditors’ resolution........................................314
444B Execution of deed..........................................................315
444C Creditor etc. not to act inconsistently with deed
before its execution .......................................................315
444D Effect of deed on creditors ............................................316
444DA Giving priority to eligible employee creditors...............317
444DB Superannuation contribution debts not admissible
to proof..........................................................................318
444E Protection of company’s property from persons
bound by deed ...............................................................319
444F Court may limit rights of secured creditor or
owner or lessor ..............................................................320
444G Effect of deed on company, officers and members........321
444GA Transfer of shares ..........................................................322
444H Extent of release of company’s debts ............................322
444J Guarantees and indemnities...........................................322
Division 11—Variation, termination and avoidance of deed 323
445A Variation of deed by creditors .......................................323
445B Court may cancel variation............................................323
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445C When deed terminates ...................................................323
445CA When creditors may terminate deed ..............................324
445D When Court may terminate deed ...................................324
445E Creditors may terminate deed and resolve that
company be wound up...................................................325
445FA Notice of termination of deed........................................325
445G When Court may void or validate deed .........................326
445H Effect of termination or avoidance ................................327
Division 11AA—Notification of contravention of deed 328
445HA Notification of contravention of deed of company
arrangement...................................................................328
Division 12—Transition to creditors’ voluntary winding up 329
446A Administrator becomes liquidator in certain cases ........329
446AA Administrator becomes liquidator—additional
cases ..............................................................................330
446B Regulations may provide for transition in other
cases ..............................................................................332
446C Liquidator may require submission of a report
about the company’s affairs...........................................332
Division 13—Powers of Court 335
447A General power to make orders.......................................335
447B Orders to protect creditors during administration..........335
447C Court may declare whether administrator validly
appointed.......................................................................336
447F Effect of Division ..........................................................336
Division 14—Qualifications of administrators 337
448A Appointee must consent ................................................337
448B Administrator must be registered liquidator ..................337
448C Disqualification of person connected with
company ........................................................................337
Division 15—Removal and replacement of administrator 340
449A Appointment of administrator cannot be revoked .........340
449C Vacancy in office of administrator of company ............340
449CA Declarations by administrator—indemnities and
relevant relationships.....................................................341
Division 16—Notices about steps taken under Part 344
450A Appointment of administrator .......................................344
450B Execution of deed of company arrangement .................345
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450C Failure to execute deed of company arrangement .........345
450D Termination of deed of company arrangement ..............345
450E Notice in public documents etc. of company.................345
450F Effect of contravention of this Division ........................346
Division 17—Miscellaneous 347
451A Appointment of 2 or more administrators of
company ........................................................................347
451B Appointment of 2 or more administrators of deed
of company arrangement ...............................................347
451C Effect of things done during administration of
company ........................................................................348
451D Time for doing act does not run while act
prevented by this Part ....................................................348
Part 5.4—Winding up in insolvency 349
Division 1—When company to be wound up in insolvency 349
459A Order that insolvent company be wound up in
insolvency .....................................................................349
459B Order made on application under section 234, 462
or 464 ............................................................................349
459C Presumptions to be made in certain proceedings...........349
459D Contingent or prospective liability relevant to
whether company solvent ..............................................350
Division 2—Statutory demand 351
459E Creditor may serve statutory demand on company........351
459F When company taken to fail to comply with
statutory demand ...........................................................352
Division 3—Application to set aside statutory demand 354
459G Company may apply......................................................354
459H Determination of application where there is a
dispute or offsetting claim .............................................354
459J Setting aside demand on other grounds .........................356
459K Effect of order setting aside demand .............................356
459L Dismissal of application ................................................356
459M Order subject to conditions............................................356
459N Costs where company successful ..................................356
Division 4—Application for order to wind up company in
insolvency 357
459P Who may apply for order under section 459A ..............357
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459Q Application relying on failure to comply with
statutory demand ...........................................................358
459R Period within which application must be
determined.....................................................................358
459S Company may not oppose application on certain
grounds..........................................................................359
459T Application to wind up joint debtors in insolvency .......359
Part 5.4A—Winding up by the Court on other grounds 360 461 General grounds on which company may be
wound up by Court ........................................................360
462 Standing to apply for winding up ..................................361
464 Application for winding up in connection with
investigation under ASIC Act .......................................362
Part 5.4B—Winding up in insolvency or by the Court 363
Division 1A—Preliminary 363
465 Definitions.....................................................................363
Division 1—General 364
465A Notice of application .....................................................364
465B Substitution of applicants ..............................................364
465C Applicant to be given notice of grounds for
opposing application......................................................365
466 Payment of preliminary costs etc...................................365
467 Court’s powers on hearing application ..........................366
467A Effect of defect or irregularity on application
under Part 5.4 or 5.4A ...................................................367
467B Court may order winding up of company that is
being wound up voluntarily...........................................368
468 Avoidance of dispositions of property, attachments
etc. .................................................................................368
468A Effect of winding up on company’s members ...............369
469 Application to be lis pendens ........................................372
470 Certain notices to be lodged ..........................................372
Division 1A—Effect of winding up order 374
471 Effect on creditors and contributories............................374
471B Stay of proceedings and suspension of
enforcement process ......................................................374
471C Secured creditor’s rights not affected ............................374
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Division 2—Court-appointed liquidators 375
472 Court to appoint registered liquidator............................375
473 Resignation of liquidators..............................................376
473A Vacancies in office of court-appointed liquidator .........376
474 Custody and vesting of company’s property .................376
475 Report as to company’s affairs to be submitted to
liquidator .......................................................................377
477 Powers of liquidator ......................................................379
478 Application of property; list of contributories ...............382
480 Release of liquidator and deregistration of
company ........................................................................383
481 Orders for release or deregistration ...............................383
Division 3—General powers of Court 385
Subdivision A—General powers 385
482 Power to stay or terminate winding up ..........................385
483 Delivery of property to liquidator..................................387
484 Appointment of special manager ...................................388
485 Claims of creditors and distribution of property............389
486 Inspection of books by creditors and contributories ......389
486A Court may make order to prevent officer or related
entity from avoiding liability to company .....................389
486B Warrant to arrest person who is absconding, or
who has dealt with property or books, in order to
avoid obligations in connection with winding up ..........392
487 Power to arrest absconding contributory .......................392
488 Delegation to liquidator of certain powers of Court ......393
489 Powers of Court cumulative ..........................................393
Subdivision B—Procedures relating to section 486B warrants 394
489A Arrest of person subject to warrant................................394
489B Procedure after arrest.....................................................394
489C Procedure on remand on bail .........................................394
489D Court’s power to make orders under other
provisions ......................................................................395
489E Jurisdiction under this Subdivision................................395
Part 5.4C—Winding up by ASIC 396 489EA ASIC may order the winding up of a company .............396
489EB Deemed resolution that company be wound up
voluntarily .....................................................................397
489EC Appointment of liquidator .............................................398
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Part 5.5—Voluntary winding up 399
Division 1A—Preliminary 399
489F Definitions.....................................................................399
Division 1—Resolution for winding up 400
490 When company cannot wind up voluntarily ..................400
491 Circumstances in which company may be wound
up voluntarily ................................................................400
493 Effect of voluntary winding up......................................401
493A Effect of voluntary winding up on company’s
members ........................................................................401
494 Declaration of solvency.................................................403
Division 2—Members’ voluntary winding up 406
495 Appointment of liquidator etc........................................406
496 Duty of liquidator where company turns out to be
insolvent ........................................................................406
Division 3—Creditors’ voluntary winding up 408
497 Information about the company’s affairs.......................408
499 Liquidators ....................................................................409
500 Execution and civil proceedings....................................412
Division 4—Voluntary winding up generally 413
501 Distribution of property of company .............................413
506 Powers and duties of liquidator .....................................413
506A Declarations by liquidator—relevant relationships
and indemnities .............................................................414
507 Power of liquidator to accept shares etc. as
consideration for sale of property of company ..............416
509 Deregistration ................................................................418
510 Arrangement: when binding on creditors ......................418
Part 5.6—Winding up generally 420
Division 1—Preliminary 420
513 Application of Part ........................................................420
513AA Definitions.....................................................................420
Division 1A—When winding up taken to begin 421
513A Winding up ordered by the Court ..................................421
513B Voluntary winding up....................................................421
513C Section 513C day in relation to an administration
under Part 5.3A .............................................................422
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513D Validity of proceedings in earlier winding up ...............423
Division 2—Contributories 424
514 Where Division applies .................................................424
515 General liability of contributory ....................................424
516 Company limited by shares ...........................................424
517 Company limited by guarantee......................................424
518 Company limited both by shares and by guarantee .......424
519 Exceptions for former unlimited company ....................425
520 Past member: later debts................................................425
521 Person ceasing to be a member a year or more
before winding up..........................................................425
522 Present members to contribute first ...............................425
523 Past member of former unlimited company ..................425
524 Past member of former limited company ......................426
526 Liability on certain contracts .........................................426
527 Nature of contributory’s liability...................................426
528 Death of contributory ....................................................426
529 Bankruptcy of contributory ...........................................427
Division 3—Liquidators 428
530 Appointment of 2 or more liquidators of a
company ........................................................................428
530AA Appointment of 2 or more provisional liquidators
of a company .................................................................428
530A Officers to help liquidator .............................................428
530B Liquidator’s rights to company’s books ........................430
530C Warrant to search for, and seize, company’s
property or books ..........................................................431
532 Disqualification of liquidator ........................................432
533 Reports by liquidator .....................................................434
534 Prosecution by liquidator of delinquent officers
and members .................................................................435
535 When liquidator has qualified privilege ........................436
537 Notice of appointment and address of liquidator ...........436
Division 4—General 437
541 Notification that company is in liquidation ...................437
543 Investment of surplus funds on general account............437
544 Unclaimed money to be paid to ASIC...........................438
545 Expenses of winding up where property
insufficient.....................................................................439
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Division 6—Proof and ranking of claims 440
Subdivision A—Admission to proof of debts and claims 440
553 Debts or claims that are provable in winding up ...........440
553A Member cannot prove debt unless contributions
paid................................................................................441
553AA Selling shareholder cannot prove debt unless
documents given............................................................441
553AB Superannuation contribution debts not admissible
to proof..........................................................................441
553B Insolvent companies—penalties and fines not
generally provable .........................................................443
553C Insolvent companies—mutual credit and set-off ...........443
553D Debts or claims may be proved formally or
informally......................................................................443
553E Application of Bankruptcy Act to winding up of
insolvent company.........................................................444
Subdivision B—Computation of debts and claims 444
554 General rule—compute amount as at relevant date .......444
554A Determination of value of debts and claims of
uncertain value ..............................................................444
554B Discounting of debts payable after relevant date ...........446
554C Conversion into Australian currency of foreign
currency debts or claims................................................446
Subdivision C—Special provisions relating to secured creditors of
insolvent companies 447
554D Application of Subdivision............................................447
554E Proof of debt by secured creditor ..................................447
554F Redemption of security interest by liquidator................448
554G Amendment of valuation ...............................................449
554H Repayment of excess .....................................................449
554J Subsequent realisation of security interest.....................450
Subdivision D—Priorities 450
555 Debts and claims proved to rank equally except as
otherwise provided ........................................................450
556 Priority payments ..........................................................451
558 Debts due to employees.................................................458
559 Debts of a class to rank equally .....................................459
560 Advances for company to make priority payments
in relation to employees ................................................459
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561 Priority of employees’ claims over circulating
security interests ............................................................460
562 Application of proceeds of contracts of insurance.........461
562A Application of proceeds of contracts of
reinsurance ....................................................................461
563 Provisions relating to injury compensation ...................463
563AA Seller under a buy-back agreement................................464
563A Postponing subordinate claims ......................................464
563AAA Redemption of debentures.............................................465
Subdivision E—Miscellaneous 465
563B Interest on debts and claims from relevant date to
date of payment .............................................................465
563C Debt subordination ........................................................466
564 Power of Court to make orders in favour of certain
creditors.........................................................................466
Division 7—Effect on certain transactions 467
565 Undue preference ..........................................................467
566 Effect of floating charge................................................467
567 Liquidator’s right to recover in respect of certain
transactions....................................................................467
Division 7A—Disclaimer of onerous property 471
568 Disclaimer by liquidator; application to Court by
party to contract.............................................................471
568A Liquidator must give notice of disclaimer .....................473
568B Application to set aside disclaimer before it takes
effect..............................................................................473
568C When disclaimer takes effect.........................................474
568D Effect of disclaimer .......................................................475
568E Application to set aside disclaimer after it has
taken effect ....................................................................475
568F Court may dispose of disclaimed property ....................476
Division 7B—Effect on enforcement process against company’s
property 478
569 Executions, attachments etc. before winding up............478
570 Duties of sheriff after receiving notice of
application .....................................................................479
Division 8—Pooling 483
Subdivision A—Pooling determinations 483
571 Pooling determination ...................................................483
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572 Variation of pooling determination ...............................486
573 Lodgment of copy of pooling determination etc............486
577 Eligible unsecured creditors may decide to
approve the determination or variation..........................487
578 When pooling determination comes into force etc. .......487
579 Duties of liquidator........................................................489
579A Court may vary or terminate pooling
determination.................................................................489
579B Court may cancel or confirm variation..........................491
579C When Court may void or validate pooling
determination.................................................................492
579D Effect of termination or avoidance ................................493
Subdivision B—Pooling orders 494
579E Pooling orders ...............................................................494
579F Variation of pooling orders ...........................................498
579G Court may make ancillary orders etc. ............................498
579H Variation of ancillary orders etc. ...................................500
579J Notice of application for pooling order etc....................501
579K Notice of pooling order etc............................................502
579L Consolidated meetings of creditors ...............................505
Subdivision C—Other provisions 506
579M When debts or claims are provable in winding up.........506
579N Group of companies ......................................................506
579P Secured debt may become unsecured ............................507
579Q Eligible unsecured creditor............................................507
Division 9—Co-operation between Australian and foreign courts
in external administration matters 508
580 Definitions.....................................................................508
581 Courts to act in aid of each other ...................................508
Part 5.7—Winding up bodies other than companies 510 582 Application of Part ........................................................510
583 Winding up Part 5.7 bodies ...........................................510
585 Insolvency of Part 5.7 body...........................................511
586 Contributories in winding up of Part 5.7 body ..............512
587 Power of Court to stay or restrain proceedings..............513
588 Outstanding property of defunct registrable body .........513
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Part 5.7B—Recovering property or compensation for the
benefit of creditors of insolvent company 515
Division 1—Preliminary 515
588C Definitions.....................................................................515
588D Secured debt may become unsecured ............................515
588E Presumptions to be made in recovery proceedings........515
588F Certain taxation liabilities taken to be debts..................518
Division 2—Voidable transactions 519
588FA Unfair preferences .........................................................519
588FB Uncommercial transactions ...........................................520
588FC Insolvent transactions ....................................................520
588FD Unfair loans to a company.............................................521
588FDA Unreasonable director-related transactions....................522
588FE Voidable transactions ....................................................523
588FF Courts may make orders about voidable
transactions....................................................................526
588FG Transaction not voidable as against certain persons ......528
588FGA Directors to indemnify Commissioner of Taxation
if certain payments set aside..........................................530
588FGB Defences in proceedings under section 588FGA...........531
588FH Liquidator may recover from related entity benefit
resulting from insolvent transaction ..............................532
588FI Creditor who gives up benefit of unfair preference
may prove for preferred debt .........................................533
588FJ Circulating security interest created within 6
months before relation-back day ...................................534
Division 2A—Vesting of PPSA security interests if not
continuously perfected 536
588FK Interpretation and application........................................536
588FL Vesting of PPSA security interests if collateral not
registered within time....................................................536
588FM Extension of time for registration ..................................539
588FN PPSA security interests unaffected by
section 588FL................................................................540
588FO Certain lessors, bailors and consignors entitled to
damages.........................................................................542
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Division 2B—Security interests in favour of company officers
etc. 544
588FP Security interests in favour of an officer of a
company etc. void .........................................................544
Division 3—Director’s duty to prevent insolvent trading 547
588G Director’s duty to prevent insolvent trading by
company ........................................................................547
588H Defences........................................................................549
Division 4—Director liable to compensate company 551
Subdivision A—Proceedings against director 551
588J On application for civil penalty order, Court may
order compensation .......................................................551
588K Criminal court may order compensation .......................552
588L Enforcement of order under section 588J or 588K........552
588M Recovery of compensation for loss resulting from
insolvent trading............................................................552
588N Avoiding double recovery .............................................553
588P Effect of sections 588J, 588K and 588M.......................553
588Q Certificates evidencing contravention ...........................554
Subdivision B—Proceedings by creditor 554
588R Creditor may sue for compensation with
liquidator’s consent .......................................................554
588S Creditor may give liquidator notice of intention to
sue for compensation.....................................................555
588T When creditor may sue for compensation without
liquidator’s consent .......................................................555
588U Events preventing creditor from suing ..........................556
Division 5—Liability of holding company for insolvent trading
by subsidiary 557
588V When holding company liable.......................................557
588W Recovery of compensation for loss resulting from
insolvent trading............................................................557
588X Defences........................................................................558
Division 6—Application of compensation under Division 4 or 5 560
588Y Application of amount paid as compensation................560
Division 7—Person managing a corporation while disqualified
may become liable for corporation’s debts 561
588Z Court may make order imposing liability ......................561
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Part 5.8—Offences 562 589 Interpretation and application........................................562
590 Offences by officers of certain companies ....................565
592 Incurring of certain debts; fraudulent conduct...............568
593 Powers of Court.............................................................570
594 Certain rights not affected .............................................571
595 Inducement to be appointed liquidator etc. of
company ........................................................................572
596 Frauds by officers..........................................................572
Part 5.8A—Employee entitlements 574 596AA Object and coverage of Part ..........................................574
596AB Entering into agreements or transactions to avoid
employee entitlements ...................................................575
596AC Person who contravenes section 596AB liable to
compensate for loss .......................................................576
596AD Avoiding double recovery .............................................577
596AE Effect of section 596AC ................................................577
596AF Employee may sue for compensation with
liquidator’s consent .......................................................577
596AG Employee may give liquidator notice of intention
to sue for compensation.................................................577
596AH When employee may sue for compensation
without liquidator’s consent ..........................................578
596AI Events preventing employee from suing .......................579
Part 5.9—Miscellaneous 580
Division 1—Examining a person about a corporation 580
596A Mandatory examination.................................................580
596B Discretionary examination.............................................580
596C Affidavit in support of application under
section 596B..................................................................581
596D Content of summons......................................................581
596E Notice of examination ...................................................581
596F Court may give directions about examination ...............582
597 Conduct of examination ................................................582
597A When Court is to require affidavit about
corporation’s examinable affairs ...................................585
597B Costs of unnecessary examination or affidavit ..............586
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Division 2—Orders against a person in relation to a corporation 588
598 Order against person concerned with corporation .........588
Division 3—Provisions applying to various kinds of external
administration 590
599 Appeals from decisions of receivers etc. .......................590
600AA Duty of receiver, administrator or liquidator—
parental leave pay..........................................................590
600F Limitation on right of suppliers of essential
services to insist on payment as condition of
supply ............................................................................591
600G Electronic methods of giving or sending certain
notices etc......................................................................592
600H Rights if claim against the company postponed ............594
600J Acts of external administrator valid etc.........................594
Division 4—Insolvency Practice Schedule (Corporations) 596
600K Insolvency Practice Schedule (Corporations)................596
Chapter 5A—Deregistration, and transfer of
registration, of companies 597
Part 5A.1—Deregistration 597 601 Definitions.....................................................................597
601AA Deregistration—voluntary.............................................597
601AB Deregistration—ASIC initiated .....................................599
601AC Deregistration—following amalgamation or
winding up.....................................................................600
601AD Effect of deregistration ..................................................601
601AE What the Commonwealth or ASIC does with the
property .........................................................................602
601AF The Commonwealth’s and ASIC’s power to fulfil
outstanding obligations of deregistered company..........605
601AG Claims against insurers of deregistered company..........605
601AH Reinstatement ................................................................605
Part 5A.2—Transfer of registration 608 601AI Transferring registration................................................608
601AJ Applying to transfer registration....................................608
601AK ASIC makes transfer of registration declaration............609
601AL ASIC to deregister company .........................................609
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Chapter 5B—Bodies corporate registered as
companies, and registrable bodies 610
Part 5B.1—Registering a body corporate as a company 610
Division 1—Registration 610
601BA Bodies corporate may be registered as certain
types of companies ........................................................610
601BB Bodies registered as proprietary companies ..................611
601BC Applying for registration under this Part .......................611
601BD ASIC gives body ACN, registers as company and
issues certificate ............................................................615
601BE Registered office ...........................................................616
601BF Name .............................................................................616
601BG Constitution ...................................................................616
601BH Modifications of constitution ........................................617
601BJ ASIC may direct company to apply for Court
approval for modifications of constitution.....................617
601BK Establishing registers and minute books........................618
601BL Registration of registered bodies ...................................618
Division 2—Operation of this Act 619
601BM Effect of registration under this Part..............................619
601BN Liability of members on winding up .............................619
601BP Bearer shares .................................................................619
601BQ References in pre-registration contracts and other
documents to par value in existing contracts and
documents .....................................................................620
601BR First AGM .....................................................................621
601BS Modification by regulations ..........................................621
Part 5B.2—Registrable bodies 622
Division 1A—Preliminary 622
601C Definitions.....................................................................622
Division 1—Registrable Australian bodies 623
601CA When a registrable Australian body may carry on
business in this jurisdiction and outside its place of
origin .............................................................................623
601CB Application for registration ...........................................623
601CC Cessation of business etc. ..............................................624
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Division 2—Foreign companies 627
601CD When a foreign company may carry on business in
this jurisdiction..............................................................627
601CDA Limited disclosure if place of origin is a prescribed
country ..........................................................................627
601CE Application for registration ...........................................627
601CF Appointment of local agent ...........................................628
601CG Local agent: how appointed...........................................629
601CH Local agent: how removed ............................................630
601CJ Liability of local agent ..................................................630
601CK Balance-sheets and other documents .............................630
601CL Cessation of business etc. ..............................................632
601CM Register of members of foreign company......................635
601CN Register kept under section 601CM ..............................636
601CP Notifying ASIC about register kept under
section 601CM ..............................................................637
601CQ Effect of right to acquire shares compulsorily...............637
601CR Index of members and inspection of registers ...............638
601CS Certificate as to shareholding ........................................638
Division 3—Bodies registered under this Part 639
601CTA Limited disclosure if place of origin is a prescribed
country ..........................................................................639
601CT Registered office ...........................................................639
601CU Certificate of registration...............................................640
601CV Notice of certain changes ..............................................640
601CW Body’s name etc. must be displayed at office and
place of business............................................................641
601CX Service of documents on registered body......................642
601CY Power to hold land.........................................................643
Division 4—Register of debenture holders for non-companies 644
601CZA Certain documents are debentures .................................644
601CZB Register of debenture holders to be maintained by
non-companies ..............................................................644
601CZC Location of register .......................................................644
601CZD Application of sections 173 to 177 ................................645
Part 5B.3—Names of registrable Australian bodies and foreign
companies 646 601DA Reserving a name ..........................................................646
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601DB Acceptable abbreviations...............................................646
601DC When a name is available ..............................................647
601DD Registered Australian bodies and registered
foreign companies can carry on business with
some names only ...........................................................648
601DE Using a name and ARBN ..............................................649
601DF Exception to requirement to have ARBN on
receipts ..........................................................................650
601DG Regulations may exempt from requirement to set
out information on documents.......................................650
601DH Notice of name change must be given to ASIC.............650
601DJ ASIC’s power to direct a registered name be
changed .........................................................................651
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Debentures Chapter 2L
Requirement for trust deed and trustee Part 2L.1
Section 283AA
Corporations Act 2001 1
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Chapter 2L—Debentures
Part 2L.1—Requirement for trust deed and trustee
283AA Requirement for trust deed and trustee
(1) Before a body:
(a) makes an offer of debentures in this jurisdiction that needs
disclosure to investors under Chapter 6D, or does not need
disclosure to investors under Chapter 6D because of
subsection 708(14) (disclosure document exclusion for
debenture roll overs) or section 708A (sale offers that do not
need disclosure); or
(b) makes an offer of debentures in this jurisdiction or elsewhere
as consideration for the acquisition of securities under an
off-market takeover bid; or
(c) issues debentures in this jurisdiction or elsewhere under a
compromise or arrangement under Part 5.1 approved at a
meeting held as a result of an order under subsection 411(1)
or (1A);
regardless of where any resulting issue, sale or transfer occurs, the
body must enter into a trust deed that complies with section 283AB
and appoint a trustee that complies with section 283AC.
Note: For rules about when an offer of debentures will need disclosure to
investors under Chapter 6D, see sections 706, 707, 708, 708AA and
708A.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The body may revoke the trust deed after it has repaid all amounts
payable under the debentures in accordance with the debentures’
terms and the trust deed.
(3) The body must comply with this Chapter.
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Part 2L.1 Requirement for trust deed and trustee
Section 283AB
2 Corporations Act 2001
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Note: Sections 168 and 601CZB require a register of debenture holders to be
set up and kept.
(4) The regulations may exempt a specified offer of debentures, or a
specified class of offers of debentures, from subsection (1).
283AB Trust deed
(1) The trust deed must provide that the following are held in trust by
the trustee for the benefit of the debenture holders:
(a) the right to enforce the borrower’s duty to repay;
(b) any charge or security for repayment;
(c) the right to enforce any other duties that the borrower and
any guarantor have under:
(i) the terms of the debentures; or
(ii) the provisions of the trust deed or this Chapter.
Note: For information about the duties that the borrower and any guarantor
body have under this Chapter, see sections 283BB to 283CE.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
283AC Who can be a trustee
Who can be trustee
(1) The trustee must be:
(a) the Public Trustee of any State or Territory; or
(aa) a licensed trustee company (within the meaning of
Chapter 5D); or
(b) a body corporate authorised by a law of any State or
Territory to take in its own name a grant of probate of the
will, or letters of administration of the estate, of a deceased
person; or
(c) a body corporate registered under section 21 of the Life
Insurance Act 1995; or
(d) an Australian ADI; or
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Requirement for trust deed and trustee Part 2L.1
Section 283AD
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(e) a body corporate, all of whose shares are held beneficially by
a body corporate or bodies corporate of the kind referred to in
paragraph (b), (c) or (d) if that body or those bodies:
(i) are liable for all of the liabilities incurred, or to be
incurred, by the trustee as trustee; or
(ii) have subscribed for and beneficially hold shares in the
trustee and there is an uncalled liability of at least
$500,000 in respect of those shares that can only be
called up if the trustee becomes a Chapter 5 body
corporate (see section 254N); or
(f) a body corporate approved by ASIC (see section 283GB).
Note: Section 283BD provides that if the borrower becomes aware that the
trustee cannot be a trustee, the trustee must be replaced.
Circumstances in which a person cannot be trustee
(2) A person may only be appointed or act as trustee (except to the
extent provided for by section 283AD) if the appointment or acting
will not result in a conflict of interest or duty. This subsection is
not intended to affect any rule of law or equity.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
283AD Existing trustee continues to act until new trustee takes office
An existing trustee continues to act as the trustee until a new
trustee is appointed and has taken office as trustee, despite any rule
of law or equity to the contrary.
Note: This section applies even if the existing trustee resigns.
283AE Replacement of trustee
Related party of existing trustee may be appointed as a new trustee
(1) In addition to any other powers of appointment under the terms of
the debentures or provisions of the trust deed, the borrower may
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Part 2L.1 Requirement for trust deed and trustee
Section 283AE
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appoint a body corporate that is related to the existing trustee as
trustee in place of the existing trustee if:
(a) the body corporate can be a trustee under section 283AC; and
(b) the existing trustee consents in writing to the appointment.
The appointment has effect despite any terms of the debentures or
provisions of the trust deed.
Appointment by Court
(2) The Court may:
(a) appoint a person who may be a trustee under section 283AC
as trustee on the application of the borrower, a debenture
holder or ASIC if:
(i) a trustee has not been validly appointed; or
(ii) the trustee has ceased to exist; or
(b) terminate the existing trustee’s appointment and appoint a
person who may be a trustee under section 283AC as trustee
in the existing trustee’s place on the application of the
borrower, the existing trustee, a debenture holder or ASIC if:
(i) the existing trustee cannot be trustee under
section 283AC; or
(ii) the existing trustee fails, or refuses, to act.
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Duties of borrower Part 2L.2
Section 283BA
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Part 2L.2—Duties of borrower
283BA Duties of borrower
A borrower that is required to enter into a trust deed under
section 283AA has the duties imposed by this Part.
283BB General duties
The borrower must:
(a) carry on and conduct its business in a proper and efficient
manner; and
(b) provide a copy of the trust deed to:
(i) a debenture holder; or
(ii) the trustee;
if they request a copy; and
(c) make all of its financial and other records available for
inspection by:
(i) the trustee; or
(ii) an officer or employee of the trustee authorised by the
trustee to carry out the inspection; or
(iii) a registered company auditor appointed by the trustee to
carry out the inspection;
and give them any information, explanations or other
assistance that they require about matters relating to those
records.
Note: The borrower also has a duty to call a meeting of debenture holders in
certain circumstances (see section 283EA).
283BC Duty to notify ASIC of information related to trustee
(1) Within 14 days after the trustee is appointed, the borrower must
lodge with ASIC a notice containing the following information:
(a) the name of the trustee;
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Part 2L.2 Duties of borrower
Section 283BCA
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(b) any other information related to the trustee or the debentures
that is prescribed by the regulations.
(2) If there is any change to the information, the borrower must, within
14 days of the change, lodge with ASIC a notice containing the
changed information.
(3) A notice under subsection (1) or (2) must be in the prescribed
form.
283BCA Register relating to trustees for debenture holders
The register
(1) ASIC must establish and maintain a register relating to trustees for
debenture holders.
(2) The regulations may prescribe the way in which the register must
be established or maintained, including the details that ASIC must
enter in the register.
Inspection of register
(3) A person may inspect the register, and may make copies of, or take
extracts from, the register.
(4) The regulations may prescribe the fees that a person must pay
ASIC to do the things mentioned in subsection (3).
(5) Any disclosure necessary for the purposes of this section is
authorised by this section.
283BD Duty to replace trustee
The borrower must take all reasonable steps to replace the trustee
under section 283AE as soon as practicable after the borrower
becomes aware that the trustee:
(a) has ceased to exist; or
(b) has not been validly appointed; or
(c) cannot be a trustee under section 283AC; or
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(d) has failed or refused to act as trustee.
283BE Duty to inform trustee about security interests
If the borrower creates a security interest, it must:
(a) give the trustee written details of the security interest within
21 days after it is created; and
(b) if the total amount to be advanced on the security of the
security interest is indeterminate and the advances are not
merged in a current account with bankers, trade creditors or
anyone else—give the trustee written details of the amount of
each advance within 7 days after it is made.
Note: If the advances are merged in a current account the borrower must
give the trustee the details in the quarterly report (see
subsection 283BF(4)).
283BF Duty to give trustee and ASIC quarterly reports
Quarterly reports
(1) Within 1 month after the end of each quarter, the borrower must:
(a) give the trustee a quarterly report that sets out the
information required by subsections (4), (5) and (6); and
(b) lodge a copy of the report with ASIC (see section 351).
First quarter
(2) The first quarter is the period of 3 months ending on a day fixed by
the borrower, by written notice to the trustee. The day must be less
than 6 months after the first issue of a debenture under the trust
deed.
Subsequent quarters
(3) Each of the subsequent quarters are periods of 3 months. The
trustee may allow a particular quarter to be a period of less than 3
months if the trustee is satisfied that special circumstances justify
doing so.
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Section 283BF
8 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Content of quarterly report
(4) The report for a quarter must include details of:
(a) any failure by the borrower and each guarantor to comply
with the terms of the debentures or the provisions of the trust
deed or this Chapter during the quarter; and
(b) any event that has happened during the quarter that has
caused, or could cause, 1 or more of the following:
(i) any amount deposited or lent under the debentures to
become immediately payable;
(ii) the debentures to become immediately enforceable;
(iii) any other right or remedy under the terms of the
debenture or provisions of the trust deed to become
immediately enforceable; and
(c) any circumstances that have occurred during the quarter that
materially prejudice:
(i) the borrower, any of its subsidiaries, or any of the
guarantors; or
(ii) any security interest included in or created by the
debentures or the trust deed; and
(d) any substantial change in the nature of the business of the
borrower, any of its subsidiaries, or any of the guarantors that
has occurred during the quarter; and
(e) any of the following events that happened in the quarter:
(i) the appointment of a guarantor;
(ii) the cessation of liability of a guarantor body for the
payment of the whole or part of the money for which it
was liable under the guarantee;
(iii) a change of name of a guarantor (if this happens, the
report must also disclose the guarantor’s new name);
and
(f) the net amount outstanding on any advances at the end of the
quarter if the borrower has created a security interest where:
(i) the total amount to be advanced on the security of the
security interest is indeterminate; and
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Corporations Act 2001 9
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(ii) the advances are merged in a current account with
bankers, trade creditors or anyone else; and
(g) any other matters that may materially prejudice any security
interests or other interests of the debenture holders.
Note: Paragraph (f)—the borrower has a duty to inform the trustee about
security interests as they are created (see section 283BE).
(5) If the borrower has deposited money with, or lent money to, a
related body corporate during the quarter, the report must also
include details of:
(a) the total of the money deposited with, or lent to, the related
body corporate during the quarter (see subsection (7)); and
(b) the total amount of money owing to the borrower at the end
of the quarter in respect of the deposits or loans to the related
body corporate.
Disregard any amount that the borrower deposits with an ADI in
the normal course of the borrower’s business.
(6) If the borrower has assumed a liability of a related body corporate
during the quarter, the report must also include details of the extent
of the liability assumed during the quarter and the extent of the
liability as at the end of the quarter.
(7) For the purposes of subsections (5) and (6), the report:
(a) must distinguish between deposits, loans and assumptions of
liability that are secured and those that are unsecured; and
(b) may exclude any deposit, loan or assumption of liability on
behalf of the related body corporate if it has:
(i) guaranteed the repayment of the debentures of the
borrower; and
(ii) secured the guarantee by a security interest over all of
its property in favour of the trustee.
Formalities
(8) The report must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the date on which the report is made.
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Part 2L.2 Duties of borrower
Section 283BG
10 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
283BG Exceptions to borrower’s duty to report to trustee and ASIC
Section 283BF does not apply in respect of:
(a) a borrower, while:
(i) it is under external administration; or
(ii) a receiver, or a receiver and manager, of property of the
borrower has been appointed and has not ceased to act
under that appointment; or
(b) a security interest in PPSA retention of title property.
283BH How debentures may be described
(1) The borrower may describe or refer to the debentures in:
(a) any disclosure in relation to the offer of the debentures; or
(b) any other document constituting or relating to the offer of the
debentures; or
(c) the debentures themselves;
only in accordance with the following table:
How debentures may be described
Item Description When description may be used
1 mortgage debenture only if the circumstances set out in
subsection (2) are satisfied
2 debenture only if the circumstances set out in
subsection (2) or (3) are satisfied
3 unsecured note or
unsecured deposit note
in any other case
(1A) The borrower commits an offence if it intentionally or recklessly
contravenes subsection (1).
When debentures can be called mortgage debentures or debentures
(2) The borrower may describe or refer to the debentures as:
(a) mortgage debentures; or
(b) debentures;
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Corporations Act 2001 11
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if:
(c) the repayment of all money that has been, or may be,
deposited or lent under the debentures is secured by a first
mortgage given to the trustee over land vested in the
borrower or in any of the guarantors; and
(d) the mortgage has been registered, or is a registrable mortgage
that has been lodged for registration, in accordance with the
law relating to the registration of mortgages of land in the
place where the land is situated; and
(e) the total amount of that money and of all other liabilities (if
any) secured by the mortgage of that land ranking equally
with the liability to repay that money does not exceed 60% of
the value of the borrower’s or guarantor’s interest in that land
as shown in the valuation included in the disclosure
document for the debentures.
When debentures can be called debentures
(3) The borrower may describe or refer to the debentures as debentures
if:
(a) the repayment of all money that has been, or may be,
deposited or lent under the debentures has been secured by a
security interest in favour of the trustee over the whole or any
part of the tangible property of the borrower or of any of the
guarantors; and
(b) the tangible property that constitutes the security for the
security interest is sufficient and is reasonably likely to be
sufficient to meet the liability for the repayment of all such
money and all other liabilities that:
(i) have been or may be incurred; and
(ii) rank in priority to, or equally with, that liability.
283BI Offences for failure to comply with statutory duties
The borrower commits an offence if it intentionally or recklessly
contravenes section 283BB, 283BC, 283BD, 283BE, 283BF or
283EA.
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Part 2L.3 Duties of guarantor
Section 283CA
12 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2L.3—Duties of guarantor
283CA Duties of guarantor
If a borrower is required to enter into a trust deed under
section 283AA in relation to debentures, a guarantor in respect of
the debentures has the duties imposed by this Part.
283CB General duties
The guarantor must:
(a) carry on and conduct its business in a proper and efficient
manner; and
(b) make all of its financial and other records available for
inspection by:
(i) the trustee; or
(ii) an officer or employee of the trustee authorised by the
trustee to carry out the inspection; or
(iii) a registered company auditor appointed by the trustee to
carry out the inspection;
and give them any information, explanations or other
assistance that they require about matters relating to those
records.
283CC Duty to inform trustee about security interests
If the guarantor creates a security interest, it must:
(a) give the trustee written details of the security interest within
21 days after it is created; and
(b) if the total amount to be advanced on the security of the
security interest is indeterminate, give the trustee written
details of:
(i) the amount of each advance made within 7 days after it
is made; or
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Section 283CD
Corporations Act 2001 13
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(ii) where the advances are merged in a current account
with bankers, trade creditors or anyone else—the net
amount outstanding on the advances at the end of every
3 months.
283CD Exceptions to guarantor’s duty to inform trustee
Section 283CC does not apply in respect of:
(a) the guarantor, while:
(i) it is under external administration; or
(ii) a receiver, or a receiver and manager, of property of the
guarantor has been appointed and has not ceased to act
under that appointment; or
(b) a security interest in PPSA retention of title property.
283CE Offences for failure to comply with statutory duties
The guarantor commits an offence if it intentionally or recklessly
contravenes paragraph 283CB(b) or section 283CC.
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Chapter 2L Debentures
Part 2L.4 Trustee
Section 283DA
14 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2L.4—Trustee
283DA Trustee’s duties
The trustee of a trust deed entered into under section 283AA must:
(a) exercise reasonable diligence to ascertain whether the
property of the borrower and of each guarantor that is or
should be available (whether by way of security or
otherwise) will be sufficient to repay the amount deposited or
lent when it becomes due; and
(b) exercise reasonable diligence to ascertain whether the
borrower or any guarantor has committed any breach of:
(i) the terms of the debentures; or
(ii) the provisions of the trust deed or this Chapter; and
(c) do everything in its power to ensure that the borrower or a
guarantor remedies any breach known to the trustee of:
(i) any term of the debentures; or
(ii) any provision of the trust deed or this Chapter;
unless the trustee is satisfied that the breach will not
materially prejudice the debenture holders’ interests or any
security for the debentures; and
(e) notify ASIC as soon as practicable if:
(i) the borrower has not complied with section 283BE,
283BF or subsection 318(1) or (4); or
(ii) a guarantor has not complied with section 283CC; and
(f) notify ASIC and the borrower as soon as practicable if the
trustee discovers that it cannot be a trustee under
section 283AC; and
(g) give the debenture holders a statement explaining the effect
of any proposal that the borrower submits to the debenture
holders before any meeting that:
(i) the Court calls in relation to a scheme under
subsection 411(1) or (1A); or
(ii) the trustee calls under subsection 283EB(1); and
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Section 283DB
Corporations Act 2001 15
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(h) comply with any directions given to it at a debenture holders’
meeting referred to in section 283EA, 283EB or 283EC
unless:
(i) the trustee is of the opinion that the direction is
inconsistent with the terms of the debentures or the
provisions of the trust deed or this Act or is otherwise
objectionable; and
(ii) has either obtained, or is in the process of obtaining, an
order from the Court under section 283HA setting aside
or varying the direction; and
(i) apply to the Court for an order under section 283HB if the
borrower requests it to do so.
Note 1: Paragraph (g)—Section 411 relates to compromises and arrangements.
Note 2: Section 283DC deals with indemnification in respect of a trustee’s
liability to the debenture holders.
283DB Exemptions and indemnifications of trustee from liability
(1) A term of a debenture, provision of a trust deed or a term of a
contract with holders of debentures secured by a trust deed, is void
in so far as the term or provision would have the effect of:
(a) exempting a trustee from liability for breach of
section 283DA for failure to show the degree of care and
diligence required of it as trustee; or
(b) indemnifying the trustee against that liability;
unless the term or provision:
(c) releases the trustee from liability for something done or
omitted to be done before the release is given; or
(d) enables a meeting of debenture holders to approve the release
of the trustee from liability for something done or omitted to
be done before the release is given.
(2) For the purposes of paragraph (1)(d):
(a) a release is approved if the debenture holders who vote for
the resolution hold 75% of the nominal value of the
debentures held by all the debenture holders who attend the
meeting and vote on the resolution; and
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Section 283DC
16 Corporations Act 2001
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(b) a debenture holder attends the meeting and votes on the
resolution if:
(i) they attend the meeting in person and vote on the
resolution; or
(ii) if proxies are permitted—they are represented at the
meeting by a proxy and the proxy votes on the
resolution.
283DC Indemnity
The trustee is not liable for anything done or omitted to be done in
accordance with a direction given to it by the debenture holders at
any meeting called under section 283EA, 283EB or 283EC.
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Section 283EA
Corporations Act 2001 17
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Part 2L.5—Meetings of debenture holders
283EA Borrower’s duty to call meeting
Duty to call meeting
(1) The borrower must call a meeting of debenture holders if:
(a) debenture holders who together hold 10% or more of the
nominal value of the issued debentures to which the trust
relates direct the borrower to do so; and
(b) the direction is given to the borrower in writing at its
registered office; and
(c) the purpose of the meeting is to:
(i) consider the financial statements that were laid before
the last AGM of the borrower; or
(ii) give the trustee directions in relation to the exercise of
any of its powers.
Note: The trustee usually must comply with any directions given to it by the
debenture holders at the meeting (see paragraph 283DA(h)).
Duty to give notification of meeting
(2) If the borrower is required to call a meeting, it must give notice of
the time and place of the meeting to:
(a) the trustee; and
(b) the borrower’s auditor; and
(c) each of the debenture holders whose names are entered on
the register of debenture holders.
Notice to joint holders of a debenture must be given to the joint
holder named first in the register of debenture holders.
(3) The borrower may give the notice to a debenture holder:
(a) personally; or
(b) by sending it by post to the address for the debenture holder
in the register of debenture holders; or
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Part 2L.5 Meetings of debenture holders
Section 283EB
18 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) by sending it to the fax number or electronic address (if any)
nominated by the debenture holder; or
(d) by any other means that the trust deed or the terms of the
debentures permit.
Note: A defect in the notice may not invalidate a meeting (see section 1322).
When notice by post or fax is given
(4) A notice of meeting sent to a debenture holder is taken to be given:
(a) 3 days after it is posted, if it is posted; or
(b) on the business day after it is sent, if it is sent by fax or other
electronic means;
unless the trust deed or the terms of the debentures provide
otherwise.
283EB Trustee’s power to call meeting
Trustee may call meeting in event of breach
(1) If the borrower or a guarantor fails to remedy any breach of the
terms of the debentures or provisions of the trust deed or this
Chapter when required by the trustee, the trustee may:
(a) call a meeting of debenture holders; and
(b) inform the debenture holders of the failure at the meeting;
and
(c) submit proposals for protection of the debenture holders’
interests to the meeting; and
(d) ask for directions from the debenture holders in relation to
the matter.
Trustee may appoint person to chair meeting
(2) The trustee may appoint a person to chair a meeting of debenture
holders called under subsection (1). If the trustee does not exercise
this power, the debenture holders present at the meeting may
appoint a person to chair the meeting.
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Section 283EC
Corporations Act 2001 19
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283EC Court may order meeting
(1) Without limiting section 283HA or 283HB, the Court may make an
order under either of those sections for a meeting of all or any of
the debenture holders to be held to give directions to the trustee.
The order may direct the trustee to:
(a) place before the debenture holders any information
concerning their interests; and
(b) place before the debenture holders any proposals to protect
their interests that the Court directs or the trustee considers
appropriate; and
(c) obtain the debenture holders’ directions concerning the
protection of their interests.
(2) The meeting is to be held and conducted in the manner the Court
directs. The trustee may appoint a person to chair the meeting. If
the trustee does not exercise this power, the debenture holders
present at the meeting may appoint a person to chair the meeting.
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Chapter 2L Debentures
Part 2L.6 Civil liability
Section 283F
20 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2L.6—Civil liability
283F Civil liability for contravening this Chapter
(1) A person who suffers loss or damage because a person contravenes
a provision of this Chapter may recover the amount of the loss or
damage from:
(a) the person who contravened the provision; or
(b) a person involved in the contravention.
This is so even if the person did not commit, and was not involved
in, the contravention.
(2) An action under subsection (1) may begin at any time within 6
years after the day on which the cause of action arose.
(3) This Part does not affect any liability that a person has under any
other law.
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ASIC powers Part 2L.7
Section 283GA
Corporations Act 2001 21
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Part 2L.7—ASIC powers
283GA ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) The exemption or declaration may do all or any of the following:
(a) apply to all or specified provisions of this Chapter;
(b) apply to all persons, specified persons, or a specified class of
persons;
(c) relate to all debentures, specified debentures or a specified
class of debentures;
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to
references in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
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Part 2L.7 ASIC powers
Section 283GB
22 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
283GB ASIC may approve body corporate to be trustee
(1) ASIC may approve a body corporate in writing to be a trustee for
the purposes of paragraph 283AC(1)(f). The approval may allow
the body corporate to act as trustee:
(a) in any circumstances; or
(b) in relation to a particular borrower or particular class of
borrower; or
(c) in relation to a particular trust deed;
and may be given subject to conditions.
(2) ASIC must publish notice of the approval in the Gazette.
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Court Part 2L.8
Section 283HA
Corporations Act 2001 23
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Part 2L.8—Court
283HA General Court power to give directions and determine
questions
If the trustee applies to the Court for any direction in relation to the
performance of the trustee’s functions or to determine any question
in relation to the interests of the debenture holders, the Court may
give any direction and make any declaration or determination in
relation to the matter that the Court considers appropriate. The
Court may also make ancillary or consequential orders.
Note: Under this section, the Court may order a meeting of debenture
holders to be held, see section 283EC.
283HB Specific Court powers
(1) If the trustee or ASIC applies to the Court, the Court may make
any or all of the following orders:
(a) an order staying an action or other civil proceedings before a
court by or against the borrower or a guarantor body;
(b) an order restraining the borrower from paying any money to
the debenture holders or any holders of any other class of
debentures;
(c) an order that any security for the debentures be enforceable
immediately or at the time the Court directs (even if the
debentures are irredeemable or redeemable only on the
happening of a contingency);
(d) an order appointing a receiver of any property constituting
security for the debentures;
(e) an order restricting advertising by the borrower for deposits
or loans;
(f) an order restricting borrowing by the borrower;
(g) any other order that the Court considers appropriate to
protect the interests of existing or prospective debenture
holders.
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Part 2L.8 Court
Section 283HB
24 Corporations Act 2001
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(2) In deciding whether to make an order under subsection (1), the
Court must have regard to:
(a) the ability of the borrower and each guarantor to repay the
amount deposited or lent as and when it becomes due; and
(b) any contravention of section 283GA by the borrower; and
(c) the interests of the borrower’s members and creditors; and
(d) the interests of the members of each of the guarantors.
Note: The Court may order a meeting of debenture holders to be held (see
section 283EC).
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Location of other debenture provisions Part 2L.9
Section 283I
Corporations Act 2001 25
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2L.9—Location of other debenture provisions
283I Signpost to other debenture provisions
There are other rules relating to debentures in paragraph 124(1)(b)
and section 563AAA.
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Chapter 2M Financial reports and audit
Part 2M.1 Overview
Section 285
26 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2M—Financial reports and audit
Part 2M.1—Overview
285 Overview of obligations under this Chapter
Obligations under this Chapter
(1) Under this Chapter, all companies, registered schemes and
disclosing entities must keep financial records (see
sections 286-291)—and some must prepare financial reports (see
sections 292-323D). All those that have to prepare financial reports
have to prepare them annually; disclosing entities have to prepare
half-year financial reports as well. The following table sets out
what is involved in annual financial reporting:
Annual financial reporting
steps sections comments
1 prepare financial report s. 295 The financial report
includes:
• financial statements
• disclosures and notes
• directors’ declaration.
2 prepare directors’ report s. 298 Unless the report relates to a
company limited by
guarantee, it has a general
component (sections 299 and
299A), a specific component
(section 300) and a special
component for listed
companies (section 300A).
See section 285A for an
overview of the obligations
of companies limited by
guarantee.
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Section 285
Corporations Act 2001 27
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Annual financial reporting
steps sections comments
3 have the financial report
audited and obtain
auditor’s report
s. 301, 307, 308 A small proprietary company
preparing a financial report
in response to a shareholder
direction under s. 293 only
has to have an audit if the
direction asks for it.
There are similar rules for
companies limited by
guarantee (see section 285A
for an overview).
Under s. 312, officers must
assist the auditor in the
conduct of the audit.
ASIC may use its exemption
powers under s. 340 and 341
to relieve large proprietary
companies from the audit
requirements in appropriate
cases (s. 342(2) and (3)).
4 provide the financial
report, directors’ report
and auditor’s report to
members
s. 314 Unless the report relates to a
company limited by
guarantee, a concise
financial report may be
provided to members instead
of the full financial
statements
(subsections 314(1) and (2)).
For deadline, see
subsections 315(1) to (4).
See section 285A for an
overview of the obligations
of companies limited by
guarantee.
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Section 285A
28 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Annual financial reporting
steps sections comments
5 lodge the financial
report, directors’ report
and auditor’s report with
ASIC
s. 319 For deadline see s. 319(3).
Companies that have the
benefit of the grandfathering
in the relevant Part 10.1
transitionals do not have to
lodge.
6 [public companies only]
lay financial report,
directors’ report and
auditor’s report before
AGM
s. 317 For the AGM deadline see s.
250N.
Application to disclosing entities
(2) This Chapter covers all disclosing entities:
(a) incorporated or formed in Australia; and
(b) whether or not they are companies or registered schemes.
Application to registered schemes
(3) For the purposes of applying this Chapter to a registered scheme:
(a) the scheme’s responsible entity is responsible for the
performance of obligations in respect of the scheme; and
(b) the directors and officers of the responsible entity are taken
to be the directors and officers of the scheme; and
(c) the debts incurred in operating the scheme are taken to be the
debts of the scheme.
285A Overview of obligations of companies limited by guarantee
The following table sets out what is involved in annual financial
reporting for companies limited by guarantee:
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Section 285A
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Annual financial reporting for companies limited by guarantee
Item Nature of company Obligations Sections
1 Small company limited by
guarantee.
No obligation to do any of the
following unless required to
do so under a member
direction or ASIC direction:
• prepare a financial report;
• prepare a directors’ report;
• have financial report audited;
• notify members of reports.
Sections 292,
301 and 316A
2 Company limited by
guarantee with annual
revenue or, if part of a
consolidated entity, annual
consolidated revenue of less
than $1 million.
Must prepare a financial
report.
Must prepare a directors’
report, although less detailed
than that required of other
companies.
Need not have financial report
audited unless a
Commonwealth company, or a
subsidiary of a
Commonwealth company or
Commonwealth authority. If
the company does not have
financial report audited, it
must have financial report
reviewed.
Must give reports to any
member who elects to receive
them.
Sections 292,
298, 300B,
301, 316A
3 Company limited by
guarantee with annual
revenue or, if part of a
consolidated entity, annual
consolidated revenue of $1
million or more.
Must prepare a financial
report.
Must prepare a directors’
report, although less detailed
than that required of other
companies.
Sections 292,
298, 300B,
301, 316A
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30 Corporations Act 2001
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Annual financial reporting for companies limited by guarantee
Item Nature of company Obligations Sections
Must have financial report
audited.
Must give reports to any
member who elects to receive
them.
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Financial records Part 2M.2
Section 286
Corporations Act 2001 31
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Part 2M.2—Financial records
286 Obligation to keep financial records
(1) A company, registered scheme or disclosing entity must keep
written financial records that:
(a) correctly record and explain its transactions and financial
position and performance; and
(b) would enable true and fair financial statements to be prepared
and audited.
The obligation to keep financial records of transactions extends to
transactions undertaken as trustee.
Note: Section 9 defines financial records.
Period for which records must be retained
(2) The financial records must be retained for 7 years after the
transactions covered by the records are completed.
Strict liability offences
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
287 Language requirements
(1) The financial records may be kept in any language.
(2) An English translation of financial records not kept in English must
be made available within a reasonable time to a person who:
(a) is entitled to inspect the records; and
(b) asks for the English translation.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 288
32 Corporations Act 2001
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288 Physical format
(1) If financial records are kept in electronic form, they must be
convertible into hard copy. Hard copy must be made available
within a reasonable time to a person who is entitled to inspect the
records.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
289 Place where records are kept
(1) A company, registered scheme or disclosing entity may decide
where to keep the financial records.
Records kept outside this jurisdiction
(2) If financial records about particular matters are kept outside this
jurisdiction, sufficient written information about those matters
must be kept in this jurisdiction to enable true and fair financial
statements to be prepared. The company, registered scheme or
disclosing entity must give ASIC written notice in the prescribed
form of the place where the information is kept.
(2A) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) ASIC may direct a company, registered scheme or disclosing entity
to produce specified financial records that are kept outside this
jurisdiction.
(4) The direction must:
(a) be in writing; and
(b) specify a place in this jurisdiction where the records are to be
produced (the place must be reasonable in the
circumstances); and
(c) specify a day (at least 14 days after the direction is given) by
which the records are to be produced.
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Section 290
Corporations Act 2001 33
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290 Director access
Personal access
(1) A director of a company, registered scheme or disclosing entity has
a right of access to the financial records at all reasonable times.
Court order for inspection on director’s behalf
(2) On application by a director, the Court may authorise a person to
inspect the financial records on the director’s behalf.
(3) A person authorised to inspect records may make copies of the
records unless the Court orders otherwise.
(4) The Court may make any other orders it consider appropriate,
including either or both of the following:
(a) an order limiting the use that a person who inspects the
records may make of information obtained during the
inspection;
(b) an order limiting the right of a person who inspects the
records to make copies in accordance with subsection (3).
291 Signposts to other relevant provisions
The following table sets out other provisions that are relevant to
access to financial records.
Other provisions relevant to access to financial records
1 section 247A
members
A member may apply to the Court for an order to
inspect the records.
2 section 310
auditor
The auditor has a right of access to the records.
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34 Corporations Act 2001
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Other provisions relevant to access to financial records
3 section 431
controllers
A controller of a corporation’s property (for example, a receiver or receiver and manager) has a right of
access to the records.
4 sections 28 to 39 of
the ASIC Act
ASIC
ASIC has power to inspect the records. It also has
power under subsection 289(3) of this Act to call for
the production of financial records kept outside this
jurisdiction.
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Annual financial reports and directors’ reports Division 1
Section 292
Corporations Act 2001 35
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Part 2M.3—Financial reporting
Division 1—Annual financial reports and directors’ reports
292 Who has to prepare annual financial reports and directors’
reports
(1) A financial report and a directors’ report must be prepared for each
financial year by:
(a) all disclosing entities; and
(b) all public companies; and
(c) all large proprietary companies; and
(d) all registered schemes.
Note: This Chapter only applies to disclosing entities incorporated or formed
in Australia (see subsection 285(2)).
Small proprietary companies
(2) A small proprietary company has to prepare the financial report
and directors’ report only if:
(a) it is directed to do so under section 293 or 294; or
(b) it was controlled by a foreign company for all or part of the
year and it is not consolidated for that period in financial
statements for that year lodged with ASIC by:
(i) a registered foreign company; or
(ii) a company, registered scheme or disclosing entity.
The rest of this Part does not apply to any other small proprietary
company.
Small companies limited by guarantee
(3) Despite subsection (1), a small company limited by guarantee has
to prepare the financial report and directors’ report only if it is
directed to do so under section 294A or 294B. The rest of this Part
does not apply to any other small company limited by guarantee.
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Division 1 Annual financial reports and directors’ reports
Section 293
36 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
293 Small proprietary company—shareholder direction
(1) Shareholders with at least 5% of the votes in a small proprietary
company may give the company a direction to:
(a) prepare a financial report and directors’ report for a financial
year; and
(b) send them to all shareholders.
(2) The direction must be:
(a) signed by the shareholders giving the direction; and
(b) made no later than 12 months after the end of the financial
year concerned.
(3) The direction may specify all or any of the following:
(a) that the financial report does not have to comply with some
or all of the accounting standards;
(b) that a directors’ report or a part of that report need not be
prepared;
(c) that the financial report is to be audited.
294 Small proprietary company—ASIC direction
(1) ASIC may give a small proprietary company a direction to comply
with requirements of this Division and Divisions 3, 4, 5 and 6 for a
financial year.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The direction may be general or may specify the particular
requirements that the company is to comply with.
(3) The direction must specify the date by which the documents have
to be prepared, sent or lodged. The date must be a reasonable one
in view of the nature of the direction.
(4) The direction must:
(a) be made in writing; and
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(b) specify the financial year concerned; and
(c) be made no later than 6 years after the end of that financial
year.
294A Small company limited by guarantee—member direction
(1) Members with at least 5% of the votes in a small company limited
by guarantee may give the company a direction to:
(a) prepare a financial report and directors’ report for a financial
year; and
(b) send them to members who have elected to receive them
under section 316A.
(2) The direction must be:
(a) signed by the members giving the direction; and
(b) made no later than 12 months after the end of the financial
year concerned.
(3) The direction may specify all or any of the following:
(a) that the financial report does not have to comply with some
or all of the accounting standards;
(b) that a directors’ report or a part of that report need not be
prepared;
(c) that the financial report is to be audited or reviewed.
294B Small company limited by guarantee—ASIC direction
(1) ASIC may give a small company limited by guarantee a direction
to comply with the requirements of this Division and Divisions 3,
4, 5 and 6 for a financial year.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) The direction may be general or may specify the particular
requirements that the company is to comply with.
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Section 295
38 Corporations Act 2001
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(4) The direction must specify the date by which the documents have
to be prepared, sent or lodged. The date must be a reasonable one
in view of the nature of the direction.
(5) The direction must:
(a) be made in writing; and
(b) specify the financial year concerned; and
(c) be made no later than 6 years after the end of that financial
year.
(6) A direction given under subsection (1) is not a legislative
instrument.
295 Contents of annual financial report
Basic contents
(1) The financial report for a financial year consists of:
(a) the financial statements for the year; and
(b) the notes to the financial statements; and
(c) the directors’ declaration about the statements and notes.
Financial statements
(2) The financial statements for the year are:
(a) unless paragraph (b) applies—the financial statements in
relation to the company, registered scheme or disclosing
entity required by the accounting standards; or
(b) if the accounting standards require the company, registered
scheme or disclosing entity to prepare financial statements in
relation to a consolidated entity—the financial statements in
relation to the consolidated entity required by the accounting
standards.
Notes to financial statements
(3) The notes to the financial statements are:
(a) disclosures required by the regulations; and
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(b) notes required by the accounting standards; and
(c) any other information necessary to give a true and fair view
(see section 297).
Directors’ declaration
(4) The directors’ declaration is a declaration by the directors:
(c) whether, in the directors’ opinion, there are reasonable
grounds to believe that the company, registered scheme or
disclosing entity will be able to pay its debts as and when
they become due and payable; and
(ca) if the company, registered scheme or disclosing entity has
included in the notes to the financial statements, in
compliance with the accounting standards, an explicit and
unreserved statement of compliance with international
financial reporting standards—that this statement has been
included in the notes to the financial statements; and
(d) whether, in the directors’ opinion, the financial statement and
notes are in accordance with this Act, including:
(i) section 296 (compliance with accounting standards);
and
(ii) section 297 (true and fair view); and
(e) if the company, disclosing entity or registered scheme is
listed—that the directors have been given the declarations
required by section 295A.
Note: See paragraph 285(3)(c) for the reference to the debts of a registered
scheme.
(5) The declaration must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the date on which the declaration is made; and
(c) be signed by a director.
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Division 1 Annual financial reports and directors’ reports
Section 295A
40 Corporations Act 2001
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295A Declaration in relation to listed entity’s financial statements by
chief executive officer and chief financial officer
(1) If the company, disclosing entity or registered scheme is listed, the
directors’ declaration under subsection 295(4) must be made only
after each person who performs:
(a) a chief executive function; or
(b) a chief financial officer function;
in relation to the company, disclosing entity or registered scheme
has given the directors a declaration under subsection (2) of this
section.
(2) The declaration is a declaration whether, in the person’s opinion:
(a) the financial records of the company, disclosing entity or
registered scheme for the financial year have been properly
maintained in accordance with section 286; and
(b) the financial statements, and the notes referred to in
paragraph 295(3)(b), for the financial year comply with the
accounting standards; and
(c) the financial statements and notes for the financial year give
a true and fair view (see section 297); and
(d) any other matters that are prescribed by the regulations for
the purposes of this paragraph in relation to the financial
statements and the notes for the financial year are satisfied.
(3) The declaration must:
(a) be made in writing; and
(b) specify the date on which the declaration is made; and
(c) specify the capacity in which the person is making the
declaration; and
(d) be signed by the person making the declaration.
A person who performs both a chief executive function and a chief
financial officer function may make a single declaration in both
capacities.
(4) A person performs a chief executive function in relation to the
company, disclosing entity or registered scheme if the person is the
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person who is primarily and directly responsible to the directors for
the general and overall management of the company, disclosing
entity or registered scheme.
(5) If there is no one person who performs a chief executive function
in relation to the company, disclosing entity or registered scheme
under subsection (4), a person performs a chief executive function
in relation to the company, disclosing entity or registered scheme if
the person is one of a number of people who together are primarily
and directly responsible to the directors for the general and overall
management of the company, disclosing entity or registered
scheme.
(6) A person performs a chief financial officer function in relation to
the company, disclosing entity or registered scheme if that person
is the person who is:
(a) primarily responsible for financial matters in relation to the
company, disclosing entity or registered scheme; and
(b) directly responsible for those matters to either:
(i) the directors; or
(ii) the person or persons who perform the chief executive
function in relation to the company.
(7) If there is no one person who performs a chief financial officer
function in relation to the company, disclosing entity or registered
scheme under subsection (6), a person performs a chief financial
officer function in relation to the company, disclosing entity or
registered scheme if the person is one of a number of people who
together are:
(a) primarily responsible for financial matters in relation to the
company, disclosing entity or registered scheme; and
(b) directly responsible for those matters to either:
(i) the directors; or
(ii) the person or persons who perform the chief executive
function in relation to the company.
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Division 1 Annual financial reports and directors’ reports
Section 296
42 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) Nothing in this section derogates from the responsibility that a
director has for ensuring that financial statements comply with this
Act.
296 Compliance with accounting standards and regulations
(1) The financial report for a financial year must comply with the
accounting standards.
Small proprietary companies
(1A) Despite subsection (1), the financial report of a small proprietary
company does not have to comply with particular accounting
standards if:
(a) the report is prepared in response to a shareholder direction
under section 293; and
(b) the direction specifies that the report does not have to comply
with those standards.
Small companies limited by guarantee
(1B) Despite subsection (1), the financial report of a small company
limited by guarantee does not have to comply with particular
accounting standards if:
(a) the report is prepared in response to a member direction
under section 294A; and
(b) the direction specifies that the report does not have to comply
with those standards.
Further requirements
(2) The financial report must comply with any further requirements in
the regulations.
297 True and fair view
The financial statements and notes for a financial year must give a
true and fair view of:
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(a) the financial position and performance of the company,
registered scheme or disclosing entity; and
(b) if consolidated financial statements are required—the
financial position and performance of the consolidated entity.
This section does not affect the obligation under section 296 for a
financial report to comply with accounting standards.
Note: If the financial statements and notes prepared in compliance with the
accounting standards would not give a true and fair view, additional
information must be included in the notes to the financial statements
under paragraph 295(3)(c).
298 Annual directors’ report
(1) The company, registered scheme or disclosing entity must prepare
a directors’ report for each financial year.
(1AA) Except in the case of a company limited by guarantee, the report
must include:
(a) the general information required by sections 299 (all entities)
and 299A (additional requirements for listed entities); and
(b) the specific information required by sections 300 and 300A;
and
(c) a copy of the auditor’s declaration under section 307C in
relation to the audit for the financial year.
(1AB) In the case of a company limited by guarantee, the report must
include:
(a) the general information required by section 300B; and
(b) a copy of the auditor’s declaration under section 307C in
relation to the audit or review for the financial year.
(1A) If the financial report for a financial year includes additional
information under paragraph 295(3)(c) (information included to
give true and fair view of financial position and performance), the
directors’ report for the financial year must also:
(a) set out the directors’ reasons for forming the opinion that the
inclusion of that additional information was necessary to give
the true and fair view required by section 297; and
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44 Corporations Act 2001
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(b) specify where that additional information can be found in the
financial report.
(2) The report must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the date on which the report is made; and
(c) be signed by a director.
Small proprietary companies
(3) A small proprietary company does not have to comply with
subsection (1) for a financial year if:
(a) it is preparing financial statements for that year in response to
a shareholder direction under section 293; and
(b) the direction specified that a directors’ report need not be
prepared.
Small companies limited by guarantee
(4) A small company limited by guarantee does not have to comply
with subsection (1) for a financial year if:
(a) it is preparing the financial statements for that year in
response to a member direction under section 294A; and
(b) the direction specified that a directors’ report need not be
prepared.
299 Annual directors’ report—general information
General information about operations and activities
(1) The directors’ report for a financial year must:
(a) contain a review of operations during the year of the entity
reported on and the results of those operations; and
(b) give details of any significant changes in the entity’s state of
affairs during the year; and
(c) state the entity’s principal activities during the year and any
significant changes in the nature of those activities during the
year; and
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(d) give details of any matter or circumstance that has arisen
since the end of the year that has significantly affected, or
may significantly affect:
(i) the entity’s operations in future financial years; or
(ii) the results of those operations in future financial years;
or
(iii) the entity’s state of affairs in future financial years; and
(e) refer to likely developments in the entity’s operations in
future financial years and the expected results of those
operations; and
(f) if the entity’s operations are subject to any particular and
significant environmental regulation under a law of the
Commonwealth or of a State or Territory—give details of the
entity’s performance in relation to environmental regulation.
(2) The entity reported on is:
(a) the company, registered scheme or disclosing entity (if
consolidated financial statements are not required); or
(b) the consolidated entity (if consolidated financial statements
are required).
Prejudicial information need not be disclosed
(3) The report may omit material that would otherwise be included
under paragraph (1)(e) if it is likely to result in unreasonable
prejudice to:
(a) the company, registered scheme or disclosing entity; or
(b) if consolidated financial statements are required—the
consolidated entity or any entity (including the company,
registered scheme or disclosing entity) that is part of the
consolidated entity.
If material is omitted, the report must say so.
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Section 299A
46 Corporations Act 2001
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299A Annual directors’ report—additional general requirements for
listed entities
(1) The directors’ report for a financial year for a company, registered
scheme or disclosing entity that is listed must also contain
information that members of the listed entity would reasonably
require to make an informed assessment of:
(a) the operations of the entity reported on; and
(b) the financial position of the entity reported on; and
(c) the business strategies, and prospects for future financial
years, of the entity reported on.
(2) The entity reported on is:
(a) the company, registered scheme or disclosing entity that is
listed (if consolidated financial statements are not required);
or
(b) the consolidated entity (if consolidated financial statements
are required).
(3) The report may omit material that would otherwise be included
under paragraph (1)(c) if it is likely to result in unreasonable
prejudice to:
(a) the company, registered scheme or disclosing entity; or
(b) if consolidated financial statements are required—the
consolidated entity or any entity (including the company,
registered scheme or disclosing entity) that is part of the
consolidated entity.
If material is omitted, the report must say so.
300 Annual directors’ report—specific information
(1) The directors’ report for a financial year must include details of:
(a) dividends or distributions paid to members during the year;
and
(b) dividends or distributions recommended or declared for
payment to members, but not paid, during the year; and
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(c) the name of each person who has been a director of the
company, registered scheme or disclosing entity at any time
during or since the end of the year and the period for which
they were a director; and
(ca) the name of each person who:
(i) is an officer of the company, registered scheme or
disclosing entity at any time during the year; and
(ii) was a partner in an audit firm, or a director of an audit
company, that is an auditor of the company, disclosing
entity or registered scheme for the year; and
(iii) was such a partner or director at a time when the audit
firm or the audit company undertook an audit of the
company, disclosing entity or registered scheme; and
(d) options that are:
(i) granted over unissued shares or unissued interests
during or since the end of the year; and
(ii) granted to any of the directors or any of the 5 most
highly remunerated officers of the company (other than
the directors); and
(iii) granted to them as part of their remuneration;
(see subsections (3), (4) and (5)); and
(e) unissued shares or interests under option as at the day the
report is made (see subsections (3) and (6)); and
(f) shares or interests issued during or since the end of the year
as a result of the exercise of an option over unissued shares
or interests (see subsections (3) and (7)); and
(g) indemnities given and insurance premiums paid during or
since the end of the year for a person who is or has been an
officer or auditor (see subsections (8) and (9)).
Public companies, listed companies and registered schemes must
include additional information under subsections (10), (11),
(11AA), (11A), (11B), (12) and (13) of this section and
section 300A.
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(2) Details do not have to be included in the directors’ report under
this section if they are included in the company’s financial report
for the financial year.
(2A) If subsection (2) is relied on to not include in the directors’ report
for a financial year details that would otherwise be required to be
included in that report under paragraph (11B)(a) or (11C)(b), that
report must specify, in the section headed “Non-audit services”,
where those details may be found in the company’s financial report
for that financial year.
(3) Paragraphs (1)(d), (e) and (f) cover:
(a) options over unissued shares and interests of the company,
registered scheme or disclosing entity; and
(b) if consolidated financial statements are required—options
over unissued shares and interests of any controlled entity
that is a company, registered scheme or disclosing entity.
Options details
(5) The details of an option granted are:
(a) the company, registered scheme or disclosing entity granting
the option; and
(b) the name of the person to whom the option is granted; and
(c) the number and class of shares or interests over which the
option is granted.
(6) The details of unissued shares or interests under option are:
(a) the company, registered scheme or disclosing entity that will
issue shares or interests when the options are exercised; and
(b) the number and classes of those shares or interests; and
(c) the issue price, or the method of determining the issue price,
of those shares or interests; and
(d) the expiry date of the options; and
(e) any rights that option holders have under the options to
participate in any share issue or interest issue of the
company, registered scheme or disclosing entity or of any
other body corporate or registered scheme.
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Shares or interests issued as a result of exercise of option
(7) The details of shares or interests issued as a result of the exercise
of an option are:
(a) the company, registered scheme or disclosing entity issuing
the shares or interests; and
(b) the number of shares or interests issued; and
(c) if the company, registered scheme or disclosing entity has
different classes of shares or interests—the class to which
each of those shares or interests belongs; and
(d) the amount unpaid on each of those shares or interests; and
(e) the amount paid, or agreed to be considered as paid, on each
of those shares or interests.
Indemnities and insurance premiums for officers or auditors
(8) The report for a company must include details of:
(a) any indemnity that is given to a current or former officer or
auditor against a liability and that is covered by
subsection 199A(2) or (3), or any relevant agreement under
which an officer or auditor may be given an indemnity of that
kind; and
(b) any premium that is paid, or agreed to be paid, for insurance
against a current or former officer’s or auditor’s liability for
legal costs.
Note: Sections 199A and 199B contain general prohibitions against giving
certain indemnities and paying certain insurance premiums. This
subsection requires transactions that are exceptions to these
prohibitions to be reported.
(9) The details required under subsection (8) are:
(a) for an officer—their name or the class of officer to which
they belong or belonged; and
(b) for an auditor—their name; and
(c) the nature of the liability; and
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(d) for an indemnity given—the amount the company paid and
any other action the company took to indemnify the officer or
auditor; and
(e) for an agreement to indemnify—the amount that the relevant
agreement requires the company to pay and any other action
the relevant agreement requires the company to take to
indemnify the officer or auditor; and
(f) for an insurance premium—the amount of the premium.
The report need not give details of the nature of the liability
covered by, or the amount of the premium payable under, a
contract of insurance to the extent that disclosure of those details is
prohibited by the insurance contract.
Special rules for public companies
(10) The report for a public company that is not a wholly-owned
subsidiary of another company must also include details of:
(a) each director’s qualifications, experience and special
responsibilities; and
(b) the number of meetings of the board of directors held during
the year and each director’s attendance at those meetings; and
(c) the number of meetings of each board committee held during
the year and each director’s attendance at those meetings; and
(d) the qualifications and experience of each person who is a
company secretary of the company as at the end of the year.
Special rules for listed companies and schemes
(11) The report for a listed company must also include the following
details for each director:
(a) their relevant interests in shares of the company or a related
body corporate;
(b) their relevant interests in debentures of, or interests in a
registered scheme made available by, the company or a
related body corporate;
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(c) their rights or options over shares in, debentures of or
interests in a registered scheme made available by, the
company or a related body corporate;
(d) contracts:
(i) to which the director is a party or under which the
director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, or
debentures of or interests in a registered scheme made
available by the company or a related body corporate;
(e) all directorships of other listed companies held by the
director at any time in the 3 years immediately before the end
of the financial year and the period for which each
directorship has been held.
Note: Directors must also disclose interests of these kinds to a relevant
market operator under section 205G as they are acquired.
(11AA) If an individual plays a significant role in the audit of a listed
company or listed registered scheme for the financial year in
reliance on an approval granted under section 324DAA, the report
for the company or scheme must also include details of, and
reasons for, the approval.
(11A) If a registered company auditor plays a significant role in the audit
of a listed company for the financial year in reliance on a
declaration made under section 342A, the report for the company
must also include details of the declaration.
Listed companies—non-audit services and auditor independence
(11B) The report for a listed company must also include the following in
relation to each auditor:
(a) details of the amounts paid or payable to the auditor for
non-audit services provided, during the year, by the auditor
(or by another person or firm on the auditor’s behalf);
(b) a statement whether the directors are satisfied that the
provision of non-audit services, during the year, by the
auditor (or by another person or firm on the auditor’s behalf)
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is compatible with the general standard of independence for
auditors imposed by this Act;
(c) a statement of the directors’ reasons for being satisfied that
the provision of those non-audit services, during the year, by
the auditor (or by another person or firm on the auditor’s
behalf) did not compromise the auditor independence
requirements of this Act.
These details and statements must be included in the directors’
report under the heading “Non-audit services”. If consolidated
financial statements are required, the details and statements must
relate to amounts paid or payable to the auditor by, and non-audit
services provided to, any entity (including the company, registered
scheme or disclosing entity) that is part of the consolidated entity.
(11C) For the purposes of paragraph (11B)(a), the details of amounts paid
or payable to an auditor for non-audit services provided, during the
year, by the auditor (or by another person or firm on the auditor’s
behalf) are:
(a) the name of the auditor; and
(b) the dollar amount that:
(i) the listed company; or
(ii) if consolidated financial statements are required—any
entity that is part of the consolidated entity;
paid, or is liable to pay, for each of those non-audit services.
(11D) The statements under paragraphs (11B)(b) and (c) must be made in
accordance with:
(a) advice provided by the listed company’s audit committee if
the company has an audit committee; or
(b) a resolution of the directors of the listed company if
paragraph (a) does not apply.
(11E) For the purposes of subsection (11D), a statement is taken to be
made in accordance with advice provided by the company’s audit
committee only if:
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(a) the statement is consistent with that advice and does not
contain any material omission of material included in that
advice; and
(b) the advice is endorsed by a resolution passed by the members
of the audit committee; and
(c) the advice is written advice signed by a member of the audit
committee on behalf of the audit committee and given to the
directors.
Special rules for listed registered schemes
(12) The report for a registered scheme whose interests are quoted on a
prescribed financial market must also include the following details
for each director of the company that is the responsible entity for
the scheme:
(a) their relevant interests in interests in the scheme;
(b) their rights or options over interests in the scheme;
(c) contracts to which the director is a party or under which the
director is entitled to a benefit and that confer a right to call
for or deliver interests in the scheme.
Special rules for registered schemes
(13) The report for a registered scheme must also include details of:
(a) the fees paid to the responsible entity and its associates out of
scheme property during the financial year; and
(b) the number of interests in the scheme held by the responsible
entity or its associates as at the end of the financial year; and
(c) interests in the scheme issued during the financial year; and
(d) withdrawals from the scheme during the financial year; and
(e) the value of the scheme’s assets as at the end of the financial
year, and the basis for the valuation; and
(f) the number of interests in the scheme as at the end of the
financial year.
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Section 300A
54 Corporations Act 2001
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Proceedings on behalf of a company
(14) The report for a company must also include the following details of
any application for leave under section 237 made in respect of the
company:
(a) the applicant’s name; and
(b) a statement whether leave was granted.
(15) The report for a company must also include the following details of
any proceedings that a person has brought or intervened in on
behalf of the company with leave under section 237:
(a) the person’s name;
(b) the names of the parties to the proceedings;
(c) sufficient information to enable members to understand the
nature and status of the proceedings (including the cause of
action and any orders made by the court).
300A Annual directors’ report—specific information to be provided
by listed companies
(1) The directors’ report for a financial year for a company must also
include (in a separate and clearly identified section of the report):
(a) discussion of board policy for determining, or in relation to,
the nature and amount (or value, as appropriate) of
remuneration of the key management personnel for:
(i) the company, if consolidated financial statements are
not required; or
(ii) the consolidated entity, if consolidated financial
statements are required; and
(b) discussion of the relationship between such policy and the
company’s performance; and
(ba) if an element of the remuneration of a member of the key
management personnel for the company, or if consolidated
financial statements are required, for the consolidated entity
is dependent on the satisfaction of a performance condition:
(i) a detailed summary of the performance condition; and
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(ii) an explanation of why the performance condition was
chosen; and
(iii) a summary of the methods used in assessing whether the
performance condition is satisfied and an explanation of
why those methods were chosen; and
(iv) if the performance condition involves a comparison
with factors external to the company:
(A) a summary of the factors to be used in making
the comparison; and
(B) if any of the factors relates to the performance
of another company, of 2 or more other
companies or of an index in which the
securities of a company or companies are
included—the identity of that company, of each
of those companies or of the index; and
(c) the prescribed details in relation to the remuneration of:
(i) if consolidated financial statements are required—each
member of the key management personnel for the
consolidated entity; or
(ii) if consolidated financial statements are not required—
each member of the key management personnel for the
company; and
(d) if an element of the remuneration of a person referred to in
paragraph (c) consists of securities of a body and that
element is not dependent on the satisfaction of a performance
condition—an explanation of why that element of the
remuneration is not dependent on the satisfaction of a
performance condition; and
(e) for each person referred to in paragraph (c):
(i) an explanation of the relative proportions of those
elements of the person’s remuneration that are related to
performance and those elements of the person’s
remuneration that are not; and
(ii) the value (worked out as at the time they are granted
and in accordance with any applicable accounting
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standards) of options that are granted to the person
during the year as part of their remuneration; and
(iii) the value (worked out as at the time they are exercised)
of options that were granted to the person as part of
their remuneration and that are exercised by the person
during the year; and
(iv) if options granted to the person as part of their
remuneration lapse during the financial year—the
number of those options, and the financial year in which
those options were granted; and
(vii) if the person is employed by the company under a
contract—the duration of the contract, the periods of
notice required to terminate the contract and the
termination payments provided for under the contract;
and
(f) such other matters related to the policy or policies referred to
in paragraph (a) as are prescribed by the regulations; and
(g) if:
(i) at the company’s most recent AGM, comments were
made on the remuneration report that was considered at
that AGM; and
(ii) when a resolution that the remuneration report for the
last financial year be adopted was put to the vote at the
company’s most recent AGM, at least 25% of the votes
cast were against adoption of that report;
an explanation of the board’s proposed action in response or,
if the board does not propose any action, the board’s reasons
for inaction; and
(h) if a remuneration consultant made a remuneration
recommendation in relation to any of the key management
personnel for the company or, if consolidated financial
statements are required, for the consolidated entity, for the
financial year:
(i) the name of the consultant; and
(ii) a statement that the consultant made such a
recommendation; and
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(iii) if the consultant provided any other kind of advice to
the company or entity for the financial year—a
statement that the consultant provided that other kind or
those other kinds of advice; and
(iv) the amount and nature of the consideration payable for
the remuneration recommendation; and
(v) the amount and nature of the consideration payable for
any other kind of advice referred to in
subparagraph (iii); and
(vi) information about the arrangements the company made
to ensure that the making of the remuneration
recommendation would be free from undue influence by
the member or members of the key management
personnel to whom the recommendation relates; and
(vii) a statement about whether the board is satisfied that the
remuneration recommendation was made free from
undue influence by the member or members of the key
management personnel to whom the recommendation
relates; and
(viii) if the board is satisfied that the remuneration
recommendation was made free from undue influence
by the member or members of the key management
personnel to whom the recommendation relates—the
board’s reasons for being satisfied of this.
(1AA) Without limiting paragraph (1)(b), the discussion under that
paragraph of the company’s performance must specifically deal
with:
(a) the company’s earnings; and
(b) the consequences of the company’s performance on
shareholder wealth;
in the financial year to which the report relates and in the previous
4 financial years.
(1AB) In determining, for the purposes of subsection (1AA), the
consequences of the company’s performance on shareholder
wealth in a financial year, have regard to:
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(a) dividends paid by the company to its shareholders during that
year; and
(b) changes in the price at which shares in the company are
traded between the beginning and the end of that year; and
(c) any return of capital by the company to its shareholders
during that year that involves:
(i) the cancellation of shares in the company; and
(ii) a payment to the holders of those shares that exceeds the
price at which shares in that class are being traded at the
time when the shares are cancelled; and
(d) any other relevant matter.
(1A) The material referred to in subsection (1) must be included in the
directors’ report under the heading “Remuneration report”.
(1C) Without limiting paragraph (1)(c), the regulations may:
(a) provide that the value of an element of remuneration is to be
determined, for the purposes of this section, in a particular
way or by reference to a particular standard; and
(b) provide that details to be given of an element of remuneration
must relate to the remuneration provided in:
(i) the financial year to which the directors’ report relates;
and
(ii) the earlier financial years specified in the regulations.
(2) This section applies to any listed disclosing entity that is a
company.
(3) This section applies despite anything in the company’s
constitution.
(4) For the purposes of this section, if:
(a) consolidated financial statements are required; and
(b) a person is a group executive who is a group executive of 2
or more entities within the consolidated entity;
the person’s remuneration is taken to include all of the person’s
remuneration from those entities (regardless of the capacity in
which the person received the remuneration).
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300B Annual directors’ report—companies limited by guarantee
(1) The directors’ report for a financial year for a company limited by
guarantee must:
(a) contain a description of the short and long term objectives of
the entity reported on; and
(b) set out the entity’s strategy for achieving those objectives;
and
(c) state the entity’s principal activities during the year; and
(d) state how those activities assisted in achieving the entity’s
objectives; and
(e) state how the entity measures its performance, including any
key performance indicators used by the entity.
(2) The entity reported on is:
(a) the company (if consolidated financial statements are not
required); or
(b) the consolidated entity (if consolidated financial statements
are required).
(3) The directors’ report for a financial year for a company limited by
guarantee must also include details of:
(a) the name of each person who has been a director of the
company at any time during or since the end of the year and
the period for which the person was a director; and
(b) each director’s qualifications, experience and special
responsibilities; and
(c) the number of meetings of the board of directors held during
the year and each director’s attendance at those meetings; and
(d) for each class of membership in the company—the amount
which a member of that class is liable to contribute if the
company is wound up; and
(e) the total amount that members of the company are liable to
contribute if the company is wound up.
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Section 301
60 Corporations Act 2001
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301 Audit of annual financial report
(1) A company, registered scheme or disclosing entity must have the
financial report for a financial year audited in accordance with
Division 3 and obtain an auditor’s report.
Small proprietary companies
(2) A small proprietary company’s financial report for a financial year
does not have to be audited if:
(a) the report is prepared in response to a direction under
section 293; and
(b) the direction did not ask for the financial report to be audited.
Companies limited by guarantee
(3) A company limited by guarantee may have its financial report for a
financial year reviewed, rather than audited, if:
(a) the company is not one of the following:
(i) a Commonwealth company for the purposes of the
Public Governance, Performance and Accountability
Act 2013;
(ii) a subsidiary of a Commonwealth company for the
purposes of that Act;
(iii) a subsidiary of a corporate Commonwealth entity for the
purposes of that Act; and
(b) one of the following is true:
(i) the company is not required by the accounting standards
to be included in consolidated financial statements and
the revenue of the company for the financial year is less
than $1 million;
(ii) the company is required by the accounting standards to
be included in consolidated financial statements and the
consolidated revenue of the consolidated entity for the
financial year is less than $1 million.
(4) A small company limited by guarantee’s financial report for a
financial year does not have to be audited or reviewed if:
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(a) the report is prepared in response to a member direction
under section 294A; and
(b) the direction does not ask for the audit or review.
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Division 2 Half-year financial report and directors’ report
Section 302
62 Corporations Act 2001
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Division 2—Half-year financial report and directors’
report
302 Disclosing entity must prepare half-year financial report and
directors’ report
A disclosing entity must:
(a) prepare a financial report and directors’ report for each
half-year; and
(b) have the financial report audited or reviewed in accordance
with Division 3 and obtain an auditor’s report; and
(c) lodge the financial report, the directors’ report and the
auditor’s report on the financial report with ASIC;
unless the entity is not a disclosing entity when lodgment is due.
Note 1: This Chapter only applies to disclosing entities incorporated or formed
in Australia (see subsection 285(2)).
Note 2: See section 320 for the time for lodgment with ASIC.
Note 3: Subsection 318(4) requires disclosing entities that are borrowers in
relation to debentures to also report to the trustee for debenture
holders.
303 Contents of half-year financial report
Basic contents
(1) The financial report for a half-year consists of:
(a) the financial statements for the half-year; and
(b) the notes to the financial statements; and
(c) the directors’ declaration about the statements and notes.
Financial statements
(2) The financial statements for the half-year are:
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(a) unless paragraph (b) applies—the financial statements in
relation to the disclosing entity required by the accounting
standards; or
(b) if the accounting standards require the disclosing entity to
prepare financial statements in relation to a consolidated
entity—the financial statements in relation to the
consolidated entity required by the accounting standards.
Notes to financial statements
(3) The notes to the financial statements are:
(a) disclosures required by the regulations; and
(b) notes required by the accounting standards; and
(c) any other information necessary to give a true and fair view
(see section 305).
Directors’ declaration
(4) The directors’ declaration is a declaration by the directors:
(c) whether, in the directors’ opinion, there are reasonable
grounds to believe that the disclosing entity will be able to
pay its debts as and when they become due and payable; and
(d) whether, in the directors’ opinion, the financial statement and
notes are in accordance with this Act, including:
(i) section 304 (compliance with accounting standards);
and
(ii) section 305 (true and fair view).
Note: See paragraph 285(3)(c) for the reference to the debts of a disclosing
entity that is a registered scheme.
(5) The declaration must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the day on which the declaration is made; and
(c) be signed by a director.
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Section 304
64 Corporations Act 2001
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304 Compliance with accounting standards and regulations
The financial report for a half-year must comply with the
accounting standards and any further requirements in the
regulations.
305 True and fair view
The financial statements and notes for a half-year must give a true
and fair view of:
(a) the financial position and performance of the disclosing
entity; or
(b) if consolidated financial statements are required—the
financial position and performance of the consolidated entity.
This section does not affect the obligation under section 304 for
financial reports to comply with accounting standards.
Note: If the financial statements prepared in compliance with the accounting
standards would not give a true and fair view, additional information
must be included in the notes to the financial statements under
paragraph 303(3)(c).
306 Half-year directors’ report
(1) The directors of the disclosing entity must prepare a directors’
report for each half-year that consists of:
(a) a review of the entity’s operations during the half-year and
the results of those operations; and
(b) the name of each person who has been a director of the
disclosing entity at any time during or since the end of the
half-year and the period for which they were a director.
If consolidated financial statements are required, the review under
paragraph (a) must cover the consolidated entity.
(1A) The directors’ report must include a copy of the auditor’s
declaration under section 307C in relation to the audit or review for
the half-year.
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(2) If the financial report for a half-year includes additional
information under paragraph 303(3)(c) (information included to
give true and fair view of financial position and performance), the
directors’ report for the half-year must also:
(a) set out the directors’ reasons for forming the opinion that the
inclusion of that additional information was necessary to give
the true and fair view required by section 305; and
(b) specify where that information can be found in the financial
report.
(3) The report must:
(a) be made in accordance with a resolution of the directors; and
(b) specify the date on which the report is made; and
(c) be signed by a director.
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Section 307
66 Corporations Act 2001
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Division 3—Audit and auditor’s report
307 Audit
An auditor who conducts an audit of the financial report for a
financial year or half-year must form an opinion about:
(a) whether the financial report is in accordance with this Act,
including:
(i) section 296 or 304 (compliance with accounting
standards); and
(ii) section 297 or 305 (true and fair view); and
(aa) if the financial report includes additional information under
paragraph 295(3)(c) or 303(3)(c) (information included to
give true and fair view of financial position and
performance)—whether the inclusion of that additional
information was necessary to give the true and fair view
required by section 297 or 305; and
(b) whether the auditor has been given all information,
explanation and assistance necessary for the conduct of the
audit; and
(c) whether the company, registered scheme or disclosing entity
has kept financial records sufficient to enable a financial
report to be prepared and audited; and
(d) whether the company, registered scheme or disclosing entity
has kept other records and registers as required by this Act.
307A Audit to be conducted in accordance with auditing standards
(1) If an individual auditor, or an audit company, conducts:
(a) an audit or review of the financial report for a financial year;
or
(b) an audit or review of the financial report for a half-year;
the individual auditor or audit company must conduct the audit or
review in accordance with the auditing standards.
(2) If an audit firm, or an audit company, conducts:
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(a) an audit or review of the financial report for a financial year;
or
(b) an audit or review of the financial report for a half-year;
the lead auditor for the audit or review must ensure that the audit or
review is conducted in accordance with the auditing standards.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability see section 6.1 of the Criminal Code.
307B Audit working papers to be retained for 7 years
Contravention by individual auditor or audit company
(1) An auditor contravenes this subsection if:
(a) the auditor is an individual auditor or an audit company; and
(b) the auditor conducts:
(i) an audit or review of the financial report for a financial
year; or
(ii) an audit or review of the financial report for a half-year;
and
(c) the auditor does not retain all audit working papers prepared
by or for, or considered or used by, the auditor in accordance
with the requirements of the auditing standards until:
(i) the end of 7 years after the date of the audit report
prepared in relation to the audit or review to which the
audit working papers relate; or
(ii) an earlier date determined for the audit working papers
by ASIC under subsection (6).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability see section 6.1 of the Criminal Code.
Contravention by member of audit firm
(3) A person (the defendant) contravenes this subsection if:
(a) an audit firm conducts:
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(i) an audit or review of the financial report for a financial
year; or
(ii) an audit or review of the financial report for a half-year;
and
(b) the audit firm fails, at a particular time, to retain all audit
working papers prepared by or for, or considered or used by,
the audit firm in accordance with the requirements of the
auditing standards until:
(i) the end of 7 years after the date of the audit report
prepared in relation to the audit or review to which the
documents relate; or
(ii) the earlier date determined by ASIC for the audit
working papers under subsection (6); and
(c) the defendant is a member of the firm at that time.
(4) An offence based on subsection (3) is an offence of strict liability.
Note 1: For strict liability see section 6.1 of the Criminal Code.
Note 2: Subsection (5) provides a defence.
(5) A member of an audit firm does not commit an offence at a
particular time because of a contravention of subsection (3) if the
member either:
(a) does not know at that time of the circumstances that
constitute the contravention of subsection (3); or
(b) knows of those circumstances at that time but takes all
reasonable steps to correct the contravention as soon as
possible after the member becomes aware of those
circumstances.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Earlier retention date for audit working papers
(6) ASIC may, on application by a person, determine, in writing, an
earlier date for the audit working papers for the purposes of
paragraphs (1)(c) and (3)(b) if:
(a) the auditor is an individual auditor and the auditor:
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(i) dies; or
(ii) ceases to be a registered company auditor; or
(b) the auditor is an audit firm and the firm is dissolved
(otherwise than simply as part of a reconstitution of the firm
because of the death, retirement or withdrawal of a member
or members or because of the admission of a new member or
members); or
(c) the auditor is an audit company and the company:
(i) is wound up; or
(ii) ceases to be an authorised audit company.
(7) In deciding whether to make a determination under subsection (6),
ASIC must have regard to:
(a) whether ASIC is inquiring into or investigating any matters
in respect of:
(i) the auditor; or
(ii) the audited body for the audit to which the documents
relate; and
(b) whether the professional accounting bodies have any
investigations or disciplinary action pending in relation to the
auditor; and
(c) whether civil or criminal proceedings in relation to:
(i) the conduct of the audit; or
(ii) the contents of the financial report to which the audit
working papers relate;
have been, or are about to be, commenced; and
(d) any other relevant matter.
Audit working papers kept in electronic form
(8) For the purposes of this section, if audit working papers are in
electronic form they are taken to be retained only if they are
convertible into hard copy.
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Section 307C
70 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
307C Auditor’s independence declaration
Contravention by individual auditor
(1) If an individual auditor conducts:
(a) an audit or review of the financial report for a financial year;
or
(b) an audit or review of the financial report for a half-year;
the individual auditor must give the directors of the company,
registered scheme or disclosing entity:
(c) a written declaration that, to the best of the individual
auditor’s knowledge and belief, there have been:
(i) no contraventions of the auditor independence
requirements of this Act in relation to the audit or
review; and
(ii) no contraventions of any applicable code of professional
conduct in relation to the audit or review; or
(d) a written declaration that, to the best of the individual
auditor’s knowledge and belief, the only contraventions of:
(i) the auditor independence requirements of this Act in
relation to the audit or review; or
(ii) any applicable code of professional conduct in relation
to the audit or review;
are those contraventions details of which are set out in the
declaration.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability see section 6.1 of the Criminal Code.
Contravention by lead auditor
(3) If an audit firm or audit company conducts:
(a) an audit or review of the financial report for a financial year;
or
(b) an audit or review of the financial report for a half-year;
the lead auditor for the audit must give the directors of the
company, registered scheme or disclosing entity:
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(c) a written declaration that, to the best of the lead auditor’s
knowledge and belief, there have been:
(i) no contraventions of the auditor independence
requirements of this Act in relation to the audit or
review; and
(ii) no contraventions of any applicable code of professional
conduct in relation to the audit or review; or
(d) a written declaration that, to the best of the lead auditor’s
knowledge and belief, the only contraventions of:
(i) the auditor independence requirements of this Act in
relation to the audit or review; or
(ii) any applicable code of professional conduct in relation
to the audit or review;
are those contraventions details of which are set out in the
declaration.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability see section 6.1 of the Criminal Code.
(5) The declaration under subsection (1) or (3):
(a) either:
(i) must be given when the audit report is given to the
directors of the company, registered scheme or
disclosing entity; or
(ii) must satisfy the conditions in subsection (5A); and
(b) must be signed by the person making the declaration.
(5A) A declaration under subsection (1) or (3) in relation to a financial
report for a financial year or half-year satisfies the conditions in
this subsection if:
(a) the declaration is given to the directors of the company,
registered scheme or disclosing entity before the directors
pass a resolution under subsection 298(2) or 306(3) (as the
case requires) in relation to the directors’ report for the
financial year or half-year; and
(b) a director signs the directors’ report within 7 days after the
declaration is given to the directors; and
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(c) the auditor’s report on the financial report is made within 7
days after the directors’ report is signed; and
(d) the auditor’s report includes either of the following
statements:
(i) a statement to the effect that the declaration would be in
the same terms if it had been given to the directors at the
time the auditor’s report was made;
(ii) a statement to the effect that circumstances have
changed since the declaration was given to the directors,
and setting out how the declaration would differ if it had
been given to the directors at the time the auditor’s
report was made.
(5B) An individual auditor or a lead auditor is not required to give a
declaration under subsection (1) or (3) in respect of a contravention
if:
(a) the contravention was a contravention by a person of
subsection 324CE(2), 324CF(2) or 324CG(2); and
(b) the person does not commit an offence because of
subsection 324CE(4), 324CF(4) or 324CG(4).
Self-incrimination
(6) An individual is not excused from giving a declaration under
subsection (1) or (3) on the ground that giving the declaration
might tend to incriminate the individual or expose the individual to
a penalty.
Use/derivative use indemnity
(7) However, neither:
(a) the information included in the declaration; nor
(b) any information, document or thing obtained as a direct or
indirect consequence of including the information in the
declaration;
is admissible in evidence against the individual in any criminal
proceedings, or in any proceedings that would expose the person to
a penalty, other than:
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(c) proceedings for an offence against section 1308 or 1309 in
relation to the declaration; or
(d) proceedings for an offence against section 137.1 or 137.2 of
the Criminal Code (false or misleading information or
documents) in relation to the declaration.
308 Auditor’s report on annual financial report
(1) An auditor who audits the financial report for a financial year must
report to members on whether the auditor is of the opinion that the
financial report is in accordance with this Act, including:
(a) section 296 (compliance with accounting standards); and
(b) section 297 (true and fair view).
If not of that opinion, the auditor’s report must say why.
(2) If the auditor is of the opinion that the financial report does not
comply with an accounting standard, the auditor’s report must, to
the extent it is practicable to do so, quantify the effect that
non-compliance has on the financial report. If it is not practicable
to quantify the effect fully, the report must say why.
(3) The auditor’s report must describe:
(a) any defect or irregularity in the financial report; and
(b) any deficiency, failure or shortcoming in respect of the
matters referred to in paragraph 307(b), (c) or (d).
(3AA) An auditor who reviews the financial report for a company limited
by guarantee must report to members on whether the auditor
became aware of any matter in the course of the review that makes
the auditor believe that the financial report does not comply with
Division 1.
(3AB) A report under subsection (3AA) must:
(a) describe any matter referred to in subsection (3AA); and
(b) say why that matter makes the auditor believe that the
financial report does not comply with Division 1.
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Section 309
74 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3A) The auditor’s report must include any statements or disclosures
required by the auditing standards.
(3B) If the financial report includes additional information under
paragraph 295(3)(c) (information included to give true and fair
view of financial position and performance), the auditor’s report
must also include a statement of the auditor’s opinion on whether
the inclusion of that additional information was necessary to give
the true and fair view required by section 297.
(3C) If the directors’ report for the financial year includes a
remuneration report, the auditor must also report to members on
whether the auditor is of the opinion that the remuneration report
complies with section 300A. If not of that opinion, the auditor’s
report must say why.
(4) A report under subsection (1) or (3AA) must specify the date on
which it is made.
(5) An offence based on subsection (1), (3), (3AA), (3AB), (3A), (3C)
or (4) is an offence of strict liability.
Note: For strict liability see section 6.1 of the Criminal Code.
309 Auditor’s report on half-year financial report
Audit of financial report
(1) An auditor who audits the financial report for a half-year must
report to members on whether the auditor is of the opinion that the
financial report is in accordance with this Act, including:
(a) section 304 (compliance with accounting standards); and
(b) section 305 (true and fair view).
If not of that opinion, the auditor’s report must say why.
(2) If the auditor is of the opinion that the financial report does not
comply with an accounting standard, the auditor’s report must, to
the extent that it is practicable to do so, quantify the effect that
non-compliance has on the financial report. If it is not practicable
to quantify the effect fully, the report must say why.
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(3) The auditor’s report must describe:
(a) any defect or irregularity in the financial report; and
(b) any deficiency, failure or shortcoming in respect of the
matters referred to in paragraph 307(b), (c) or (d).
Review of financial report
(4) An auditor who reviews the financial report for a half-year must
report to members on whether the auditor became aware of any
matter in the course of the review that makes the auditor believe
that the financial report does not comply with Division 2.
(5) A report under subsection (4) must:
(a) describe any matter referred to in subsection (4); and
(b) say why that matter makes the auditor believe that the
financial report does not comply with Division 2.
(5A) The auditor’s report must include any statements or disclosures
required by the auditing standards.
(5B) If the financial report includes additional information under
paragraph 303(3)(c) (information included to give true and fair
view of financial position and performance), the auditor’s report
must also include a statement of the auditor’s opinion on whether
the inclusion of that additional information was necessary to give
the true and fair view required by section 305.
Report to specify day made
(6) A report under subsection (1) or (4) must specify the date on which
it is made.
(7) An offence based on subsection (1), (3), (4), (5), (5A) or (6) is an
offence of strict liability.
Note: For strict liability see section 6.1 of the Criminal Code.
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Section 310
76 Corporations Act 2001
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310 Auditor’s power to obtain information
The auditor:
(a) has a right of access at all reasonable times to the books of
the company, registered scheme or disclosing entity; and
(b) may require any officer to give the auditor information,
explanations or other assistance for the purposes of the audit
or review.
A request under paragraph (b) must be a reasonable one.
311 Reporting to ASIC
Contravention by individual auditor
(1) An individual auditor conducting an audit contravenes this
subsection if:
(a) the auditor is aware of circumstances that:
(i) the auditor has reasonable grounds to suspect amount to
a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (6)); or
(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(b) if subparagraph (a)(i) applies:
(i) the contravention is a significant one; or
(ii) the contravention is not a significant one and the auditor
believes that the contravention has not been or will not
be adequately dealt with by commenting on it in the
auditor’s report or bringing it to the attention of the
directors; and
(c) the auditor does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the auditor becomes aware of those
circumstances.
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Contravention by audit company
(2) An audit company conducting an audit contravenes this subsection
if:
(a) the lead auditor for the audit is aware of circumstances that:
(i) the lead auditor has reasonable grounds to suspect
amount to a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (6)); or
(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(b) if subparagraph (a)(i) applies:
(i) the contravention is a significant one; or
(ii) the contravention is not a significant one and the lead
auditor believes that the contravention has not been or
will not be adequately dealt with by commenting on it in
the auditor’s report or bringing it to the attention of the
directors; and
(c) the lead auditor does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the lead auditor becomes aware of those
circumstances.
Contravention by lead auditor
(3) A person contravenes this subsection if:
(a) the person is the lead auditor for an audit; and
(b) the person is aware of circumstances that:
(i) the person has reasonable grounds to suspect amount to
a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (6)); or
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(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(c) if subparagraph (b)(i) applies:
(i) the contravention is a significant one; or
(ii) the contravention is not a significant one and the person
believes that the contravention has not been or will not
be adequately dealt with by commenting on it in the
auditor’s report or bringing it to the attention of the
directors; and
(d) the person does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the person becomes aware of those
circumstances.
Significant contraventions
(4) In determining for the purposes of this section whether a
contravention of this Act is a significant one, have regard to:
(a) the level of penalty provided for in relation to the
contravention; and
(b) the effect that the contravention has, or may have, on:
(i) the overall financial position of the company, registered
scheme or disclosing entity; or
(ii) the adequacy of the information available about the
overall financial position of the company, registered
scheme or disclosing entity; and
(c) any other relevant matter.
(5) Without limiting paragraph (4)(a), a penalty provided for in
relation to a contravention of a provision of Part 2M.2 or 2M.3, or
section 324DAA, 324DAB or 324DAC, includes a penalty
imposed on a director, because of the operation of section 344, for
failing to take reasonable steps to comply with, or to secure
compliance with, that provision.
Person involved in an audit
(6) In this section:
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person involved in the conduct of an audit means:
(a) the auditor; or
(b) the lead auditor for the audit; or
(c) the review auditor for the audit; or
(d) a professional member of the audit team for the audit; or
(e) any other person involved in the conduct of the audit.
312 Assisting auditor
(1) An officer of a company, registered scheme or disclosing entity
must:
(a) allow the auditor access to the books of the company, scheme
or entity; and
(b) give the auditor any information, explanation or assistance
required under section 310.
Note: Books include registers and documents generally (not only the
accounting “books”): see the definition of books in section 9.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
313 Special provisions on audit of debenture issuers and guarantors
Auditor to give trustee for debenture holders copies of reports,
certificates etc.
(1) The auditor of a borrower in relation to debentures must give the
trustee for debenture holders:
(a) a copy of any report, certificate or other document that the
auditor must give the borrower or its members under this
Act, the debentures or the trust deed; and
(b) a copy of any document that accompanies it.
The copies must be given within 7 days after the auditor gives the
originals to the borrower or its members.
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Section 313
80 Corporations Act 2001
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Auditor to report on matters prejudicial to debenture holders’
interests
(2) The auditor of a borrower, or guarantor, in relation to debentures
must give the borrower or guarantor a written report about any
matter that:
(a) the auditor became aware of in conducting the audit or
review; and
(b) in the auditor’s opinion, is or is likely to be prejudicial to the
interests of debenture holders; and
(c) in the auditor’s opinion, is relevant to the exercise of the
powers of the trustee for debenture holders, or the
performance of the trustee’s duties, under this Act or the trust
deed.
The auditor must give a copy of the report to the trustee for
debenture holders. The report and the copy must be given within 7
days after the auditor becomes aware of the matter.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 314
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Division 4—Annual financial reporting to members
314 Annual financial reporting to members
(1) A company, registered scheme or disclosing entity must report to
members for a financial year by providing either of the following
in accordance with subsection (1AA) or (1AE):
(a) all of the following reports:
(i) the financial report for the year;
(ii) the directors’ report for the year (see sections 298 to
300A);
(iii) the auditor’s report on the financial report;
(b) a concise report for the year that complies with
subsection (2).
(1AAA) This section does not apply to a company limited by guarantee.
Note: The requirement for annual financial reporting to members for those
companies is in section 316A.
(1AA) A company, registered scheme or disclosing entity may provide the
reports, or the concise report, for a financial year by doing all of
the following:
(a) sending, to each member who has made the election referred
to in paragraph (1AB)(a):
(i) a hard copy of the reports, or the concise report; or
(ii) if the member has elected to receive the reports, or the
concise report, as an electronic copy in accordance
paragraph (1AB)(c)—an electronic copy of the reports,
or the concise reports;
(b) making a copy of the reports, or the concise report, readily
accessible on a website;
(c) directly notifying, in writing, all members who did not make
the election referred to in paragraph (1AB)(a) that the copy is
accessible on the website, and specifying the direct address
on the website where the reports, or the concise report, may
be accessed.
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Division 4 Annual financial reporting to members
Section 314
82 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A direct address may be specified, for example, by specifying the
URL of the reports or the concise report.
(1AB) For the purposes of paragraph (1AA)(a), a company, registered
scheme or disclosing entity must, on at least one occasion, directly
notify in writing each member that:
(a) the member may elect to receive, free of charge, a copy of
the reports for each financial year, or a copy of the concise
report for each financial year; and
(b) if the member does not so elect—the member may access the
reports, or the concise report, on a specified website; and
(c) if the member does so elect and the company, scheme or
entity offers to send the report either as a hard copy or an
electronic copy—the member may elect to receive the copy
as either a hard copy or an electronic copy.
(1AC) An election made under subsection (1AB) is a standing election for
each later financial year until the member changes his, her or its
election.
Note: The member may request, under section 316, the company, registered
scheme or disclosing entity not to send them material under this
section.
(1AD) A member may, for the purposes of paragraph (1AA)(c) or
subsection (1AB), be notified by electronic means only if the
member has previously nominated that means as one by which the
member may be notified.
(1AE) A company, registered scheme or disclosing entity may provide the
reports, or the concise report, by sending each member:
(a) a hard copy of the reports, or the concise report; or
(b) an electronic copy of the reports, or the concise report, if the
member has nominated that means as one by which the
member may be sent the reports or the concise report.
(1A) An offence based on subsection (1) or (1AB) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Annual financial reporting to members Division 4
Section 315
Corporations Act 2001 83
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Concise report
(2) A concise report for a financial year consists of:
(a) a concise financial report for the year drawn up in accordance
with accounting standards made for the purposes of this
paragraph; and
(b) the directors’ report for the year (see sections 298-300A); and
(c) a statement by the auditor:
(i) that the financial report has been audited; and
(ii) whether, in the auditor’s opinion, the concise financial
report complies with the accounting standards made for
the purposes of paragraph (a); and
(d) a copy of any qualification in, and of any statements included
in the emphasis of matter section of, the auditor’s report on
the financial report; and
(e) a statement that the report is a concise report and that the full
financial report and auditor’s report will be sent to the
member free of charge if the member asks for them.
(3) If the accounting standards made for the purposes of
paragraph (2)(a) require a discussion and analysis to be included in
a concise financial report:
(a) the auditor must report on whether the discussion and
analysis complies with the requirements that the accounting
standards lay down for the discussion and analysis; and
(b) the auditor does not otherwise need to audit the statements
made in the discussion and analysis.
315 Deadline for reporting to members
Public companies and disclosing entities that are not registered
schemes
(1) A public company, or a disclosing entity that is not a registered
scheme, must report to members under section 314 by the earlier
of:
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Division 4 Annual financial reporting to members
Section 316
84 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) 21 days before the next AGM after the end of the financial
year; or
(b) 4 months after the end of the financial year.
Note: For the deadline for holding an AGM, see section 250N.
Small proprietary companies (shareholder direction under
section 293)
(2) If a shareholder direction is given to a small proprietary company
under section 293 after the end of the financial year, the company
must report to members under section 314 by the later of:
(a) 2 months after the date on which the direction is given; and
(b) 4 months after the end of the financial year.
Registered schemes
(3) A registered scheme must report to members under section 314
within 3 months after the end of the financial year.
Other proprietary companies
(4) A proprietary company that is not covered by subsection (1) or (2)
must report to members under section 314 within 4 months after
the end of the financial year.
(5) For the purposes of this section, a company, registered scheme or
disclosing entity that reports in accordance with
subsection 314(1AA) is taken to report at the time that the
company, scheme or entity has fully complied with the
requirements of that subsection.
316 Member’s choices for annual financial information
(1) A member may request the company, registered scheme or
disclosing entity:
(a) not to send them the material required by section 314; or
(b) to send them a full financial report and the directors’ report
and auditor’s report.
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Annual financial reporting to members Division 4
Section 316A
Corporations Act 2001 85
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
A request may be a standing request or for a particular financial
year. The member is not entitled to a report for a financial year
earlier than the one before the financial year in which the request is
made.
(2) The time for complying with a request under paragraph (1)(b) is:
(a) 7 days after the request is received; or
(b) the deadline for reporting under section 315;
whichever is later.
(3) A full financial report, directors’ report and auditor’s report are to
be sent free of charge unless the member has already received a
copy of them free of charge.
(4) An offence based on subsection (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) This section does not apply in relation to a company limited by
guarantee.
316A Annual financial reporting to members of companies limited
by guarantee
(1) A member of a company limited by guarantee may, by notice in
writing to the company, elect to receive a hard copy or an
electronic copy of the following reports:
(a) the financial reports;
(b) the directors’ reports;
(c) the auditor’s reports.
(2) If a member makes an election in a financial year, the election:
(a) is made by the member for that financial year; and
(b) is a standing election made by the member for each later
financial year until the member changes the election.
(3) If the company prepares a financial report or a directors’ report for
a financial year, or obtains an auditor’s report on the financial
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Division 4 Annual financial reporting to members
Section 317
86 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
report, the company must send a copy of the report, free of charge,
to each member who has made an election for that financial year,
in accordance with the election, by the earlier of:
(a) 21 days before the next AGM after the end of the financial
year; and
(b) 4 months after the end of the financial year.
Note: For the deadline for holding an AGM, see section 250N.
(4) If a member direction is given to a small company limited by
guarantee under section 294A after the end of a financial year,
subsection (3) does not apply and the company must send a copy of
the reports that the company prepares or obtains as a result of the
direction to each member who has made an election for that
financial year, in accordance with the election, by the later of:
(a) 2 months after the date on which the direction was given; and
(b) 4 months after the end of the financial year.
(5) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
317 Consideration of reports at AGM
(1) The directors of a public company that is required to hold an AGM
must lay before the AGM:
(a) the financial report; and
(b) the directors’ report; and
(c) the auditor’s report;
for the last financial year that ended before the AGM.
Note 1: If the company’s first AGM is held before the end of its first financial
year, there will be no reports to lay before the meeting.
Note 2: A public company that has only 1 member is not required to hold an
AGM (see section 250N).
Note 3: Section 250RA imposes on the auditor of a listed public company an
obligation to attend or be represented at the AGM.
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Annual financial reporting to members Division 4
Section 318
Corporations Act 2001 87
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1A) Subsection (1) does not apply to a small company limited by
guarantee in relation to a report if the company is not required
under a member direction made under section 294A or an ASIC
direction made under section 294B to prepare or obtain the report.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
318 Additional reporting by debenture issuers
(1) A company or disclosing entity that was a borrower in relation to
debentures at the end of a financial year must give a copy of the
annual financial report, directors’ report and auditor’s report to the
trustee for debenture holders by the deadline for the financial year
set by section 315.
(2) A debenture holder may ask the company or disclosing entity that
issued the debenture for copies of:
(a) the last reports provided to members under section 314; or
(b) the full financial report and the directors’ report and auditor’s
report for the last financial year.
(3) The company or entity must give the debenture holder the copies
as soon as practicable after the request and free of charge.
(4) A disclosing entity that was a borrower in relation to debentures at
the end of a half-year must give a copy of the half-year financial
report, directors’ report and auditor’s report to the trustee for
debenture holders within 75 days after the end of the half-year.
(5) An offence based on subsection (1), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Division 5 Lodging reports with ASIC
Section 319
88 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Lodging reports with ASIC
319 Lodgment of annual reports with ASIC
(1) A company, registered scheme or disclosing entity that has to
prepare or obtain a report for a financial year under Division 1
must lodge the report with ASIC. This obligation extends to a
concise report provided to members under section 314.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) Subsection (1) does not apply to:
(a) a small proprietary company that prepares a report in
response to a shareholder direction under section 293 or an
ASIC direction under section 294; and
(b) a small company limited by guarantee that prepares a report
in response to a member direction under section 294A or an
ASIC direction under section 294B.
(3) The time for lodgment is:
(a) within 3 months after the end of the financial year for a
disclosing entity or registered scheme; and
(b) within 4 months after the end of the financial year for anyone
else.
320 Lodgment of half-year reports with ASIC
(1) A disclosing entity that has to prepare or obtain a report for a
half-year under Division 2 must lodge the report with ASIC within
75 days after the end of the half-year.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Lodging reports with ASIC Division 5
Section 321
Corporations Act 2001 89
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
321 ASIC power to require lodgment
(1) ASIC may give a company, registered scheme or disclosing entity
a direction to lodge with ASIC a copy of reports prepared or
obtained by it under Division 1 or 2.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The direction must:
(a) be made in writing; and
(b) specify the period or periods concerned; and
(c) be made no later than 6 years after the end of the period or
periods; and
(d) specify the date by which the documents have to be lodged.
The date specified under paragraph (d) must be at least 14 days
after the date on which the direction is given.
322 Relodgment if financial statements or directors’ reports
amended after lodgment
(1) If a financial report or directors’ report is amended after it is
lodged with ASIC, the company, registered scheme or disclosing
entity must:
(a) lodge the amended report with ASIC within 14 days after the
amendment; and
(b) give a copy of the amended report free of charge to any
member who asks for it.
(2) If the amendment is a material one, the company, registered
scheme or disclosing entity must also notify members as soon as
practicable of:
(a) the nature of the amendment; and
(b) their right to obtain a copy of the amended report under
subsection (1).
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
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Division 5 Lodging reports with ASIC
Section 322
90 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For strict liability, see section 6.1 of the Criminal Code.
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Special provisions about consolidated financial statements Division 6
Section 323
Corporations Act 2001 91
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Special provisions about consolidated financial
statements
323 Directors and officers of controlled entity to give information
(1) If a company, registered scheme or disclosing entity has to prepare
consolidated financial statements, a director or officer of a
controlled entity must give the company, registered scheme or
disclosing entity all information requested that is necessary to
prepare the consolidated financial statements and the notes to those
statements.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
323A Auditor’s power to obtain information from controlled entity
(1) An auditor who audits or reviews a financial report that includes
consolidated financial statements:
(a) has a right of access at all reasonable times to the books of
any controlled entity; and
(b) may require any officer of the entity to give the auditor
information, explanations or other assistance for the purposes
of the audit or review.
A request under paragraph (b) must be a reasonable one.
(2) The information, explanations or other assistance required under
paragraph (1)(b) is to be given at the expense of the company,
registered scheme or disclosing entity whose financial report is
being audited or reviewed.
323B Controlled entity to assist auditor
(1) If a company, registered scheme or disclosing entity has to prepare
a financial report that includes consolidated financial statements,
an officer or auditor of a controlled entity must:
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Section 323C
92 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) allow the auditor for the company, scheme or entity access to
the controlled entity’s books; and
(b) give the auditor any information, explanation or assistance
required under section 323A.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
323C Application of Division to entity that has ceased to be
controlled
Sections 323, 323A and 323B apply to the preparation or audit of a
financial report that covers a controlled entity even if the entity is
no longer controlled by the company, registered scheme or
disclosing entity whose financial report is being prepared or
audited.
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Financial years and half-years Division 7
Section 323D
Corporations Act 2001 93
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Financial years and half-years
323D Financial years and half-years
First financial year
(1) The first financial year for a company, registered scheme or
disclosing entity starts on the day on which it is registered or
incorporated. It lasts for 12 months or the period (not longer than
18 months) determined by the directors.
Financial years after first year
(2) Subject to subsections (2A) and (4), subsequent financial years
must:
(a) start at the end of the previous financial year; and
(b) be 12 months long.
The directors may determine that the financial year is to be shorter
or longer (but not by more than 7 days).
(2A) A subsequent financial year may last for a period of less than 12
months determined by the directors if:
(a) the subsequent financial year starts at the end of the previous
financial year; and
(b) there has not been a period during the previous 5 financial
years in which there was a financial year of less than 12
months in reliance on this subsection; and
(c) the change to the subsequent financial year is made in good
faith in the best interests of the company, registered scheme
or disclosing entity.
Note: For the purposes of paragraph (b), financial years that, in reliance on
subsection (2) or (4), were less than 12 months are disregarded.
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Division 7 Financial years and half-years
Section 323D
94 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Synchronisation of financial years where consolidated financial
statements are required
(3) A company, registered scheme or disclosing entity that has to
prepare consolidated financial statements must do whatever is
necessary to ensure that the financial years of the consolidated
entities are synchronised with its own financial years. It must
achieve this synchronisation by the end of 12 months after the
situation that calls for consolidation arises.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) To facilitate this synchronisation, the financial year for a controlled
entity may be extended or shortened. The extended financial year
cannot be longer than 18 months.
Half-years
(5) A half-year for a company, registered scheme or disclosing entity
is the first 6 months of a financial year. The directors may
determine that the half-year is to be shorter or longer (but not by
more than 7 days).
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Disclosure by listed companies of information filed overseas Division 8
Section 323DA
Corporations Act 2001 95
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—Disclosure by listed companies of information
filed overseas
323DA Listed companies to disclose information filed overseas
(1) A company that discloses information to, or as required by:
(a) the Securities and Exchange Commission of the United
States of America; or
(b) the New York Stock Exchange; or
(c) a financial market in a foreign country if that financial
market is prescribed by regulations made for the purposes of
this paragraph;
must disclose that information in English to each relevant market
operator, if the company is listed on the next business day after
doing so.
(3) This section applies despite anything in the company’s
constitution.
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Part 2M.4 Appointment and removal of auditors
Division 1 Entities that may be appointed as an auditor for a company or registered
scheme
Section 324AA
96 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2M.4—Appointment and removal of auditors
Division 1—Entities that may be appointed as an auditor
for a company or registered scheme
324AA Individual auditors, audit firms and authorised audit
companies
Subject to this Part, the following may be appointed as auditor for
a company or a registered scheme for the purposes of this Act:
(a) an individual;
(b) a firm;
(c) a company.
The company or registered scheme may have more than one
auditor.
324AB Effect of appointing firm as auditor—general
(1) The appointment of a firm as auditor of a company or registered
scheme is taken to be an appointment of all persons who, at the
date of the appointment, are:
(a) members of the firm; and
(b) registered company auditors.
This is so whether or not those persons are resident in Australia.
(2) The appointment of the members of a firm as auditors of a
company or registered scheme that is taken by subsection (1) to
have been made because of the appointment of the firm as auditor
of the company or scheme is not affected by the dissolution of the
firm. This subsection has effect subject to section 324AC.
(3) A report or notice that purports to be made or given by a firm
appointed as auditor of a company or registered scheme is not
taken to be duly made or given unless it is signed by a member of
the firm who is a registered company auditor both:
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Division 1
Section 324AC
Corporations Act 2001 97
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(a) in the firm name; and
(b) in his or her own name.
(4) A notice required or permitted to be given to an audit firm under
the Corporations legislation may be given to the firm by giving the
notice to a member of the firm.
(5) For the purposes of criminal proceedings under this Act against a
member of an audit firm, an act or omission by:
(a) a member of the firm; or
(b) an employee or agent of the audit firm;
acting within the actual or apparent scope of his or her
employment, or within his or her actual or apparent authority, is
also to be attributed to the audit firm.
324AC Effect of appointing firm as auditor—reconstitution of firm
Reconstitution of firm
(1) This section deals with the situation in which:
(a) a firm is appointed as auditor of a company or registered
scheme; and
(b) the firm is reconstituted because of either or both of the
following:
(i) the death, retirement or withdrawal of a member or
members; or
(ii) the admission of a new member or new members.
Retiring or withdrawing member
(2) A person who:
(a) is taken under subsection 324AB(1) to be an auditor of the
company; and
(b) retires or withdraws from the firm as previously constituted
as mentioned in subparagraph (1)(b)(i) of this section;
is taken to resign as auditor of the company as from the day of his
or her retirement or withdrawal.
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scheme
Section 324AD
98 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Section 329 does not apply to the resignation that is taken to occur
under subsection (2) unless:
(a) the person who is taken to have resigned was the only
member of the firm who was a registered company auditor;
and
(b) there is no member of the firm who is a registered company
auditor after that person retires or withdraws from the firm.
New member
(4) A person who:
(a) is a registered company auditor; and
(b) is admitted to the firm as mentioned in
subparagraph (1)(b)(ii);
is taken to have been appointed as an auditor of the company or
registered scheme as from the day of his or her admission to the
firm.
Appointments of continuing members not affected
(5) The reconstitution of the firm does not affect the appointment of
the continuing members of the firm who are registered company
auditors as auditors of the company or registered scheme.
(6) Nothing in this section affects the operation of section 324BB.
324AD Effect of appointing company as auditor
(1) A report or notice that purports to be made or given by an audit
company appointed as auditor of a company or registered scheme
is not taken to be duly made or given unless it is signed by a
director of the audit company (or the lead auditor or review auditor
for the audit) both:
(a) in the audit company’s name; and
(b) in his or her own name.
(2) For the purposes of criminal proceedings under this Act against a
director of an audit company, an act or omission by:
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Section 324AE
Corporations Act 2001 99
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(a) an officer of the audit company; or
(b) an employee or agent of the audit company;
acting within the actual or apparent scope of his or her
employment, or within his or her actual or apparent authority, is
also to be attributed to the audit company.
324AE Professional members of the audit team
If an individual auditor, audit firm or audit company conducts an
audit of a company or registered scheme, the professional
members of the audit team are:
(a) any registered company auditor who participates in the
conduct of the audit; and
(b) any other person who participates in the conduct of the audit
and, in the course of doing so, exercises professional
judgment in relation to the application of or compliance with:
(i) accounting standards; or
(ii) auditing standards; or
(iii) the provisions of this Act dealing with financial
reporting and the conduct of audits; and
(c) any other person who is in a position to directly influence the
outcome of the audit because of the role they play in the
design, planning, management, supervision or oversight of
the audit; and
(d) any person who recommends or decides what the lead auditor
is to be paid in connection with the performance of the audit;
and
(e) any person who provides, or takes part in providing, quality
control for the audit.
324AF Lead and review auditors
Lead auditor
(1) If an audit firm or audit company conducts an audit of a company
or registered scheme, the lead auditor for the audit is the registered
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scheme
Section 324AF
100 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
company auditor who is primarily responsible to the audit firm or
the audit company for the conduct of the audit.
Review auditor
(2) If an individual auditor, audit firm or audit company conducts an
audit of a company or registered scheme, the review auditor for the
audit is the registered company auditor (if any) who is primarily
responsible to the individual auditor, the audit firm or the audit
company for reviewing the conduct of the audit.
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Registration requirements Division 2
Section 324BA
Corporations Act 2001 101
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Division 2—Registration requirements
324BA Registration requirements for appointment of individual as
auditor
Subject to section 324BD, an individual contravenes this section if:
(a) the individual:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) the person is not a registered company auditor.
324BB Registration requirements for appointment of firm as
auditor
Contraventions by members of firm
(1) A person (the defendant) contravenes this subsection if:
(a) at a particular time, a firm:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) at that time, the firm:
(i) does not satisfy subsection (5); or
(ii) does not satisfy subsection (6); and
(c) the defendant is a member of the firm at that time; and
(d) the defendant is aware of the circumstances referred to in
paragraphs (a) and (b) at that time.
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Division 2 Registration requirements
Section 324BB
102 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A person (the defendant) contravenes this subsection if:
(a) at a particular time, a firm:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) at that time, the firm:
(i) does not satisfy subsection (5); or
(ii) does not satisfy subsection (6); and
(c) the defendant is a member of the firm at that time.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraphs (2)(a) and (b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (4) provides a defence.
(4) A member of an audit firm does not commit an offence at a
particular time because of a contravention of subsection (2) if the
member either:
(a) does not know at that time of the circumstances that
constitute the contravention of subsection (2); or
(b) does know of those circumstances at that time but takes all
reasonable steps to correct the contravention as soon as
possible after the member becomes aware of those
circumstances.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Registered company auditor requirement
(5) The firm satisfies this subsection if at least 1 member of the firm is
a registered company auditor who is ordinarily resident in
Australia.
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Registration requirements Division 2
Section 324BC
Corporations Act 2001 103
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Business name or members names requirement
(6) The firm satisfies this subsection if:
(a) the business name under which the firm is carrying on
business is registered on the Business Names Register; or
(b) a return in the prescribed form has been lodged showing, in
relation to each member of the firm, the member’s full name
and address as at the time when the firm so consents, acts or
prepares a report.
324BC Registration requirements for appointment of company as
auditor
Contravention by company
(1) A company contravenes this subsection if:
(a) the company:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) the company is not an authorised audit company.
Contraventions by directors of company
(2) A person (the defendant) contravenes this subsection if:
(a) at a particular time, a company:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) at that time, the company is not an authorised audit company;
and
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Section 324BC
104 Corporations Act 2001
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(c) the defendant is a director of the company at that time; and
(d) the defendant is aware of the circumstances referred to in
paragraphs (a) and (b) at that time.
(3) A person (the defendant) contravenes this subsection if:
(a) at a particular time, a company:
(i) consents to be appointed as auditor of a company or
registered scheme; or
(ii) acts as auditor of a company or registered scheme; or
(iii) prepares a report required by this Act to be prepared by
a registered company auditor or by an auditor of a
company or registered scheme; and
(b) at that time, the company is not an authorised audit company;
and
(c) the defendant is a director of the company at that time.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical elements of the offence specified in
paragraphs (3)(a) and (b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (5) provides a defence.
(5) A director of a company does not commit an offence at a particular
time because of a contravention of subsection (3) if the director
either:
(a) does not know at that time of the circumstances that
constitute the contravention of subsection (3); or
(b) knows of those circumstances at that time but takes all
reasonable steps to correct the contravention of
subsection (3) as soon as possible after the director becomes
aware of those circumstances.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
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Registration requirements Division 2
Section 324BD
Corporations Act 2001 105
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324BD Exception from registration requirement for proprietary
company
(1) An individual who is not a registered company auditor may be
appointed as auditor of a proprietary company if:
(a) ASIC is satisfied that it is impracticable for a proprietary
company to obtain the services of:
(i) an individual who could be appointed as auditor
consistently with section 324BA; or
(ii) a firm that could be appointed as auditor consistently
with section 324BB; or
(iii) a company that could be appointed consistently with
section 324BC;
because of the place where the company carries on business;
and
(b) ASIC is satisfied that the individual is suitably qualified or
experienced; and
(c) ASIC approves the individual for the purposes of this Act in
relation to the audit of the company’s financial reports.
The appointment is subject to such terms and conditions as are
specified in the approval under paragraph (c).
(2) If an individual is appointed in accordance with subsection (1):
(a) the individual is taken to be a registered company auditor in
relation to the auditing of any of the company’s financial
reports; and
(b) the provisions of this Act apply, with the necessary
modifications, in relation to the individual accordingly.
Paragraph (a) has effect subject to the terms and conditions of the
approval under subsection (1).
(3) If an individual approved by ASIC under subsection (1) is acting as
auditor of a company, ASIC may at any time, by notice in writing
given to the company:
(a) amend, revoke or vary the terms and conditions of its
approval; or
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Section 324BE
106 Corporations Act 2001
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(b) terminate the appointment of that individual as auditor of the
company.
(4) A notice under subsection (3) terminating the appointment of an
individual as auditor of a company takes effect as if, on the date on
which the notice is received by the company, the company had
received from the individual notice of the individual’s resignation
as auditor taking effect from that date.
324BE Exception from registration requirement—reviewing
financial reports of companies limited by guarantee
(1) An individual is taken to be a registered company auditor for the
purposes of a review of a financial report of a company limited by
guarantee if the individual:
(a) is a member of a professional accounting body; and
(b) has a designation, in respect of that membership, prescribed
by the regulations for the purposes of this paragraph.
(2) The provisions of this Act apply, with the necessary modifications,
in relation to the individual accordingly.
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Auditor independence Division 3
Section 324CA
Corporations Act 2001 107
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Division 3—Auditor independence
Subdivision A—General requirement
324CA General requirement for auditor independence—auditors
Contravention by individual auditor or audit company
(1) An individual auditor or audit company contravenes this subsection
if:
(a) the individual auditor or audit company engages in audit
activity in relation to an audited body at a particular time;
and
(b) a conflict of interest situation exists in relation to the audited
body at that time; and
(c) at that time:
(i) in the case of an individual auditor—the individual
auditor is aware that the conflict of interest situation
exists; or
(ii) in the case of an audit company—the audit company is
aware that the conflict of interest situation exists; and
(d) the individual auditor or audit company does not, as soon as
possible after the individual auditor or the audit company
becomes aware that the conflict of interest situation exists,
take all reasonable steps to ensure that the conflict of interest
situation ceases to exist.
Note: For conflict of interest situation, see section 324CD.
Individual auditor or audit company to notify ASIC
(1A) An individual auditor or audit company contravenes this subsection
if:
(a) the individual auditor or audit company is the auditor of an
audited body; and
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(b) a conflict of interest situation exists in relation to the audited
body while the individual auditor or audit company is the
auditor of the audited body; and
(c) on a particular day (the start day):
(i) in the case of an individual auditor—the individual
auditor becomes aware that the conflict of interest
situation exists; or
(ii) in the case of an audit company—the audit company
becomes aware that the conflict of interest situation
exists; and
(d) at the end of the period of 7 days from the start day:
(i) the conflict of interest situation remains in existence;
and
(ii) the individual auditor or audit company has not
informed ASIC in writing that the conflict of interest
situation exists.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2A) or (2C) (public company) or 331AAA(2A) or
(2C) (registered scheme) within the period of 21 days (or a longer
period that has been approved by ASIC) from the day the notice under
this subsection is given, the audit appointment will be terminated at
the end of that period.
(1B) A person is not excused from informing ASIC under
subsection (1A) that a conflict of interest situation exists on the
ground that the information might tend to incriminate the person or
expose the person to a penalty.
(1C) However, if the person is a natural person:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
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Section 324CA
Corporations Act 2001 109
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(1D) If the individual auditor or audit company gives ASIC a notice
under paragraph (1A)(d), ASIC must, as soon as practicable after
the notice has been received, give a copy of the notice to the
audited body.
Conflict of interest situation of which individual auditor or audit
company is not aware
(2) An individual auditor or audit company contravenes this subsection
if:
(a) the individual auditor or audit company engages in audit
activity in relation to an audited body at a particular time;
and
(b) a conflict of interest situation exists in relation to the audited
body at the time; and
(c) at that time:
(i) in the case of an individual auditor—the individual
auditor is not aware that the conflict of interest situation
exists; or
(ii) in the case of an audit company—the audit company is
not aware that the conflict of interest situation exists;
and
(d) the individual auditor or the audit company would have been
aware of the existence of the conflict of interest situation at
that time if the individual auditor or audit company had had
in place a quality control system reasonably capable of
making the individual auditor or audit company aware of the
existence of such a conflict of interest situation.
Note: For conflict of interest situation, see section 324CD.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical element of the offence specified in
paragraph (2)(b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsections (4) and (5) provide defences.
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Section 324CA
110 Corporations Act 2001
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(4) An individual auditor does not commit an offence because of a
contravention of subsection (2) in relation to audit activity engaged
in by the auditor at a particular time if the individual auditor has
reasonable grounds to believe that the individual auditor had in
place at that time a quality control system that provided reasonable
assurance (taking into account the size and nature of the audit
practice of the individual auditor) that the individual auditor and
the individual auditor’s employees complied with the requirements
of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
(5) An audit company does not commit an offence because of a
contravention of subsection (2) in relation to audit activity engaged
in by the audit company at a particular time if the audit company
has reasonable grounds to believe that the audit company had in
place at that time a quality control system that provided reasonable
assurance (taking into account the size and nature of the audit
practice of the audit company) that the audit company and the audit
company’s employees complied with the requirements of this
Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Relationship between obligations under this section and other
obligations
(6) The obligations imposed by this section are in addition to, and do
not derogate from, any obligation imposed by:
(a) another provision of this Act; or
(b) a code of professional conduct.
Note: Paragraph (a)—see, for example, the specific obligations imposed by
Subdivision B.
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Auditor independence Division 3
Section 324CB
Corporations Act 2001 111
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324CB General requirement for auditor independence—member of
audit firm
Contravention by member of audit firm
(1) A person (the defendant) contravenes this subsection if:
(a) an audit firm engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at that time; and
(c) the defendant is a member of the audit firm at that time; and
(d) the defendant is or becomes aware of the circumstances
referred to in paragraphs (a) and (b); and
(e) the defendant does not, as soon as possible after the
defendant becomes aware of those circumstances, take
reasonable steps to ensure that the conflict of interest
situation ceases to exist.
Note: For conflict of interest situation, see section 324CD.
Member of audit firm to notify ASIC
(1A) A person (the defendant) contravenes this subsection if:
(a) an audit firm is the auditor of an audited body; and
(b) a conflict of interest situation exists in relation to the audited
body while the audit firm is the auditor of the audited body;
and
(c) the defendant is a member of the audit firm at a time when
the conflict of interest situation exists; and
(d) on a particular day (the start day), the defendant becomes
aware of the circumstances referred to in paragraphs (a) and
(b); and
(e) at the end of the period of 7 days from the start day:
(i) the conflict of interest situation remains in existence;
and
(ii) ASIC has not been informed in writing by the
defendant, by another member of the audit firm or by
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Section 324CB
112 Corporations Act 2001
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someone else on behalf of the audit firm that the conflict
of interest situation exists.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2B) (public company) or 331AAA(2B) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(1B) A person is not excused from informing ASIC under
subsection (1A) that a conflict of interest situation exists on the
ground that the information might tend to incriminate the person or
expose the person to a penalty.
(1C) However:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
(1D) If ASIC is given a notice under paragraph (1A)(e), ASIC must, as
soon as practicable after the notice is received, give a copy of the
notice to the audited body.
Conflict of interest situation of which another member of audit firm
is aware
(2) A person contravenes this subsection if:
(a) an audit firm engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at the time; and
(c) the person is a member of the audit firm at that time; and
(d) at that time, another member of the audit firm is aware that
the conflict of interest situation exists; and
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Section 324CB
Corporations Act 2001 113
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(e) the audit firm does not, as soon as possible after the member
referred to in paragraph (d) becomes aware that the conflict
of interest situation exists, take all reasonable steps to ensure
that the conflict of interest situation ceases to exist.
Note: For conflict of interest situation, see section 324CD.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraphs (2)(a), (b), (d) and (e).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (6) provides a defence.
Conflict of interest situation of which members are not aware
(4) A person contravenes this subsection if:
(a) an audit firm engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at the time; and
(c) the person is a member of the audit firm at that time; and
(d) at that time none of the members of the audit firm is aware
that the conflict of interest situation exists; and
(e) a member of the audit firm would have been aware of the
existence of the conflict of interest situation if the audit firm
had in place a quality control system reasonably capable of
making the audit firm aware of the existence of such a
conflict of interest situation.
Note: For conflict of interest situation, see section 324CD.
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical elements of the offence specified in
paragraphs (4)(a), (b), (d) and (e).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (6) provides a defence.
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Section 324CC
114 Corporations Act 2001
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Defence
(6) A person does not commit an offence because of a contravention of
subsection (2) or (4) in relation to audit activity engaged in by an
audit firm at a particular time if the person has reasonable grounds
to believe that the audit firm had in place at that time a quality
control system that provided reasonable assurance (taking into
account the size and nature of the audit practice of the audit firm)
that the audit firm and its employees complied with the
requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Relationship between obligations under this section and other
obligations
(7) The obligations imposed by this section are in addition to, and do
not derogate from, any obligation imposed by:
(a) another provision of this Act; or
(b) a code of professional conduct.
Note: Paragraph (a)—see, for example, the specific obligations imposed by
Subdivision B.
324CC General requirement for auditor independence—director of
audit company
Contravention by director of audit company
(1) A person (the defendant) contravenes this subsection if:
(a) an audit company engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at that time; and
(c) the defendant is a director of the audit company at that time;
and
(d) the defendant is or becomes aware of the circumstances
referred to in paragraphs (a) and (b); and
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Section 324CC
Corporations Act 2001 115
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(e) the defendant does not, as soon as possible after the
defendant becomes aware of those circumstances, take
reasonable steps to ensure that the conflict of interest
situation ceases to exist.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: The audit company itself will commit an offence based on the
contravention of subsection 324AA(1).
Director of audit company to notify ASIC
(1A) A person (the defendant) contravenes this subsection if:
(a) an audit company is the auditor of an audited body; and
(b) a conflict of interest situation exists in relation to the audited
body while the audit company is the auditor of the audited
body; and
(c) the defendant is a director of the audit company at a time
when the conflict of interest situation exists; and
(d) on a particular day (the start day), the defendant becomes
aware of the circumstances referred to in paragraphs (a) and
(b); and
(e) at the end of the period of 7 days from the start day:
(i) the conflict of interest situation remains in existence;
and
(ii) ASIC has not been informed in writing by the
defendant, by another director of the audit company or
by the audit company that the conflict of interest
situation exists.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2C) (public company) or 331AAA(2C) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(1B) A person is not excused from informing ASIC under
subsection (1A) that a conflict of interest situation exists on the
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Section 324CC
116 Corporations Act 2001
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ground that the information might tend to incriminate the person or
expose the person to a penalty.
(1C) However, if the person is a natural person:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
(1D) If ASIC is given a notice under paragraph (1A)(e), ASIC must, as
soon as practicable after the notice is received, give a copy of the
notice to the audited body.
Conflict of interest situation of which another director of audit
company aware
(2) A person contravenes this subsection if:
(a) an audit company engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at the time; and
(c) the person is a director of the audit company at that time; and
(d) at that time, another director of the audit company is aware
that the conflict of interest situation exists; and
(e) the audit company does not, as soon as possible after the
director referred to in paragraph (d) becomes aware that the
conflict of interest situation exists, take all reasonable steps
to ensure that the conflict of interest situation ceases to exist.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: The company itself will commit an offence based on the contravention
of subsection 324AA(1).
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraphs (2)(a), (b), (d) and (e).
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Section 324CC
Corporations Act 2001 117
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Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (6) provides a defence.
Conflict of interest situation of which directors of audit company
not aware
(4) A person contravenes this subsection if:
(a) an audit company engages in audit activity in relation to an
audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited
body at the time; and
(c) the person is a director of the audit company at that time; and
(d) at that time none of the directors of the audit company is
aware that the conflict of interest situation exists; and
(e) a director of the audit company would have been aware of the
existence of the conflict of interest situation if the audit
company had in place a quality control system reasonably
capable of making the audit company aware of the existence
of such a conflict of interest situation.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: The company itself will commit an offence based on the contravention
of subsection 324AA(2).
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical elements of the offence specified in
paragraphs (4)(a), (b), (d) and (e).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (6) provides a defence.
Defence
(6) A person does not commit an offence because of a contravention of
subsection (2) or (4) in relation to audit activity engaged in by an
audit company at a particular time if the person has reasonable
grounds to believe that the audit company had in place at that time
a quality control system that provided reasonable assurance (taking
into account the size and nature of the audit practice of the audit
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Section 324CD
118 Corporations Act 2001
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company) that the audit company and its employees complied with
the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Relationship between obligations under this section and other
obligations
(7) The obligations imposed by this section are in addition to, and do
not derogate from, any obligation imposed by:
(a) another provision of this Act; or
(b) a code of professional conduct.
Note: Paragraph (a)—see, for example, the specific obligations imposed by
Subdivision B.
324CD Conflict of interest situation
(1) For the purposes of sections 324CA, 324CB and 324CC, a conflict
of interest situation exists in relation to an audited body at a
particular time if, because of circumstances that exist at that time:
(a) the auditor, or a professional member of the audit team, is not
capable of exercising objective and impartial judgment in
relation to the conduct of the audit of the audited body; or
(b) a reasonable person, with full knowledge of all relevant facts
and circumstances, would conclude that the auditor, or a
professional member of the audit team, is not capable of
exercising objective and impartial judgment in relation to the
conduct of the audit of the audited body.
(2) Without limiting subsection (1), have regard to circumstances
arising from any relationship that exists, has existed, or is likely to
exist, between:
(a) the individual auditor; or
(b) the audit firm or any current or former member of the firm;
or
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Auditor independence Division 3
Section 324CD
Corporations Act 2001 119
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(c) the audit company, any current or former director of the audit
company or any person currently or formerly involved in the
management of the audit company;
and any of the persons and bodies set out in the following table:
Relevant relationships
Item If the audited body
is…
have regard to any relationship
with…
1 a company the company; or
a current or former director of the
company; or
a person currently or formerly
involved in the management of the
company.
2 a disclosing entity the entity; or
a current or former director of the
entity; or
a person currently or formerly
involved in the management of the
entity.
3 a registered scheme the responsible entity for the
registered scheme; or
a current or former director of the
responsible entity; or
a person currently or formerly
involved in the management of the
scheme; or
a person currently or formerly
involved in the management of the
responsible entity.
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Division 3 Auditor independence
Section 324CE
120 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Specific requirements
324CE Auditor independence—specific requirements for individual
auditor
Specific independence requirements for individual auditor
(1) An individual auditor contravenes this subsection if:
(a) the individual auditor engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (5) of
this section; and
(c) the individual auditor is or becomes aware of the
circumstances referred to in paragraph (b); and
(d) the individual auditor does not, as soon as possible after the
individual auditor becomes aware of those circumstances,
take all reasonable steps to ensure that the individual auditor
does not continue to engage in audit activity in those
circumstances.
Individual auditor to notify ASIC
(1A) An individual auditor contravenes this subsection if:
(a) the individual auditor is the auditor of an audited body; and
(b) a relevant item of the table in subsection 324CH(1) applies to
a person or entity covered by subsection (5) of this section
while the individual auditor is the auditor of the audited
body; and
(c) on a particular day (the start day), the individual auditor
becomes aware of the circumstances referred to in
paragraph (b); and
(d) at the end of the period of 7 days from the start day:
(i) those circumstances remain in existence; and
(ii) the individual auditor has not informed ASIC in writing
of those circumstances.
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Auditor independence Division 3
Section 324CE
Corporations Act 2001 121
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Note: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2A) (public company) or 331AAA(2A) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(1B) A person is not excused from informing ASIC under
subsection (1A) that the circumstances referred to in
paragraph (1A)(b) exist on the ground that the information might
tend to incriminate the person or expose the person to a penalty.
(1C) However:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
(1D) If the individual auditor gives ASIC a notice under
paragraph (1A)(d), ASIC must, as soon as practicable after the
notice has been received, give a copy of the notice to the audited
body.
Strict liability contravention of specific independence requirements
by individual auditor
(2) An individual auditor contravenes this subsection if:
(a) the individual auditor engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (5) of
this section.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraph (2)(b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
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Section 324CE
122 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: Subsection (4) provides a defence.
(4) An individual auditor does not commit an offence because of a
contravention of subsection (2) in relation to audit activity engaged
in by the individual auditor at a particular time if the individual
auditor has reasonable grounds to believe that the individual
auditor had in place at that time a quality control system that
provided reasonable assurance (taking into account the size and
nature of the audit practice of the individual auditor) that the
individual auditor and the individual auditor’s employees complied
with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
People and entities covered
(5) The following table sets out:
(a) the persons and entities covered by this subsection in relation
to audit activity engaged in by an individual auditor; and
(b) the items of the table in subsection 324CH(1) that are the
relevant items for each of those persons and entities:
Individual auditor
Item For this person or entity... the relevant items
of the table in
subsection 324CH
(1) are...
1 the individual auditor 1 to 19
2 a service company or trust acting for, or on
behalf of, the individual auditor, or another
entity performing a similar function
1 to 19
3 a professional member of the audit team
conducting the audit of the audited body
1 to 6
8 to 19
4 an immediate family member of a
professional member of the audit team
conducting the audit of the audited body
1 and 2
10 to 19
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Auditor independence Division 3
Section 324CE
Corporations Act 2001 123
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Individual auditor
Item For this person or entity... the relevant items
of the table in
subsection 324CH
(1) are...
5 a person who is a non-audit services
provider and who does not satisfy the
maximum hours test in subsection (6)
10 to 12
6 an immediate family member of a person
who is a non-audit services provider and
who does not satisfy the maximum hours
test in subsection (6)
10 to 12
7 an entity that the auditor (or a service
company or trust acting for, or on behalf
of, the individual auditor, or another entity
performing a similar function) controls
15
8 a body corporate in which the auditor (or a
service company or trust acting for, or on
behalf of, the individual auditor, or another
entity performing a similar function) has a
substantial holding
15
9 a person who:
(a) is a former professional employee of
the auditor; and
(b) does not satisfy the independence test
in subsection (7)
1 and 2
10 an individual who:
(a) is the former owner of the individual
auditor’s business; and
(b) does not satisfy the independence test
in subsection (7)
1 and 2
Maximum hours test
(6) A non-audit services provider satisfies the maximum hours test in
this subsection if:
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Section 324CE
124 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the number of hours for which the person provides services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the period to
which the audit relates does not exceed 10 hours; and
(b) the number of hours for which the person provides services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the 12 months
immediately before the beginning of the period to which the
audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection (1) or (2), the
prosecution must prove that the non-audit services provider did not
satisfy the maximum hours test in this subsection.
Independence test
(7) A person satisfies the independence test in this subsection in
relation to an individual auditor if the person:
(a) does not influence the operations or financial policies of the
accounting and audit practice conducted by the auditor; and
(b) does not participate, or appear to participate, in the business
or professional activities of the accounting and audit practice
conducted by the auditor; and
(c) does not have any rights against the auditor in relation to the
accounting and audit practice conducted by the auditor in
relation to the termination of the person’s former
employment by the auditor; and
(d) has no financial arrangements with the auditor in relation to
the accounting and audit practice conducted by the auditor,
other than:
(i) an arrangement providing for regular payments of a
fixed pre-determined dollar amount which is not
dependent, directly or indirectly, on the revenues,
profits or earnings of the auditor; or
(ii) an arrangement providing for regular payments of a
dollar amount where the method of calculating the
dollar amount is fixed and is not dependent, directly or
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Auditor independence Division 3
Section 324CF
Corporations Act 2001 125
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
indirectly, on the revenues, profits or earnings of the
auditor; and
(e) without limiting paragraph (d), has no financial arrangement
with the auditor to receive a commission or similar payment
in relation to business generated by the person for the
accounting and audit practice conducted by the auditor.
In a prosecution for an offence based on subsection (1) or (2), the
prosecution must prove that the person did not satisfy the
independence test in this subsection in relation to the individual
auditor.
(8) In applying subsection (7), disregard any rights that the person has
against the auditor by way of an indemnity for, or contribution in
relation to, liabilities incurred by the person when the person was
an employee of the auditor or the owner of the auditor’s business.
324CF Auditor independence—specific requirements for audit firm
Contraventions by members of audit firm
(1) A person (the defendant) contravenes this subsection if:
(a) an audit firm engages in audit activity at a particular time;
and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (5) of
this section; and
(c) the defendant is a member of the audit firm at that time; and
(d) the defendant is or becomes aware of the circumstances
referred to in paragraphs (a) and (b); and
(e) the defendant does not, as soon as possible after the
defendant becomes aware of those circumstances, take all
reasonable steps to ensure that the audit firm does not
continue to engage in audit activity in those circumstances.
Member of audit firm to notify ASIC
(1A) A person (the defendant) contravenes this subsection if:
(a) an audit firm is the auditor of an audited body; and
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Section 324CF
126 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a relevant item of the table in subsection 324CH(1) applies to
a person or entity covered by subsection (5) of this section
while the audit firm is the auditor of the audited body; and
(c) the defendant is a member of the audit firm at a time when
the circumstances referred to in paragraph (b) exist; and
(d) on a particular day (the start day), the defendant becomes
aware of the circumstances referred to in paragraphs (a) and
(b); and
(e) at the end of the period of 7 days from the start day:
(i) the circumstances referred to in paragraph (b) remain in
existence; and
(ii) ASIC has not been informed in writing of those
circumstances by the defendant, by another member of
the audit firm or by someone else on behalf of the audit
firm.
Note: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2B) (public company) or 331AAA(2B) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(1B) A person is not excused from informing ASIC under
subsection (1A) that the circumstances referred to in
paragraph (1A)(b) exist on the ground that the information might
tend to incriminate the person or expose the person to a penalty.
(1C) However:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
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Auditor independence Division 3
Section 324CF
Corporations Act 2001 127
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1D) If ASIC is given a notice under paragraph (1A)(e), ASIC must, as
soon as practicable after the notice is received, give a copy of the
notice to the audited body.
Contravention of independence requirements by members of audit
firm
(2) A person (the defendant) contravenes this subsection if:
(a) an audit firm engages in audit activity at a particular time;
and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (5) of
this section; and
(c) the defendant is a member of the audit firm at that time.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraphs (2)(a) and (b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (4) provides a defence.
(4) A person does not commit an offence because of a contravention of
subsection (2) in relation to audit activity engaged in by an audit
firm at a particular time if the person has reasonable grounds to
believe that the audit firm had in place at that time a quality control
system that provided reasonable assurance (taking into account the
size and nature of the audit practice of the audit firm) that the audit
firm and its employees complied with the requirements of this
Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
People and entities covered
(5) The following table sets out:
(a) the persons and entities covered by this subsection in relation
to audit activity engaged in by an audit firm; and
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Section 324CF
128 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the items of the table in subsection 324CH(1) that are the
relevant items for each of those persons and entities:
Audit firm
Item For this person or entity... the relevant items
of the table in
subsection 324CH
(1) are...
1 the firm 4
7
10 to 19
2 a service company or trust acting for, or on
behalf of, the firm, or another entity
performing a similar function
4
7
10 to 19
3 a member of the firm 1 to 7
9
15
4 a professional member of the audit team
conducting the audit of the audited body
1 to 6
8 to 19
5 an immediate family member of a
professional member of the audit team
conducting the audit of the audited body
1 and 2
10 to 19
6 a person who:
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours
test in subsection (6)
10 to 12
7 an immediate family member of a person
who:
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours
test in subsection (6)
10 to 12
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Auditor independence Division 3
Section 324CF
Corporations Act 2001 129
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Audit firm
Item For this person or entity... the relevant items
of the table in
subsection 324CH
(1) are...
8 an entity that the firm (or a service
company or trust acting for, or on behalf
of, the firm, or another entity performing a
similar function) controls
15
9 a body corporate in which the firm (or a
service company or trust acting for, or on
behalf of, the firm, or another entity
performing a similar function) has a
substantial holding
15
10 an entity that a member of the firm
controls or a body corporate in which a
member of the firm has a substantial
holding
15
11 a person who:
(a) is a former member of the firm; and
(b) does not satisfy the independence test
in subsection (7)
1 and 2
12 a person who:
(a) is a former professional employee of
the firm; and
(b) does not satisfy the independence test
in subsection (7)
1 and 2
Maximum hours test
(6) A non-audit services provider satisfies the maximum hours test in
this subsection if:
(a) the number of hours for which the person provides services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the period to
which the audit relates does not exceed 10 hours; and
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Section 324CF
130 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the number of hours for which the person provided services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the 12 months
immediately before the beginning of the period to which the
audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection (1) or (2), the
prosecution must prove that the non-audit services provider did not
satisfy the maximum hours test in this subsection.
Independence test
(7) A person satisfies the independence test in this subsection in
relation to a firm if the person:
(a) does not influence the operations or financial policies of the
accounting and audit practice conducted by the firm; and
(b) does not participate, or appear to participate, in the business
or professional activities of the accounting and audit practice
conducted by the firm; and
(c) does not have any rights against the firm, or the members of
the firm, in relation to the accounting and audit practice
conducted by the firm in relation to the termination of, or the
value of, the person’s former partnership interest in the firm;
and
(d) has no financial arrangements with the firm in relation to the
accounting and audit practice conducted by the firm, other
than:
(i) an arrangement providing for regular payments of a
fixed pre-determined dollar amount which is not
dependent, directly or indirectly, on the revenues,
profits or earnings of the firm; or
(ii) an arrangement providing for regular payments of a
dollar amount where the method of calculating the
dollar amount is fixed and is not dependent, directly or
indirectly, on the revenues, profits or earnings of the
firm; and
(e) without limiting paragraph (d), has no financial arrangement
with the firm to receive a commission or similar payment in
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Section 324CG
Corporations Act 2001 131
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relation to business generated by the person for the
accounting and audit practice conducted by the firm.
In a prosecution for an offence based on subsection (1) or (2), the
prosecution must prove that the person did not satisfy the
independence test in this subsection in relation to the firm.
(8) In applying subsection (7), disregard any rights that the person has
against the firm, or the members of the firm, by way of an
indemnity for, or contribution in relation to, liabilities incurred by
the person when the person was a member or employee of the firm.
Meaning of holding by firm in body corporate
(9) For the purposes of item 9 in the table in subsection (5), a firm is
taken to have a holding in a body corporate if the holding is one of
the firm’s partnership assets.
324CG Auditor independence—specific requirements for audit
company
Specific independence requirements for audit company
(1) An audit company contravenes this subsection if:
(a) the audit company engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (9) of
this section; and
(c) the audit company is or becomes aware of the circumstances
referred to in paragraph (b); and
(d) the audit company does not, as soon as possible after the
audit company becomes aware of those circumstances, take
all reasonable steps to ensure that the audit company does not
continue to engage in audit activity in those circumstances.
Audit company to notify ASIC
(1A) An audit company contravenes this subsection if:
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Section 324CG
132 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the audit company is the auditor of an audited body; and
(b) a relevant item of the table in subsection 324CH(1) applies to
a person or entity covered by subsection (9) of this section
while the audit company is the auditor of the audited body;
and
(c) on a particular day (the start day), the audit company
becomes aware of the circumstances referred to in
paragraph (b); and
(d) at the end of the period of 7 days from the start day:
(i) those circumstances remain in existence; and
(ii) the audit company has not informed ASIC in writing of
those circumstances.
Note: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2C) (public company) or 331AAA(2C) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(1B) If the audit company gives ASIC a notice under paragraph (1A)(d),
ASIC must, as soon as practicable after the notice has been
received, give a copy of the notice to the audited body.
Strict liability contravention of specific independence requirements
by audit company
(2) An audit company contravenes this subsection if:
(a) the audit company engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (9) of
this section.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraph (2)(b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
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Auditor independence Division 3
Section 324CG
Corporations Act 2001 133
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: Subsection (4) provides a defence.
(4) An audit company does not commit an offence because of a
contravention of subsection (2) in relation to audit activity engaged
in by the audit company at a particular time if the audit company
has reasonable grounds to believe that the audit company had in
place at that time a quality control system that provided reasonable
assurance (taking into account the size and nature of the audit
practice of the audit company) that the audit company and the audit
company’s employees complied with the requirements of this
Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
Contraventions by directors of audit company
(5) A person (the defendant) contravenes this subsection if:
(a) an audit company engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (9) of
this section; and
(c) the defendant is a director of the audit company at that time;
and
(d) the defendant is or becomes aware of the circumstances
referred to in paragraphs (a) and (b); and
(e) the defendant does not, as soon as possible after the
defendant becomes aware of those circumstances, take all
reasonable steps to ensure that the audit company does not
continue to engage in audit activity in those circumstances.
Director of audit company to notify ASIC
(5A) A person (the defendant) contravenes this subsection if:
(a) an audit company is the auditor of an audited body; and
(b) a relevant item of the table in subsection 324CH(1) applies to
a person or entity covered by subsection (9) of this section
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Section 324CG
134 Corporations Act 2001
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while the audit company is the auditor of the audited body;
and
(c) the defendant is a director of the audit company at a time
when the circumstances referred to in paragraph (b) exist;
and
(d) on a particular day (the start day), the defendant becomes
aware of the circumstances referred to in paragraphs (a) and
(b); and
(e) at the end of the period of 7 days from the start day:
(i) the circumstances referred to in paragraph (b) remain in
existence; and
(ii) ASIC has not been informed in writing of those
circumstances by the defendant, by another director of
the company or by the audit company.
Note: If the audited body is a public company or a registered scheme and the
notice under this subsection is not followed up by a notice under
subsection 327B(2C) (public company) or 331AAA(2C) (registered
scheme) within the period of 21 days (or a longer period that has been
approved by ASIC) from the day the notice under this subsection is
given, the audit appointment will be terminated at the end of that
period.
(5B) A person is not excused from informing ASIC under
subsection (5A) that the circumstances referred to in
paragraph (5A)(b) exist on the ground that the information might
tend to incriminate the person or expose the person to a penalty.
(5C) However, if the person is a natural person:
(a) the information; and
(b) the giving of the information;
are not admissible in evidence against the person in a criminal
proceeding, or any other proceeding for the recovery of a penalty,
other than proceedings for an offence based on the information
given being false or misleading.
(5D) If ASIC is given a notice under paragraph (5A)(e), ASIC must, as
soon as practicable after the notice is received, give a copy of the
notice to the audited body.
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Section 324CG
Corporations Act 2001 135
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Strict liability contravention of specific independence requirements
by director of audit company
(6) A person (the defendant) contravenes this subsection if:
(a) an audit company engages in audit activity at a particular
time; and
(b) a relevant item of the table in subsection 324CH(1) applies at
that time to a person or entity covered by subsection (9) of
this section; and
(c) the defendant is a director of the audit company at that time.
(7) For the purposes of an offence based on subsection (6), strict
liability applies to the physical elements of the offence specified in
paragraphs (6)(a) and (b).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (8) provides a defence.
(8) A person does not commit an offence because of a contravention of
subsection (6) in relation to audit activity engaged in by an audit
company at a particular time if the person has reasonable grounds
to believe that the audit company had in place at that time a quality
control system that provided reasonable assurance (taking into
account the size and nature of the audit practice of the audit
company) that the audit company and its employees complied with
the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
People and entities covered
(9) The following table sets out:
(a) the persons and entities covered by this subsection in relation
to audit activity engaged in by an audit company; and
(b) the items of the table in subsection 324CH(1) that are the
relevant items for each of those persons and entities:
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Section 324CG
136 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Audit company
Item For this person or entity... the relevant items
of the table in
subsection 324CH(
1) are...
1 the audit company 4
7
10 to 19
2 a service company or trust
acting for, or on behalf of, the
audit company, or another
entity performing a similar
function
4
7
10 to 19
3 a director or senior manager of
the audit company
1 to 7
9
15
4 a professional member of the
audit team conducting the audit
of the audited body
1 to 6
8 to 19
5 an immediate family member of
a professional member of the
audit team conducting the audit
of the audited body
1 and 2
10 to 19
6 a person who:
(a) is a non-audit services
provider; and
(b) does not satisfy the
maximum hours test in
subsection (10)
10 to 12
7 an immediate family member of
a person who:
(a) is a non-audit services
provider; and
(b) does not satisfy the
maximum hours test in
10 to 12
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Auditor independence Division 3
Section 324CG
Corporations Act 2001 137
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Audit company
Item For this person or entity... the relevant items
of the table in
subsection 324CH(
1) are...
subsection (10)
8 an entity that the audit company
(or a service company or trust
acting for, or on behalf of, the
audit company, or another
entity performing a similar
function) controls
15
9 a body corporate in which the
audit company (or a service
company or trust acting for, or
on behalf of, the audit
company, or another entity
performing a similar function)
has a substantial holding
15
10 an entity that an officer of the
audit company controls or a
body corporate in which an
officer of the audit company
has a substantial holding
16
11 a person who:
(a) is a former officer of the
audit company; and
(b) does not satisfy the
independence test in
subsection (11)
1 and 2
12 a person who:
(a) is a former professional
employee of the audit
company; and
(b) does not satisfy the
independence test in
subsection (11)
1 and 2
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Division 3 Auditor independence
Section 324CG
138 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Maximum hours test
(10) A non-audit services provider satisfies the maximum hours test in
this subsection if:
(a) the number of hours for which the person provides services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the period to
which the audit relates does not exceed 10 hours; and
(b) the number of hours for which the person provided services
(other than services related to the conduct of an audit) to the
audited body on behalf of the auditor during the 12 months
immediately before the beginning of the period to which the
audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection (1), (2), (5) or
(6), the prosecution must prove that the non-audit services provider
did not satisfy the maximum hours test in this subsection.
Independence test
(11) A person satisfies the independence test in this subsection in
relation to an audit company if the person:
(a) does not influence the operations or financial policies of the
accounting and audit practice conducted by the audit
company; and
(b) does not participate, or appear to participate, in the business
or professional activities of the accounting and audit practice
conducted by the audit company; and
(c) does not have any rights against the audit company in
relation to the accounting and audit practice conducted by the
audit company in relation to the termination of the person’s
former position as an officer of the audit company; and
(d) has no financial arrangements with the audit company in
relation to the accounting and audit practice conducted by the
audit company, other than:
(i) an arrangement providing for regular payments of a
fixed pre-determined dollar amount which is not
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Section 324CH
Corporations Act 2001 139
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dependent, directly or indirectly, on the revenues,
profits or earnings of the audit company; or
(ii) an arrangement providing for regular payments of a
dollar amount where the method of calculating the
dollar amount is fixed and is not dependent, directly or
indirectly, on the revenues, profits or earnings of the
audit company; and
(e) without limiting paragraph (d), has no financial arrangement
with the audit company to receive a commission or similar
payment in relation to business generated by the person for
the accounting and audit practice conducted by the audit
company.
In a prosecution for an offence based on subsection (1), (2), (5) or
(6), the prosecution must prove that the person did not satisfy the
independence test in this subsection in relation to the audit
company.
(12) In applying subsection (11), disregard any rights that the person
has against the audit company by way of an indemnity for, or
contribution in relation to, liabilities incurred by the person when
the person was an officer or employee of the audit company.
324CH Relevant relationships
Table of relevant relationships
(1) The following table lists the relationships between:
(a) a person or a firm; and
(b) the audited body for an audit;
that are relevant for the purposes of sections 324CE, 324CF and
324CG:
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Section 324CH
140 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Relevant relationships
Item This item applies to a person (or, if applicable, to a firm) at a
particular time if at that time the person (or firm)...
1 is an officer of the audited body
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
2 is an audit-critical employee of the audited body
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
3 is a partner of:
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
4 is an employer of:
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
5 is an employee of:
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
6 is a partner or employee of an employee of:
(a) an officer of the company; or
(b) an audit-critical employee of the company
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
7 provides remuneration to:
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body;
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Auditor independence Division 3
Section 324CH
Corporations Act 2001 141
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Relevant relationships
Item This item applies to a person (or, if applicable, to a firm) at a
particular time if at that time the person (or firm)...
for acting as a consultant to the person
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
8 was an officer of the audited body at any time during:
(a) the period to which the audit relates; or
(b) the 12 months immediately preceding the beginning of the
period to which the audit relates; or
(c) the period during which the audit is being conducted or the
audit report is being prepared
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
9 was an audit-critical employee of the audited body at any time
during:
(a) the period to which the audit relates; or
(b) the 12 months immediately preceding the beginning of the
period to which the audit relates; or
(c) the period during which the audit is being conducted or the
audit report is being prepared
This item does not apply if the audited body is a small
proprietary company for the relevant financial year.
10 has an asset that is an investment in the audited body
11 has an asset that is a beneficial interest in an investment in the
audited body and has control over that asset
12 has an asset that is a beneficial interest in an investment in the
audited body that is a material interest
13 has an asset that is a material investment in an entity that has a
controlling interest in the audited body
14 has an asset that is a material beneficial interest in an investment
in an entity that has a controlling interest in the audited body
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Section 324CH
142 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Relevant relationships
Item This item applies to a person (or, if applicable, to a firm) at a
particular time if at that time the person (or firm)...
15 owes an amount to:
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls;
unless the debt is disregarded under subsection (5), (5A) or (5B)
16 is owed an amount by:
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls;
under a loan that is not disregarded under subsection (6) or (6A)
17 is liable under a guarantee of a loan made to:
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls
19 is entitled to the benefit of a guarantee given by:
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls
in relation to a loan unless the guarantee is disregarded under
subsection (8)
Applying table if audited body is registered scheme
(2) If the audited body is a registered scheme, apply the table in
subsection (1) as if:
(a) references to the audited body in items 1 to 9, and items 15 to
19, in the table were references to the responsible entity for
the registered scheme; and
(b) references to an interest in the audited body in items 10 to 12
in the table were references to an interest in either:
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Section 324CH
Corporations Act 2001 143
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(i) the registered scheme; or
(ii) the responsible entity for the registered scheme; and
(c) references to an investment in an entity that has a controlling
interest in the audited body in items 13 and 14 of the table
were references to an investment in an entity that has a
controlling interest in the responsible entity for the registered
scheme.
Applying table if audited body is listed entity (other than registered
scheme)
(3) If the audited body is a listed entity (other than a registered
scheme), apply the table in subsection (1) as if references in the
table to the audited body included references to an associated entity
of the audited body.
Note: See section 50AAA for the definition of associated entity.
Firm assets
(4) For the purpose of applying items 10 to 14 in the table in
subsection (1) to an audit firm, the firm is taken to have a particular
asset if the asset is one of the firm’s partnership assets.
Housing loan exception
(5) For the purposes of item 15 of the table in subsection (1), disregard
a debt owed by an individual to a body corporate or entity if:
(a) the body corporate or entity is:
(i) an Australian ADI; or
(ii) a body corporate registered under section 21 of the Life
Insurance Act 1995; and
(b) the debt arose because of a loan that the body corporate or
entity made to the person in the ordinary course of its
ordinary business; and
(c) the person used the amount of the loan to pay the whole or
part of the purchase price of premises that the person uses as
their principal place of residence.
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Section 324CH
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Goods and services exception
(5A) For the purposes of item 15 of the table in subsection (1), disregard
a debt owed by a person or firm to a body corporate or entity if:
(a) the debt arises from the acquisition of goods or services
from:
(i) the audited body; or
(ii) an entity that the audited body controls; or
(iii) a related body corporate; and
(b) the acquisition of goods and services was on the terms and
conditions that would normally apply to goods or services
acquired from the body, entity or related body corporate; and
(c) the debt is owed on the terms and conditions that would
normally apply to a debt owing to the body, entity or related
body corporate; and
(d) the goods or services will be used by the person or firm:
(i) for the personal use of the person or firm; or
(ii) in the ordinary course of business of the person or firm.
Ordinary commercial loan exception
(5B) For the purposes of item 15 of the table in subsection (1), disregard
a debt owed under a loan that:
(a) is made or given in the ordinary course of business of:
(i) the audited body; or
(ii) the related body corporate; or
(iii) the controlled entity; and
(b) is made or given on the terms and conditions that would
normally apply to a loan made or given by the audited body,
the related body corporate or the controlled entity.
Loans by immediate family members in ordinary business dealing
with client
(6) For the purposes of item 16 of the table in subsection (1), disregard
a debt owed to a person by a body corporate or entity if:
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Section 324CH
Corporations Act 2001 145
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(a) the item applies to the person because the person is an
immediate family member of:
(i) a professional member of the audit team conducting the
audit of the audited body; or
(ii) a non-audit services provider; and
(b) the debt is incurred in the ordinary course of business of the
body corporate or entity.
(6A) For the purposes of item 16 in the table in subsection (1), disregard
an amount owed under a loan to a person or firm by the audited
body, a related body corporate or an entity that the audited body
controls if:
(a) the body, body corporate or entity is an Australian ADI; and
(b) the amount is deposited in a basic deposit product (within the
meaning of section 761A) provided by the body, body
corporate or entity; and
(c) the amount was deposited, in the ordinary course of business
of the audited body, body corporate or entity, on the terms
and conditions that would normally apply to a basic deposit
product provided by the body, body corporate or entity.
Ordinary commercial guarantee exception
(8) For the purposes of item 19 of the table in subsection (1), disregard
any guarantee that:
(a) is made or given in the ordinary course of the business of:
(i) the audited body; or
(ii) the related body corporate; or
(iii) the controlled entity; and
(b) is made or given on the terms and conditions that would
normally apply to a guarantee made or given by the audited
body, the related body corporate or the controlled entity.
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Section 324CI
146 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Future debts and liabilities
(8A) In this section:
(a) a reference to a debt or amount that is owed by one entity to
another entity includes a reference to a debt or amount that
will (or may) be owed by the first entity to the other entity
under an existing agreement between the entities; and
(b) a reference to a liability under a guarantee of a loan includes
a reference to a liability that will arise under the guarantee if
the loan is not repaid.
Relevant financial year
(9) In this section:
relevant financial year, in relation to audit activities undertaken in
relation to an audit or review of a financial report for a financial
year or an audit or review of a financial report for a half-year in a
financial year, means the financial year immediately before that
financial year.
324CI Special rule for retiring partners of audit firms and retiring
directors of authorised audit companies
A person contravenes this section if:
(a) the person ceases to be:
(i) a member of an audit firm; or
(ii) a director of an audit company;
at a particular time (the departure time); and
(b) at any time before the departure time, the audit firm or audit
company has engaged in an audit of an audited body; and
(c) the person was a professional member of the audit team for
the audit; and
(d) within the period of 2 years starting on the date the report
under section 308 or 309 was made on the latest audit to
which paragraphs (b) and (c) apply, the person becomes, or
continues to be, an officer of the audited body; and
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Section 324CJ
Corporations Act 2001 147
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(e) the audited body is not a small proprietary company for the
most recently ended financial year.
If the audited body is a listed entity (other than a registered
scheme), apply paragraph (d) as if references in that paragraph to
the audited body included references to a related body corporate of
the audited body.
324CJ Special rule for retiring professional member of audit
company
A person contravenes this section if:
(a) the person who is not a director of an audit company ceases
to be a professional employee of the audit company at a
particular time (the departure time); and
(b) at any time before the departure time, the audit company has
engaged in an audit of an audited body; and
(c) the person was a lead auditor or review auditor for the audit;
and
(d) within the period of 2 years starting on the date the report
under section 308 or 309 was made on the latest audit to
which paragraphs (b) and (c) apply, the person becomes, or
continues to be, an officer of the audited body; and
(e) the audited body is not a small proprietary company for the
most recently ended financial year.
If the audited body is a listed entity (other than a registered
scheme), apply paragraph (d) as if references in that paragraph to
the audited body included references to a related body corporate of
the audited body.
324CK Multiple former audit firm partners or audit company
directors
A person contravenes this section if:
(a) an audit firm, or audit company, is an auditor of an audited
body for a financial year; and
(b) the person has at any time been a member of the audit firm or
a director of the audit company; and
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Section 324CL
148 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the person becomes an officer of the audited body within a
period of 5 years after the person ceased (or last ceased) to be
a member of the audit firm or a director of the audit company
(as the case may be); and
(d) at the time when paragraph (c) is satisfied another person
who is or who also has at any time been a member of the
audit firm, or a director of the audit company, at a time when
the audit firm, or audit company, undertook an audit of the
audited body is also an officer of the audited body; and
(e) the audited body is not a small proprietary company for the
most recently ended financial year.
If the audited body is a listed entity (other than a registered
scheme), apply paragraphs (c) and (d) as if references in those
paragraphs to the audited body included references to a related
body corporate of the audited body.
Subdivision C—Common provisions
324CL People who are regarded as officers of a company for the
purposes of this Division
(1) For the purposes of this Division, a person is taken to be an officer
of a company if:
(a) the person is an officer of:
(i) a related body corporate; or
(ii) an entity that the company controls; or
(b) the person has, at any time within the immediately preceding
period of 12 months, been an officer or promoter of:
(i) the company; or
(ii) a related body corporate; or
(iii) an entity that the company controlled at that time.
(2) Paragraph (b) does not apply if ASIC directs that it does not apply
in relation to the person in relation to the company. ASIC may give
the direction only if ASIC thinks that it is appropriate to do so in
the circumstances of the case.
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Section 324CL
Corporations Act 2001 149
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(3) For the purposes of this Division, a person is not taken to be an
officer of a company by reason only of being, or having been, the
liquidator of:
(a) the company; or
(b) a related body corporate; or
(c) an entity that the company controls or has controlled.
(4) For the purposes of this Division, a person is not taken to be an
officer of a company merely because of one or more of the
following:
(a) having been appointed as auditor of:
(i) the company; or
(ii) a related body corporate; or
(iii) an entity that the company controls or has controlled;
(b) having been appointed, for any purpose relating to taxation,
as public officer of:
(i) a body corporate; or
(ii) an unincorporated body; or
(iii) a trust estate;
(c) being or having been authorised to accept service of process
or notices on behalf of:
(i) the company; or
(ii) a related body corporate; or
(iii) an entity that the company controls or has controlled.
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Division 4 Deliberately disqualifying auditor
Section 324CM
150 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Deliberately disqualifying auditor
324CM Deliberately disqualifying auditor
Individual auditor
(1) An individual contravenes this subsection if:
(a) the individual is appointed auditor of a company or registered
scheme; and
(b) while the appointment continues, the individual brings about
a state of affairs; and
(c) the individual cannot, while that state of affairs continues, act
as auditor of the company or scheme without contravening
Division 2 or 3.
Audit firm
(2) A member of a firm contravenes this subsection if:
(a) the firm is appointed auditor of a company or a registered
scheme; and
(b) while the appointment continues, the member brings about a
state of affairs; and
(c) the firm cannot, while that state of affairs continues, act as
auditor of the company or scheme without a person
contravening Division 2 or 3.
Audit company
(3) A person who is:
(a) a member of a company; or
(b) a director of a company; or
(c) a lead auditor in relation to an audit conducted by a
company;
contravenes this subsection if:
(d) the company is appointed auditor of a company or a
registered scheme; and
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Section 324CM
Corporations Act 2001 151
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(e) while the appointment continues, the person brings about a
state of affairs; and
(f) the company cannot, while that state of affairs continues, act
as auditor of the company or scheme without contravening
Division 2 or 3.
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Division 5 Auditor rotation for listed companies
Section 324DA
152 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Auditor rotation for listed companies
324DA Limited term for eligibility to play significant role in audit of
a listed company or listed registered scheme
(1) If an individual plays a significant role in the audit of a listed
company or listed registered scheme for 5 successive financial
years (the extended audit involvement period), the individual is
not eligible to play a significant role in the audit of the company or
the scheme for a later financial year (the subsequent financial
year) unless:
(a) the individual has not played a significant role in the audit of
the company or the scheme for at least 2 successive financial
years (the intervening financial years); and
(b) the intervening financial years:
(i) commence after the end of the extended audit
involvement period; and
(ii) end before the beginning of the subsequent financial
year.
Note: Play a significant role in an audit is defined in section 9.
(2) An individual is not eligible to play a significant role in the audit of
a listed company or listed registered scheme for a financial year if,
were the individual to do so, the individual would play a significant
role in the audit of the company or scheme for more than 5 out of 7
successive financial years.
(3) For the purposes of subsection (2), disregard an individual’s
playing of a significant role in the audit of a company or scheme
for a financial year if:
(a) either:
(i) the directors of the company or scheme grant an
approval under section 324DAA in relation to the
individual; or
(ii) ASIC makes a declaration under paragraph 342A(1)(a)
in relation to the individual; and
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Auditor rotation for listed companies Division 5
Section 324DAA
Corporations Act 2001 153
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(b) because of the approval or the declaration, subsection (1) of
this section does not operate to make the individual not
eligible to play a significant role in the audit of the company
or scheme for that financial year.
324DAA Directors may extend eligibility term
(1) Subject to section 324DAB, the directors of a listed company, or of
a listed registered scheme, may, by resolution, grant an approval
for an individual to play a significant role in the audit of the
company or scheme for not more than 2 successive financial years
in addition to the 5 successive financial years mentioned in
subsection 324DA(1).
(2) The approval must be granted before the end of those 5 successive
financial years.
(3) If the directors grant the approval, subsection 324DA(1) applies to
the individual, in relation to the audit of the company or scheme, as
if the references in that subsection to 5 successive financial years
were references to:
(a) if the approval is for one additional successive financial
year—6 successive financial years; or
(b) if the approval is for an additional 2 successive financial
years—7 successive financial years.
(4) If the directors grant the approval for one successive financial year,
the directors may, by resolution before the end of that year, grant
an approval for an additional successive year.
(5) If the directors grant the approval for the additional successive
year, subsection 324DA(1) applies to the individual, in relation to
the audit of the company or scheme, as if the references in that
subsection to 5 successive financial years were references to 7
successive financial years.
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Division 5 Auditor rotation for listed companies
Section 324DAB
154 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
324DAB Requirements for directors to approve extension of
eligibility term
Requirements if company or scheme has audit committee
(1) If a listed company, or the responsible entity of a listed registered
scheme, has an audit committee:
(a) an approval under section 324DAA must not be granted
unless it is in accordance with a recommendation provided
by the audit committee; and
(b) the resolution granting the approval must set out the reasons
why the audit committee is satisfied as mentioned in
paragraph (2)(d) of this section.
Note: Directors are not required to grant an approval merely because the
audit committee has recommended that an approval be granted.
(2) An approval is taken to be made in accordance with a
recommendation provided by the audit committee only if:
(a) the approval is consistent with the audit committee’s
recommendation; and
(b) the recommendation is endorsed by a resolution passed by
the members of the audit committee; and
(c) the recommendation is in writing signed by a member of the
audit committee on behalf of the audit committee and given
to the directors of the company or scheme; and
(d) the recommendation states that the audit committee is
satisfied that the approval:
(i) is consistent with maintaining the quality of the audit
provided to the company or scheme; and
(ii) would not give rise to a conflict of interest situation (as
defined in section 324CD);
and sets out the reasons why the committee is so satisfied.
Requirements if company or scheme does not have audit committee
(3) If a listed company, or the responsible entity of a listed registered
scheme, does not have an audit committee:
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Section 324DAC
Corporations Act 2001 155
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(a) an approval under section 324DAA must not be granted
unless the directors of the company or scheme are satisfied
that the approval:
(i) is consistent with maintaining the quality of the audit
provided to the company or scheme; and
(ii) would not give rise to a conflict of interest situation (as
defined in section 324CD); and
(b) the resolution granting the approval must set out the reasons
why the directors are so satisfied.
Auditor must have agreed to extension
(4) The directors of a listed company, or of a listed registered scheme,
must not grant an approval under section 324DAA unless:
(a) if the individual to whom the approval relates does not act on
behalf of an audit firm or company—the individual agrees, in
writing, to the approval being granted; or
(b) if the individual to whom the approval relates acts on behalf
of an audit firm or company—the audit firm or company on
whose behalf the individual acts agrees, in writing, to the
approval being granted.
324DAC Notifications about approval to extend eligibility term
If the directors of a listed company, or of a listed registered
scheme, grant an approval under section 324DAA, the directors
must, within 14 days of granting the approval:
(a) lodge a copy of the resolution granting the approval with
ASIC; and
(b) give a copy of the resolution to:
(i) if the individual to whom the approval relates does not
act on behalf of an audit firm or company—the
individual; and
(ii) if the individual to whom the approval relates acts on
behalf of an audit firm or company—the audit firm or
company on whose behalf the individual acts.
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Section 324DAD
156 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Details of the approval, and the reasons for the approval, must be
included in the directors’ report under section 300.
324DAD Approval ineffective unless it complies with requirements
A purported grant of approval under section 324DAA is ineffective
unless the requirements of sections 324DAA, 324DAB and
324DAC are complied with in relation to the approval.
324DB Individual’s rotation obligation
An individual contravenes this section if the individual:
(a) plays a significant role in the audit of a listed company or
listed registered scheme for a financial year; and
(b) is not eligible to play that role.
324DC Audit firm’s rotation obligation
Contraventions by members of audit firm
(1) A person (the defendant) contravenes this subsection if:
(a) an audit firm consents to act as a listed company’s or listed
registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the firm, as a lead or review
auditor in relation to the audit of the company’s or scheme’s
financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the
audit of the company or scheme for that financial year; and
(d) the defendant is a member of the firm; and
(e) the defendant is not the individual and is or becomes aware
that the individual is not eligible to play that role; and
(f) the defendant fails to take the necessary steps, as soon as
possible after the defendant becomes aware that the
individual is not eligible to play that role, either:
(i) to ensure that the audit firm resigns as auditor of the
company or scheme; or
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Section 324DC
Corporations Act 2001 157
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(ii) to ensure that the individual ceases to act, on behalf of
the audit firm, as a lead or review auditor in relation to
the audit of the company or scheme for that financial
year.
(2) A person (the defendant) contravenes this subsection if:
(a) an audit firm consents to act as a listed company’s or listed
registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the firm, as a lead or review
auditor in relation to the audit of the company’s or scheme’s
financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the
audit of the company or scheme for that financial year:
(i) because of section 324DAD; or
(ii) for any other reason; and
(d) the defendant is a member of the firm.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical elements of the offence specified in
paragraphs (2)(a) and (b) and subparagraph (2)(c)(ii).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (4) provides a defence.
(4) A person does not commit an offence because of a contravention of
subsection (2) in relation to an individual acting as lead or review
auditor on behalf of an audit firm at a particular time if the person
has reasonable grounds to believe that the audit firm had in place at
that time a quality control system that provided reasonable
assurance (taking into account the size and nature of the audit
practice of the audit firm) that the audit firm and its employees
complied with the requirements of this Division.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
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Section 324DD
158 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
324DD Audit company’s rotation obligation
Contravention by audit company
(1) An audit company contravenes this subsection if:
(a) the audit company consents to act as a listed company’s or
listed registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the audit company, as a lead
or review auditor in relation to the audit of the company’s or
scheme’s financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the
audit of the company or scheme for that financial year; and
(d) a director of the audit company (other than the individual) is
aware that the individual is not eligible to play that role; and
(e) the audit company fails to take the necessary steps, as soon as
possible after the director becomes aware that the individual
is not eligible to play that role, either:
(i) to resign as auditor of the company or scheme; or
(ii) to ensure that the individual ceases to act, on behalf of
the audit company, as a lead or review auditor in
relation to the audit of the company or scheme for that
financial year.
Contraventions by directors of audit company
(2) A person (the defendant) contravenes this subsection if:
(a) an audit company consents to act as a listed company’s or
listed registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the audit company, as a lead
or review auditor in relation to the audit of the company’s or
scheme’s financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the
audit of the company or scheme for that financial year; and
(d) the defendant is a director of the audit company; and
(e) the defendant is not the individual and is or becomes aware
that the individual is not eligible to play that role; and
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Section 324DD
Corporations Act 2001 159
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(f) the defendant fails to take the necessary steps, as soon as
possible after the defendant becomes aware that the
individual is not eligible to play that role, either:
(i) to ensure that the audit company resigns as auditor of
the company or scheme; or
(ii) to ensure that the individual ceases to act, on behalf of
the audit company, as a lead or review auditor in
relation to the audit of the company or scheme for that
financial year.
(3) A person (the defendant) contravenes this subsection if:
(a) an audit company consents to act as a listed company’s or
listed registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the audit company, as a lead
or review auditor in relation to the audit of the company’s or
scheme’s financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the
audit of the company or scheme for that financial year:
(i) because of section 324DAD; or
(ii) for any other reason; and
(d) the defendant is a director of the audit company.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical elements of the offence specified in
paragraphs (3)(a) and (b) and subparagraph (3)(c)(ii).
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Subsection (5) provides a defence.
(5) A person does not commit an offence because of a contravention of
subsection (3) in relation to an individual acting as lead or review
auditor on behalf of an audit company at a particular time if the
person has reasonable grounds to believe that the audit company
had in place at that time a quality control system that provided
reasonable assurance (taking into account the size and nature of the
audit practice of the audit company) that the audit company and its
employees complied with the requirements of this Division.
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Section 324DD
160 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
this subsection, see subsection 13.3(3) of the Criminal Code.
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Section 325
Corporations Act 2001 161
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Appointment, removal and fees of auditors for
companies
Subdivision A—Appointment of company auditors
325 Appointment of auditor by proprietary company
The directors of a proprietary company may appoint an auditor for
the company if an auditor has not been appointed by the company
in general meeting.
327A Public company auditor (initial appointment of auditor)
(1) The directors of a public company must appoint an auditor of the
company within 1 month after the day on which a company is
registered as a company unless the company at a general meeting
has appointed an auditor.
(1A) Subsection (1) does not apply in relation to a company if:
(a) the directors reasonably believe that subsection 301(3) will
apply to the company’s financial reports; or
(b) the company is a small company limited by guarantee.
(2) Subject to this Part, an auditor appointed under subsection (1)
holds office until the company’s first AGM.
(3) A director of a company must take all reasonable steps to comply
with, or to secure compliance with, subsection (1).
327B Public company auditor (annual appointments at AGMs to fill
vacancies)
(1) A public company must:
(a) appoint an auditor of the company at its first AGM; and
(b) appoint an auditor of the company to fill any vacancy in the
office of auditor at each subsequent AGM.
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Section 327B
162 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1A) Subsection (1) does not apply in relation to a company if:
(a) subsection 301(3) applies to the company’s financial reports;
or
(b) the company is a small company limited by guarantee.
(2) An auditor appointed under subsection (1) holds office until the
auditor:
(a) dies; or
(b) is removed, or resigns, from office in accordance with
section 329; or
(c) ceases to be capable of acting as auditor because of
Division 2 of this Part; or
(d) ceases to be auditor under subsection (2A), (2B) or (2C).
(2A) An individual auditor ceases to be auditor of a company under this
subsection if:
(a) on a particular day (the start day), the individual auditor:
(i) informs ASIC of a conflict of interest situation in
relation to the company under subsection 324CA(1A);
or
(ii) informs ASIC of particular circumstances in relation to
the company under subsection 324CE(1A); and
(b) the individual auditor does not give ASIC a notice, before the
notification day (see subsection (2D)), that that conflict of
interest situation has, or those circumstances have, ceased to
exist before the end of the period (the remedial period) of 21
days, or such longer period as ASIC approves in writing,
from the start day.
(2B) An audit firm ceases to be auditor of a company under this
subsection if:
(a) on a particular day (the start day), ASIC is:
(i) informed of a conflict of interest situation in relation to
the company under subsection 324CB(1A); or
(ii) informed of particular circumstances in relation to the
company under subsection 324CF(1A); and
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Section 327B
Corporations Act 2001 163
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(b) ASIC has not been given a notice on behalf of the audit firm,
before the notification day (see subsection (2D)), that that
conflict of interest situation has, or those circumstances have,
ceased to exist before the end of the period (the remedial
period) of 21 days, or such longer period as ASIC approves
in writing, from the start day.
(2C) An audit company ceases to be auditor of a company under this
subsection if:
(a) on a particular day (the start day), ASIC is:
(i) informed of a conflict of interest situation in relation to
the company under subsection 324CB(1A) or
324CC(1A); or
(ii) informed of particular circumstances in relation to the
company under subsection 324CF(1A) or 324CG(1A)
or (5A); and
(b) ASIC has not been given a notice on behalf of the audit
company, before the notification day (see subsection (2D)),
that that conflict of interest situation has, or those
circumstances have, ceased to exist before the end of the
period (the remedial period) of 21 days, or such longer
period as ASIC approves in writing, from the start day.
(2D) The notification day is:
(a) the last day of the remedial period; or
(b) such later day as ASIC approves in writing (whether before
or after the remedial period ends).
(3) A director of a company must take all reasonable steps to comply
with, or to secure compliance with, subsection (1).
(4) If an audit firm ceases to be the auditor of a company under
subsection (2) at a particular time, each member of the firm who:
(a) is taken to have been appointed as an auditor of the company
under subsection 324AB(1) or 324AC(4); and
(b) is an auditor of the company immediately before that time;
ceases to be an auditor of the company at that time.
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Section 327C
164 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
327C Public company auditor (appointment to fill casual vacancy)
(1) If:
(a) a vacancy occurs in the office of auditor of a public
company; and
(b) the vacancy is not caused by the removal of an auditor from
office; and
(c) there is no surviving or continuing auditor of the company;
the directors must, within 1 month after the vacancy occurs,
appoint an auditor to fill the vacancy unless the company at a
general meeting has appointed an auditor to fill the vacancy.
Note: Certain public companies are not required to appoint an auditor: see
subsections 327A(1A) and 327B(1A).
(2) An auditor appointed under subsection (1) holds office, subject to
this Part, until the company’s next AGM.
(3) A director of a public company must take all reasonable steps to
comply with, or to secure compliance with, subsection (1).
327D Appointment to replace auditor removed from office
(1) This section deals with the situation in which an auditor of a
company is removed from office at a general meeting in
accordance with section 329.
(2) The company may at that general meeting (without adjournment),
by special resolution immediately appoint an individual, firm or
company as auditor of the company if a copy of the notice of
nomination has been sent to the individual, firm or company under
subsection 328B(3).
(3) If a special resolution under subsection (2):
(a) is not passed; or
(b) could not be passed merely because a copy of the notice of
nomination has not been sent to an individual, firm or
company under subsection 328B(3);
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Section 327E
Corporations Act 2001 165
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the general meeting may be adjourned and the company may, at the
adjourned meeting, by ordinary resolution appoint an individual,
firm or company as auditor of the company if:
(c) a member of the company gives the company notice of the
nomination of the individual, firm or company for
appointment as auditor; and
(d) the company receives the notice at least 14 clear days before
the day to which the meeting is adjourned.
(4) The day to which the meeting is adjourned must be:
(a) not earlier than 20 days after the day of the meeting; and
(b) not later than 30 days after the day of the meeting.
(5) Subject to this Part, an auditor appointed under subsection (2) or
(3) holds office until the company’s next AGM.
327E ASIC may appoint public company auditor if auditor removed
but not replaced
(1) This section deals with the situation in which a public company
fails to appoint an auditor under subsection 327D(2) or (3). The
failure is referred to as the auditor replacement failure.
(2) The company must give ASIC written notice of the auditor
replacement failure within the period of 7 days commencing on the
day of the auditor replacement failure (the notification period).
(3) If the company gives ASIC the notice required by subsection (2),
ASIC must appoint an auditor of the company as soon as
practicable after receiving the notice. This subsection has effect
subject to section 327G.
(4) If the company does not give ASIC the notice required by
subsection (2), ASIC may appoint an auditor of the company at any
time:
(a) after the end of the notification period; and
(b) before ASIC receives notice of the auditor replacement
failure from the company.
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Section 327F
166 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This subsection has effect subject to section 327G.
(5) If the company:
(a) does not give ASIC the notice required by subsection (2); and
(b) gives ASIC notice of the auditor replacement failure after the
end of the notification period;
ASIC must appoint an auditor of the company as soon as
practicable after receiving the notice. This subsection has effect
subject to section 327G.
(6) Subject to this Part, an auditor appointed under this section holds
office until the company’s next AGM.
327F ASIC’s general power to appoint public company auditor
(1) ASIC may appoint an auditor of a public company if:
(a) the company does not appoint an auditor when required by
this Act to do so; and
(b) a member of the company applies to ASIC in writing for the
appointment of an auditor under this section.
This subsection has effect subject to section 327G.
(2) An individual, firm or company appointed as auditor of a company
under subsection (1) holds office, subject to this Part, until the next
AGM of the company.
327G Restrictions on ASIC’s powers to appoint public company
auditor
(1) ASIC may appoint an individual, firm or company as auditor of a
company under section 327E or 327F only if the individual, firm or
company consents to being appointed.
(2) ASIC must not appoint an auditor of a company under
section 327E or 327F if:
(a) there is another auditor of the company (the continuing
auditor); and
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Section 327H
Corporations Act 2001 167
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(b) ASIC is satisfied that the continuing auditor is able to carry
out the responsibilities of auditor alone; and
(c) the continuing auditor agrees to continue as auditor.
(3) ASIC must not appoint an auditor of a company under
section 327E or 327F if:
(a) the company does not give ASIC the notice required by
subsection 327E(2) before the end of the notification period;
and
(b) ASIC has already appointed an auditor of the company under
section 327E after the end of the notification period.
327H Effect on appointment of public company auditor of company
beginning to be controlled by a corporation
An auditor of a public company that begins to be controlled by a
corporation:
(a) must retire at the AGM of the company next held after the
company begins to be controlled by the corporation unless
the auditor vacates that office before then; and
(b) is, subject to this Part, eligible for re-appointment.
This section has effect notwithstanding subsection 327B(2).
327I Remaining auditors may act during vacancy
While a vacancy in the office of auditor of a company continues,
the surviving or continuing auditor or auditors (if any) may act as
auditors of the company.
328A Auditor’s consent to appointment
(1) A company, the directors of a company or the responsible entity of
a registered scheme must not appoint an individual, firm or
company as auditor of the company unless that individual, firm or
company:
(a) has consented, before the appointment, to act as auditor; and
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Section 328B
168 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) has not withdrawn that consent before the appointment is
made.
For the purposes of this section, a consent, or the withdrawal of a
consent, must be given by written notice to the company, the
directors or the responsible entity of the scheme.
(2) A notice under subsection (1) given by a firm must be signed by a
member of the firm who is a registered company auditor both:
(a) in the firm name; and
(b) in his or her own name.
(3) A notice under subsection (1) given by a company must be signed
by a director or senior manager of the company both:
(a) in the company’s name; and
(b) in his or her own name.
(4) If a company, the directors of a company or the responsible entity
of a registered scheme appoints an individual, firm or company as
auditor of a company in contravention of subsection (1):
(a) the purported appointment does not have any effect; and
(b) the company or responsible entity, and any officer of the
company or responsible entity who is in default, are each
guilty of an offence.
Note: An officer of a company, or of a responsible entity, is in default if the
officer is involved in the contravention of subsection (1) by the
company, the company’s directors or the entity (see section 83).
Section 79 defines involved.
328B Nomination of auditor
(1) Subject to this section, a company may appoint an individual, firm
or company as auditor of the company at its AGM only if a
member of the company gives the company written notice of the
nomination of the individual, firm or company for appointment as
auditor:
(a) before the meeting was convened; or
(b) not less than 21 days before the meeting.
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Section 329
Corporations Act 2001 169
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This subsection does not apply if an auditor is removed from office
at the AGM.
(2) If a company purports to appoint an individual, firm or company as
auditor of the company in contravention of subsection (1):
(a) the purported appointment is of no effect; and
(b) the company and any officer of the company who is in
default are each guilty of an offence.
Note: An officer of a company is in default if the officer is involved in the
company’s contravention of subsection (1) (see section 83).
Section 79 defines involved.
(3) If a member gives a company notice of the nomination of an
individual, firm or company for appointment as auditor of the
company, the company must send a copy of the notice to:
(a) each individual, firm or company nominated; and
(b) each auditor of the company; and
(c) each person entitled to receive notice of general meetings of
the company.
This is so whether the appointment is to be made at a meeting or an
adjourned meeting referred to in section 327D or at an AGM.
(4) The copy of the notice of nomination must be sent:
(a) not less than 7 days before the meeting; or
(b) at the time notice of the meeting is given.
Subdivision B—Removal and resignation of company auditors
329 Removal and resignation of auditors
(1) An auditor of a company may be removed from office by
resolution of the company at a general meeting of which notice
under subsection (1A) has been given, but not otherwise.
(1A) Notice of intention to move the resolution must be given to the
company at least 2 months before the meeting is to be held.
However, if the company calls a meeting after the notice of
intention is given under this subsection, the meeting may pass the
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Section 329
170 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
resolution even though the meeting is held less than 2 months after
the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see
subsection 249H(4)).
(2) Where notice under subsection (1A) of a resolution to remove an
auditor is received by a company, it must as soon as possible send
a copy of the notice to the auditor and lodge a copy of the notice.
(3) Within 7 days after receiving a copy of the notice, the auditor may
make representations in writing, not exceeding a reasonable length,
to the company and request that, before the meeting at which the
resolution is to be considered, a copy of the representations be sent
by the company at its expense to every member of the company to
whom notice of the meeting is sent.
(4) Unless ASIC on the application of the company otherwise orders,
the company must send a copy of the representations in accordance
with the auditor’s request, and the auditor may, without prejudice
to his or her right to be heard orally or, where a firm is the auditor,
to have a member of the firm heard orally on its behalf, require that
the representations be read out at the meeting.
(5) An auditor of a company may, by notice in writing given to the
company, resign as auditor of the company if:
(a) the auditor has, by notice in writing given to ASIC, applied
for consent to the resignation and stated the reasons for the
application and, at or about the same time as the notice was
given to ASIC, notified the company in writing of the
application to ASIC; and
(b) the consent of ASIC has been given.
(6) ASIC must, as soon as practicable after receiving a notice from an
auditor under subsection (5), notify the auditor and the company
whether it consents to the resignation of the auditor.
(7) A statement made by an auditor in an application to ASIC under
subsection (5) or in answer to an inquiry by ASIC relating to the
reasons for the application:
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(a) is not admissible in evidence in any civil or criminal
proceedings against the auditor; and
(b) may not be made the ground of a prosecution, action or suit
against the auditor;
and a certificate by ASIC that the statement was made in the
application or in the answer to the inquiry by ASIC is conclusive
evidence that the statement was so made.
(8) Subject to subsection (9), the resignation of an auditor takes effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
(b) on the day on which ASIC gives its consent to the
resignation; or
(c) on the day (if any) fixed by ASIC for the purpose;
whichever last occurs.
(9) The resignation of an auditor of a proprietary company or a small
company limited by guarantee does not require the consent of
ASIC under subsection (5), and takes effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
(b) on the day on which the notice is received by the company;
whichever is the later.
(10) Where on the retirement or withdrawal from a firm of a member
the firm will no longer be capable, by reason of the provisions of
subparagraph 324BB(1)(b)(i) or (2)(b)(i) of acting as auditor of a
company, the member so retiring or withdrawing is (if not
disqualified from acting as auditor of the company) taken to be the
auditor of the company until he or she obtains the consent of ASIC
to his or her retirement or withdrawal.
(11) Within 14 days after:
(a) the removal from office of an auditor of a company; or
(b) the receipt of a notice of resignation from an auditor of a
company;
the company must:
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Section 330
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(c) lodge with ASIC a notice of the removal or resignation in the
prescribed form; and
(d) where there is a trustee for the holders of debentures of the
company—give to the trustee a copy of the notice lodged
with ASIC.
330 Effect of winding up on office of auditor
An auditor of a company ceases to hold office if:
(a) a special resolution is passed for the voluntary winding up of
the company; or
(b) in a case to which paragraph (a) does not apply—an order is
made by the Court for the winding up of the company.
Subdivision C—Company auditors’ fees and expenses
331 Fees and expenses of auditors
The reasonable fees and expenses of an auditor of a company are
payable by the company.
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Appointment, removal and fees of auditors for registered schemes Division 7
Section 331AAA
Corporations Act 2001 173
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Division 7—Appointment, removal and fees of auditors for
registered schemes
Subdivision A—Appointment of registered scheme auditors
331AAA Registered scheme auditor (initial appointment of auditor)
(1) The responsible entity of a registered scheme must appoint an
auditor of the registered scheme within 1 month after the day on
which the scheme is registered.
(2) An auditor appointed under subsection (1) holds office until the
auditor:
(a) dies; or
(b) is removed, or resigns, from office in accordance with
section 331AC; or
(c) ceases to be capable of acting as an auditor because of
Division 2 of this Part; or
(d) ceases to be auditor under subsection (2A), (2B) or (2C).
(2A) An individual auditor ceases to be auditor of a registered scheme
under this subsection if:
(a) on a particular day (the start day), the individual auditor:
(i) informs ASIC of a conflict of interest situation in
relation to the scheme under subsection 324CA(1A); or
(ii) informs ASIC of particular circumstances in relation to
the scheme under subsection 324CE(1A); and
(b) the individual auditor does not give ASIC a notice, before the
notification day (see subsection (2D)), that that conflict of
interest situation has, or those circumstances have, ceased to
exist before the end of the period (the remedial period) of 21
days, or such longer period as ASIC approves in writing,
from the start day.
(2B) An audit firm ceases to be auditor of a registered scheme under this
subsection if:
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(a) on a particular day (the start day), ASIC is:
(i) informed of a conflict of interest situation in relation to
the scheme under subsection 324CB(1A); or
(ii) informed of particular circumstances in relation to the
scheme under subsection 324CF(1A); and
(b) ASIC has not been given a notice on behalf of the audit firm,
before the notification day (see subsection (2D)), that that
conflict of interest situation has, or those circumstances have,
ceased to exist before the end of the period (the remedial
period) of 21 days, or such longer period as ASIC approves
in writing, from the start day.
(2C) An audit company ceases to be auditor of a registered scheme
under this subsection if:
(a) on a particular day (the start day), ASIC is:
(i) informed of a conflict of interest situation in relation to
the scheme under subsection 324CB(1A) or
324CC(1A); or
(ii) informed of particular circumstances in relation to the
scheme under subsection 324CF(1A) or 324CG(1A) or
(5A); and
(b) ASIC has not been given a notice on behalf of the audit
company, before the notification day (see subsection (2D)),
that that conflict of interest situation has, or those
circumstances have, ceased to exist before the end of the
period (the remedial period) of 21 days, or such longer
period as ASIC approves in writing, from the start day.
(2D) The notification day is:
(a) the last day of the remedial period; or
(b) such later day as ASIC approves in writing (whether before
or after the remedial period ends).
(3) A director of the responsible entity of a registered scheme must
take all reasonable steps to secure compliance with subsection (1).
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Section 331AAB
Corporations Act 2001 175
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(4) If an audit firm ceases to be the auditor of a registered scheme
under subsection (2) at a particular time, each member of the firm
who:
(a) is taken to have been appointed as an auditor of the scheme
under subsection 324AB(1) or 324AC(4); and
(b) is an auditor of the scheme immediately before that time;
ceases to be an auditor of the scheme at that time.
331AAB Registered scheme auditor (appointment to fill vacancy)
(1) If:
(a) a vacancy occurs in the office of auditor of a registered
scheme; and
(b) there is no surviving or continuing auditor of the scheme;
the responsible entity must, within 1 month after the vacancy
occurs, appoint an auditor to fill the vacancy.
(2) A director of the responsible entity of a registered scheme must
take all reasonable steps to secure compliance with subsection (1).
331AAC ASIC’s power to appoint registered scheme auditor
(1) ASIC may appoint an auditor of a registered scheme if:
(a) the responsible entity of the scheme does not appoint an
auditor when required by this Act to do so; and
(b) a member of the scheme applies to ASIC in writing for the
appointment of an auditor under this section.
(2) ASIC may only appoint an individual, firm or company as auditor
under subsection (1) if the individual, firm or company consents to
being appointed.
331AAD Remaining auditors may act during vacancy
While a vacancy in the office of auditor of a registered scheme
continues, the surviving or continuing auditor or auditors (if any)
may act as auditors of the company.
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Section 331AC
176 Corporations Act 2001
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Subdivision B—Removal and resignation of registered scheme
auditors
331AC Removal and resignation of auditors
(1) The responsible entity of a registered scheme may, with ASIC’s
consent, remove the auditor of the scheme from office.
(2) An auditor of a registered scheme may, by notice in writing given
to the responsible entity, resign as auditor of the scheme if:
(a) the auditor:
(i) has, by notice in writing given to ASIC, applied for
consent to the resignation and stated the reasons for the
application; and
(ii) has, at or about the same time as giving the notice to
ASIC, given the responsible entity notice in writing of
the application to ASIC; and
(b) ASIC has given its consent.
(3) As soon as practicable after ASIC receives a notice from an auditor
under subsection (2), ASIC must notify the auditor, and the
responsible entity of the registered scheme, whether it consents to
the resignation.
(4) A statement made by an auditor in an application to ASIC under
subsection (2) or in answer to an inquiry by ASIC relating to the
reasons for the application:
(a) is not admissible in evidence in any civil or criminal
proceedings against the auditor; and
(b) must not be made the ground of a prosecution, action or suit
against the auditor.
A certificate by the ASIC that the statement was made in the
application or in answer to the inquiry by ASIC is conclusive
evidence that the statement was so made.
(5) The resignation of an auditor takes effect:
(a) on the day (if any) specified for the purpose in the notice of
resignation; or
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(b) on the day on which ASIC gives its consent to the
resignation; or
(c) on the day (if any) fixed by ASIC for the purpose;
whichever occurs last.
(6) If, on the retirement or withdrawal of a member of a firm, the firm
will no longer be capable of acting as auditor of a registered
scheme because of subparagraph 324BB(1)(b)(i) or (2)(b)(i), the
member is (if not disqualified from acting as auditor of the
scheme) taken to be the auditor of the scheme until he or she
obtains the consent of ASIC to his or her retirement or withdrawal.
(7) Within 14 days after:
(a) the removal from office of an auditor of a registered scheme;
or
(b) the receipt of a notice of resignation from an auditor of a
registered scheme;
the responsible entity must lodge with ASIC a notice of the
removal or resignation in the prescribed form.
331AD Effect of winding up on office of auditor
An auditor of a registered scheme ceases to hold office if:
(a) the scheme’s constitution provides that the scheme is to be
wound up at a specified time, in specified circumstances or
on the happening of a specified event, and that time is
reached, those circumstances occur or that event occurs; or
(b) the members pass a resolution directing the responsible entity
to wind up the scheme; or
(c) the Court makes an order directing the responsible entity to
wind up the scheme; or
(d) the members pass a resolution to remove the responsible
entity but do not, at the same meeting, pass a resolution
choosing a company to be the new responsible entity that
consents to becoming the scheme’s responsible entity.
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Section 331AE
178 Corporations Act 2001
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Subdivision C—Fees and expenses of auditors
331AE Fees and expenses of auditors
The reasonable fees and expenses of an auditor of a registered
scheme are payable by the responsible entity.
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Section 332
Corporations Act 2001 179
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Part 2M.4A—Annual transparency reports for
auditors
332 Meaning of transparency reporting auditor and transparency
reporting year
(1) A transparency reporting auditor is:
(a) an individual auditor; or
(b) an audit firm; or
(c) an authorised audit company.
(2) A transparency reporting year is a period of 12 months starting on
1 July.
332A Transparency reporting auditors must publish annual
transparency reports
(1) This section applies if, during a transparency reporting year, a
transparency reporting auditor conducts audits, under Division 3 of
Part 2M.3, of 10 or more bodies of any of the following kinds:
(a) listed companies;
(b) listed registered schemes;
(c) ADIs (authorised deposit-taking institutions) within the
meaning of the Banking Act 1959;
(d) bodies mentioned in paragraph (c) or (e) of the definition of
body regulated by APRA in subsection 3(2) of the Australian
Prudential Regulation Authority Act 1998;
(e) bodies prescribed by the regulations for the purposes of this
paragraph.
Note: The 10 or more bodies do not all have to be of the same kind. This
section applies (for example) if, during the year, the transparency
reporting auditor conducts audits of 6 listed companies and 4 listed
registered schemes.
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Section 332B
180 Corporations Act 2001
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(2) The auditor must publish an annual transparency report for the
transparency reporting year, containing the information required by
section 332B, on the auditor’s website within the period of 4
months after the end of the year (or that period as extended under
section 332C).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The auditor must lodge a copy of the report with ASIC on or
before the day it is first published on the auditor’s website.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) An offence based on subsection (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
332B Content of annual transparency report
(1) Subject to subsection (2), an annual transparency report must
contain the information prescribed by the regulations.
(2) The report may omit information that would otherwise be included
under subsection (1) if the inclusion of the information is likely to
result in unreasonable prejudice to the transparency reporting
auditor. If material is omitted, the report must say so.
332C Extension of period for publication of annual transparency
report
(1) On an application made by a transparency reporting auditor in
accordance with subsection (3), ASIC may make an order
extending the period within which the auditor must publish an
annual transparency report.
(2) The order may be expressed to be subject to conditions.
(3) The application must be:
(a) in writing; and
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Section 332D
Corporations Act 2001 181
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(b) lodged with ASIC before the end of the period within which
the auditor would otherwise be required to publish the report;
and
(c) if the auditor is an individual auditor—signed by the auditor;
and
(d) if the auditor is an audit firm—signed by a member of the
firm who is a registered company auditor both:
(i) in the firm name; and
(ii) in the member’s own name; and
(e) if the auditor is an audit company:
(i) authorised by a resolution of the directors; and
(ii) signed by a director.
(4) ASIC must give the auditor written notice of the making of the
order.
332D Exemption orders—applications by transparency reporting
auditors
(1) On an application made by a transparency reporting auditor in
accordance with subsection (3), ASIC may make an order in
writing relieving the auditor from compliance with all or specified
requirements of sections 332A and 332B.
Note: For the criteria for making orders under this section, see section 332F.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) The application must be:
(a) in writing; and
(b) lodged with ASIC; and
(c) if the auditor is an individual auditor—signed by the auditor;
and
(d) if the auditor is an audit firm—signed by a member of the
firm who is a registered company auditor both:
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(i) in the firm name; and
(ii) in the member’s own name; and
(e) if the auditor is an audit company:
(i) authorised by a resolution of the directors; and
(ii) signed by a director.
(4) ASIC must give the auditor written notice of the making or
revocation of the order.
332E Exemption orders—class orders for transparency reporting
auditors
(1) ASIC may, by legislative instrument, make an order in respect of a
specified class of transparency reporting auditors relieving the
auditors from all or specified requirements of sections 332A and
332B.
Note: For the criteria for making orders under this section, see section 332F.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
332F Exemption orders—criteria for orders
(1) To make an order under section 332D or 332E exempting a
transparency reporting auditor, or class of transparency reporting
auditors, from one or more requirements of sections 332A and
332B, ASIC must be satisfied that complying with the
requirements would:
(a) be inappropriate in the circumstances; or
(b) impose unreasonable burdens.
(2) In deciding for the purposes of subsection (1) whether complying
with the requirements would impose an unreasonable burden on
the auditor or class of auditors, ASIC is to have regard to:
(a) the expected costs of complying with the requirements; and
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Section 332G
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(b) the expected benefits of having the auditor or class of
auditors comply with the requirements; and
(c) any practical difficulties that the auditor or class of auditors
faces in complying effectively with the requirements; and
(d) any unusual aspects of the operations of the auditor or class
of auditors; and
(e) any other matters that ASIC considers relevant.
332G Offences by members of audit firm
(1) This Part applies to an audit firm as if it were a person, but with the
changes set out in this section.
(2) An obligation that would otherwise be imposed on the firm by a
provision of this Part is imposed on each member of the firm
instead, but may be discharged by any of the members.
(3) An offence based on a provision of this Part that would otherwise
be committed by the audit firm is taken to have been committed by
each member of the firm.
(4) A member of the firm does not commit an offence because of
subsection (3) if the member:
(a) does not know of the circumstances that constitute the
contravention of the provision concerned; or
(b) knows of those circumstances but takes all reasonable steps
to correct the contravention as soon as possible after the
member becomes aware of those circumstances.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4)—see subsection 13.3(3) of the Criminal Code.
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Part 2M.5 Accounting and auditing standards
Section 334
184 Corporations Act 2001
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Part 2M.5—Accounting and auditing standards
334 Accounting standards
AASB’s power to make accounting standards
(1) The AASB may, by legislative instrument, make accounting
standards for the purposes of this Act. The standards must not be
inconsistent with this Act or the regulations.
(4) An accounting standard applies to:
(a) periods ending after the commencement of the standard; or
(b) periods ending, or starting, on or after a later date specified in
the standard.
(5) A company, registered scheme or disclosing entity may elect to
apply the accounting standard to an earlier period unless the
standard says otherwise. The election must be made in writing by
the directors.
335 Equity accounting
This Chapter (and, in particular, the provisions on consolidation of
financial statements) does not prevent accounting standards from
incorporating equity accounting principles.
336 Auditing standards
AUASB’s power to make auditing standards
(1) The AUASB may, by legislative instrument, make auditing
standards for the purposes of this Act. The standards must not be
inconsistent with this Act or the regulations.
(3) An auditing standard applies to financial reports in relation to:
(a) periods ending after the commencement of the standard; or
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(b) periods ending, or starting, on or after a later date specified in
the standard.
(4) If:
(a) the AUASB makes an auditing standard; and
(b) the standard applies to financial reports in relation to
particular periods under subsection (3); and
(c) an auditor is conducting an audit of a financial report in
relation to a period that occurs before the start of the earliest
of those periods;
the auditor may elect to apply the auditing standard to that audit
unless the standard says otherwise. The election must be recorded
in the audit report.
337 Interpretation of accounting and auditing standards
In interpreting an accounting or auditing standard, unless the
contrary intention appears:
(a) expressions used in the standard have the same meanings as
they have in this Chapter; and
(b) the provisions of Part 1.2 apply as if the standard’s
provisions were provisions of this Chapter.
338 Evidence of text of accounting standard or auditing standard
(1) This section applies to a document that purports to be published by,
or on behalf of, the AASB or the AUASB and to set out the text of:
(a) a specified standard as in force at a specified time under
section 334 or 336; or
(b) a specified provision of a standard of that kind.
It also applies to a copy of a document of that kind.
(2) In the absence of evidence to the contrary, a document to which
this section applies is proof in proceedings under this Act that:
(a) the specified standard was in force at that time under that
section; and
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(b) the text set out in the document is the text of the standard
referred to in paragraph (1)(a) or the provision referred to in
paragraph (1)(b).
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Section 340
Corporations Act 2001 187
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Part 2M.6—Exemptions and modifications
340 Exemption orders—companies, registered schemes and
disclosing entities
(1) On an application made in accordance with subsection (3) in
relation to a company, registered scheme or disclosing entity,
ASIC may make an order in writing relieving any of the following
from all or specified requirements of Parts 2M.2, 2M.3 and 2M.4
(other than Division 4):
(a) the directors;
(b) the company, scheme or entity;
(c) the auditor.
Note: For the criteria for making orders under this section, see section 342.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) The application must be:
(a) authorised by a resolution of the directors; and
(b) in writing and signed by a director; and
(c) lodged with ASIC.
(4) ASIC must give the applicant written notice of the making,
revocation or suspension of the order.
341 Exemption orders—class orders for companies, registered
schemes and disclosing entities
(1) ASIC may make an order in writing in respect of a specified class
of companies, registered schemes or disclosing entities, relieving
any of the following from all or specified requirements of
Parts 2M.2, 2M.3 and 2M.4 (other than Division 4):
(a) directors;
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Section 342
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(b) the companies, registered schemes or disclosing entities
themselves;
(c) auditors of the companies, registered schemes or disclosing
entities.
Note: For the criteria for making orders under this section, see section 342.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) Notice of the making, revocation or suspension of the order must
be published in the Gazette.
342 Exemption orders—criteria for orders for companies, registered
schemes and disclosing entities
(1) To make an order under section 340 or 341, ASIC must be satisfied
that complying with the relevant requirements of Parts 2M.2, 2M.3
and 2M.4 would:
(a) make the financial report or other reports misleading; or
(b) be inappropriate in the circumstances; or
(c) impose unreasonable burdens.
(2) In deciding for the purposes of subsection (1) whether the audit
requirements for a proprietary company, or a class of proprietary
companies, would impose an unreasonable burden on the company
or companies, ASIC is to have regard to:
(a) the expected costs of complying with the audit requirements;
and
(b) the expected benefits of having the company or companies
comply with the audit requirements; and
(c) any practical difficulties that the company or companies face
in complying effectively with the audit requirements (in
particular, any difficulties that arise because a financial year
is the first one for which the audit requirements apply or
because the company or companies are likely to move
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Section 342AA
Corporations Act 2001 189
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frequently between the small and large proprietary company
categories from one financial year to another); and
(d) any unusual aspects of the operation of the company or
companies during the financial year concerned; and
(e) any other matters that ASIC considers relevant.
(3) In assessing expected benefits under subsection (2), ASIC is to
take account of:
(a) the number of creditors and potential creditors; and
(b) the position of creditors and potential creditors (in particular,
their ability to independently obtain financial information
about the company or companies); and
(c) the nature and extent of the liabilities of the company or
companies.
342AA Exemption orders—non-auditor members and former
members of audit firms; former employees of audit
companies
(1) On an application made in accordance with subsection (3) by any
of the following, ASIC may make an order in writing relieving the
applicant from all or specified requirements of Division 3 of
Part 2M.4 (auditor independence):
(a) a member of the firm who is not a registered company
auditor;
(b) a person who has ceased to be:
(i) a member of an audit firm; or
(ii) a director of an audit company; or
(iii) a professional employee of an audit company.
Note: For the criteria for making orders under this section, see
section 342AC.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) The application must be:
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190 Corporations Act 2001
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(a) in writing and signed by the applicant; and
(b) lodged with ASIC.
(4) ASIC must give the applicant written notice of the making,
revocation or suspension of the order.
(5) An order under subsection (1) is not a legislative instrument.
342AB Exemption orders—class orders for non-auditor members
etc.
(1) ASIC may make an order in writing in respect of a specified class
of audit firms or audit companies, relieving any of the following
from all or specified requirements of Division 3 of Part 2M.4
(auditor independence):
(a) members of firms who are not registered company auditors;
(b) persons who have ceased to be:
(i) members of audit firms; or
(ii) directors of audit companies; or
(iii) professional employees of audit companies.
Note: For the criteria for making orders under this section, see
section 342AC.
(2) The order may:
(a) be expressed to be subject to conditions; and
(b) be indefinite or limited to a specified period.
(3) An order under subsection (1) is a legislative instrument.
342AC Exemption orders—criteria for orders for non-auditor
members etc.
To make an order under section 342AA or 342AB, ASIC must be
satisfied that complying with the relevant requirements of
Division 3 of Part 2M.4 would:
(a) make the financial report or other reports misleading; or
(b) be inappropriate in the circumstances; or
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(c) impose unreasonable burdens.
342A ASIC’s power to modify the operation of section 324DA
(1) On an application made in accordance with this section, ASIC
may:
(a) declare that subsection 324DA(1) applies to a registered
company auditor, in relation to the audit of an audited body
or a class of audited bodies, as if the references in that
subsection to 5 successive financial years were references to:
(i) 6 successive financial years; or
(ii) 7 successive financial years; or
(b) declare that subsection 324DA(2) applies to a registered
company auditor, in relation to the audit of an audited body
or a class of audited bodies during a particular period of 7
successive financial years, as if the reference in that
subsection to 5 out of 7 successive financial years were a
reference to 6 out of 7 successive financial years.
(2) The following persons may apply for the declaration:
(a) the registered company auditor;
(b) a firm or company on whose behalf the registered company
auditor acts or would act in relation to the audit or audits.
If the application is made by a firm or company, the declaration
has effect only in relation to activities undertaken by the registered
company auditor on behalf of that firm or company.
(3) The application must be:
(a) in writing; and
(b) signed by the applicant; and
(c) lodged with ASIC.
(4) If the application is made by a registered company auditor who
engages, or is to engage, in audit activities on behalf of a firm or
company, the application must include the firm’s or company’s
written consent to the application.
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Section 342B
192 Corporations Act 2001
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(5) If the application is made by a firm or company in relation to a
registered company auditor, the application must include the
registered company auditor’s written consent to the application.
(6) To make a declaration under subsection (1), ASIC must be
satisfied that, without the modification, Division 4 of Part 2M.4
would impose an unreasonable burden on:
(a) a registered company auditor; or
(b) a firm or company that is applying for the declaration; or
(c) the audited body or bodies in relation to which the
application was made.
(7) In deciding for the purposes of subsection (6) whether, without the
modification, Division 4 of Part 2M.4 would impose an
unreasonable burden on a person referred to in that subsection,
ASIC is to have regard to:
(a) the nature of the audited body or bodies, including whether
the activity in which the audited body or bodies engage is
such that specialist knowledge about that activity is necessary
to carry out the audit properly; and
(b) the availability of other registered company auditors capable
of providing satisfactory audit services for the audited body
or bodies; and
(c) any other matters which ASIC considers relevant.
(8) ASIC must give the applicant written notice of the making,
revocation or suspension of the declaration.
342B Auditor to notify company or registered scheme of
section 342A declaration
(1) If a registered company auditor plays a significant role in the audit
of a company or registered scheme in reliance on a declaration by
ASIC under section 342A, the auditor must give the company or
the responsible entity for the registered scheme written notice of
the declaration.
(2) The notice must specify:
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(a) the name of the registered company auditor; and
(b) the additional financial years for which the registered
company auditor is, because of the declaration under
section 342A, eligible to play a significant role in the audit of
the company or registered scheme.
(3) The notice must be given:
(a) as soon as practicable after the declaration is made if the
auditor has been appointed before the declaration is made; or
(b) before the auditor is appointed if the declaration is made
before the auditor is appointed.
343 Modification by regulations
The regulations may modify the operation of this Chapter in
relation to:
(a) a specified company, registered scheme or disclosing entity;
or
(b) all companies, registered schemes or disclosing entities of a
specified kind.
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Part 2M.7 Sanctions for contraventions of Chapter
Section 344
194 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2M.7—Sanctions for contraventions of
Chapter
344 Contravention of Part 2M.2 or 2M.3, or of certain provisions of
Part 2M.4
(1) A director of a company, registered scheme or disclosing entity
contravenes this section if they fail to take all reasonable steps to
comply with, or to secure compliance with, Part 2M.2 or 2M.3, or
section 324DAA, 324DAB or 324DAC.
Note: This section is a civil penalty provision (see section 1317E).
(2) A person commits an offence if they contravene subsection (1) and
the contravention is dishonest.
(3) Subsection (1) does not apply to section 310, 312, 323A or 323B.
(4) This section does not affect the application of the provisions of
Part 2M.2 or 2M.3 to a director as an officer.
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Review date Part 2N.1
Section 345A
Corporations Act 2001 195
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Chapter 2N—Updating ASIC information
about companies and registered
schemes
Part 2N.1—Review date
345A Review date
(1) The review date for a company is:
(a) either:
(i) if the company became registered as a company after
the commencement of this Act—the anniversary of the
company’s registration as a company under this Act; or
(ii) otherwise—the date of the company’s incorporation or
registration as a company, as recorded in a register
maintained by ASIC under section 1274; or
(b) if a choice of a different date has effect under section 345C—
that different date.
(1A) If:
(a) a company was incorporated as a company or became
registered as a company before the commencement of this
Act; and
(b) there is no date of incorporation of the company as a
company or registration of the company as a company
recorded in a register maintained by ASIC under
section 1274; and
(c) paragraph (1)(b) does not apply to the company;
the review date for the company is the date determined by ASIC
and notified to the company.
(1B) If, apart from this subsection, the review date for a company would
be February 29, the review date for the company is February 28.
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Part 2N.1 Review date
Section 345B
196 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The review date for a registered scheme is:
(a) the anniversary of the scheme’s registration as a registered
scheme; or
(b) if a choice of a different date has effect under section 345C—
that different date.
345B Company or responsible entity may change review date
(1) With ASIC’s approval, a company may choose as its review date a
date that is different from the anniversary of its registration.
(2) With ASIC’s approval, the responsible entity of a registered
scheme may choose as the review date for the scheme a date that is
different from the anniversary of its registration.
(3) If ASIC approves the choice, ASIC must notify the company or
responsible entity in writing.
345C When choice has effect
If ASIC notifies the company or responsible entity of its approval
under section 345B, the choice has effect:
(a) if the different date occurs before the next review date for the
company or scheme—at the time that ASIC notifies its
approval; or
(b) otherwise—immediately after the next review date for the
company or scheme.
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Extract of particulars Part 2N.2
Section 346A
Corporations Act 2001 197
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2N.2—Extract of particulars
346A ASIC must give an extract of particulars each year
(1) ASIC must, within 2 weeks after each review date for a company
or a registered scheme, give to the company or responsible entity
of the scheme an extract of particulars for the company or scheme.
(2) If an agreement or approval under subsection 352(1) covers the
lodgment of a response to an extract of particulars for a company,
ASIC may satisfy subsection (1) by making the extract available to
the company or its agent by electronic means.
(3) An extract of particulars must specify the date of issue.
346B ASIC may ask questions
ASIC may include, in an extract of particulars for a company or a
registered scheme, a requirement that the company or responsible
entity of the scheme provide a particular prescribed by the
regulations for the purposes of this section.
346C Requirements in relation to an extract of particulars
Respond if a particular is incorrect
(1) A company, or responsible entity of a registered scheme, must
respond to an extract of particulars that it receives if any particular
set out in the extract is not correct as at the date of receipt. The
response must comply with subsection (3).
Respond if required to provide a particular
(2) A company, or responsible entity of a registered scheme, must
respond to an extract of particulars that it receives if the extract
includes a requirement to provide a particular under section 346B.
The response must comply with subsection (3).
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Part 2N.2 Extract of particulars
Section 346C
198 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Contents of response
(3) The response to an extract of particulars by a company, or by the
responsible entity of a registered scheme:
(a) must be lodged within 28 days after the date of issue of the
extract; and
(b) must be in the prescribed form; and
(c) must be signed or authenticated; and
(d) if subsection (1) applies—must be such that the particulars
set out in the extract, taken together with the response, are
correct as at the date the response is signed or authenticated;
and
(e) if subsection (2) applies—must provide the required
particular, correct as at the date the response is signed or
authenticated.
Response satisfies other requirements to notify
(4) If a company responds to an extract of particulars:
(a) correcting a particular; or
(b) providing a particular;
in accordance with subsection (3), any requirement elsewhere in
this Act to lodge a prescribed form in relation to the particular is
satisfied by the response.
(5) Subsection (4) does not affect the company’s liability for late
lodgment fees incurred before the response to the extract of
particulars is lodged or continuing offences committed before that
time.
Strict liability offences
(6) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Solvency resolution Part 2N.3
Section 347A
Corporations Act 2001 199
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Part 2N.3—Solvency resolution
347A Directors must pass a solvency resolution after each review
date
(1) The directors of a company must pass a solvency resolution within
2 months after each review date for the company.
(2) Subsection (1) does not apply to the directors of a company that
has lodged a financial report with ASIC under Chapter 2M within
the period of 12 months before the review date.
Note: The defendant bears an evidential burden in relation to the matter in
subsection (2). See subsection 13.3(3) of the Criminal Code.
(3) An offence based on this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
347B Notice to ASIC
(1) If the directors of a company pass a negative solvency resolution
under section 347A, the company must notify ASIC of that fact, in
the prescribed form, within 7 days after the resolution is passed.
(2) If:
(a) subsection 347A(1) applies to the directors of a company;
and
(b) the directors have not passed a solvency resolution under
section 347A within 2 months after a review date;
the company must notify ASIC of that fact, in the prescribed form,
within 7 days after the end of the 2 month period following the
review date.
(3) An offence based on this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 2N.3 Solvency resolution
Section 347C
200 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
347C Payment of review fee is taken to be a representation by the
directors that the company is solvent
(1) If:
(a) a company has paid its review fee in respect of a review date;
and
(b) the company has not lodged a notice under section 347B
within 7 days after the end of the 2 month period following
the review date; and
(c) the company has not lodged a financial report with ASIC
under Chapter 2M within the period of 12 months before the
review date;
the directors of the company are taken to have represented to
ASIC, as at the end of the 2 month period following the company’s
review date, that, in their opinion, there are reasonable grounds to
believe that the company will be able to pay its debts as and when
they become due and payable.
Note: Directors are not taken to have passed a solvency resolution for the
purposes of section 347A merely because they are taken, under this
subsection, to have made a representation to ASIC.
(2) Subsection (1) does not apply if the directors prove that they made
a positive solvency resolution under section 347A within 2 months
after the end of the review date.
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Return of particulars Part 2N.4
Section 348A
Corporations Act 2001 201
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2N.4—Return of particulars
348A ASIC may give a return of particulars
(1) ASIC may give to a company or responsible entity of a registered
scheme a return of particulars for the company or scheme if ASIC
suspects or believes that particulars recorded in relation to the
company or scheme in a register maintained by ASIC under
subsection 1274(1) are not correct.
(2) If an agreement or approval under subsection 352(1) covers the
lodgment of a response to a return of particulars for a company,
ASIC may satisfy subsection (1) by making the return available to
the company or its agent by electronic means.
(3) A return of particulars must specify the date of issue.
348B ASIC may ask questions
ASIC may include, in a return of particulars for a company or a
registered scheme, a requirement that the company or responsible
entity of the scheme provide a particular prescribed by the
regulations for the purposes of this section.
348C ASIC may require a solvency resolution and statement
(1) ASIC may include, in a return of particulars for a company, a
requirement that the company comply with subsection (2) or
subsection (3). The company may choose which subsection to
comply with.
(2) The company complies with this subsection if:
(a) before the company lodges a response to the return of
particulars, the directors of the company pass a solvency
resolution; and
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Part 2N.4 Return of particulars
Section 348D
202 Corporations Act 2001
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(b) the response to the return of particulars states whether the
resolution passed was a positive solvency resolution or a
negative solvency resolution.
(3) The company complies with this subsection if the response to the
return of particulars states the date on which the directors passed a
positive solvency resolution under section 347A in respect of the
company’s most recent review date.
348D General requirements in relation to a return of particulars
Response is required
(1) A company, or responsible entity of a registered scheme, must
respond to a return of particulars that it receives. The response
must comply with subsection (2).
Contents of response
(2) The response to a return of particulars by a company, or by the
responsible entity of a registered scheme:
(a) must be lodged with ASIC within 2 months after the date of
issue of the return; and
(b) must be in the prescribed form; and
(c) must be signed or authenticated; and
(d) if, as at the date that the response is signed or authenticated,
any particular set out in the return is not correct—must be
such that the particulars set out in the return, taken together
with the response, are correct as at the date the response is
signed or authenticated; and
(e) if the return includes a requirement that the company or
responsible entity of the scheme provide a particular under
section 348B—must provide the required particular, correct
as at the date the response is signed or authenticated; and
(f) if the return includes a requirement to comply with a
subsection of section 348C—must include the statement
required by the subsection that the company chooses to
comply with.
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Section 348D
Corporations Act 2001 203
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Response satisfies other requirements to notify
(3) If a company responds to a return of particulars:
(a) correcting a particular; or
(b) providing a particular;
in accordance with subsection (2), any requirement elsewhere in
this Act to lodge a prescribed form in relation to the particular is
satisfied by the response.
(4) Subsection (3) does not affect the company’s liability for late
lodgment fees incurred before the response to the return of
particulars is lodged or continuing offences committed before that
time.
Strict liability offences
(5) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 2N.5 Notice by proprietary companies of changes to ultimate holding company
Section 349A
204 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 2N.5—Notice by proprietary companies of
changes to ultimate holding company
349A Proprietary companies must notify ASIC of changes to
ultimate holding company
(1) If an event mentioned in section 349B, 349C or 349D happens in
relation to a proprietary company, the proprietary company must
notify ASIC, in the prescribed form and within 28 days after the
event, of the details required by that section.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
349B Another company becomes an ultimate holding company
If another company becomes an ultimate holding company in
relation to a proprietary company, the proprietary company must
notify ASIC of:
(a) the other company’s name; and
(b) either:
(i) if the other company is registered in Australia—its
ABN, ACN or ARBN; or
(ii) if the other company is not registered in Australia—the
place at which it was incorporated or formed; and
(c) the date on which the other company became an ultimate
holding company in relation to the proprietary company.
349C A company ceases to be an ultimate holding company
If a company ceases to be an ultimate holding company in relation
to a proprietary company, the proprietary company must notify
ASIC of:
(a) the name of the company that ceased to be an ultimate
holding company in relation to the proprietary company; and
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Section 349D
Corporations Act 2001 205
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(b) the date the cessation occurred.
349D Ultimate holding company changes its name
If an ultimate holding company in relation to a proprietary
company changes its name, the proprietary company must notify
ASIC of the new name of the ultimate holding company.
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Chapter 2P Lodgments with ASIC
Section 350
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 2P—Lodgments with ASIC
350 Forms for documents to be lodged with ASIC
(1) A document that this Act requires to be lodged with ASIC in a
prescribed form must:
(a) if a form for the document is prescribed in the regulations:
(i) be in the prescribed form; and
(ii) include the information, statements, explanations or
other matters required by the form; and
(iii) be accompanied by any other material required by the
form; or
(b) if a form for the document is not prescribed in the regulations
but ASIC has approved a form for the document:
(i) be in the approved form; and
(ii) include the information, statements, explanations or
other matters required by the form; and
(iii) be accompanied by any other material required by the
form.
(2) A reference in this Act to a document that has been lodged (being a
document to which subsection (1) applies), includes, unless a
contrary intention appears, a reference to any other material lodged
with the document as required by the relevant form.
(3) If:
(a) this Act requires a document to be lodged with ASIC in a
prescribed form; and
(b) a provision of this Act either specifies, or provides for
regulations to specify, information, statements, explanations
or other matters that must be included in the document, or
other material that must accompany the document;
that other provision is not taken to exclude or limit the operation of
subsection (1) in relation to the prescribed form (and so the
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Section 351
Corporations Act 2001 207
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prescribed form may also require information etc. to be included in
the form or material to accompany the form).
351 Signing documents lodged with ASIC
(1) A document lodged with ASIC in writing by, or on behalf of, a
body or a registered scheme must be signed by a director or
secretary of the body or of the responsible entity of the registered
scheme. If the body is a foreign company, it may be signed by:
(a) its local agent; or
(b) if the local agent is a company—a director or secretary of the
company.
(2) An individual who lodges a document with ASIC in writing must
sign it.
(3) The person’s name must be printed next to the signature.
352 Documents lodged with ASIC electronically
(1) A document may be lodged with ASIC electronically only if:
(a) ASIC and the person seeking to lodge it (either on their own
behalf or as agent) have agreed, in writing, that it may be
lodged electronically; or
(b) ASIC has approved, in writing, the electronic lodgment of
documents of that kind.
The document is taken to be lodged with ASIC if it is lodged in
accordance with the agreement or approval (including any
requirements of the agreement or approval as to authentication).
(1A) For the purposes of paragraph (1)(b), ASIC may approve:
(a) a particular kind of document; or
(b) documents in a particular class of documents.
(2) Subsection (1) does not apply to a document covered by
section 353 or a notice lodged under subsection 1015D(2).
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Section 353
208 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
353 Electronic lodgment of certain documents
(1) ASIC may determine conditions in relation to the electronic
lodgment of documents:
(a) that must be given to a relevant market operator under
section 205G; or
(b) that must be given to ASIC under section 792C.
(2) The electronic lodgment of a document covered by a determination
under subsection (1) is only effective if the lodgment complies
with the conditions determined.
(3) ASIC must publish in the Gazette a copy of any determination
under subsection (1).
354 Telephone notice of certain changes
(1) ASIC may, in its discretion, accept telephone notice of a change to
a particular in relation to a company or a registered scheme if:
(a) either:
(i) the change relates to a misspelling or other minor
typographical error; or
(ii) the change is to a particular included on a list published
by ASIC on the internet for the purposes of this section;
and
(b) the notice satisfies the authentication requirements published
by ASIC on the internet for the purposes of this section.
(2) If ASIC accepts telephone notice of a change to a particular under
subsection (1), any obligation elsewhere in this Act to lodge a
prescribed form in relation to the change is satisfied by the
telephone notice. However, this does not affect the company’s
liability for late lodgment fees incurred before the notice is given
or continuing offences committed before that time.
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External administration Chapter 5
Arrangements and reconstructions Part 5.1
Section 410
Corporations Act 2001 209
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Chapter 5—External administration
Part 5.1—Arrangements and reconstructions
410 Interpretation
A reference in this Part, in relation to a Part 5.1 body, to the
directors is a reference to the directors of the body or any one or
more of them.
411 Administration of compromises etc.
(1) Where a compromise or arrangement is proposed between a
Part 5.1 body and its creditors or any class of them or between a
Part 5.1 body and its members or any class of them, the Court may,
on the application in a summary way of the body or of any creditor
or member of the body, or, in the case of a body being wound up,
of the liquidator, order a meeting or meetings of the creditors or
class of creditors or of the members of the body or class of
members to be convened in such manner, and to be held in such
place or places (in this jurisdiction or elsewhere), as the Court
directs and, where the Court makes such an order, the Court may
approve the explanatory statement required by paragraph 412(1)(a)
to accompany notices of the meeting or meetings.
(1A) Where:
(a) a compromise or arrangement is proposed:
(i) between 30 or more Part 5.1 bodies that are
wholly-owned subsidiaries of a holding company and
the creditors or a class of the creditors of each of those
subsidiaries; and
(ii) between the holding company and the creditors or a
class of the creditors of the holding company; and
(b) the proposed compromise or arrangement in relation to each
subsidiary includes a term that orders will be sought under
section 413 transferring the whole of the undertaking and of
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the property and liabilities of the subsidiary to the holding
company; and
(c) the Court is satisfied, on the application in a summary way:
(i) of the holding company or of a creditor of the holding
company; or
(ii) if the holding company is being wound up—of the
liquidator;
that the number of meetings that would be required between
creditors in order to consider the proposed compromises or
arrangements would be so great as to result in a significant
impediment to the timely and effective consideration by
those creditors of the terms of the compromises or
arrangements;
the Court may order a meeting or meetings, on a consolidated
basis, of the creditors of the holding company and of each of the
subsidiaries or of such class or classes of those creditors as the
Court determines and, where the Court makes such an order, the
Court may approve the explanatory statement required by
paragraph 412(1)(a) to accompany notices of the meeting or
meetings.
(1B) Where:
(a) there are fewer than 30 wholly-owned subsidiaries of the
holding company but the matters referred to in
paragraphs (1A)(b) and (c) are satisfied; and
(b) the Court considers that circumstances exist that would
justify its doing so;
the Court may make an order under subsection (1A) in relation to
the proposed compromise or arrangement.
(1C) Where an order is made under subsection (1A) in relation to a
proposed compromise or arrangement, the succeeding provisions
of this Part apply to the compromise or arrangement as if:
(a) references in this Part to a company included references to all
of the Part 5.1 bodies to which the order relates; and
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(b) references in this Part to creditors of a company included
references to the creditors of all the Part 5.1 bodies to which
the order relates; and
(c) references in this Part to a class of the creditors of a company
were references to the relevant class of creditors of all of the
Part 5.1 bodies to which the order relates.
(2) The Court must not make an order pursuant to an application under
subsection (1) or (1A) unless:
(a) 14 days notice of the hearing of the application, or such
lesser period of notice as the Court or ASIC permits, has
been given to ASIC; and
(b) the Court is satisfied that ASIC has had a reasonable
opportunity:
(i) to examine the terms of the proposed compromise or
arrangement to which the application relates and a draft
explanatory statement relating to the proposed
compromise or arrangement; and
(ii) to make submissions to the Court in relation to the
proposed compromise or arrangement and the draft
explanatory statement.
(3) In subsection (2), draft explanatory statement, in relation to a
proposed compromise or arrangement between a body and its
creditors or any class of them or between a body and its members
or any class of them, means a statement:
(a) explaining the effect of the proposed compromise or
arrangement and, in particular, stating any material interests
of the directors of the body, whether as directors, as members
or creditors of the body or otherwise, and the effect on those
interests of the proposed compromise or arrangement in so
far as that effect is different from the effect on the like
interests of other persons; and
(b) setting out such information as is prescribed and any other
information that is material to the making of a decision by a
creditor or member of the body whether or not to agree to the
proposed compromise or arrangement, being information that
is within the knowledge of the directors of the body and has
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not previously been disclosed to the creditors or members of
the body.
(3A) In considering whether to make an order under subsection (1) or
(1A) for a meeting to be held outside this jurisdiction, the Court
must have regard to where the creditors or members, or the
creditors or members included in the class concerned, as the case
requires, reside.
(4) A compromise or arrangement is binding on the creditors, or on a
class of creditors, or on the members, or on a class of members, as
the case may be, of the body and on the body or, if the body is in
the course of being wound up, on the liquidator and contributories
of the body, if, and only if:
(a) at a meeting convened in accordance with an order of the
Court under subsection (1) or (1A):
(i) in the case of a compromise or arrangement between a
body and its creditors or a class of creditors—the
compromise or arrangement is agreed to by a majority
in number of the creditors, or of the creditors included
in that class of creditors, present and voting, either in
person or by proxy, being a majority whose debts or
claims against the company amount in the aggregate to
at least 75% of the total amount of the debts and claims
of the creditors present and voting in person or by
proxy, or of the creditors included in that class present
and voting in person or by proxy, as the case may be;
and
(ii) in the case of a compromise or arrangement between a
body and its members or a class of members—a
resolution in favour of the compromise or arrangement
is:
(A) unless the Court orders otherwise—passed by a
majority in number of the members, or
members in that class, present and voting
(either in person or by proxy); and
(B) if the body has a share capital—passed by 75%
of the votes cast on the resolution; and
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(b) it is approved by order of the Court.
(5) Where the Court orders 2 or more meetings of creditors or of a
class of creditors, or 2 or more meetings of members or of a class
of members, to be held in relation to the proposed compromise or
arrangement:
(a) in the case of meetings of creditors—the meetings are, for the
purposes of subsection (4), taken together to constitute a
single meeting and the votes in favour of the proposed
compromise or arrangement cast at each of the meetings are
to be aggregated, and the votes against the proposed
compromise or arrangement cast at each of the meetings are
to be aggregated, accordingly; or
(b) in the case of meetings of members—the meetings are, for
the purposes of subsection (4), taken together to constitute a
single meeting and the votes in favour of the proposed
compromise or arrangement cast at each of the meetings is to
be aggregated, and the votes against the proposed
compromise or arrangement cast at each of the meetings is to
be aggregated, accordingly.
(5A) If the compromise or arrangement:
(a) involves creditors of the Part 5.1 body with subordinate
claims (within the meaning of subsection 563A(2)); and
(b) is approved by the Court;
those creditors are also bound by the compromise or arrangement
despite the fact that a meeting of those creditors has not been
ordered by the Court under subsection (1) or (1A).
(6) The Court may grant its approval to a compromise or arrangement
subject to such alterations or conditions as it thinks just.
(6A) If:
(a) the Court has granted its approval to a compromise or
arrangement subject to an alteration or condition; and
(b) the body concerned contravenes:
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(i) in the case of an alteration—the provision or provisions
of the compromise or arrangement to which the
alteration relates; or
(ii) in the case of a condition—the condition; and
(c) the Court is satisfied that a person suffered loss or damage as
a result of the contravention;
the Court may make such order as it thinks just.
(6B) The Court may make either or both of the following orders under
subsection (6A):
(a) an order that the body concerned pay compensation to the
person of such amount as the order specifies;
(b) an order directing the body concerned to comply with:
(i) in the case of an alteration—the provision or provisions
of the compromise or arrangement to which the
alteration relates; or
(ii) in the case of a condition—the condition.
(6C) Subsection (6B) does not limit subsection (6A).
(7) Except with the leave of the Court, a person must not be appointed
to administer, and must not administer, a compromise or
arrangement approved under this Act between a body and its
creditors or any class of them or between a body and its members
or any class of them, whether by the terms of that compromise or
arrangement or pursuant to a power given by the terms of a
compromise or arrangement, if the person:
(a) is a secured party in relation to any property (including PPSA
retention of title property) of the body; or
(b) is an auditor of the body; or
(ba) is a director, secretary, senior manager or employee of the
body; or
(c) is a director, secretary, senior manager or employee of a body
corporate that is a secured party in relation to any property
(including PPSA retention of title property) of the body; or
(d) is not a registered liquidator; or
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(e) is a director, secretary, senior manager or employee of a body
corporate related to the body; or
(f) unless ASIC directs in writing that this paragraph does not
apply in relation to the person in relation to the body—has at
any time within the last 12 months been an officer or
promoter of the body or of a related body corporate.
(8) Paragraph (7)(d) does not apply in relation to a body corporate
authorised by or under a law of a State or Territory in this
jurisdiction to administer the compromise or arrangement
concerned.
(8A) Subsection (7) does not disqualify a person from administering a
compromise or arrangement under an appointment validly made
before 1 January 1991.
(9) Where a person is or persons are appointed by, or under a power
given by, the terms of a compromise or arrangement, to administer
the compromise or arrangement:
(a) sections 422A, 422B and 425, subsections 427(2) and (4) and
sections 428, 432 and 434 apply in relation to that person or
those persons as if:
(i) the appointment of the person or persons to administer
the compromise or arrangement were an appointment of
the person or persons as a receiver and manager, or as
receivers and managers, of property of the body; and
(ii) a reference in any of those sections or subsections to a
receiver, or to a receiver of property, of a corporation
were a reference to that person or to those persons; and
(b) Subdivision B (court powers to inquire and make orders) of
Division 90 of Schedule 2 applies in relation to that person or
those persons as if:
(i) the appointment of the person or persons to administer
the compromise or arrangement were an appointment of
the person or persons as an external administrator of the
body; and
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(ii) a reference in that Subdivision to an external
administration were a reference to the administration of
the compromise or arrangement; and
(iii) a reference in that Subdivision to an external
administrator were a reference to that person or to those
persons.
(10) An order of the Court made for the purposes of paragraph (4)(b)
does not have any effect until an office copy of the order is lodged
with ASIC, and upon being so lodged, the order takes effect, or is
taken to have taken effect, on and from the date of lodgment or
such earlier date as the Court determines and specifies in the order.
(11) Subject to subsection (12), a copy of every order of the Court made
for the purposes of paragraph (4)(b) must be annexed to every copy
of the constitution of the body issued after the order has been
made.
(12) The Court may, by order, exempt a body from compliance with
subsection (11) or determine the period during which the body
must comply with that subsection.
(13) Where a compromise or arrangement referred to in subsection (1)
or (1A) (whether or not for the purposes of or in connection with a
scheme for the reconstruction of a body or bodies or the
amalgamation of any 2 or more bodies) has been proposed, the
directors of the body must:
(a) if a meeting of the members of the body by resolution so
directs—instruct such accountants or solicitors or both as are
named in the resolution to report on the proposals and send
their report or reports to the directors as soon as practicable;
and
(b) if a report or reports is or are obtained pursuant to
paragraph (a)—make the report or reports available at the
registered office of the body for inspection by the
shareholders and creditors of the body at least 7 days before
the day of the meeting ordered by the Court to be convened
as provided in subsection (1) or (1A), as the case may be.
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(14) If default is made in complying with subsection (11), the body
contravenes this subsection.
(15) If default is made in complying with subsection (13), each director
of the body contravenes this subsection.
(16) Where no order has been made or resolution passed for the
winding up of a Part 5.1 body and a compromise or arrangement
has been proposed between the body and its creditors or any class
of them, the Court may, in addition to exercising any of its other
powers, on the application in a summary way of the body or of any
member or creditor of the body, restrain further proceedings in any
action or other civil proceeding against the body except by leave of
the Court and subject to such terms as the Court imposes.
(17) The Court must not approve a compromise or arrangement under
this section unless:
(a) it is satisfied that the compromise or arrangement has not
been proposed for the purpose of enabling any person to
avoid the operation of any of the provisions of Chapter 6; or
(b) there is produced to the Court a statement in writing by ASIC
stating that ASIC has no objection to the compromise or
arrangement;
but the Court need not approve a compromise or arrangement
merely because a statement by ASIC stating that ASIC has no
objection to the compromise or arrangement has been produced to
the Court as mentioned in paragraph (b).
412 Information as to compromise with creditors
(1) Where a meeting is convened under section 411, the body must:
(a) with every notice convening the meeting that is sent to a
creditor or member, send a statement (in this section called
the explanatory statement):
(i) explaining the effect of the compromise or arrangement
and, in particular, stating any material interests of the
directors, whether as directors, as members or creditors
of the body or otherwise, and the effect on those
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interests of the compromise or arrangement in so far as
that effect is different from the effect on the like
interests of other persons; and
(ii) setting out such information as is prescribed and any
other information that is material to the making of a
decision by a creditor or member whether or not to
agree to the compromise or arrangement, being
information that is within the knowledge of the directors
and has not previously been disclosed to the creditors or
members; and
(b) in every notice convening the meeting that is given by
advertisement or that is published in the prescribed manner,
include either a copy of the explanatory statement or a
notification of the place at which and the manner in which
creditors or members entitled to attend the meeting may
obtain copies of the explanatory statement.
(2) In the case of a creditor whose debt does not exceed $200,
paragraph (1)(a) does not apply unless the Court otherwise orders
but the notice convening the meeting that is sent to such a creditor
must specify a place at which a copy of the explanatory statement
can be obtained on request and, where the creditor makes such a
request, the body must as soon as practicable comply with the
request.
(3) Where the compromise or arrangement affects the rights of
debenture holders, the explanatory statement must specify any
material interests of the trustees for the debenture holders, whether
as such trustees, as members or creditors of the body or otherwise,
and the effect on those interests of the compromise or arrangement
in so far as that effect is different from the effect on the like
interests of other persons.
(4) Where a notice given by advertisement, or published in the
prescribed manner, includes a notification that copies of the
explanatory statement can be obtained in a particular manner,
every creditor or member entitled to attend the meeting must, on
making application in that matter, be furnished by the body free of
charge with a copy of the explanatory statement.
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(5) Each person who is a director or trustee for debenture holders must
give notice to the body of such matters relating to the person as are
required to be included in the explanatory statement.
(6) In the case of a compromise or arrangement that is not, or does not
include, a compromise or arrangement between a Part 5.1 body and
its creditors or any class of them, the body must not send out an
explanatory statement pursuant to subsection (1) unless a copy of
that statement has been registered by ASIC.
(7) Where an explanatory statement sent out under subsection (1) is
not required by subsection (6) to be registered by ASIC, the Court
must not make an order approving the compromise or arrangement
unless it is satisfied that ASIC has had a reasonable opportunity to
examine the explanatory statement and to make submissions to the
Court in relation to that statement.
(8) Where a copy of an explanatory statement is lodged with ASIC for
registration under subsection (6), ASIC must not register the copy
of the statement unless the statement appears to comply with this
Act and ASIC is of the opinion that the statement does not contain
any matter that is false in a material particular or materially
misleading in the form or context in which it appears.
(9) Where a body contravenes this section, a person involved in the
contravention contravenes this subsection.
(10) It is a defence to a prosecution for a contravention of this section if
it is proved that the contravention was due to the failure of a person
(other than the defendant), being a director of the body or a trustee
for debenture holders of the body, to supply for the purposes of the
explanatory statement particulars of the person’s interests.
413 Provisions for facilitating reconstruction and amalgamation of
Part 5.1 bodies
(1) Where an application is made to the Court under this Part for the
approval of a compromise or arrangement and it is shown to the
Court that the compromise or arrangement has been proposed for
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the purposes of, or in connection with, a scheme for the
reconstruction of a Part 5.1 body or Part 5.1 bodies or the
amalgamation of 2 or more Part 5.1 bodies and that, under the
scheme, the whole or any part of the undertaking or of the property
of a body concerned in the scheme (in this section called the
transferor body) is to be transferred to a company (in this section
called the transferee company), the Court may, either by the order
approving the compromise or arrangement or by a later order,
provide for all or any of the following matters:
(a) the transfer to the transferee company of the whole or a part
of the undertaking and of the property or liabilities of the
transferor body;
(b) the allotting or appropriation by the transferee company of
shares, debentures, policies or other interests in that company
that, under the compromise or arrangement, are to be allotted
or appropriated by that company to or for any person;
(c) the continuation by or against the transferee company of any
legal proceedings pending by or against the transferor body;
(d) if the transferor body is a company—the deregistration by
ASIC, without winding up, of the transferor body;
(e) the provision to be made for any persons who, within such
time and in such manner as the Court directs, dissent from
the compromise or arrangement;
(f) the transfer or allotment of any interest in property to any
person concerned in the compromise or arrangement;
(g) such incidental, consequential and supplemental matters as
are necessary to ensure that the reconstruction or
amalgamation is fully and effectively carried out.
(2) Where an order made under this section provides for the transfer of
property or liabilities, then, by virtue of the order, that property is
transferred to and vests in, and those liabilities are transferred to
and become the liabilities of, the transferee company, free, in the
case of any particular property if the order so directs, from any
security interest that is, by virtue of the compromise or
arrangement, to cease to have effect.
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(3) Where an order is made under this section, each body to which the
order relates must, within 14 days after the making of the order,
lodge with ASIC an office copy of the order.
(4) In this section:
liabilities includes duties of any description, including duties that
are of a personal character or are incapable under the general law
of being assigned or performed vicariously.
property includes rights and powers of any description, including
rights and powers that are of a personal character and are incapable
under the general law of being assigned or performed vicariously.
414 Acquisition of shares of shareholders dissenting from scheme or
contract approved by majority
(1) In this section:
dissenting shareholder, in relation to a scheme or contract, means
a shareholder who has not assented to the scheme or contract or
who has failed to transfer his, her or its shares in accordance with
the scheme or contract.
excluded shares, in relation to a scheme or contract involving a
transfer to a person of shares in a class of shares in a company,
means shares in that class that, when the offer relating to the
scheme or contract is made, are held by:
(a) in any case—the person or a nominee of the person; or
(b) if the person is a body corporate—a subsidiary of the body.
(2) Where a scheme or contract (not being a scheme or contract arising
out of the making of offers under a takeover bid) involving a
transfer of shares in a class of shares in a company (in this section
called the transferor company) to a person (in this section called
the transferee) has, within 4 months after the making of the offer
relating to the scheme or contract by the transferee, been approved
by members holding shares in that class carrying at least 90% of
the votes attached to shares in that class (other than excluded
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shares), the transferee may, within 2 months after the offer has
been so approved, give notice as prescribed to a dissenting
shareholder that the transferee wishes to acquire the shares held by
that shareholder.
(3) Where such a notice is given, then, unless the Court orders
otherwise on an application by a dissenting shareholder made
within one month after the day on which the notice was given or
within 14 days after a statement is supplied under subsection (7) to
a dissenting shareholder, whichever is the later, the transferee is
entitled and bound, subject to this section, to acquire those shares
on the terms on which, under the scheme or contract, the shares of
the approving shareholders are to be transferred to the transferee.
(4) Where alternative terms were offered to the approving
shareholders, the dissenting shareholder is entitled to elect not later
than the end of one month after the date on which the notice is
given under subsection (2) or 14 days after a statement is supplied
under subsection (7), whichever is the later, which of those terms
he, she or it prefers and, if he, she or it fails to make the election
within the time allowed by this subsection, the transferee may,
unless the Court otherwise orders, determine which of those terms
is to apply to the acquisition of the shares of the dissenting
shareholder.
(5) Despite subsections (3) and (4), if the number of votes attached to
the excluded shares is more than 10% of the votes attached to the
excluded shares and the shares (other than excluded shares) to be
transferred under the scheme or contract, those subsections do not
apply unless:
(a) the transferee offers the same terms to all holders of the
shares (other than excluded shares) to be transferred under
the scheme or contract; and
(b) the holders who approve the scheme or contract hold shares
to which are attached at least 90% of the votes attached to the
shares (other than excluded shares) to be transferred under
the scheme or contract and are also at least 75% in number of
the holders of those shares.
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(6) For the purposes of paragraph (5)(b), 2 or more persons registered
as holding shares jointly are to be counted as one person.
(7) When a notice is given under subsection (2), the dissenting
shareholder may, by written notice given to the transferee within
one month after the day on which the notice was given under
subsection (2), ask for a statement in writing of the names and
addresses of all other dissenting shareholders as shown in the
register of members.
(8) Where a notice is given under subsection (7), the transferee must
comply with it.
(9) Where, under a scheme or contract referred to in subsection (2), the
transferee becomes beneficially entitled to shares in the transferor
company which, together with any other shares in the transferor
company to which the transferee or, where the transferee is a body
corporate, a body corporate related to the transferee is beneficially
entitled, have attached to them at least 90% of the votes attached to
the shares included in the class of shares concerned, then:
(a) the transferee must, within one month after the date on which
he, she or it becomes beneficially entitled to those shares
(unless in relation to the scheme or contract he, she or it has
already complied with this requirement), give notice of the
fact as prescribed to the holders of the remaining shares
included in that class who, when the notice was given, had
not assented to the scheme or contract or been given notice
by the transferee under subsection (2); and
(b) such a holder may, within 3 months after the giving of the
notice to him, her or it by notice to the transferee, require the
transferee to acquire his, her or its share and, where
alternative terms were offered to the approving shareholders,
elect which of those terms he, she or it will accept.
(10) Where a shareholder gives notice under paragraph (9)(b) with
respect to his, her or its shares, the transferee is entitled and bound
to acquire those shares:
(a) on the terms on which under the scheme or contract the
shares of the approving shareholders were transferred to him,
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her or it and, where alternative terms were offered to those
shareholders, on the terms for which the shareholder has
elected, or where he, she or it has not so elected, for
whichever of the terms the transferee determines; or
(b) on such other terms as are agreed or as the Court, on the
application of the transferee or of the shareholder, thinks fit
to order.
(11) Subsections (12) and (13) apply where a notice has been given
under subsection (1) unless the Court, on an application made by
the dissenting shareholder, orders to the contrary.
(12) The transferee must, within 14 days after:
(a) the end of one month after the day on which the notice was
given; or
(b) the end of 14 days after a statement under subsection (7) is
supplied; or
(c) if an application has been made to the Court by a dissenting
shareholder—the application is disposed of;
whichever last happens:
(d) send a copy of the notice to the transferor company together
with an instrument of transfer that relates to the shares that
the transferee is entitled to acquire under this section and is
executed, on the shareholder’s behalf, by a person appointed
by the transferee and, on the transferee’s own behalf, by the
transferee; and
(e) pay, allot or transfer to the transferor company the
consideration for the shares.
(13) When the transferee has complied with subsection (12), the
transferor company must register the transferee as the holder of the
shares.
(14) All sums received by the transferor company under this section
must be paid into a separate bank account and those sums, and any
other consideration so received, must be held by that company in
trust for the several persons entitled to the shares in respect of
which they were respectively received.
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(15) Where a sum or other property received by a company under this
section has been held in trust by the company for a person for at
least 2 years (whether or not that period began before the
commencement of this Act), the company must, before the end of
10 years after the day on which the sum was paid, or the
consideration was allotted or transferred, to the company, pay the
sum or transfer the consideration, and any accretions to it and any
property that may become substituted for it or for part of it, to
ASIC to be dealt with under Part 9.7.
415 Notification of appointment of scheme manager and power of
Court to require report
(1) Within 14 days after being appointed to administer a compromise
or arrangement approved under this Part, a person must lodge a
notice in writing of the appointment.
(2) Where an application is made to the Court under this Part in
relation to a proposed compromise or arrangement, the Court may:
(a) before making any order on the application, require ASIC or
another person specified by the Court to give to the Court a
report as to the terms of the compromise or arrangement or of
the scheme for the purposes of or in connection with which
the compromise or arrangement has been proposed, the
conduct of the officers of the body or bodies concerned and
any other matters that, in the opinion of ASIC or that person,
ought to be brought to the attention of the Court;
(b) in deciding the application, have regard to anything
contained in the report; and
(c) make such order or orders as to the payment of the costs of
preparing and giving the report as the Court thinks fit.
415A Outcome of voting at creditors’ meeting determined by related
entity—Court powers
(1) Subsection (3) applies if, on the application of a creditor of a
Part 5.1 body, the Court is satisfied of the following matters:
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(a) a proposed resolution has been voted on at a meeting of
creditors, or of a class of creditors, of the body held under
this Part;
(b) that, if the vote or votes that a particular related creditor, or
particular related creditors, of the body cast on the proposed
resolution had been disregarded for the purposes of
determining whether or not the proposed resolution was
passed, the proposed resolution:
(i) if it was in fact passed—would not have been passed; or
(ii) if in fact it was not passed—would have been passed;
or the question would have had to be decided on a casting
vote;
(c) that the passing of the proposed resolution, or the failure to
pass it, as the case requires:
(i) is contrary to the interests of the creditors as a whole or
of that class of creditors as a whole, as the case may be;
or
(ii) has prejudiced, or is reasonably likely to prejudice, the
interests of the creditors who voted against the proposed
resolution, or for it, as the case may be, to an extent that
is unreasonable having regard to the matters in
subsection (2).
(2) The matters are:
(a) the benefits resulting to the related creditor, or to some or all
of the related creditors, from the resolution, or from the
failure to pass the proposed resolution, as the case may be;
and
(b) the nature of the relationship between the related creditor and
the body, or of the respective relationships between the
related creditors and the body; and
(c) any other relevant matter.
(3) The Court may make one or more of the following:
(a) if the proposed resolution was passed—an order setting aside
the resolution;
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(b) an order that the proposed resolution be considered and voted
on at a meeting of the creditors of the body, or of that class of
creditors, as the case may be, convened and held as specified
in the order;
(c) an order directing that the related creditor is not, or such of
the related creditors as the order specifies are not, entitled to
vote on:
(i) the proposed resolution; or
(ii) a resolution to amend or vary the proposed resolution;
(d) such other orders as the Court thinks necessary.
(4) In this section:
related creditor, in relation to a Part 5.1 body, in relation to a vote,
means a person who, when the vote was cast, was a related entity,
and a creditor, of the body.
415B Interim order on application under section 415A
(1) If:
(a) an application under subsection 415A(1) has not yet been
determined; and
(b) the Court is of the opinion that it is desirable to do so;
the Court may make such interim orders as it thinks appropriate.
(2) An interim order must be expressed to apply until the application is
determined, but may be varied or discharged.
415C Order under section 415A does not affect act already done
pursuant to resolution
An act done pursuant to a resolution as in force before the making,
under section 415A, of an order setting aside or varying the
resolution, is as valid and binding on and after the making of the
order as if the order had not been made.
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Part 5.2—Receivers, and other controllers, of
property of corporations
416 Definitions
In this Part, unless the contrary intention appears:
officer, in relation to a registered foreign company, includes a local
agent of the foreign company.
property, in relation to a corporation, means property:
(a) in the case of a company—in Australia or outside Australia;
or
(b) in the case of a registered foreign company—in this
jurisdiction or an external Territory; or
(c) in the case of a registrable Australian body—in this
jurisdiction but outside the body’s place of origin.
receiver, in relation to property of a corporation, includes a
receiver and manager.
417 Application of Part
(1) Except so far as the contrary intention appears in this Part or
Part 11.2, this Part applies in relation to a receiver of property of a
corporation who is appointed after 1 January 1991, even if the
appointment arose out of a transaction entered into, or an act or
thing done, before 1 January 1991.
(2) To avoid doubt, this Part does not apply, of its own force, to the
property of a corporation that is an Aboriginal and Torres Strait
Islander corporation.
Note 1: The definition of property in section 416 does not define that term in
relation to a corporation that is an Aboriginal and Torres Strait
Islander corporation.
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Note 2: Section 516-1 of the Corporations (Aboriginal and Torres Strait
Islander) Act 2006 applies this Part to a corporation that is an
Aboriginal and Torres Strait Islander corporation with the
modifications provided for in that section.
418 Persons not to act as receivers
(1) A person is not qualified to be appointed, and must not act, as
receiver of property of a corporation if the person:
(a) is a secured party in relation to any property (including PPSA
retention of title property) of the corporation; or
(b) is an auditor or a director, secretary, senior manager or
employee of the corporation; or
(c) is a director, secretary, senior manager or employee of a body
corporate that is a secured party in relation to any property
(including PPSA retention of title property) of the
corporation; or
(d) is not a registered liquidator; or
(e) is a director, secretary, senior manager or employee of a body
corporate related to the corporation; or
(f) unless ASIC directs in writing that this paragraph does not
apply in relation to the person in relation to the corporation—
has at any time within the last 12 months been a director,
secretary, senior manager, employee or promoter of the
corporation or of a related body corporate.
(3) Paragraph (1)(d) does not apply in relation to a body corporate
authorised by or under a law of the Commonwealth, of a State or of
a Territory to act as receiver of property of the corporation
concerned.
(4) In this section:
senior manager does not include a receiver and manager.
418A Court may declare whether controller is validly acting
(1) Where there is doubt, on a specific ground, about:
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(a) whether a purported appointment of a person, after 23 June
1993, as receiver of property of a corporation is valid; or
(b) whether a person who has entered into possession, or
assumed control, of property of a corporation after 23 June
1993 did so validly under the terms of a security interest in
that property;
the person, the corporation or any of the corporation’s creditors
may apply to the Court for an order under subsection (2).
(2) On an application, the Court may make an order declaring whether
or not:
(a) the purported appointment was valid; or
(b) the person entered into possession, or assumed control,
validly under the terms of the security interest;
as the case may be, on the ground specified in the application or on
some other ground.
419 Liability of controller
(1) A receiver, or any other authorised person, who, whether as agent
for the corporation concerned or not, enters into possession or
assumes control of any property of a corporation for the purpose of
enforcing any security interest is, notwithstanding any agreement
to the contrary, but without prejudice to the person’s rights against
the corporation or any other person, liable for debts incurred by the
person in the course of the receivership, possession or control for
services rendered, goods purchased or property hired, leased
(including a lease of goods that gives rise to a PPSA security
interest in the goods), used or occupied.
(2) Subsection (1) does not constitute the person entitled to the
security interest a mortgagee in possession.
(3) Where:
(a) a person (in this subsection called the controller) enters into
possession or assumes control of property of a corporation;
and
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(b) the controller purports to have been properly appointed as a
receiver in respect of that property under a power contained
in an instrument, but has not been properly so appointed; and
(c) civil proceedings in an Australian court arise out of an act
alleged to have been done by the controller;
the court may, if it is satisfied that the controller believed on
reasonable grounds that the controller had been properly so
appointed, order that:
(d) the controller be relieved in whole or in part of a liability that
the controller has incurred but would not have incurred if the
controller had been properly so appointed; and
(e) a person who purported to appoint the controller as receiver
be liable in respect of an act, matter or thing in so far as the
controller has been relieved under paragraph (d) of liability in
respect of that act, matter or thing.
419A Liability of controller under pre-existing agreement about
property used by corporation
(1) This section applies if:
(a) under an agreement made before the control day in relation to
a controller of property of a corporation, the corporation
continues after that day to use or occupy, or to be in
possession of, property (the third party property) of which
someone else is the owner or lessor; and
(b) the controller is controller of the third party property.
(2) Subject to subsections (4) and (7), the controller is liable for so
much of the rent or other amounts payable by the corporation
under the agreement as is attributable to a period:
(a) that begins more than 7 days after the control day; and
(b) throughout which:
(i) the corporation continues to use or occupy, or to be in
possession of, the third party property; and
(ii) the controller is controller of the third party property.
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(3) Within 7 days after the control day, the controller may give to the
owner or lessor a notice that specifies the third party property and
states that the controller does not propose to exercise rights in
relation to that property as controller of the property, whether on
behalf of the corporation or anyone else.
(4) Despite subsection (2), the controller is not liable for so much of
the rent or other amounts payable by the corporation under the
agreement as is attributable to a period during which a notice under
subsection (3) is in force, but such a notice does not affect a
liability of the corporation.
(5) A notice under subsection (3) ceases to have effect if:
(a) the controller revokes it by writing given to the owner or
lessor; or
(b) the controller exercises, or purports to exercise, a right in
relation to the third party property as controller of the
property, whether on behalf of the corporation or anyone
else.
(6) For the purposes of subsection (5), the controller does not exercise,
or purport to exercise, a right as mentioned in paragraph (5)(b)
merely because the controller continues to be in possession, or to
have control, of the third party property, unless the controller:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to continue.
(7) Subsection (2) does not apply in so far as a court, by order, excuses
the controller from liability, but an order does not affect a liability
of the corporation.
(8) The controller is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned
in subsection (2).
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420 Powers of receiver
(1) Subject to this section, a receiver of property of a corporation has
power to do, in Australia and elsewhere, all things necessary or
convenient to be done for or in connection with, or as incidental to,
the attainment of the objectives for which the receiver was
appointed.
(2) Without limiting the generality of subsection (1), but subject to any
provision of the court order by which, or the instrument under
which, the receiver was appointed, being a provision that limits the
receiver’s powers in any way, a receiver of property of a
corporation has, in addition to any powers conferred by that order
or instrument, as the case may be, or by any other law, power, for
the purpose of attaining the objectives for which the receiver was
appointed:
(a) to enter into possession and take control of property of the
corporation in accordance with the terms of that order or
instrument; and
(b) to lease, let on hire or dispose of property of the corporation;
and
(c) to grant options over property of the corporation on such
conditions as the receiver thinks fit; and
(d) to borrow money on the security of property of the
corporation; and
(e) to insure property of the corporation; and
(f) to repair, renew or enlarge property of the corporation; and
(g) to convert property of the corporation into money; and
(h) to carry on any business of the corporation; and
(j) to take on lease or on hire, or to acquire, any property
necessary or convenient in connection with the carrying on of
a business of the corporation; and
(k) to execute any document, bring or defend any proceedings or
do any other act or thing in the name of and on behalf of the
corporation; and
(m) to draw, accept, make and indorse a bill of exchange or
promissory note; and
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(n) to use a seal of the corporation; and
(o) to engage or discharge employees on behalf of the
corporation; and
(p) to appoint a solicitor, accountant or other professionally
qualified person to assist the receiver; and
(q) to appoint an agent to do any business that the receiver is
unable to do, or that it is unreasonable to expect the receiver
to do, in person; and
(r) where a debt or liability is owed to the corporation—to prove
the debt or liability in a bankruptcy, insolvency or winding
up and, in connection therewith, to receive dividends and to
assent to a proposal for a composition or a scheme of
arrangement; and
(s) if the receiver was appointed under an instrument that created
a security interest in uncalled share capital of the corporation:
(i) to make a call in the name of the corporation for the
payment of money unpaid on the corporation’s shares;
or
(ii) on giving a proper indemnity to a liquidator of the
corporation—to make a call in the liquidator’s name for
the payment of money unpaid on the corporation’s
shares; and
(t) to enforce payment of any call that is due and unpaid,
whether the calls were made by the receiver or otherwise;
and
(u) to make or defend an application for the winding up of the
corporation; and
(w) to refer to arbitration any question affecting the corporation.
(3) The conferring by this section on a receiver of powers in relation to
property of a corporation does not affect any rights in relation to
that property of any other person other than the corporation.
(4) In this section, a reference, in relation to a receiver, to property of a
corporation is, unless the contrary intention appears, a reference to
the property of the corporation in relation to which the receiver
was appointed.
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(5) In this section:
lease includes a lease of goods that gives rise to a PPSA security
interest in the goods.
420A Controller’s duty of care in exercising power of sale
(1) In exercising a power of sale in respect of property of a
corporation, a controller must take all reasonable care to sell the
property for:
(a) if, when it is sold, it has a market value—not less than that
market value; or
(b) otherwise—the best price that is reasonably obtainable,
having regard to the circumstances existing when the
property is sold.
(2) Nothing in subsection (1) limits the generality of anything in
section 180, 181, 182, 183 or 184.
420B Court may authorise managing controller to dispose of
property despite prior security interest
(1) On the application of a managing controller of property of a
corporation, the Court may by order authorise the controller to sell,
or to dispose of in some other specified way, specified property of
the corporation, even though it is subject to a security interest (the
prior security interest) that has priority over a security interest (the
controller’s security interest) in that property that the controller is
enforcing.
(2) However, the Court may only make an order if satisfied that:
(a) apart from the existence of the prior security interest, the
controller would have power to sell, or to so dispose of, the
property; and
(b) the controller has taken all reasonable steps to obtain the
consent of the secured party in relation to the prior security
interest to the sale or disposal, but has not obtained that
consent; and
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(c) sale or disposal of the property under the order is in the best
interests of the corporation’s creditors and of the corporation;
and
(d) sale or disposal of the property under the order will not
unreasonably prejudice the rights or interests of the secured
party in relation to the prior security interest.
(3) The Court is to have regard to the need to protect adequately the
rights and interests of the secured party in relation to the prior
security interest.
(4) If the property would be sold or disposed of together with other
property that is subject to the controller’s security interest, the
Court may have regard to:
(a) the amount (if any) by which it is reasonable to expect that
the net proceeds of selling or disposing of that other property
otherwise than together with the first-mentioned property
would be less than so much of the net proceeds of selling or
disposing of all the property together as would be attributable
to that other property; and
(b) the amount (if any) by which it is reasonable to expect that
the net proceeds of selling or disposing of the first-mentioned
property otherwise than together with the other property
would be greater than so much of the net proceeds of selling
or disposing of all the property together as would be
attributable to the first-mentioned property.
(5) Nothing in subsection (3) or (4) limits the matters to which the
Court may have regard for the purposes of subsection (2).
(6) An order may be made subject to conditions, for example (but
without limitation):
(a) a condition that:
(i) the net proceeds of the sale or disposal; and
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(ii) the net proceeds of the sale or disposal of such other
property (if any) as is specified in the condition and is
subject to the controller’s security interest;
or a specified part of those net proceeds, be applied in
payment of specified amounts secured by the prior security
interest; or
(b) a condition that the controller apply a specified amount in
payment of specified amounts secured by the prior security
interest.
420C Receiver’s power to carry on corporation’s business during
winding up
(1) A receiver of property of a corporation that is being wound up
may:
(a) with the written approval of the corporation’s liquidator or
with the approval of the Court, carry on the corporation’s
business either generally or as otherwise specified in the
approval; and
(b) do whatever is necessarily incidental to carrying on that
business under paragraph (a).
(2) Subsection (1) does not:
(a) affect a power that the receiver has otherwise than under that
subsection; or
(b) empower the receiver to do an act that he or she would not
have power to do if the corporation were not being wound
up.
(3) A receiver of property of a corporation who carries on the
corporation’s business under subsection (1) does so:
(a) as agent for the corporation; and
(b) in his or her capacity as receiver of property of the
corporation.
(4) The consequences of subsection (3) include, but are not limited to,
the following:
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(a) for the purposes of subsection 419(1), a debt that the receiver
incurs in carrying on the business as mentioned in
subsection (3) of this section is incurred in the course of the
receivership;
(b) a debt or liability that the receiver incurs in so carrying on the
business is not a cost, charge or expense of the winding up.
421 Managing controller’s duties in relation to bank accounts and
financial records
(1) A managing controller of property of a corporation must:
(a) open and maintain an account, with an Australian ADI,
bearing:
(i) the managing controller’s own name; and
(ii) in the case of a receiver of the property—the title
“receiver”; and
(iii) otherwise—the title “managing controller”; and
(iv) the corporation’s name;
or 2 or more such accounts; and
(b) within 3 business days after money of the corporation comes
under the control of the managing controller, pay that money
into such an account that the managing controller maintains;
and
(c) ensure that no such account that the managing controller
maintains contains money other than money of the
corporation that comes under the control of the managing
controller; and
(d) keep such financial records as correctly record and explain all
transactions that the managing controller enters into as the
managing controller.
(2) Any director, creditor or member of a corporation may, unless the
Court otherwise orders, personally or by an agent, inspect records
kept by a managing controller of property of the corporation for the
purposes of paragraph (1)(d).
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421A Managing controller to report within 2 months about
corporation’s affairs
(1) A managing controller of property of a corporation must prepare a
report about the corporation’s affairs that is in the prescribed form
and is made up to a day not later than 30 days before the day when
it is prepared.
(2) The managing controller must prepare and lodge the report within
2 months after the control day.
(4) If, in the managing controller’s opinion, it would seriously
prejudice:
(a) the corporation’s interests; or
(b) the achievement of the objectives for which the controller
was appointed, or entered into possession or assumed control
of property of the corporation, as the case requires;
if particular information that the controller would otherwise
include in the report were made available to the public, the
controller need not include the information in the report.
(5) If the managing controller omits information from the report as
permitted by subsection (4), the controller must include instead a
notice:
(a) stating that certain information has been omitted from the
report; and
(b) summarising what the information is about, but without
disclosing the information itself.
422 Reports by receiver or managing controller
(1) If it appears to the receiver or managing controller of property of a
corporation that:
(a) a past or present officer or employee, or a member, of the
corporation may have been guilty of an offence in relation to
the corporation; or
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(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the
corporation:
(i) may have misapplied or retained, or may have become
liable or accountable for, any money or property
(whether the property is in Australia or elsewhere) of
the corporation; or
(ii) may have been guilty of any negligence, default, breach
of duty or breach of trust in relation to the corporation;
the receiver or managing controller must:
(c) lodge as soon as practicable a report about the matter; and
(d) give to ASIC such information, and such access to and
facilities for inspecting and taking copies of any documents,
as ASIC requires.
(2) The receiver or managing controller may also lodge further reports
specifying any other matter that, in the opinion of the receiver or
managing controller, it is desirable to bring to the notice of ASIC.
(3) If it appears to the Court:
(a) that a past or present officer or employee, or a member, of a
corporation in respect of property of which a receiver has
been appointed has been guilty of an offence in relation to
the corporation; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a corporation
in respect of property of which a receiver has been appointed
has engaged in conduct referred to in paragraph (1)(b) in
relation to the corporation;
and that the receiver has not lodged a report about the matter, the
Court may, on the application of a person interested in the
appointment of the receiver, direct the receiver to lodge such a
report.
(4) If:
(a) there is a managing controller in relation to property of a
corporation; and
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(b) it appears to the Court that:
(i) a past or present officer or employee, or a member, of
the corporation has been guilty of an offence in relation
to the corporation; or
(ii) a person who has taken part in the formation,
promotion, administration, management or winding up
of the corporation has engaged in conduct referred to in
paragraph (1)(b) in relation to the corporation; and
(c) it appears to the Court that the managing controller has not
lodged a report about the matter;
the Court may, on the application of a person interested in the
appointment of the managing controller, direct the managing
controller to lodge such a report.
422A Annual return by controller
(1) This section applies if a person is the controller of property of a
corporation during all or part of a control return year for the
controller for the corporation.
(2) However, this section does not apply if:
(a) the control of the property ends during the control return
year; and
(b) the person is the controller of the property when the control
of the property ends.
Note: If a person is the controller of property of the corporation when the
control of the property ends, the person must instead lodge a return
under section 422B.
(3) The person must lodge a return in relation to the control of the
property of the corporation.
(4) The return must:
(a) be in the approved form; and
(b) be lodged with ASIC within 3 months after the end of the
control return year.
Note: Fees for lodging documents and late lodgement fees may be imposed
under the Corporations (Fees) Act 2001.
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Section 422B
242 Corporations Act 2001
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(5) Each of the following is a control return year for a controller for a
corporation:
(a) the period of 12 months beginning on the day on which the
person first began to be a controller of the property of the
corporation;
(b) each subsequent period of 12 months.
422B End of control return
Application of this section
(1) This section applies if the control of the property of a corporation
ends.
End of receivership return to be lodged
(2) The person who is the controller of the property of the corporation
when the control of the property of the corporation ends (the last
controller) must lodge a return in relation to the control of the
property of the corporation.
(3) The return must:
(a) be in the approved form; and
(b) be lodged with ASIC within 1 month after the control of the
property of the corporation ends.
Note: Fees for lodging documents and late lodgement fees may be imposed
under the Corporations (Fees) Act 2001.
Notice of lodgement to be given
(4) The last controller must give notice that the return has been lodged
to a person mentioned in subsection (5), if that person requests in
writing that the last controller give the person such a notice.
Note: For notification, see section 600G.
(5) The persons who may request such a notice are:
(a) the members of the corporation; and
(b) the creditors; and
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(c) the corporation; and
(d) if the corporation is a company under external
administration—the external administrator of the company.
422C Transfer of books to new controller
Application of this section
(1) This section applies if:
(a) a person (the former controller) ceases to act as a controller
of property of a corporation; and
(b) ASIC has not issued a notice to the former controller under
section 422D; and
(c) a registered liquidator (the new controller) is appointed
instead as:
(i) the controller of that property of the corporation; or
(ii) if the corporation is a company under external
administration—the external administrator of the
company.
Transfer of books to new controller
(2) The former controller must transfer to the new controller, within 5
business days after the new controller is appointed, possession or
control of any books relating to the control of the property that are
in the former controller’s possession or control.
(3) The former controller may take a copy of any part of the books
before transferring possession or control of them to the new
controller.
New controller must allow inspection etc.
(4) After possession or control of the books is transferred, the new
controller must allow the former controller to inspect them at any
reasonable time and take a copy of any part of the books.
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Section 422D
244 Corporations Act 2001
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Offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (2) or
(4); and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 50 penalty units.
Lien against books not prejudiced
(6) If the new controller is entitled to take possession or control of the
books under this section:
(a) a person is not entitled, as against the new controller, to
claim a lien on the books; and
(b) such a lien is not otherwise prejudiced.
422D Transfer of books to ASIC etc.
Transfer of books to ASIC
(1) If a person ceases to act as a controller of property of a corporation,
ASIC may, by written notice given to the person, require the
person to:
(a) if the person has possession or control of books relating to
the control of that property of the corporation in his or her
possession or control—transfer possession or control of those
books to ASIC within the period specified in the notice; or
(b) otherwise—notify ASIC, within the period and in the manner
specified in the notice, that the person does not have books
relating to the control of that property of the corporation in
the person’s possession or control.
Offence
(2) A person commits an offence if:
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(a) the person is subject to a requirement under subsection (1);
and
(b) the person intentionally or recklessly fails to comply with the
requirement.
Penalty: 50 penalty units.
ASIC must transfer books to new controller
(3) If:
(a) possession or control of books relating to the control of
property of a corporation is transferred to ASIC under this
section; and
(b) the books are in ASIC’s possession or control; and
(c) a person (the new controller) is or becomes:
(i) the controller of that property of the corporation; or
(ii) if the corporation is a company under external
administration—the external administrator of the
company;
ASIC must, as soon as practicable, transfer possession or control of
those books to the new controller.
ASIC must transfer books to company
(4) If:
(a) possession or control of books relating to the control of
property of a corporation is transferred to ASIC under this
section; and
(b) the books are in ASIC’s possession or control; and
(c) it is unlikely that another person will be appointed as:
(i) the controller of that property of the corporation; or
(ii) if the corporation is a company under external
administration—the external administrator of the
company;
ASIC must, as soon as practicable, transfer possession or control of
those books to the relevant corporation.
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Section 422D
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Lien against books not prejudiced
(5) If ASIC is entitled to take possession or control of the books under
this section:
(a) a person is not entitled, as against ASIC, to claim a lien on
the books; and
(b) such a lien is not otherwise prejudiced.
(6) If ASIC is required to give possession or control of the books to
the new controller under this section:
(a) a person is not entitled, as against the new controller, to
claim a lien on the books; and
(b) such a lien is not otherwise prejudiced.
Notice is not a legislative instrument
(7) A notice under subsection (1) is not a legislative instrument.
Retention period for books
(8) ASIC must retain all books:
(a) that are relevant to the control of property of the corporation;
and
(b) possession or control of which is transferred to ASIC under
this section; and
(c) possession or control of which is not transferred to another
entity under this section, or under any other law;
for a period (the retention period) of 2 years after the day on which
ASIC takes possession or control of the books.
Destruction of books at end of retention period
(9) ASIC may destroy the books at the end of the retention period.
Relationship with other laws
(10) Subsections (8) and (9) do not apply to the extent that ASIC is
under an obligation to retain the books, or a part of the books,
under another provision of this Act or under any other law.
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423 Supervision of controller
(1) If:
(a) it appears to the Court or to ASIC that a controller of
property of a corporation has not faithfully performed, or is
not faithfully performing, the controller’s functions or has
not observed, or is not observing, a requirement of:
(i) in the case of a receiver—the order by which, or the
instrument under which, the receiver was appointed; or
(ii) otherwise—an instrument under which the controller
entered into possession, or took control, of that
property; or
(iii) in any case—the Court; or
(iv) in any case—this Act, the regulations or the rules; or
(b) a person complains to the Court or to ASIC about an act or
omission of a controller of property of a corporation in
connection with performing or exercising any of the
controller’s functions and powers;
the Court or ASIC, as the case may be, may inquire into the matter
and, where the Court or ASIC so inquires, the Court may take such
action as it thinks fit.
(2) ASIC may report to the Court any matter that in its opinion is a
misfeasance, neglect or omission on the part of a controller of
property of a corporation and the Court may order the controller to
make good any loss that the estate of the corporation has sustained
thereby and may make such other order or orders as it thinks fit.
(3) The Court may at any time:
(a) require a controller of property of a corporation to answer
questions about the performance or exercise of any of the
controller’s functions and powers as controller; or
(b) examine a person about the performance or exercise by such
a controller of any of the controller’s functions and powers as
controller; or
(c) direct an investigation to be made of such a controller’s
books.
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Section 424
248 Corporations Act 2001
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424 Controller may apply to Court
(1) A controller of property of a corporation may apply to the Court
for directions in relation to any matter arising in connection with
the performance or exercise of any of the controller’s functions and
powers as controller.
(2) In the case of a receiver of property of a corporation, subsection (1)
applies only if the receiver was appointed under a power contained
in an instrument.
425 Court’s power to fix receiver’s remuneration
(1) The Court may by order fix the amount to be paid by way of
remuneration to any person who, under a power contained in an
instrument, has been appointed as receiver of property of a
corporation.
(2) The power of the Court to make an order under this section:
(a) extends to fixing the remuneration for any period before the
making of the order or the application for the order; and
(b) is exercisable even if the receiver has died, or ceased to act,
before the making of the order or the application for the
order; and
(c) if the receiver has been paid or has retained for the receiver’s
remuneration for any period before the making of the order
any amount in excess of that fixed for that period—extends
to requiring the receiver or the receiver’s personal
representatives to account for the excess or such part of the
excess as is specified in the order.
(3) The power conferred by paragraph (2)(c) must not be exercised in
respect of any period before the making of the application for the
order unless, in the opinion of the Court, there are special
circumstances making it proper for the power to be so exercised.
(4) The Court may from time to time vary or amend an order under
this section.
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(5) An order under this section may be made, varied or amended on
the application of:
(a) a liquidator of the corporation; or
(b) an administrator of the corporation; or
(c) an administrator of a deed of company arrangement executed
by the corporation; or
(d) ASIC.
(6) An order under this section may be varied or amended on the
application of the receiver concerned.
(7) An order under this section may be made, varied or amended only
as provided in subsections (5) and (6).
(8) In exercising its powers under this section, the Court must have
regard to whether the remuneration is reasonable, taking into
account any or all of the following matters:
(a) the extent to which the work performed by the receiver was
reasonably necessary;
(b) the extent to which the work likely to be performed by the
receiver is likely to be reasonably necessary;
(c) the period during which the work was, or is likely to be,
performed by the receiver;
(d) the quality of the work performed, or likely to be performed,
by the receiver;
(e) the complexity (or otherwise) of the work performed, or
likely to be performed, by the receiver;
(f) the extent (if any) to which the receiver was, or is likely to
be, required to deal with extraordinary issues;
(g) the extent (if any) to which the receiver was, or is likely to
be, required to accept a higher level of risk or responsibility
than is usually the case;
(h) the value and nature of any property dealt with, or likely to
be dealt with, by the receiver;
(i) whether the receiver was, or is likely to be, required to deal
with:
(i) one or more other receivers; or
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(ii) one or more receivers and managers; or
(iii) one or more liquidators; or
(iv) one or more administrators; or
(v) one or more administrators of deeds of company
arrangement;
(j) the number, attributes and behaviour, or the likely number,
attributes and behaviour, of the company’s creditors;
(k) if the remuneration is ascertained, in whole or in part, on a
time basis:
(i) the time properly taken, or likely to be properly taken,
by the receiver in performing the work; and
(ii) whether the total remuneration payable to the receiver is
capped;
(l) any other relevant matters.
426 Controller has qualified privilege in certain cases
A controller of property of a corporation has qualified privilege in
respect of:
(a) a matter contained in a report or return that the controller
lodges under section 421A, 422, 422A or 422B; or
(b) a comment that the controller makes under
paragraph 429(2)(c).
427 Notification of matters relating to controller
(1) A person who:
(a) obtains an order for the appointment of a receiver of property
of a corporation; or
(b) appoints such a receiver under a power contained in an
instrument;
must, within 7 days after obtaining the order or making the
appointment, lodge notice that the order has been obtained, or that
the appointment has been made, as the case may be.
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Section 428
Corporations Act 2001 251
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(1A) A person who appoints another person to enter into possession, or
take control, of property of a corporation (whether or not as agent
for the corporation) for the purpose of enforcing a security interest
otherwise than as receiver of that property must, within 7 days after
making the appointment, lodge notice of the appointment.
(1B) A person who enters into possession, or takes control, as
mentioned in subsection (1A) must, within 7 days after entering
into possession or taking control, lodge notice that the person has
done so, unless another person:
(a) appointed the first-mentioned person so to enter into
possession or take control; and
(b) complies with subsection (1A) in relation to the appointment.
(2) Within 14 days after becoming a controller of property of a
corporation, a person must lodge notice in the prescribed form of
the address of the person’s office.
(3) A controller of property of a corporation must, within 14 days after
a change in the situation of the controller’s office, lodge notice in
the prescribed form of the change.
(4) A person who ceases to be a controller of property of a corporation
must, within 7 days after so ceasing, lodge notice that the person
has so ceased.
428 Statement that receiver appointed or other controller acting
(1) Where a receiver of property (whether in or outside this
jurisdiction or in or outside Australia) of a corporation has been
appointed, the corporation must set out, in every public document,
and in every negotiable instrument, of the corporation, after the
name of the corporation where it first appears, a statement that a
receiver, or a receiver and manager, as the case requires, has been
appointed.
(2) Where there is a controller (other than a receiver) of property
(whether in Australia or elsewhere) of a corporation, the
corporation must set out, in every public document, and in every
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Section 429
252 Corporations Act 2001
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negotiable instrument, of the corporation, after the corporation’s
name where it first appears, a statement that a controller is acting.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
429 Officers to report to controller about corporation’s affairs
(1) In this section:
reporting officer, in relation to a corporation in respect of property
of which a person is controller, means a person who was:
(a) in the case of a company or registrable Australian body—a
director or secretary of the company or registrable Australian
body; or
(b) in the case of a foreign company—a local agent of the
foreign company;
on the control day.
(2) Where a person becomes a controller of property of a corporation:
(a) the person must serve on the corporation as soon as
practicable notice that the person is a controller of property
of the corporation; and
(b) within 10 business days after the corporation receives the
notice, the reporting officers must make out and submit to the
person a report in the prescribed form about the affairs of the
corporation as at the control day; and
(c) the person must, within one month after receipt of the report:
(i) lodge a copy of the report and a notice setting out any
comments the person sees fit to make relating to the
report or, if the person does not see fit to make any
comment, a notice stating that the person does not see
fit to make any comment; and
(ii) send to the corporation a copy of the notice lodged in
accordance with subparagraph (i); and
(iii) if the person became a controller of the property:
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(A) because of an appointment as receiver of the
property that was made by or on behalf of the
holder of debentures of the corporation; or
(B) by entering into possession, or taking control,
of the property for the purpose of enforcing a
security interest securing such debentures;
and there are trustees for the holders of those
debentures—send to those trustees a copy of the report
and a copy of the notice lodged under subparagraph (i).
(3) Where notice has been served on a corporation under
paragraph (2)(a), the reporting officers may apply to the controller
or to the Court to extend the period within which the report is to be
submitted and:
(a) if application is made to the controller—if the controller
believes that there are special reasons for so doing, the
controller may, by notice in writing given to the reporting
officers, extend that period until a specified day; and
(b) if application is made to the Court—if the Court believes that
there are special reasons for so doing, the Court may, by
order, extend that period until a specified day.
(4) As soon as practicable after granting an extension under
paragraph (3)(a), the controller must lodge a copy of the notice.
(5) As soon as practicable after the Court grants an extension under
paragraph (3)(b), the reporting officers must lodge a copy of the
order.
(6) Subsections (2), (3) and (4) do not apply in a case where a person
becomes a controller of property of a corporation:
(a) to act with an existing controller of property of the
corporation; or
(b) in place of a controller of such property who has died or
ceased to be a controller of such property.
(6A) However, if subsection (2) applies in a case where a controller of
property of a corporation dies, or ceases to be a controller of
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Section 430
254 Corporations Act 2001
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property of the corporation, before subsection (2) is fully complied
with, then:
(a) the references in paragraphs (2)(b) and (c) to the person; and
(b) the references in subsections (3) and (4) to the controller;
include references to the controller’s successor and to any
continuing controller.
(7) Where a corporation is being wound up, this section (including
subsection (6A)) and section 430 apply even if the controller and
the liquidator are the same person, but with any necessary
modifications arising from that fact.
430 Controller may require reports
(1) A controller of property of a corporation may, by notice given to
the person or persons, require one or more persons included in one
or more of the following classes of persons to make out as required
by the notice, verify by a statement in writing in the prescribed
form, and submit to the controller, a report, containing such
information as is specified in the notice as to the affairs of the
corporation or as to such of those affairs as are specified in the
notice, as at a date specified in the notice:
(a) persons who are or have been officers of the corporation;
(b) where the corporation was incorporated within one year
before the control day—persons who have taken part in the
formation of the corporation;
(c) persons who are employed by the corporation or have been
so employed within one year before the control day and are,
in the opinion of the controller, capable of giving the
information required;
(d) persons who are, or have been within one year before the
control day, officers of, or employed by, a corporation that is,
or within that year was, an officer of the corporation.
(2) Without limiting the generality of subsection (1), a notice under
that subsection may specify the information that the controller
requires as to affairs of the corporation by reference to information
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that this Act requires to be included in any other report, statement
or notice under this Act.
(3) A person making a report and verifying it as required by
subsection (1) must, subject to the regulations, be allowed, and
must be paid by the controller (or the controller’s successor) out of
the controller’s receipts, such costs and expenses incurred in and
about the preparation and making of the report and the verification
of the report as the controller (or the controller’s successor)
considers reasonable.
(4) A person must comply with a requirement made under
subsection (1).
(5) A reference in this section to the controller’s successor includes a
reference to a continuing controller.
431 Controller may inspect books
A controller of property of a corporation is entitled to inspect at
any reasonable time any books of the corporation that relate to that
property and a person must not fail to allow the controller to
inspect such books at such a time.
432 Auditing returns by controllers
(2) ASIC may, of its own motion or on the application of the
corporation or a creditor of the corporation, cause the returns
lodged in accordance with sections 422A and 422B to be audited
by a registered company auditor appointed by ASIC and, for the
purpose of the audit, the controller must furnish the auditor with
such books and information as the auditor requires.
(3) Where ASIC causes the returns to be audited on the request of the
corporation or a creditor, ASIC may require the corporation or
creditor, as the case may be, to give security for the payment of the
cost of the audit.
(4) The costs of an audit under subsection (2) must be fixed by ASIC
and ASIC may if it thinks fit make an order declaring that, for the
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Section 433
256 Corporations Act 2001
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purposes of subsection 419(1), those costs are taken to be a debt
incurred by the controller as mentioned in subsection 419(1) and,
where such an order is made, the controller is liable accordingly.
(5) A person must comply with a requirement made under this section.
433 Property subject to circulating security interest—payment of
certain debts to have priority
(2) This section applies where:
(a) a receiver is appointed on behalf of the holders of any
debentures of a company or registered body that are secured
by a circulating security interest, or possession is taken or
control is assumed, by or on behalf of the holders of any
debentures of a company or registered body, of any property
comprised in or subject to a circulating security interest; and
(b) at the date of the appointment or of the taking of possession
or assumption of control (in this section called the relevant
date):
(i) the company or registered body has not commenced to
be wound up voluntarily; and
(ii) the company or registered body has not been ordered to
be wound up by the Court.
(3) In the case of a company, the receiver or other person taking
possession or assuming control of property of the company must
pay, out of the property coming into his, her or its hands, the
following debts or amounts in priority to any claim for principal or
interest in respect of the debentures:
(a) first, any amount that in a winding up is payable in priority to
unsecured debts pursuant to section 562;
(b) next, if an auditor of the company had applied to ASIC under
subsection 329(6) for consent to his, her or its resignation as
auditor and ASIC had refused that consent before the
relevant date—the reasonable fees and expenses of the
auditor incurred during the period beginning on the day of
the refusal and ending on the relevant date;
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(c) subject to subsections (6) and (7), next, any debt or amount
that in a winding up is payable in priority to other unsecured
debts pursuant to paragraph 556(1)(e), (g) or (h) or
section 560.
(4) In the case of a registered body, the receiver or other person taking
possession or assuming control of property of the registered body
must pay, out of the property of the registered body coming into
his, her or its hands, the following debts or amounts in priority to
any claim for principal or interest in respect of the debentures:
(a) first, any amount that in a winding up is payable in priority to
unsecured debts pursuant to section 562;
(b) next, any debt or amount that in a winding up is payable in
priority to other unsecured debts pursuant to
paragraph 556(1)(e), (g) or (h) or section 560.
(5) The receiver or other person taking possession or assuming control
of property must pay debts and amounts payable pursuant to
paragraph (3)(c) or (4)(b) in the same order of priority as is
prescribed by Division 6 of Part 5.6 in respect of those debts and
amounts.
(6) In the case of a company, if an auditor of the company had applied
to ASIC under subsection 329(6) for consent to his, her or its
resignation as auditor and ASIC had, before the relevant date,
refused that consent, a receiver must, when property comes to the
receiver’s hands, before paying any debt or amount referred to in
paragraph (3)(c), make provision out of that property for the
reasonable fees and expenses of the auditor incurred after the
relevant date but before the date on which the property comes into
the receiver’s hands, being fees and expenses in respect of which
provision has not already been made under this subsection.
(7) If an auditor of the company applies to ASIC under
subsection 329(6) for consent to his, her or its resignation as
auditor and, after the relevant date, ASIC refuses that consent, the
receiver must, in relation to property that comes into the receiver’s
hands after the refusal, before paying any debt or amount referred
to in paragraph (3)(c), make provision out of that property for the
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reasonable fees and expenses of the auditor incurred after the
refusal and before the date on which the property comes into the
receiver’s hands, being fees and expenses in respect of which
provision has not already been made under this subsection.
(8) A receiver must make provision in respect of reasonable fees and
expenses of an auditor in respect of a particular period as required
by subsection (6) or (7) whether or not the auditor has made a
claim for fees and expenses for that period, but where the auditor
has not made a claim, the receiver may estimate the reasonable fees
and expenses of the auditor for that period and make provision in
accordance with the estimate.
(9) For the purposes of this section, the references in Division 6 of
Part 5.6 to the relevant date are to be read as references to the date
of the appointment of the receiver, or of possession being taken or
control being assumed, as the case may be.
434 Enforcing controller’s duty to make returns
(1) If a controller of property of a corporation:
(a) who has made default in making or lodging any return,
account or other document or in giving any notice required
by law fails to make good the default within 14 days after the
service on the controller, by any member or creditor of the
corporation or trustee for debenture holders, of a notice
requiring the controller to do so; or
(b) who has become a controller of property of the corporation
otherwise than by being appointed a receiver of such
property by a court and who has, after being required at any
time by the liquidator of the corporation so to do, failed to
render proper accounts of, and to vouch, the controller’s
receipts and payments and to pay over to the liquidator the
amount properly payable to the liquidator;
the Court may make an order directing the controller to make good
the default within such time as is specified in the order.
(2) An application under subsection (1) may be made:
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(a) if paragraph (1)(a) applies—by a member or creditor of the
corporation or by a trustee for debenture holders; and
(b) if paragraph (1)(b) applies—by the liquidator of the
corporation.
434A Court may remove controller for misconduct
Where, on the application of a corporation, the Court is satisfied
that a controller of property of the corporation has been guilty of
misconduct in connection with performing or exercising any of the
controller’s functions and powers, the Court may order that, on and
after a specified day, the controller cease to act as receiver or give
up possession or control, as the case requires, of property of the
corporation.
434B Court may remove redundant controller
(1) The Court may order that, on and after a specified day, a controller
of property of a corporation:
(a) cease to act as receiver, or give up possession or control, as
the case requires, of property of the corporation; or
(b) act as receiver, or continue in possession or control, as the
case requires, only of specified property of the corporation.
(2) However, the Court may only make an order under subsection (1)
if satisfied that the objectives for which the controller was
appointed, or entered into possession or took control of property of
the corporation, as the case requires, have been achieved, so far as
is reasonably practicable, except in relation to any property
specified in the order under paragraph (1)(b).
(3) For the purposes of subsection (2), the Court must have regard to:
(a) the corporation’s interests; and
(b) the interests of the secured party in relation to the security
interest that the controller is enforcing; and
(c) the interests of the corporation’s other creditors; and
(d) any other relevant matter.
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Section 434C
260 Corporations Act 2001
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(4) The Court may only make an order under subsection (1) on the
application of a liquidator appointed for the purposes of winding
up the corporation in insolvency.
(5) An order under subsection (1) may also prohibit the secured party
from doing any or all of the following, except with the leave of the
Court:
(a) appointing a person as receiver of property of the corporation
under a power contained in an instrument relating to the
security interest;
(b) entering into possession, or taking control, of such property
for the purpose of enforcing the security interest;
(c) appointing a person so to enter into possession or take control
(whether as agent for the secured party or for the
corporation).
434C Effect of sections 434A and 434B
(1) Except as expressly provided in section 434A or 434B, an order
under that section does not affect a security interest in property of a
corporation.
(2) Nothing in section 434A or 434B limits any other power of the
Court to remove, or otherwise deal with, a controller of property of
a corporation (for example, the Court’s powers under section 423).
434D Appointment of 2 or more receivers of property of a
corporation
If 2 or more persons have been appointed as receivers of property
of a corporation:
(a) a function or power of a receiver of property of the
corporation may be performed or exercised by any one of
them, or by any 2 or more of them together, except so far as
the order or instrument appointing them otherwise provides;
and
(b) a reference in this Act to a receiver, or to the receiver, of
property of a corporation is, in the case of the first-mentioned
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corporation, a reference to whichever one or more of those
receivers the case requires.
434E Appointment of 2 or more receivers and managers of property
of a corporation
If 2 or more persons have been appointed as receivers and
managers of property of a corporation:
(a) a function or power of a receiver and manager of property of
the corporation may be performed or exercised by any one of
them, or by any 2 or more of them together, except so far as
the order or instrument appointing them otherwise provides;
and
(b) a reference in this Act to a receiver and manager, or to the
receiver and manager, of property of a corporation is, in the
case of the first-mentioned corporation, a reference to
whichever one or more of those receivers and managers the
case requires.
434F Appointment of 2 or more controllers of property of a
corporation
If 2 or more persons have been appointed as controllers of property
of a corporation:
(a) a function or power of a controller of property of the
corporation may be performed or exercised by any one of
them, or by any 2 or more of them together, except so far as
the order or instrument appointing them otherwise provides;
and
(b) a reference in this Act to a controller, or to the controller, of
property of a corporation is, in the case of the first-mentioned
corporation, a reference to whichever one or more of those
controllers the case requires.
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Section 434G
262 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
434G Appointment of 2 or more managing controllers of property of
a corporation
If 2 or more persons have been appointed as managing controllers
of property of a corporation:
(a) a function or power of a managing controller of property of
the corporation may be performed or exercised by any one of
them, or by any 2 or more of them together, except so far as
the order or instrument appointing them otherwise provides;
and
(b) a reference in this Act to a managing controller, or to the
managing controller, of property of a corporation is, in the
case of the first-mentioned corporation, a reference to
whichever one or more of those managing controllers the
case requires.
434H Regulations may provide for reporting to ASIC
(1) The regulations may provide for and in relation to the obligations
of a controller, or a managing controller, of the property of a
corporation:
(a) to give information; and
(b) to provide reports; and
(c) to produce documents;
to ASIC.
(2) Without limiting subsection (1), the regulations may provide for
and in relation to:
(a) the manner and form in which information is to be given, a
report provided or a document produced; and
(b) the timeframes in which information is to be given, a report
provided or a document produced; and
(c) who is to bear the cost of giving information, providing a
report or producing a document.
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Preliminary Division 1
Section 435A
Corporations Act 2001 263
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Part 5.3A—Administration of a company’s affairs
with a view to executing a deed of company
arrangement
Division 1—Preliminary
435A Object of Part
The object of this Part, and Schedule 2 to the extent that it relates
to this Part, is to provide for the business, property and affairs of an
insolvent company to be administered in a way that:
(a) maximises the chances of the company, or as much as
possible of its business, continuing in existence; or
(b) if it is not possible for the company or its business to
continue in existence—results in a better return for the
company’s creditors and members than would result from an
immediate winding up of the company.
Note: Schedule 2 contains additional rules about companies under external
administration.
435B Definitions
In this Part, unless the contrary intention appears:
property of a company includes any PPSA retention of title
property of the company.
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property). An extended definition of property applies in
subsection 444E(3) (see subsection 444E(4)).
receiver includes a receiver and manager.
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Division 1 Preliminary
Section 435C
264 Corporations Act 2001
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435C When administration begins and ends
(1) The administration of a company:
(a) begins when an administrator of the company is appointed
under section 436A, 436B or 436C; and
(b) ends on the happening of whichever event of a kind referred
to in subsection (2) or (3) happens first after the
administration begins.
(2) The normal outcome of the administration of a company is that:
(a) a deed of company arrangement is executed by both the
company and the deed’s administrator; or
(b) the company’s creditors resolve under paragraph 439C(b)
that the administration should end; or
(c) the company’s creditors resolve under paragraph 439C(c)
that the company be wound up.
(3) However, the administration of a company may also end because:
(a) the Court orders, under section 447A or otherwise, that the
administration is to end, for example, because the Court is
satisfied that the company is solvent; or
(b) the convening period, as fixed by subsection 439A(5), for a
meeting of the company’s creditors ends:
(i) without the meeting being convened in accordance with
section 439A; and
(ii) without an application being made for the Court to
extend under subsection 439A(6) the convening period
for the meeting; or
(c) an application for the Court to extend under
subsection 439A(6) the convening period for such a meeting
is finally determined or otherwise disposed of otherwise than
by the Court extending the convening period; or
(d) the convening period, as extended under subsection 439A(6),
for such a meeting ends without the meeting being convened
in accordance with section 439A; or
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(e) such a meeting convened under section 439A ends (whether
or not it was earlier adjourned) without a resolution under
section 439C being passed at the meeting; or
(f) the company contravenes subsection 444B(2) by failing to
execute a proposed deed of company arrangement; or
(g) the Court appoints a provisional liquidator of the company,
or orders that the company be wound up; or
(h) if the company is a general insurer (within the meaning of the
Insurance Act 1973)—management of the general insurer
vests in a judicial manager of the company appointed by the
Federal Court under Part VB of the Insurance Act 1973; or
(i) if the company is a life company (within the meaning of the
Life Insurance Act 1995)—management of the life company
vests in a judicial manager of the life company appointed by
the Federal Court under Part 8 of the Life Insurance Act
1995.
(4) During the administration of a company, the company is taken to
be under administration.
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Division 2 Appointment of administrator and first meeting of creditors
Section 436A
266 Corporations Act 2001
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Division 2—Appointment of administrator and first
meeting of creditors
436A Company may appoint administrator if board thinks it is or
will become insolvent
(1) A company may, by writing, appoint an administrator of the
company if the board has resolved to the effect that:
(a) in the opinion of the directors voting for the resolution, the
company is insolvent, or is likely to become insolvent at
some future time; and
(b) an administrator of the company should be appointed.
(2) Subsection (1) does not apply to a company if a person holds an
appointment as liquidator, or provisional liquidator, of the
company.
436B Liquidator may appoint administrator
(1) A liquidator or provisional liquidator of a company may by writing
appoint an administrator of the company if he or she thinks that the
company is insolvent, or is likely to become insolvent at some
future time.
(2) A liquidator or provisional liquidator of a company must not
appoint any of the following persons under subsection (1):
(a) himself or herself;
(b) if he or she is a partner of a partnership—a partner or
employee of the partnership;
(c) if he or she is an employee—his or her employer;
(d) if he or she is an employer—his or her employee;
(e) if he or she is a director, secretary, employee or senior
manager of a corporation—a director, secretary, employee or
senior manager of the corporation;
unless:
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(f) at a meeting of the company’s creditors, the company’s
creditors pass a resolution approving the appointment; or
(g) the appointment is made with the leave of the Court.
436C Secured party may appoint administrator
(1) A person who is entitled to enforce a security interest in the whole,
or substantially the whole, of a company’s property may by writing
appoint an administrator of the company if the security interest has
become, and is still, enforceable.
(1A) Subsection (1) applies in relation to a PPSA security interest only
if the security interest is perfected within the meaning of the
Personal Property Securities Act 2009.
(2) Subsection (1) does not apply to a company if a person holds an
appointment as liquidator, or provisional liquidator, of the
company.
436D Company already under administration
An administrator cannot be appointed under section 436A, 436B or
436C if the company is already under administration.
436DA Declarations by administrator—indemnities and relevant
relationships
Scope
(1) This section applies to an administrator appointed under
section 436A, 436B or 436C.
Declaration of relationships and indemnities
(2) As soon as practicable after being appointed, the administrator
must make:
(a) a declaration of relevant relationships; and
(b) a declaration of indemnities.
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Section 436DA
268 Corporations Act 2001
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Notification of creditors
(3) The administrator must:
(a) give a copy of each declaration under subsection (2) to as
many of the company’s creditors as reasonably practicable;
and
(b) do so at the same time as the administrator gives those
creditors notice of the meeting referred to in section 436E.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The administrator must table a copy of each declaration under
subsection (2) at the meeting referred to in section 436E.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4A) As soon as practicable after making a declaration under
subsection (2), the administrator must lodge a copy of the
declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Updating of declaration
(5) If:
(a) at a particular time, the administrator makes:
(i) a declaration of relevant relationships; or
(ii) a declaration of indemnities;
under subsection (2) or this subsection; and
(b) at a later time:
(i) the declaration has become out-of-date; or
(ii) the administrator becomes aware of an error in the
declaration;
the administrator must, as soon as practicable, make:
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(c) if subparagraph (a)(i) applies—a replacement declaration of
relevant relationships; or
(d) if subparagraph (a)(ii) applies—a replacement declaration of
indemnities.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) The administrator must table a copy of a replacement declaration
under subsection (5):
(a) if:
(i) there is a committee of inspection; and
(ii) the next meeting of the committee of inspection occurs
before the next meeting of the company’s creditors;
at the next meeting of the committee of inspection; or
(b) in any other case—at the next meeting of the company’s
creditors.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6A) As soon as practicable after making a replacement declaration
under subsection (5), the administrator must lodge a copy of the
replacement declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Defence
(7) In a prosecution for an offence constituted by a failure to include a
particular matter in a declaration under this section, it is a defence
if the defendant proves that:
(a) the defendant made reasonable enquiries; and
(b) after making these enquiries, the defendant had no reasonable
grounds for believing that the matter should have been
included in the declaration.
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Section 436E
270 Corporations Act 2001
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436E Purpose and timing of first meeting of creditors
(1) The administrator of a company under administration must
convene a meeting of the company’s creditors in order to
determine:
(a) whether to appoint a committee of inspection; and
(b) if so, who are to be the committee’s members.
(2) The meeting must be held within 8 business days after the
administration begins.
(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the
company’s creditors as reasonably practicable; and
(b) causing a notice setting out the prescribed information about
the meeting to be published in the prescribed manner;
at least 5 business days before the meeting.
Note: For electronic notification under paragraph (a), see section 600G.
(3A) A notice under paragraph (3)(b) that relates to a company may be
combined with a notice under paragraph 450A(1)(b) that relates to
the company.
(4) At the meeting, the company’s creditors may also pass a
resolution:
(a) removing the administrator from office; and
(b) appointing someone else as administrator of the company.
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Section 437A
Corporations Act 2001 271
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Division 3—Administrator assumes control of company’s
affairs
437A Role of administrator
(1) While a company is under administration, the administrator:
(a) has control of the company’s business, property and affairs;
and
(b) may carry on that business and manage that property and
those affairs; and
(c) may terminate or dispose of all or part of that business, and
may dispose of any of that property; and
(d) may perform any function, and exercise any power, that the
company or any of its officers could perform or exercise if
the company were not under administration.
(2) Nothing in subsection (1) limits the generality of anything else in
it.
Note: A PPSA security interest in property of a company that is unperfected
(within the meaning of the Personal Property Securities Act 2009)
immediately before an administrator of the company is appointed
vests in the company at the time of appointment, subject to certain
exceptions (see section 267 of that Act).
437B Administrator acts as company’s agent
When performing a function, or exercising a power, as
administrator of a company under administration, the administrator
is taken to be acting as the company’s agent.
437D Only administrator can deal with company’s property
(1) This section applies where:
(a) a company under administration purports to enter into; or
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Section 437D
272 Corporations Act 2001
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(b) a person purports to enter into, on behalf of a company under
administration;
a transaction or dealing affecting property of the company.
(2) The transaction or dealing is void unless:
(a) the administrator entered into it on the company’s behalf; or
(b) the administrator consented to it in writing before it was
entered into; or
(c) it was entered into under an order of the Court.
(3) Subsection (2) does not apply to a payment made:
(a) by an Australian ADI out of an account kept by the company
with the ADI; and
(b) in good faith and in the ordinary course of the ADI’s banking
business; and
(c) after the administration began and on or before the day on
which:
(i) the administrator gives to the ADI (under
subsection 450A(3) or otherwise) written notice of the
appointment that began the administration; or
(ii) the administrator complies with paragraph 450A(1)(b)
in relation to that appointment;
whichever happens first.
(4) Subsection (2) has effect subject to an order that the Court makes
after the purported transaction or dealing.
(5) If, because of subsection (2), the transaction or dealing is void, or
would be void apart from subsection (4), an officer or employee of
the company who:
(a) purported to enter into the transaction or dealing on the
company’s behalf; or
(b) was in any other way, by act or omission, directly or
indirectly, knowingly concerned in, or party to, the
transaction or dealing;
contravenes this subsection.
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Section 437E
Corporations Act 2001 273
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437E Order for compensation where officer involved in void
transaction
(1) Where:
(a) a court finds a person guilty of an offence constituted by a
contravention of subsection 437D(5) (including such an
offence that is taken to have been committed because of
section 5 of the Crimes Act 1914); and
(b) the court is satisfied that the company or another person has
suffered loss or damage because of the act or omission
constituting the offence;
the court may (whether or not it imposes a penalty) order the
first-mentioned person to pay compensation to the company or
other person, as the case may be, of such amount as the order
specifies.
Note: Section 73A defines when a court is taken to find a person guilty of an
offence.
(2) An order under subsection (1) may be enforced as if it were a
judgment of the court.
(3) The power of a court under section 1318 to relieve a person from
liability as mentioned in that section extends to relieving a person
from liability to be ordered under this section to pay compensation.
437F Effect of administration on company’s members
Transfer of shares
(1) A transfer of shares in a company that is made during the
administration of the company is void except if:
(a) both:
(i) the administrator gives written consent to the transfer;
and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the administrator gives written consent to the transfer;
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Section 437F
274 Corporations Act 2001
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(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (4) authorising
the transfer.
(2) The administrator may only give consent under paragraph (1)(a) or
(b) if he or she is satisfied that the transfer is in the best interests of
the company’s creditors as a whole.
(3) If the administrator refuses to give consent under paragraph (1)(a)
or (b) to a transfer of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
may apply to the Court for an order authorising the transfer.
(4) If the Court is satisfied, on an application under subsection (3), that
the transfer is in the best interests of the company’s creditors as a
whole, the Court may, by order, authorise the transfer.
(5) If the administrator gives consent under paragraph (1)(b) to a
transfer of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(6) If the Court is satisfied, on an application under subsection (5), that
any or all of the conditions covered by the application are not in
the best interests of the company’s creditors as a whole, the Court
may, by order, set aside any or all of the conditions.
(7) The administrator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (3) or (5).
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Section 437F
Corporations Act 2001 275
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Alteration in the status of members
(8) An alteration in the status of members of a company that is made
during the administration of the company is void except if:
(a) both:
(i) the administrator gives written consent to the alteration;
and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the administrator gives written consent to the alteration;
(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (12) authorising
the alteration.
(9) The administrator may only give consent under paragraph (8)(a) or
(b) if he or she is satisfied that the alteration is in the best interests
of the company’s creditors as a whole.
(10) The administrator must refuse to give consent under
paragraph (8)(a) or (b) if the alteration would contravene Part 2F.2.
(11) If the administrator refuses to give consent under paragraph (8)(a)
or (b) to an alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order authorising the alteration.
(12) If the Court is satisfied, on an application under subsection (11),
that:
(a) the alteration is in the best interests of the company’s
creditors as a whole; and
(b) the alteration does not contravene Part 2F.2;
the Court may, by order, authorise the alteration.
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Division 3 Administrator assumes control of company’s affairs
Section 437F
276 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(13) If the administrator gives consent under paragraph (8)(b) to an
alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(14) If the Court is satisfied, on an application under subsection (13),
that any or all of the conditions covered by the application are not
in the best interests of the company’s creditors as a whole, the
Court may, by order, set aside any or all of the conditions.
(15) The administrator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (11) or (13).
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arrangement Part 5.3A
Administrator investigates company’s affairs Division 4
Section 438A
Corporations Act 2001 277
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Administrator investigates company’s affairs
438A Administrator to investigate affairs and consider possible
courses of action
As soon as practicable after the administration of a company
begins, the administrator must:
(a) investigate the company’s business, property, affairs and
financial circumstances; and
(b) form an opinion about each of the following matters:
(i) whether it would be in the interests of the company’s
creditors for the company to execute a deed of company
arrangement;
(ii) whether it would be in the creditors’ interests for the
administration to end;
(iii) whether it would be in the creditors’ interests for the
company to be wound up.
438B Directors to help administrator
(1) As soon as practicable after the administration of a company
begins, each director must:
(a) deliver to the administrator all books in the director’s
possession that relate to the company, other than books that
the director is entitled, as against the company and the
administrator, to retain; and
(b) if the director knows where other books relating to the
company are—tell the administrator where those books are.
(2) Within 5 business days after the administration of a company
begins or such longer period as the administrator allows, the
directors must give to the administrator a report in the prescribed
form about the company’s business, property, affairs and financial
circumstances.
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Division 4 Administrator investigates company’s affairs
Section 438C
278 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2A) The administrator must, within 5 business days after receiving a
report under subsection (2), lodge a copy of the report.
(3) A director of a company under administration must:
(a) attend on the administrator at such times; and
(b) give the administrator such information about the company’s
business, property, affairs and financial circumstances;
as the administrator reasonably requires.
(4) A person must not fail to comply with subsection (1), (2), (2A) or
(3).
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) Subsection (4) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6), see subsection 13.3(3) of the Criminal Code.
438C Administrator’s rights to company’s books
(1) A person is not entitled, as against the administrator of a company
under administration:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to books of which a
secured creditor of the company is entitled to possession otherwise
than because of a lien, but the administrator is entitled to inspect,
and make copies of, such books at any reasonable time.
(3) The administrator of a company under administration may give to a
person a written notice requiring the person to deliver to the
administrator, as specified in the notice, books so specified that are
in the person’s possession.
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Administrator investigates company’s affairs Division 4
Section 438D
Corporations Act 2001 279
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) A notice under subsection (3) must specify a period of at least 3
business days as the period within which the notice must be
complied with.
(5) A person must comply with a notice under subsection (3).
(6) Subsection (5) does not apply to the extent that the person is
entitled, as against the company and the administrator, to retain
possession of the books.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6), see subsection 13.3(3) of the Criminal Code.
(7) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
438D Reports by administrator
(1) If it appears to the administrator of a company under
administration that:
(a) a past or present officer or employee, or a member, of the
company may have been guilty of an offence in relation to
the company; or
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become
liable or accountable for, money or property (in
Australia or elsewhere) of the company; or
(ii) may have been guilty of negligence, default, breach of
duty or breach of trust in relation to the company;
the administrator must:
(c) lodge a report about the matter as soon as practicable; and
(d) give ASIC such information, and such access to and facilities
for inspecting and taking copies of documents, as ASIC
requires.
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Division 4 Administrator investigates company’s affairs
Section 438D
280 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The administrator may also lodge further reports specifying any
other matter that, in his or her opinion, it is desirable to bring to
ASIC’s notice.
(3) If it appears to the Court:
(a) that a past or present officer or employee, or a member, of a
company under administration has been guilty of an offence
in relation to the company; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a company
under administration has engaged in conduct of a kind
referred to in paragraph (1)(b) in relation to the company;
and that the administrator has not lodged a report about the matter,
the Court may, on the application of an interested person, direct the
administrator to lodge such a report.
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arrangement Part 5.3A
Meeting of creditors decides company’s future Division 5
Section 439A
Corporations Act 2001 281
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Meeting of creditors decides company’s future
439A Administrator to convene meeting and inform creditors
(1) The administrator of a company under administration must
convene a meeting of the company’s creditors within the
convening period as fixed by subsection (5) or extended under
subsection (6).
Note: For body corporate representatives’ powers at a meeting of the
company’s creditors, see section 250D.
(2) The meeting must be held within 5 business days before, or within
5 business days after, the end of the convening period.
(5) The convening period is:
(a) if the day after the administration begins is in December, or
is less than 25 business days before Good Friday—the period
of 25 business days beginning on:
(i) that day; or
(ii) if that day is not a business day—the next business day;
or
(b) otherwise—the period of 20 business days beginning on:
(i) the day after the administration begins; or
(ii) if that day is not a business day—the next business day.
(6) The Court may extend the convening period on an application
made during or after the period referred to in paragraph (5)(a) or
(b), as the case requires.
(7) If an application is made under subsection (6) after the period
referred to in paragraph (5)(a) or (b), as the case may be, the Court
may only extend the convening period if the Court is satisfied that
it would be in the best interests of the creditors if the convening
period were extended in accordance with the application.
(8) If an application is made under subsection (6) after the period
referred to in paragraph (5)(a) or (b), as the case may be, then, in
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Division 5 Meeting of creditors decides company’s future
Section 439C
282 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
making an order about the costs of the application, the Court must
have regard to:
(a) the fact that the application was made after that period; and
(b) any other conduct engaged in by the administrator; and
(c) any other relevant matters.
439C What creditors may decide
At a meeting convened under section 439A, the creditors may
resolve:
(a) that the company execute a deed of company arrangement
specified in the resolution (even if it differs from the
proposed deed (if any) details of which accompanied any
notice of meeting); or
(b) that the administration should end; or
(c) that the company be wound up.
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Protection of company’s property during administration Division 6
Section 440A
Corporations Act 2001 283
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Protection of company’s property during
administration
440A Winding up company
(1) A company under administration cannot be wound up voluntarily,
except as provided by section 446A or 446AA.
(2) The Court is to adjourn the hearing of an application for an order to
wind up a company if the company is under administration and the
Court is satisfied that it is in the interests of the company’s
creditors for the company to continue under administration rather
than be wound up.
(3) The Court is not to appoint a provisional liquidator of a company if
the company is under administration and the Court is satisfied that
it is in the interests of the company’s creditors for the company to
continue under administration rather than have a provisional
liquidator appointed.
440B Restrictions on exercise of third party property rights
General rule
(1) During the administration of a company, the restrictions set out in
the table at the end of this section apply in relation to the exercise
of the rights of a person (the third party) in property of the
company, or other property used or occupied by, or in the
possession of, the company, as set out in the table.
Note: The property of the company includes any PPSA retention of title
property of the company (see section 435B).
Exception—consent of administrator or leave of court
(2) The restrictions set out in the table at the end of this section do not
apply in relation to the exercise of a third party’s rights in property
if the rights are exercised:
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Section 440B
284 Corporations Act 2001
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(a) with the administrator’s written consent; or
(b) with the leave of the Court.
Possessory security interests—continued possession
(3) If a company’s property is subject to a possessory security interest,
and the property is in the lawful possession of the secured party,
the secured party may continue to possess the property during the
administration of the company.
Restrictions on exercise of third party rights
Item If the third party is … then …
1 a secured party in relation to
property of the company, and is not
otherwise covered by this table
the third party cannot enforce the
security interest.
2 a secured party in relation to a
possessory security interest in the
property of the company
the third party cannot sell the
property, or otherwise enforce the
security interest.
3 a lessor of property used or occupied
by, or in the possession of, the
company, including a secured party
(a PPSA secured party) in relation
to a PPSA security interest in goods
arising out of a lease of the goods
the following restrictions apply:
(a) distress for rent must not be
carried out against the property;
(b) the third party cannot take
possession of the property or
otherwise recover it;
(c) if the third party is a PPSA
secured party—the third party
cannot otherwise enforce the
security interest.
4 an owner (other than a lessor) of
property used or occupied by, or in
the possession of, the company,
including a secured party (a PPSA
secured party) in relation to a PPSA
security interest in the property
the following restrictions apply:
(a) the third party cannot take
possession of the property or
otherwise recover it;
(b) if the third party is a PPSA
secured party—the third party
cannot otherwise enforce the
security interest.
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Section 440D
Corporations Act 2001 285
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
440D Stay of proceedings
(1) During the administration of a company, a proceeding in a court
against the company or in relation to any of its property cannot be
begun or proceeded with, except:
(a) with the administrator’s written consent; or
(b) with the leave of the Court and in accordance with such
terms (if any) as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.
440E Administrator not liable in damages for refusing consent
A company’s administrator is not liable to an action or other
proceeding for damages in respect of a refusal to give an approval
or consent for the purposes of this Division.
440F Suspension of enforcement process
During the administration of a company, no enforcement process in
relation to property of the company can be begun or proceeded
with, except:
(a) with the leave of the Court; and
(b) in accordance with such terms (if any) as the Court imposes.
440G Duties of court officer in relation to property of company
(1) This section applies where an officer of a court (in this section
called the court officer), being:
(a) a sheriff; or
(b) the registrar or other appropriate officer of the court;
receives written notice of the fact that a company is under
administration.
(2) During the administration, the court officer cannot:
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Section 440G
286 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) take action to sell property of the company under a process of
execution; or
(b) pay to a person (other than the administrator):
(i) proceeds of selling property of the company (at any
time) under a process of execution; or
(ii) money of the company seized (at any time) under a
process of execution; or
(iii) money paid (at any time) to avoid seizure or sale of
property of the company under a process of execution;
or
(c) take action in relation to the attachment of a debt due to the
company; or
(d) pay to a person (other than the administrator) money received
because of the attachment of such a debt.
(3) The court officer must deliver to the administrator any property of
the company that is in the court officer’s possession under a
process of execution (whenever begun).
(4) The court officer must pay to the administrator all proceeds or
money of a kind referred to in paragraph (2)(b) or (d) that:
(a) are in the court officer’s possession; or
(b) have been paid into the court and have not since been paid
out.
(5) The costs of the execution or attachment are a first charge on
property delivered under subsection (3) or proceeds or money paid
under subsection (4).
(6) In order to give effect to a charge under subsection (5) on proceeds
or money, the court officer may retain, on behalf of the person
entitled to the charge, so much of the proceeds or money as the
court officer thinks necessary.
(7) The Court may, if it is satisfied that it is appropriate to do so,
permit the court officer to take action, or to make a payment, that
subsection (2) would otherwise prevent.
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Protection of company’s property during administration Division 6
Section 440H
Corporations Act 2001 287
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) A person who buys property in good faith under a sale under a
process of execution gets a good title to the property as against the
company and the administrator, despite anything else in this
section.
440H Lis pendens taken to exist
(1) This section has effect only for the purposes of a law about the
effect of a lis pendens on purchasers or mortgagees.
(2) During the administration of a company, an application to wind up
the company is taken to be pending.
(3) An application that is taken because of subsection (2) to be
pending constitutes a lis pendens.
440J Administration not to trigger liability of director or relative
under guarantee of company’s liability
(1) During the administration of a company:
(a) a guarantee of a liability of the company cannot be enforced,
as against:
(i) a director of the company who is a natural person; or
(ii) a spouse or relative of such a director; and
(b) without limiting paragraph (a), a proceeding in relation to
such a guarantee cannot be begun against such a director,
spouse or relative;
except with the leave of the Court and in accordance with such
terms (if any) as the Court imposes.
(2) While subsection (1) prevents a person (the creditor) from:
(a) enforcing as against another person (the guarantor) a
guarantee of a liability of a company; or
(b) beginning a proceeding against another person (the
guarantor) in relation to such a guarantee;
section 1323 applies in relation to the creditor and the guarantor as
if:
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Section 440JA
288 Corporations Act 2001
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(c) a civil proceeding against the guarantor had begun under this
Act; and
(d) the creditor were the only person of a kind referred to in that
section as an aggrieved person.
Note: Under section 1323 the Court can make a range of orders to ensure
that a person can meet the person’s liabilities.
(3) The effect that section 1323 has because of a particular application
of subsection (2) is additional to, and does not prejudice, the effect
the section otherwise has.
(4) In this section:
guarantee, in relation to a liability of a company, includes a
relevant agreement (as defined in section 9) because of which a
person other than the company has incurred, or may incur, whether
jointly with the company or otherwise, a liability in respect of the
liability of the company.
liability means a debt, liability or other obligation.
440JA Property subject to a banker’s lien—exemption from this
Division
If:
(a) a company is under administration; and
(b) property of the company consists of:
(i) cash in the form of notes or coins; or
(ii) a negotiable instrument; or
(iii) a security (as defined by subsection 92(1)); or
(iv) a derivative (as defined in Chapter 7); and
(c) the property is subject to a possessory security interest; and
(d) the secured party is:
(i) an ADI (within the meaning of the Banking Act 1959);
or
(ii) the operator of a clearing and settlement facility (within
the meaning of section 768A);
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Section 440JA
Corporations Act 2001 289
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
this Division does not apply to the property.
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Division 7 Rights of secured party, owner or lessor
Section 441
290 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Rights of secured party, owner or lessor
Subdivision A—General
441 Application of Division
Except as expressly provided, nothing in this Division limits the
generality of anything else in it.
Subdivision B—Property subject to security interests
441AA Application of Subdivision—PPSA security interests
This Subdivision only applies in relation to the enforcement of a
PPSA security interest if the security interest is perfected, within
the meaning of the Personal Property Securities Act 2009, at the
time the enforcement starts.
441A Secured party acts before or during decision period
Scope
(1) This section applies if:
(a) the whole, or substantially the whole, of the property of a
company under administration is subject to a security
interest; and
(b) before or during the decision period, the secured party
enforced the security interest in relation to all property
(including any PPSA retention of title property) of the
company subject to the security interest, whether or not the
security interest was enforced in the same way in relation to
all that property.
(2) This section also applies if:
(a) a company is under administration; and
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Section 441A
Corporations Act 2001 291
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(b) the same person is the secured party in relation to each of 2
or more security interests in property (including PPSA
retention of title property) of the company; and
(c) the property of the company (the secured property) subject to
the respective security interests together constitutes the
whole, or substantially the whole, of the company’s property;
and
(d) before or during the decision period, the secured party
enforced the security interests in relation to all the secured
property:
(i) whether or not the security interests were enforced in
the same way in relation to all the secured property; and
(ii) whether or not any of the security interests was enforced
in the same way in relation to all the property of the
company subject to that security interest; and
(iii) in so far as the security interests were enforced in
relation to property of the company by a receiver or
controller appointed for the purposes of Part 5.2
(whether under an instrument relating to the security
interest or a court order)—whether or not the same
person was appointed in respect of all of the
last-mentioned property.
Power of enforcement by secured party, receiver or controller
(3) Nothing in section 198G, 440B, 440F or 440G, or in an order
under subsection 444F(2), prevents any of the following from
enforcing the security interest, or any of the security interests:
(a) the secured party;
(b) a receiver or controller appointed for the purposes of Part 5.2
(whether under an instrument relating to the security interest
or a court order, and even if appointed after the decision
period).
(4) Section 437D does not apply in relation to a transaction or dealing
that affects property of the company and is entered into by:
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Section 441B
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the secured party in the performance or exercise of a function
or power as secured party; or
(b) a receiver or controller mentioned in paragraph (3)(b) of this
section, in the performance or exercise of a function or power
as such a receiver or controller.
441B Where enforcement of security interest begins before
administration
(1) This section applies if, before the beginning of the administration
of a company, a secured party, receiver or other person:
(a) entered into possession, or assumed control, of property of
the company; or
(b) entered into an agreement to sell such property; or
(c) made arrangements for such property to be offered for sale
by public auction; or
(d) publicly invited tenders for the purchase of such property; or
(e) exercised any other power in relation to such property;
for the purpose of enforcing a security interest in that property.
(2) Nothing in section 198G, 440B, 440F or 440G prevents the secured
party, receiver or other person from enforcing the security interest
in relation to that property.
(3) Section 437D does not apply in relation to a transaction or dealing
that affects that property and is entered into:
(a) in the exercise of a power of the secured party as secured
party; or
(b) in the performance or exercise of a function or power of the
receiver or other person;
as the case may be.
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Section 441C
Corporations Act 2001 293
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441C Security interest in perishable property
Scope
(1) This section applies if perishable property of a company under
administration is subject to a security interest.
Power of enforcement by secured party, receiver or controller
(2) Nothing in section 198G or 440B prevents any of the following
from enforcing the security interest, so far as it is a security interest
in perishable property:
(a) the secured party;
(b) a receiver or controller appointed for the purposes of Part 5.2
(whether under an instrument relating to the security interest
or a court order, and even if appointed after the decision
period).
(3) Section 437D does not apply in relation to a transaction or dealing
that affects perishable property of the company and is entered into
by:
(a) the secured party in the performance or exercise of a function
or power as secured party; or
(b) a receiver or controller mentioned in paragraph (2)(b) of this
section, in the performance or exercise of a function or power
as such a receiver or controller.
441D Court may limit powers of secured party etc. in relation to
secured property
(1) This section applies if:
(a) for the purpose of enforcing a security interest in property of
a company, the secured party, or a receiver or other person,
does or proposes to do an act of a kind referred to in a
paragraph of subsection 441B(1); and
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Section 441E
294 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the company is under administration when the secured party,
receiver or other person does or proposes to do the act, or the
company later begins to be under administration;
but does not apply in a case where section 441A applies.
(2) On application by the administrator, the Court may order the
secured party, receiver or other person not to perform specified
functions, or exercise specified powers, except as permitted by the
order.
(3) The Court may only make an order if satisfied that what the
administrator proposes to do during the administration will
adequately protect the secured party’s interests.
(4) An order may only be made, and only has effect, during the
administration.
(5) An order has effect despite sections 441B and 441C.
441E Giving a notice under a security agreement etc.
Nothing in section 198G or 440B prevents a person from giving a
notice under the provisions of an agreement or instrument under
which a security interest is created or arises.
441EA Sale of property subject to a possessory security interest
Scope
(1) This section applies if:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security
interest; and
(c) the property is in the possession of the secured party; and
(ca) either:
(i) there is no other security interest in the property; or
(ii) there are one or more other security interests in the
property, but none of the debts secured by those other
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Section 441EB
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security interests has a priority that is equal to or higher
than the priority of the debt secured by the possessory
security interest; and
(d) the secured party sells the property.
Distribution of proceeds of sale
(2) The secured party is entitled to retain proceeds of the sale as
follows:
(a) if the net proceeds of sale equals the debt secured by the
possessory security interest—the secured party is entitled to
retain the net proceeds;
(b) if the net proceeds of sale exceeds the debt secured by the
possessory security interest—the secured party is entitled to
retain so much of the net proceeds as equals the amount of
the debt secured by the security interest, but must pay the
excess to the administrator on behalf of the company;
(c) if the net proceeds of sale fall short of the debt secured by the
possessory security interest—the secured party is entitled to
retain the net proceeds.
Subdivision C—Property not subject to security interests
441EB Scope of Subdivision
This Subdivision does not apply in relation to the enforcement of a
right, or the performance or exercise of a function or power, if the
enforcement, performance or exercise is authorised by (or because
of) a transaction or dealing that gives rise to a security interest in
the property concerned.
Example: An example of a transaction or dealing in relation to which this
Subdivision does not apply because of this section is a commercial
consignment of personal property. Such a transaction gives rise to a
PPSA security interest because of section 12 of the Personal Property
Securities Act 2009. The consigned property is PPSA retention of title
property of the company (see sections 51F and 435B).
Note: Subdivision B (property subject to security interests) may apply in
relation to transactions or dealings to which this Subdivision does not
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Section 441F
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apply because of this section. For example, Subdivision B would
apply in relation to a commercial consignment of personal property,
because such a transaction gives rise to a PPSA security interest.
441F Where recovery of property begins before administration
(1) This section applies if, before the beginning of the administration
of a company, a receiver or other person:
(a) entered into possession, or assumed control, of property used
or occupied by, or in the possession of, the company; or
(b) exercised any other power in relation to such property;
for the purpose of enforcing a right of the owner or lessor of the
property to take possession of the property or otherwise recover it.
(2) Nothing in section 198G or 440B prevents the receiver or other
person from performing a function, or exercising a power, in
relation to the property.
(3) Section 437D does not apply in relation to a transaction or dealing
that affects the property and is entered into in the performance or
exercise of a function or power of the receiver or other person.
441G Recovering perishable property
(1) Nothing in section 198G or 440B prevents a person from taking
possession of, or otherwise recovering, perishable property.
(2) Section 437D does not apply in relation to a transaction or dealing
that affects perishable property and is entered into for the purpose
of enforcing a right of the owner or lessor of the property to take
possession of the property or otherwise recover it.
441H Court may limit powers of receiver etc. in relation to property
used by company
(1) This section applies if:
(a) for the purpose of enforcing a right of the owner or lessor of
property used or occupied by, or in the possession of, a
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Section 441J
Corporations Act 2001 297
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company to take possession of the property or otherwise
recover it, a person:
(i) enters into possession, or assumes control, of the
property; or
(ii) exercises any other power in relation to the property;
and
(b) the company is under administration when the person does
so, or the company later begins to be under administration.
(2) On application by the administrator, the Court may order the
person not to perform specified functions, or exercise specified
powers, in relation to the property, except as permitted by the
order.
(3) The Court may only make an order if satisfied that what the
administrator proposes to do during the administration will
adequately protect the interests of the owner or lessor.
(4) An order may only be made, and only has effect, during the
administration.
(5) An order has effect despite sections 441F and 441G.
441J Giving a notice under an agreement about property
Nothing in section 198G or 440C prevents a person from giving a
notice to a company under an agreement relating to property that is
used or occupied by, or is in the possession of, the company.
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Section 442A
298 Corporations Act 2001
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Division 8—Powers of administrator
442A Additional powers of administrator
Without limiting section 437A, the administrator of a company
under administration has power to do any of the following:
(a) remove from office a director of the company;
(b) appoint a person as such a director, whether to fill a vacancy
or not;
(c) execute a document, bring or defend proceedings, or do
anything else, in the company’s name and on its behalf;
(d) whatever else is necessary for the purposes of this Part.
442B Dealing with property subject to circulating security interests
Scope
(1) This section applies if a security interest in property (the secured
property) of a company under administration was a circulating
security interest when the interest arose, but has stopped being a
circulating security interest because:
(a) in the case of a PPSA security interest—the property has
stopped being a circulating asset (within the meaning of the
Personal Property Securities Act 2009); or
(b) in the case of a security interest that was a floating charge
when it arose—the floating charge has since become a fixed
or specific charge.
Note 1: A circulating security interest can be either a PPSA security interest
to which a circulating asset has attached, or a floating charge, in the
circumstances set out in section 51C.
Note 2: For the meaning of circulating asset, see section 340 of the Personal
Property Securities Act 2009.
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Section 442C
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Security interest in circulating asset
(2) Subject to sections 442C and 442D, in the case of a PPSA security
interest, the administrator may deal with any of the secured
property in any way the company could deal with the secured
property immediately before it stopped being a circulating asset.
Floating charge
(3) Subject to sections 442C and 442D, in the case of a security
interest that was a floating charge when it arose, the administrator
may deal with any of the secured property as if the security interest
were still a floating charge.
Note: Section 442C deals with the disposal of encumbered property by an
administrator. Section 442D makes the administrator’s functions and
powers subject to those of a secured party, receiver or controller.
442C When administrator may dispose of encumbered property
(1) The administrator of a company under administration or of a deed
of company arrangement must not dispose of:
(a) property of the company that is subject to a security interest;
or
(b) property (other than PPSA retention of title property) that is
used or occupied by, or is in the possession of, the company
but of which someone else is the owner or lessor.
Note: PPSA retention of title property is subject to a PPSA security interest,
and so is covered by paragraph (a) (see definition of PPSA retention
of title property in section 51F).
(2) Subsection (1) does not prevent a disposal:
(a) in the ordinary course of the company’s business; or
(b) with the written consent of the secured party, owner or lessor,
as the case may be; or
(c) with the leave of the Court.
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(3) The Court may only give leave under paragraph (2)(c) if satisfied
that arrangements have been made to protect adequately the
interests of the secured party, owner or lessor, as the case may be.
(4) If the administrator proposes to dispose of property under
paragraph (2)(a), the Court may, by order, direct the administrator
not to carry out that proposal.
(5) The Court may only make an order under subsection (4) on the
application of:
(a) if paragraph (1)(a) applies—the secured party; or
(b) if paragraph (1)(b) applies—the owner or lessor, as the case
may be.
(6) The Court may only make an order under subsection (4) if it is not
satisfied that arrangements have been made to protect adequately
the interests of the applicant for the order.
(7) If:
(a) a company is under administration or is subject to a deed of
company arrangement; and
(b) property of the company is subject to a security interest; and
(c) the administrator disposes of the property;
the disposal extinguishes the security interest.
(8) For the purposes of paragraph (2)(a), if:
(a) property is used or occupied by, or is in the possession of, a
company; and
(b) another person is the owner of the property; and
(c) either:
(i) the property is PPSA retention of title property; or
(ii) the property is subject to a retention of title clause under
a contract; and
(d) the owner demands the return of the property;
a disposal of the property that occurs after the demand is made
does not mean that the disposal is not in the ordinary course of the
company’s business.
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Section 442CA
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442CA Property subject to a possessory security interest—
inspection or examination by potential purchasers etc.
(1) If:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security
interest; and
(c) the administrator is entitled to dispose of the property by way
of sale;
the secured party must, if requested to do so by the administrator,
give potential purchasers a reasonable opportunity to inspect or
examine the property.
(2) If:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security
interest; and
(c) the administrator disposes of the property by way of sale;
the administrator is entitled to obtain possession of the property in
order to effect the sale.
442CB Property subject to a security interest or to a retention of
title clause—administrator’s duty of care in exercising
power of sale
(1) If the administrator of a company is entitled to dispose of property
of the company by way of sale, and the property is subject to a
security interest, the administrator must act reasonably in
exercising a power of sale in respect of the property.
Note: A company’s property includes its PPSA retention of title property
(see the definition of property applying to Part 5.3A, in section 435B).
(2) If:
(a) a company is under administration; and
(b) property is used or occupied by, or is in the possession of, the
company; and
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(c) another person is the owner of the property; and
(d) the property is subject to a retention of title clause under a
contract; and
(e) the administrator is entitled to dispose of the property by way
of sale;
then, in exercising a power of sale in respect of the property, the
administrator must act reasonably.
(3) Subsections (1) and (2) do not limit section 180, 181, 182, 183 or
184.
442CC Proceeds of sale of property
Property subject to a possessory security interest
(1) If:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security
interest; and
(c) the administrator disposes of the property by way of sale;
then:
(d) if the net proceeds of sale equals or exceeds the total of the
debts secured by:
(i) the possessory security interest; and
(ii) any other security interest in the property, where the
debt secured by the security interest has a priority that is
equal to or higher than the priority of the debt secured
by the possessory security interest;
the administrator must:
(iii) set aside so much of the net proceeds as equals the total
of those debts; and
(iv) apply the amount so set aside in paying those debts; or
(e) if the net proceeds of sale fall short of the total of the debts
secured by:
(i) the possessory security interest; and
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(ii) any other security interest in the property, where the
debt secured by the security interest has a priority that is
equal to or higher than the priority of the debt secured
by the possessory security interest;
then:
(iii) the administrator must set aside the net proceeds; and
(iv) the administrator must apply the amount so set aside in
paying those debts in order of priority, on the basis that
if the amount is insufficient to fully pay debts of the
same priority, they must be paid proportionately; and
(v) if any of those debts is not fully paid—so much of the
debt as remains unpaid may be recovered from the
company as an unsecured debt.
PPSA retention of title property
(1A) If the administrator of a company disposes of PPSA retention of
title property of the company by way of sale, then the administrator
must apply the net proceeds of the sale in the same way as a
secured party is required, under section 140 of the Personal
Property Securities Act 2009, to apply an amount, personal
property or proceeds of collateral received by the secured party as
a result of enforcing a security interest in the property.
Note: PPSA retention of title property does not include property that is
subject to a retention of title clause (see section 9, definitions of PPSA
retention of title property and retention of title clause).
Subsection (2) deals with property that is subject to a retention of title
clause.
Property subject to a retention of title clause
(2) If:
(a) a company is under administration; and
(b) property is used or occupied by, or is in the possession of, the
company; and
(c) another person is the owner of the property; and
(d) the property is subject to a retention of title clause under a
contract (the original contract); and
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Section 442D
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(e) the administrator disposes of the property by way of sale;
then:
(f) if the net proceeds of sale equals or exceeds the total of:
(i) so much of the purchase price, or other amount, under
the original contract as remains unpaid; and
(ii) if there are one or more securities over the property—
the debts secured by the securities;
the administrator must:
(iii) set aside so much of the net proceeds as equals that
total; and
(iv) apply the amount so set aside in paying that total; or
(g) if the net proceeds of sale fall short of the total of:
(i) so much of the purchase price, or other amount, under
the original contract as remains unpaid; and
(ii) if there are one or more securities over the property—
the debts secured by the securities;
then:
(iii) the administrator must set aside the net proceeds; and
(iv) the administrator must apply the amount so set aside in
paying those debts in order of priority, on the basis that
if the amount is insufficient to fully pay debts of the
same priority, they must be paid proportionately; and
(v) if any of those debts is not fully paid—so much of the
debt as remains unpaid may be recovered from the
company as an unsecured debt.
Note: Property that is subject to a retention of title clause does not include
PPSA retention of title property (see section 9, definitions of PPSA
retention of title property and retention of title clause).
Subsection (1A) deals with PPSA retention of title property.
442D Administrator’s powers subject to powers of secured party,
receiver or controller
(1) Where section 441A applies, the administrator’s functions and
powers are subject to the functions and powers of a person as:
(a) the secured party; or
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Section 442E
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(b) a receiver or controller appointed under Part 5.2 (whether
under an instrument relating to the security interest or a court
order, and even if appointed after the decision period).
(2) Where section 441C applies, then, so far as concerns perishable
property of the company, the administrator’s functions and powers
are subject to the functions and powers of a person as:
(a) the secured party; or
(b) a receiver or controller appointed under Part 5.2 (whether
under an instrument relating to the security interest or a court
order, and even if appointed after the decision period).
(3) Where section 441B, 441F or 441G applies, then, so far as
concerns the property referred to in subsection 441B(1), 441F(1) or
441G(1), the administrator’s functions and powers are subject to
the functions and powers of the secured party, receiver or
controller.
442E Administrator has qualified privilege
A person who is or has been the administrator of a company under
administration has qualified privilege in respect of a statement that
he or she has made, whether orally or in writing, in the course of
performing or exercising any of his or her functions and powers as
administrator of the company.
442F Protection of persons dealing with administrator
(1) Sections 128 and 129 apply in relation to a company under
administration as if:
(a) a reference in those sections to the company, or to an officer
of the company, included a reference to the administrator;
and
(b) a reference in those sections to an assumption referred to in
section 129 included a reference to an assumption that the
administrator is:
(i) acting within his or her functions and powers as
administrator; and
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(ii) in particular, is complying with this Act.
(2) The effect that sections 128 and 129 have because of subsection (1)
of this section is additional to, and does not prejudice, the effect
that sections 128 and 129 otherwise have in relation to a company
under administration.
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Section 443A
Corporations Act 2001 307
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Division 9—Administrator’s liability and indemnity for
debts of administration
Subdivision A—Liability
443A General debts
(1) The administrator of a company under administration is liable for
debts he or she incurs, in the performance or exercise, or purported
performance or exercise, of any of his or her functions and powers
as administrator, for:
(a) services rendered; or
(b) goods bought; or
(c) property hired, leased, used or occupied, including property
consisting of goods that is subject to a lease that gives rise to
a PPSA security interest in the goods; or
(d) the repayment of money borrowed; or
(e) interest in respect of money borrowed; or
(f) borrowing costs.
(2) Subsection (1) has effect despite any agreement to the contrary, but
without prejudice to the administrator’s rights against the company
or anyone else.
443B Payments for property used or occupied by, or in the
possession of, the company
Scope
(1) This section applies if, under an agreement made before the
administration of a company began, the company continues to use
or occupy, or to be in possession of, property of which someone
else is the owner or lessor, including property consisting of goods
that is subject to a lease that gives rise to a PPSA security interest
in the goods.
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Section 443B
308 Corporations Act 2001
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General rule
(2) Subject to this section, the administrator is liable for so much of
the rent or other amounts payable by the company under the
agreement as is attributable to a period:
(a) that begins more than 5 business days after the administration
began; and
(b) throughout which:
(i) the company continues to use or occupy, or to be in
possession of, the property; and
(ii) the administration continues.
(3) Within 5 business days after the beginning of the administration,
the administrator may give to the owner or lessor a notice that:
(a) specifies the property; and
(b) states that the company does not propose to exercise rights in
relation to the property; and
(c) if the administrator:
(i) knows the location of the property; or
(ii) could, by the exercise of reasonable diligence, know the
location of the property;
specifies the location of the property.
(4) Despite subsection (2), the administrator is not liable for so much
of the rent or other amounts payable by the company under the
agreement as is attributable to a period during which a notice under
subsection (3) is in force, but such a notice does not affect a
liability of the company.
(5) A notice under subsection (3) ceases to have effect if:
(a) the administrator revokes it by writing given to the owner or
lessor; or
(b) the company exercises, or purports to exercise, a right in
relation to the property.
(6) For the purposes of subsection (5), the company does not exercise,
or purport to exercise, a right in relation to the property merely
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Section 443BA
Corporations Act 2001 309
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because the company continues to occupy, or to be in possession
of, the property, unless the company:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to continue.
Restrictions on general rule
(7) Subsection (2) does not apply in relation to so much of a period as
elapses after:
(a) a receiver of the property is appointed; or
(b) under an agreement or instrument under which a security
interest in the property is created or arises:
(i) the secured party appoints an agent to enter into
possession, or to assume control, of the property; or
(ii) the secured party takes possession, or assumes control,
of the property;
but this subsection does not affect a liability of the company.
(8) Subsection (2) does not apply in so far as a court, by order, excuses
the administrator from liability, but an order does not affect a
liability of the company.
(9) The administrator is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned
in subsection (2).
443BA Certain taxation liabilities
(1) The administrator of a company is liable to pay to the
Commissioner of Taxation:
(a) each amount payable under a remittance provision because of
a deduction made by the administrator; and
(b) without limiting paragraph (a), so much of each amount
payable under a remittance provision because of a deduction
made by the company during the administration as equals so
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Section 443C
310 Corporations Act 2001
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much of the deduction as is attributable to a period
throughout which the administration continued;
even if the amount became payable after the end of the
administration.
(2) In this section:
remittance provision means any of the following former provisions
of the Income Tax Assessment Act 1936:
(aa) section 220AAE, 220AAM or 220AAR;
(a) section 221F (except subsection 221F(12)) or section 221G
(except subsection 221G(4A));
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
and any of the provisions of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953.
443C Administrator not otherwise liable for company’s debts
The administrator of a company under administration is not liable
for the company’s debts except under this Subdivision.
Subdivision B—Indemnity
443D Right of indemnity
The administrator of a company under administration is entitled to
be indemnified out of the company’s property (other than any
PPSA retention of title property subject to a PPSA security interest
that is perfected within the meaning of the Personal Property
Securities Act 2009) for:
(a) debts for which the administrator is liable under Subdivision
A or a remittance provision as defined in
subsection 443BA(2); and
(aa) any other debts or liabilities incurred, or damages or losses
sustained, in good faith and without negligence, by the
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Section 443E
Corporations Act 2001 311
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administrator in the performance or exercise, or purported
performance or exercise, of any of his or her functions or
powers as administrator; and
(b) the remuneration to which he or she is entitled under
Division 60 of Schedule 2 (external administrator’s
remuneration).
443E Right of indemnity has priority over other debts
General rule
(1) Subject to section 556, a right of indemnity under section 443D has
priority over:
(a) all the company’s unsecured debts; and
(b) any debts of the company secured by a PPSA security
interest in property of the company if, when the
administration of the company begins, the security interest is
vested in the company because of the operation of any of the
following provisions:
(i) section 267 or 267A of the Personal Property Securities
Act 2009 (property subject to unperfected security
interests);
(ii) section 588FL of this Act (collateral not registered
within time); and
(c) subject otherwise to this section—debts of the company
secured by a circulating security interest in property of the
company.
Debts secured by circulating security interests—receiver appointed
before the beginning of administration etc.
(2) A right of indemnity under section 443D does not have priority
over debts of the company under administration that are secured by
a circulating security interest in property of the company, except so
far as the secured party agrees, if:
(a) before the beginning of the administration, the secured party:
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(i) appointed a receiver of property of the company under a
power contained in an instrument relating to the security
interest; or
(ii) obtained an order for the appointment of a receiver of
property of the company for the purpose of enforcing
the security interest; or
(iii) entered into possession, or assumed control, of property
of the company for that purpose; or
(iv) appointed a person so to enter into possession or assume
control (whether as agent for the secured party or for the
company); and
(b) the receiver or person is still in office, or the secured party is
still in possession or control of the property.
Debts secured by circulating security interests—receiver appointed
during administration etc.
(3) Subsection (4) applies if:
(a) debts of a company under administration are secured by a
circulating security interest in property of the company; and
(b) during the administration, the secured party, consistently
with this Part:
(i) appoints a receiver of property of the company under a
power contained in an instrument relating to the security
interest; or
(ii) obtains an order for the appointment of a receiver of
property of the company for the purpose of enforcing
the security interest; or
(iii) enters into possession, or assumes control, of property
of the company for that purpose; or
(iv) appoints a person so to enter into possession or assume
control (whether as agent for the secured party or for the
company).
(4) A right of indemnity of the administrator under section 443D has
priority over those debts only in so far as it is a right of indemnity
for debts incurred, or remuneration accruing, before written notice
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arrangement Part 5.3A
Administrator’s liability and indemnity for debts of administration Division 9
Section 443F
Corporations Act 2001 313
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
of the appointment, or of the entering into possession or assuming
of control, as the case may be, was given to the administrator.
Debts secured by circulating security interests—priority over right
of indemnity in relation to repayment of money borrowed etc.
(5) A right of indemnity under section 443D does not have priority
over debts of the company under administration that are secured by
a circulating security interest in property of the company, except so
far as the secured party consents in writing, to the extent that the
right of indemnity relates to debts incurred for:
(a) the repayment of money borrowed; or
(b) interest in respect of money borrowed; or
(c) borrowing costs.
443F Lien to secure indemnity
(1) To secure a right of indemnity under section 443D, the
administrator has a lien on the company’s property.
(2) A lien under subsection (1) has priority over another security
interest only in so far as the right of indemnity under section 443D
has priority over debts secured by the other security interest.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 10 Execution and effect of deed of company arrangement
Section 444A
314 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 10—Execution and effect of deed of company
arrangement
444A Effect of creditors’ resolution
(1) This section applies where, at a meeting convened under
section 439A, a company’s creditors resolve that the company
execute a deed of company arrangement.
(2) The administrator of the company is to be the administrator of the
deed, unless the creditors, by resolution passed at the meeting,
appoint someone else to be administrator of the deed.
(3) The administrator of the company must prepare an instrument
setting out the terms of the deed.
(4) The instrument must also specify the following:
(a) the administrator of the deed;
(b) the property of the company (whether or not already owned
by the company when it executes the deed) that is to be
available to pay creditors’ claims;
(c) the nature and duration of any moratorium period for which
the deed provides;
(d) to what extent the company is to be released from its debts;
(e) the conditions (if any) for the deed to come into operation;
(f) the conditions (if any) for the deed to continue in operation;
(g) the circumstances in which the deed terminates;
(h) the order in which proceeds of realising the property referred
to in paragraph (b) are to be distributed among creditors
bound by the deed;
(i) the day (not later than the day when the administration
began) on or before which claims must have arisen if they are
to be admissible under the deed.
(5) The instrument is taken to include the prescribed provisions, except
so far as it provides otherwise.
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arrangement Part 5.3A
Execution and effect of deed of company arrangement Division 10
Section 444B
Corporations Act 2001 315
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
444B Execution of deed
(1) This section applies where an instrument is prepared under
section 444A.
(2) The company must execute the instrument within:
(a) 15 business days after the end of the meeting of creditors; or
(b) such further period as the Court allows on an application
made within those 15 business days.
(3) The board of the company may, by resolution, authorise the
instrument to be executed by or on behalf of the company.
(4) Subsection (3) has effect despite section 198G, but does not limit
the functions and powers of the administrator of the company.
(5) The proposed administrator of the deed must execute the
instrument before, or as soon as practicable after, the company
executes it.
(6) When executed by both the company and the deed’s proposed
administrator, the instrument becomes a deed of company
arrangement.
(7) Division 12 provides for consequences of the company
contravening subsection (2).
444C Creditor etc. not to act inconsistently with deed before its
execution
(1) Where, at a meeting convened under section 439A, a company’s
creditors resolve that the company execute a deed of company
arrangement, this section applies until:
(a) the deed is executed by both the company and the deed’s
administrator; or
(b) the period within which subsection 444B(2) requires the
company to execute the deed ends;
whichever happens sooner.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 10 Execution and effect of deed of company arrangement
Section 444D
316 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) In so far as a person would be bound by the deed if it had already
been so executed, the person:
(a) must not do anything inconsistent with the deed, except with
the leave of the Court; and
(b) is subject to section 444E.
444D Effect of deed on creditors
(1) A deed of company arrangement binds all creditors of the
company, so far as concerns claims arising on or before the day
specified in the deed under paragraph 444A(4)(i).
(2) Subsection (1) does not prevent a secured creditor from realising or
otherwise dealing with the security interest, except so far as:
(a) the deed so provides in relation to a secured creditor who
voted in favour of the resolution of creditors because of
which the company executed the deed; or
(b) the Court orders under subsection 444F(2).
(3) Subsection (1) does not affect a right that an owner or lessor of
property has in relation to that property, except so far as:
(a) the deed so provides in relation to an owner or lessor of
property who voted in favour of the resolution of creditors
because of which the company executed the deed; or
(b) the Court orders under subsection 444F(4).
(3A) Subsection (3) does not apply in relation to an owner or lessor of
PPSA retention of title property of the company.
Note: Subsection (2) applies in relation to an owner or lessor of PPSA
retention of title property of the company. Such an owner or lessor is a
secured creditor of the company (see section 51F (meaning of PPSA
retention of title property)).
(4) Section 231 does not prevent a creditor of the company from
becoming a member of the company as a result of the deed
requiring the creditor to accept an offer of shares in the company.
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arrangement Part 5.3A
Execution and effect of deed of company arrangement Division 10
Section 444DA
Corporations Act 2001 317
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
444DA Giving priority to eligible employee creditors
(1) A deed of company arrangement must contain a provision to the
effect that, for the purposes of the application by the administrator
of the property of the company coming under his or her control
under the deed, any eligible employee creditors will be entitled to a
priority at least equal to what they would have been entitled if the
property were applied in accordance with sections 556, 560 and
561.
(2) However, the rule in subsection (1) does not apply if:
(a) at a meeting of eligible employee creditors held before the
meeting convened under section 439A, the eligible employee
creditors pass a resolution agreeing to the non-inclusion of
such a provision; or
(b) the Court makes an order under subsection (5) approving the
non-inclusion of such a provision.
Meeting of eligible employee creditors
(3) The administrator of the company must convene a meeting under
paragraph (2)(a) by giving written notice of the meeting to as many
of the eligible employee creditors as reasonably practicable at least
5 business days before the meeting.
(4) A notice under subsection (3) must be accompanied by a copy of a
statement setting out:
(a) the administrator’s opinion whether the non-inclusion of such
a provision would be likely to result in the same or a better
outcome for eligible employee creditors as a whole than
would result from an immediate winding up of the company;
and
(b) his or her reasons for that opinion; and
(c) such other information known to the administrator as will
enable the eligible employee creditors to make an informed
decision about the matter covered by paragraph (a).
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 10 Execution and effect of deed of company arrangement
Section 444DB
318 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Court approval
(5) The Court may approve the non-inclusion of such a provision if the
Court is satisfied that the non-inclusion of the provision would be
likely to result in the same or a better outcome for eligible
employee creditors as a whole than would result from an
immediate winding up of the company.
(6) The Court may only make an order under subsection (5) on the
application of:
(a) the administrator, or proposed administrator, of the deed; or
(b) an eligible employee creditor; or
(c) any interested person.
(7) The Court may make an order under subsection (5) before or after
the meeting convened under section 439A.
444DB Superannuation contribution debts not admissible to proof
Whole of superannuation contribution debt
(1) A deed of company arrangement must contain a provision to the
effect that the administrator of the deed must determine that the
whole of a debt by way of a superannuation contribution is not
admissible to proof against the company if:
(a) a debt by way of superannuation guarantee charge:
(i) has been paid; or
(ii) is, or is to be, admissible to proof against the company;
and
(b) the administrator of the deed is satisfied that the
superannuation guarantee charge is attributable to the whole
of the first-mentioned debt.
(2) If the administrator of a deed of company arrangement determines,
under a provision covered by subsection (1), that the whole of a
debt is not admissible to proof against the company, the whole of
the debt is extinguished.
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arrangement Part 5.3A
Execution and effect of deed of company arrangement Division 10
Section 444E
Corporations Act 2001 319
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part of superannuation contribution debt
(3) A deed of company arrangement must contain a provision to the
effect that the administrator of the deed must determine that a
particular part of a debt by way of a superannuation contribution is
not admissible to proof against the company if:
(a) a debt by way of superannuation guarantee charge:
(i) has been paid; or
(ii) is, or is to be, admissible to proof against the company;
and
(b) the administrator of the deed is satisfied that the
superannuation guarantee charge is attributable to that part of
the first-mentioned debt.
(4) If the administrator of a deed of company arrangement determines,
under a provision covered by subsection (3), that a part of a debt is
not admissible to proof against the company, that part of the debt is
extinguished.
Definition
(5) In this section:
superannuation contribution has the same meaning as in
section 556.
444E Protection of company’s property from persons bound by deed
(1) Until a deed of company arrangement terminates, this section
applies to a person bound by the deed.
(2) The person cannot:
(a) make an application for an order to wind up the company; or
(b) proceed with such an application made before the deed
became binding on the person.
(3) The person cannot:
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 10 Execution and effect of deed of company arrangement
Section 444F
320 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) begin or proceed with a proceeding against the company or in
relation to any of its property; or
(b) begin or proceed with enforcement process in relation to
property of the company;
except:
(c) with the leave of the Court; and
(d) in accordance with such terms (if any) as the Court imposes.
(4) In subsection (3):
property of a company includes:
(a) any PPSA retention of title property of the company; and
(b) any other property used or occupied by, or in the possession
of, the company.
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
444F Court may limit rights of secured creditor or owner or lessor
(1) This section applies where:
(a) at a meeting convened under section 439A, a company’s
creditors have resolved that the company execute a deed of
company arrangement; or
(b) a company has executed such a deed.
(2) Subject to subsection 441A(3), the Court may order a secured
creditor of the company not to realise or otherwise deal with the
security interest, except as permitted by the order.
(3) The Court may only make an order under subsection (2) if satisfied
that:
(a) for the creditor to realise or otherwise deal with the security
interest would have a material adverse effect on achieving the
purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
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Section 444G
Corporations Act 2001 321
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) any other relevant matter;
the creditor’s interests will be adequately protected.
(4) The Court may order the owner or lessor of property that is used or
occupied by, or is in the possession of, the company not to take
possession of the property or otherwise recover it.
(4A) Subsection (4) does not apply in relation to PPSA retention of title
property of the company.
(5) The Court may only make an order under subsection (4) if satisfied
that:
(a) for the owner or lessor to take possession of the property or
otherwise recover it would have a material adverse effect on
achieving the purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter;
the interests of the owner or lessor will be adequately
protected.
(6) An order under this section may be made subject to conditions.
(7) An order under this section may only be made on the application
of:
(a) if paragraph (1)(a) applies—the administrator of the
company; or
(b) if paragraph (1)(b) applies—the deed’s administrator.
444G Effect of deed on company, officers and members
A deed of company arrangement also binds:
(a) the company; and
(b) its officers and members; and
(c) the deed’s administrator.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 10 Execution and effect of deed of company arrangement
Section 444GA
322 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
444GA Transfer of shares
(1) The administrator of a deed of company arrangement may transfer
shares in the company if the administrator has obtained:
(a) the written consent of the owner of the shares; or
(b) the leave of the Court.
(2) A person is not entitled to oppose an application for leave under
subsection (1) unless the person is:
(a) a member of the company; or
(b) a creditor of the company; or
(c) any other interested person; or
(d) ASIC.
(3) The Court may only give leave under subsection (1) if it is satisfied
that the transfer would not unfairly prejudice the interests of
members of the company.
444H Extent of release of company’s debts
A deed of company arrangement releases the company from a debt
only in so far as:
(a) the deed provides for the release; and
(b) the creditor concerned is bound by the deed.
444J Guarantees and indemnities
Section 444H does not affect a creditor’s rights under a guarantee
or indemnity.
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arrangement Part 5.3A
Variation, termination and avoidance of deed Division 11
Section 445A
Corporations Act 2001 323
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 11—Variation, termination and avoidance of deed
445A Variation of deed by creditors
A deed of company arrangement may be varied by a resolution
passed at a meeting of the company’s creditors, but only if the
variation is not materially different from a proposed variation set
out in the notice of the meeting.
445B Court may cancel variation
(1) Where a deed of company arrangement is varied under
section 445A, a creditor of the company may apply to the Court for
an order cancelling the variation.
(2) On an application, the Court:
(a) may make an order cancelling the variation, or confirming it,
either wholly or in part, on such conditions (if any) as the
order specifies; and
(b) may make such other orders as it thinks appropriate.
445C When deed terminates
A deed of company arrangement terminates when:
(a) the Court makes under section 445D an order terminating the
deed; or
(b) the company’s creditors pass a resolution terminating the
deed at a meeting; or
(c) if the deed specifies circumstances in which it is to
terminate—those circumstances exist; or
(d) the administrator of the deed executes a notice of termination
of the deed in accordance with section 445FA;
whichever happens first.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 11 Variation, termination and avoidance of deed
Section 445CA
324 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
445CA When creditors may terminate deed
The creditors are not entitled to pass a resolution under
paragraph 445C(b) unless:
(a) there has been a breach of the deed; and
(b) the breach has not been rectified before the resolution is
passed.
445D When Court may terminate deed
(1) The Court may make an order terminating a deed of company
arrangement if satisfied that:
(a) information about the company’s business, property, affairs
or financial circumstances that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to
creditors of the company in deciding whether to vote in
favour of the resolution that the company execute the
deed;
was given to the administrator of the company or to such
creditors; or
(b) such information was contained in a document that
accompanied a notice of the meeting at which the resolution
was passed; or
(c) there was an omission from such a document and the
omission can reasonably be expected to have been material to
such creditors in so deciding; or
(d) there has been a material contravention of the deed by a
person bound by the deed; or
(e) effect cannot be given to the deed without injustice or undue
delay; or
(f) the deed or a provision of it is, an act or omission done or
made under the deed was, or an act or omission proposed to
be so done or made would be:
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, one or more such creditors; or
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Variation, termination and avoidance of deed Division 11
Section 445E
Corporations Act 2001 325
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) contrary to the interests of the creditors of the company
as a whole; or
(g) the deed should be terminated for some other reason.
(2) An order may be made on the application of:
(a) a creditor of the company; or
(b) the company; or
(ba) ASIC; or
(c) any other interested person.
445E Creditors may terminate deed and resolve that company be
wound up
Where:
(a) the company’s creditors pass a resolution at a meeting
terminating the deed; and
(b) the notice of the meeting set out a proposed resolution that
the company be wound up;
the creditors may also resolve at the meeting that the company be
wound up.
445FA Notice of termination of deed
(1) If a company is subject to a deed of company arrangement, and:
(a) the administrator of the deed has applied all of the proceeds
of the realisation of the assets available for the payment of
creditors; or
(b) the administrator of the deed has paid to the creditors:
(i) the sum of 100 cents in the dollar; or
(ii) any lesser sum determined by the creditors at a general
meeting; or
(c) all of the following conditions are satisfied:
(i) the company’s obligations under the deed have been
fulfilled;
(ii) the obligations of any other party to the deed have been
fulfilled;
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 11 Variation, termination and avoidance of deed
Section 445G
326 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) creditors’ claims under the deed have been dealt with in
accordance with the deed;
the administrator of the deed must:
(d) certify to that effect in writing; and
(e) within 28 days, lodge with ASIC a notice of termination of
the deed.
(2) The notice of termination must be in the prescribed form.
Note: For termination of the deed, see section 445C.
445G When Court may void or validate deed
(1) Where there is doubt, on a specific ground, whether a deed of
company arrangement was entered into in accordance with this
Part or complies with this Part, the administrator of the deed, a
member or creditor of the company, or ASIC, may apply to the
Court for an order under this section.
(2) On an application, the Court may make an order declaring the
deed, or a provision of it, to be void or not to be void, as the case
requires, on the ground specified in the application or some other
ground.
(3) On an application, the Court may declare the deed, or a provision
of it, to be valid, despite a contravention of a provision of this Part,
if the Court is satisfied that:
(a) the provision was substantially complied with; and
(b) no injustice will result for anyone bound by the deed if the
contravention is disregarded.
(4) Where the Court declares a provision of a deed of company
arrangement to be void, the Court may by order vary the deed, but
only with the consent of the deed’s administrator.
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Administration of a company’s affairs with a view to executing a deed of company
arrangement Part 5.3A
Variation, termination and avoidance of deed Division 11
Section 445H
Corporations Act 2001 327
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
445H Effect of termination or avoidance
The termination or avoidance, in whole or in part, of a deed of
company arrangement does not affect the previous operation of the
deed.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 11AA Notification of contravention of deed
Section 445HA
328 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 11AA—Notification of contravention of deed
445HA Notification of contravention of deed of company
arrangement
Director to notify administrator
(1) If a director of a company that is subject to a deed of company
arrangement becomes aware that:
(a) there has been a material contravention of the deed by a
person bound by the deed (who may be the director); or
(b) there is likely to be a material contravention of the deed by a
person bound by the deed (who may be the director);
the director must, as soon as practicable after becoming aware of
the contravention or likely contravention, give notice of the
contravention or likely contravention to the administrator of the
deed of company arrangement. The notice must be in the
prescribed form.
Administrator to notify company’s creditors
(2) If the administrator of a deed of company arrangement becomes
aware that:
(a) there has been a material contravention of the deed by a
person bound by the deed (who may be the administrator); or
(b) there is likely to be a material contravention of the deed by a
person bound by the deed (who may be the administrator);
the administrator must, as soon as practicable after becoming
aware of the contravention or likely contravention, give notice of
the contravention or likely contravention to as many of the
company’s creditors as reasonably practicable. The notice must be
in the prescribed form.
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arrangement Part 5.3A
Transition to creditors’ voluntary winding up Division 12
Section 446A
Corporations Act 2001 329
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 12—Transition to creditors’ voluntary winding up
446A Administrator becomes liquidator in certain cases
(1) This section applies if:
(a) the creditors of a company under administration resolve at a
particular time under paragraph 439C(c) that the company be
wound up; or
(b) a company under administration contravenes
subsection 444B(2) at a particular time; or
(c) the company’s creditors:
(i) pass a resolution terminating a deed of company
arrangement executed by the company; and
(ii) also resolve at a particular time under section 445E that
the company be wound up.
(2) The company is taken:
(a) to have passed, at the time referred to in paragraph (1)(a) or
(b) or subparagraph (1)(c)(ii), as the case may be, a special
resolution under section 491 that the company be wound up
voluntarily; and
(b) to have done so without a declaration having been made and
lodged under section 494.
(3) Section 497 is taken to have been complied with in relation to the
winding up.
(5) The liquidator must:
(a) within 5 business days after the day on which the company is
taken to have passed the resolution, lodge a written notice
stating that the company is taken because of this section to
have passed such a resolution and specifying that day; and
(b) cause the notice to be published, within the period
ascertained in accordance with the regulations, in the
prescribed manner.
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Part 5.3A Administration of a company’s affairs with a view to executing a deed of
company arrangement
Division 12 Transition to creditors’ voluntary winding up
Section 446AA
330 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) Section 482 applies in relation to the winding up as if it were a
winding up in insolvency or by the Court.
Note: Section 482 empowers the Court to stay or terminate a winding up and
give consequential directions.
(7) An application under section 482 as applying because of
subsection (6) may be made:
(a) despite section 198G (exercise of powers while company
under external administration), by the company pursuant to a
resolution of the board; or
(b) by the liquidator; or
(c) by a creditor; or
(d) by a contributory.
Note: See also section 499 (appointment of liquidator).
446AA Administrator becomes liquidator—additional cases
Scope
(1) This section applies if a company has executed a deed of company
arrangement and:
(a) the Court, at a particular time, makes an order under
section 445D terminating the deed of company arrangement;
or
(b) both:
(i) the deed of company arrangement specifies
circumstances in which the deed is to terminate and the
company is to be wound up; and
(ii) those circumstances exist at a particular time.
Resolution that company be wound up voluntarily
(2) The company is taken:
(a) to have passed, at the time referred to in paragraph (1)(a) or
subparagraph (1)(b)(ii), as the case may be, a special
resolution under section 491 that the company be wound up
voluntarily; and
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Section 446AA
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(b) to have done so without a declaration having been made and
lodged under section 494.
Information about company’s affairs
(3) Section 497 is taken to have been complied with in relation to the
winding up.
Notice of resolution
(4) The liquidator must:
(a) within 5 business days after the day on which the company is
taken to have passed the resolution, lodge with ASIC a
written notice in the prescribed form:
(i) stating that the company is taken because of this section
to have passed such a resolution; and
(ii) specifying that day; and
(b) cause the notice to be published, within 5 business days after
that day, in the prescribed manner.
Power to stay or terminate winding up
(5) Section 482 applies in relation to the winding up as if it were a
winding up in insolvency or by the Court.
Note: Section 482 empowers the Court to stay or terminate a winding up and
give consequential directions.
(6) An application under section 482 as applying because of
subsection (5) may be made:
(a) despite section 198G (exercise of directors’ powers while
company under external administration), by the company
pursuant to a resolution of the board; or
(b) by the liquidator; or
(c) by a creditor; or
(d) by a contributory.
Note: See also section 499 (appointment of liquidator).
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Division 12 Transition to creditors’ voluntary winding up
Section 446B
332 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
446B Regulations may provide for transition in other cases
(1) The regulations may prescribe cases where:
(a) a company under administration; or
(b) a company that has executed a deed of company arrangement
(even if the deed has terminated);
is taken to have passed a special resolution under section 491 that
the company be wound up voluntarily.
(2) The regulations may provide for Part 5.5 or Schedule 2 to apply
with prescribed modifications in cases prescribed for the purposes
of subsection (1).
(3) Without limiting subsection (2), the regulations may provide, in
relation to such cases, for matters of a kind provided for by any of
subsections 446A(2) to (7) and 446AA(2) to (6), inclusive.
(4) Regulations in force for the purposes of this section have effect
accordingly.
446C Liquidator may require submission of a report about the
company’s affairs
Scope
(1) This section applies if:
(a) at a particular time (the liquidation time), a company
resolves by special resolution that it be wound up voluntarily;
and
(b) immediately before the liquidation time:
(i) the company was under administration; or
(ii) the company was subject to a deed of company
arrangement.
Report
(2) The liquidator may, by written notice given to a person who is or
has been an officer of the company, require the person to:
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(a) give the liquidator a report containing such information as is
specified in the notice about:
(i) the affairs of the company, as at a date specified in the
notice; or
(ii) if one or more of the affairs of the company are
specified in the notice—those affairs, as at a date
specified in the notice; and
(b) verify the report by a statement in writing in the prescribed
form.
(3) The following provisions have effect:
(a) if subparagraph (1)(b)(i) applies—the date specified in the
subsection (2) notice must not be earlier than the beginning
of the administration;
(b) if subparagraph (1)(b)(ii) applies—the date specified in the
subsection (2) notice must not be earlier than the beginning
of the administration that ended when the deed was executed.
Deadline for giving report to liquidator
(4) If a person is given a notice under subsection (2), the person must
give the liquidator the report required by the notice:
(a) within 14 days after the notice was given; or
(b) if the liquidator, by written notice given to the person, allows
a longer period—within that longer period.
(5) The liquidator may allow a longer period under paragraph (4)(b)
only on written application made within the period of 14 days
mentioned in paragraph (4)(a).
(6) The liquidator may allow a longer period under paragraph (4)(b)
only if the liquidator believes there are special reasons for doing
so.
Report to be lodged with ASIC
(7) The liquidator must, within 7 days after receiving a report under
subsection (2), lodge a copy of the report with ASIC.
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Division 12 Transition to creditors’ voluntary winding up
Section 446C
334 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Cost of preparation of report
(8) If:
(a) a person is required to give a report under subsection (2); and
(b) the person incurs costs or expenses in relation to the
preparation or giving of the report;
the person is entitled to be paid by the liquidator out of the
property of the company (other than its PPSA retention of title
property), so much of those costs and expenses as the liquidator
considers reasonable.
Reasonable excuse
(9) Subsection (4) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (9), see subsection 13.3(3) of the Criminal Code.
Strict liability
(10) An offence against subsection 1311(1) that relates to subsection (4)
of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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arrangement Part 5.3A
Powers of Court Division 13
Section 447A
Corporations Act 2001 335
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Division 13—Powers of Court
447A General power to make orders
(1) The Court may make such order as it thinks appropriate about how
this Part is to operate in relation to a particular company.
(2) For example, if the Court is satisfied that the administration of a
company should end:
(a) because the company is solvent; or
(b) because provisions of this Part are being abused; or
(c) for some other reason;
the Court may order under subsection (1) that the administration is
to end.
(3) An order may be made subject to conditions.
(4) An order may be made on the application of:
(a) the company; or
(b) a creditor of the company; or
(c) in the case of a company under administration—the
administrator of the company; or
(d) in the case of a company that has executed a deed of
company arrangement—the deed’s administrator; or
(e) ASIC; or
(f) any other interested person.
447B Orders to protect creditors during administration
(1) On the application of ASIC, the Court may make such order as it
thinks necessary to protect the interests of a company’s creditors
while the company is under administration.
(2) On the application of a creditor of a company, the Court may make
such order as it thinks necessary to protect the creditor’s interests
while the company is under administration.
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Division 13 Powers of Court
Section 447C
336 Corporations Act 2001
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(3) An order may be made subject to conditions.
447C Court may declare whether administrator validly appointed
(1) If there is doubt, on a specific ground, about whether a purported
appointment of a person as administrator of a company, or of a
deed of company arrangement, is valid, the person, the company or
any of the company’s creditors may apply to the Court for an order
under subsection (2).
(2) On an application, the Court may make an order declaring whether
or not the purported appointment was valid on the ground specified
in the application or on some other ground.
447F Effect of Division
Nothing in this Division limits the generality of anything else in it.
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Section 448A
Corporations Act 2001 337
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Division 14—Qualifications of administrators
448A Appointee must consent
A person cannot be appointed as administrator of a company or of
a deed of company arrangement unless:
(a) the person has consented in writing to the appointment; and
(b) as at the time of the appointment, the person has not
withdrawn the consent.
448B Administrator must be registered liquidator
(1) A person must not consent to be appointed, and must not act, as
administrator of a company or of a deed of company arrangement.
(2) Subsection (1) does not apply if the person is a registered
liquidator.
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) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
448C Disqualification of person connected with company
(1) Subject to this section, a person must not, except with the leave of
the Court, seek or consent to be appointed as, or act as,
administrator of a company or of a deed of company arrangement
if:
(a) the person, or a body corporate in which the person has a
substantial holding, is indebted in an amount exceeding
$5,000 to the company or to a body corporate related to the
company; or
(b) the person is, otherwise than in a capacity as administrator or
liquidator of, or as administrator of a deed of company
arrangement executed by, the company or a related body
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Division 14 Qualifications of administrators
Section 448C
338 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
corporate, a creditor of the company or of a related body
corporate in an amount exceeding $5,000; or
(c) the person is a director, secretary, senior manager or
employee of the company; or
(d) the person is a director, secretary, senior manager or
employee of a body corporate that is a secured party in
relation to property of the company; or
(e) the person is an auditor of the company; or
(f) the person is a partner or employee of an auditor of the
company; or
(g) the person is a partner, employer or employee of an officer of
the company; or
(h) the person is a partner or employee of an employee of an
officer of the company.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) For the purposes of paragraph (1)(a), disregard a debt owed by a
natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under section 21 of the Life
Insurance Act 1995; and
(b) the debt arose because of a loan that the body corporate or
entity made to the person in the ordinary course of its
ordinary business; and
(c) the person used the amount of the loan to pay the whole or
part of the purchase price of premises that the person uses as
their principal place of residence.
(3) For the purposes of this section, a person is taken to be a director,
secretary, senior manager, employee or auditor of a company if:
(a) the person is or has, within the last 2 years, been a director,
secretary, senior manager, employee, auditor or promoter of
the company or a related body corporate; and
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(b) ASIC has not directed that the person not be taken to be a
director, secretary, senior manager, employee or auditor for
the purposes of this section.
ASIC may give a direction under paragraph (b) only if it thinks fit
in the circumstances of the case.
(4) For the purposes of paragraphs (1)(g) and (h), officer does not
include liquidator.
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Division 15 Removal and replacement of administrator
Section 449A
340 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 15—Removal and replacement of administrator
449A Appointment of administrator cannot be revoked
The appointment of a person as administrator of a company or of a
deed of company arrangement cannot be revoked.
449C Vacancy in office of administrator of company
(1) Where the administrator of a company under administration:
(a) dies; or
(b) becomes prohibited from acting as administrator of the
company; or
(c) resigns by notice in writing given to his or her appointer and
to the company;
his or her appointer may appoint someone else as administrator of
the company.
(2) In subsection (1):
appointer, in relation to the administrator of a company under
administration, means:
(a) if the administrator was appointed by the Court under
Division 90 of Schedule 2 (review of the external
administration of a company) or subsection (6) of this
section—the Court; or
(b) otherwise:
(i) if the administration began because of an appointment
under section 436A—the company; or
(ii) if the administration began because of an appointment
under section 436B—a liquidator or provisional
liquidator of the company; or
(iii) if the administration began because of an appointment
under section 436C—a person who is entitled, or would
apart from section 440B or 441D be entitled, to enforce
the security interest.
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Section 449CA
Corporations Act 2001 341
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(3) An appointment under subsection (1) by the company under
administration must be made pursuant to a resolution of the board.
(4) Within 5 business days after being appointed under subsection (1)
as administrator of a company otherwise than by the Court, a
person must convene a meeting of the company’s creditors so that
they may:
(a) determine whether to remove the person from office; and
(b) if so, appoint someone else as administrator of the company.
(6) Where a company is under administration, but for some reason no
administrator is acting, the Court may appoint a person as
administrator on the application of ASIC or of an officer, member
or creditor of the company.
(7) Subsections (3) and (6) have effect despite section 198G.
449CA Declarations by administrator—indemnities and relevant
relationships
Scope
(1) This section applies to an administrator appointed under
subsection 449C(1) otherwise than by the Court.
Declaration of relationships and indemnities
(2) As soon as practicable after being appointed, the administrator
must make:
(a) a declaration of relevant relationships; and
(b) a declaration of indemnities.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Notification of creditors
(3) The administrator must:
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Section 449CA
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(a) give a copy of each declaration under subsection (2) to as
many of the company’s creditors as reasonably practicable;
and
(b) do so at the same time as the administrator gives those
creditors notice of the meeting convened under
subsection 449C(4).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The administrator must table a copy of each declaration under
subsection (2) at the meeting convened under subsection 449C(4).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4A) As soon as practicable after making a declaration under
subsection (2), the administrator must lodge a copy of the
declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Updating of declaration
(5) If:
(a) at a particular time, the administrator makes:
(i) a declaration of relevant relationships; or
(ii) a declaration of indemnities;
under subsection (2) or this subsection; and
(b) at a later time:
(i) the declaration has become out-of-date; or
(ii) the administrator becomes aware of an error in the
declaration;
the administrator must, as soon as practicable, make:
(c) if subparagraph (a)(i) applies—a replacement declaration of
relevant relationships; or
(d) if subparagraph (a)(ii) applies—a replacement declaration of
indemnities.
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Section 449CA
Corporations Act 2001 343
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) The administrator must table a copy of a replacement declaration
under subsection (5):
(a) if:
(i) there is a committee of inspection; and
(ii) the next meeting of the committee of inspection occurs
before the next meeting of the company’s creditors;
at the next meeting of the committee of inspection; or
(b) in any other case—at the next meeting of the company’s
creditors.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6A) As soon as practicable after making a replacement declaration
under subsection (5), the administrator must lodge a copy of the
replacement declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Defence
(7) In a prosecution for an offence constituted by a failure to include a
particular matter in a declaration under this section, it is a defence
if the defendant proves that:
(a) the defendant made reasonable enquiries; and
(b) after making these enquiries, the defendant had no reasonable
grounds for believing that the matter should have been
included in the declaration.
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Division 16 Notices about steps taken under Part
Section 450A
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 16—Notices about steps taken under Part
450A Appointment of administrator
(1) Where an administrator of a company is appointed under
section 436A, 436B or 436C, the administrator must:
(a) lodge a notice of the appointment before the end of the next
business day after the appointment; and
(b) cause a notice setting out the prescribed information about
the appointment to be published, within the period
ascertained in accordance with the regulations, in the
prescribed manner.
(1A) A notice under paragraph (1)(b) that relates to a company may be
combined with a notice under paragraph 436E(3)(b) that relates to
the company.
(2) As soon as practicable, and in any event before the end of the next
business day, after appointing an administrator of a company under
section 436C, a person must give to the company a written notice
of the appointment.
(3) As soon as practicable, and in any event before the end of the next
business day, after an administrator of a company is appointed
under section 436A, 436B or 436C, he or she must give a written
notice of the appointment to:
(a) each person who holds a security interest in the whole, or
substantially the whole, of the company’s property; and
(b) each person who holds 2 or more security interests in
property of the company where the property of the company
subject to the respective security interests together constitutes
the whole, or substantially the whole, of the company’s
property.
Note: For electronic notification, see section 600G.
(4) An administrator need not give a notice under subsection (3) to the
person who appointed the administrator.
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Notices about steps taken under Part Division 16
Section 450B
Corporations Act 2001 345
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450B Execution of deed of company arrangement
As soon as practicable after a deed of company arrangement is
executed, the deed’s administrator must:
(a) send to each creditor of the company a written notice of the
execution of the deed; and
(b) lodge notice in the prescribed form with ASIC of the
execution of the deed.
Note: For electronic notification under paragraph (a), see section 600G.
450C Failure to execute deed of company arrangement
As soon as practicable after a company contravenes
subsection 444B(2), the deed’s administrator must:
(a) lodge a notice that the company has failed to execute the
instrument within the required period; and
(b) send such a notice to each of the company’s creditors.
Note: For electronic notification under paragraph (b), see section 600G.
450D Termination of deed of company arrangement
Where a deed of company arrangement terminates because of
paragraph 445C(b), the deed’s administrator must:
(a) lodge a notice of the termination; and
(b) send such a notice to each of the company’s creditors.
Note: For electronic notification under paragraph (b), see section 600G.
450E Notice in public documents etc. of company
(1) A company under administration must set out, in every public
document, and in every negotiable instrument, of the company,
after the company’s name where it first appears, the expression
(“administrator appointed”).
(2) Except with the leave of the Court, until a deed of company
arrangement terminates, the company must set out, in every public
document, and in every negotiable instrument, of the company,
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Division 16 Notices about steps taken under Part
Section 450F
346 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
after the company’s name where it first appears, the expression
(“subject to deed of company arrangement”).
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The Court may only grant leave under subsection (2) on the
application of:
(a) the administrator of the deed of company arrangement; or
(b) any interested person.
(5) The Court may only grant leave under subsection (2) if it is
satisfied that the granting of leave will not result in any significant
risk to the interests of the company’s creditors (including
contingent or prospective creditors) as a whole.
450F Effect of contravention of this Division
A contravention of this Division does not affect the validity of
anything done or omitted under this Part, except so far as the Court
otherwise orders.
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arrangement Part 5.3A
Miscellaneous Division 17
Section 451A
Corporations Act 2001 347
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Division 17—Miscellaneous
451A Appointment of 2 or more administrators of company
(1) Where a provision of this Act provides for an administrator of a
company to be appointed, 2 or more persons may be appointed as
administrators of the company.
(2) Where, because of subsection (1), there are 2 or more
administrators of a company:
(a) a function or power of an administrator of the company may
be performed or exercised by any one of them, or by any 2 or
more of them together, except so far as the instrument or
resolution appointing them otherwise provides; and
(b) a reference in this Act to an administrator, or to the
administrator, of a company is, in the case of the
first-mentioned company, a reference to whichever one or
more of those administrators the case requires.
451B Appointment of 2 or more administrators of deed of company
arrangement
(1) Where a provision of this Act provides for an administrator of a
deed of company arrangement to be appointed, 2 or more persons
may be appointed as administrators of the deed.
(2) Where, because of subsection (1), there are 2 or more
administrators of a deed of company arrangement:
(a) a function or power of an administrator of the deed may be
performed or exercised by any one of them, or by any 2 or
more of them together, except so far as the deed, or the
resolution or instrument appointing them, otherwise
provides; and
(b) a reference in this Act to an administrator, or to the
administrator, of a deed of company arrangement is, in the
case of the first-mentioned deed, a reference to whichever
one or more of those administrators the case requires.
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Division 17 Miscellaneous
Section 451C
348 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
451C Effect of things done during administration of company
A payment made, transaction entered into, or any other act or thing
done, in good faith, by, or with the consent of, the administrator of
a company under administration:
(a) is valid and effectual for the purposes of this Act; and
(b) is not liable to be set aside in a winding up of the company.
451D Time for doing act does not run while act prevented by this
Part
Where:
(a) for any purpose (for example, the purposes of a law,
agreement or instrument) an act must or may be done within
a particular period or before a particular time; and
(b) this Part prevents the act from being done within that period
or before that time;
the period is extended, or the time is deferred, because of this
section, according to how long this Part prevented the act from
being done.
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Winding up in insolvency Part 5.4
When company to be wound up in insolvency Division 1
Section 459A
Corporations Act 2001 349
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Part 5.4—Winding up in insolvency
Division 1—When company to be wound up in insolvency
459A Order that insolvent company be wound up in insolvency
On an application under section 459P, the Court may order that an
insolvent company be wound up in insolvency.
459B Order made on application under section 234, 462 or 464
Where, on an application under section 234, 462 or 464, the Court
is satisfied that the company is insolvent, the Court may order that
the company be wound up in insolvency.
459C Presumptions to be made in certain proceedings
(1) This section has effect for the purposes of:
(a) an application under section 234, 459P, 462 or 464; or
(b) an application for leave to make an application under
section 459P.
(2) The Court must presume that the company is insolvent if, during or
after the 3 months ending on the day when the application was
made:
(a) the company failed (as defined by section 459F) to comply
with a statutory demand; or
(b) execution or other process issued on a judgment, decree or
order of an Australian court in favour of a creditor of the
company was returned wholly or partly unsatisfied; or
(c) a receiver, or receiver and manager, of property of the
company was appointed under a power contained in an
instrument relating to a circulating security interest in such
property; or
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Part 5.4 Winding up in insolvency
Division 1 When company to be wound up in insolvency
Section 459D
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) an order was made for the appointment of such a receiver, or
receiver and manager, for the purpose of enforcing such a
security interest; or
(e) a person entered into possession, or assumed control, of such
property for such a purpose; or
(f) a person was appointed so to enter into possession or assume
control (whether as agent for the secured party or for the
company).
(3) A presumption for which this section provides operates except so
far as the contrary is proved for the purposes of the application.
459D Contingent or prospective liability relevant to whether
company solvent
(1) In determining, for the purposes of an application of a kind referred
to in subsection 459C(1), whether or not the company is solvent,
the Court may take into account a contingent or prospective
liability of the company.
(2) Subsection (1) does not limit the matters that may be taken into
account in determining, for a particular purpose, whether or not a
company is solvent.
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Statutory demand Division 2
Section 459E
Corporations Act 2001 351
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Statutory demand
459E Creditor may serve statutory demand on company
(1) A person may serve on a company a demand relating to:
(a) a single debt that the company owes to the person, that is due
and payable and whose amount is at least the statutory
minimum; or
(b) 2 or more debts that the company owes to the person, that are
due and payable and whose amounts total at least the
statutory minimum.
(2) The demand:
(a) if it relates to a single debt—must specify the debt and its
amount; and
(b) if it relates to 2 or more debts—must specify the total of the
amounts of the debts; and
(c) must require the company to pay the amount of the debt, or
the total of the amounts of the debts, or to secure or
compound for that amount or total to the creditor’s
reasonable satisfaction, within 21 days after the demand is
served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor.
(3) Unless the debt, or each of the debts, is a judgment debt, the
demand must be accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts,
is due and payable by the company; and
(b) complies with the rules.
(4) A person may make a demand under this section relating to a debt
even if the debt is owed to the person as assignee.
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Part 5.4 Winding up in insolvency
Division 2 Statutory demand
Section 459F
352 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) A demand under this section may relate to a liability under any of
the following provisions of the Income Tax Assessment Act 1936:
(aa) former section 220AAE, 220AAM or 220AAR;
(a) former section 221F (except subsection 221F(12)), former
section 221G (except subsection 221G(4A)) or former
section 221P;
(b) former subsection 221YHDC(2);
(c) former subsection 221YHZD(1) or (1A);
(d) former subsection 221YN(1);
(e) section 222AHA;
and any of the provisions of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953, even if the liability arose before
1 January 1991.
(6) Subsection (5) is to avoid doubt and is not intended to limit the
generality of a reference in this Act to a debt.
459F When company taken to fail to comply with statutory demand
(1) If, as at the end of the period for compliance with a statutory
demand, the demand is still in effect and the company has not
complied with it, the company is taken to fail to comply with the
demand at the end of that period.
(2) The period for compliance with a statutory demand is:
(a) if the company applies in accordance with section 459G for
an order setting aside the demand:
(i) if, on hearing the application under section 459G, or on
an application by the company under this paragraph, the
Court makes an order that extends the period for
compliance with the demand—the period specified in
the order, or in the last such order, as the case requires,
as the period for such compliance; or
(ii) otherwise—the period beginning on the day when the
demand is served and ending 7 days after the
application under section 459G is finally determined or
otherwise disposed of; or
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Statutory demand Division 2
Section 459F
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) otherwise—21 days after the demand is served.
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Chapter 5 External administration
Part 5.4 Winding up in insolvency
Division 3 Application to set aside statutory demand
Section 459G
354 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Application to set aside statutory demand
459G Company may apply
(1) A company may apply to the Court for an order setting aside a
statutory demand served on the company.
(2) An application may only be made within 21 days after the demand
is so served.
(3) An application is made in accordance with this section only if,
within those 21 days:
(a) an affidavit supporting the application is filed with the Court;
and
(b) a copy of the application, and a copy of the supporting
affidavit, are served on the person who served the demand on
the company.
459H Determination of application where there is a dispute or
offsetting claim
(1) This section applies where, on an application under section 459G,
the Court is satisfied of either or both of the following:
(a) that there is a genuine dispute between the company and the
respondent about the existence or amount of a debt to which
the demand relates;
(b) that the company has an offsetting claim.
(2) The Court must calculate the substantiated amount of the demand
in accordance with the formula:
where:
admitted total means:
(a) the admitted amount of the debt; or
Admitted total Offsetting total
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Application to set aside statutory demand Division 3
Section 459H
Corporations Act 2001 355
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the total of the respective admitted amounts of the debts;
as the case requires, to which the demand relates.
offsetting total means:
(a) if the Court is satisfied that the company has only one
offsetting claim—the amount of that claim; or
(b) if the Court is satisfied that the company has 2 or more
offsetting claims—the total of the amounts of those claims;
or
(c) otherwise—a nil amount.
(3) If the substantiated amount is less than the statutory minimum, the
Court must, by order, set aside the demand.
(4) If the substantiated amount is at least as great as the statutory
minimum, the Court may make an order:
(a) varying the demand as specified in the order; and
(b) declaring the demand to have had effect, as so varied, as from
when the demand was served on the company.
(5) In this section:
admitted amount, in relation to a debt, means:
(a) if the Court is satisfied that there is a genuine dispute
between the company and the respondent about the existence
of the debt—a nil amount; or
(b) if the Court is satisfied that there is a genuine dispute
between the company and the respondent about the amount
of the debt—so much of that amount as the Court is satisfied
is not the subject of such a dispute; or
(c) otherwise—the amount of the debt.
offsetting claim means a genuine claim that the company has
against the respondent by way of counterclaim, set-off or
cross-demand (even if it does not arise out of the same transaction
or circumstances as a debt to which the demand relates).
respondent means the person who served the demand on the
company.
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Part 5.4 Winding up in insolvency
Division 3 Application to set aside statutory demand
Section 459J
356 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) This section has effect subject to section 459J.
459J Setting aside demand on other grounds
(1) On an application under section 459G, the Court may by order set
aside the demand if it is satisfied that:
(a) because of a defect in the demand, substantial injustice will
be caused unless the demand is set aside; or
(b) there is some other reason why the demand should be set
aside.
(2) Except as provided in subsection (1), the Court must not set aside a
statutory demand merely because of a defect.
459K Effect of order setting aside demand
A statutory demand has no effect while there is in force under
section 459H or 459J an order setting aside the demand.
459L Dismissal of application
Unless the Court makes, on an application under section 459J, an
order under section 459H or 459J, the Court is to dismiss the
application.
459M Order subject to conditions
An order under section 459H or 459J may be made subject to
conditions.
459N Costs where company successful
Where, on an application under section 459G, the Court sets aside
the demand, it may order the person who served the demand to pay
the company’s costs in relation to the application.
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Application for order to wind up company in insolvency Division 4
Section 459P
Corporations Act 2001 357
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Application for order to wind up company in
insolvency
459P Who may apply for order under section 459A
(1) Any one or more of the following may apply to the Court for a
company to be wound up in insolvency:
(a) the company;
(b) a creditor (even if the creditor is a secured creditor or is only
a contingent or prospective creditor);
(c) a contributory;
(d) a director;
(e) a liquidator or provisional liquidator of the company;
(f) ASIC;
(g) a prescribed agency.
(2) An application by any of the following, or by persons including
any of the following, may only be made with the leave of the
Court:
(a) a person who is a creditor only because of a contingent or
prospective debt;
(b) a contributory;
(c) a director;
(d) ASIC.
(3) The Court may give leave if satisfied that there is a prima facie
case that the company is insolvent, but not otherwise.
(4) The Court may give leave subject to conditions.
(5) Except as permitted by this section, a person cannot apply for a
company to be wound up in insolvency.
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Chapter 5 External administration
Part 5.4 Winding up in insolvency
Division 4 Application for order to wind up company in insolvency
Section 459Q
358 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
459Q Application relying on failure to comply with statutory
demand
If an application for a company to be wound up in insolvency relies
on a failure by the company to comply with a statutory demand,
the application:
(a) must set out particulars of service of the demand on the
company and of the failure to comply with the demand; and
(b) must have attached to it:
(i) a copy of the demand; and
(ii) if the demand has been varied by an order under
subsection 459H(4)—a copy of the order; and
(c) unless the debt, or each of the debts, to which the demand
relates is a judgment debt—must be accompanied by an
affidavit that:
(i) verifies that the debt, or the total of the amounts of the
debts, is due and payable by the company; and
(ii) complies with the rules.
459R Period within which application must be determined
(1) An application for a company to be wound up in insolvency is to
be determined within 6 months after it is made.
(2) The Court may by order extend the period within which an
application must be determined, but only if:
(a) the Court is satisfied that special circumstances justify the
extension; and
(b) the order is made within that period as prescribed by
subsection (1), or as last extended under this subsection, as
the case requires.
(3) An application is, because of this subsection, dismissed if it is not
determined as required by this section.
(4) An order under subsection (2) may be made subject to conditions.
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Application for order to wind up company in insolvency Division 4
Section 459S
Corporations Act 2001 359
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
459S Company may not oppose application on certain grounds
(1) In so far as an application for a company to be wound up in
insolvency relies on a failure by the company to comply with a
statutory demand, the company may not, without the leave of the
Court, oppose the application on a ground:
(a) that the company relied on for the purposes of an application
by it for the demand to be set aside; or
(b) that the company could have so relied on, but did not so rely
on (whether it made such an application or not).
(2) The Court is not to grant leave under subsection (1) unless it is
satisfied that the ground is material to proving that the company is
solvent.
459T Application to wind up joint debtors in insolvency
(1) A single application may be made for 2 or more companies to be
wound up in insolvency if they are joint debtors, whether partners
or not.
(2) On such an application, the Court may order that one or more of
the companies be wound up in insolvency, even if it dismisses the
application in so far as it relates to another or others.
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Chapter 5 External administration
Part 5.4A Winding up by the Court on other grounds
Section 461
360 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.4A—Winding up by the Court on other
grounds
461 General grounds on which company may be wound up by Court
(1) The Court may order the winding up of a company if:
(a) the company has by special resolution resolved that it be
wound up by the Court; or
(c) the company does not commence business within one year
from its incorporation or suspends its business for a whole
year; or
(d) the company has no members; or
(e) directors have acted in affairs of the company in their own
interests rather than in the interests of the members as a
whole, or in any other manner whatsoever that appears to be
unfair or unjust to other members; or
(f) affairs of the company are being conducted in a manner that
is oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member or members or in a manner
that is contrary to the interests of the members as a whole; or
(g) an act or omission, or a proposed act or omission, by or on
behalf of the company, or a resolution, or a proposed
resolution, of a class of members of the company, was or
would be oppressive or unfairly prejudicial to, or unfairly
discriminatory against, a member or members or was or
would be contrary to the interests of the members as a whole;
or
(h) ASIC has stated in a report prepared under Division 1 of
Part 3 of the ASIC Act that, in its opinion:
(i) the company cannot pay its debts and should be wound
up; or
(ii) it is in the interests of the public, of the members, or of
the creditors, that the company should be wound up; or
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Section 462
Corporations Act 2001 361
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(k) the Court is of opinion that it is just and equitable that the
company be wound up.
(2) A company must lodge a copy of a special resolution referred to in
paragraph (1)(a) with ASIC within 14 days after the resolution is
passed.
462 Standing to apply for winding up
(1) A reference in this section to an order to wind up a company is a
reference to an order to wind up the company on a ground provided
for by section 461.
(2) Subject to this section, any one or more of the following may apply
for an order to wind up a company:
(a) the company; or
(b) a creditor (including a contingent or prospective creditor) of
the company; or
(c) a contributory; or
(d) the liquidator of the company; or
(e) ASIC pursuant to section 464; or
(f) ASIC (in the circumstances set out in subsection (2A)); or
(h) APRA.
(2A) ASIC may apply for an order to wind up a company under
paragraph (2)(f) only if:
(a) the company has no members; and
(b) ASIC has given the company at least 1 month’s written
notice of its intention to apply for the order.
(4) The Court must not hear an application by a person being, or
persons including, a contingent or prospective creditor of a
company for an order to wind up the company unless and until:
(a) such security for costs has been given as the Court thinks
reasonable; and
(b) a prima facie case for winding up the company has been
established to the Court’s satisfaction.
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Part 5.4A Winding up by the Court on other grounds
Section 464
362 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) Except as permitted by this section, a person is not entitled to apply
for an order to wind up a company.
464 Application for winding up in connection with investigation
under ASIC Act
(1) Where ASIC is investigating, or has investigated, under Division 1
of Part 3 of the ASIC Act:
(a) matters being, or connected with, affairs of a company; or
(b) matters including such matters;
ASIC may apply to the Court for the winding up of the company.
(2) For the purposes of an application under subsection (1), this Act
applies, with such modifications as the circumstances require, as if
a winding up application had been made by the company.
(3) ASIC must give a copy of an application made under
subsection (1) to the company.
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Winding up in insolvency or by the Court Part 5.4B
Preliminary Division 1A
Section 465
Corporations Act 2001 363
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.4B—Winding up in insolvency or by the
Court
Division 1A—Preliminary
465 Definitions
In this Part:
property of a company includes PPSA retention of title property, if
the security interest in the property is vested in the company
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
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Part 5.4B Winding up in insolvency or by the Court
Division 1 General
Section 465A
364 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 1—General
465A Notice of application
(1) A person who applies under section 459P, 462 or 464 for a
company to be wound up must:
(a) lodge notice in the prescribed form that the application has
been made; and
(b) within 14 days after the application is made, serve a copy of
it on the company; and
(c) cause a notice setting out the prescribed information about
the application to be published in the prescribed manner.
(2) If the Court orders the winding up of a company as a result of an
application under section 459P, 462 or 464, the liquidator (or
provisional liquidator) must cause notice setting out prescribed
information about the order to be published in the prescribed
manner.
465B Substitution of applicants
(1) The Court may by order substitute, as applicant or applicants in an
application under section 459P, 462 or 464 for a company to be
wound up, a person or persons who might otherwise have so
applied for the company to be wound up.
(2) The Court may only make an order if the Court thinks it
appropriate to do so:
(a) because the application is not being proceeded with diligently
enough; or
(b) for some other reason.
(3) The substituted applicant may be, or the substituted applicants may
be or include, the person who was the applicant, or any of the
persons who were the applicants, before the substitution.
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General Division 1
Section 465C
Corporations Act 2001 365
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) After an order is made, the application may proceed as if the
substituted applicant or applicants had been the original applicant
or applicants.
465C Applicant to be given notice of grounds for opposing
application
On the hearing of an application under section 459P, 462 or 464, a
person may not, without the leave of the Court, oppose the
application unless, within the period prescribed by the rules, the
person has filed, and served on the applicant:
(a) notice of the grounds on which the person opposes the
application; and
(b) an affidavit verifying the matters stated in the notice.
466 Payment of preliminary costs etc.
(1) The persons, other than the company itself or the liquidator of the
company, on whose application any winding up order is made
must, at their own cost, prosecute all proceedings in the winding up
until a liquidator has been appointed under this Part.
(2) The liquidator must, unless the Court orders otherwise, reimburse
the applicant out of the property of the company the taxed costs
incurred by the applicant in any such proceedings.
(3) Where the company has no property or does not have sufficient
property and, in the opinion of ASIC, a fraud has been committed
by any person in the promotion or formation of the company or by
any officer or employee of the company in relation to the company
since its formation, the taxed costs or so much of them as is not
reimbursed under subsection (2) may be reimbursed by ASIC to an
amount not exceeding $1,000.
(4) Where any winding up order is made upon the application of the
company or a liquidator of the company, the costs incurred must,
subject to any order of the Court, be paid out of the property of the
company in like manner as if they were the costs of any other
applicant.
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 1 General
Section 467
366 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
467 Court’s powers on hearing application
(1) Subject to subsection (2) and section 467A, on hearing a winding
up application the Court may:
(a) dismiss the application with or without costs, even if a
ground has been proved on which the Court may order the
company to be wound up on the application; or
(b) adjourn the hearing conditionally or unconditionally; or
(c) make any interim or other order that it thinks fit.
(2) The Court must not refuse to make a winding up order merely
because:
(a) the total amount secured by one or more security interests in
the property of the company is equal to or greater than the
value of the property subject to the interest (or interests); or
(b) the company has no property.
(3) The Court may, on the application coming on for hearing or at any
time at the request of the applicant, the company or any person
who has given notice of intention to appear on the hearing of the
application:
(a) direct that any notices be given or any steps be taken before
or after the hearing of the application; and
(b) dispense with any notices being given or steps being taken
that are required by this Act, or by the rules, or by any prior
order of the Court; and
(c) direct that oral evidence be taken on the application or any
matter relating to the application; and
(d) direct a speedy hearing or trial of the application or of any
issue or matter; and
(e) allow the application to be amended or withdrawn; and
(f) give such directions as to the proceedings as the Court thinks
fit.
(4) Where the application is made by members as contributories on the
ground that it is just and equitable that the company should be
wound up or that the directors have acted in a manner that appears
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General Division 1
Section 467A
Corporations Act 2001 367
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
to be unfair or unjust to other members, the Court, if it is of the
opinion that:
(a) the applicants are entitled to relief either by winding up the
company or by some other means; and
(b) in the absence of any other remedy it would be just and
equitable that the company should be wound up;
must make a winding up order unless it is also of the opinion that
some other remedy is available to the applicants and that they are
acting unreasonably in seeking to have the company wound up
instead of pursuing that other remedy.
(5) Notwithstanding any rule of law to the contrary, the Court must not
refuse to make an order for winding up on the application of a
contributory on the ground that, if the order were made, no
property of the company would be available for distribution among
the contributories.
(7) At any time after the filing of a winding up application and before
a winding up order has been made, the company or any creditor or
contributory may, where any action or other civil proceeding
against the company is pending, apply to the Court to stay or
restrain further proceedings in the action or proceeding, and the
Court may stay or restrain the proceedings accordingly on such
terms as it thinks fit.
467A Effect of defect or irregularity on application under Part 5.4
or 5.4A
An application under Part 5.4 or 5.4A must not be dismissed
merely because of one or more of the following:
(a) in any case—a defect or irregularity in connection with the
application;
(b) in the case of an application for a company to be wound up in
insolvency—a defect in a statutory demand;
unless the Court is satisfied that substantial injustice has been
caused that cannot otherwise be remedied (for example, by an
adjournment or an order for costs).
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 1 General
Section 467B
368 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
467B Court may order winding up of company that is being wound
up voluntarily
The Court may make an order under section 233, 459A, 459B or
461 even if the company is already being wound up voluntarily.
468 Avoidance of dispositions of property, attachments etc.
(1) Any disposition of property of the company, other than an exempt
disposition, made after the commencement of the winding up by
the Court is, unless the Court otherwise orders, void.
(2) In subsection (1), exempt disposition, in relation to a company that
has commenced to be wound up by the Court, means:
(a) a disposition made by the liquidator, or by a provisional
liquidator, of the company pursuant to a power conferred on
him or her by:
(i) this Act; or
(ii) rules of the Court that appointed him or her; or
(iii) an order of the Court; or
(aa) a disposition made in good faith by, or with the consent of,
an administrator of the company; or
(ab) a disposition under a deed of company arrangement executed
by the company; or
(b) a payment of money by an Australian ADI out of an account
maintained by the company with the Australian ADI, being a
payment made by the Australian ADI:
(i) on or before the day on which the Court makes the order
for the winding up of the company; and
(ii) in good faith and in the ordinary course of the banking
business of the Australian ADI.
(3) Notwithstanding subsection (1), the Court may, where an
application for winding up has been filed but a winding up order
has not been made, by order:
(a) validate the making, after the filing of the application, of a
disposition of property of the company; or
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General Division 1
Section 468A
Corporations Act 2001 369
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) permit the business of the company or a portion of the
business of the company to be carried on, and such acts as
are incidental to the carrying on of the business or portion of
the business to be done, during the period before a winding
up order (if any) is made;
on such terms as it thinks fit.
(4) Any attachment, sequestration, distress or execution put in force
against the property of the company after the commencement of
the winding up by the Court is void.
468A Effect of winding up on company’s members
Transfer of shares
(1) A transfer of shares in a company that is made after the
commencement of the winding up by the Court is void except if:
(a) both:
(i) the liquidator gives written consent to the transfer; and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the liquidator gives written consent to the transfer;
(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (4) authorising
the transfer.
(2) The liquidator may only give consent under paragraph (1)(a) or (b)
if he or she is satisfied that the transfer is in the best interests of the
company’s creditors as a whole.
(3) If the liquidator refuses to give consent under paragraph (1)(a) or
(b) to a transfer of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
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Part 5.4B Winding up in insolvency or by the Court
Division 1 General
Section 468A
370 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
may apply to the Court for an order authorising the transfer.
(4) If the Court is satisfied, on an application under subsection (3), that
the transfer is in the best interests of the company’s creditors as a
whole, the Court may, by order, authorise the transfer.
(5) If the liquidator gives consent under paragraph (1)(b) to a transfer
of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(6) If the Court is satisfied, on an application under subsection (5), that
any or all of the conditions covered by the application are not in
the best interests of the company’s creditors as a whole, the Court
may, by order, set aside any or all of the conditions.
(7) The liquidator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (3) or (5).
Alteration in the status of members
(8) An alteration in the status of members of a company that is made
after the commencement of the winding up by the Court is void
except if:
(a) both:
(i) the liquidator gives written consent to the alteration; and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the liquidator gives written consent to the alteration;
(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (12) authorising
the alteration.
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Winding up in insolvency or by the Court Part 5.4B
General Division 1
Section 468A
Corporations Act 2001 371
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(9) The liquidator may only give consent under paragraph (8)(a) or (b)
if he or she is satisfied that the alteration is in the best interests of
the company’s creditors as a whole.
(10) The liquidator must refuse to give consent under paragraph (8)(a)
or (b) if the alteration would contravene Part 2F.2.
(11) If the liquidator refuses to give consent under paragraph (8)(a) or
(b) to an alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order authorising the alteration.
(12) If the Court is satisfied, on an application under subsection (11),
that:
(a) the alteration is in the best interests of the company’s
creditors as a whole; and
(b) the alteration does not contravene Part 2F.2;
the Court may, by order, authorise the alteration.
(13) If the liquidator gives consent under paragraph (8)(b) to an
alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(14) If the Court is satisfied, on an application under subsection (13),
that any or all of the conditions covered by the application are not
in the best interests of the company’s creditors as a whole, the
Court may, by order, set aside any or all of the conditions.
(15) The liquidator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (11) or (13).
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 1 General
Section 469
372 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
469 Application to be lis pendens
An application for winding up a company constitutes a lis pendens
for the purposes of any law relating to the effect of a lis pendens
upon purchasers or mortgagees.
470 Certain notices to be lodged
(1) An applicant (other than ASIC) for the winding up of a company
must:
(a) lodge, not later than 10.30 am on the next business day after
the filing of the application, notice of the filing of the
application and of the date on which the application was
filed; and
(b) after an order for winding up is made—lodge, within 2
business days after the making of the order, notice of the
making of the order, of the date on which the order was made
and of the name and address of the liquidator; and
(c) if the application is withdrawn or dismissed—lodge, within 2
business days after the withdrawal or dismissal of the
application, notice of the withdrawal or dismissal of the
application and of the date on which the application was
withdrawn or dismissed.
(2) The applicant must, within 7 days after the passing and entering of
a winding up order:
(a) except where the applicant is ASIC—lodge an office copy of
the order; and
(b) serve an office copy of the order on the company or such
other person as the Court directs; and
(c) deliver to the liquidator an office copy of the order together
with a statement that the order has been served as mentioned
in paragraph (b).
(3) Where ASIC applies for the winding up of a company, ASIC must
enter in its records particulars of the application and, after the
passing and entering of a winding up order, an office copy of the
order, and subsection 1274(2) applies in relation to the document
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Winding up in insolvency or by the Court Part 5.4B
General Division 1
Section 470
Corporations Act 2001 373
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
containing those particulars and to the office copy as if they were
documents lodged with ASIC.
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 1A Effect of winding up order
Section 471
374 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 1A—Effect of winding up order
471 Effect on creditors and contributories
An order for winding up a company operates in favour of all the
creditors and contributories of the company as if it had been made
on the joint application of all the creditors and contributories.
471B Stay of proceedings and suspension of enforcement process
While a company is being wound up in insolvency or by the Court,
or a provisional liquidator of a company is acting, a person cannot
begin or proceed with:
(a) a proceeding in a court against the company or in relation to
property of the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such
terms (if any) as the Court imposes.
471C Secured creditor’s rights not affected
Nothing in section 471B affects a secured creditor’s right to realise
or otherwise deal with the security interest.
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Winding up in insolvency or by the Court Part 5.4B
Court-appointed liquidators Division 2
Section 472
Corporations Act 2001 375
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Court-appointed liquidators
472 Court to appoint registered liquidator
(1) On an order being made for the winding up of a company, the
Court may appoint a registered liquidator to be liquidator of the
company.
(2) The Court may appoint a registered liquidator provisionally at any
time after the filing of a winding up application and before the
making of a winding up order or, if there is an appeal against a
winding up order, before a decision in the appeal is made.
(3) A liquidator appointed provisionally has or may exercise such
functions and powers:
(a) as are conferred on him or her by this Act or by rules of the
Court that appointed him or her; or
(b) as the Court specifies in the order appointing him or her.
(4) A liquidator of a company appointed provisionally also has:
(a) power to carry on the company’s business; and
(b) the powers that a liquidator of the company would have
under paragraph 477(1)(d), subsection 477(2) (except
paragraph 477(2)(m)) and subsection 477(3) if the company
were being wound up in insolvency or by the Court.
(5) Subsections 477(2A) and (2B) apply in relation to a company’s
provisional liquidator, with such modifications (if any) as the
circumstances require, as if he or she were a liquidator appointed
for the purposes of a winding up in insolvency or by the Court.
(6) If more than one liquidator is appointed by the Court, the Court
must declare whether anything that is required or authorised by this
Act to be done by the liquidator is to be done by all or any one or
more of the persons appointed.
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 2 Court-appointed liquidators
Section 473
376 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
473 Resignation of liquidators
A liquidator appointed by the Court may resign.
473A Vacancies in office of court-appointed liquidator
(1) A vacancy in the office of a liquidator appointed by the Court may
be filled by:
(a) the Court; or
(b) ASIC.
(2) If ASIC fills a vacancy in the office of a liquidator under
subsection (1), ASIC must:
(a) publish notice of the filling of the vacancy; and
(b) publish the notice in the prescribed manner.
(3) If ASIC fills a vacancy in the office of a liquidator under
subsection (1), the liquidator is taken, for the purposes of this Act,
to be appointed by the Court.
(4) If more than one liquidator is appointed under this section, the
Court or ASIC (as the case may be) must declare whether anything
that is required or authorised by this Act to be done by the
liquidator is to be done by all or any one or more of the persons
appointed.
(5) If a declaration made by ASIC under subsection (4) is inconsistent
with a declaration of the Court made under that subsection, the
declaration of the Court prevails to the extent of any inconsistency.
474 Custody and vesting of company’s property
(1) If a company is being wound up in insolvency or by the Court, or a
provisional liquidator of a company has been appointed:
(a) in a case in which a liquidator or provisional liquidator has
been appointed—the liquidator or provisional liquidator must
take into his or her custody, or under his or her control, all
the property which is, or which appears to be, property of the
company; or
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Winding up in insolvency or by the Court Part 5.4B
Court-appointed liquidators Division 2
Section 475
Corporations Act 2001 377
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) in a case in which there is no liquidator—all the property of
the company is to be in the custody of the Court.
Note: Section 465 extends the meaning of the property of the company to
include PPSA retention of title property, if the security interest in the
property has vested in the company in certain situations.
(2) The Court may, on the application of the liquidator, by order direct
that all or any part of the property of the company vests in the
liquidator and thereupon the property to which the order relates
vests accordingly and the liquidator may, after giving such
indemnity (if any) as the Court directs, bring, or may defend, any
action or other legal proceeding that relates to that property or that
it is necessary to bring or defend for the purpose of effectually
winding up the company and recovering its property.
(3) Where an order is made under this section, the liquidator of the
company to which the order relates must, within 14 days after the
making of the order, lodge with ASIC an office copy of the order.
475 Report as to company’s affairs to be submitted to liquidator
(1A) In this section:
liquidator includes a provisional liquidator.
(1) There must be made out and verified by a statement in writing in
the prescribed form, and submitted to the liquidator, by the persons
who were, at the date of the winding up order or, if the liquidator
specifies an earlier date, that earlier date, the directors and
secretary of the company a report in the prescribed form as to the
affairs of the company as at the date concerned.
(2) The liquidator may, by notice in writing served personally or by
post addressed to the last known address of the person, require one
or more persons included in one or more of the following classes of
persons to make out as required by the notice, verify by a statement
in writing in the prescribed form, and submit to him or her, a
report, containing such information as is specified in the notice as
to the affairs of the company or as to such of those affairs as are
specified in the notice, as at a date specified in the notice:
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Part 5.4B Winding up in insolvency or by the Court
Division 2 Court-appointed liquidators
Section 475
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) persons who are or have been officers of the company;
(b) where the company was formed within one year before the
date of the winding up order—persons who have taken part
in the formation of the company;
(c) persons who are employed by the company or have been
employed by the company within one year before the date of
the winding up order and are, in the opinion of the liquidator,
capable of giving the information required;
(d) persons who are, or have been within one year before the
date of the winding up order, officers of, or employed by, a
body corporate that is, or within that year was, an officer of
the company to the affairs of which the report relates;
(e) a person who was a provisional liquidator of the company.
(3) The liquidator may, in a notice under subsection (2), specify the
information that he or she requires as to affairs of the company by
reference to information required by this Act or the regulations to
be included in any other report, statement or notice under this Act.
(4) A report referred to in subsection (1) must, subject to
subsection (6), be submitted to the liquidator not later than 10
business days after the making of the winding up order.
(5) A person required to submit a report referred to in subsection (2)
must, subject to subsection (6), submit it not later than 10 business
days after the liquidator serves notice of the requirement.
(6) Where the liquidator believes there are special reasons for so
doing, he or she may, on an application in writing made to him or
her before the end of the time limited by subsection (4) or (5) for
the submission by the applicant of a report under subsection (1) or
(2), grant, by notice in writing, an extension of that time.
(7) A liquidator:
(a) must, within 5 business days after receiving a report under
subsection (1) or (2), cause a copy of the report to be filed
with the Court and a copy to be lodged; and
(b) must, where he or she gives a notice under subsection (6), as
soon as practicable lodge a copy of the notice.
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Winding up in insolvency or by the Court Part 5.4B
Court-appointed liquidators Division 2
Section 477
Corporations Act 2001 379
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) A person making or concurring in making a report required by this
section and verifying it as required by this section must, subject to
the rules, be allowed, and must be paid by the liquidator out of the
property of the company, such costs and expenses incurred in and
about the preparation and making of the report and the verification
of that report as the liquidator considers reasonable.
(9) A person must not contravene a provision of this section.
(10) An offence based on subsection (9) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(11) Subsection (9) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (11), see subsection 13.3(3) of the Criminal Code.
477 Powers of liquidator
(1) Subject to this section, a liquidator of a company may:
(a) carry on the business of the company so far as is, in the
opinion of the liquidator, required for the beneficial disposal
or winding up of that business; and
(b) subject to the provisions of section 556, pay any class of
creditors in full; and
(c) make any compromise or arrangement with creditors or
persons claiming to be creditors or having or alleging that
they have any claim (present or future, certain or contingent,
ascertained or sounding only in damages) against the
company or whereby the company may be rendered liable;
and
(d) compromise any calls, liabilities to calls, debts, liabilities
capable of resulting in debts and any claims (present or
future, certain or contingent, ascertained or sounding only in
damages) subsisting or supposed to subsist between the
company and a contributory or other debtor or person
apprehending liability to the company, and all questions in
any way relating to or affecting the property or the winding
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 2 Court-appointed liquidators
Section 477
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
up of the company, on such terms as are agreed, and take any
security for the discharge of, and give a complete discharge
in respect of, any such call, debt, liability or claim.
(2) Subject to this section, a liquidator of a company may:
(a) bring or defend any legal proceeding in the name and on
behalf of the company; and
(b) appoint a solicitor to assist him or her in his or her duties;
and
(c) sell or otherwise dispose of, in any manner, all or any part of
the property of the company; and
(ca) exercise the Court’s powers under subsection 483(3) (except
paragraph 483(3)(b)) in relation to calls on contributories;
and
(d) do all acts and execute in the name and on behalf of the
company all deeds, receipts and other documents and for that
purpose use when necessary a seal of the company; and
(e) subject to the Bankruptcy Act 1966, prove in the bankruptcy
of any contributory or debtor of the company or under any
deed executed under that Act; and
(f) draw, accept, make and indorse any bill of exchange or
promissory note in the name and on behalf of the company;
and
(g) obtain credit, whether on the security of the property of the
company or otherwise; and
(h) take out letters of administration of the estate of a deceased
contributory or debtor, and do any other act necessary for
obtaining payment of any money due from a contributory or
debtor, or his or her estate, that cannot be conveniently done
in the name of the company; and
(k) appoint an agent to do any business that the liquidator is
unable to do, or that it is unreasonable to expect the
liquidator to do, in person; and
(m) do all such other things as are necessary for winding up the
affairs of the company and distributing its property.
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External administration Chapter 5
Winding up in insolvency or by the Court Part 5.4B
Court-appointed liquidators Division 2
Section 477
Corporations Act 2001 381
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2A) Except with the approval of the Court, of the committee of
inspection or of a resolution of the creditors, a liquidator of a
company must not compromise a debt to the company if the
amount claimed by the company is more than:
(a) if an amount greater than $20,000 is prescribed—the
prescribed amount; or
(b) otherwise—$20,000.
(2B) Except with the approval of the Court, of the committee of
inspection or of a resolution of the creditors, a liquidator of a
company must not enter into an agreement on the company’s
behalf (for example, but without limitation, a lease or a an
agreement under which a security interest arises or is created) if:
(a) without limiting paragraph (b), the term of the agreement
may end; or
(b) obligations of a party to the agreement may, according to the
terms of the agreement, be discharged by performance;
more than 3 months after the agreement is entered into, even if the
term may end, or the obligations may be discharged, within those 3
months.
(2C) Subsection (2B) does not apply to an agreement if the costs and
expenses of the company under the agreement are to be paid out of
money paid to the liquidator:
(a) by ASIC on behalf of the Commonwealth; and
(b) for the purpose of paying the costs and expenses.
(3) A liquidator of a company is entitled to inspect at any reasonable
time any books of the company and a person who refuses or fails to
allow the liquidator to inspect such books at such a time is guilty of
an offence.
(5) For the purpose of enabling the liquidator to take out letters of
administration or recover money as mentioned in paragraph (2)(h),
the money due is taken to be due to the liquidator.
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 2 Court-appointed liquidators
Section 478
382 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) Subject to this Part, the liquidator must use his or her own
discretion in the management of affairs and property of the
company and the distribution of its property.
(7) This section does not apply to calls on shares in a no liability
company.
478 Application of property; list of contributories
(1) As soon as practicable after the Court orders that a company be
wound up, the liquidator must:
(a) cause the company’s property to be collected and applied in
discharging the company’s liabilities; and
(b) consider whether subsection (1A) requires him or her to
settle a list of contributories.
(1A) A liquidator of a company that is being wound up in insolvency or
by the Court must settle a list of contributories if it appears to him
or her likely that:
(a) either:
(i) there are persons liable as members or past members to
contribute to the company’s property on the winding up;
or
(ii) there will be a surplus available for distribution; and
(b) it will be necessary:
(i) to make calls on contributories; or
(ii) to adjust the rights of the contributories among
themselves.
(1B) A liquidator of such a company may rectify the register of
members so far as required under this Part.
(3) In settling the list of contributories the liquidator must distinguish
between persons who are contributories in their own right and
persons who are contributories by virtue of representing, or being
liable for the debts of, other persons.
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Winding up in insolvency or by the Court Part 5.4B
Court-appointed liquidators Division 2
Section 480
Corporations Act 2001 383
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The list of contributories, when settled in accordance with the
regulations, is prima facie evidence of the liabilities of the persons
named in the list as contributories.
(5) Paragraph (1)(b) and subsections (1A), (1B), (3) and (4) do not
apply to a no liability company.
480 Release of liquidator and deregistration of company
When the liquidator:
(a) has realised all the property of the company or so much of
that property as can in his or her opinion be realised without
needlessly protracting the winding up, and has distributed a
final dividend (if any) to the creditors and adjusted the rights
of the contributories among themselves and made a final
return (if any) to the contributories; or
(b) has resigned or has been removed from office;
he or she may apply to the Court:
(c) for an order that he or she be released; or
(d) for an order that he or she be released and that ASIC
deregister the company.
481 Orders for release or deregistration
(1) The Court:
(a) may cause a report on the accounts of the liquidator to be
prepared by the auditor appointed by ASIC under
section 70-15 of Schedule 2 (audit of administration books)
or by some other registered company auditor appointed by
the Court; and
(b) on the liquidator complying with all the requirements of the
Court—must take into consideration the report and any
objection against the release of the liquidator that is made by
the auditor or by any creditor, contributory or other person
interested; and
(c) must either grant or withhold the release accordingly.
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 2 Court-appointed liquidators
Section 481
384 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Where the release of a liquidator is withheld and the Court is
satisfied that the liquidator has been guilty of default, negligence,
breach of trust or breach of duty, the Court may order the
liquidator to make good any loss that the company has sustained by
reason of the default, negligence, breach of trust or breach of duty
and may make such other order as it thinks fit.
(3) An order of the Court releasing the liquidator discharges him or her
from all liability in respect of any act done or default made by him
or her in the administration of the affairs of the company or
otherwise in relation to his or her conduct as liquidator, but any
such order may be revoked on proof that it was obtained by fraud
or by suppression or concealment of any material fact.
(4) Where the liquidator has not previously resigned or been removed,
his or her release operates as a removal from office.
(5) Where the Court has made:
(a) an order that the liquidator be released; or
(b) an order that the liquidator be released and that ASIC
deregister the company;
the liquidator must, within 14 days after the making of the order,
lodge an office copy of the order.
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External administration Chapter 5
Winding up in insolvency or by the Court Part 5.4B
General powers of Court Division 3
Section 482
Corporations Act 2001 385
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—General powers of Court
Subdivision A—General powers
482 Power to stay or terminate winding up
(1) At any time during the winding up of a company, the Court may,
on application, make an order staying the winding up either
indefinitely or for a limited time or terminating the winding up on a
day specified in the order.
(1A) An application may be made by:
(a) in any case—the liquidator, or a creditor or contributory, of
the company; or
(b) in the case of a company registered under section 21 of the
Life Insurance Act 1995—APRA; or
(c) in the case of a company subject to a deed of company
arrangement—the administrator of the deed.
(2) On such an application, the Court may, before making an order,
direct the liquidator to give a report with respect to a relevant fact
or matter.
(2A) If such an application is made in relation to a company subject to a
deed of company arrangement, then, in determining the
application, the Court must have regard to all of the following
matters:
(a) any report that has been given to the Court by:
(i) the administrator, or a former administrator, of the
company; or
(ii) the liquidator, or a former liquidator, of the company; or
(iii) ASIC;
and that contains an allegation that an officer of the company
has engaged in misconduct;
(b) any report that has been lodged with ASIC by:
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Chapter 5 External administration
Part 5.4B Winding up in insolvency or by the Court
Division 3 General powers of Court
Section 482
386 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) the administrator, or a former administrator, of the
company; or
(ii) the liquidator, or a former liquidator, of the company;
and that contains an allegation that an officer of the company
has engaged in misconduct;
(c) the decision of the company’s creditors to resolve that the
company execute a deed of company arrangement;
(d) any document that accompanied a notice of the meeting
under section 439A when the company was under
administration;
(da) any notice that has been given to the administrator of the
deed of company arrangement or the company’s creditors
under section 445HA (notification of contravention of deed
of company arrangement);
(e) whether the deed of company arrangement is likely to result
in the company becoming or remaining insolvent;
(f) any other relevant matters.
(3) Where the Court has made an order terminating the winding up, the
Court may give such directions as it thinks fit for the resumption of
the management and control of the company by its officers,
including directions for the convening of a general meeting of
members of the company to elect directors of the company to take
office upon the termination of the winding up.
(4) The costs of proceedings before the Court under this section and
the costs incurred in convening a meeting of members of the
company in accordance with an order of the Court under this
section, if the Court so directs, forms part of the costs, charges and
expenses of the winding up.
(5) Where an order is made under this section, the company must
lodge an office copy of the order within 14 days after the making
of the order.
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General powers of Court Division 3
Section 483
Corporations Act 2001 387
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
483 Delivery of property to liquidator
(1) The Court may require a person who is a contributory, trustee,
receiver, banker, agent, officer or employee of the company to pay,
deliver, convey, surrender or transfer to the liquidator or
provisional liquidator, as soon as practicable or within a specified
period, any money, property of the company or books in the
person’s hands to which the company is prima facie entitled.
(2) The Court may make an order directing any contributory for the
time being on the list of contributories to pay to the company in the
manner directed by the order any money due from the contributory
or from the estate of the person whom the contributory represents,
exclusive of any money payable by the contributory or the estate
by virtue of any call pursuant to this Act, and may:
(a) in the case of an unlimited company—allow to the
contributory by way of set-off any money due to the
contributory or to the estate that the contributory represents
from the company on any independent dealing or contract but
not any money due to the contributory as a member of the
company in respect of any dividend or profit; and
(b) in the case of a limited company—make to any director
whose liability is unlimited or to such a director’s estate the
like allowance;
and, in the case of any company whether limited or unlimited,
when all the creditors are paid in full, any money due on any
account whatever to a contributory from the company may be
allowed to him, her or it by way of set-off against any subsequent
call.
(3) The Court may, either before or after it has ascertained the
sufficiency of the property of the company:
(a) make calls on all or any of the contributories for the time
being on the list of contributories, to the extent of their
liability, for payment of any money that the Court considers
necessary to satisfy the debts and liabilities of the company
and the costs, charges and expenses of winding up and for the
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Part 5.4B Winding up in insolvency or by the Court
Division 3 General powers of Court
Section 484
388 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
adjustment of the rights of the contributories among
themselves; and
(b) make an order for payment of any calls made by the Court or
the company’s liquidator;
and, in making a call, may take into consideration the probability
that some of the contributories may partly or wholly fail to pay the
call.
(3A) Subsection (3) does not apply to a no liability company.
(4) The Court may order any contributory, purchaser or other person
from whom money is due to the company to pay the amount due
into a bank named in the order to the account of the liquidator
instead of to the liquidator, and any such order may be enforced in
the same manner as if it had directed payment to the liquidator.
(5) All money and securities paid or delivered into any bank under this
Division are subject in all respects to orders of the Court.
(6) An order made by the Court under this section is, subject to any
right of appeal, conclusive evidence that the money (if any)
thereby appearing to be due or ordered to be paid is due, and all
other pertinent matters stated in the order are taken to be truly
stated as against all persons and in all proceedings.
484 Appointment of special manager
(1) The liquidator may, if satisfied that the nature of the property or
business of the company, or the interests of the creditors or
contributories generally, requires or require the appointment of a
special manager of the property or business of the company other
than himself or herself, apply to the Court, and the Court may
appoint a special manager of the property or business to act during
such time as the Court directs with such powers, including any of
the powers of a receiver or manager, as are entrusted to him or her
by the Court.
(2) The special manager:
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Section 485
Corporations Act 2001 389
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) must give such security and account in such manner as the
Court directs; and
(b) must receive such remuneration as is fixed by the Court; and
(c) may at any time resign by notice in writing addressed to the
liquidator or may, on cause shown, be removed by the Court.
485 Claims of creditors and distribution of property
(1) The Court may fix a day on or before which creditors are to prove
their debts or claims or after which they will be excluded from the
benefit of any distribution made before those debts are proved.
(2) The Court must adjust the rights of the contributories among
themselves and distribute any surplus among the persons entitled to
it.
(3) The Court may, in the event of the property being insufficient to
satisfy the liabilities, make an order as to the payment out of the
property of the costs, charges and expenses incurred in the winding
up in such order of priority as the Court thinks just.
486 Inspection of books by creditors and contributories
The Court may make such order for inspection of the books of the
company by creditors and contributories as the Court thinks just,
and any books in the possession of the company may be inspected
by creditors or contributories accordingly, but not further or
otherwise.
486A Court may make order to prevent officer or related entity
from avoiding liability to company
(1) The Court may make one or more of the following:
(a) an order prohibiting, either absolutely or subject to
conditions, an officer, employee or related entity of a
company from taking or sending out of this jurisdiction, or
out of Australia, money or other property of the company or
of the officer, employee or related entity;
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Part 5.4B Winding up in insolvency or by the Court
Division 3 General powers of Court
Section 486A
390 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) an order appointing:
(i) a receiver or trustee, with specified powers, of property
of an officer or employee of a company, or of property
of a related entity of a company that is a natural person;
or
(ii) a receiver, or a receiver and manager, with specified
powers, of property of a related entity of a company that
is not a natural person;
(c) an order requiring an officer or employee of a company, or a
related entity of a company that is a natural person, to
surrender to the Court his or her passport and any other
specified documents;
(d) an order prohibiting an officer or employee of a company, or
a related entity of a company that is a natural person, from
leaving this jurisdiction, or Australia, without the Court’s
consent.
(2) The Court may only make an order under subsection (1) if:
(a) the company is being wound up in insolvency or by the
Court, or an application has been made for the company to be
so wound up; and
(b) the Court is satisfied that there is at least a prima facie case
that the officer, employee or related entity is or will become
liable:
(i) to pay money to the company, whether in respect of a
debt, by way of damages or compensation or otherwise;
or
(ii) to account for property of the company; and
(c) the Court is also satisfied that there is substantial evidence
that the officer, employee or related entity:
(i) has concealed or removed money or other property, has
tried to do so, or intends to do so; or
(ii) has tried to leave this jurisdiction or Australia, or
intends to do so;
in order to avoid that liability or its consequences; and
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General powers of Court Division 3
Section 486A
Corporations Act 2001 391
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) the Court thinks it necessary or desirable to make the order in
order to protect the company’s rights against the officer,
employee or related entity.
(2A) An order under subsection (1) may only be made on the application
of:
(a) a liquidator or provisional liquidator of the company; or
(b) ASIC.
(3) On hearing an application for an order under subsection (1), the
Court must have regard to any relevant application under
section 1323.
(4) Before considering an application for an order under
subsection (1), the Court may, if in the Court’s opinion it is
desirable to do so, grant an interim order of the kind applied for
that is expressed to have effect until the application is determined.
(5) The Court must not require an applicant for an order under
subsection (1) or any other person, as a condition of granting an
interim order under subsection (4), to give an undertaking as to
damages.
(6) On the application of a person who applied for, or is affected by,
an order under this section, the Court may make a further order
discharging or varying the first-mentioned order.
(7) An order under subsection (1) may be expressed to operate for a
specified period or until it is discharged by a further order.
(8) A person must not intentionally or recklessly contravene an order
under this section that is applicable to the person.
(9) This section has effect subject to the Bankruptcy Act 1966.
(10) Nothing in this section affects any other powers of the Court.
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Part 5.4B Winding up in insolvency or by the Court
Division 3 General powers of Court
Section 486B
392 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
486B Warrant to arrest person who is absconding, or who has dealt
with property or books, in order to avoid obligations in
connection with winding up
(1) The Court may issue a warrant for a person to be arrested and
brought before the Court if:
(a) a company is being wound up in insolvency or by the Court,
or an application has been made for a company to be so
wound up; and
(b) the Court is satisfied that the person:
(i) is about to leave this jurisdiction, or Australia, in order
to avoid:
(A) paying money payable to the company; or
(B) being examined about the company’s affairs; or
(C) complying with an order of the Court, or some
other obligation, under this Chapter in
connection with the winding up; or
(ii) has concealed or removed property of the company in
order to prevent or delay the taking of the property into
the liquidator’s custody or control; or
(iii) has destroyed, concealed or removed books of the
company or is about to do so.
Note: For procedures relating to such a warrant, see Subdivision B.
(2) A warrant under subsection (1) may also provide for property or
books of the company in the person’s possession to be seized and
delivered into the custody of a specified person.
(3) A warrant under subsection (1) may only be issued on the
application of:
(a) a liquidator or provisional liquidator of the company; or
(b) ASIC.
487 Power to arrest absconding contributory
The Court, at any time before or after making a winding up order,
on proof of probable cause for believing that a contributory is
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Section 488
Corporations Act 2001 393
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
about to leave this jurisdiction, or Australia, or otherwise to
abscond or to remove or conceal any of his or her property for the
purpose of evading payment of calls or of avoiding examination
respecting affairs of the company, may cause the contributory to be
arrested and held in custody and the books and movable personal
property of the contributory to be seized and safely kept until such
time as the Court orders.
488 Delegation to liquidator of certain powers of Court
(1) Provision may be made by rules or regulations for enabling or
requiring all or any of the powers and duties conferred and
imposed on the Court by this Part or Schedule 2 in respect of:
(a) the holding and conducting of meetings to ascertain the
wishes of creditors and contributories; and
(b) the paying, delivery, conveyance, surrender or transfer of
money, property or books to the liquidator; and
(c) the adjusting of the rights of contributories among
themselves and the distribution of any surplus among the
persons entitled to it; and
(d) the fixing of a time within which debts and claims must be
proved;
to be exercised or performed by the liquidator as an officer of the
Court and subject to the control of the Court.
(2) Despite anything in rules or regulations made for the purposes of
subsection (1), a liquidator may distribute a surplus only with the
Court’s special leave.
489 Powers of Court cumulative
Any powers conferred on the Court by this Act are in addition to,
and not in derogation of, any existing powers of instituting
proceedings against any contributory or debtor of the company or
the property of any contributory or debtor for the recovery of any
call or other sums.
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Part 5.4B Winding up in insolvency or by the Court
Division 3 General powers of Court
Section 489A
394 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Procedures relating to section 486B warrants
489A Arrest of person subject to warrant
If:
(a) the Court issues a section 486B warrant for a person to be
arrested and brought before the Court; and
(b) the person is not in prison;
the person named in the section 486B warrant may be arrested by:
(c) an officer of the police force of the State or Territory in
which the person is found; or
(d) the Sheriff of that State or Territory, or any of the Sheriff’s
officers; or
(e) a member or special member of the Australian Federal
Police.
489B Procedure after arrest
(1) As soon as practicable after being arrested, the person is to be
taken before the Court that issued the section 486B warrant.
(2) The Court must order:
(a) that the person be remanded on bail on condition that the
person appear at the Court at such time and place as the
Court specifies; or
(b) that the person be remanded in such custody or otherwise as
the Court specifies, pending the person’s appearance at the
Court at such time and place as the Court specifies; or
(c) that the person be released.
(3) An order under this section may be subject to other specified
conditions.
489C Procedure on remand on bail
(1) If the Court has made an order under section 489B remanding the
person (the warrant person) on bail, the Court must prepare, or
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General powers of Court Division 3
Section 489D
Corporations Act 2001 395
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
cause to be prepared, an instrument setting out the conditions to
which the grant of bail is subject.
(2) The instrument must be signed by:
(a) a judge of the Court, or the person who prepared the
instrument; and
(b) the warrant person.
(3) The warrant person must be given a copy of the instrument.
(4) The Court must revoke the order, and make an order remanding the
warrant person in custody, if that person:
(a) refuses to sign the instrument; or
(b) does not comply with a condition to which the grant of bail is
subject and that condition is a condition precedent to that
person’s release on bail.
489D Court’s power to make orders under other provisions
(1) To avoid doubt, the Court may make an order under section 486A,
598 or 1323, or section 45-1 or 90-15 of Schedule 2 in relation to a
person appearing before the Court under:
(a) a section 486B warrant; or
(b) section 489B.
(2) Subsection (1) does not limit section 486A, 598 or 1323, or
section 45-1 or 90-15 of Schedule 2.
489E Jurisdiction under this Subdivision
To avoid doubt, a matter arising under this Subdivision is a civil
matter for the purposes of Part 9.6A.
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Part 5.4C Winding up by ASIC
Section 489EA
396 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.4C—Winding up by ASIC
489EA ASIC may order the winding up of a company
(1) ASIC may order the winding up of a company if:
(a) the response to a return of particulars given to the company is
at least 6 months late; and
(b) the company has not lodged any other documents under this
Act in the last 18 months; and
(c) ASIC has reason to believe that the company is not carrying
on business; and
(d) ASIC has reason to believe that making the order is in the
public interest.
(2) ASIC may order the winding up of a company if the company’s
review fee in respect of a review date has not been paid in full at
least 12 months after the due date for payment.
(3) ASIC may order the winding up of a company if:
(a) ASIC has reinstated the registration of the company under
subsection 601AH(1) in the last 6 months; and
(b) ASIC has reason to believe that making the order is in the
public interest.
(4) ASIC may order the winding up of a company if:
(a) ASIC has reason to believe that the company is not carrying
on business; and
(b) at least 20 business days before making the order, ASIC
gives to:
(i) the company; and
(ii) each director of the company;
a notice:
(iii) stating ASIC’s intention to make the order; and
(iv) informing the company or the director, as the case may
be, that the company or the director may, within 10
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Section 489EB
Corporations Act 2001 397
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
business days after the receipt of the notice, give ASIC
a written objection to the making of the order; and
(c) neither the company, nor any of its directors, has given ASIC
such an objection within the time limit specified in the
notice.
(5) Paragraphs (4)(b) and (c) do not apply to a person if ASIC does not
have the necessary information about the person’s identity or
address.
(6) Before making an order under subsection (1), (2), (3) or (4), ASIC
must:
(a) give notice of its intention to make the order on ASIC
database; and
(b) both:
(i) publish notice of its intention to make the order; and
(ii) do so in the prescribed manner.
(7) ASIC must not order the winding up of a company under
subsection (1), (2), (3) or (4) if an application is before the Court
for the winding up of the company.
(8) Paragraph (b) of the definition of director in section 9 does not
apply to subsection (4) of this section.
(9) To avoid doubt, subsections (1), (2), (3) and (4):
(a) have effect independently of each other; and
(b) do not limit each other.
489EB Deemed resolution that company be wound up voluntarily
If ASIC orders under section 489EA that a company be wound up:
(a) the company is taken to have passed a special resolution
under section 491 that the company be wound up voluntarily;
and
(b) the company is taken to have passed the special resolution:
(i) at the time when ASIC made the order under
section 489EA; and
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Part 5.4C Winding up by ASIC
Section 489EC
398 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) without a declaration having been made and lodged
under section 494; and
(c) section 496 has effect as if:
(i) a declaration had been made under section 494; and
(ii) the reference in subsection 496(1) to the period stated in
the declaration were a reference to the 12-month period
beginning when ASIC made the order under
section 489EA; and
(d) section 497 is taken to have been complied with in relation to
the winding up.
489EC Appointment of liquidator
(1) If ASIC orders under section 489EA that a company be wound up,
ASIC may appoint a liquidator for the purpose of winding up the
affairs and distributing the property of the company.
Note: For the remuneration of liquidators appointed under this section, see
Subdivision D of Division 60 of Schedule 2.
(2) An appointment of a liquidator by ASIC must not be made without
the written consent of the liquidator.
(3) A vacancy in the office of a liquidator appointed by ASIC is to be
filled by the appointment of a liquidator by ASIC.
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Preliminary Division 1A
Section 489F
Corporations Act 2001 399
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.5—Voluntary winding up
Division 1A—Preliminary
489F Definitions
In this Part:
property of a company includes PPSA retention of title property, if
the security interest in the property is vested in the company
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
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Part 5.5 Voluntary winding up
Division 1 Resolution for winding up
Section 490
400 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 1—Resolution for winding up
490 When company cannot wind up voluntarily
(1) Except with the leave of the Court, a company cannot resolve that
it be wound up voluntarily if:
(a) an application for the company to be wound up in insolvency
has been filed; or
(b) the Court has ordered that the company be wound up in
insolvency, whether or not the order was made on such an
application; or
(c) the company is a trustee company (within the meaning of
Chapter 5D) that is in the course of administering or
managing one or more estates.
(2) A person with a proper interest (within the meaning of Chapter 5D)
in the estate referred to in paragraph (1)(c), or who has any claim
in respect of the estate, is entitled to be heard in a proceeding
before the Court for leave under subsection (1).
491 Circumstances in which company may be wound up voluntarily
(1) Subject to section 490, a company may be wound up voluntarily if
the company so resolves by special resolution.
(2) A company must:
(a) within 7 days after the passing of a resolution for voluntary
winding up, lodge with ASIC, in the prescribed form, a
notice setting out the text of the resolution; and
(b) within the period ascertained in accordance with the
regulations, cause a notice setting out the prescribed
information about the resolution to be published in the
prescribed manner.
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Voluntary winding up Part 5.5
Resolution for winding up Division 1
Section 493
Corporations Act 2001 401
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
493 Effect of voluntary winding up
The company must, from the passing of the resolution, cease to
carry on its business except so far as is in the opinion of the
liquidator required for the beneficial disposal or winding up of that
business, but the corporate state and corporate powers of the
company, notwithstanding anything to the contrary in its
constitution, continue until it is deregistered.
493A Effect of voluntary winding up on company’s members
Transfer of shares
(1) A transfer of shares in a company that is made after the passing of
the resolution is void except if:
(a) both:
(i) the liquidator gives written consent to the transfer; and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the liquidator gives written consent to the transfer;
(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (4) authorising
the transfer.
(2) The liquidator may only give consent under paragraph (1)(a) or (b)
if he or she is satisfied that the transfer is in the best interests of the
company’s creditors as a whole.
(3) If the liquidator refuses to give consent under paragraph (1)(a) or
(b) to a transfer of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
may apply to the Court for an order authorising the transfer.
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Part 5.5 Voluntary winding up
Division 1 Resolution for winding up
Section 493A
402 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If the Court is satisfied, on an application under subsection (3), that
the transfer is in the best interests of the company’s creditors as a
whole, the Court may, by order, authorise the transfer.
(5) If the liquidator gives consent under paragraph (1)(b) to a transfer
of shares in the company:
(a) the prospective transferor; or
(b) the prospective transferee; or
(c) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(6) If the Court is satisfied, on an application under subsection (5), that
any or all of the conditions covered by the application are not in
the best interests of the company’s creditors as a whole, the Court
may, by order, set aside any or all of the conditions.
(7) The liquidator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (3) or (5).
Alteration in the status of members
(8) An alteration in the status of members of a company that is made
after the passing of the resolution is void except if:
(a) both:
(i) the liquidator gives written consent to the alteration; and
(ii) that consent is unconditional; or
(b) all of the following subparagraphs apply:
(i) the liquidator gives written consent to the alteration;
(ii) that consent is subject to one or more specified
conditions;
(iii) those conditions have been satisfied; or
(c) the Court makes an order under subsection (12) authorising
the alteration.
(9) The liquidator may only give consent under paragraph (8)(a) or (b)
if he or she is satisfied that the alteration is in the best interests of
the company’s creditors as a whole.
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Voluntary winding up Part 5.5
Resolution for winding up Division 1
Section 494
Corporations Act 2001 403
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(10) The liquidator must refuse to give consent under paragraph (8)(a)
or (b) if the alteration would contravene Part 2F.2.
(11) If the liquidator refuses to give consent under paragraph (8)(a) or
(b) to an alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order authorising the alteration.
(12) If the Court is satisfied, on an application under subsection (11),
that:
(a) the alteration is in the best interests of the company’s
creditors as a whole; and
(b) the alteration does not contravene Part 2F.2;
the Court may, by order, authorise the alteration.
(13) If the liquidator gives consent under paragraph (8)(b) to an
alteration in the status of members of a company:
(a) a member of the company; or
(b) a creditor of the company;
may apply to the Court for an order setting aside any or all of the
conditions to which the consent is subject.
(14) If the Court is satisfied, on an application under subsection (13),
that any or all of the conditions covered by the application are not
in the best interests of the company’s creditors as a whole, the
Court may, by order, set aside any or all of the conditions.
(15) The liquidator is entitled to be heard in a proceeding before the
Court in relation to an application under subsection (11) or (13).
494 Declaration of solvency
(1) Where it is proposed to wind up a company voluntarily, a majority
of the directors may, before the date on which the notices of the
meeting at which the resolution for the winding up of the company
is to be proposed are sent out, make a written declaration to the
effect that they have made an inquiry into the affairs of the
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Part 5.5 Voluntary winding up
Division 1 Resolution for winding up
Section 494
404 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
company and that, at a meeting of directors, they have formed the
opinion that the company will be able to pay its debts in full within
a period not exceeding 12 months after the commencement of the
winding up.
(2) There must be attached to the declaration a statement of affairs of
the company showing, in the prescribed form:
(a) the property of the company, and the total amount expected
to be realised from that property; and
(b) the liabilities of the company; and
(c) the estimated expenses of winding up;
made up to the latest practicable date before the making of the
declaration.
(3) A declaration so made has no effect for the purposes of this Act
unless:
(a) the declaration is made at the meeting of directors referred to
in subsection (1); and
(b) the declaration is lodged before the date on which the notices
of the meeting at which the resolution for the winding up of
the company is to be proposed are sent out or such later date
as ASIC, whether before, on or after the first-mentioned date,
allows; and
(c) the resolution for voluntary winding up is passed within the
period of 5 weeks after the making of the declaration or
within such further period after the making of that
declaration as ASIC, whether before or after the end of that
period of 5 weeks, allows.
(4) A director who makes a declaration under this section (including a
declaration that has no effect for the purposes of this Act by reason
of subsection (3)) without having reasonable grounds for his or her
opinion that the company will be able to pay its debts in full within
the period stated in the declaration is guilty of an offence.
(5) If the company is wound up pursuant to a resolution for voluntary
winding up passed within the period of 5 weeks after the making of
the declaration or, if pursuant to paragraph (3)(c) ASIC has
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Section 494
Corporations Act 2001 405
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allowed a further period after the end of that period of 5 weeks,
within that further period, but its debts are not paid or provided for
in full within the period stated in the declaration, it is to be
presumed, unless the contrary is shown, that a director who made
the declaration did not have reasonable grounds for his or her
opinion.
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Chapter 5 External administration
Part 5.5 Voluntary winding up
Division 2 Members’ voluntary winding up
Section 495
406 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Members’ voluntary winding up
495 Appointment of liquidator etc.
(1) The company in general meeting must appoint a liquidator or
liquidators for the purpose of winding up the affairs and
distributing the property of the company.
Note: For rules about the liquidator’s remuneration, see Division 60 of
Part 3 of Schedule 2. For rules about convening meetings, see
Division 75 of Part 3 of Schedule 2.
(2) If a vacancy occurs in the office of a liquidator (whether by death,
resignation or otherwise), the company in general meeting may fill
the vacancy by the appointment of a liquidator.
(3) A general meeting may be convened for the purposes of
subsection (2) by any contributory or, if there were 2 or more
liquidators, by the continuing liquidators.
(4) The meeting must be held in the manner provided by this Act or by
the company’s constitution or in such manner as is, on application
by any contributory or by the continuing liquidators, determined by
the Court.
496 Duty of liquidator where company turns out to be insolvent
(1) Where a declaration has been made under section 494 and the
liquidator is at any time of the opinion that the company will not be
able to pay or provide for the payment of its debts in full within the
period stated in the declaration, he or she must do one of the
following as soon as practicable:
(a) apply under section 459P for the company to be wound up in
insolvency;
(b) appoint an administrator of the company under section 436B;
(c) convene a meeting of the company’s creditors;
and if he or she convenes such a meeting, the following
subsections apply.
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Section 496
Corporations Act 2001 407
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(4) The liquidator must lay before the meeting a statement of the assets
and liabilities of the company and the notice convening the
meeting must draw the attention of the creditors to the right
conferred upon them by subsection (5).
(5) The creditors may, at the meeting convened under subsection (1),
appoint some other person to be liquidator for the purpose of
winding up the affairs and distributing the property of the company
instead of the liquidator appointed by the company.
(6) If the creditors appoint some other person under subsection (5), the
winding up must thereafter proceed as if the winding up were a
creditors’ voluntary winding up.
(7) The liquidator or, if another person is appointed by the creditors to
be liquidator, the person so appointed must, within 7 days after a
meeting has been held pursuant to subsection (1), lodge a notice in
the prescribed form.
(8) After the meeting the winding up must proceed as if it were a
creditors’ voluntary winding up.
(9) An offence based on subsection (4), (5), (6), (7) or (8) is an offence
of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 5.5 Voluntary winding up
Division 3 Creditors’ voluntary winding up
Section 497
408 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Creditors’ voluntary winding up
497 Information about the company’s affairs
(1) The liquidator of the company must, within 10 business days after
the day of the meeting of the company at which the resolution for
voluntary winding up is passed:
(a) send to each creditor:
(i) a summary of the affairs of the company in the
prescribed form; and
(ii) a list setting out the names of all creditors, the addresses
of those creditors and the estimated amounts of their
claims, as shown in the records of the company; and
(b) lodge a copy of the documents sent in accordance with
paragraph (a).
Note: For electronic notification under paragraph (a), see section 600G.
(2) The list referred to in subparagraph (1)(a)(ii) must identify any
creditors that are related entities of the company.
(3) Unless the Court orders otherwise, nothing in subsection (1)
requires the liquidator to send the list referred to in
subparagraph (1)(a)(ii) to a creditor whose debt does not exceed
$1,000.
(4) Within 5 business days after the day of the meeting of the company
at which the resolution for voluntary winding up is passed or such
longer period as the liquidator allows, the directors of the company
must give the liquidator a report, in the prescribed form, about the
company’s business, property, affairs and financial circumstances.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) The liquidator must, within 10 business days after receiving a
report under subsection (4), lodge a copy of the report.
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Section 499
Corporations Act 2001 409
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(7) A person must not contravene subsection (6).
(8) An offence based on subsection (7) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(9) Subsection (7) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in this
subsection, see subsection 13.3(3) of the Criminal Code.
499 Liquidators
(1) The company in general meeting must appoint a liquidator for the
purpose of winding up the affairs and distributing the property of
the company.
(2) However, subsection (1) does not apply to the company if:
(a) section 446A or 446AA applies in relation to the company;
or
(b) regulations made for the purposes of section 446B have the
effect that the company is taken to have passed a special
resolution under section 491 that the company be wound up
voluntarily.
(2A) If section 446A applies in relation to the company because of
paragraph 446A(1)(a):
(a) the company’s creditors may, at the meeting at which the
resolution referred to in that paragraph is passed, appoint a
person to be liquidator for the purpose of winding up the
affairs and distributing the property of the company; and
(b) if an appointment is not made under paragraph (a) of this
subsection before the end of the meeting at which the
resolution referred to in paragraph 446A(1)(a) is passed:
(i) the company’s creditors are taken to have appointed the
administrator of the company to be liquidator for the
purpose of winding up the affairs and distributing the
property of the company; and
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Division 3 Creditors’ voluntary winding up
Section 499
410 Corporations Act 2001
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(ii) the appointment under subparagraph (i) of this
paragraph takes effect at the end of that meeting.
(2B) If section 446A applies in relation to the company because of
paragraph 446A(1)(b):
(a) the company’s creditors are taken to have appointed the
administrator of the company to be liquidator for the purpose
of winding up the affairs and distributing the property of the
company; and
(b) the appointment takes effect at the time referred to in that
paragraph.
(2C) If section 446A applies in relation to the company because of
paragraph 446A(1)(c):
(a) the company’s creditors may, at the meeting at which the
resolution referred to in subparagraph 446A(1)(c)(ii) is
passed, appoint a person to be liquidator for the purpose of
winding up the affairs and distributing the property of the
company; and
(b) if an appointment is not made under paragraph (a) of this
subsection before the end of the meeting at which the
resolution referred to in subparagraph 446A(1)(c)(ii) is
passed:
(i) the company’s creditors are taken to have appointed the
administrator of the deed to be liquidator for the
purpose of winding up the affairs and distributing the
property of the company; and
(ii) the appointment under subparagraph (i) of this
paragraph takes effect at the end of that meeting.
(2D) If section 446AA applies in relation to the company because of
paragraph 446AA(1)(a):
(a) the Court may, immediately after it makes the order referred
to in that paragraph, appoint a person to be the liquidator for
the purpose of winding up the affairs and distributing the
property of the company; and
(b) if no appointment is made under paragraph (a) of this
subsection:
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Corporations Act 2001 411
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(i) the company is taken to have appointed the
administrator of the deed of company arrangement
referred to in section 446AA to be the liquidator for the
purpose of winding up the affairs and distributing the
property of the company; and
(ii) the appointment takes effect at the time referred to in
paragraph 446AA(1)(a).
(2E) If section 446AA applies in relation to the company because of
paragraph 446AA(1)(b):
(a) the company is taken to have appointed the administrator of
the deed of company arrangement referred to in
section 446AA to be the liquidator for the purpose of
winding up the affairs and distributing the property of the
company; and
(b) the appointment takes effect at the time referred to in
subparagraph 446AA(1)(b)(ii).
(2F) If regulations made for the purposes of section 446B have the
effect that a company under administration is taken to have passed
a special resolution under section 491 that the company be wound
up voluntarily:
(a) the company is taken to have appointed the administrator of
the company to be the liquidator for the purpose of winding
up the affairs and distributing the property of the company;
and
(b) the appointment takes effect when the resolution is taken to
have been passed.
(2G) If regulations made for the purposes of section 446B have the
effect that a company subject to a deed of company arrangement is
taken to have passed a special resolution under section 491 that the
company be wound up voluntarily:
(a) the company is taken to have appointed the administrator of
the deed to be the liquidator for the purpose of winding up
the affairs and distributing the property of the company; and
(b) the appointment takes effect when the resolution is taken to
have been passed.
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Part 5.5 Voluntary winding up
Division 3 Creditors’ voluntary winding up
Section 500
412 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) If a liquidator, other than a liquidator appointed by, or by the
direction of, the Court resigns:
(a) the Court; or
(b) ASIC; or
(c) the creditors;
may fill the vacancy by the appointment of a liquidator.
Note: If the registration of a liquidator is suspended or cancelled, ASIC must
fill the vacancy: see section 40-111 of Schedule 2.
(4) If ASIC fills a vacancy in the office of a liquidator under
subsection (3), ASIC must:
(a) publish notice of the filling of the vacancy; and
(b) publish the notice in the prescribed manner.
(5) If ASIC or the Court fills a vacancy in the office of a liquidator
under subsection (3), the liquidator is taken, for the purposes of
this Act, to be appointed by the creditors.
500 Execution and civil proceedings
(1) Any attachment, sequestration, distress or execution put in force
against the property of the company after the passing of the
resolution for voluntary winding up is void.
(2) After the passing of the resolution for voluntary winding up, no
action or other civil proceeding is to be proceeded with or
commenced against the company except by leave of the Court and
subject to such terms as the Court imposes.
(3) The Court may require any contributory, trustee, receiver, banker,
agent, officer or employee of the company to pay, deliver, convey,
surrender or transfer forthwith or within such time as the Court
directs to the liquidator any money, property of the company or
books in his, her or its hands to which the company is prima facie
entitled.
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Voluntary winding up generally Division 4
Section 501
Corporations Act 2001 413
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Division 4—Voluntary winding up generally
501 Distribution of property of company
Subject to the provisions of this Act as to preferential payments,
the property of a company must, on its winding up, be applied in
satisfaction of its liabilities equally and, subject to that application,
must, unless the company’s constitution otherwise provides, be
distributed among the members according to their rights and
interests in the company.
506 Powers and duties of liquidator
(1) The liquidator may:
(b) exercise any of the powers that this Act confers on a
liquidator in a winding up in insolvency or by the Court; or
(c) exercise the power under section 478 of a liquidator
appointed by the Court to settle a list of contributors; or
(d) exercise the Court’s powers under subsection 483(3) (except
paragraph 483(3)(b)) in relation to calls on contributories; or
(e) exercise the power of the Court of fixing a time within which
debts and claims must be proved.
(1A) Subsections 477(2A) and (2B) apply in relation to the liquidator as
if:
(a) he or she were a liquidator in a winding up in insolvency or
by the Court; and
(b) in the case of a members’ voluntary winding up—a reference
in those subsections to an approval were a reference to the
approval of a special resolution of the company.
(1B) The company must lodge a copy of a special resolution referred to
in paragraph (1A)(b) with ASIC within 14 days after the resolution
is passed.
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Part 5.5 Voluntary winding up
Division 4 Voluntary winding up generally
Section 506A
414 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A list of contributories settled in accordance with paragraph (1)(c)
is prima facie evidence of the liability of the persons named in the
list to be contributories.
(3) The liquidator must pay the debts of the company and adjust the
rights of the contributories among themselves.
506A Declarations by liquidator—relevant relationships and
indemnities
Scope
(1) This section applies to a liquidator appointed in relation to a
creditors’ voluntary winding up.
Declaration and notification of relevant relationships and
indemnities
(2) Within 10 business days after the day of the meeting of the
company at which the resolution for voluntary winding up is
passed, the liquidator must:
(a) make:
(i) a declaration of relevant relationships; and
(ii) a declaration of indemnities; and
(b) give a copy of each declaration to as many of the company’s
creditors as reasonably practicable.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) As soon as practicable after making a declaration under
subsection (2), the administrator must lodge a copy of the
declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Replacement declarations
(4) If:
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(a) at a particular time, the liquidator makes:
(i) a declaration of relevant relationships; or
(ii) a declaration of indemnities;
under subsection (2) of this section; and
(b) at a later time:
(i) the declaration has become out-of-date; or
(ii) the liquidator becomes aware of an error in the
declaration;
the liquidator must, as soon as practicable, make:
(c) if subparagraph (a)(i) applies—a replacement declaration of
relevant relationships; or
(d) if subparagraph (a)(ii) applies—a replacement declaration of
indemnities.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) The liquidator must table a copy of a replacement declaration
under subsection (4):
(a) if:
(i) there is a committee of inspection; and
(ii) the next meeting of the committee of inspection occurs
before the next meeting of the company’s creditors;
at the next meeting of the committee of inspection; or
(b) in any other case—at the next meeting of the company’s
creditors.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) As soon as practicable after making a replacement declaration
under subsection (4), the administrator must lodge a copy of the
replacement declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Part 5.5 Voluntary winding up
Division 4 Voluntary winding up generally
Section 507
416 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(7) In a prosecution for an offence constituted by a failure to include a
matter in a declaration under this section, it is a defence if the
defendant proves that:
(a) the defendant made reasonable enquiries; and
(b) after making these enquiries, the defendant had no reasonable
grounds for believing that the matter should have been
included in the declaration.
507 Power of liquidator to accept shares etc. as consideration for
sale of property of company
(1) This section applies where it is proposed to transfer or sell to a
body corporate the whole or a part of the business or property of a
company.
(2) The liquidator of the company may, with the sanction of a special
resolution of the company conferring on the liquidator either a
general authority or an authority in respect of a particular
arrangement, enter into an arrangement under which, in
compensation or part compensation for the transfer or sale:
(a) the liquidator is to receive shares, debentures, policies or
other like interests in the body corporate for distribution
among the members of the company; or
(b) the members of the company may, instead of, or as well as,
receiving cash, shares, debentures, policies or other like
interests in the body corporate, participate in the profits of, or
receive any other benefit from, the body corporate.
(3) A transfer, sale or arrangement under this section is binding on the
members of the company.
(4) If a member of the company who did not vote in favour of a special
resolution expresses dissent from the resolution in writing
addressed to the liquidator and left at the office of the liquidator
within 7 days after the passing of the resolution, the member may
require the liquidator either to abstain from carrying the resolution
into effect or to purchase the member’s interest at a price to be
determined by agreement or by arbitration under this section.
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Section 507
Corporations Act 2001 417
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(5) If the liquidator elects to purchase the member’s interest, the
purchase money must be paid before the company is deregistered
and be raised by the liquidator in such manner as is determined by
special resolution.
(6) A special resolution is not invalid for the purposes of this section
because it is passed before, or concurrently with, a resolution for
voluntary winding up or for appointing liquidators but, if an order
for winding up the company by the Court is made within 1 year
after the passing of the resolution, the resolution is not valid unless
sanctioned by the Court.
(7) For the purposes of an arbitration under this section, the agreed
arbitration law applies as if there were a submission for reference
to 2 arbitrators, one to be appointed by each party.
(7A) Parties to the arbitration may agree on the State or Territory in this
jurisdiction whose law is to govern the arbitration. The agreed
arbitration law is the law of that State or Territory relating to
commercial arbitration.
(8) The appointment of an arbitrator may be made in writing signed
by:
(a) if there is only one liquidator—the liquidator; or
(b) if there is more than one liquidator—any 2 or more of the
liquidators.
(9) The Court may give any directions necessary for the initiation and
conduct of the arbitration and any such direction is binding on the
parties.
(10) In the case of a creditors’ voluntary winding up, the powers of the
liquidator under this section must not be exercised except with the
approval of the Court or the committee of inspection.
(11) The company must lodge a copy of a special resolution referred to
in subsection (2) or (5) with ASIC within 14 days after the
resolution is passed.
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Part 5.5 Voluntary winding up
Division 4 Voluntary winding up generally
Section 509
418 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
509 Deregistration
ASIC must deregister at the end of 3 month period
(1) If an end of administration return for a company is lodged with
ASIC on the basis that the affairs of the company are fully wound
up, ASIC must deregister the company at the end of the period of 3
months beginning on the day after the return is lodged (the
deregistration period).
ASIC must deregister on a day specified by the Court
(2) On application by the liquidator or any other interested party, the
Court may make an order that ASIC deregister the company on a
specified day. The Court must make the order before the end of the
deregistration period.
(3) The person on whose application an order under subsection (2) is
made must, within 10 business days after the making of the order,
lodge a copy of the order.
510 Arrangement: when binding on creditors
(1) An arrangement entered into between a company about to be, or in
the course of being, wound up and its creditors is, subject to
subsection (4):
(a) binding on the company if sanctioned by a special resolution;
and
(b) binding on the creditors if sanctioned by a resolution of the
creditors.
(1A) The company must lodge a copy of a special resolution referred to
in paragraph (1)(a) with ASIC within 14 days after the resolution is
passed.
(2) A creditor must be accounted a creditor for value for such sum as
upon an account fairly stated, after allowing the value of any
security interests held by the creditor and the amount of any debt or
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Corporations Act 2001 419
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set-off owing by the creditor to the company, appears to be the
balance due to the creditor.
(3) A dispute about the value of any such security interest or the
amount of any such debt or set-off may be settled by the Court on
the application of the company, the liquidator or the creditor.
(4) A creditor or contributory may, within 3 weeks after the
completion of the arrangement, appeal to the Court in respect of
the arrangement, and the Court may confirm, set aside or modify
the arrangement and make such further order as it thinks just.
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Chapter 5 External administration
Part 5.6 Winding up generally
Division 1 Preliminary
Section 513
420 Corporations Act 2001
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Part 5.6—Winding up generally
Division 1—Preliminary
513 Application of Part
Except so far as the contrary intention appears, the provisions of
this Act about winding up apply in relation to the winding up of a
company whether in insolvency, by the Court or voluntarily.
513AA Definitions
In this Part:
property of a company includes PPSA retention of title property, if
the security interest in the property is vested in the company
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
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When winding up taken to begin Division 1A
Section 513A
Corporations Act 2001 421
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Division 1A—When winding up taken to begin
513A Winding up ordered by the Court
If the Court orders under section 233, 459A, 459B or 461 that a
company be wound up, the winding up is taken to have begun or
commenced:
(a) if, when the order was made, a winding up of the company
was already in progress—when the last-mentioned winding
up is taken because of this Division to have begun or
commenced; or
(b) if, immediately before the order was made, the company was
under administration—on the section 513C day in relation to
the administration; or
(c) if:
(i) when the order was made, a provisional liquidator of the
company was acting; and
(ii) immediately before the provisional liquidator was
appointed, the company was under administration;
on the section 513C day in relation to the administration; or
(d) if, immediately before the order was made, a deed of
company arrangement had been executed by the company
and had not yet terminated—on the section 513C day in
relation to the administration that ended when the deed was
executed; or
(e) otherwise—on the day when the order was made.
513B Voluntary winding up
Where a company resolves by special resolution that it be wound
up voluntarily, the winding up is taken to have begun or
commenced:
(a) if, when the resolution was passed, a winding up of the
company was already in progress—when the last-mentioned
winding up is taken because of this Division to have begun or
commenced; or
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Part 5.6 Winding up generally
Division 1A When winding up taken to begin
Section 513C
422 Corporations Act 2001
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(b) if, immediately before the resolution was passed, the
company was under administration—on the section 513C day
in relation to the administration; or
(c) if, immediately before the resolution was passed, a deed of
company arrangement had been executed by the company but
had not yet terminated—on the section 513C day in relation
to the administration that ended when the deed was executed;
or
(d) if the resolution is taken to have been passed because the
company’s creditors:
(i) passed a resolution terminating a deed of company
arrangement executed by the company; and
(ii) also resolved under section 445E that the company be
wound up;
on the section 513C day in relation to the administration that
ended when the deed was executed; or
(da) if the resolution is taken to have been passed under
section 446AA because of:
(i) the making of an order under section 445D by the Court
terminating a deed of company arrangement executed
by the company; or
(ii) the existence of circumstances that are specified in a
deed of company arrangement executed by the company
to be circumstances in which the deed is to terminate
and the company is to be wound up;
on the section 513C day in relation to the administration that
ended when the deed was executed; or
(e) otherwise—on the day on which the resolution was passed.
513C Section 513C day in relation to an administration under
Part 5.3A
The section 513C day in relation to the administration of a
company is:
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(a) if, when the administration began, a winding up of the
company was in progress—the day on which the winding up
is taken because of this Division to have begun; or
(b) otherwise—the day on which the administration began.
513D Validity of proceedings in earlier winding up
Where, at the time when:
(a) the Court orders under section 233, 459A, 459B or 461 that a
company be wound up; or
(b) a company resolves by special resolution that it be wound up
voluntarily;
a winding up of the company is already in progress, all proceedings
in the last-mentioned winding up are taken to have been valid,
except so far as the Court otherwise orders because fraud or
mistake has been proved.
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Division 2 Contributories
Section 514
424 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Contributories
514 Where Division applies
(1) This Division applies where a company is wound up.
(2) This Division does not apply to the winding up of a no liability
company.
515 General liability of contributory
Subject to this Division, a present or past member is liable to
contribute to the company’s property to an amount sufficient:
(a) to pay the company’s debts and liabilities and the costs,
charges and expenses of the winding up; and
(b) to adjust the rights of the contributories among themselves.
516 Company limited by shares
Subject to sections 518 and 519, if the company is a company
limited by shares, a member need not contribute more than the
amount (if any) unpaid on the shares in respect of which the
member is liable as a present or past member.
517 Company limited by guarantee
Subject to sections 518 and 519, if the company is a company
limited by guarantee, a member need not contribute more than the
amount the member has undertaken to contribute to the company’s
property if the company is wound up.
518 Company limited both by shares and by guarantee
Subject to section 519, if the company is a company limited both
by shares and by guarantee, neither of sections 516 and 517 applies
but the member need not contribute more than the aggregate of the
following:
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(a) the amount (if any) unpaid on shares in respect of which the
member is liable as a present or past member;
(b) the amount that the member has undertaken to contribute to
the company’s property if the company is wound up.
519 Exceptions for former unlimited company
Despite sections 516, 517 and 518, if the company is a limited
company and became a limited company by virtue of a change of
status, the amount that a member at the time of the change of
status, or a person who at that time was a past member, is liable to
contribute in respect of the company’s debts and liabilities
contracted before that time is unlimited.
520 Past member: later debts
A past member need not contribute in respect of a debt or liability
of the company contracted after the past member ceased to be a
member.
521 Person ceasing to be a member a year or more before winding
up
Subject to section 523, a past member need not contribute if he, she
or it was a member at no time during the year ending on the day of
the commencement of the winding up.
522 Present members to contribute first
Subject to paragraph 523(b), a past member need not contribute
unless it appears to the Court that the existing members are unable
to satisfy the contributions they are liable to make under this Act.
523 Past member of former unlimited company
If an unlimited company changes to a limited company under
section 164, a past member who was a member at the time of the
change is liable:
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Division 2 Contributories
Section 524
426 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) despite section 521; and
(b) if no person who was a member at that time is a member at
the commencement of the winding up—despite section 522;
to contribute in respect of the company’s debts and liabilities
contracted before that time.
524 Past member of former limited company
If a limited company changes to an unlimited company under
section 164, a person who, at the time when the company applied
for the change, was a past member and did not again become a
member after that time need not contribute more than they would
have been liable to contribute if the company had not changed
type.
526 Liability on certain contracts
Nothing in this Act invalidates a provision, in a policy of insurance
or other contract, whereby the liability of individual members on
the policy or contract is restricted or whereby the funds of the
company are alone made liable in respect of the policy or contract.
527 Nature of contributory’s liability
A contributory’s liability is of the nature of a specialty debt
according to the law of the Capital Territory accruing due from the
contributory when the contributory’s liability commenced but
payable at the times when calls are made for enforcing the liability.
528 Death of contributory
If a contributory dies, whether before or after being placed on the
list of contributories:
(a) his or her personal representatives are liable in due course of
administration to contribute to the company’s property in
discharge of his or her liability to contribute and are
contributories accordingly; and
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Section 529
Corporations Act 2001 427
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(b) if his or her personal representatives default in paying any
money that they are ordered to pay—proceedings may be
taken for administering his or her estate and for compelling
payment, out of the assets of that estate, of the money due.
529 Bankruptcy of contributory
If a contributory becomes an insolvent under administration, or
assigns his or her estate for the benefit of his or her creditors,
whether before or after being placed on the list of contributories:
(a) his or her trustee is to represent him or her for the purposes
of the winding up and is to be a contributory accordingly;
and
(b) calls already made, and the estimated value of his or her
liability to future calls, may be proved against his or her
estate.
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Division 3 Liquidators
Section 530
428 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Liquidators
530 Appointment of 2 or more liquidators of a company
If 2 or more persons have been appointed as liquidators of a
company:
(a) a function or power of a liquidator of the company may be
performed or exercised by any one of them, or by any 2 or
more of them together, except so far as the order or
resolution appointing them otherwise provides; and
(b) a reference in this Act to a liquidator, or to the liquidator, of a
company is, in the case of the first-mentioned company, a
reference to whichever one or more of those liquidators the
case requires.
530AA Appointment of 2 or more provisional liquidators of a
company
If 2 or more persons have been appointed as provisional liquidators
of a company:
(a) a function or power of a provisional liquidator of the
company may be performed or exercised by any one of them,
or by any 2 or more of them together, except so far as the
order appointing them otherwise provides; and
(b) a reference in this Act to a provisional liquidator, or to the
provisional liquidator, of a company is, in the case of the
first-mentioned company, a reference to whichever one or
more of those provisional liquidators the case requires.
530A Officers to help liquidator
(1) As soon as practicable after the Court orders that a company be
wound up or appoints a provisional liquidator of a company, or a
company resolves that it be wound up, each officer of the company
must:
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(a) deliver to the liquidator appointed for the purposes of the
winding up, or to the provisional liquidator, as the case may
be, all books in the officer’s possession that relate to the
company, other than books possession of which the officer is
entitled, as against the company and the liquidator or
provisional liquidator, to retain; and
(b) if the officer knows where other books relating to the
company are—tell the liquidator or provisional liquidator
where those books are.
(2) Where a company is being wound up, or a provisional liquidator of
a company is acting, an officer of the company must:
(a) attend on the liquidator or provisional liquidator at such
times; and
(b) give the liquidator or provisional liquidator such information
about the company’s business, property, affairs and financial
circumstances; and
(c) attend such meetings of the company’s creditors or members;
as the liquidator or provisional liquidator reasonably requires.
(3) An officer of a company that is being wound up must do whatever
the liquidator reasonably requires the officer to do to help in the
winding up.
(4) An officer of a company must do whatever a provisional liquidator
of the company reasonably requires the officer to do to help in the
performance or exercise of any of the provisional liquidator’s
functions and powers.
(5) The liquidator or provisional liquidator of a company may require
an officer of the company:
(a) to tell the liquidator the officer’s residential address and work
or business address; or
(b) to keep the liquidator informed of any change in either of
those addresses that happens during the winding up.
(6) A person must not fail to comply with subsection (1), (2), (3) or
(4), or with a requirement under subsection (5).
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Division 3 Liquidators
Section 530B
430 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6A) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6B) Subsection (6) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6B), see subsection 13.3(3) of the Criminal Code.
(7) For the purposes of this section, officer includes a former officer.
(9) Nothing in this section limits the generality of anything else in it.
530B Liquidator’s rights to company’s books
(1) A person is not entitled, as against the liquidator of a company:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
(2) Paragraph (1)(a) does not apply in relation to books of which a
secured creditor of the company is entitled to possession otherwise
than because of a lien, but the liquidator is entitled to inspect, and
make copies of, such books at any reasonable time.
(3) A person must not engage in conduct that results in the hindering
or obstruction of a liquidator of a company in obtaining possession
of books of the company.
(3A) Subsection (3) does not apply if the person is entitled, as against
the company and the liquidator, to retain possession of the books.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3A), see subsection 13.3(3) of the Criminal Code.
(4) The liquidator of a company may give to a person a written notice
requiring the person to deliver to the liquidator, as specified in the
notice, books so specified that are in the person’s possession.
(5) A notice under subsection (4) must specify a period of at least 3
days as the period within which the notice must be complied with.
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Section 530C
Corporations Act 2001 431
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(6) A person must comply with a notice under subsection (4).
(6A) Subsection (6) does not apply to the extent that the person is
entitled, as against the company and the liquidator, to retain
possession of the books.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6A), see subsection 13.3(3) of the Criminal Code.
(6B) An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(7) In this section:
liquidator includes a provisional liquidator.
530C Warrant to search for, and seize, company’s property or
books
(1) The Court may issue a warrant under subsection (2) if:
(a) a company is being wound up or a provisional liquidator of a
company is acting; and
(b) on application by the liquidator or provisional liquidator, as
the case may be, or by ASIC, the Court is satisfied that a
person:
(i) has concealed or removed property of the company with
the result that the taking of the property into the custody
or control of the liquidator or provisional liquidator will
be prevented or delayed; or
(ii) has concealed, destroyed or removed books of the
company or is about to do so.
(2) The warrant may authorise a specified person, with such help as is
reasonably necessary:
(a) to search for and seize property or books of the company in
the possession of the person referred to in subsection (1); and
(b) to deliver, as specified in the warrant, property or books
seized under it.
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Section 532
432 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) In order to seize property or books under the warrant, the specified
person may break open a building, room or receptacle where the
property is or the books are, or where the person reasonably
believes the property or books to be.
(4) A person who has custody of property or a book because of the
execution of the warrant must retain it until the Court makes an
order for its disposal.
532 Disqualification of liquidator
(1A) In this section:
liquidator includes a provisional liquidator.
(1) Subject to this section, a person must not consent to be appointed,
and must not act, as liquidator of a company unless he or she is a
registered liquidator.
(2) Subject to this section, a person must not, except with the leave of
the Court, seek to be appointed, or act, as liquidator of a company:
(a) if the person, or a body corporate in which the person has a
substantial holding, is indebted in an amount exceeding
$5,000 to the company or a body corporate related to the
company; or
(b) if the person is, otherwise than in his or her capacity as
liquidator, a creditor of the company or of a related body
corporate in an amount exceeding $5,000; or
(c) if:
(i) the person is an officer or employee of the company
(otherwise than by reason of being a liquidator of the
company or of a related body corporate); or
(ii) the person is an officer or employee of any body
corporate that is a secured party in relation to property
of the company; or
(iii) the person is an auditor of the company; or
(iv) the person is a partner or employee of an auditor of the
company; or
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(v) the person is a partner, employer or employee of an
officer of the company; or
(vi) the person is a partner or employee of an employee of
an officer of the company.
(3) For the purposes of paragraph (2)(a), disregard a debt owed by a
natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under section 21 of the Life
Insurance Act 1995; and
(b) the debt arose because of a loan that the body corporate or
entity made to the person in the ordinary course of its
ordinary business; and
(c) the person used the amount of the loan to pay the whole or
part of the purchase price of premises that the person uses as
their principal place of residence.
(4) Subsection (1) and paragraph (2)(c) do not apply to a members’
voluntary winding up of a proprietary company.
(5) Paragraph (2)(c) does not apply to a creditors’ voluntary winding
up if, by a resolution of the creditors passed at a meeting of the
creditors of which 7 days notice has been given to every creditor
stating the purpose of the meeting, it is determined that that
paragraph does not so apply.
(6) For the purposes of subsection (2), a person is taken to be an
officer, employee or auditor of a company if:
(a) the person is an officer, employee or auditor of a related body
corporate; or
(b) except where ASIC, if it thinks fit in the circumstances of the
case, directs that this paragraph does not apply in relation to
the person—the person has, at any time within the
immediately preceding period of 2 years, been an officer,
employee, auditor or promoter of the company or of a related
body corporate.
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Division 3 Liquidators
Section 533
434 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) A person must not consent to be appointed, and must not act, as
liquidator of a company that is being wound up by order of the
Court if the person is not entitled to act as such a liquidator in
accordance with the current conditions (if any) imposed on the
person.
(9) A person must not be appointed as liquidator of a company unless
the person has, before his or her appointment, consented in writing
to act as liquidator of the company.
(10) An offence based on subsection (1), (2), (8) or (9) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
533 Reports by liquidator
(1) If it appears to the liquidator of a company, in the course of a
winding up of the company, that:
(a) a past or present officer or employee, or a member or
contributory, of the company may have been guilty of an
offence under a law of the Commonwealth or a State or
Territory in relation to the company; or
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become
liable or accountable for, any money or property of the
company; or
(ii) may have been guilty of any negligence, default, breach
of duty or breach of trust in relation to the company; or
(c) the company may be unable to pay its unsecured creditors
more than 50 cents in the dollar;
the liquidator must:
(d) as soon as practicable, and in any event within 6 months,
after it so appears to him or her, lodge a report with respect to
the matter and state in the report whether he or she proposes
to make an application for an examination or order under
section 597; and
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Section 534
Corporations Act 2001 435
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(e) give ASIC such information, and give to it such access to and
facilities for inspecting and taking copies of any documents,
as ASIC requires.
(2) The liquidator may also, if he or she thinks fit, lodge further reports
specifying any other matter that, in his or her opinion, it is
desirable to bring to the notice of ASIC.
(3) If it appears to the Court, in the course of winding up a company:
(a) that a past or present officer or employee, or a contributory or
member, of the company has been guilty of an offence under
a law referred to in paragraph (1)(a) in relation to the
company; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of the company
has engaged in conduct referred to in paragraph (1)(b) in
relation to the company;
and that the liquidator has not lodged with ASIC a report with
respect to the matter, the Court may, on the application of a person
interested in the winding up, direct the liquidator so to lodge such a
report.
534 Prosecution by liquidator of delinquent officers and members
(1) Where:
(a) a report has been lodged under section 533; and
(b) it appears to ASIC that the matter is not one in respect of
which a prosecution ought to be begun;
it must inform the liquidator accordingly, and the liquidator may
begin a prosecution for any offence referred to in the report.
(2) ASIC may direct that the whole or a specified part of the costs and
expenses properly incurred by a liquidator in proceedings under
this section must be paid out of money of ASIC.
(3) Subject to a direction under subsection (2), to any security interests
in the property of the company and to any debts to which this Act
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Division 3 Liquidators
Section 535
436 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
gives priority, all such costs and expenses are payable out of that
property as part of the costs of the winding up.
535 When liquidator has qualified privilege
(1) A liquidator has qualified privilege in respect of a statement that he
or she makes, whether orally or in writing, in the course of his or
her duties as liquidator.
(2) In this section:
liquidator includes a provisional liquidator.
537 Notice of appointment and address of liquidator
(1A) In this section:
liquidator includes a provisional liquidator.
(1) A liquidator must, within 14 days after his or her appointment,
lodge notice in the prescribed form of his or her appointment and
of the address of his or her office and, in the event of any change in
the situation of his or her office, must, within 14 days after the
change, lodge notice in the prescribed form of the change.
(2) A liquidator must, within 14 days after his or her resignation or
removal from office, lodge notice of the resignation or removal in
the prescribed form.
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Section 541
Corporations Act 2001 437
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—General
541 Notification that company is in liquidation
(1) A company that is being wound up must set out, in every public
document, and in every negotiable instrument, of the company,
after the name of the company where it first appears, the
expression in liquidation.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
543 Investment of surplus funds on general account
(1) Whenever the cash balance standing to the credit of a company that
is in the course of being wound up is in excess of the amount that,
in the opinion of the committee of inspection, or, if there is no
committee of inspection, of the liquidator, is required for the time
being to answer demands in respect of the property of the
company, the liquidator, if so directed in writing by the committee
of inspection, or, if there is not committee of inspection, the
liquidator himself or herself, may, unless the Court on application
by any creditor thinks fit to order otherwise and so orders, invest
the sum or any part of the sum:
(a) in any manner in which trustees are for the time being
authorised by law to invest trust funds; or
(b) on deposit with an eligible money market dealer; or
(c) on deposit at interest with any bank;
and any interest received in respect of that money so invested
forms part of the property of the company.
(2) Whenever any part of the money so invested is, in the opinion of
the committee of inspection, or, if there is no committee of
inspection, of the liquidator, required to answer any demands in
respect of the property of the company, the committee of
inspection may direct, or, if there is no committee of inspection,
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Division 4 General
Section 544
438 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the liquidator may arrange for, the sale or realisation of such part
of the securities as is necessary.
544 Unclaimed money to be paid to ASIC
(1) Where a liquidator of a company has in his or her hands or under
his or her control:
(a) any amount being a dividend or other money that has
remained unclaimed for more than 6 months after the day
when the dividend or other money became payable; or
(b) after making a final distribution, any unclaimed or
undistributed amount of money arising from the property of
the company;
he or she must forthwith pay that money to ASIC to be dealt with
under Part 9.7.
(1A) If a liquidator has, or has control of, the money of a company that
has no members, the liquidator must pay it to ASIC as soon as
practicable for it to be dealt with under Part 9.7.
(2) The Court may at any time, on the application of ASIC:
(a) order a liquidator of a company to submit to it an account,
verified by affidavit, of any unclaimed or undistributed
funds, dividends or other money in his or her hands or under
his or her control; and
(b) direct an audit of accounts submitted to it in accordance with
paragraph (a); and
(c) direct a liquidator of a company to pay any money referred to
in paragraph (a) to ASIC to be dealt with under Part 9.7.
(3) Where a liquidator of a company pays money to ASIC pursuant to
subsection (1) or (1A) or an order of the Court made under
paragraph (2)(c), the liquidator is entitled to a receipt for the
money so paid and the giving of that receipt discharges the
liquidator from any liability in respect of the money.
(4) For the purposes of this section the Court may exercise all the
powers conferred by this Act with respect to the discovery and
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Section 545
Corporations Act 2001 439
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
realisation of the property of a company and the provisions of this
Act with respect to the exercise of those powers apply, with such
adaptations as are prescribed, to proceedings under this section.
(5) The provisions of this section do not, except as expressly declared
in this Act, deprive a person of any other right or remedy to which
the person is entitled against the liquidator or another person.
545 Expenses of winding up where property insufficient
(1) Subject to this section, a liquidator is not liable to incur any
expense in relation to the winding up of a company unless there is
sufficient available property.
(2) The Court or ASIC may, on the application of a creditor or a
contributory, direct a liquidator to incur a particular expense on
condition that the creditor or contributory indemnifies the
liquidator in respect of the recovery of the amount expended and, if
the Court or ASIC so directs, gives such security to secure the
amount of the indemnity as the Court or ASIC thinks reasonable.
(3) Nothing in this section is taken to relieve a liquidator of any
obligation to lodge a document (including a report) with ASIC
under any provision of this Act by reason only that he or she would
be required to incur expense in order to perform that obligation.
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Part 5.6 Winding up generally
Division 6 Proof and ranking of claims
Section 553
440 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Proof and ranking of claims
Subdivision A—Admission to proof of debts and claims
553 Debts or claims that are provable in winding up
(1) Subject to this Division and Division 8, in every winding up, all
debts payable by, and all claims against, the company (present or
future, certain or contingent, ascertained or sounding only in
damages), being debts or claims the circumstances giving rise to
which occurred before the relevant date, are admissible to proof
against the company.
(1A) Even though the circumstances giving rise to a debt payable by the
company, or a claim against the company, occur on or after the
relevant date, the debt or claim is admissible to proof against the
company in the winding up if:
(a) the circumstances occur at a time when the company is under
a deed of company arrangement; and
(b) the company is under the deed immediately before the
resolution or court order that the company be wound up.
This subsection has effect subject to the other sections in this
Division.
Note 1: See Division 10 of Part 5.3A (sections 444A-444H) for the provisions
dealing with deeds of company arrangement.
Note 2: See paragraph 513A(d) for deeds that are followed immediately by
court ordered winding up. See paragraphs 513B(c), (d) and (da) for
deeds that are followed immediately by voluntary winding up.
Subsections 446A(2) and 446AA(2) and section 446B provide that
companies are taken in certain circumstances to have passed
resolutions that they be wound up.
Note 3: A debt or claim admissible to proof under subsection (1A) will only
be covered by paragraph 556(1)(a) if the administrator of the deed is
personally liable for the debt or claim (see subsection 556(1AA).
(1B) For the purpose of applying the other sections of this Division to a
debt or claim that is admissible to proof under subsection (1A), the
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relevant date for the debt or claim is the date on which the deed
terminates.
(2) Where, after the relevant date, an order is made under section 91 of
the ASIC Act against a company that is being wound up, the
amount that, pursuant to the order, the company is liable to pay is
admissible to proof against the company.
553A Member cannot prove debt unless contributions paid
A debt owed by a company to a person in the person’s capacity as
a member of the company, whether by way of dividends, profits or
otherwise, is not admissible to proof against the company unless
the person has paid to the company or the liquidator all amounts
that the person is liable to pay as a member of the company.
553AA Selling shareholder cannot prove debt unless documents
given
The selling shareholder in a share buy-back may claim in a
winding up of the company but is not entitled to a distribution of
money or property unless the shareholder has discharged the
shareholder’s obligations to give documents in connection with the
buy-back.
Note: The selling shareholder’s claim ranks after those of non-member
creditors and before those of other member creditors (see
section 563AA).
553AB Superannuation contribution debts not admissible to proof
Whole of superannuation contribution debt
(1) In a winding up, the liquidator must determine that the whole of a
debt by way of a superannuation contribution is not admissible to
proof against the company if:
(a) a debt by way of superannuation guarantee charge, or by way
of a liability to pay the amount of an estimate under
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442 Corporations Act 2001
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Division 268 in Schedule 1 to the Taxation Administration
Act 1953:
(i) has been paid; or
(ii) is, or is to be, admissible to proof against the company;
and
(b) the liquidator is satisfied that the superannuation guarantee
charge or estimate liability is attributable to the whole of the
first-mentioned debt.
(2) If the liquidator determines, under subsection (1), that the whole of
a debt is not admissible to proof against the company, the whole of
the debt is extinguished.
Part of superannuation contribution debt
(3) In a winding up, the liquidator must determine that a particular part
of a debt by way of a superannuation contribution is not admissible
to proof against the company if:
(a) a debt by way of superannuation guarantee charge, or by way
of a liability to pay the amount of an estimate under
Division 268 in Schedule 1 to the Taxation Administration
Act 1953:
(i) has been paid; or
(ii) is, or is to be, admissible to proof against the company;
and
(b) the liquidator is satisfied that the superannuation guarantee
charge or estimate liability is attributable to that part of the
first-mentioned debt.
(4) If the liquidator determines, under subsection (3), that a part of a
debt is not admissible to proof against the company, that part of the
debt is extinguished.
Definition
(5) In this section:
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superannuation contribution has the same meaning as in
section 556.
553B Insolvent companies—penalties and fines not generally
provable
(1) Subject to subsection (2), penalties or fines imposed by a court in
respect of an offence against a law are not admissible to proof
against an insolvent company.
(2) An amount payable under a pecuniary penalty order, or an
interstate pecuniary penalty order, within the meaning of the
Proceeds of Crime Act 1987, is admissible to proof against an
insolvent company.
553C Insolvent companies—mutual credit and set-off
(1) Subject to subsection (2), where there have been mutual credits,
mutual debts or other mutual dealings between an insolvent
company that is being wound up and a person who wants to have a
debt or claim admitted against the company:
(a) an account is to be taken of what is due from the one party to
the other in respect of those mutual dealings; and
(b) the sum due from the one party is to be set off against any
sum due from the other party; and
(c) only the balance of the account is admissible to proof against
the company, or is payable to the company, as the case may
be.
(2) A person is not entitled under this section to claim the benefit of a
set-off if, at the time of giving credit to the company, or at the time
of receiving credit from the company, the person had notice of the
fact that the company was insolvent.
553D Debts or claims may be proved formally or informally
(1) A debt or claim must be proved formally if the liquidator, in
accordance with the regulations, requires it to be proved formally.
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Section 553E
444 Corporations Act 2001
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(2) A debt or claim that is not required to be proved formally:
(a) may be proved formally; or
(b) may be proved in some other way, subject to compliance
with the requirements of the regulations (if any) relating to
the informal proof of debts and claims.
(3) A debt or claim is proved formally if it satisfies the requirements of
the regulations relating to the formal proof of debts and claims.
553E Application of Bankruptcy Act to winding up of insolvent
company
Subject to this Division, in the winding up of an insolvent company
the same rules are to prevail and be observed with regard to debts
provable as are in force for the time being under the Bankruptcy
Act 1966 in relation to the estates of bankrupt persons (except the
rules in sections 82 to 94 (inclusive) and 96 of that Act), and all
persons who in any such case would be entitled to prove for and
receive dividends out of the property of the company may come in
under the winding up and make such claims against the company
as they respectively are entitled to because of this section.
Subdivision B—Computation of debts and claims
554 General rule—compute amount as at relevant date
(1) The amount of a debt or claim of a company (including a debt or
claim that is for or includes interest) is to be computed for the
purposes of the winding up as at the relevant date.
(2) Subsection (1) does not apply to an amount admissible to proof
under subsection 553(2).
554A Determination of value of debts and claims of uncertain value
(1) This section applies where, in the winding up of a company, the
liquidator admits a debt or claim that, as at the relevant date, did
not bear a certain value.
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Section 554A
Corporations Act 2001 445
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(2) The liquidator must:
(a) make an estimate of the value of the debt or claim as at the
relevant date; or
(b) refer the question of the value of the debt or claim to the
Court.
(3) A person who is aggrieved by the liquidator’s estimate of the value
of the debt or claim may, in accordance with the regulations,
appeal to the Court against the liquidator’s estimate.
(4) If:
(a) the liquidator refers the question of the value of the debt or
claim to the Court; or
(b) a person appeals to the Court against the liquidator’s estimate
of the value of the debt or claim;
the Court must:
(c) make an estimate of the value of the debt or claim as at the
relevant date; or
(d) determine a method to be applied by the liquidator in
working out the value of the debt or claim as at the relevant
date.
(5) If the Court determines a method to be applied by the liquidator in
working out the value of the debt or claim, the liquidator must
work out the value of the debt or claim as at the relevant date in
accordance with that method.
(6) If:
(a) the Court has determined a method to be applied by the
liquidator in working out the value of the debt or claim as at
the relevant date; and
(b) a person is aggrieved by the way in which that method has
been applied by the liquidator in working out that value;
the person may, in accordance with the regulations, appeal to the
Court against the way in which the method was applied.
(7) If:
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(a) a person appeals to the Court against the way in which the
liquidator, in working out the value of the debt or claim,
applied a method determined by the court; and
(b) the Court is satisfied that the liquidator did not correctly
apply that method;
the Court must work out the value of the debt or claim as at the
relevant date in accordance with that method.
(8) For the purposes of this Division, the amount of the debt or claim
that is admissible to proof is the value as estimated or worked out
under this section.
554B Discounting of debts payable after relevant date
The amount of a debt that is admissible to proof but that, as at the
relevant date, was not payable by the company until an ascertained
or ascertainable date (the future date) after the relevant date is the
amount payable on the future date reduced by the amount of the
discount worked out in accordance with the regulations.
554C Conversion into Australian currency of foreign currency debts or claims
(1) This section applies if the amount of a debt or claim admissible to
proof against a company would, apart from this section, be an
amount of foreign currency.
(2) If the company and the creditor or claimant have, in an instrument
created before the relevant date, agreed on a method to be applied
for the purpose of converting the company’s liability in respect of
the debt or claim into Australian currency, the amount of the debt
or claim that is admissible to proof is the equivalent in Australian
currency of the amount of foreign currency, worked out as at the
relevant date and in accordance with the agreed method.
(3) If subsection (2) does not apply, the amount of the debt or claim
that is admissible to proof is the equivalent in Australian currency
of the amount of foreign currency, worked out by reference to the
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Section 554D
Corporations Act 2001 447
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opening carded on demand airmail buying rate in relation to the
foreign currency available at the Commonwealth Bank of Australia
on the relevant date.
Subdivision C—Special provisions relating to secured creditors
of insolvent companies
554D Application of Subdivision
(1) This Subdivision applies in relation to the proof of a secured debt
in the winding up of an insolvent company.
(2) For the purposes of the application of this Subdivision in relation
to a secured debt of an insolvent company that is being wound up,
the amount of the debt is taken to be the amount of the debt as at
the relevant date (as worked out in accordance with Subdivision
B).
554E Proof of debt by secured creditor
(1) In the winding up of an insolvent company, a secured creditor is
not entitled to prove the whole or a part of the secured debt
otherwise than in accordance with this section and with any other
provisions of this Act or the regulations that are applicable to
proving the debt.
(2) The creditor’s proof of debt must be in writing.
(3) If the creditor surrenders the security interest to the liquidator for
the benefit of creditors generally, the creditor may prove for the
whole of the amount of the secured debt.
(4) If the creditor realises the security interest, the creditor may prove
for any balance due after deducting the net amount realised, unless
the liquidator is not satisfied that the realisation has been effected
in good faith and in a proper manner.
(5) If the creditor has not realised or surrendered the security interest,
the creditor may:
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448 Corporations Act 2001
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(a) estimate its value; and
(b) prove for the balance due after deducting the value so
estimated.
(6) If subsection (5) applies, the proof of debt must include particulars
of the security interest and the creditor’s estimate of its value.
554F Redemption of security interest by liquidator
(1) This section applies where a secured creditor’s proof of debt is in
respect of the balance due after deducting the creditor’s estimate of
the value of the security interest.
(2) The liquidator may, at any time, redeem the security interest on
payment to the creditor of the amount of the creditor’s estimate of
its value.
(3) If the liquidator is dissatisfied with the amount of the creditor’s
estimate of the value of the security interest, the liquidator may
require the property comprised in the security interest to be offered
for sale at such times and on such terms and conditions as are
agreed on by the creditor and the liquidator or, in default of
agreement, as the Court determines.
(4) If the property is offered for sale by public auction, both the
creditor and the liquidator are entitled to bid for, and purchase, the
property.
(5) The creditor may at any time, by notice in writing, require the
liquidator to elect whether to exercise the power to redeem the
security interest or to require it to be sold and, if the liquidator does
not, within 3 months after receiving the notice, notify the creditor,
in writing, that the liquidator elects to exercise the power:
(a) the liquidator is not entitled to exercise it; and
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Section 554G
Corporations Act 2001 449
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(b) subject to subsection (6), any equity of redemption or other
interest in the property comprised in the security interest that
is vested in the company or the liquidator vests in the
creditor; and
(c) the amount of the creditor’s debt is, for the purposes of this
Division, taken to be reduced by the amount of the creditor’s
estimate of the value of the security interest.
(6) The vesting of an equity of redemption or other interest in property
because of paragraph (5)(b) is subject to compliance with any law
requiring the transmission of such interests in property to be
registered.
554G Amendment of valuation
(1) If a secured creditor’s proof of debt is in respect of the balance due
after deducting the creditor’s estimate of the value of the security
interest, the creditor may, at any time, apply to the liquidator or the
Court for permission to amend the proof of debt by altering the
estimated value.
(2) If the liquidator or the Court is satisfied:
(a) that the estimate of the value of the security interest was
made in good faith on a mistaken basis; or
(b) that the value of the security interest has changed since the
estimate was made;
the liquidator or the Court may permit the creditor to amend the
proof of debt accordingly.
(3) If the Court permits the creditor to amend the proof of debt, it may
do so on such terms as it thinks just and equitable.
554H Repayment of excess
(1) Where a creditor who has amended a proof of debt under
section 554G has received, in the winding up of the debtor
company, an amount in excess of the amount to which the creditor
would have been entitled under the amended proof of debt, the
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450 Corporations Act 2001
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creditor must, without delay, repay the amount of the excess to the
liquidator.
(2) Where a creditor who has so amended a proof of debt has received,
in the winding up of the debtor company, less than the amount to
which the creditor would have been entitled under the amended
proof of debt, the creditor is entitled to be paid, out of the money
remaining for distribution in the winding up, the amount of the
deficiency before any of that money is applied in the payment of
future distributions, but the creditor is not entitled to affect a
distribution made before the amendment of the proof of debt.
554J Subsequent realisation of security interest
Where:
(a) a secured creditor’s proof of debt is in respect of the balance
due after deducting the creditor’s estimate of the value of the
security interest; and
(b) subsequently:
(i) the creditor realises the security interest; or
(ii) the security interest is realised under section 554F;
the net amount realised is to be substituted for the estimated value
of the security interest and section 554H applies as if the proof of
debt had been amended accordingly under section 554G.
Subdivision D—Priorities
555 Debts and claims proved to rank equally except as otherwise
provided
Except as otherwise provided by this Act, all debts and claims
proved in a winding up rank equally and, if the property of the
company is insufficient to meet them in full, they must be paid
proportionately.
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Section 556
Corporations Act 2001 451
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556 Priority payments
(1) Subject to this Division, in the winding up of a company the
following debts and claims must be paid in priority to all other
unsecured debts and claims:
(a) first, expenses (except deferred expenses) properly incurred
by a relevant authority in preserving, realising or getting in
property of the company, or in carrying on the company’s
business;
(b) if the Court ordered the winding up—next, the costs in
respect of the application for the order (including the
applicant’s taxed costs payable under section 466);
(ba) if:
(i) during the period of 12 months ending when the
winding up commenced, an application (the first
application) was made under section 459P for the
company to be wound up in insolvency; and
(ii) when the first application was made, the company was
not under administration; and
(iii) the company began to be under administration at a time
after the first application was made; and
(iv) the first application was not withdrawn or dismissed
before the administration began; and
(v) the Court did not, in response to the first application,
make an order under section 459A that the company be
wound up in insolvency;
next, the costs in respect of the first application;
(c) next, the debts for which paragraph 443D(a) or (aa) entitles
an administrator of the company to be indemnified (even if
the administration ended before the relevant date), except
expenses covered by paragraph (a) of this subsection and
deferred expenses;
(da) if the Court ordered the winding up—next, costs and
expenses that are payable under subsection 475(8) out of the
company’s property;
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(daa) if the company resolved by special resolution that it be
wound up voluntarily—next, costs and expenses that are
payable under subsection 446C(8) out of the company’s
property;
(db) next, costs that form part of the expenses of the winding up
because of subsection 539(6), or subsection 70-15(5) (audit
of administration books by ASIC) or section 90-27 (review
by another registered liquidator) of Schedule 2;
(dd) next, any other expenses (except deferred expenses) properly
incurred by a relevant authority;
(de) next, the deferred expenses;
(df) if a committee of inspection has been appointed for the
purposes of the winding up—next, expenses incurred by a
person as a member of the committee;
(e) subject to subsection (1A)—next:
(i) wages, superannuation contributions and
superannuation guarantee charge payable by the
company in respect of services rendered to the company
by employees before the relevant date; or
(ii) liabilities to pay the amounts of estimates under
Division 268 in Schedule 1 to the Taxation
Administration Act 1953 of superannuation guarantee
charge mentioned in subparagraph (i);
(f) next, amounts due in respect of injury compensation, being
compensation the liability for which arose before the relevant
date;
(g) subject to subsection (1B)—next, all amounts due:
(i) on or before the relevant date; and
(ii) because of an industrial instrument; and
(iii) to, or in respect of, employees of the company; and
(iv) in respect of leave of absence;
(h) subject to subsection (1C)—next, retrenchment payments
payable to employees of the company.
(1AA) Paragraph (1)(a) does not apply to expenses:
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(a) incurred by the administrator of a deed of company
arrangement; and
(b) relating to a debt or claim admissible to proof under
subsection 553(1A);
unless the administrator is personally liable for the expenses.
Superannuation guarantee charge
(1A) The amount or total paid under paragraph (1)(e) to, or in respect of,
an excluded employee of the company must be such that so much
(if any) of it as is attributable to non-priority days does not exceed
$2,000.
(1AB) For the purposes of paragraph (1)(e), if:
(a) the company has a superannuation guarantee shortfall for a
quarter; and
(b) the shortfall relates to one or more employees; and
(c) the quarter ends before the relevant date;
superannuation guarantee charge in respect of the quarter is taken
to be payable by the company in respect of services rendered to the
company by those employees before the relevant date.
(1AC) If:
(a) the company has a superannuation guarantee shortfall for a
quarter; and
(b) the shortfall relates to one or more employees; and
(c) the relevant date occurs during the quarter; and
(d) the relevant date is not the first day of the quarter;
then:
(e) for the purposes of paragraph (1)(e), so much of the
superannuation guarantee charge in respect of the quarter as
is attributable to the period before the relevant date is taken
to be payable by the company in respect of services rendered
to the company by those employees before the relevant date;
and
(f) the remainder of the superannuation guarantee charge in
respect of the quarter is taken:
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(i) to be an expense referred to in paragraph (1)(a); and
(ii) not to be an amount of superannuation guarantee charge
referred in paragraph (1)(e).
(1AD) If:
(a) the company has a superannuation guarantee shortfall for a
quarter; and
(b) the shortfall relates to one or more employees; and
(c) the relevant date is the first day of the quarter;
the superannuation guarantee charge in respect of the quarter is
taken:
(d) to be an expense referred to in paragraph (1)(a); and
(e) not to be an amount of superannuation guarantee charge
referred in paragraph (1)(e).
(1AE) For the purposes of paragraph (1)(e), if:
(a) the company has a superannuation guarantee shortfall for a
quarter; and
(b) the shortfall relates to one or more employees; and
(c) the quarter begins after the relevant date; and
(d) one or more payments were made by the company during the
quarter on account of wages payable to those employees in
respect of services rendered to the company by those
employees before the relevant date; and
(e) those payments were made as a result of an advance of
money by a person after the relevant date for the purpose of
making those payments;
then:
(f) for the purposes of paragraph (1)(e), so much of the
superannuation guarantee charge in respect of the quarter as
is attributable to those payments is taken to be payable by the
company in respect of services rendered to the company by
those employees before the relevant date; and
(g) the remainder of the superannuation guarantee charge in
respect of the quarter is taken:
(i) to be an expense referred to in paragraph (1)(a); and
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(ii) not to be an amount of superannuation guarantee charge
referred in paragraph (1)(e).
(1AF) If:
(a) the company has a superannuation guarantee shortfall for a
quarter; and
(b) the shortfall relates to one or more employees; and
(c) the relevant date occurs during the quarter; and
(d) one or more payments were made by the company during the
quarter on account of wages payable to those employees in
respect of services rendered to the company by those
employees before the relevant date; and
(e) those payments were made as a result of an advance of
money by a person after the relevant date for the purpose of
making those payments;
then:
(f) for the purposes of paragraph (1)(e), so much of the
superannuation guarantee charge in respect of the quarter as
is attributable to either or both of the following:
(i) those payments;
(ii) the period before the relevant date;
is taken to be payable by the company in respect of services
rendered to the company by those employees before the
relevant date; and
(g) the remainder of the superannuation guarantee charge in
respect of the quarter is taken:
(i) to be an expense referred to in paragraph (1)(a); and
(ii) not to be an amount of superannuation guarantee charge
referred in paragraph (1)(e); and
(h) subsections (1AC) and (1AD) do not apply to the
superannuation guarantee charge in respect of the quarter.
(1AG) Subsections (1AC) to (1AF) apply to a liability to pay the amount
of an estimate of superannuation guarantee charge for a quarter in
the same way as they apply to superannuation guarantee charge
payable for the quarter.
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Leave amounts
(1B) The amount or total paid under paragraph (1)(g) to, or in respect of,
an excluded employee of the company must be such that so much
(if any) of it as is attributable to non-priority days does not exceed
$1,500.
Retrenchment payments
(1C) A payment under paragraph (1)(h) to an excluded employee of the
company must not include an amount attributable to non-priority
days.
Definitions
(2) In this section:
company means a company that is being wound up.
deferred expenses, in relation to a company, means expenses
properly incurred by a relevant authority, in so far as they consist
of:
(a) remuneration, or fees for services, payable to the relevant
authority; or
(b) expenses incurred by the relevant authority in respect of the
supply of services to the relevant authority by:
(i) a partnership of which the relevant authority is a
member; or
(ii) an employee of the relevant authority; or
(iii) a member or employee of such a partnership; or
(c) expenses incurred by the relevant authority in respect of the
supply to the relevant authority of services that it is
reasonable to expect could have instead been supplied by:
(i) the relevant authority; or
(ii) a partnership of which the relevant authority is a
member; or
(iii) an employee of the relevant authority; or
(iv) a member or employee of such a partnership.
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Section 556
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employee, in relation to a company, means a person:
(a) who has been or is an employee of the company, whether
remunerated by salary, wages, commission or otherwise; and
(b) whose employment by the company commenced before the
relevant date.
excluded employee, in relation to a company, means:
(a) an employee of the company who has been:
(i) at any time during the period of 12 months ending on
the relevant date; or
(ii) at any time since the relevant date;
or who is, a director of the company;
(b) an employee of the company who has been:
(i) at any time during the period of 12 months ending on
the relevant date; or
(ii) at any time since the relevant date;
or who is, the spouse of an employee of the kind referred to
in paragraph (a); or
(c) an employee of the company who is a relative (other than a
spouse) of an employee of the kind referred to in
paragraph (a).
non-priority day, in relation to an excluded employee of a
company, means a day on which the employee was:
(a) if paragraph (a) of the definition of excluded employee
applies—a director of the company; or
(b) if paragraph (b) of that definition applies—a spouse of an
employee of the kind referred to in paragraph (a) of that
definition; or
(c) if paragraph (c) of that definition applies—a relative (other
than a spouse) of an employee of the kind referred to in
paragraph (a) of that definition;
even if the day was more than 12 months before the relevant date.
quarter has the same meaning as in the Superannuation Guarantee
(Administration) Act 1992.
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Section 558
458 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
relevant authority, in relation to a company, means any of the
following:
(a) in any case—a liquidator or provisional liquidator of the
company;
(c) in any case—an administrator of the company, even if the
administration ended before the winding up began;
(d) in any case—an administrator of a deed of company
arrangement executed by the company, even if the deed
terminated before the winding up began.
retrenchment payment, in relation to an employee of a company,
means an amount payable by the company to the employee, by
virtue of an industrial instrument, in respect of the termination of
the employee’s employment by the company, whether the amount
becomes payable before, on or after the relevant date.
superannuation contribution, in relation to a company, means a
contribution by the company to a fund or scheme for the purposes
of making provision for, or obtaining, superannuation benefits
(including defined benefits) for an employee of the company, or
for dependants of such an employee.
558 Debts due to employees
(1) Where a contract of employment with a company being wound up
was subsisting immediately before the relevant date, the employee
under the contract is, whether or not he or she is a person referred
to in subsection (2), entitled to payment under section 556 as if his
or her services with the company had been terminated by the
company on the relevant date.
(2) Where, for the purposes of the winding up of a company, a
liquidator employs a person whose services with the company had
been terminated by reason of the winding up, that person is, for the
purpose of calculating any entitlement to payment for leave of
absence, or any entitlement to a retrenchment amount in respect of
employment, taken, while the liquidator employs him or her for
those purposes, to be employed by the company.
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Section 559
Corporations Act 2001 459
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Subject to subsection (4), where, after the relevant date, an amount
in respect of long service leave or extended leave, or a
retrenchment amount, becomes payable to a person referred to in
subsection (2) in respect of the employment so referred to, the
amount is a cost of the winding up.
(4) Where, at the relevant date, the length of qualifying service of a
person employed by a company that is being wound up is
insufficient to entitle him or her to any amount in respect of long
service leave or extended leave, or to any retrenchment amount in
respect of employment by the company, but, by the operation of
subsection (2) he or she becomes entitled to such an amount after
that date, that amount:
(a) is a cost of the winding up to the extent of an amount that
bears to that amount the same proportion as the length of his
or her qualifying service after that relevant date bears to the
total length of his or her qualifying service; and
(b) is, to the extent of the balance of that amount, taken, for the
purposes of section 556, to be an amount referred to in
paragraph 556(1)(g), or a retrenchment payment payable to
the person, as the case may be.
(5) In this section, retrenchment amount, in relation to employment of
a person, means an amount payable to the person, by virtue of an
industrial instrument, in respect of termination of the employment.
559 Debts of a class to rank equally
The debts of a class referred to in each of the paragraphs of
subsection 556(1) rank equally between themselves and must be
paid in full, unless the property of the company is insufficient to
meet them, in which case they must be paid proportionately.
560 Advances for company to make priority payments in relation to
employees
If:
(a) a payment has been made by a company:
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Section 561
460 Corporations Act 2001
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(i) on account of wages; or
(ii) on account of superannuation contributions (within the
meaning of section 556); or
(iii) in respect of leave of absence, or termination of
employment, under an industrial instrument; and
(b) the payment was made as a result of an advance of money by
a person (whether before, on or after the relevant date) for the
purpose of making the payment;
then:
(c) the person by whom the money was advanced has the same
rights under this Chapter as a creditor of the company; and
(d) subject to paragraph (e), the person by whom the money was
advanced has, in the winding up of the company, the same
right of priority of payment in respect of the money so
advanced and paid as the person who received the payment
would have had if the payment had not been made; and
(e) the right of priority conferred by paragraph (d) is not to
exceed the amount by which the sum in respect of which the
person who received the payment would have been entitled
to priority in the winding up has been diminished by reason
of the payment.
561 Priority of employees’ claims over circulating security interests
So far as the property of a company available for payment of
creditors other than secured creditors is insufficient to meet
payment of:
(a) any debt referred to in paragraph 556(1)(e), (g) or (h); and
(b) any amount that pursuant to subsection 558(3) or (4) is a cost
of the winding up, being an amount that, if it had been
payable on or before the relevant date, would have been a
debt referred to in paragraph 556(1)(e), (g) or (h); and
(c) any amount in respect of which a right of priority is given by
section 560;
payment of that debt or amount must be made in priority over the
claims of a secured party in relation to a circulating security
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Section 562
Corporations Act 2001 461
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
interest created by the company and may be made accordingly out
of any property comprised in or subject to the circulating security
interest.
562 Application of proceeds of contracts of insurance
(1) Where a company is, under a contract of insurance (not being a
contract of reinsurance) entered into before the relevant date,
insured against liability to third parties, then, if such a liability is
incurred by the company (whether before or after the relevant date)
and an amount in respect of that liability has been or is received by
the company or the liquidator from the insurer, the amount must,
after deducting any expenses of or incidental to getting in that
amount, be paid by the liquidator to the third party in respect of
whom the liability was incurred to the extent necessary to
discharge that liability, or any part of that liability remaining
undischarged, in priority to all payments in respect of the debts
mentioned in section 556.
(2) If the liability of the insurer to the company is less than the liability
of the company to the third party, subsection (1) does not limit the
rights of the third party in respect of the balance.
(3) This section has effect notwithstanding any agreement to the
contrary.
562A Application of proceeds of contracts of reinsurance
(1) This section applies where:
(a) a company is insured, under a contract of reinsurance entered
into before the relevant date, against liability to pay amounts
in respect of a relevant contract of insurance or relevant
contracts of insurance; and
(b) an amount in respect of that liability has been or is received
by the company or the liquidator under the contract of
reinsurance.
(2) Subject to subsection (4), if the amount received, after deducting
expenses of or incidental to getting in that amount, equals or
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462 Corporations Act 2001
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exceeds the total of all the amounts that are payable by the
company under relevant contracts of insurance, the liquidator must,
out of the amount received and in priority to all payments in
respect of the debts mentioned in section 556, pay the amounts that
are so payable under those contracts of insurance.
(3) Subject to subsection (4), if subsection (2) does not apply, the
liquidator must, out of the amount received and in priority to all
payments in respect of the debts mentioned in section 556, pay to
each person to whom an amount is payable by the company under
a relevant contract of insurance an amount calculated in
accordance with the formula:
where:
particular amount owed means the amount payable to the person
under the relevant contract of insurance.
reinsurance payment means the amount received under the
contract of reinsurance, less any expenses of or incidental to
getting in that amount.
total amount owed means the total of all the amounts payable by
the company under relevant contracts of insurance.
(4) The Court may, on application by a person to whom an amount is
payable under a relevant contract of insurance, make an order to
the effect that subsections (2) and (3) do not apply to the amount
received under the contract of reinsurance and that that amount
must, instead, be applied by the liquidator in the manner specified
in the order, being a manner that the Court considers just and
equitable in the circumstances.
(5) The matters that the Court may take into account in considering
whether to make an order under subsection (4) include, but are not
limited to:
Particular amount owed Reinsurance payment
Total amount owed
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Section 563
Corporations Act 2001 463
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(a) whether it is possible to identify particular relevant contracts
of insurance as being the contracts in respect of which the
contract of reinsurance was entered into; and
(b) whether it is possible to identify persons who can be said to
have paid extra in order to have particular relevant contracts
of insurance protected by reinsurance; and
(c) whether particular relevant contracts of insurance include
statements to the effect that the contracts are to be protected
by reinsurance; and
(d) whether a person to whom an amount is payable under a
relevant contract of insurance would be severely prejudiced if
subsections (2) and (3) applied to the amount received under
the contract of reinsurance.
(6) If receipt of a payment under this section only partially discharges
a liability of the company to a person, nothing in this section
affects the rights of the person in respect of the balance of the
liability.
(7) This section has effect despite any agreement to the contrary.
(8) In this section:
relevant contract of insurance means a contract of insurance
entered into by the company, as insurer, before the relevant date.
563 Provisions relating to injury compensation
(1) Notwithstanding anything in section 556, paragraph 556(1)(f) does
not apply in relation to the winding up of a company in any case
where:
(a) the company is being wound up voluntarily merely for the
purpose of reconstruction or of amalgamation with another
company and the right to the injury compensation has, on the
reconstruction or amalgamation, been preserved to the person
entitled to it; or
(b) the company has entered into a contract with an insurer in
respect of any liability for injury compensation.
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Section 563AA
464 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Where injury compensation is payable by way of periodical
payments, the amount of that compensation is, for the purposes of
paragraph 556(1)(f), taken to be the lump sum for which those
periodical payments could, if redeemable, be redeemed under the
law under which the periodical payments are made.
563AA Seller under a buy-back agreement
(1) The selling shareholder’s claim under a buy-back agreement is
postponed until all debts owed to people otherwise than as
members of the company have been satisfied.
(2) The shareholder’s claim is not a debt owed by the company to the
seller in the shareholder’s capacity as a member of the company
for the purposes of section 563A.
563A Postponing subordinate claims
(1) The payment of a subordinate claim against a company is to be
postponed until all other debts payable by, and claims against, the
company are satisfied.
(2) In this section:
claim means a claim that is admissible to proof against the
company (within the meaning of section 553).
debt means a debt that is admissible to proof against the company
(within the meaning of section 553).
subordinate claim means:
(a) a claim for a debt owed by the company to a person in the
person’s capacity as a member of the company (whether by
way of dividends, profits or otherwise); or
(b) any other claim that arises from buying, holding, selling or
otherwise dealing in shares in the company.
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Section 563AAA
Corporations Act 2001 465
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
563AAA Redemption of debentures
Priorities
(1) Debentures of a company under a trust deed that are issued in place
of debentures under that deed that have been redeemed have the
priority that the redeemed debentures would have had if they had
never been redeemed.
Deposit of debentures to secure advance
(2) Debentures of a company are not to be taken to be redeemed
merely because:
(a) the debentures secure advances on current account or
otherwise; and
(b) the company’s account ceases to be in debit while those
debentures remain available.
Subdivision E—Miscellaneous
563B Interest on debts and claims from relevant date to date of
payment
(1) If, in the winding up of a company, the liquidator pays an amount
in respect of an admitted debt or claim, there is also payable to the
debtor or claimant, as a debt payable in the winding up, interest, at
the prescribed rate, on the amount of the payment in respect of the
period starting on the relevant date and ending on the day on which
the payment is made.
(2) Subject to subsection (3), payment of the interest is to be
postponed until all other debts and claims in the winding up have
been satisfied, other than subordinate claims (within the meaning
of section 563A).
(3) If the admitted debt or claim is a debt to which section 554B
applied, subsection (2) does not apply to postpone payment of so
much of the interest as is attributable to the period starting at the
relevant date and ending on the earlier of:
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(a) the day on which the payment is made; and
(b) the future date, within the meaning of section 554B.
563C Debt subordination
(1) Nothing in this Division renders a debt subordination by a creditor
of a company unlawful or unenforceable, except so far as the debt
subordination would disadvantage any creditor of the company
who was not a party to, or otherwise concerned in, the debt
subordination.
(2) In this section:
debt subordination means an agreement or declaration by a
creditor of a company, however expressed, to the effect that, in
specified circumstances:
(a) a specified debt that the company owes the creditor; or
(b) a specified part of such a debt;
will not be repaid until other specified debts that the company
owes are repaid to a specified extent.
564 Power of Court to make orders in favour of certain creditors
Where in any winding up:
(a) property has been recovered under an indemnity for costs of
litigation given by certain creditors, or has been protected or
preserved by the payment of money or the giving of
indemnity by creditors; or
(b) expenses in relation to which a creditor has indemnified a
liquidator have been recovered;
the Court may make such orders, as it deems just with respect to
the distribution of that property and the amount of those expenses
so recovered with a view to giving those creditors an advantage
over others in consideration of the risk assumed by them.
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Effect on certain transactions Division 7
Section 565
Corporations Act 2001 467
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Effect on certain transactions
565 Undue preference
(1) A settlement, a conveyance or transfer of property, a charge on
property, a payment made, or an obligation incurred, before
23 June 1993, by a company that, if it had been made or incurred
by a natural person, would, in the event of his or her becoming a
bankrupt, be void as against the trustee in the bankruptcy, is, in the
event of the company being wound up, void as against the
liquidator.
(2) For the purposes of subsection (1), the date that corresponds with
the date of presentation of the petition in bankruptcy in the case of
a natural person is the relation-back day.
(3) For the purposes of this section, the date that corresponds with the
date on which a person becomes a bankrupt is the relation-back
day.
(4) Subject to Part 5.3A, a transfer or assignment by a company of all
its property to trustees for the benefit of all its creditors is void.
566 Effect of floating charge
A floating charge on the undertaking or property of the company
created before 23 June 1993 and within 6 months before the
relation-back day is, unless it is proved that the company
immediately after the creation of the charge was solvent, invalid
except to the amount of any money paid to the company at the time
of or subsequently to the creation of and in consideration for the
charge together with interest on that amount at the rate of 8% per
annum or at such other rate as is prescribed.
567 Liquidator’s right to recover in respect of certain transactions
(1) Where any property, business or undertaking has been acquired by
a company for a cash consideration before 23 June 1993 and within
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Section 567
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4 years before the relation-back day in relation to a winding up of
the company:
(a) from a promoter of the company or a spouse of such a
promoter, or from a relative of such a promoter or spouse; or
(b) from a person who was, at the time of the acquisition, a
director of the company, from a spouse of such a director, or
from a relative of such a person or spouse; or
(c) from a body corporate that was, at the time of the acquisition,
related to the company; or
(d) from a person who was, at the time of the acquisition, a
director of a body corporate that was related to the company,
from a spouse of such a person, or from a relative of such a
person or spouse;
the liquidator may recover from the person or body corporate from
which the property, business or undertaking was acquired any
amount by which the cash consideration for the acquisition
exceeded the value of the property, business or undertaking at the
time of its acquisition.
(2) Where any property, business or undertaking has been sold by a
company for a cash consideration before 23 June 1993 and within
4 years before the relation-back day in relation to a winding up of
the company:
(a) to a promoter of the company or a spouse of such a promoter,
or to a relative of such a promoter or spouse; or
(b) to a person who was, at the time of the sale, a director of the
company, to a spouse of such a director, or to a relative of
such a person or spouse; or
(c) to a body corporate that was, at the time of the sale, related to
the company; or
(d) to a person who was, at the time of the sale, a director of a
body corporate that was related to the company, to a spouse
of such a director, or to a relative of such a person or spouse;
the liquidator may recover from the person or body corporate to
which the property, business or undertaking was sold any amount
by which the value of the property, business or undertaking at the
time of the sale exceeded the cash consideration.
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(3) For the purposes of this section, the value of the property, business
or undertaking includes the value of any goodwill, profits or gain
that might have been made from the property, business or
undertaking.
(4) In this section, cash consideration means any consideration
payable otherwise than by the issue of shares in the company.
(5) Where:
(a) a disposition of property is made by a company before
23 June 1993 and within 6 months before the relation-back
day in relation to a winding up of the company; and
(b) the disposition of property confers a preference upon a
creditor of the company; and
(c) the disposition of property has the effect of discharging an
officer of the company from a liability (whether under a
guarantee or otherwise and whether contingent or otherwise);
the liquidator:
(d) in a case to which paragraph (e) does not apply—may
recover from that officer an amount equal to the value of the
relevant property, as the case may be; or
(e) where the liquidator has recovered from the creditor in
respect of the disposition of the relevant property:
(i) an amount equal to part of the value of the relevant
property; or
(ii) part of the relevant property;
may recover from that officer an amount equal to the amount
by which the value of the relevant property exceeds the sum
of any amounts recovered as mentioned in subparagraph (i)
and the amount of the value of any property recovered as
mentioned in subparagraph (ii).
(6) Where:
(a) a liquidator recovers an amount of money from an officer of
a company in respect of a disposition of property to a creditor
as mentioned in subsection (5); and
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Section 567
470 Corporations Act 2001
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(b) the liquidator subsequently recovers from that creditor an
amount equal to the whole or part of the value of the property
disposed of;
the officer may recover from the liquidator an amount equal to the
amount so recovered or the value of the property so recovered.
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Disclaimer of onerous property Division 7A
Section 568
Corporations Act 2001 471
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7A—Disclaimer of onerous property
568 Disclaimer by liquidator; application to Court by party to
contract
(1) Subject to this section, a liquidator of a company may at any time,
on the company’s behalf, by signed writing disclaim property of
the company that consists of:
(a) land burdened with onerous covenants; or
(b) shares; or
(c) property that is unsaleable or is not readily saleable; or
(d) property that may give rise to a liability to pay money or
some other onerous obligation; or
(e) property where it is reasonable to expect that the costs,
charges and expenses that would be incurred in realising the
property would exceed the proceeds of realising the property;
or
(f) a contract;
whether or not:
(g) except in the case of a contract—the liquidator has tried to
sell the property, has taken possession of it or exercised an
act of ownership in relation to it; or
(h) in the case of a contract—the company or the liquidator has
tried to assign, or has exercised rights in relation to, the
contract or any property to which it relates.
(1AA) This section does not apply to:
(a) an agreement by the company to buy back its own shares; or
(b) PPSA retention of title property that is taken to form part of
the property of the company because of the definition of
property in section 513AA.
Note: The definition of property in section 513AA includes PPSA retention
of title property of the company, if the security interest in the property
has vested in the company in certain situations.
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Division 7A Disclaimer of onerous property
Section 568
472 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1A) A liquidator cannot disclaim a contract (other than an unprofitable
contract or a lease of land) except with the leave of the Court.
(1B) On an application for leave under subsection (1A), the Court may:
(a) grant leave subject to such conditions; and
(b) make such orders in connection with matters arising under, or
relating to, the contract;
as the Court considers just and equitable.
(8) Where:
(a) an application in writing has been made to the liquidator by a
person interested in property requiring the liquidator to
decide whether he or she will disclaim the property; and
(b) the liquidator has, for the period of 28 days after the receipt
of the application, or for such extended period as is allowed
by the Court, declined or neglected to disclaim the property;
the liquidator is not entitled to disclaim the property under this
section and, in the case of a contract, he or she is taken to have
adopted it.
(9) The Court may, on the application of a person who is, as against
the company, entitled to the benefit or subject to the burden of a
contract made with the company, make an order:
(a) discharging the contract on such terms as to payment by or to
either party of damages for the non-performance of the
contract, or otherwise, as the Court thinks proper; or
(b) rescinding the contract on such terms as to restitution by or to
either party, or otherwise, as the Court thinks proper.
(10) Amounts payable pursuant to an order under subsection (9) may be
proved as a debt in the winding up.
(13) For the purpose of determining whether property of a company is
of a kind to which subsection (1) applies, the liquidator may, by
notice served on a person claiming to have an interest in the
property, require the person to give to the liquidator within such
period, not being less than 14 days, as is specified in the notice, a
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Section 568A
Corporations Act 2001 473
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
statement of the interest claimed by the person and the person must
comply with the requirement.
568A Liquidator must give notice of disclaimer
(1) As soon as practicable after disclaiming property, a liquidator
must:
(a) lodge a written notice of the disclaimer; and
(b) give written notice of the disclaimer to each person who
appears to the liquidator to have, or to claim to have, an
interest in the property; and
(c) if the liquidator has reason to suspect that some person or
persons may have, or may claim to have, an interest or
interests in the property, but either does not know who, or
does not know where, the person is or the persons are—
comply with subsection (2); and
(d) if a law of the Commonwealth or of a State or Territory
requires the transfer or transmission of the property to be
registered—give written notice of the disclaimer to the
registrar or other person who has the function under that law
of registering the transfer or transmission of the property.
Note: For electronic notification under paragraph (b), see section 600G.
(2) If paragraph (1)(c) applies, the liquidator must cause a notice
setting out the prescribed information about the disclaimer to be
published in the prescribed manner.
568B Application to set aside disclaimer before it takes effect
(1) A person who has, or claims to have, an interest in disclaimed
property may apply to the Court for an order setting aside the
disclaimer before it takes effect, but may only do so within 14 days
after:
(a) if the liquidator gives to the person notice of the disclaimer,
because of paragraph 568A(1)(b), before the end of 14 days
after the liquidator lodges such notice—the liquidator gives
such notice to the person; or
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Section 568C
474 Corporations Act 2001
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(b) if paragraph (a) does not apply but notice of the disclaimer is
published under subsection 568A(2) before the end of the 14
days referred to in that paragraph—the last such notice to be
so published is so published; or
(c) otherwise—the liquidator lodges notice of the disclaimer.
(2) On an application under subsection (1), the Court:
(a) may by order set aside the disclaimer; and
(b) if it does so—may make such further orders as it thinks
appropriate.
(3) However, the Court may set aside a disclaimer under this section
only if satisfied that the disclaimer would cause, to persons who
have, or claim to have, interests in the property, prejudice that is
grossly out of proportion to the prejudice that setting aside the
disclaimer would cause to the company’s creditors.
568C When disclaimer takes effect
(1) A disclaimer takes effect if, and only if:
(a) in a case where only one application under section 568B for
an order setting aside the disclaimer, or each of 2 or more
such applications, is made within the period that that section
prescribes for making the application—the application, or
each of the applications, is unsuccessful; or
(b) no such application is so made.
(2) For the purposes of subsection (1), an application under
section 568B is successful if, and only if, the result of the
application, and all appeals (if any) arising out of the application,
being finally determined or otherwise disposed of is an order
setting aside the disclaimer (whether or not further orders are also
made).
(3) A disclaimer that takes effect because of subsection (1) is taken to
have taken effect on the day after:
(a) if:
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(i) the liquidator gave to a person notice of the disclaimer
because of paragraph 568A(1)(b); or
(ii) notice of the disclaimer was published under
subsection 568A(2);
before the end of 14 days after the liquidator lodged notice of
the disclaimer—the last day when the liquidator so gave such
notice or such notice was so published; or
(b) otherwise—the day when the liquidator lodged notice of the
disclaimer.
568D Effect of disclaimer
(1) A disclaimer is taken to have terminated, as from the day on which
it is taken because of subsection 568C(3) to take effect, the
company’s rights, interests, liabilities and property in or in respect
of the disclaimer property, but does not affect any other person’s
rights or liabilities except so far as necessary in order to release the
company and its property from liability.
(2) A person aggrieved by the operation of a disclaimer is taken to be a
creditor of the company to the extent of any loss suffered by the
person because of the disclaimer and may prove such a loss as a
debt in the winding up.
568E Application to set aside disclaimer after it has taken effect
(1) With the leave of the Court, a person who has, or claims to have,
an interest in disclaimed property may apply to the Court for an
order setting aside the disclaimer after it has taken effect.
(2) The Court may give leave only if it is satisfied that it is
unreasonable in all the circumstances to expect the person to have
applied for an order setting aside the disclaimer before it took
effect.
(3) The Court may give leave subject to conditions.
(4) On an application under subsection (1), the Court:
(a) may by order set aside the disclaimer; and
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Section 568F
476 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if it does so—may make such further orders as it thinks
appropriate, including orders necessary to put the company,
the liquidator or anyone else in the same position, as nearly
as practicable, as if the disclaimer had never taken effect.
(5) However, the Court may set aside a disclaimer only if satisfied that
the disclaimer has caused, or would cause, to persons who have, or
claim to have, interests in the property, prejudice that is grossly out
of proportion to the prejudice that setting aside the disclaimer (and
making any further orders) would cause to:
(a) the company’s creditors; and
(b) persons who have changed their position in reliance on the
disclaimer taking effect.
568F Court may dispose of disclaimed property
(1) The Court may order that disclaimed property vest in, or be
delivered to:
(a) a person entitled to the property; or
(b) a person in or to whom it seems to the Court appropriate that
the property be vested or delivered; or
(c) a person as trustee for a person of a kind referred to in
paragraph (a) or (b).
(2) The Court may make an order under subsection (1):
(a) on the application of a person who claims an interest in the
property, or is under a liability in respect of the property that
this Act has not discharged; and
(b) after hearing such persons as it thinks appropriate.
(3) Subject to subsection (4), where an order is made under
subsection (1) vesting property, the property vests immediately, for
the purposes of the order, without any conveyance, transfer or
assignment.
(4) Where:
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Corporations Act 2001 477
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(a) a law of the Commonwealth or of a State or Territory
requires the transfer of property vested by an order under
subsection (1) to be registered; and
(b) that law enables the order to be registered;
the property vests in equity because of the order but does not vest
at law until that law has been complied with.
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Division 7B Effect on enforcement process against company’s property
Section 569
478 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7B—Effect on enforcement process against
company’s property
569 Executions, attachments etc. before winding up
(1) Where:
(a) a creditor has issued execution against property of a
company, or instituted proceedings to attach a debt due to a
company or to enforce a charge or a charging order against
property of a company, within 6 months immediately before
the commencement of the winding up; and
(b) the company commences to be wound up;
the creditor must pay to the liquidator an amount equal to the
amount (if any) received by the creditor as a result of the
execution, attachment or enforcement of the charge or the charging
order, less an amount in respect of the costs of the execution,
attachment or enforcement of the charge or the charging order,
being an amount agreed between the creditor and the liquidator or,
if no agreement is reached, an amount equal to the taxed cost of
that execution, attachment or enforcement.
(2) Where the creditor has paid to the liquidator an amount in
accordance with subsection (1), the creditor may prove in the
winding up for the creditor’s debt as an unsecured creditor as if the
execution or attachment or the enforcement of the charge or the
charging order, as the case may be, had not taken place.
(3) Subject to subsections (4) and (5), where a creditor of a company
receives:
(a) notice in writing of an application to the Court for the
winding up of the company; or
(b) notice in writing of the convening of a meeting of the
company to consider a resolution that the company be wound
up voluntarily;
it is not competent for the creditor to take any action, or any further
action, as the case may be, to attach a debt due to the company or
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Section 570
Corporations Act 2001 479
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to enforce a charge or a charging order against property of the
company.
(4) Subsection (3) does not affect the right of a creditor to take action
or further action if:
(a) in a case to which paragraph (3)(a) applies—the application
has been withdrawn or dismissed; or
(b) in a case to which paragraph (3)(b) applies—the meeting of
the company has refused to pass the resolution.
(5) Subsection (3) does not prevent a creditor from performing a
binding contract for the sale of property entered into before the
creditor received a notice referred to in that subsection.
(6) Notwithstanding anything contained in this Division, a person who
purchases property in good faith:
(a) under a sale by the sheriff in consequence of the issue of
execution against property of a company that, after the sale,
commences to be wound up; or
(b) under a sale in consequence of the enforcement by a creditor
of a charge or a charging order against property of a company
that, after the sale, commences to be wound up;
acquires a good title to it as against the liquidator and the company.
(7) In this section:
charge means a charge created by a law upon registration of a
judgment in a registry.
charging order means a charging order made by a court in respect
of a judgment.
570 Duties of sheriff after receiving notice of application
(1) Subject to this section, where a sheriff:
(a) receives notice in writing of an application to the Court for
the winding up of a company; or
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Section 570
480 Corporations Act 2001
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(b) receives notice in writing of the convening of a meeting of a
company to consider a resolution that the company be wound
up voluntarily;
it is not competent for the sheriff to:
(c) take any action to sell property of the company pursuant to
any process of execution issued by or on behalf of a creditor;
or
(d) pay to the creditor by whom or on whose behalf the process
of execution was issued or to any person on the creditor’s
behalf the proceeds of the sale of property of the company
that has been sold pursuant to such a process or any money
seized, or paid to avoid seizure or sale of property of the
company, under such a process.
(2) Subsection (1) does not affect the power of the sheriff to take any
action or make any payment if:
(a) in a case to which paragraph (1)(a) applies—the application
has been withdrawn or dismissed; or
(b) in a case to which paragraph (1)(b) applies—the meeting of
the company has refused to pass the resolution.
(3) Subject to this section, where the registrar or other appropriate
officer of a court to which proceeds of the sale of property of a
company or other money has been paid by a sheriff pursuant to a
process of execution issued by or on behalf of a creditor of the
company:
(a) receives notice in writing of an application to the Court for
the winding up of the company; or
(b) receives notice in writing of the convening of a meeting of
the company to consider a resolution that the company be
wound up voluntarily;
any of those proceeds or money not paid out of court must not be
paid to the creditor or to any person on behalf of the creditor.
(4) Subsection (3) does not prevent the making of a payment if:
(a) in a case to which paragraph (3)(a) applies—the application
has been withdrawn or dismissed; or
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Section 570
Corporations Act 2001 481
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(b) in a case to which paragraph (3)(b) applies—the meeting of
the company has refused to pass the resolution.
(5) Where a company is being wound up, the liquidator may serve
notice in writing of that fact on a sheriff or the registrar or other
appropriate officer of a court.
(6) Upon such a notice being so served:
(a) the sheriff must deliver or pay to the liquidator:
(i) any property of the company in the sheriff’s possession
under a process of execution issued by or on behalf of a
creditor; and
(ii) any proceeds of the sale of property of the company or
other money in the sheriff’s possession, being proceeds
of the sale of property sold, whether before or after the
commencement of the winding up, pursuant to such a
process or money seized, or paid to avoid seizure or sale
of property of the company, whether before or after the
commencement of the winding up, under such a
process; or
(b) the registrar or other officer of the court must pay to the
liquidator any proceeds of the sale of property of the
company or other money in court, being proceeds of sale or
other money paid into court, whether before or after the
commencement of the winding up, by a sheriff pursuant to a
process of execution issued by or on behalf of a creditor;
as the case requires.
(7) Where:
(a) property is, or proceeds of the sale of property or other
money are, required by subsection (6) to be delivered or paid
to a liquidator; or
(b) a sheriff has, pursuant to subsection (1), refrained from
taking action to sell property of a company, being land, and
that company is being wound up under an order made on the
application referred to in that subsection;
the costs of the execution are a first charge on that property or on
those proceeds of sale or other money.
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Section 570
482 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) For the purpose of giving effect to the charge referred to in
subsection (7), the sheriff, registrar or other officer may retain, on
behalf of the creditor entitled to the benefit of the charge, such
amount from the proceeds of sale or other money referred to in that
subsection as he or she thinks necessary for the purpose.
(9) The Court may, if in a particular case it considers it is proper to do
so:
(a) permit a sheriff to take action to sell property or make a
payment that the sheriff could not, by reason of
subsection (1), otherwise validly take; or
(b) permit the making of a payment the making of which would,
by reason of subsection (3), otherwise be prohibited.
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Section 571
Corporations Act 2001 483
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—Pooling
Subdivision A—Pooling determinations
571 Pooling determination
Making of pooling determination
(1) If the following conditions are satisfied in relation to a group of 2
or more companies:
(a) each company in the group is being wound up;
(b) any of the following subparagraphs applies:
(i) each company in the group is a related body corporate
of each other company in the group;
(ii) apart from this section, the companies in the group are
jointly liable for one or more debts or claims;
(iii) the companies in the group jointly own or operate
particular property that is or was used, or for use, in
connection with a business, a scheme, or an
undertaking, carried on jointly by the companies in the
group;
(iv) one or more companies in the group own particular
property that is or was used, or for use, by any or all of
the companies in the group in connection with a
business, a scheme, or an undertaking, carried on jointly
by the companies in the group;
the liquidator or liquidators of the companies may, by writing:
(c) determine that the group is a pooled group for the purposes
of this section; and
(d) if the liquidator or liquidators consider that it is just and
equitable, as between the various creditors of the companies
in the group, to do so—determine that any or all of the
following provisions:
(i) subsection (2);
(ii) subsection (3);
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(iii) subsection (4);
(iv) subsection (5);
(v) subsection (6);
(vi) subsection (7);
are modified, as set out in the determination, in their
application to the companies in the group.
Note 1: Section 9 provides that pooling determination means a determination
under subsection (1) of this section.
Note 2: A pooling determination comes into force when it is approved by the
eligible unsecured creditors of each of the companies in the group—
see section 578.
Consequences of pooling determination
(2) If a determination under paragraph (1)(c) comes into force in
relation to a group of 2 or more companies:
(a) each company in the group is taken to be jointly and
severally liable for each debt payable by, and each claim
against, each other company in the group; and
(b) each debt payable by a company or companies in the group
to any other company or companies in the group is
extinguished; and
(c) each claim that a company or companies in the group has
against any other company or companies in the group is
extinguished.
(3) Subsection (2) applies to a debt or claim:
(a) whether present or future; and
(b) whether certain or contingent; and
(c) whether ascertained or sounding only in damages.
(4) Subsection (2) does not apply to a debt payable by, or a claim
against, a company in the group unless the debt or claim is
admissible to proof against the company.
(5) If a determination under paragraph (1)(c) comes into force in
relation to a group of 2 or more companies, the order of priority
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applicable under sections 556, 560 and 561 is not altered for a
company in the group.
(6) If:
(a) a determination under paragraph (1)(c) comes into force in
relation to a group of 2 or more companies; and
(b) a secured creditor of a company in the group surrenders the
relevant security interest to the liquidator of the company for
the benefit of creditors of the companies in the group
generally;
the debt may be recovered as a debt that is jointly and severally
payable by the companies in the group.
(7) If:
(a) a determination under paragraph (1)(c) comes into force in
relation to a group of 2 or more companies; and
(b) a secured creditor of a company in the group realises the
security interest;
so much of the debt as remains after deducting the net amount
realised may be recovered as a debt that is jointly and severally
payable by the companies in the group.
(8) The following provisions have effect subject to any modifications
under paragraph (1)(d):
(a) subsection (2);
(b) subsection (3);
(c) subsection (4);
(d) subsection (5);
(e) subsection (6);
(f) subsection (7).
(9) Subsection (2) does not apply in relation to a secured creditor
unless the relevant debt is payable by a company or companies in
the group to any other company or companies in the group.
(10) If:
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486 Corporations Act 2001
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(a) a pooling determination comes into force in relation to a
group of 2 or more companies; and
(b) there are one or more eligible employee creditors of a
company in the group;
those eligible employee creditors are entitled to a priority at least
equal to what they would have been entitled if the determination
had not been made.
Section 477 not limited
(11) This section does not limit section 477.
572 Variation of pooling determination
If a pooling determination is in force in relation to a group of 2 or
more companies, the liquidator or liquidators of the companies
may, by writing, vary the determination.
Note: A variation of a pooling determination comes into force when it is
approved by the creditors of the companies in the group—see
section 578.
573 Lodgment of copy of pooling determination etc.
Pooling determination
(1) Within 7 days after a pooling determination comes into force in
relation to a group of 2 or more companies, the liquidator or
liquidators of the companies in the group must lodge a copy of the
determination with ASIC.
Note: A pooling determination comes into force when it is approved by the
eligible unsecured creditors of each of the companies in the group—
see section 578.
Variation of pooling determination
(2) Within 7 days after a variation of a pooling determination comes
into force in relation to a group of 2 or more companies, the
liquidator or liquidators of the companies in the group must lodge a
copy of the variation with ASIC.
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Section 577
Corporations Act 2001 487
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A variation of a pooling determination comes into force when it is
approved by the eligible unsecured creditors of each of the companies
in the group—see section 578.
577 Eligible unsecured creditors may decide to approve the
determination or variation
(1A) Within 5 business days after the liquidator or liquidators of a group
of 2 or more companies:
(a) make a pooling determination in relation to the group; or
(b) vary a pooling determination in force in relation to the group;
the liquidator or liquidators must convene separate meetings of the
eligible unsecured creditors of each of the companies in the group.
Note: For eligible unsecured creditor, see section 579Q.
(1) At a meeting convened under subsection (1A), the eligible
unsecured creditors may resolve to approve the making of the
determination or variation.
(3) If, at a meeting convened under subsection (1A), the eligible
unsecured creditors do not resolve to approve the making of the
determination or variation:
(a) the determination or variation is cancelled at the end of the
meeting; and
(b) if, as at the end of the meeting, a corresponding resolution
has not been considered at another meeting convened under
subsection (1A) of the eligible unsecured creditors of another
company in the group—that other meeting is cancelled.
578 When pooling determination comes into force etc.
Pooling determination
(1) If:
(a) a pooling determination is made in relation to a group of 2 or
more companies; and
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(b) meetings are convened under subsection 577(1A) of the
eligible unsecured creditors of each company in the group;
and
(c) at each meeting, the eligible unsecured creditors pass a
resolution, as referred to in section 577, approving the
making of the determination;
then:
(d) if all the resolutions were passed at the same time—the
determination comes into force immediately after the
resolutions were passed; or
(e) if the resolutions were passed at different times—the
determination comes into force immediately after the last of
those times.
Note: For eligible unsecured creditor, see section 579Q.
Variation of pooling determination
(2) If:
(a) a pooling determination is in force in relation to a group of 2
or more companies; and
(b) the pooling determination is varied; and
(c) meetings are convened under subsection 577(1A) of the
eligible unsecured creditors of each company in the group;
and
(d) at each meeting, the eligible unsecured creditors pass a
resolution, as referred to in section 577, approving the
making of the variation;
then:
(e) if all the resolutions were passed at the same time—the
variation comes into force immediately after the resolutions
were passed; or
(f) if the resolutions were passed at different times—the
variation comes into force immediately after the last of those
times.
Note: For eligible unsecured creditor, see section 579Q.
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Section 579
Corporations Act 2001 489
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579 Duties of liquidator
(1) This section applies if:
(a) the liquidator or liquidators of a group of 2 or more
companies exercise a power conferred by section 571 or
subsection 577(1A); and
(b) the liquidator or liquidators, in the exercise of that power,
acted:
(i) with due care; and
(ii) in good faith; and
(iii) for the benefit of the creditors of the companies in the
group, considered as a whole.
(2) The liquidator or liquidators are taken not to be in breach of:
(a) any duty to a company in the group concerned (whether
under section 180, 181, 182, 183 or 184 or otherwise and
whether of a fiduciary nature or not); or
(b) any duty to the creditors of a company in the group
concerned (whether of a fiduciary nature or not);
in connection with the exercise of that power.
579A Court may vary or terminate pooling determination
(1) If a pooling determination is in force in relation to a group of 2 or
more companies, the Court may make an order varying or
terminating the pooling determination if the Court is satisfied that:
(a) information that was about the business, property, affairs or
financial circumstances of a company in the group, and that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to
eligible unsecured creditors of a company in the group
in deciding whether to vote in favour of a resolution to
approve the making of the pooling determination;
was given to:
(iii) the liquidator of a company in the group; or
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490 Corporations Act 2001
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(iv) eligible unsecured creditors of a company in the group;
or
(b) information that was about the business, property, affairs or
financial circumstances of a company in the group, and that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to
eligible unsecured creditors of a company in the group
in deciding whether to vote in favour of a resolution to
approve the making of the pooling determination;
was contained in a document that accompanied a notice of
the meeting at which the resolution was passed; or
(c) there was an omission from such a document, and the
omission can reasonably be expected to have been material to
any of those eligible unsecured creditors in deciding whether
to vote in favour of a resolution to approve the making of the
pooling determination; or
(d) effect cannot be given to the pooling determination without
injustice or undue delay; or
(e) the pooling determination would materially disadvantage an
eligible unsecured creditor who is an applicant for the order;
or
(f) the pooling determination would be oppressive or unfairly
prejudicial to, or unfairly discriminatory against, an applicant
for the order who is an eligible unsecured creditor of a
company in the group; or
(g) the pooling determination would be contrary to the interests
of the creditors of the companies in the group, considered as
a whole; or
(h) in a case where a company in the group is being wound up
under a members’ voluntary winding up:
(i) the pooling determination would materially
disadvantage a member of the company who is an
applicant for the order; or
(ii) the pooling determination would be oppressive or
unfairly prejudicial to, or unfairly discriminatory
against, one or more such members; or
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(iii) the pooling determination would be contrary to the
interests of the members of the company as a whole; or
(i) the pooling determination should be varied or terminated for
some other reason.
Note: For eligible unsecured creditor, see section 579Q.
(2) An order may only be made on the application of:
(a) a creditor of a company in the group; or
(b) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group; or
(c) any other interested person.
(3) If the Court makes an order under subsection (1), the applicant for
the order must:
(a) lodge with ASIC a notice setting out the text of the order; and
(b) do so within 2 business days after the making of the order.
The notice must be in the prescribed form.
579B Court may cancel or confirm variation
(1) If:
(a) a pooling determination is in force in relation to a group of 2
or more companies; and
(b) the determination is varied; and
(c) the variation has come into force;
either of the following persons may apply to the Court for an order
cancelling the variation:
(d) a creditor of a company in the group;
(e) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group.
(2) On an application, the Court:
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(a) may make an order cancelling the variation, or confirming it,
either wholly or in part, on such conditions (if any) as the
order specifies; and
(b) may make such other orders as it thinks appropriate.
(3) If the Court makes an order under subsection (2), the applicant for
the order must:
(a) lodge with ASIC a notice setting out the text of the order; and
(b) do so within 2 business days after the making of the order.
The notice must be in the prescribed form.
579C When Court may void or validate pooling determination
(1) If there is doubt, on a specific ground, whether a pooling
determination that relates to a group of 2 or more companies:
(a) was made, varied or approved in accordance with this
Division; or
(b) complies with this Division;
any of the following persons may apply to the Court for an order
under this section:
(c) the liquidator of a company in the group;
(d) a creditor of a company in the group;
(e) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group;
(f) ASIC.
(2) On an application, the Court may make an order declaring the
pooling determination, or a provision of it, to be void or not to be
void, as the case requires, on the ground specified in the
application or some other ground.
(3) On an application, the Court may declare the pooling
determination, or a provision of it, to be valid, despite a
contravention of a provision of this Division, if the Court is
satisfied that:
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Section 579D
Corporations Act 2001 493
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the provision was substantially complied with; and
(b) no injustice will result for anyone affected by the pooling
determination if the contravention is disregarded.
(4) If the Court declares a provision of a pooling determination to be
void, the Court may, by order, vary the pooling determination.
(5) If the Court makes an order under subsection (2), the applicant for
the order must:
(a) lodge with ASIC a notice setting out the text of the order; and
(b) do so within 2 business days after the making of the order.
The notice must be in the prescribed form.
(6) If the Court makes a declaration under subsection (3), the applicant
for the declaration must:
(a) lodge with ASIC a notice setting out the text of the
declaration; and
(b) do so within 2 business days after the making of the
declaration.
The notice must be in the prescribed form.
(7) If the Court makes an order under subsection (4) on the application
of a person, the applicant for the order must:
(a) lodge with ASIC a notice setting out the text of the order; and
(b) do so within 2 business days after the making of the order.
The notice must be in the prescribed form.
579D Effect of termination or avoidance
The termination or avoidance, in whole or in part, of a pooling
determination does not affect the previous operation of:
(a) the pooling determination; or
(b) this Division in so far as it relates to the pooling
determination.
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Section 579E
494 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Pooling orders
579E Pooling orders
Making of pooling order
(1) If it appears to the Court that the following conditions are satisfied
in relation to a group of 2 or more companies:
(a) each company in the group is being wound up;
(b) any of the following subparagraphs applies:
(i) each company in the group is a related body corporate
of each other company in the group;
(ii) apart from this section, the companies in the group are
jointly liable for one or more debts or claims;
(iii) the companies in the group jointly own or operate
particular property that is or was used, or for use, in
connection with a business, a scheme, or an
undertaking, carried on jointly by the companies in the
group;
(iv) one or more companies in the group own particular
property that is or was used, or for use, by any or all of
the companies in the group in connection with a
business, a scheme, or an undertaking, carried on jointly
by the companies in the group;
the Court may, if the Court is satisfied that it is just and equitable
to do so, by order, determine that the group is a pooled group for
the purposes of this section.
Note 1: Section 9 provides that pooling order means an order under
subsection (1) of this section.
Note 2: See also subsection (12) (just and equitable criteria).
Consequences of pooling order
(2) If a pooling order comes into force in relation to a group of 2 or
more companies:
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Section 579E
Corporations Act 2001 495
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) each company in the group is taken to be jointly and
severally liable for each debt payable by, and each claim
against, each other company in the group; and
(b) each debt payable by a company or companies in the group
to any other company or companies in the group is
extinguished; and
(c) each claim that a company or companies in the group has
against any other company or companies in the group is
extinguished.
Note: For exemptions, see paragraph 579G(1)(a).
(3) Subsection (2) applies to a debt or claim:
(a) whether present or future; and
(b) whether certain or contingent; and
(c) whether ascertained or sounding only in damages.
(4) Subsection (2) does not apply to a debt payable by, or a claim
against, a company in the group unless the debt or claim is
admissible to proof against the company.
(5) If a pooling order comes into force in relation to a group of 2 or
more companies, the order of priority applicable under
sections 556, 560 and 561 is not altered for a company in the
group.
(6) If:
(a) a pooling order comes into force in relation to a group of 2 or
more companies; and
(b) a secured creditor of a company in the group surrenders the
relevant security interest to the liquidator of the company for
the benefit of creditors of the companies in the group
generally;
the debt may be recovered as a debt that is jointly and severally
payable by the companies in the group.
(7) If:
(a) a pooling order comes into force in relation to a group of 2 or
more companies; and
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Section 579E
496 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a secured creditor of a company in the group realises the
security interest;
so much of the debt as remains after deducting the net amount
realised may be recovered as a debt that is jointly and severally
payable by the companies in the group.
(8) The following provisions have effect subject to any modifications
under paragraph 579G(1)(d):
(a) subsection (2);
(b) subsection (3);
(c) subsection (4);
(d) subsection (5);
(e) subsection (6);
(f) subsection (7).
(9) Subsection (2) does not apply in relation to a secured creditor
unless the relevant debt is payable by a company or companies in
the group to any other company or companies in the group.
(10) The Court must not make a pooling order in relation to a group of 2
or more companies if:
(a) both:
(i) the Court is satisfied the order would materially
disadvantage an eligible unsecured creditor of a
company in the group; and
(ii) the eligible unsecured creditor has not consented to the
making of the order; or
(b) all of the following conditions are satisfied:
(i) a company in the group is being wound up under a
members’ voluntary winding up;
(ii) the Court is satisfied that the order would materially
disadvantage a member of that company;
(iii) the member is not a company in the group;
(iv) the member has not consented to the making of the
order.
Note: For eligible unsecured creditor, see section 579Q.
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Section 579E
Corporations Act 2001 497
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Standing
(11) The Court may only make a pooling order on the application of the
liquidator or liquidators of the companies in the group.
Just and equitable criteria
(12) In determining whether it is just and equitable to make a pooling
order, the Court must have regard to all of the following matters:
(a) the extent to which:
(i) a company in the group; and
(ii) the officers or employees of a company in the group;
were involved in the management or operations of any of the
other companies in the group;
(b) the conduct of:
(i) a company in the group; and
(ii) the officers or employees of a company in the group;
towards the creditors of any of the other companies in the
group;
(c) the extent to which the circumstances that gave rise to the
winding up of any of the companies in the group are directly
or indirectly attributable to the acts or omissions of:
(i) any of the other companies in the group; or
(ii) the officers or employees of any of the other companies
in the group;
(d) the extent to which the activities and business of the
companies in the group have been intermingled;
(e) the extent to which creditors of any of the companies in the
group may be advantaged or disadvantaged by the making of
the order;
(f) any other relevant matters.
Lodgment of pooling order
(13) A pooling order must be lodged with ASIC.
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Section 579F
498 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
579F Variation of pooling orders
(1) The Court may, by order, vary a pooling order if the Court is of the
opinion that it is just and equitable to do so.
(2) A pooling order may only be varied on the application of:
(a) the liquidator of a company in the group; or
(b) a creditor of a company in the group; or
(c) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group.
Lodgment of order
(3) An order under subsection (1) must be lodged with ASIC.
579G Court may make ancillary orders etc.
(1) If the Court makes a pooling order in relation to a group of 2 or
more companies, the Court may, if the Court is of the opinion that
it is just and equitable to do so, do any or all of the following
things:
(a) by order, exempt:
(i) a specified debt or claim; or
(ii) a specified class of debts or claims;
from the application of subsection 579E(2) to the group;
(b) by order, transfer, or direct the transfer, of:
(i) specified property; or
(ii) a specified class of property;
from a company in the group to another company in the
group;
(c) by order, transfer, or direct the transfer, of liability for:
(i) a specified debt or claim; or
(ii) a specified class of debts or claims;
from a company in the group to another company in the
group;
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Section 579G
Corporations Act 2001 499
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) by order, modify the application of this Act in relation to the
winding up of the companies in the group;
(e) make such other orders, and give such directions, in relation
to the winding up of the companies in the group, as the Court
thinks fit.
Standing
(2) An order or direction under subsection (1) may only be made or
given on the application of:
(a) the liquidator of a company in the group; or
(b) a creditor of a company in the group; or
(c) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group.
Conditional orders etc.
(3) An order or direction under subsection (1) may be made or given
subject to conditions.
(4) An order or direction under subsection (1) may provide for
different returns for different creditors or classes of creditors.
(5) An order or direction under subsection (1) may provide for the
subordination of the debts and claims of specified creditors or
classes of creditors to those of other creditors.
(6) Subsections (4) and (5) do not limit subsection (1) or (3).
Rights of secured creditors
(7) An order or direction under subsection (1) does not affect the rights
of a secured creditor, unless the relevant debt is payable by a
company or companies in the group to any other company or
companies in the group.
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Section 579H
500 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Lodgment of order or direction
(8) An order or direction under subsection (1) must be lodged with
ASIC.
579H Variation of ancillary orders etc.
Variation of ancillary order
(1) The Court may, by order, vary an order made under
subsection 579G(1) if the Court is of the opinion that it is just and
equitable to do so.
(2) An order made under subsection 579G(1) may only be varied on
the application of:
(a) the liquidator of a company in the group; or
(b) a creditor of a company in the group, so long as the creditor
is not a company in the group; or
(c) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group.
Variation of direction
(3) The Court may vary a direction given under subsection 579G(1) if
the Court is of the opinion that it is just and equitable to do so.
(4) A direction given under subsection 579G(1) may only be varied on
the application of:
(a) the liquidator of a company in the group; or
(b) a creditor of a company in the group; or
(c) in a case where a company in the group is being wound up
under a members’ voluntary winding up—a member of the
company, so long as the member is not a company in the
group.
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Section 579J
Corporations Act 2001 501
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Lodgment of order or direction
(5) An order under subsection (1) must be lodged with ASIC.
(6) A variation of a direction given under subsection 579G(1) must be
lodged with ASIC.
579J Notice of application for pooling order etc.
(1) If the liquidator or liquidators of the companies in a group apply
for a pooling order, the liquidator or liquidators must give written
notice of:
(a) the application; or
(b) a website where persons can view a copy of the application;
to:
(c) each eligible unsecured creditor of each company in the
group; and
(d) in a case where a company in the group is being wound up
under a members’ voluntary winding up—each member of
the company, so long as the member is not a company in the
group; and
(e) such other persons (if any) as the Court directs.
Note 1: For eligible unsecured creditor, see section 579Q.
Note 2: For electronic notification under this subsection, see section 600G.
(2) If:
(a) a pooling order is made in relation to a group of 2 or more
companies; and
(b) the liquidator of a company in the group applies for:
(i) an order under subsection 579F(1); or
(ii) an order under subsection 579G(1); or
(iii) an order under subsection 579H(1); or
(iv) a direction under subsection 579G(1); or
(v) a variation of a direction given under
subsection 579G(1);
the liquidator must give written notice of:
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Section 579K
502 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the application; or
(d) a website where persons can view a copy of the application;
to:
(e) each eligible unsecured creditor of each company in the
group; and
(f) in a case where a company in the group is being wound up
under a members’ voluntary winding up—each member of
the company, so long as the member is not a company in the
group; and
(g) such other persons (if any) as the Court directs.
Note 1: For eligible unsecured creditor, see section 579Q.
Note 2: For electronic notification under this subsection, see section 600G.
579K Notice of pooling order etc.
Notice of pooling order
(1) If a pooling order is made in relation to a group of 2 or more
companies, the liquidator or liquidators of the companies in the
group must:
(a) give each eligible unsecured creditor of each company in the
group a written notice setting out:
(i) the order; and
(ii) a summary description of the order; or
(b) give each eligible unsecured creditor of each company in the
group a written notice of a website where persons can view a
copy of:
(i) the order; and
(ii) a summary description of the order.
Note 1: For eligible unsecured creditor, see section 579Q.
Note 2: For electronic notification under this subsection, see section 600G.
(2) If:
(a) a pooling order is made in relation to a group of 2 or more
companies; and
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Section 579K
Corporations Act 2001 503
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) a company in the group is being wound up under a members’
voluntary winding up;
the liquidator or liquidators of the companies in the group must:
(c) give each member of that company a written notice setting
out:
(i) the order; and
(ii) a summary description of the order;
so long as the member is not a company in the group; or
(d) give each member of that company a written notice of a
website where persons can view a copy of:
(i) the order; and
(ii) a summary description of the order;
so long as the member is not a company in the group.
Note: For electronic notification under this subsection, see section 600G.
Notice of application by liquidator
(3) If:
(a) a pooling order is made in relation to a group of 2 or more
companies; and
(b) the Court does any of the following on the application of a
liquidator of a company in the group:
(i) makes an order under subsection 579F(1);
(ii) makes an order under subsection 579G(1);
(iii) makes an order under subsection 579H(1);
(iv) gives a direction under subsection 579G(1);
(v) varies a direction given under subsection 579G(1);
the liquidator must:
(c) give each eligible unsecured creditor of each company in the
group a written notice setting out:
(i) the order, direction or variation; and
(ii) a summary description of the order, direction or
variation; or
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504 Corporations Act 2001
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(d) give each eligible unsecured creditor of each company in the
group a written notice of a website where persons can view a
copy of:
(i) the order, direction or variation; and
(ii) a summary description of the order, direction or
variation.
Note 1: For eligible unsecured creditor, see section 579Q.
Note 2: For electronic notification under this subsection, see section 600G.
(4) If:
(a) a pooling order is made in relation to a group of 2 or more
companies; and
(b) the Court does any of the following on the application of a
liquidator of a company in the group:
(i) makes an order under subsection 579F(1);
(ii) makes an order under subsection 579G(1);
(iii) makes an order under subsection 579H(1);
(iv) gives a direction under subsection 579G(1);
(v) varies a direction given under subsection 579G(1); and
(c) a company in the group is being wound up under a members’
voluntary winding up;
the liquidator must:
(d) give each member of that company a written notice setting
out:
(i) the order, direction or variation; and
(ii) a summary description of the order, direction or
variation;
so long as the member is not a company in the group; or
(e) give each member of that company a written notice of a
website where persons can view a copy of:
(i) the order, direction or variation; and
(ii) a summary description of the order, direction or
variation;
so long as the member is not a company in the group.
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Section 579L
Corporations Act 2001 505
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For electronic notification under this subsection, see section 600G.
579L Consolidated meetings of creditors
(1) If:
(a) either:
(i) a pooling determination is in force in relation to a group
of 2 or more companies; or
(ii) a pooling order is in force in relation to a group of 2 or
more companies; and
(b) each company in the group is being wound up;
then, unless the Court otherwise orders:
(c) instead of convening separate meetings under or for the
purposes of a particular provision of this Act, the liquidator
or liquidators may convene a meeting under or for the
purposes of that provision, on a consolidated basis, of the
creditors of the companies in the group; and
(d) a resolution passed at a consolidated meeting by those
creditors is taken to have been passed by the creditors of each
of the companies in the group; and
(e) if there are 2 or more liquidators—one of those liquidators is
to preside at a consolidated meeting; and
(f) notice of a consolidated meeting may be given by the
liquidator or liquidators.
Note: See also Division 80 (committees of inspection) of Schedule 2.
(2) The regulations may make provision for or in relation to:
(a) the convening of, conduct of, and procedure and voting at,
consolidated meetings of creditors; and
(b) the number of persons required to constitute a quorum at any
such meeting; and
(c) the sending of notices of meetings to persons entitled to
attend any such meeting; and
(d) the lodging of copies of notices of, and of resolutions passed
at, any such meeting; and
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Section 579M
506 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) generally regulating the conduct of, and procedure at, any
such meeting.
Subdivision C—Other provisions
579M When debts or claims are provable in winding up
If a debt or claim becomes a debt payable by, or a claim against, a
company under any of the following provisions:
(a) subsection 571(2) (including that subsection as modified by a
determination under paragraph 571(1)(d));
(b) subsection 571(6) (including that subsection as modified by a
determination under paragraph 571(1)(d));
(c) subsection 571(7) (including that subsection as modified by a
determination under paragraph 571(1)(d));
(d) subsection 579E(2) (including that subsection as modified by
an order under paragraph 579G(1)(d));
(e) subsection 579E(6) (including that subsection as modified by
an order under paragraph 579G(1)(d));
(f) subsection 579E(7) (including that subsection as modified by
an order under paragraph 579G(1)(d));
(g) subsection 579G(1);
then, in the winding up of the company, the debt or claim is
admissible to proof against the company.
579N Group of companies
To avoid doubt, for the purposes of:
(a) this Division; or
(b) any other provision of this Act to the extent to which it
relates to this Division;
a group of 2 or more companies need not be associated with each
other in any way (other than a way described in
paragraph 571(1)(b) or 579E(1)(b)).
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Section 579P
Corporations Act 2001 507
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
579P Secured debt may become unsecured
For the purposes of this Division, a secured debt becomes an
unsecured debt to the extent that the creditor proves for the debt as
an unsecured creditor.
579Q Eligible unsecured creditor
(1) Subject to subsection (2), for the purposes of the application of this
Division to a group of 2 or more companies, a creditor of a
company in the group is an eligible unsecured creditor of that
company if:
(a) both:
(i) the creditor’s debt or claim is unsecured; and
(ii) the creditor is not a company in the group; or
(b) the creditor is specified in the regulations.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
(2) The regulations may provide that, for the purposes of the
application of this Division to a group of 2 or more companies, a
specified creditor of a company in the group is not an eligible
unsecured creditor of that company.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
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Division 9 Co-operation between Australian and foreign courts in external
administration matters
Section 580
508 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 9—Co-operation between Australian and foreign
courts in external administration matters
580 Definitions
In this Division:
external administration matter means a matter relating to:
(a) winding up, under this Chapter, a company or a Part 5.7
body; or
(b) winding up, outside Australia, a body corporate or a Part 5.7
body; or
(c) the insolvency of a body corporate or of a Part 5.7 body.
prescribed country means:
(a) a country prescribed for the purposes of this definition; or
(b) a colony, overseas territory or protectorate of a country so
prescribed.
581 Courts to act in aid of each other
(1) All courts having jurisdiction in matters arising under this Act, the
Judges of those courts and the officers of, or under the control of,
those courts must severally act in aid of, and be auxiliary to, each
other in all external administration matters.
(2) In all external administration matters, the Court:
(a) must act in aid of, and be auxiliary to, the courts of:
(i) external Territories; and
(ii) States that are not in this jurisdiction; and
(iii) prescribed countries;
that have jurisdiction in external administration matters; and
(b) may act in aid of, and be auxiliary to, the courts of other
countries that have jurisdiction in external administration
matters.
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Division 9
Section 581
Corporations Act 2001 509
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Where a letter of request from a court of an external Territory, or
of a country other than Australia, requesting aid in an external
administration matter is filed in the Court, the Court may exercise
such powers with respect to the matter as it could exercise if the
matter had arisen in its own jurisdiction.
(4) The Court may request a court of an external Territory, or of a
country other than Australia, that has jurisdiction in external
administration matters to act in aid of, and be auxiliary to, it in an
external administration matter.
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Part 5.7 Winding up bodies other than companies
Section 582
510 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.7—Winding up bodies other than companies
582 Application of Part
(1) This Part has effect in addition to, and not in derogation of,
sections 601CC and 601CL and any provisions contained in this
Act or any other law with respect to the winding up of bodies, and
the liquidator or Court may exercise any powers or do any act in
the case of Part 5.7 bodies that might be exercised or done by him,
her or it in the winding up of companies.
(2) Nothing in this Part affects the operation of the Bankruptcy Act
1966.
(3) A Part 5.7 body may be wound up under this Part notwithstanding
that it is being wound up or has been dissolved, deregistered or has
otherwise ceased to exist as a body corporate under or by virtue of
the laws of the place under which it was incorporated.
583 Winding up Part 5.7 bodies
Subject to this Part, a Part 5.7 body may be wound up under this
Chapter and this Chapter applies accordingly to a Part 5.7 body
with such adaptations as are necessary, including the following
adaptations:
(a) the principal place of business of a Part 5.7 body in this
jurisdiction is taken, for all the purposes of the winding up, to
be the registered office of the Part 5.7 body;
(b) a Part 5.7 body is not to be wound up voluntarily under this
Chapter;
(c) the circumstances in which a Part 5.7 body may be wound up
are as follows:
(i) if the Part 5.7 body is unable to pay its debts, has been
dissolved or deregistered, has ceased to carry on
business in this jurisdiction or has a place of business in
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Section 585
Corporations Act 2001 511
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
this jurisdiction only for the purpose of winding up its
affairs;
(ii) if the Court is of opinion that it is just and equitable that
the Part 5.7 body should be wound up;
(iii) if ASIC has stated in a report prepared under Division 1
of Part 3 of the ASIC Act that, in its opinion:
(A) the Part 5.7 body cannot pay its debts and
should be wound up; or
(B) it is in the interests of the public, of the
members, or of the creditors, that the Part 5.7
body should be wound up;
(d) if the Part 5.7 body is a registrable Australian body—the
winding up must deal only with the affairs of the body
outside its place of origin.
585 Insolvency of Part 5.7 body
For the purposes of this Part, a Part 5.7 body is taken to be unable
to pay its debts if:
(a) a creditor, by assignment or otherwise, to whom the Part 5.7
body is indebted in a sum exceeding the statutory minimum
then due has served on the Part 5.7 body, by leaving at its
principal place of business in this jurisdiction or by
delivering to the secretary or a director or senior manager of
the Part 5.7 body or by otherwise serving in such manner as
the Court approves or directs, a demand, signed by or on
behalf of the creditor, requiring the body to pay the sum so
due and the body has, for 3 weeks after the service of the
demand, failed to pay the sum or to secure or compound for
it to the satisfaction of the creditor; or
(b) an action or other proceeding has been instituted against any
member for any debt or demand due or claimed to be due
from the Part 5.7 body or from the member as such and,
notice in writing of the institution of the action or proceeding
having been served on the body by leaving it at its principal
place of business in this jurisdiction or by delivering it to the
secretary or a director or senior manager of the Part 5.7 body
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Section 586
512 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
or by otherwise serving it in such manner as the Court
approves or directs, the Part 5.7 body has not, within 10 days
after service of the notice, paid, secured or compounded for
the debt or demand or procured the action or proceeding to be
stayed or indemnified the defendant to his, her or its
reasonable satisfaction against the action or proceeding and
against all costs, damages and expenses to be incurred by
him, her or it by reason of the action or proceeding; or
(c) execution or other process issued on a judgment, decree or
order obtained in a court (whether an Australian court or not)
in favour of a creditor against the Part 5.7 body or a member
of the Part 5.7 body as such, or a person authorised to be
sued as nominal defendant on behalf of the Part 5.7 body, is
returned unsatisfied; or
(d) it is otherwise proved to the satisfaction of the Court that the
Part 5.7 body is unable to pay its debts.
586 Contributories in winding up of Part 5.7 body
(1) On a Part 5.7 body being wound up, every person who:
(a) in any case—is liable to pay or contribute to the payment of:
(i) a debt or liability of the Part 5.7 body; or
(ii) any sum for the adjustment of the rights of the members
among themselves; or
(iii) the costs and expenses of winding up; or
(b) if the Part 5.7 body has been dissolved or deregistered in its
place of origin—was so liable immediately before the
dissolution or deregistration;
is a contributory and every contributory is liable to contribute to
the property of the Part 5.7 body all sums due from the
contributory in respect of any such liability.
(2) On the death or bankruptcy of a contributory, the provisions of this
Act with respect to the personal representatives of deceased
contributories or the assignees and trustees of bankrupt
contributories, as the case may be, apply.
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Section 587
Corporations Act 2001 513
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587 Power of Court to stay or restrain proceedings
(1) The provisions of this Act with respect to staying and restraining
actions and other civil proceedings against a company at any time
after the filing of an application for winding up and before the
making of a winding up order extend, in the case of a Part 5.7 body
where the application to stay or restrain is by a creditor, to actions
and other civil proceedings against a contributory of the Part 5.7
body.
(2) Where an order has been made for winding up a Part 5.7 body, no
action or other civil proceeding is to be proceeded with or
commenced against a contributory of the Part 5.7 body in respect
of a debt of the Part 5.7 body except by leave of the Court and
subject to such terms as the Court imposes.
588 Outstanding property of defunct registrable body
(1) This section applies if, after the dissolution or deregistration of a
registrable body, outstanding property of the body remains:
(a) in this jurisdiction; and
(b) outside the body’s place of origin.
(2) The estate and interest in the property, at law or in equity, of the
body or its liquidator at that time, together with all claims, rights
and remedies that the body or its liquidator then had in respect of
the property, vests by force of this section in:
(a) if the body was incorporated in Australia or an external
Territory—the person entitled to the property under the law
of the body’s place of origin; or
(b) if paragraph (a) does not apply and the property was held by
the body or liquidator on trust—the Commonwealth; or
(c) otherwise—ASIC.
(3) Where any claim, right or remedy of a liquidator may under this
Act be made, exercised or availed of only with the approval or
concurrence of the Court or some other person, the Commonwealth
or ASIC may, for the purposes of this section, make, exercise or
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Section 588
514 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
avail itself of the claim, right or remedy without such approval or
concurrence.
(4) Section 601AE applies to:
(a) property that vests in the Commonwealth under
paragraph (2)(b) of this section as if the property were vested
in the Commonwealth under subsection 601AD(1A); and
(b) property that vests in ASIC under paragraph (2)(c) of this
section as if the property were vested in ASIC under
subsection 601AD(2).
(5) In this section:
property of a body includes PPSA retention of title property, if the
security interest in the property is vested in the body because of the
operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
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Part 5.7B
Preliminary Division 1
Section 588C
Corporations Act 2001 515
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.7B—Recovering property or compensation
for the benefit of creditors of insolvent
company
Division 1—Preliminary
588C Definitions
In this Part:
property of a company includes PPSA retention of title property, if
the security interest in the property is vested in the company
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
588D Secured debt may become unsecured
For the purposes of this Part, a secured debt becomes an unsecured
debt to the extent that the creditor proves for the debt as an
unsecured creditor.
588E Presumptions to be made in recovery proceedings
(1) In this section:
recovery proceeding, in relation to a company, means:
(a) an application under section 588FF by the company’s
liquidator; or
(b) proceedings begun under subsection 588FH(2) by the
company’s liquidator; or
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Section 588E
516 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) proceedings, in so far as they relate to the question whether a
security interest created by the company is void to any
extent, as against the company’s liquidator, because of
subsection 588FJ(2); or
(d) proceedings begun under subsection 588FJ(6) by the
company’s liquidator; or
(e) proceedings for a contravention of subsection 588G(2) in
relation to the incurring of a debt by the company (including
proceedings under section 588M in relation to the incurring
of the debt but not including proceedings for an offence); or
(f) proceedings under section 588W in relation to the incurring
of a debt by the company.
(2) Subsections (3) to (9), inclusive, have effect for the purposes of a
recovery proceeding in relation to a company.
(3) If:
(a) the company is being wound up; and
(b) it is proved, or because of subsection (4) or (8) it must be
presumed, that the company was insolvent at a particular
time during the 12 months ending on the relation-back day;
it must be presumed that the company was insolvent throughout the
period beginning at that time and ending on that day.
(4) Subject to subsections (5) to (7), if it is proved that the company:
(a) has failed to keep financial records in relation to a period as
required by subsection 286(1); or
(b) has failed to retain financial records in relation to a period for
the 7 years required by subsection 286(2);
the company is to be presumed to have been insolvent throughout
the period.
(5) Paragraph (4)(a) does not apply in relation to a contravention of
subsection 286(1) that is only minor or technical.
(6) Subsection (4) does not have effect, in so far as it would prejudice
a right or interest of a person for the company to be presumed
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Section 588E
Corporations Act 2001 517
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insolvent because of a contravention of subsection 286(2), if it is
proved that:
(a) the contravention was due solely to someone destroying,
concealing or removing financial records of the company;
and
(b) none of those financial records was destroyed, concealed or
removed by the first-mentioned person; and
(c) the person was not in any way, by act or omission, directly or
indirectly, knowingly or recklessly, concerned in, or party to,
destroying, concealing or removing any of those financial
records.
(7) If the recovery proceeding is an application under section 588FF,
subsection (4) of this section does not have effect for the purposes
of proving, for the purposes of the application, that an unfair
preference given by the company to a creditor of the company is an
insolvent transaction, unless it is proved, for the purposes of the
application, that a related entity of the company was a party to the
unfair preference.
(8) If, for the purposes of another recovery proceeding in relation to
the company, there has been proved:
(a) if the other proceeding is of the kind referred to in
paragraph (1)(a) of this section—a matter of the kind referred
to in a paragraph of section 588FC or of
subsection 588FG(2); or
(b) if the other proceeding is of the kind referred to in
paragraph (1)(b) of this section—a matter of the kind referred
to in a paragraph of section 588FC or of subsection 588FG(2)
or 588FH(1), or a defence under subsection 588FH(3); or
(c) if the other proceeding is of the kind referred to in
paragraph (1)(c) or (d) of this section—a matter of the kind
referred to in subsection 588FJ(3); or
(d) if the other proceeding is of the kind referred to in
paragraph (1)(e) of this section—a matter of the kind referred
to in a paragraph of section 588G, or a defence under
section 588H; or
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Division 1 Preliminary
Section 588F
518 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) if the other proceeding is of the kind referred to in
paragraph (1)(f) of this section—a matter of the kind referred
to in a paragraph of subsection 588V(1), or a defence under
section 588X;
it must be presumed that that matter was the case, or that the
matters constituting that defence were the case.
(9) A presumption for which this section provides operates except so
far as the contrary is proved for the purposes of the proceeding
concerned.
588F Certain taxation liabilities taken to be debts
(1) For the purposes of this Part, a company’s liability under a
remittance provision to pay to the Commissioner of Taxation an
amount equal to a deduction made by the company, after 1 July
1993, from a payment:
(a) is taken to be a debt; and
(b) is taken to have been incurred when the deduction was made.
(2) In this section:
remittance provision means any of the following former provisions
of the Income Tax Assessment Act 1936:
(aa) section 220AAE, 220AAM or 220AAR;
(a) section 221F (except subsection 221F(12)) or section 221G
(except subsection 221G(4A));
(b) subsection 221YHDC(2);
(c) subsection 221YHZD(1) or (1A);
(d) subsection 221YN(1);
or any of the provisions of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953.
(3) This section is not intended to limit the generality of a reference in
this Act to a debt or to incurring a debt.
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Part 5.7B
Voidable transactions Division 2
Section 588FA
Corporations Act 2001 519
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Voidable transactions
588FA Unfair preferences
(1) A transaction is an unfair preference given by a company to a
creditor of the company if, and only if:
(a) the company and the creditor are parties to the transaction
(even if someone else is also a party); and
(b) the transaction results in the creditor receiving from the
company, in respect of an unsecured debt that the company
owes to the creditor, more than the creditor would receive
from the company in respect of the debt if the transaction
were set aside and the creditor were to prove for the debt in a
winding up of the company;
even if the transaction is entered into, is given effect to, or is
required to be given effect to, because of an order of an Australian
court or a direction by an agency.
(2) For the purposes of subsection (1), a secured debt is taken to be
unsecured to the extent of so much of it (if any) as is not reflected
in the value of the security.
(3) Where:
(a) a transaction is, for commercial purposes, an integral part of
a continuing business relationship (for example, a running
account) between a company and a creditor of the company
(including such a relationship to which other persons are
parties); and
(b) in the course of the relationship, the level of the company’s
net indebtedness to the creditor is increased and reduced from
time to time as the result of a series of transactions forming
part of the relationship;
then:
(c) subsection (1) applies in relation to all the transactions
forming part of the relationship as if they together constituted
a single transaction; and
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Division 2 Voidable transactions
Section 588FB
520 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) the transaction referred to in paragraph (a) may only be taken
to be an unfair preference given by the company to the
creditor if, because of subsection (1) as applying because of
paragraph (c) of this subsection, the single transaction
referred to in the last-mentioned paragraph is taken to be
such an unfair preference.
588FB Uncommercial transactions
(1) A transaction of a company is an uncommercial transaction of the
company if, and only if, it may be expected that a reasonable
person in the company’s circumstances would not have entered
into the transaction, having regard to:
(a) the benefits (if any) to the company of entering into the
transaction; and
(b) the detriment to the company of entering into the transaction;
and
(c) the respective benefits to other parties to the transaction of
entering into it; and
(d) any other relevant matter.
(2) A transaction may be an uncommercial transaction of a company
because of subsection (1):
(a) whether or not a creditor of the company is a party to the
transaction; and
(b) even if the transaction is given effect to, or is required to be
given effect to, because of an order of an Australian court or
a direction by an agency.
588FC Insolvent transactions
A transaction of a company is an insolvent transaction of the
company if, and only if, it is an unfair preference given by the
company, or an uncommercial transaction of the company, and:
(a) any of the following happens at a time when the company is
insolvent:
(i) the transaction is entered into; or
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Section 588FD
Corporations Act 2001 521
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(ii) an act is done, or an omission is made, for the purpose
of giving effect to the transaction; or
(b) the company becomes insolvent because of, or because of
matters including:
(i) entering into the transaction; or
(ii) a person doing an act, or making an omission, for the
purpose of giving effect to the transaction.
588FD Unfair loans to a company
(1) A loan to a company is unfair if, and only if:
(a) the interest on the loan was extortionate when the loan was
made, or has since become extortionate because of a
variation; or
(b) the charges in relation to the loan were extortionate when the
loan was made, or have since become extortionate because of
a variation;
even if the interest is, or the charges are, no longer extortionate.
(2) In determining:
(a) whether interest on a loan was or became extortionate at a
particular time as mentioned in paragraph (1)(a); or
(b) whether charges in relation to a loan were or became
extortionate at a particular time as mentioned in
paragraph (1)(b);
regard is to be had to the following matters as at that time:
(c) the risk to which the lender was exposed; and
(d) the value of any security in respect of the loan; and
(e) the term of the loan; and
(f) the schedule for payments of interest and charges and for
repayments of principal; and
(g) the amount of the loan; and
(h) any other relevant matter.
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Division 2 Voidable transactions
Section 588FDA
522 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588FDA Unreasonable director-related transactions
(1) A transaction of a company is an unreasonable director-related
transaction of the company if, and only if:
(a) the transaction is:
(i) a payment made by the company; or
(ii) a conveyance, transfer or other disposition by the
company of property of the company; or
(iii) the issue of securities by the company; or
(iv) the incurring by the company of an obligation to make
such a payment, disposition or issue; and
(b) the payment, disposition or issue is, or is to be, made to:
(i) a director of the company; or
(ii) a close associate of a director of the company; or
(iii) a person on behalf of, or for the benefit of, a person
mentioned in subparagraph (i) or (ii); and
(c) it may be expected that a reasonable person in the company’s
circumstances would not have entered into the transaction,
having regard to:
(i) the benefits (if any) to the company of entering into the
transaction; and
(ii) the detriment to the company of entering into the
transaction; and
(iii) the respective benefits to other parties to the transaction
of entering into it; and
(iv) any other relevant matter.
The obligation referred to in subparagraph (a)(iv) may be a
contingent obligation.
Note: Subparagraph (a)(iv)—This would include, for example, granting
options over shares in the company.
(2) To avoid doubt, if:
(a) the transaction is a payment, disposition or issue; and
(b) the transaction is entered into for the purpose of meeting an
obligation the company has incurred;
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Section 588FE
Corporations Act 2001 523
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the test in paragraph (1)(c) applies to the transaction taking into
account the circumstances as they exist at the time when the
transaction is entered into (rather than as they existed at the time
when the obligation was incurred).
(3) A transaction may be an unreasonable director-related transaction
because of subsection (1):
(a) whether or not a creditor of the company is a party to the
transaction; and
(b) even if the transaction is given effect to, or is required to be
given effect to, because of an order of an Australian court or
a direction by an agency.
588FE Voidable transactions
(1) If a company is being wound up:
(a) a transaction of the company may be voidable because of any
one or more of subsections (2) to (6) if the transaction was
entered into on or after 23 June 1993; and
(b) a transaction of the company may be voidable because of
subsection (6A) if the transaction was entered into on or after
the commencement of the Corporations Amendment
(Repayment of Directors’ Bonuses) Act 2003.
(2) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) it was entered into, or an act was done for the purpose of
giving effect to it:
(i) during the 6 months ending on the relation-back day; or
(ii) after that day but on or before the day when the winding
up began.
(2A) The transaction is voidable if:
(a) the transaction is:
(i) an uncommercial transaction of the company; or
(ii) an unfair preference given by the company to a creditor
of the company; or
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Section 588FE
524 Corporations Act 2001
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(iii) an unfair loan to the company; or
(iv) an unreasonable director-related transaction of the
company; and
(b) the company was under administration immediately before:
(i) the company resolved by special resolution that it be
wound up voluntarily; or
(ii) the Court ordered that the company be wound up; and
(c) the transaction was entered into, or an act was done for the
purpose of giving effect to it, during the period beginning at
the start of the relation-back day and ending:
(i) when the company made the special resolution that it be
wound up voluntarily; or
(ii) when the Court made the order that the company be
wound up; and
(d) the transaction, or the act done for the purpose of giving
effect to it, was not entered into, or done, on behalf of the
company by, or under the authority of, the administrator of
the company.
(2B) The transaction is voidable if:
(a) the transaction is:
(i) an uncommercial transaction of the company; or
(ii) an unfair preference given by the company to a creditor
of the company; or
(iii) an unfair loan to the company; or
(iv) an unreasonable director-related transaction of the
company; and
(b) the company was subject to a deed of company arrangement
immediately before:
(i) the company resolved by special resolution that it be
wound up voluntarily; or
(ii) the Court ordered that the company be wound up; and
(c) the transaction was entered into, or an act was done for the
purpose of giving effect to it, during the period beginning at
the start of the relation-back day and ending:
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Section 588FE
Corporations Act 2001 525
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(i) when the company made the special resolution that it be
wound up voluntarily; or
(ii) when the Court made the order that the company be
wound up; and
(d) the transaction, or the act done for the purpose of giving
effect to it, was not entered into, or done, on behalf of the
company by, or under the authority of:
(i) the administrator of the deed; or
(ii) the administrator of the company.
(3) The transaction is voidable if:
(a) it is an insolvent transaction, and also an uncommercial
transaction, of the company; and
(b) it was entered into, or an act was done for the purpose of
giving effect to it, during the 2 years ending on the
relation-back day.
(4) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) a related entity of the company is a party to it; and
(c) it was entered into, or an act was done for the purpose of
giving effect to it, during the 4 years ending on the
relation-back day.
(5) The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) the company became a party to the transaction for the
purpose, or for purposes including the purpose, of defeating,
delaying, or interfering with, the rights of any or all of its
creditors on a winding up of the company; and
(c) the transaction was entered into, or an act done was for the
purpose of giving effect to the transaction, during the 10
years ending on the relation-back day.
(6) The transaction is voidable if it is an unfair loan to the company
made at any time on or before the day when the winding up began.
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Division 2 Voidable transactions
Section 588FF
526 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6A) The transaction is voidable if:
(a) it is an unreasonable director-related transaction of the
company; and
(b) it was entered into, or an act was done for the purposes of
giving effect to it:
(i) during the 4 years ending on the relation-back day; or
(ii) after that day but on or before the day when the winding
up began.
(7) A reference in this section to doing an act includes a reference to
making an omission.
588FF Courts may make orders about voidable transactions
(1) Where, on the application of a company’s liquidator, a court is
satisfied that a transaction of the company is voidable because of
section 588FE, the court may make one or more of the following
orders:
(a) an order directing a person to pay to the company an amount
equal to some or all of the money that the company has paid
under the transaction;
(b) an order directing a person to transfer to the company
property that the company has transferred under the
transaction;
(c) an order requiring a person to pay to the company an amount
that, in the court’s opinion, fairly represents some or all of
the benefits that the person has received because of the
transaction;
(d) an order requiring a person to transfer to the company
property that, in the court’s opinion, fairly represents the
application of either or both of the following:
(i) money that the company has paid under the transaction;
(ii) proceeds of property that the company has transferred
under the transaction;
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Part 5.7B
Voidable transactions Division 2
Section 588FF
Corporations Act 2001 527
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) an order releasing or discharging, wholly or partly, a debt
incurred, or a security or guarantee given, by the company
under or in connection with the transaction;
(f) if the transaction is an unfair loan and such a debt, security or
guarantee has been assigned—an order directing a person to
indemnify the company in respect of some or all of its
liability to the assignee;
(g) an order providing for the extent to which, and the terms on
which, a debt that arose under, or was released or discharged
to any extent by or under, the transaction may be proved in a
winding up of the company;
(h) an order declaring an agreement constituting, forming part of,
or relating to, the transaction, or specified provisions of such
an agreement, to have been void at and after the time when
the agreement was made, or at and after a specified later
time;
(i) an order varying such an agreement as specified in the order
and, if the Court thinks fit, declaring the agreement to have
had effect, as so varied, at and after the time when the
agreement was made, or at and after a specified later time;
(j) an order declaring such an agreement, or specified provisions
of such an agreement, to be unenforceable.
(2) Nothing in subsection (1) limits the generality of anything else in
it.
(3) An application under subsection (1) may only be made:
(a) during the period beginning on the relation-back day and
ending:
(i) 3 years after the relation-back day; or
(ii) 12 months after the first appointment of a liquidator in
relation to the winding up of the company;
whichever is the later; or
(b) within such longer period as the Court orders on an
application under this paragraph made by the liquidator
during the paragraph (a) period.
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Division 2 Voidable transactions
Section 588FG
528 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If the transaction is a voidable transaction solely because it is an
unreasonable director-related transaction, the court may make
orders under subsection (1) only for the purpose of recovering for
the benefit of the creditors of the company the difference between:
(a) the total value of the benefits provided by the company under
the transaction; and
(b) the value (if any) that it may be expected that a reasonable
person in the company’s circumstances would have provided
having regard to the matters referred to in
paragraph 588FDA(1)(c).
588FG Transaction not voidable as against certain persons
(1) A court is not to make under section 588FF an order materially
prejudicing a right or interest of a person other than a party to the
transaction if it is proved that:
(a) the person received no benefit because of the transaction; or
(b) in relation to each benefit that the person received because of
the transaction:
(i) the person received the benefit in good faith; and
(ii) at the time when the person received the benefit:
(A) the person had no reasonable grounds for
suspecting that the company was insolvent at
that time or would become insolvent as
mentioned in paragraph 588FC(b); and
(B) a reasonable person in the person’s
circumstances would have had no such grounds
for so suspecting.
(2) A court is not to make under section 588FF an order materially
prejudicing a right or interest of a person if the transaction is not an
unfair loan to the company, or an unreasonable director-related
transaction of the company, and it is proved that:
(a) the person became a party to the transaction in good faith;
and
(b) at the time when the person became such a party:
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Voidable transactions Division 2
Section 588FG
Corporations Act 2001 529
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) the person had no reasonable grounds for suspecting
that the company was insolvent at that time or would
become insolvent as mentioned in paragraph 588FC(b);
and
(ii) a reasonable person in the person’s circumstances
would have had no such grounds for so suspecting; and
(c) the person has provided valuable consideration under the
transaction or has changed his, her or its position in reliance
on the transaction.
(3) For the purposes of paragraph (2)(c), if an amount has been paid or
applied towards discharging to a particular extent a liability to pay
tax, the discharge is valuable consideration provided:
(a) by the person to whom the tax is payable; and
(b) under any transaction that consists of, or involves, the
payment or application.
(4) In subsection (3):
tax means tax (however described) payable under a law of the
Commonwealth or of a State or Territory, and includes, for
example, a levy, a charge, and municipal or other rates.
(5) For the purposes of paragraph (2)(c), if an amount has been paid or
applied towards discharging to a particular extent a liability to the
Commonwealth, or to the Commissioner of Taxation, that arose
under or because of an Act of which the Commissioner has the
general administration, the discharge is valuable consideration
provided by the Commonwealth, or by the Commissioner, as the
case requires, under any transaction that consists of, or involves,
the payment or application.
(6) Subsections (3) and (5):
(a) are to avoid doubt and are not intended to limit the cases
where a person may be taken to have provided valuable
consideration under a transaction; and
(b) apply to an amount even if it was paid or applied before the
commencement of this Act.
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Division 2 Voidable transactions
Section 588FGA
530 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588FGA Directors to indemnify Commissioner of Taxation if certain
payments set aside
(1) This section applies if the court makes an order under
section 588FF against the Commissioner of Taxation because of
the payment of an amount in respect of a liability:
(a) under any of the following provisions:
(i) former section 220AAE, 220AAM or 220AAR of the
Income Tax Assessment Act 1936;
(ii) former section 221F (except subsection 221F(12)),
former section 221G (except subsection 221G(4A)) or
former section 221P of the Income Tax Assessment Act
1936;
(iii) former subsection 221YHDC(2) of the Income Tax
Assessment Act 1936;
(iv) former subsection 221YHZD(1) or (1A) of the Income
Tax Assessment Act 1936;
(v) former subsection 221YN(1) of the Income Tax
Assessment Act 1936;
(vi) section 222AHA of the Income Tax Assessment Act
1936;
(vii) Subdivision 16-B in Schedule 1 to the Taxation
Administration Act 1953; or
(b) to pay the amount of an estimate of unpaid superannuation
guarantee charge under Division 268 in Schedule 1 to the
Taxation Administration Act 1953.
(2) Each person who was a director of the company when the payment
was made is liable to indemnify the Commissioner in respect of
any loss or damage resulting from the order.
(3) An amount payable to the Commissioner under subsection (2):
(a) is a debt due to the Commonwealth and payable to the
Commissioner; and
(b) may be recovered in a court of competent jurisdiction by the
Commissioner, or a Deputy Commissioner of Taxation, suing
in his or her official name.
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Voidable transactions Division 2
Section 588FGB
Corporations Act 2001 531
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The court may, in the proceedings in which it made the order
against the Commissioner, order a person to pay to the
Commissioner an amount payable by the person under
subsection (2).
(5) A person who pays an amount under subsection (2) has the same
rights:
(a) whether by way of indemnity, subrogation, contribution or
otherwise; and
(b) against the company or anyone else;
as if the payment had been made under a guarantee:
(c) of the liability referred to in subsection (1); and
(d) under which the person and every other person who was a
director of the company as mentioned in subsection (2) were
jointly and severally liable as guarantors.
588FGB Defences in proceedings under section 588FGA
(1) This section has effect for the purposes of:
(a) proceedings to recover from a person an amount payable
under subsection 588FGA(2); and
(b) proceedings under subsection 588FGA(5) against a person of
the kind referred to in paragraph 588FGA(5)(d).
(2) The time when the payment referred to in subsection 588FGA(1)
was made is called the payment time.
(3) It is a defence if it is proved that, at the payment time, the person
had reasonable grounds to expect, and did expect, that the company
was solvent at that time and would remain solvent even if it made
the payment.
(4) Without limiting the generality of subsection (3), it is a defence if
it is proved that, at the payment time, the person:
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person (the other person)
was responsible for providing to the first-mentioned
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Division 2 Voidable transactions
Section 588FH
532 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
person adequate information about whether the
company was solvent; and
(ii) that the other person was fulfilling that responsibility;
and
(b) expected, on the basis of information provided to the
first-mentioned person by the other person, that the company
was solvent at that time and would remain solvent even if it
made the payment.
(5) It is a defence if it is proved that, because of illness or for some
other good reason, the person did not take part in the management
of the company at the payment time.
(6) It is a defence if it is proved that:
(a) the person took all reasonable steps to prevent the company
from making the payment; or
(b) there were no such steps the person could have taken.
(7) In determining whether a defence under subsection (6) has been
proved, the matters to which regard is to be had include, but are not
limited to:
(a) any action the person took with a view to appointing an
administrator of the company; and
(b) when that action was taken; and
(c) the results of that action.
588FH Liquidator may recover from related entity benefit resulting
from insolvent transaction
(1) This section applies where a company is being wound up and a
transaction of the company:
(a) is an insolvent transaction of the company; and
(b) is voidable under section 588FE; and
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Section 588FI
Corporations Act 2001 533
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) has had the effect of discharging, to the extent of a particular
amount, a liability (whether under a guarantee or otherwise
and whether contingent or otherwise) of a related entity of
the company.
(2) The company’s liquidator may recover from the related entity, as a
debt due to the company, an amount equal to the amount referred
to in paragraph (1)(c).
(3) In deciding what orders (if any) to make under section 588FF on an
application relating to the transaction, a court must take into
account any amount recovered under subsection (2) of this section.
(4) If the liquidator recovers an amount under subsection (2) from the
related entity, the related entity has the same rights:
(a) whether by way of indemnity, subrogation, contribution or
otherwise; and
(b) against the company or anyone else;
as if the related entity had paid the amount in discharging, to the
extent of that amount, the liability referred to in paragraph (1)(c).
588FI Creditor who gives up benefit of unfair preference may prove
for preferred debt
(1) This section applies where:
(a) a transaction is an unfair preference given by a company to a
creditor of the company after 23 June 1993; and
(b) at the request of the company’s liquidator, because of an
order under section 588FF, or for any other reason, the
creditor has put the company in the same position as if the
transaction had not been entered into.
(2) A court must not make under section 588FF, on an application
relating to the transaction, an order prejudicing a right or interest of
the creditor.
(3) The creditor may prove in the winding up as if the transaction had
not been entered into.
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Division 2 Voidable transactions
Section 588FJ
534 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588FJ Circulating security interest created within 6 months before
relation-back day
(1) This section applies if:
(a) a company is being wound up in insolvency; and
(b) the company created a circulating security interest in
property of the company at a particular time that is at or after
23 June 1993 and:
(i) during the 6 months ending on the relation-back day; or
(ii) after that day but on or before the day when the winding
up began.
(2) The circulating security interest is void, as against the company’s
liquidator, except so far as it secures:
(a) an advance paid to the company, or at its direction, at or after
that time and as consideration for the circulating security
interest; or
(b) interest on such an advance; or
(c) the amount of a liability under a guarantee or other obligation
undertaken at or after that time on behalf of, or for the benefit
of, the company; or
(d) an amount payable for property or services supplied to the
company at or after that time; or
(e) interest on an amount so payable.
(3) Subsection (2) does not apply if it is proved that the company was
solvent immediately after that time.
(4) Paragraphs (2)(a) and (b) do not apply in relation to an advance so
far as it was applied to discharge, directly or indirectly, an
unsecured debt, whether contingent or otherwise, that the company
owed to:
(a) the secured party; or
(b) if the secured party was a body corporate—a related entity of
the body.
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Section 588FJ
Corporations Act 2001 535
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) Paragraphs (2)(d) and (e) do not apply in relation to an amount
payable as mentioned in paragraph (2)(d) in so far as the amount
exceeds the market value of the property or services when supplied
to the company.
(6) If, during the 6 months ending on the relation-back day, or after
that day but on or before the day when the winding up began, a
debt secured by the circulating security interest was discharged, out
of the company’s money or property, to the extent of a particular
amount (in this subsection called the realised amount), the
liquidator may, by proceedings in a court of competent jurisdiction,
recover from the secured party, as a debt due to the company, the
amount worked out in accordance with the formula:
where:
realisation costs means so much (if any) of the costs and expenses
of enforcing the security interest as is attributable to realising the
realised amount.
unsecured amount means so much of the realised amount as does
not exceed so much of the debt as would, if the debt had not been
so discharged, have been unsecured, as against the liquidator,
because of subsection (2).
Unsecured amount Realisation costs
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Division 2A Vesting of PPSA security interests if not continuously perfected
Section 588FK
536 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2A—Vesting of PPSA security interests if not
continuously perfected
588FK Interpretation and application
(1) A word or expression used in this Division has the same meaning
as in the Personal Property Securities Act 2009.
(2) Subsection (1) applies despite any other provision of this Act
(subject to subsection (4)).
(3) For the purposes of this Division, whether or not a person has
acquired actual or constructive knowledge of a circumstance is to
be determined in accordance with sections 297 to 300 of the
Personal Property Securities Act 2009.
(4) In this Division:
PPSA security interest has the meaning given by section 51.
Note: As a result of this section, in this Division, company has the same
meaning as in the Personal Property Securities Act 2009. At the time
this section was enacted, section 10 of that Act provided that company
means:
(a) a company registered under Part 2A.2 or Part 5B.1 of the Corporations Act 2001; or
(b) a registrable body that is registered under Division 1 or 2 of Part 5B.2 of that Act.
588FL Vesting of PPSA security interests if collateral not registered
within time
Scope
(1) This section applies if:
(a) any of the following events occurs:
(i) an order is made, or a resolution is passed, for the
winding up of a company;
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Section 588FL
Corporations Act 2001 537
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) an administrator of a company is appointed under
section 436A, 436B or 436C;
(iii) a company executes a deed of company arrangement
under Part 5.3A; and
(b) a PPSA security interest granted by the company in collateral
is covered by subsection (2).
Note: A security interest granted by a company in relation to which
paragraph (a) applies that is unperfected at the critical time may vest
in the company under section 267 or 267A of the Personal Property
Securities Act 2009.
(2) This subsection covers a PPSA security interest if:
(a) at the critical time, or, if the security interest arises after the
critical time, when the security interest arises:
(i) the security interest is enforceable against third parties
under the law of Australia; and
(ii) the security interest is perfected by registration, and by
no other means; and
(b) the registration time for the collateral is after the latest of the
following times:
(i) 6 months before the critical time;
(ii) the time that is the end of 20 business days after the
security agreement that gave rise to the security interest
came into force, or the time that is the critical time,
whichever time is earlier;
(iii) if the security agreement giving rise to the security
interest came into force under the law of a foreign
jurisdiction, but the security interest first became
enforceable against third parties under the law of
Australia after the time that is 6 months before the
critical time—the time that is the end of 56 days after
the security interest became so enforceable, or the time
that is the critical time, whichever time is earlier;
(iv) a later time ordered by the Court under section 588FM.
Note 1: For the meaning of critical time, see subsection (7).
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Division 2A Vesting of PPSA security interests if not continuously perfected
Section 588FL
538 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: For when a security interest is enforceable against third parties under
the law of Australia, see section 20 of the Personal Property
Securities Act 2009.
Note 3: A security interest may become perfected at a particular time by a
registration that is made earlier than that time, if the security interest
attaches to the collateral at the later time (after registration). See
section 21 of the Personal Property Securities Act 2009.
Note 4: The Personal Property Securities Act 2009 provides for perfection by
registration, possession or control, or by force of that Act (see
section 21 of that Act).
Vesting of security interest in company
(4) The PPSA security interest vests in the company at the following
time, unless the security interest is unaffected by this section
because of section 588FN:
(a) if the security interest first becomes enforceable against third
parties at or before the critical time—immediately before the
event mentioned in paragraph (1)(a);
(b) if the security interest first becomes enforceable against third
parties after the critical time—at the time it first becomes so
enforceable.
Note: For the meaning of critical time, see subsection (7).
Property acquired for new value without knowledge
(5) Subsection (4) does not affect the title of a person to personal
property if:
(a) the person acquires the personal property for new value from
a secured party, from a person on behalf of a secured party,
or from a receiver in the exercise of powers:
(i) conferred by the security agreement providing for the
security interest; or
(ii) implied by the general law; and
(b) at the time the person acquires the property, the person has
no actual or constructive knowledge of the following (as the
case requires):
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Section 588FM
Corporations Act 2001 539
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) the filing of an application for an order to wind up the
company;
(ii) the passing of a resolution to wind up the company;
(iii) the appointment of an administrator of the company
under section 436A, 436B or 436C;
(iv) the execution of a deed of company arrangement by the
company under Part 5.3A.
Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009.
(6) In a proceeding in Australia under this Act, the onus of proving the
fact that a person acquires personal property without actual or
constructive knowledge as mentioned in paragraph (5)(b) lies with
the person asserting that fact.
(7) In this section:
critical time, in relation to a company, means:
(a) if the company is being wound up—when, on a day, the
event occurs by virtue of which the winding up is taken to
have begun or commenced on that day under section 513A or
513B; or
(b) in any other case—when, on a day, the event occurs by virtue
of which the day is the section 513C day for the company.
588FM Extension of time for registration
(1) A company, or any person interested, may apply to the Court
(within the meaning of section 58AA) for an order fixing a later
time for the purposes of subparagraph 588FL(2)(b)(iv).
Note: If an insolvency-related event occurs in relation to a company,
paragraph 588FL(2)(b) fixes a time by which a PPSA security interest
granted by the company must be registered under the Personal
Property Securities Act 2009, failing which the security interest may
vest in the company.
(2) On an application under this section, the Court may make the order
sought if it is satisfied that:
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Division 2A Vesting of PPSA security interests if not continuously perfected
Section 588FN
540 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the failure to register the collateral earlier:
(i) was accidental or due to inadvertence or some other
sufficient cause; or
(ii) is not of such a nature as to prejudice the position of
creditors or shareholders; or
(b) on other grounds, it is just and equitable to grant relief.
(3) The Court may make the order sought on any terms and conditions
that seem just and expedient to the Court.
588FN PPSA security interests unaffected by section 588FL
PPSA security interests arising under certain transactions
(1) Subsection 588FL(4) (vesting of security interests in company)
does not apply to a PPSA security interest provided for by any of
the following transactions, if the interest does not secure the
payment or performance of an obligation:
(a) a transfer of an account or chattel paper;
(b) a PPS lease, if paragraph (e) (serial numbered goods) of the
definition of PPS lease in subsection 13(1) of the Personal
Property Securities Act 2009 applies to the lease, and none of
paragraphs (a) to (d) of that definition applies to the lease;
(c) a commercial consignment.
Example: An example of a PPSA security interest mentioned in paragraph (b) is
a PPS lease of goods that does not secure the payment or performance
of an obligation, if:
(a) the goods leased may or must be described by serial number in accordance with regulations made for the purposes of the Personal Property Securities Act 2009; and
(b) the lease is for a term of between 90 days and 1 year; and
(c) paragraphs (c) and (d) of the definition of PPS lease in subsection 13(1) of the Personal Property Securities Act 2009 do not apply to the lease.
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Vesting of PPSA security interests if not continuously perfected Division 2A
Section 588FN
Corporations Act 2001 541
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
PPSA security interests and subordinated debts
(2) Subsection 588FL(4) (vesting of security interests in company)
does not apply to a PPSA security interest in an account if all of the
following conditions are satisfied:
(a) a person (the obligor) owes money to another person (the
senior creditor);
(b) the obligor also owes money to a third person (the junior
creditor);
(c) an agreement between the senior creditor and the junior
creditor provides (in substance):
(i) for the postponement or subordination of the obligor’s
debt to the junior creditor, to the obligor’s debt to the
senior creditor; and
(ii) in the event of the obligor’s debt to the junior creditor
being discharged (whether wholly or partly) by the
obligor transferring personal property to the junior
creditor—for the junior creditor to transfer the property,
or proceeds of the property, to the senior creditor to the
value of the amount owed by the obligor to the senior
creditor; and
(iii) in the event that the property or proceeds are not
transferred—for the junior creditor to hold the property
or proceeds on trust for the senior creditor to that value;
and
(iv) in the event of such a trust arising—for a security
interest to be granted by the junior creditor to the senior
creditor over the personal property or proceeds securing
payment of the obligor’s debt to the senior creditor;
(d) the security interest is a security interest granted under the
agreement, in the circumstances described in
subparagraph (c)(iv).
Transfer of collateral subject to PPSA security interests
(3) Subsection 588FL(4) (vesting of security interests in company)
does not apply to a PPSA security interest if:
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Division 2A Vesting of PPSA security interests if not continuously perfected
Section 588FO
542 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) before the critical time that applies under section 588FL, the
company acquired, by transfer, the collateral in which the
PPSA security interest is granted; and
(b) the company did not acquire the collateral free of the security
interest; and
(c) the security interest became perfected before the critical time;
and
(d) the security interest was continuously perfected by
registration during a period covered by subsection (4) that
begins before the critical time.
(4) The period covered by this subsection:
(a) begins at whichever of the following times is applicable:
(i) in a case in which the secured party consented to the
transfer—the end of 5 business days after the day of the
transfer;
(ii) in a case in which the secured party otherwise acquires
the actual or constructive knowledge required to perfect
the secured party’s interest by registration (or to
re-perfect the interest by an amendment of a
registration)—the end of 5 business days after the day
the secured party acquires the knowledge; and
(b) ends no earlier than at the critical time that applies under
section 588FL.
Note: For what is actual or constructive knowledge, see sections 297 and
298 of the Personal Property Securities Act 2009.
588FO Certain lessors, bailors and consignors entitled to damages
Scope
(1) This section applies if either of the following PPSA security
interests is vested in a company under section 588FL:
(a) a PPSA security interest of a consignor under a commercial
consignment;
(b) a PPSA security interest of a lessor or bailor under a PPS
lease.
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Vesting of PPSA security interests if not continuously perfected Division 2A
Section 588FO
Corporations Act 2001 543
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Entitlement to damages and compensation
(2) The consignor, lessor or bailor:
(a) is taken to have suffered damage immediately before the
PPSA security interest was vested in the company; and
(b) may recover an amount of compensation from the company
equal to the greater of the following amounts:
(i) the amount determined in accordance with the
consignment, lease or bailment;
(ii) the sum of the market value of the consigned, leased or
bailed property immediately before the critical time that
applies under section 588FL, and the amount of any
other damage or loss resulting from the termination of
the consignment, lease or bailment.
Note: The consignor, lessor or bailor may be able to prove the amount of
compensation in proceedings related to the winding up of the
company.
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company
Division 2B Security interests in favour of company officers etc.
Section 588FP
544 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2B—Security interests in favour of company
officers etc.
588FP Security interests in favour of an officer of a company etc.
void
General rule
(1) A security interest, and any powers purporting to be conferred by
the instrument under which the security interest is created, are
void, and are taken always to have been void, if:
(a) a company grants the security interest; and
(b) a person covered by subsection (2) is a secured party; and
(c) the secured party purports to take a step to enforce the
security interest, within 6 months after the time (the relevant
time) the instrument is made, without the leave of the Court
under subsection (4).
(2) This subsection covers the following persons:
(a) a person who is an officer (including a local agent of a
foreign company) of the company at the relevant time;
(b) a person who has been such an officer of the company at any
time within the period of 6 months ending at the relevant
time;
(c) a person associated, in relation to the creation of the security
interest, with a person of a kind mentioned in paragraph (a)
or (b).
(3) Without limiting paragraph (1)(c), a secured party takes a step to
enforce a security interest if:
(a) the secured party appoints a receiver, or a receiver and
manager, under powers conferred by an instrument creating
or evidencing the security interest; or
(b) whether directly or by an agent, the secured party enters into
possession or assumes control of property of a company for
the purposes of enforcing the security interest; or
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Section 588FP
Corporations Act 2001 545
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the secured party seizes the property under section 123 of the
Personal Property Securities Act 2009 for the purposes of
enforcing the security interest.
Extension of time on application to the Court
(4) On application by a secured party, the Court may give leave for a
security interest granted by a company to be enforced by the
secured party within 6 months after the relevant time, if it is
satisfied that:
(a) the company was solvent immediately before the relevant
time; and
(b) in all the circumstances of the case, it is just and equitable for
the Court to do so.
Exception for security interests in PPSA retention of title property
(5) This section does not apply in relation to a PPSA security interest
in PPSA retention of title property.
Effect on debts, liabilities, obligations and title
(6) A debt, liability or obligation is not affected by the fact that the
security interest securing the debt, liability or obligation is void
under subsection (1).
(7) Subsection (1) does not affect the title of a person to property if:
(a) the person acquires the property for new value (within the
meaning of the Personal Property Securities Act 2009) from
any of the following persons (the seller):
(i) a person covered by subsection (2);
(ii) another person on behalf of a person covered by
subsection (2);
(iii) a receiver, or receiver and manager, appointed under
powers conferred by an instrument creating or
evidencing the security interest; and
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Division 2B Security interests in favour of company officers etc.
Section 588FP
546 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) at the time the person acquires the property, the person has
no actual or constructive knowledge that the seller is a
secured party or acting on behalf of a secured party.
(8) Sections 297 to 300 of the Personal Property Securities Act 2009
apply in relation to the determination of whether or not a person
has actual or constructive knowledge as mentioned in
paragraph (7)(b) of this section.
Onus of proof
(9) In a proceeding in Australia under this Act, the onus of proving the
fact that a person acquires property without actual or constructive
knowledge as mentioned in paragraph (7)(b) lies with the person
asserting that fact.
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Part 5.7B
Director’s duty to prevent insolvent trading Division 3
Section 588G
Corporations Act 2001 547
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Director’s duty to prevent insolvent trading
588G Director’s duty to prevent insolvent trading by company
(1) This section applies if:
(a) a person is a director of a company at the time when the
company incurs a debt; and
(b) the company is insolvent at that time, or becomes insolvent
by incurring that debt, or by incurring at that time debts
including that debt; and
(c) at that time, there are reasonable grounds for suspecting that
the company is insolvent, or would so become insolvent, as
the case may be; and
(d) that time is at or after the commencement of this Act.
(1A) For the purposes of this section, if a company takes action set out
in column 2 of the following table, it incurs a debt at the time set
out in column 3.
When debts are incurred [operative table]
Action of company When debt is incurred
1 paying a dividend when the dividend is paid or, if the
company has a constitution that provides
for the declaration of dividends, when the
dividend is declared
2 making a reduction of share
capital to which Division 1 of
Part 2J.1 applies (other than a
reduction that consists only of the
cancellation of a share or shares
for no consideration)
when the reduction takes effect
3 buying back shares (even if the
consideration is not a sum certain
in money)
when the buy-back agreement is entered
into
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Division 3 Director’s duty to prevent insolvent trading
Section 588G
548 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
When debts are incurred [operative table]
Action of company When debt is incurred
4 redeeming redeemable preference
shares that are redeemable at its
option
when the company exercises the option
5 issuing redeemable preference
shares that are redeemable
otherwise than at its option
when the shares are issued
6 financially assisting a person to
acquire shares (or units of shares)
in itself or a holding company
when the agreement to provide the
assistance is entered into or, if there is no
agreement, when the assistance is
provided
7 entering into an uncommercial
transaction (within the meaning of
section 588FB) other than one that
a court orders, or a prescribed
agency directs, the company to
enter into
when the transaction is entered into
(2) By failing to prevent the company from incurring the debt, the
person contravenes this section if:
(a) the person is aware at that time that there are such grounds
for so suspecting; or
(b) a reasonable person in a like position in a company in the
company’s circumstances would be so aware.
Note: This subsection is a civil penalty provision (see subsection 1317E(1)).
(3) A person commits an offence if:
(a) a company incurs a debt at a particular time; and
(aa) at that time, a person is a director of the company; and
(b) the company is insolvent at that time, or becomes insolvent
by incurring that debt, or by incurring at that time debts
including that debt; and
(c) the person suspected at the time when the company incurred
the debt that the company was insolvent or would become
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Director’s duty to prevent insolvent trading Division 3
Section 588H
Corporations Act 2001 549
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
insolvent as a result of incurring that debt or other debts (as
in paragraph (1)(b)); and
(d) the person’s failure to prevent the company incurring the
debt was dishonest.
(3A) For the purposes of an offence based on subsection (3), absolute
liability applies to paragraph (3)(a).
Note: For absolute liability, see section 6.2 of the Criminal Code.
(3B) For the purposes of an offence based on subsection (3), strict
liability applies to paragraphs (3)(aa) and (b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The provisions of Division 4 of this Part are additional to, and do
not derogate from, Part 9.4B as it applies in relation to a
contravention of this section.
588H Defences
(1) This section has effect for the purposes of proceedings for a
contravention of subsection 588G(2) in relation to the incurring of
a debt (including proceedings under section 588M in relation to the
incurring of the debt).
(2) It is a defence if it is proved that, at the time when the debt was
incurred, the person had reasonable grounds to expect, and did
expect, that the company was solvent at that time and would
remain solvent even if it incurred that debt and any other debts that
it incurred at that time.
(3) Without limiting the generality of subsection (2), it is a defence if
it is proved that, at the time when the debt was incurred, the
person:
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person (the other person)
was responsible for providing to the first-mentioned
person adequate information about whether the
company was solvent; and
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Division 3 Director’s duty to prevent insolvent trading
Section 588H
550 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) that the other person was fulfilling that responsibility;
and
(b) expected, on the basis of information provided to the
first-mentioned person by the other person, that the company
was solvent at that time and would remain solvent even if it
incurred that debt and any other debts that it incurred at that
time.
(4) If the person was a director of the company at the time when the
debt was incurred, it is a defence if it is proved that, because of
illness or for some other good reason, he or she did not take part at
that time in the management of the company.
(5) It is a defence if it is proved that the person took all reasonable
steps to prevent the company from incurring the debt.
(6) In determining whether a defence under subsection (5) has been
proved, the matters to which regard is to be had include, but are not
limited to:
(a) any action the person took with a view to appointing an
administrator of the company; and
(b) when that action was taken; and
(c) the results of that action.
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Part 5.7B
Director liable to compensate company Division 4
Section 588J
Corporations Act 2001 551
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Director liable to compensate company
Subdivision A—Proceedings against director
588J On application for civil penalty order, Court may order
compensation
(1) Where, on an application for a civil penalty order against a person
in relation to a contravention of subsection 588G(2), the Court is
satisfied that:
(a) the person committed the contravention in relation to the
incurring of a debt by a company; and
(b) the debt is wholly or partly unsecured; and
(c) the person to whom the debt is owed has suffered loss or
damage in relation to the debt because of the company’s
insolvency;
the Court may (whether or not it makes a pecuniary penalty order
under section 1317G or an order under section 206C disqualifying
a person from managing corporations) order the first-mentioned
person to pay to the company compensation equal to the amount of
that loss or damage.
(2) A company’s liquidator may intervene in an application for a civil
penalty order against a person in relation to a contravention of
subsection 588G(2).
(3) A company’s liquidator who so intervenes is entitled to be heard:
(a) only if the Court is satisfied that the person committed the
contravention in relation to the incurring of a debt by that
company; and
(b) only on the question whether the Court should order the
person to pay compensation to the company.
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Division 4 Director liable to compensate company
Section 588K
552 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588K Criminal court may order compensation
If:
(a) a court finds a person guilty of an offence under
subsection 588G(3) in relation to the incurring of a debt by a
company; and
(b) the court is satisfied that:
(i) the debt is wholly or partly unsecured; and
(ii) the person to whom the debt is owed has suffered loss
or damage in relation to the debt because of the
company’s insolvency;
the court may (whether or not it imposes a penalty) order the
first-mentioned person to pay to the company compensation equal
to the amount of that loss or damage.
Note: Section 73A defines when a court is taken to find a person guilty of an
offence.
588L Enforcement of order under section 588J or 588K
An order to pay compensation that a court makes under
section 588J or 588K may be enforced as if it were a judgment of
the court.
588M Recovery of compensation for loss resulting from insolvent
trading
(1) This section applies where:
(a) a person (in this section called the director) has contravened
subsection 588G(2) or (3) in relation to the incurring of a
debt by a company; and
(b) the person (in this section called the creditor) to whom the
debt is owed has suffered loss or damage in relation to the
debt because of the company’s insolvency; and
(c) the debt was wholly or partly unsecured when the loss or
damage was suffered; and
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Section 588N
Corporations Act 2001 553
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) the company is being wound up;
whether or not:
(e) the director has been convicted of an offence in relation to
the contravention; or
(f) a civil penalty order has been made against the director in
relation to the contravention.
(2) The company’s liquidator may recover from the director, as a debt
due to the company, an amount equal to the amount of the loss or
damage.
(3) The creditor may, as provided in Subdivision B but not otherwise,
recover from the director, as a debt due to the creditor, an amount
equal to the amount of the loss or damage.
(4) Proceedings under this section may only be begun within 6 years
after the beginning of the winding up.
588N Avoiding double recovery
An amount recovered in proceedings under section 588M in
relation to the incurring of a debt by a company is to be taken into
account in working out the amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the
incurring of the debt; and
(b) proceedings under section 596AC in relation to a
contravention of section 596AB that is linked to the incurring
of the debt.
588P Effect of sections 588J, 588K and 588M
Sections 588J, 588K and 588M:
(a) have effect in addition to, and not in derogation of, any rule
of law about the duty or liability of a person because of the
person’s office or employment in relation to a company; and
(b) do not prevent proceedings from being instituted in respect of
a breach of such a duty or in respect of such a liability.
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Division 4 Director liable to compensate company
Section 588Q
554 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588Q Certificates evidencing contravention
For the purposes of this Part, a certificate that:
(a) purports to be signed by the Registrar or other proper officer
of an Australian court; and
(b) states:
(i) that that court has declared that a specified person has,
by failing to prevent a specified company from
incurring a specified debt, contravened
subsection 588G(3) in relation to the company; or
(ii) that a specified person was convicted by that court for
an offence constituted by a contravention of
section 588G in relation to the incurring of a specified
debt by a specified company; or
(iii) that a specified person charged before that court with
such an offence was found in that court to have
committed the offence but that the court did not proceed
to convict the person of the offence;
is, unless it is proved that the declaration, conviction or finding
was set aside, quashed or reversed, conclusive evidence:
(c) that the declaration was made, that the person was convicted
of the offence, or that the person was so found, as the case
may be; and
(d) that the person committed the contravention.
Subdivision B—Proceedings by creditor
588R Creditor may sue for compensation with liquidator’s consent
(1) A creditor of a company that is being wound up may, with the
written consent of the company’s liquidator, begin proceedings
under section 588M in relation to the incurring by the company of
a debt that is owed to the creditor.
(2) Subsection (1) has effect despite section 588T, but subject to
section 588U.
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Director liable to compensate company Division 4
Section 588S
Corporations Act 2001 555
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
588S Creditor may give liquidator notice of intention to sue for
compensation
After the end of 6 months beginning when a company begins to be
wound up, a creditor of the company may give to the company’s
liquidator a written notice:
(a) stating that the creditor intends to begin proceedings under
section 588M in relation to the incurring by the company of a
specified debt that is owed to the creditor; and
(b) asking the liquidator to give to the creditor, within 3 months
after receiving the notice:
(i) a written consent to the creditor beginning the
proceedings; or
(ii) a written statement of the reasons why the liquidator
thinks that proceedings under section 588M in relation
to the incurring of that debt should not be begun.
588T When creditor may sue for compensation without liquidator’s
consent
(1) This section applies where a notice is given under section 588S.
(2) The creditor may begin proceedings in a court under section 588M
in relation to the incurring by the company of the debt specified in
the notice if:
(a) as at the end of 3 months after the liquidator receives the
notice, he or she has not consented to the creditor beginning
such proceedings; and
(b) on an application made after those 3 months, the court has
given leave for the proceedings to begin.
(3) If:
(a) during those 3 months, the liquidator gives to the creditor a
written statement of the reasons why the liquidator thinks
that such proceedings should not be begun; and
(b) the creditor applies for leave under paragraph (2)(b);
then:
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Section 588U
556 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the creditor must file the statement with the court when so
applying; and
(d) in determining the application, the court is to have regard to
the reasons set out in the statement.
588U Events preventing creditor from suing
(1) A creditor of a company that is being wound up cannot begin
proceedings under section 588M in relation to the incurring of a
debt by the company if:
(a) the company’s liquidator has applied under section 588FF in
relation to the debt, or in relation to a transaction under
which the debt was incurred; or
(b) the company’s liquidator has begun proceedings under
section 588M in relation to the incurring of the debt; or
(c) the company’s liquidator has intervened in an application for
a civil penalty order against a person in relation to a
contravention of subsection 588G(2) in relation to the
incurring of the debt.
(2) Subsection (1) has effect despite sections 588R and 588T.
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Part 5.7B
Liability of holding company for insolvent trading by subsidiary Division 5
Section 588V
Corporations Act 2001 557
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Liability of holding company for insolvent
trading by subsidiary
588V When holding company liable
(1) A corporation contravenes this section if:
(a) the corporation is the holding company of a company at the
time when the company incurs a debt; and
(b) the company is insolvent at that time, or becomes insolvent
by incurring that debt, or by incurring at that time debts
including that debt; and
(c) at that time, there are reasonable grounds for suspecting that
the company is insolvent, or would so become insolvent, as
the case may be; and
(d) one or both of the following subparagraphs applies:
(i) the corporation, or one or more of its directors, is or are
aware at that time that there are such grounds for so
suspecting;
(ii) having regard to the nature and extent of the
corporation’s control over the company’s affairs and to
any other relevant circumstances, it is reasonable to
expect that:
(A) a holding company in the corporation’s
circumstances would be so aware; or
(B) one or more of such a holding company’s
directors would be so aware; and
(e) that time is at or after the commencement of this Act.
(2) A corporation that contravenes this section is not guilty of an
offence.
588W Recovery of compensation for loss resulting from insolvent
trading
(1) Where:
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Division 5 Liability of holding company for insolvent trading by subsidiary
Section 588X
558 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a corporation has contravened section 588V in relation to the
incurring of a debt by a company; and
(b) the person to whom the debt is owed has suffered loss or
damage in relation to the debt because of the company’s
insolvency; and
(c) the debt was wholly or partly unsecured when the loss or
damage was suffered; and
(d) the company is being wound up;
the company’s liquidator may recover from the corporation, as a
debt due to the company, an amount equal to the amount of the loss
or damage.
(2) Proceedings under this section may only be begun within 6 years
after the beginning of the winding up.
588X Defences
(1) This section has effect for the purposes of proceedings under
section 588W.
(2) It is a defence if it is proved that, at the time when the debt was
incurred, the corporation, and each relevant director (if any), had
reasonable grounds to expect, and did expect, that the company
was solvent at that time and would remain solvent even if it
incurred that debt and any other debts that it incurred at that time.
(3) Without limiting the generality of subsection (2), it is a defence if
it is proved that, at the time when the debt was incurred, the
corporation, and each relevant director (if any):
(a) had reasonable grounds to believe, and did believe:
(i) that a competent and reliable person was responsible for
providing to the corporation adequate information about
whether the company was solvent; and
(ii) that the person was fulfilling that responsibility; and
(b) expected, on the basis of the information provided to the
corporation by the person, that the company was solvent at
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Section 588X
Corporations Act 2001 559
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
that time and would remain solvent even if it incurred that
debt and any other debts that it incurred at that time.
(4) If it is proved that, because of illness or for some other good
reason, a particular relevant director did not take part in the
management of the corporation at the time when the company
incurred the debt, the fact that the director was aware as mentioned
in subparagraph 588V(1)(d)(i) is to be disregarded.
(5) It is a defence if it is proved that the corporation took all
reasonable steps to prevent the company from incurring the debt.
(6) In subsections (2), (3) and (4):
relevant director means a director of the corporation who was
aware as mentioned in subparagraph 588V(1)(d)(i).
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Division 6 Application of compensation under Division 4 or 5
Section 588Y
560 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Application of compensation under Division 4
or 5
588Y Application of amount paid as compensation
(1) An amount paid to a company under section 588J, 588K, 588M or
588W is not available to pay a secured debt of the company unless
all the company’s unsecured debts have been paid in full.
(2) Where:
(a) under section 588J or 588K, or in proceedings under
section 588M or 588W, a court orders a person to pay to the
company compensation, or an amount, equal to the amount
of loss or damage suffered by a person in relation to a debt
because of the company’s insolvency; and
(b) the court is satisfied that, at the time when the company
incurred the debt, the person who suffered the loss or damage
knew that the company was insolvent at that time or would
become insolvent by incurring the debt, or by incurring at
that time debts including the debt, as the case requires;
the court may order that the compensation or amount paid to the
company is not available to pay that debt unless all the company’s
unsecured debts (other than debts to which orders under this
subsection relate) have been paid in full.
(3) Subsection (2) does not apply in relation to proceedings under
section 588M in relation to the incurring of a debt by a company if
the proceedings are begun by a creditor of the company (as
provided for in Subdivision B of Division 4).
(4) Subsection (2) does not apply in relation to a liability that is taken
to be a debt because of section 588F.
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Part 5.7B
Person managing a corporation while disqualified may become liable for corporation’s
debts Division 7
Section 588Z
Corporations Act 2001 561
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Division 7—Person managing a corporation while
disqualified may become liable for corporation’s
debts
588Z Court may make order imposing liability
Where:
(a) a company is being wound up; and
(b) on or after 23 June 1993 and within 4 years before the
relation-back day, a person contravened section 206A by
managing the company;
the Court may, on the application of the company’s liquidator,
order that the person is personally liable for so much of the
company’s debts and liabilities as does not exceed an amount
specified in the order.
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Part 5.8 Offences
Section 589
562 Corporations Act 2001
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Part 5.8—Offences
589 Interpretation and application
(1) Sections 590 to 593 (inclusive) apply to a company:
(a) that has been wound up or is in the course of being wound
up; or
(b) that has been in the course of being wound up, where the
winding up has been stayed or terminated by an order under
section 482; or
(ba) of which a provisional liquidator has been appointed; or
(c) that is or has been under administration; or
(ca) that has executed a deed of company arrangement, even if the
deed has since terminated; or
(d) affairs of which are or have been under investigation; or
(e) in respect of property of which a receiver, or a receiver and
manager, has at any time been appointed, whether by the
Court or under a power contained in an instrument, whether
or not the appointment has been terminated; or
(f) that has ceased to carry on business or is unable to pay its
debts; or
(g) that has entered into a compromise or arrangement with its
creditors.
(2) For the purposes of this Part, affairs of a company are or have been
under investigation if, and only if:
(a) ASIC is investigating, or has at any time investigated, under
Division 1 of Part 3 of the ASIC Act:
(i) matters being, or connected with, affairs of the
company; or
(ii) matters including such matters; or
(b) affairs of the company have at any time been under
investigation under:
(i) Part VII of the Companies Act 1981; or
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(ii) the provisions of a previous law of a State or Territory
that correspond to that Part.
(3) For the purposes of this Part, a company is taken to have ceased to
carry on business only if:
(a) ASIC has published in the prescribed manner a notice of the
proposed deregistration of the company under
subsection 601AA(4) or 601AB(3); and
(b) if the notice was published under subsection 601AA(4) or
under subsection 601AB(3) because of a decision under
subsection 601AB(1)—2 months have passed since the
notice was published and ASIC has not been informed that
the company is carrying on business.
(4) For the purposes of this Part, a company is taken to be unable to
pay its debts if, and only if, execution or other process issued on a
judgment, decree or order of a court (whether or not an Australian
court) in favour of a creditor of the company is returned unsatisfied
in whole or in part.
(5) In this Part:
appropriate officer means:
(a) in relation to a company that has been, has been being or is
being wound up—the liquidator; and
(aa) in relation to a company of which a provisional liquidator has
been appointed—the provisional liquidator; and
(b) in relation to a company that is or has been under
administration—the administrator; and
(ba) in relation to a company that has executed a deed of company
arrangement—the deed’s administrator; and
(c) in relation to a company affairs of which are or have been
under investigation—ASIC or the NCSC, as the case
requires; and
(d) in relation to a company in respect of property of which a
receiver, or a receiver and manager, has been appointed—the
receiver or the receiver and manager; and
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(e) in relation to a company that has ceased to carry on business
or is unable to pay its debts—ASIC or the NCSC, as the case
requires; and
(f) in relation to a company that has entered into a compromise
or arrangement with its creditors—the person appointed by
the Court to administer the compromise or arrangement.
property of a company includes any PPSA retention of title
property of the company.
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
relevant day means the day on which:
(a) in relation to a company that has been wound up, has been in
the course of being wound up, or is being wound up:
(i) if, because of Division 1A of Part 5.6, the winding up is
taken to have begun on the day when an order that the
company be wound up was made—the application for
the order was filed; or
(ii) otherwise—the winding up is taken because of
Division 1A of Part 5.6 to have begun;
(aa) in relation to a company of which a provisional liquidator has
been appointed—the provisional liquidator was appointed;
(b) in relation to a company that is or has been under
administration—the administration began;
(ba) in relation to a company that has executed a deed of company
arrangement—the deed was executed;
(c) in relation to a company affairs of which are or have been
under investigation:
(i) if paragraph (2)(a) applies—the investigation began; or
(ii) if paragraph (2)(b) applies—a direction was given to the
NCSC to arrange for the investigation;
(d) in relation to a company in respect of property of which a
receiver, or a receiver and manager, has been appointed—the
receiver, or the receiver and manager, was appointed;
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(e) in relation to a company that is unable to pay its debts—the
execution or other process was returned unsatisfied in whole
or in part;
(f) in relation to a company that has ceased to carry on
business—a notice was first published in relation to the
company under subsection 601AA(4) or 601AB(3);
(g) in relation to a company that has entered into a compromise
or arrangement with its creditors—the compromise or
arrangement was approved by the Court.
(6) This Part applies in relation to a company that was first
incorporated other than under this Act:
(a) as if, in this Part (other than section 595) as so applying:
(i) a reference to the company included a reference to the
company as it existed at a time before its registration
day (including a time before the commencement of this
Act); and
(iii) a reference, in relation to a provision of this Act, to
ASIC included a reference to the NCSC (if relevant);
and
(b) with such other modifications as the circumstances require.
590 Offences by officers of certain companies
(1) A person who, being a past or present officer or employee of a
company to which this section applies:
(a) does not disclose to the appropriate officer all the property of
the company, and how and to whom and for what
consideration and when any part of the property of the
company was disposed of within 10 years next before the
relevant day, except such part as has been disposed of in the
ordinary course of the business of the company; or
(c) has, within 10 years next before the relevant day or at a time
on or after that day:
(i) engaged in conduct that resulted in the fraudulent
concealment or removal of any part of the property of
the company to the value of $100 or more; or
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(ii) engaged in conduct that resulted in the concealment of
any debt due to or by the company; or
(iii) engaged in conduct that resulted in the fraudulent
parting with, alteration or making of any omission in, or
being privy to fraudulent parting with, altering or
making any omission in, any book affecting or relating
to affairs of the company; or
(iv) by any false representation or other fraud, obtained on
credit, for or on behalf of the company, any property
that the company has not subsequently paid for; or
(v) engaged in conduct that resulted in the fraudulent
pawning, pledging or disposal of, otherwise than in the
ordinary course of the business of the company,
property of the company that has been obtained on
credit and has not been paid for;
(d) fraudulently makes any material omission in any statement or
report relating to affairs of the company; or
(f) engaged in conduct that prevented the production to the
appropriate officer of any book affecting or relating to affairs
of the company; or
(g) has, within 10 years next before the relevant day or at a time
on or after that day, attempted to account for any part of the
property of the company by making entries in the books of
the company showing fictitious transactions, losses or
expenses; or
(h) has, within 10 years next before the relevant day or at a time
on or after that day, been guilty of any false representation or
other fraud for the purpose of obtaining the consent of the
creditors of the company or any of them to an agreement
with reference to affairs of the company or to the winding up;
contravenes this subsection.
(2) Absolute liability applies to so much of an offence based on
paragraph (1)(c), (g) or (h) as requires that an event occur within
10 years next before the relevant day or at a time on or after that
day.
Note: For absolute liability, see section 6.2 of the Criminal Code.
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(3) Paragraph (1)(a) does not apply to the extent that the person is not
capable of disclosing the information referred to in that paragraph.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (3), see subsection 13.3(3) of the Criminal Code.
(4) A person who, being a past or present officer or employee of a
company to which this section applies, does not deliver up to, or in
accordance with the directions of, the appropriate officer:
(a) all the property of the company in the person’s possession; or
(b) all books in the person’s possession belonging to the
company (except books of which the person is entitled, as
against the company and the appropriate officer, to retain
possession);
contravenes this subsection.
(4A) A person who, being a past or present officer or employee of a
company and knowing or believing that a false debt has been
proved by a person, fails for a period of one month to inform the
appropriate officer of his or her knowledge or belief contravenes
this subsection.
(4B) A person must not intentionally or recklessly fail to comply with
subsection (4) or (4A).
(5) Where a person pawns, pledges or disposes of any property in
circumstances that amount to a contravention by virtue of
subparagraph (1)(c)(v), a person who takes in pawn or pledge or
otherwise receives the property knowing it to be pawned, pledged
or disposed of in those circumstances contravenes this subsection.
(6) A person who takes in pawn or pledge or otherwise receives
property in circumstances mentioned in subsection (5) and with the
knowledge mentioned in that subsection is taken to hold the
property as trustee for the company concerned and is liable to
account to the company for the property.
(7) Where, in proceedings under subsection (6), it is necessary to
establish that a person has taken property in pawn or pledge, or
otherwise received property:
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(a) in circumstances mentioned in subsection (5); and
(b) with the knowledge mentioned in that subsection;
the matter referred to in paragraph (b) of this subsection may be
established on the balance of probabilities.
592 Incurring of certain debts; fraudulent conduct
(1) Where:
(a) a company has incurred a debt before 23 June 1993; and
(b) immediately before the time when the debt was incurred:
(i) there were reasonable grounds to expect that the
company will not be able to pay all its debts as and
when they become due; or
(ii) there were reasonable grounds to expect that, if the
company incurs the debt, it will not be able to pay all its
debts as and when they become due; and
(c) the company was, at the time when the debt was incurred, or
becomes at a later time, a company to which this section
applies;
any person who was a director of the company, or took part in the
management of the company, at the time when the debt was
incurred contravenes this subsection and the company and that
person or, if there are 2 or more such persons, those persons are
jointly and severally liable for the payment of the debt.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) In any proceedings against a person under subsection (1), it is a
defence if it is proved:
(a) that the debt was incurred without the person’s express or
implied authority or consent; or
(b) that at the time when the debt was incurred, the person did
not have reasonable cause to expect:
(i) that the company would not be able to pay all its debts
as and when they became due; or
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(ii) that, if the company incurred that debt, it would not be
able to pay all its debts as and when they became due.
Note: A defendant bears a legal burden in relation to a matter mentioned in
subsection (2), see section 13.4 of the Criminal Code.
(3) Proceedings may be brought under subsection (1) for the recovery
of a debt whether or not the person against whom the proceedings
are brought, or any other person, has been convicted of an offence
under subsection (1) in respect of the incurring of that debt.
(4) In proceedings brought under subsection (1) for the recovery of a
debt, the liability of a person under that subsection in respect of the
debt may be established on the balance of probabilities.
(5) Where subsection (1) renders a person or persons liable to pay a
debt incurred by a company, the payment by that person or either
or any of those persons of the whole or any part of that debt does
not render the company liable to the person concerned in respect of
the amount so paid.
(6) Where:
(a) a company has done an act (including the making of a
contract or the entering into of a transaction) with intent to
defraud creditors of the company or of any other person or
for any other fraudulent purpose; and
(b) the company was at the time when it does the act, or becomes
at a later time, a company to which this section applies;
any person who was knowingly concerned in the doing of the act
with that intent or for that purpose contravenes this subsection.
(6A) For the purposes of an offence based on subsection (6), absolute
liability applies to paragraph (6)(b).
Note: For absolute liability, see section 6.2 of the Criminal Code.
(7) A certificate issued by the proper officer of an Australian court
stating that a person specified in the certificate:
(a) was convicted of an offence under subsection (1) in relation
to a debt specified in the certificate incurred by a company so
specified; or
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(b) was convicted of an offence under subsection (6) in relation
to a company specified in the certificate;
is, in any proceedings, prima facie evidence of the matters stated in
the certificate.
(8) A document purporting to be a certificate issued under
subsection (7) is, unless the contrary is established, taken to be
such a certificate and to have been duly issued.
593 Powers of Court
(1) Where a person has been convicted of an offence under
subsection 592(1) in respect of the incurring of a debt, the Court,
on the application of ASIC or the person to whom the debt is
payable, may, if it thinks it proper to do so, declare that the
first-mentioned person is personally responsible without any
limitation of liability for the payment to the person to whom the
debt is payable of an amount equal to the whole of the debt or such
part of it as the Court thinks proper.
(2) Where a person has been convicted of an offence under
subsection 592(6), the Court, on the application of ASIC or of a
prescribed person, may, if it thinks it proper to do so, declare that
the first-mentioned person is personally responsible without any
limitation of liability for the payment to the company of the
amount required to satisfy so much of the debts of the company as
the Court thinks proper.
(3) In relation to a company in respect of which a conviction referred
to in subsection (2) relates:
(a) the appropriate officer; and
(b) a creditor or contributory of the company authorised by
ASIC to make an application under that subsection; and
(c) if the company was a company to which section 592 applied
by reason of paragraph 589(1)(c)—a member of the
company;
are prescribed persons for the purposes of that subsection.
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(4) Where the Court makes a declaration under subsection (1) in
relation to a person, it may give such further directions as it thinks
proper for the purpose of giving effect to that declaration.
(5) In particular, the Court may order that the liability of the person
under the declaration is a charge:
(a) on a debt or obligation due from the company to the person;
or
(b) on a right or interest under a security interest in any property
of the company held by or vested in the person or a person on
the person’s behalf, or a person claiming as assignee from or
through the person liable or a person acting on the person’s
behalf.
(6) The Court may, from time to time, make such further order as it
thinks proper for the purpose of enforcing a charge imposed under
subsection (5).
(7) For the purpose of subsection (5), assignee includes a person to
whom or in whose favour, by the directions of the person liable,
the debt, obligation or security interest was created, issued or
transferred or the interest created, but does not include an assignee
for valuable consideration, not including consideration by way of
marriage, given in good faith and without actual knowledge of any
of the matters upon which the conviction or declaration was made.
(8) On the hearing of an application under subsection (1) or (2), the
appropriate officer or other applicant may give evidence or call
witnesses.
594 Certain rights not affected
Except as provided by subsection 592(4) nothing in
subsection 592(1) or 593(1) or (2) affects any rights of a person to
indemnity, subrogation or contribution.
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595 Inducement to be appointed liquidator etc. of company
(1) A person must not give, or agree or offer to give, to another person
any valuable consideration with a view to securing the
first-mentioned person’s own appointment or nomination, or to
securing or preventing the appointment or nomination of a third
person, as:
(a) a liquidator or provisional liquidator of a company; or
(b) an administrator of a company; or
(c) an administrator of a deed of company arrangement executed,
or to be executed, by a company; or
(d) a receiver, or a receiver and manager, of property of a
company; or
(e) a trustee or other person to administer a compromise or
arrangement made between a company and any other person
or persons.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
596 Frauds by officers
(1) A person who, while an officer or employee of a company:
(a) by false pretences or by means of any other fraud, induces a
person to give credit to the company or to a related body
corporate; or
(b) with intent to defraud the company or a related body
corporate, or members or creditors of the company or of a
related body corporate, makes or purports to make, or causes
to be made or to be purported to be made, any gift or transfer
of, or security interest in, or causes or connives at the levying
of any execution against, property of the company or of a
related body corporate; or
(c) with intent to defraud the company or a related body
corporate, or members or creditors of the company or of a
related body corporate, engages in conduct that results in the
concealment or removal of any part of the property of the
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company or of a related body corporate after, or within 2
months before, the date of any unsatisfied judgment or order
for payment of money obtained against the company or a
related body corporate;
contravenes this section.
(2) Absolute liability applies to so much of an offence based on
paragraph (1)(c) as requires that an event occur after, or within 2
months before, the date of any unsatisfied judgment or order for
payment of money obtained against the company or a related body
corporate.
Note: For absolute liability, see section 6.2 of the Criminal Code.
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Part 5.8A Employee entitlements
Section 596AA
574 Corporations Act 2001
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Part 5.8A—Employee entitlements
596AA Object and coverage of Part
Object
(1) The object of this Part is to protect the entitlements of a company’s
employees from agreements and transactions that are entered into
with the intention of defeating the recovery of those entitlements.
Employee entitlements
(2) The entitlements of an employee of a company that are protected
under this Part are:
(a) wages payable by the company for services rendered to the
company by the employee; and
(b) superannuation contributions (that is, contributions by the
company to a fund or scheme for the purposes of making
provision for, or obtaining, superannuation benefits
(including defined benefits) for the employee, or for
dependants of the employee) payable by the company in
respect of services rendered to the company by the employee;
and
(c) amounts due in respect of injury compensation in relation to
the employee; and
(d) amounts due under an industrial instrument in respect of the
employee’s leave of absence; and
(e) retrenchment payments for the employee (that is, amounts
payable by the company to the employee, under an industrial
instrument, in respect of the termination of the employee’s
employment by the company).
An entitlement of an employee need not be owed to the employee.
It might, for example, be an amount owed to the employee’s
dependants or a superannuation contribution payable to a fund in
respect of services rendered by the employee.
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Section 596AB
Corporations Act 2001 575
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(3) The entitlements of an excluded employee (within the meaning of
section 556) are protected under this Part only to the extent to
which they have priority under paragraph 556(1)(e), (f), (g) or (h).
Employees
(4) For the purposes of this Part, a person is an employee of a company
if the person is, or has been, an employee of the company (whether
remunerated by salary, wages, commission or otherwise).
(5) If an entitlement of an employee of a company is owed to a person
other than the employee, this Part applies to the entitlement as if a
reference to the employee included a reference to the person to
whom the entitlement is owed.
596AB Entering into agreements or transactions to avoid employee
entitlements
(1) A person must not enter into a relevant agreement or a transaction
with the intention of, or with intentions that include the intention
of:
(a) preventing the recovery of the entitlements of employees of a
company; or
(b) significantly reducing the amount of the entitlements of
employees of a company that can be recovered.
(2) Subsection (1) applies even if:
(a) the company is not a party to the agreement or transaction; or
(b) the agreement or transaction is approved by a court.
(3) A reference in this section to a relevant agreement or a
transaction includes a reference to:
(a) a relevant agreement and a transaction; and
(b) a series or combination of:
(i) relevant agreements or transactions; or
(ii) relevant agreements; or
(iii) transactions.
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Section 596AC
576 Corporations Act 2001
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(4) If a person contravenes this section by incurring a debt (within the
meaning of section 588G), the incurring of the debt and the
contravention are linked for the purposes of this Act.
596AC Person who contravenes section 596AB liable to compensate
for loss
(1) A person is liable to pay compensation under subsection (2) or (3)
if:
(a) the person contravenes section 596AB in relation to the
entitlements of employees of a company; and
(b) the company is being wound up; and
(c) the employees suffer loss or damage because of:
(i) the contravention; or
(ii) action taken to give effect to an agreement or
transaction involved in the contravention.
The person is liable whether or not the person has been convicted
of an offence in relation to the contravention.
(2) The company’s liquidator may recover from the person an amount
equal to the loss or damage as a debt due to the company.
Note: Because employee entitlements are priority payments under
paragraphs 556(1)(e) to (h), employees have priority to any
compensation recovered by the liquidator in proceedings brought
under this section.
(3) If an employee of the company has suffered loss or damage
because of:
(a) the contravention; or
(b) action taken to give effect to an agreement or transaction
involved in the contravention;
the employee may, as provided in section 596AF to 596AI (but not
otherwise), recover from the person, as a debt due to the employee,
an amount equal to the amount of the loss or damage. Any amount
recovered by the employee under this subsection is to be taken into
account in working out the amount for which the employee may
prove in the liquidation of the company.
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Section 596AD
Corporations Act 2001 577
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(4) Proceedings under this section may only be begun within 6 years
after the beginning of the winding up.
596AD Avoiding double recovery
An amount recovered in proceedings under section 596AC in
relation to a contravention of section 596AB is to be taken into
account in working out the amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the
contravention; and
(b) proceedings under section 588M in relation to the incurring
of a debt that is linked to the contravention.
596AE Effect of section 596AC
Section 596AC:
(a) has effect in addition to, and not in derogation of, any rule of
law about the duty or liability of a person because of the
person’s office or employment in relation to a company; and
(b) does not prevent proceedings from being instituted in respect
of a breach of such a duty or in respect of such a liability.
596AF Employee may sue for compensation with liquidator’s
consent
(1) If a company is being wound up, an employee of the company
may, with the written consent of the company’s liquidator, begin
proceedings under section 596AC in relation to a contravention of
section 596AB in relation to an entitlement of the employee.
(2) Subsection (1) has effect despite section 596AH, but subject to
section 596AI.
596AG Employee may give liquidator notice of intention to sue for
compensation
An employee of a company that is being wound up may give the
company’s liquidator a written notice:
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(a) stating that the employee intends to begin proceedings under
section 596AC in relation to a contravention of
section 596AB in relation to an entitlement of the employee;
and
(b) specifying the contravention of section 596AB and the
entitlement to which the proposed proceedings relate; and
(c) asking the liquidator to give the employee, within 3 months
after receiving the notice:
(i) a written consent to the employee beginning the
proceedings; or
(ii) a written statement of the reasons why the liquidator
thinks that proceedings under section 596AC in relation
to the contravention should not be begun.
The notice may be given only after the end of 6 months beginning
when the company begins to be wound up.
596AH When employee may sue for compensation without
liquidator’s consent
(1) This section applies if an employee of a company gives a notice
under section 596AG in relation to a contravention of
section 569AB and to an entitlement.
(2) The employee may begin proceedings in a court under
section 596AC in relation to the contravention and the entitlement
if:
(a) as at the end of 3 months after the liquidator receives the
notice, he or she has not consented to the employee
beginning such proceedings; and
(b) on an application made after those 3 months, the court has
given leave for the proceedings to begin.
(3) If:
(a) during those 3 months, the liquidator gives to the employee a
written statement of the reasons why the liquidator thinks
that such proceedings should not be begun; and
(b) the employee applies for leave under paragraph (2)(b);
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then:
(c) the employee must file the statement with the court when so
applying; and
(d) in determining the application, the court is to have regard to
the reasons set out in the statement.
596AI Events preventing employee from suing
(1) An employee of a company that is being wound up cannot begin
proceedings under section 596AC in relation to a contravention in
relation to an entitlement of the employee if:
(a) the company’s liquidator has applied under section 588FF in
relation to a transaction that constituted, or was part of, the
contravention; or
(b) the company’s liquidator has begun proceedings under
section 596AC in relation to the contravention; or
(c) the company’s liquidator has begun proceedings under
section 588M in relation to the incurring of the debt that is
linked to the contravention; or
(d) the company’s liquidator has intervened in an application for
a civil penalty order against a person in relation to a
contravention of section 588G in relation to the incurring of
the debt that is linked to the contravention.
(2) Subsection (1) has effect despite sections 596AF and 596AH.
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Part 5.9 Miscellaneous
Division 1 Examining a person about a corporation
Section 596A
580 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5.9—Miscellaneous
Division 1—Examining a person about a corporation
596A Mandatory examination
The Court is to summon a person for examination about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the summons; and
(b) the Court is satisfied that the person is an officer or
provisional liquidator of the corporation or was such an
officer or provisional liquidator during or after the 2 years
ending:
(i) if the corporation is under administration—on the
section 513C day in relation to the administration; or
(ii) if the corporation has executed a deed of company
arrangement that has not yet terminated—on the
section 513C day in relation to the administration that
ended when the deed was executed; or
(iii) if the corporation is being, or has been, wound up—
when the winding up began; or
(iv) otherwise—when the application is made.
596B Discretionary examination
(1) The Court may summon a person for examination about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the summons; and
(b) the Court is satisfied that the person:
(i) has taken part or been concerned in examinable affairs
of the corporation and has been, or may have been,
guilty of misconduct in relation to the corporation; or
(ii) may be able to give information about examinable
affairs of the corporation.
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Section 596C
Corporations Act 2001 581
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) This section has effect subject to section 596A.
596C Affidavit in support of application under section 596B
(1) A person who applies under section 596B must file an affidavit
that supports the application and complies with the rules.
(2) The affidavit is not available for inspection except so far as the
Court orders.
596D Content of summons
(1) A summons to a person under section 596A or 596B is to require
the person to attend before the Court:
(a) at a specified place and at a specified time on a specified day,
being a place, time and day that are reasonable in the
circumstances; and
(b) to be examined on oath about the corporation’s examinable
affairs.
(2) A summons to a person under section 596A or 596B may require
the person to produce at the examination specified books that:
(a) are in the person’s possession; and
(b) relate to the corporation or to any of its examinable affairs.
(3) A summons under section 596A is to require under subsection (2)
of this section the production of such of the books requested in the
application for the summons as the summons may so require.
596E Notice of examination
If the Court summons a person for examination, the person who
applied for the summons must give written notice of the
examination to:
(a) as many of the corporation’s creditors as reasonably
practicable; and
(b) each eligible applicant in relation to the corporation, except:
(i) the person who applied for the examination; and
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Part 5.9 Miscellaneous
Division 1 Examining a person about a corporation
Section 596F
582 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) if a person authorised by ASIC applied for the
examination—ASIC; and
(iii) a person who is such an eligible applicant only because
the person is authorised by ASIC.
596F Court may give directions about examination
(1) Subject to section 597, the Court may at any time give one or more
of the following:
(a) a direction about the matters to be inquired into at an
examination;
(b) a direction about the procedure to be followed at an
examination;
(c) a direction about who may be present at an examination
while it is being held in private;
(d) a direction that a person be excluded from an examination,
even while it is being held in public;
(e) a direction about access to records of the examination;
(f) a direction prohibiting publication or communication of
information about the examination (including questions
asked, and answers given, at the examination);
(g) a direction that a document that relates to the examination
and was created at the examination be destroyed.
(2) The Court may give a direction under paragraph (1)(e), (f) or (g) in
relation to all or part of an examination even if the examination, or
that part, was held in public.
(3) A person must not contravene a direction under subsection (1).
597 Conduct of examination
(4) An examination is to be held in public except to such extent (if
any) as the Court considers that, by reason of special
circumstances, it is desirable to hold the examination in private.
(5A) Any of the following may take part in an examination:
(a) ASIC;
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(b) any other eligible applicant in relation to the corporation;
and for that purpose may be represented by a lawyer or by an agent
authorised in writing for the purpose.
(5B) The Court may put, or allow to be put, to a person being examined
such questions about the corporation or any of its examinable
affairs as the Court thinks appropriate.
(6) A person who is summoned under section 596A or 596B to attend
before the Court must not intentionally or recklessly:
(a) fail to attend as required by the summons; or
(b) fail to attend from day to day until the conclusion of the
examination.
(6A) Subsection (6) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6A), see subsection 13.3(3) of the Criminal Code.
(7) A person who attends before the Court for examination must not:
(a) without reasonable excuse, refuse or fail to take an oath or
make an affirmation; or
(b) without reasonable excuse, refuse or fail to answer a question
that the Court directs him or her to answer; or
(c) make a statement that is false or misleading in a material
particular; or
(d) without reasonable excuse, refuse or fail to produce books
that the summons requires him or her to produce.
(9) The Court may direct a person to produce, at an examination of
that or any other person, books that are in the first-mentioned
person’s possession and are relevant to matters to which the
examination relates or will relate.
(9A) A person may comply with a direction under subsection (9) by
causing the books to be produced at the examination.
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Part 5.9 Miscellaneous
Division 1 Examining a person about a corporation
Section 597
584 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(10) Where the Court so directs a person to produce any books and the
person has a lien on the books, the production of the books does
not prejudice the lien.
(10A) A person must not refuse, or intentionally or recklessly fail, to
comply with a direction under subsection (9).
(11) Subsection (10A) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (11), see subsection 13.3(3) of the Criminal Code.
(12) A person is not excused from answering a question put to the
person at an examination on the ground that the answer might tend
to incriminate the person or make the person liable to a penalty.
(12A) Where:
(a) before answering a question put to a person (other than a
body corporate) at an examination, the person claims that the
answer might tend to incriminate the person or make the
person liable to a penalty; and
(b) the answer might in fact tend to incriminate the person or
make the person so liable;
the answer is not admissible in evidence against the person in:
(c) a criminal proceeding; or
(d) a proceeding for the imposition of a penalty;
other than a proceeding under this section, or any other proceeding
in respect of the falsity of the answer.
(13) The Court may order the questions put to a person and the answers
given by him or her at an examination to be recorded in writing
and may require him or her to sign that written record.
(14) Subject to subsection (12A), any written record of an examination
so signed by a person, or any transcript of an examination of a
person that is authenticated as provided by the rules, may be used
in evidence in any legal proceedings against the person.
(14A) A written record made under subsection (13):
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Section 597A
Corporations Act 2001 585
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(a) is to be open for inspection, without fee, by:
(i) the person who applied for the examination; or
(ii) an officer of the corporation; or
(iii) a creditor of the corporation; and
(b) is to be open for inspection by anyone else on paying the
prescribed fee.
(15) An examination under this Division may, if the Court so directs
and subject to the rules, be held before such other court as is
specified by the Court and the powers of the Court under this
Division may be exercised by that other court.
(16) A person ordered to attend before the Court or another court for
examination under this Division may, at his or her own expense,
employ a solicitor, or a solicitor and counsel, and the solicitor or
counsel, as the case may be, may put to the person such questions
as the Court, or the other court, as the case may be, considers just
for the purpose of enabling the person to explain or qualify any
answers or evidence given by the person.
(17) The Court or another court before which an examination under this
Division takes place may, if it thinks fit, adjourn the examination
from time to time.
597A When Court is to require affidavit about corporation’s
examinable affairs
(1) The Court is to require a person to file an affidavit about a
corporation’s examinable affairs if:
(a) an eligible applicant applies for the requirement to be made;
and
(b) the Court is satisfied that the person is an officer or
provisional liquidator of the corporation or was such an
officer or provisional liquidator during or after the 2 years
ending:
(i) if the corporation is under administration—on the
section 513C day in relation to the administration; or
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Part 5.9 Miscellaneous
Division 1 Examining a person about a corporation
Section 597B
586 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) if the corporation has executed a deed of company
arrangement that has not yet terminated—on the
section 513C day in relation to the administration that
ended when the deed was executed; or
(iii) if the corporation is being, or has been, wound up—
when the winding up began; or
(iv) otherwise—when the application is made;
even if the person has been summoned under section 596A or
596B for examination about those affairs.
(2) The requirement is to:
(a) specify such of the information requested in the application
as relates to examinable affairs of the corporation; and
(b) require the affidavit to set out the specified information; and
(c) require the affidavit to be filed on or before a specified day
that is reasonable in the circumstances.
(3) A person must not refuse, or intentionally or recklessly fail, to
comply with a requirement made of the person under
subsection (1).
(3A) Subsection (3) does not apply to the extent that the person has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (3A), see subsection 13.3(3) of the Criminal Code.
(4) The Court may excuse a person from answering a question at an
examination about a corporation’s examinable affairs if the person
has already filed an affidavit under this section about that
corporation’s examinable affairs that sets out information that
answers the question.
597B Costs of unnecessary examination or affidavit
Where the Court is satisfied that a summons to a person under
section 596A or 596B, or a requirement made of a person under
section 597A, was obtained without reasonable cause, the Court
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Corporations Act 2001 587
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may order some or all of the costs incurred by the person because
of the summons or requirement to be paid by:
(a) in any case—the applicant for the summons or requirement;
or
(b) in the case of a summons—any person who took part in the
examination.
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Chapter 5 External administration
Part 5.9 Miscellaneous
Division 2 Orders against a person in relation to a corporation
Section 598
588 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Orders against a person in relation to a
corporation
598 Order against person concerned with corporation
(2) Subject to subsection (3), where, on application by an eligible
applicant, the Court is satisfied that:
(a) a person is guilty of fraud, negligence, default, breach of trust
or breach of duty in relation to a corporation; and
(b) the corporation has suffered, or is likely to suffer, loss or
damage as a result of the fraud, negligence, default, breach of
trust or breach of duty;
the Court may make such order or orders as it thinks appropriate
against or in relation to the person (including either or both of the
orders specified in subsection (4)) and may so make an order
against or in relation to a person even though the person may have
committed an offence in respect of the matter to which the order
relates.
(3) The Court must not make an order against a person under
subsection (2) unless the Court has given the person the
opportunity:
(a) to give evidence; and
(b) to call witnesses to give evidence; and
(c) to bring other evidence in relation to the matters to which the
application relates; and
(d) to employ, at the person’s own expense, a solicitor, or a
solicitor and counsel, to put to the person, or to any other
witness, such questions as the Court considers just for the
purpose of enabling the person to explain or qualify any
answers or evidence given by the person.
(4) The orders that may be made under subsection (2) against a person
include:
(a) an order directing the person to pay money or transfer
property to the corporation; and
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Orders against a person in relation to a corporation Division 2
Section 598
Corporations Act 2001 589
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) an order directing the person to pay to the corporation the
amount of the loss or damage.
(5) Nothing in this section prevents any person from instituting any
other proceedings in relation to matters in respect of which an
application may be made under this section.
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Chapter 5 External administration
Part 5.9 Miscellaneous
Division 3 Provisions applying to various kinds of external administration
Section 599
590 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Provisions applying to various kinds of
external administration
599 Appeals from decisions of receivers etc.
(1) A person aggrieved by any act, omission or decision of:
(a) a person administering a compromise, arrangement or
scheme referred to in Part 5.1; or
(b) a controller, or a managing controller, of property of a
corporation;
may appeal to the Court in respect of the act, omission or decision
and the Court may confirm, reverse or modify the act or decision,
or remedy the omission, as the case may be, and make such orders
and give such directions as it thinks fit.
(2) Paragraph (1)(b) does not apply to a corporation that is an
Aboriginal and Torres Strait Islander corporation.
Note: Similar provision is made in relation to Aboriginal and Torres Strait
Islander corporations under section 576-10 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
600AA Duty of receiver, administrator or liquidator—parental leave
pay
(1) A person who:
(a) is appointed (whether or not by a court), and acts, as a
receiver and manager in respect of property of a body
corporate; or
(b) is appointed as the administrator of a body corporate under
Division 2 of Part 5.3A; or
(c) is appointed as the liquidator or provisional liquidator of a
body corporate;
must, as soon as possible, notify the Secretary (within the meaning
of the Paid Parental Leave Act 2010) of the person’s appointment,
if the body corporate was a paid parental leave employer just
before the appointment.
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Provisions applying to various kinds of external administration Division 3
Section 600F
Corporations Act 2001 591
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A person is a paid parental leave employer at a particular time if:
(a) the person must pay an instalment under section 72 of the
Paid Parental Leave Act 2010; and
(b) either:
(i) that time occurs during the instalment period (within the
meaning of that Act) to which the instalment relates; or
(ii) that time occurs after the end of the instalment period to
which the instalment relates, but the person has not paid
the instalment by that time.
600F Limitation on right of suppliers of essential services to insist on
payment as condition of supply
(1) If:
(a) a relevant authority of an eligible company requests, or
authorises someone else to request, a person or authority (the
supplier) to supply an essential service to the company in
Australia; and
(b) the company owes an amount to the supplier in respect of the
supply of the essential service before the effective day;
the supplier must not:
(c) refuse to comply with the request for the reason only that the
amount is owing; or
(d) make it a condition of the supply of the essential service
pursuant to the request that the amount is to be paid.
(2) In this section:
effective day, in relation to a relevant authority of an eligible
company, means the day when the relevant authority became a
relevant authority of the company, even if that day began before
this Act commenced.
eligible company means a company:
(a) that is being wound up; or
(b) a provisional liquidator of which is acting; or
(c) that is under administration; or
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Part 5.9 Miscellaneous
Division 3 Provisions applying to various kinds of external administration
Section 600G
592 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) that has executed a deed of company arrangement that has
not yet terminated; or
(e) a receiver, or receiver and manager, of property of which is
acting.
essential service means:
(a) electricity; or
(b) gas; or
(c) water; or
(d) a carriage service (within the meaning of the
Telecommunications Act 1997).
relevant authority, in relation to an eligible company, means:
(a) the liquidator; or
(b) the provisional liquidator; or
(c) the administrator of the company; or
(d) the administrator of the deed of company arrangement; or
(e) the receiver, or receiver and manager;
as the case requires.
600G Electronic methods of giving or sending certain notices etc.
(1) This section applies if a person (the notifier) is authorised or
required to give or send a notice, or other document, to a person
(the recipient) under any of the following provisions:
(a) paragraph 436E(3)(a);
(f) subsection 450A(3);
(g) paragraph 450B(a);
(h) paragraph 450C(b);
(i) paragraph 450D(b);
(l) paragraph 497(1)(a);
(p) paragraph 568A(1)(b);
(s) subsection 579J(1);
(t) subsection 579J(2);
(u) subsection 579K(1);
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Section 600G
Corporations Act 2001 593
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(v) subsection 579K(2);
(w) subsection 579K(3);
(x) subsection 579K(4);
(y) a provision of Schedule 2 or the Insolvency Practice Rules.
(2) If the recipient nominates a fax number, or electronic address, by
which the recipient may be notified of such notices or documents,
the notifier may give or send the notice or document to the
recipient by sending it to that fax number or electronic address.
(3) If the recipient nominates any other electronic means by which the
recipient may be notified of such notices or documents, the notifier
may give or send the notice or document to the recipient by using
that electronic means.
(4) If the notifier makes the notice or document publicly available by
electronic means, the notifier may give or send the notice or
document to the recipient by notifying the recipient (using the
electronic means nominated by the recipient or otherwise in
writing):
(a) that the notice or document is available electronically; and
(b) the way in which the notice or document can be accessed.
(4A) Subsection (4) does not apply if the recipient notifies the notifier in
accordance with the regulations, before the time for giving or
sending the notice or document expires, that the recipient does not
have access to the internet.
(5) A notice or document sent to a fax number or electronic address, or
by other electronic means, is taken to be given or sent on the
business day after it is sent.
(6) A notice or document given or sent under subsection (4) is taken to
be given or sent on the business day after the day on which the
recipient is notified that the notice or document is available.
(7) Subsections (2), (3) and (4) do not limit the provisions mentioned
in subsection (1).
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Part 5.9 Miscellaneous
Division 3 Provisions applying to various kinds of external administration
Section 600H
594 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
600H Rights if claim against the company postponed
(1) A person whose claim against a company is postponed under
section 563A is entitled:
(a) to receive a copy of any notice, report or statement to
creditors only if the person asks the administrator or
liquidator of the company, in writing, for a copy of the
notice, report or statement; and
(b) to vote in their capacity as a creditor of the company, at a
meeting ordered under subsection 411(1) or during the
external administration of the company, only if the Court so
orders.
(2) In this section:
external administration includes the following:
(a) voluntary administration;
(b) a compromise or arrangement under part 5.1;
(c) administration under a deed of company arrangement;
(d) winding up by the Court;
(e) voluntary winding up.
600J Acts of external administrator valid etc.
(1) The acts of an external administrator are valid despite any defects
that may afterwards be discovered in his or her appointment or
qualification.
(2) A disposition of a company’s property by an external administrator
(including a disposition by way of conveyance, assignment,
transfer or an instrument giving rise to a security interest) is,
despite any defect or irregularity affecting the validity of the
winding up or the appointment of the external administrator, valid
in favour of any person taking such property in good faith and for
value and without actual knowledge of the defect or irregularity.
(3) A person making or permitting a disposition of property to an
external administrator is to be protected and indemnified in so
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Section 600J
Corporations Act 2001 595
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
doing despite any defect or irregularity affecting the validity of the
winding up or the appointment of the external administrator that is
not then known to that person.
(4) For the purposes of this section, a disposition of property is taken
to include a payment of money.
(5) In this section:
external administrator of a company has the same meaning as in
Schedule 2.
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Chapter 5 External administration
Part 5.9 Miscellaneous
Division 4 Insolvency Practice Schedule (Corporations)
Section 600K
596 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Insolvency Practice Schedule (Corporations)
600K Insolvency Practice Schedule (Corporations)
Schedule 2 has effect.
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Deregistration, and transfer of registration, of companies Chapter 5A
Deregistration Part 5A.1
Section 601
Corporations Act 2001 597
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 5A—Deregistration, and transfer of
registration, of companies
Part 5A.1—Deregistration
601 Definitions
In this Part:
property of a company includes PPSA retention of title property, if
the security interest in the property is vested in the company
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
601AA Deregistration—voluntary
Who may apply for deregistration
(1) An application to deregister a company may be lodged with ASIC
by:
(a) the company; or
(b) a director or member of the company; or
(c) a liquidator of the company.
If the company lodges the application, it must nominate a person to
be given notice of the deregistration.
Circumstances in which application can be made
(2) A person may apply only if:
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Part 5A.1 Deregistration
Section 601AA
598 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) all the members of the company agree to the deregistration;
and
(b) the company is not carrying on business; and
(c) the company’s assets are worth less than $1,000; and
(d) the company has paid all fees and penalties payable under
this Act; and
(e) the company has no outstanding liabilities; and
(f) the company is not a party to any legal proceedings.
ASIC may ask for information about officers
(3) The applicant must give ASIC any information that ASIC requests
about the current and former officers of the company.
Deregistration procedure
(4) If:
(a) ASIC decides to deregister the company under this section;
and
(b) ASIC is not aware of any failure to comply with
subsections (1) to (3);
ASIC must:
(c) give notice of the proposed deregistration on ASIC database;
and
(d) publish notice of the proposed deregistration in the
prescribed manner.
(4A) When 2 months have passed since the publication of the notice
under paragraph (4)(d), ASIC may deregister the company.
(5) ASIC must give notice of the deregistration to:
(a) the applicant; or
(b) the person nominated in the application to be given the
notice.
(6) ASIC may refuse to deregister a company under this section if
ASIC decides to order under section 489EA that the company be
wound up.
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Section 601AB
Corporations Act 2001 599
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(7) Subsection (6) does not limit ASIC’s power to refuse to deregister
the company.
601AB Deregistration—ASIC initiated
Circumstances in which ASIC may deregister
(1) ASIC may decide to deregister a company if:
(a) the response to a return of particulars given to the company is
at least 6 months late; and
(b) the company has not lodged any other documents under this
Act in the last 18 months; and
(c) ASIC has no reason to believe that the company is carrying
on business.
(1A) ASIC may also decide to deregister a company if the company’s
review fee in respect of a review date has not been paid in full at
least 12 months after the due date for payment.
(1B) ASIC may also decide to deregister a company if:
(a) the company is liable to pay levy imposed by the ASIC
Supervisory Cost Recovery Levy Act 2017; and
(b) the company has not paid in full at least 12 months after the
due date for payment:
(i) the amount of the levy; and
(ii) the amount of any late payment penalty payable in
relation to the levy; and
(iii) the amount of any shortfall penalty payable in relation
to the levy.
(2) ASIC may also decide to deregister a company if the company is
being wound up and ASIC has reason to believe that:
(a) the liquidator is no longer acting; or
(b) the company’s affairs have been fully wound up and a return
that the liquidator should have lodged is at least 6 months
late; or
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Section 601AC
600 Corporations Act 2001
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(c) the company’s affairs have been fully wound up under
Part 5.4 and the company has no property or not enough
property to cover the costs of obtaining a Court order for the
company’s deregistration.
Deregistration procedure
(3) If ASIC decides to deregister a company under this section, it
must:
(a) give notice of the proposed deregistration:
(i) to the company; and
(ii) to the company’s liquidator (if any); and
(iii) to the company’s directors; and
(iv) on ASIC database; and
(b) publish notice of the proposed deregistration in the
prescribed manner.
(3A) When 2 months have passed since the publication of the notice
under paragraph (3)(b), ASIC may deregister the company.
(4) ASIC does not have to give a person notice under paragraph (3)(a)
if ASIC does not have the necessary information about the person’s
identity or address.
(5) ASIC must give notice of the deregistration to everyone who was
notified of the proposed deregistration under
subparagraph (3)(a)(ii) or (iii).
(6) ASIC may refuse to deregister a company under this section if
ASIC decides to order under section 489EA that the company be
wound up.
(7) Subsection (6) does not limit ASIC’s power to refuse to deregister
the company.
601AC Deregistration—following amalgamation or winding up
(1) ASIC must deregister a company if the Court orders the
deregistration of the company under:
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Section 601AD
Corporations Act 2001 601
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(a) paragraph 413(1)(d) (reconstruction and amalgamation of
Part 5.1 bodies); or
(b) paragraph 481(5)(b) (release of liquidator); or
(c) subsection 509(2) (deregistration after end of administration
return is lodged).
601AD Effect of deregistration
Company ceases to exist
(1) A company ceases to exist on deregistration.
Note: Despite the deregistration, officers of the company may still be liable
for things done before the company was deregistered.
Trust property vests in the Commonwealth
(1A) On deregistration, all property that the company held on trust
immediately before deregistration vests in the Commonwealth. If
property is vested in a liquidator on trust immediately before
deregistration, that property vests in the Commonwealth. This
subsection extends to property situated outside this jurisdiction.
Other company property vests in ASIC
(2) On deregistration, all the company’s property (other than any
property held by the company on trust) vests in ASIC. If company
property is vested in a liquidator (other than any company property
vested in a liquidator on trust) immediately before deregistration,
that property vests in ASIC. This subsection extends to property
situated outside this jurisdiction.
Rights and powers in respect of property
(3) Under subsection (1A) or (2), the Commonwealth or ASIC takes
only the same property rights that the company itself held. If the
company held particular property subject to a security or other
interest or claim, the Commonwealth or ASIC takes the property
subject to that interest or claim.
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Section 601AE
602 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: See also subsection 601AE(3)—which deals with liabilities that a law
imposes on the property (particularly liabilities such as rates, taxes
and other charges).
(3A) The Commonwealth has, subject to its obligations as trustee of the
trust, all the powers of an owner over property vested in it under
subsection (1A).
Note: Section 601AF confers additional powers on the Commonwealth to
fulfil outstanding obligations of the deregistered company.
(4) ASIC has all the powers of an owner over property vested in it
under subsection (2).
Note: Section 601AF confers additional powers on ASIC to fulfil
outstanding obligations of the deregistered company.
Company books to be kept by former directors
(5) The directors of the company immediately before deregistration
must keep the company’s books for 3 years after the deregistration.
(6) Subsection (5) does not apply to books that a liquidator has to keep
under subsection 542(2), or subsection 70-35(1) of Schedule 2
(retention and return or destruction of books).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6), see subsection 13.3(3) of the Criminal Code.
Strict liability offences
(7) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
601AE What the Commonwealth or ASIC does with the property
Trust property vested in the Commonwealth
(1) If property vests in the Commonwealth under
subsection 601AD(1A), the Commonwealth may:
(a) continue to act as trustee; or
(b) apply to a court for the appointment of a new trustee.
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Section 601AE
Corporations Act 2001 603
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Note: Under paragraph (1)(a), the Commonwealth may be able to transfer
the property to a new trustee chosen in accordance with the trust
instrument.
(1A) If the Commonwealth continues to act as trustee in respect of the
property, subject to its obligations as trustee, the Commonwealth:
(a) in the case of money—must credit the amount of the money
to a special account (within the meaning of the Public
Governance, Performance and Accountability Act 2013); or
(b) otherwise:
(i) may sell or dispose of the property as it thinks fit; and
(ii) if the Commonwealth does so—must credit the amount
of the proceeds to a special account (within the meaning
of the Public Governance, Performance and
Accountability Act 2013).
Note: 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 property held on trust by the Commonwealth (see
subsection 8(6) of the ASIC Act).
Property vested in ASIC
(2) If property vests in ASIC under subsection 601AD(2), ASIC may:
(a) dispose of or deal with the property as it sees fit; and
(b) apply any money it receives to:
(i) defray expenses incurred by ASIC in exercising its
powers in relation to the company under this Chapter;
and
(ii) make payments authorised by subsection (3).
ASIC must deal with the rest (if any) under Part 9.7.
Obligations attaching to property vested in the Commonwealth
(2A) For the purposes of subsection (3), if any liability is imposed on
property under a law of the Commonwealth immediately before the
property vests in the Commonwealth under
subsection 601AD(1A), then:
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(a) immediately after that time, the liability applies to the
Commonwealth as if the Commonwealth were a body
corporate; and
(b) the Commonwealth is liable to make notional payments to
discharge that liability.
Obligations attaching to property
(3) Any property that vests in the Commonwealth or ASIC under
subsection 601AD(1A) or (2) remains subject to all liabilities
imposed on the property under a law and does not have the benefit
of any exemption that the property might otherwise have because it
is vested in the Commonwealth or ASIC. These liabilities include a
liability that:
(a) is a security interest in or claim on the property; and
(b) arises under a law that imposes rates, taxes or other charges.
Extent of Commonwealth’s and ASIC’s obligation
(4) The Commonwealth’s or ASIC’s obligation under subsection (2A)
or (3) is limited to satisfying the liabilities out of the company’s
property to the extent that the property is properly available to
satisfy those liabilities.
Accounts
(5) The Commonwealth or ASIC (as the case requires) must keep:
(a) a record of property that it knows is vested in it under this
Chapter; and
(b) a record of its dealings with that property; and
(c) accounts of all money received from those dealings; and
(d) all accounts, vouchers, receipts and papers relating to the
property and that money.
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Section 601AF
Corporations Act 2001 605
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601AF The Commonwealth’s and ASIC’s power to fulfil
outstanding obligations of deregistered company
The Commonwealth or ASIC may do an act on behalf of the
company or its liquidator if the Commonwealth or ASIC is
satisfied that the company or liquidator would be bound to do the
act if the company still existed.
Note: This power is a general one and is not limited to acts in relation to
property vested in the Commonwealth under subsection 601AD(1A),
or ASIC under subsection 601AD(2). The Commonwealth or ASIC
has all the powers that automatically flow from the vesting of property
under that subsection (see subsections 601AD(3A) and (4)) and may
exercise those powers whether or not the company was bound to do
so.
601AG Claims against insurers of deregistered company
A person may recover from the insurer of a company that is
deregistered an amount that was payable to the company under the
insurance contract if:
(a) the company had a liability to the person; and
(b) the insurance contract covered that liability immediately
before deregistration.
601AH Reinstatement
Reinstatement by ASIC
(1) ASIC may reinstate the registration of a company if ASIC is
satisfied that the company should not have been deregistered.
(1A) ASIC may reinstate the registration of a company deregistered
under subsection 601AB(1B) if:
(a) ASIC receives an application in relation to the reinstatement
of the company’s registration; and
(b) the levy imposed on the company by the ASIC Supervisory
Cost Recovery Levy Act 2017 is paid in full; and
(c) the amount of any late payment penalty payable in relation to
the levy is paid in full; and
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606 Corporations Act 2001
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(d) the amount of any shortfall penalty payable in relation to the
levy is paid in full.
Reinstatement by Court
(2) The Court may make an order that ASIC reinstate the registration
of a company if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; or
(ii) a former liquidator of the company; and
(b) the Court is satisfied that it is just that the company’s
registration be reinstated.
(3) If:
(a) ASIC reinstates the registration of a company under
subsection (1) or (1A); or
(b) the Court makes an order under subsection (2);
the Court may:
(c) validate anything done during the period:
(i) beginning when the company was deregistered; and
(ii) ending when the company’s registration was reinstated;
and
(d) make any other order it considers appropriate.
Note: For example, the Court may direct ASIC to transfer to another person
property vested in ASIC under subsection 601AD(2).
ASIC to give notice of reinstatement
(4) ASIC must give notice of a reinstatement in the Gazette.
(4A) If an application was made to ASIC for the reinstatement of a
company’s registration, ASIC must give notice of the reinstatement
to the applicant.
Effect of reinstatement
(5) If a company is reinstated, the company is taken to have continued
in existence as if it had not been deregistered. A person who was a
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Corporations Act 2001 607
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director of the company immediately before deregistration
becomes a director again as from the time when ASIC or the Court
reinstates the company. Any property of the company that is still
vested in the Commonwealth or ASIC revests in the company. If
the company held particular property subject to a security or other
interest or claim, the company takes the property subject to that
interest or claim.
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Part 5A.2 Transfer of registration
Section 601AI
608 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5A.2—Transfer of registration
601AI Transferring registration
A company may transfer its registration to registration under a law
of the Commonwealth, or of a State or Territory, by:
(a) passing a special resolution resolving to transfer its
registration to registration under that law; and
(b) complying with sections 601AJ and 601AK.
The company may transfer its registration to registration under the
law of a State or Territory only if the State or Territory is the one
in which it is taken to be registered.
Note 1: Section 119A tells you which State or Territory the company is taken
to be registered in.
Note 2: In order to be registered under the State or Territory law, the company
may need to amend its constitution, or adopt a new one, and the
provisions of this Act (including the class rights provisions in
Part 2F.2) will apply to the amendment or adoption.
601AJ Applying to transfer registration
(1) To transfer its registration, a company must lodge an application
with ASIC together with:
(a) a copy of the special resolution that resolves to change the
company’s registration to a registration under the law of the
Commonwealth or of the State or Territory; and
(b) a statement signed by the directors of the company that in
their opinion the company’s creditors are not likely to be
materially prejudiced by the change and sets out their reasons
for that opinion.
(2) The application must be in the prescribed form.
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Section 601AK
Corporations Act 2001 609
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601AK ASIC makes transfer of registration declaration
ASIC may make a transfer of registration declaration in relation to
the company under this section if ASIC is satisfied that:
(a) the application complies with section 601AJ; and
(b) the company’s creditors are not likely to be materially
prejudiced by the transfer of the company’s registration; and
(c) the law of the Commonwealth or of the State or Territory
concerned adequately provides for:
(i) the continuation of the company’s legal personality after
the transfer; and
(ii) the preservation of any rights or claims against the
company (other than the right of a member as a
member) that accrued while the company was registered
under this Act.
601AL ASIC to deregister company
(1) ASIC must deregister the company if:
(a) ASIC makes a transfer of registration declaration in relation
to the company; and
(b) the company is registered under the law of the
Commonwealth or of the State or Territory.
Note: Despite the deregistration, officers of the company may still be liable
for things done before the company was deregistered.
(2) Sections 601AD, 601AE, 601AF and 601AG do not apply to the
deregistration of a company under this section.
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Part 5B.1 Registering a body corporate as a company
Division 1 Registration
Section 601BA
610 Corporations Act 2001
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Chapter 5B—Bodies corporate registered as
companies, and registrable bodies
Part 5B.1—Registering a body corporate as a
company
Division 1—Registration
601BA Bodies corporate may be registered as certain types of
companies
(1) A body corporate that is not a company or corporation sole may be
registered under this Act as a company of one of the following
types:
(a) a proprietary company limited by shares;
(b) an unlimited proprietary company with share capital;
(c) a public company limited by shares;
(d) a company limited by guarantee;
(e) an unlimited public company with share capital;
(f) a no liability company.
(2) A body corporate may be registered as a no liability company only
if:
(a) the body has a share capital; and
(b) the body’s constitution states that its sole objects are mining
purposes; and
(c) under the constitution the body has no contractual right to
recover calls made on its shares from a member who fails to
pay them.
Note: Section 9 defines mining purposes and minerals.
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Registration Division 1
Section 601BB
Corporations Act 2001 611
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601BB Bodies registered as proprietary companies
(1) The body must have no more than 50 non-employee shareholders if
it is to be registered as a proprietary company under this Part.
(2) In applying subsection (1):
(a) count joint holders of a particular parcel of shares as
1 person; and
(b) an employee shareholder is:
(i) a shareholder who is an employee of the body or of a
subsidiary of the body; or
(ii) a shareholder who was an employee of the body, or of a
subsidiary of the body, when they became a
shareholder.
601BC Applying for registration under this Part
(1) To register the body as a company under this Part, a person must
lodge an application with ASIC.
Note 1: For the types of companies that can be registered under this Part, see
section 601BA.
Note 2: A name may be reserved for a company to be registered under this
Part before the application is lodged (see Part 2B.6).
(2) The application must state the following:
(a) the type of company that the body is proposed to be
registered as under this Act;
(b) the name of the body;
(c) if the body is a registered body—its ARBN;
(d) the proposed name under which the body is to be registered
(unless the ACN is to be used);
(e) the name and address of each member of the body;
(f) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a director;
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Section 601BC
612 Corporations Act 2001
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(g) the present given and family name, all former given and
family names and the date and place of birth of each person
who consents in writing to become a company secretary;
(h) the address of each person who consents in writing to
become a director or company secretary;
(i) the address of the body’s proposed registered office;
(j) for a body proposed to be registered as a public company—
the proposed opening hours of its registered office (if they
are not the standard opening hours);
(k) the address of the body’s proposed principal place of
business (if it is not the address of the proposed registered
office);
(l) for a body proposed to be registered as a company limited by
shares or an unlimited company—the following:
(i) the number and class of shares each member already
holds or has agreed, in writing, to take up;
(ii) the amount each member has already paid or agreed, in
writing, to pay for each share;
(iia) whether the shares each member already holds or has
agreed, in writing, to take up will be fully paid on
registration;
(iii) the amount unpaid on each share;
(iv) whether or not the shares each member agrees in writing
to take up will be beneficially owned by the member on
registration;
(v) on registration, the classes into which shares will be
divided;
(vi) for each class of share on issue on registration—the
number of shares in the class on registration;
(vii) for each class of share on issue on registration—the
total amount paid up for the class on registration;
(viii) for each class of share on issue on registration—the
total amount unpaid for the class on registration;
(la) whether or not, on registration, the company will have an
ultimate holding company;
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Section 601BC
Corporations Act 2001 613
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(lb) if, on registration, the company will have an ultimate holding
company—the following:
(i) the name of the ultimate holding company;
(ii) if the ultimate holding company is registered in
Australia—its ABN, ACN or ARBN;
(iii) if the ultimate holding company is not registered in
Australia—the place at which it was incorporated or
formed;
(lc) for a body proposed to be registered as a company limited by
shares or an unlimited company—the top 20 members of
each class (worked out according to the number and class of
shares each member holds and has agreed, in writing, to take
up);
Note: See also section 107.
(m) for a body proposed to be registered as a public company, if
shares have been issued for non-cash consideration—the
prescribed particulars about the issue of the shares, unless the
shares were issued under a written contract and a copy of the
contract is lodged with the application;
(n) for a body proposed to be registered as a company limited by
guarantee—the amount of the guarantee that each member
has agreed to in writing;
(o) the State or Territory in this jurisdiction in which the
company is to be taken to be registered.
Note 1: Paragraph (h)—the address that must be stated is usually the
residential address, although an alternative address can sometimes be
stated instead (see section 205D).
Note 2: Paragraph (i)—if the body when it is registered under this Part is not
to be the occupier of premises at the address of its registered office,
the application must state that the occupier has consented to the
address being specified in the application and has not withdrawn that
consent (see section 100).
(3) If the body is proposed to be registered as a public company, the
application must be accompanied by a copy of each document
(including an agreement or consent) or resolution that is necessary
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614 Corporations Act 2001
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to ascertain the rights attached to issued or unissued shares of the
body.
(4) The application must be in the prescribed form.
(5) An applicant must have the consents and agreements referred to in
subsection (2) when the application is lodged. After the body is
registered as a company, the applicant must give the consents and
agreements to the company. The company must keep the consents
and agreements.
(5A) An offence based on subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) The following documents must be lodged with the application:
(a) a certified copy of a current certificate of the body’s
incorporation in its place of origin, or of a document that has
a similar effect;
(b) a certified printed copy of the body’s constitution (if any);
(d) any other documents that are prescribed;
(e) any other documents that ASIC requires by written notice
given to the body.
A document need not be lodged if ASIC already has the document
and agrees not to require its lodgment.
(7) The application must be accompanied by evidence that:
(a) the body is not a Chapter 5 body corporate; and
(b) no application to wind up the body has been made to a court
(in Australia or elsewhere) that has not been dealt with; and
(c) no application to approve a compromise or arrangement
between the body and another person has been made to a
court (in Australia or elsewhere) that has not been dealt with.
(8) The application must be accompanied by evidence that under the
law of the body’s place of origin:
(a) the body’s type is the same or substantially the same as the
proposed type specified in the application; and
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Section 601BD
Corporations Act 2001 615
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(b) if the members of the body have limited liability—the body’s
constitution defines how and to what extent that liability is
limited; and
(d) the transfer of the body’s incorporation is authorised; and
(e) the body has complied with the requirements (if any) of that
law for the transfer of its incorporation; and
(f) if those requirements do not include consent to the transfer
by the members of the body—the members:
(i) have consented to the transfer by a resolution that has
been passed at a meeting by at least 75% of the votes
cast by members entitled to vote on the resolution; and
(ii) were given at least 21 days notice of the meeting and
the proposed resolution.
(9) The evidence lodged in accordance with subsections (7) and (8)
must be satisfactory proof to ASIC of the matters referred to in
those subsections.
Note: Section 1304 requires documents that are not in English to be
translated into English.
601BD ASIC gives body ACN, registers as company and issues
certificate
Registration
(1) If an application is lodged under section 601BC, ASIC may:
(a) give the body an ACN; and
(b) register the body as a company of the proposed type specified
in the application; and
(c) issue a certificate that states:
(i) the company’s name; and
(ii) the company’s ACN; and
(iii) the company’s type; and
(iv) that the company is registered as a company under this
Act; and
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Division 1 Registration
Section 601BE
616 Corporations Act 2001
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(v) the State or Territory in which the company is taken to
be registered; and
(vi) the date of registration.
Note: For the evidentiary value of a certificate of registration, see
subsection 1274(7A).
ASIC must keep record of registration
(2) ASIC must keep a record of the registration. Subsections 1274(2)
and (5) apply to the record as if it were a document lodged with
ASIC.
601BE Registered office
The address specified in the application as the body’s proposed
registered office becomes the address of its registered office as a
company on registration.
601BF Name
A company registered under this Part has a name on registration
that is:
(a) an available name; or
(b) the expression “Australian Company Number” followed by
the company’s ACN.
The name must also include the words required by
subsection 148(2) or 148(3).
601BG Constitution
(1) The constitution on registration (if any) of a company registered
under this Part is the constitution lodged with the application.
(2) If any text in a constitution lodged with the application is not in
English, the English translation of that text lodged with the
application for registration is taken to be the relevant text in the
constitution on registration.
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Registration Division 1
Section 601BH
Corporations Act 2001 617
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601BH Modifications of constitution
(1) A company registered under this Part must modify its constitution
within 3 months after registration to give effect to this Part.
(2) If the constitution specifies amounts of money expressed in foreign
currency, the company must:
(a) fix a single rate of conversion by resolution; and
(b) modify its constitution by special resolution to convert those
amounts into Australian currency using that rate.
The modification must be made within 3 months after registration.
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An amendment of a company’s constitution under this section does
not affect the number and class of shares held by each member.
601BJ ASIC may direct company to apply for Court approval for
modifications of constitution
(1) ASIC may give the company a written direction to apply to the
Court within a specified period for an order approving the modified
constitution.
(2) The Court may make an order:
(a) declaring that the company has complied with
section 601BH; or
(b) declaring that the company will comply with section 601BH
if it makes further modifications of its constitution as
specified in the order.
(3) The company must lodge a copy of the order with ASIC within 14
days after the order is made.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 5B.1 Registering a body corporate as a company
Division 1 Registration
Section 601BK
618 Corporations Act 2001
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601BK Establishing registers and minute books
(1) A company registered under this Part must, within 14 days after
registration:
(a) set up the register required by section 168; and
(b) include in the register the information that is required to be
included in the register and that is available to the company
on registration; and
(c) set up the minute books required by section 251A.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) During the 14 days the company need not comply with a person’s
request to inspect or obtain a copy of:
(a) information in a register; or
(b) a minute of a general meeting.
However, the period within which the company must comply with
the request begins at the end of the 14 days.
601BL Registration of registered bodies
(1) If a registered body becomes registered as a company under this
Part, it ceases to be a registered body. ASIC must remove the
body’s name from the appropriate register kept for the purposes of
Division 1 or 2 of Part 5B.2.
(2) ASIC may keep any of the documents relating to the company that
were lodged because the company used to be a registered body.
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Operation of this Act Division 2
Section 601BM
Corporations Act 2001 619
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Division 2—Operation of this Act
601BM Effect of registration under this Part
(1) Registration under this Part does not:
(a) create a new legal entity; or
(b) affect the body’s existing property, rights or obligations
(except as against the members of the body in their capacity
as members); or
(c) render defective any legal proceedings by or against the body
or its members.
(2) This Part sets out special provisions for companies registered under
this Part.
601BN Liability of members on winding up
A person who stopped being a member of the body before it was
registered as a company under this Part is to be treated as a past
member of the company in applying Division 2 of Part 5.6 to a
winding up of the company. However, the person’s liability to
contribute to the company’s property is further limited by this
section to an amount sufficient for the following:
(a) payment of debts and liabilities contracted by the company
before the day on which the company was registered under
this Part;
(b) payment of the costs, charges and expenses of winding up the
company, so far as those costs, charges and expenses relate to
those debts and liabilities;
(c) the adjustment of the rights between the contributories, so far
as the adjustment relates to those debts and liabilities.
601BP Bearer shares
(1) A bearer of a bearer share in a company registered under this Part
may surrender the share to the company. The company must:
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Division 2 Operation of this Act
Section 601BQ
620 Corporations Act 2001
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(a) cancel the share; and
(b) include the bearer’s name in the company’s register of
members.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The company is liable to compensate anyone who suffers a loss
because the company includes the bearer’s name in the company’s
register of members despite the fact that:
(a) the share was not surrendered to the company; or
(b) the company failed to cancel the share.
(3) Subject to this section, the constitution of a company registered
under this Part may provide that the bearer of a bearer share in the
company is taken to be a member of the company for all purposes
or for specified purposes.
Note: A body must not issue bearer shares after it is registered as a company
under this Part (see paragraph 254F(a)).
601BQ References in pre-registration contracts and other
documents to par value in existing contracts and
documents
(1) This section applies in relation to a company registered under this
Part for the purpose of interpreting and applying after registration:
(a) a contract entered into before the registration; or
(b) a trust deed or other document executed before the
registration.
(2) A reference to the par value of a share is taken to be a reference to
the par value of the share immediately before the registration, or
the par value that the share would have had if it had been issued
then.
(3) A reference to a right to a return of capital on a share is taken to be
a reference to a right to a return of capital of a value equal to the
amount paid before the registration in respect of the share’s par
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Operation of this Act Division 2
Section 601BR
Corporations Act 2001 621
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value, or the par value that the share would have had if it had been
issued then.
(4) A reference to the aggregate par value of the company’s issued
share capital is taken to be a reference to that aggregate as it
existed immediately before the registration.
601BR First AGM
(1) Despite subsection 250N(1), a public company registered under
this Part must hold its first AGM after registration in the calendar
year of its registration.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
601BS Modification by regulations
The regulations may modify the operation of this Part in relation to
a company registered under this Part.
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Part 5B.2 Registrable bodies
Division 1A Preliminary
Section 601C
622 Corporations Act 2001
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Part 5B.2—Registrable bodies
Division 1A—Preliminary
601C Definitions
In this Part:
property of a corporation includes PPSA retention of title property,
if the security interest in the property is vested in the corporation
because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act
2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within
time).
Note: See sections 9 (definition of property) and 51F (PPSA retention of
title property).
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Registrable Australian bodies Division 1
Section 601CA
Corporations Act 2001 623
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Division 1—Registrable Australian bodies
601CA When a registrable Australian body may carry on business
in this jurisdiction and outside its place of origin
A registrable Australian body must not carry on business in a State
or Territory in this jurisdiction unless:
(a) that State or Territory is its place of origin; or
(b) it has its head office or principal place of business in that
State or Territory; or
(c) it is registered under this Division; or
(d) it has applied to be so registered and the application has not
been dealt with.
601CB Application for registration
Subject to this Part, where a registrable Australian body lodges an
application for registration under this Division that is in the
prescribed form and is accompanied by:
(a) a certified copy of a current certificate of its incorporation or
registration in its place of origin, or a document of similar
effect; and
(b) a certified copy of its constitution; and
(c) a list of its directors containing personal details of those
directors that are equivalent to the personal details of
directors referred to in subsection 242(2); and
(e) notice of the address of:
(i) if it has in its place of origin a registered office for the
purposes of a law (other than this Act) there in force—
that office; or
(ii) otherwise—its principal place of business in its place of
origin; and
(f) notice of the address of its registered office under
section 601CT;
ASIC must:
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Section 601CC
624 Corporations Act 2001
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(g) grant the application and register the body under this
Division by entering the body’s name in a register kept for
the purposes of this Division; and
(h) allot to the body an ARBN distinct from the ARBN or ACN
of each body corporate (other than the body) already
registered as a company or registered body under this Act.
601CC Cessation of business etc.
(1) Within 7 days after ceasing to carry on business interstate, a
registered Australian body must lodge written notice that it has so
ceased.
(1A) For the purposes of this section, a body carries on business
interstate if, and only if, the body carries on business at a place
that is in this jurisdiction and outside the body’s place of origin.
(2) Where ASIC has reasonable cause to believe that a registered
Australian body does not carry on business interstate, ASIC may
send to the body in the prescribed manner a letter to that effect and
stating that, if no answer showing cause to the contrary is received
within one month from the date of the letter, a notice will be
published in the Gazette with a view to striking the body’s name
off the register.
(3) Unless ASIC receives, within one month after the date of the letter,
an answer to the effect that the body is still carrying on business
interstate, it may publish in the Gazette, and send to the body in the
prescribed manner, a notice that, at the end of 3 months after the
date of the notice, the body’s name will, unless cause to the
contrary is shown, be struck off the register.
(4) At the end of the period specified in a notice sent under
subsection (3), ASIC may, unless cause to the contrary has been
shown, strike the body’s name off the register and must publish in
the Gazette notice of the striking off.
(5) Nothing in subsection (4) affects the power of the Court to wind up
a body whose name has been struck off the register.
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Section 601CC
Corporations Act 2001 625
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(6) Where a body’s name is struck off the register under
subsection (4), the body ceases to be registered under this Division.
(7) If ASIC is satisfied that a body’s name was struck off the register
as a result of an error on ASIC’s part, ASIC may restore the body’s
name to the register, and thereupon the body’s name is taken never
to have been struck off and the body is taken never to have ceased
to be registered under this Division.
(8) A person who is aggrieved by a body’s name having been struck
off the register may, within 15 years after the striking off, apply to
the Court for the body’s name to be restored to the register.
(9) If, on an application under subsection (8), the Court is satisfied
that:
(a) at the time of the striking off, the body was carrying on
business interstate; or
(b) it is otherwise just for the body’s name to be restored to the
register;
the Court may, by order:
(c) direct the body’s name to be restored to the register; and
(d) give such directions, and make such provisions, as it thinks
just for placing the body and all other persons in the same
position, as nearly as practicable, as if the body’s name had
never been struck off.
(10) On the lodging of an office copy of an order under subsection (9),
the body’s name is taken never to have been struck off.
(11) Where a body’s name is restored to the register under
subsection (7) or (9), ASIC must cause notice of that fact to be
published in the Gazette.
(12) Where a body ceases to be registered under this Division, an
obligation to lodge a document that this Act imposes on the body
by virtue of the doing of an act or thing, or the occurrence of an
event, at or before the time when the body so ceased, being an
obligation not discharged at or before that time, continues to apply
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Part 5B.2 Registrable bodies
Division 1 Registrable Australian bodies
Section 601CC
626 Corporations Act 2001
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in relation to the body even if the period prescribed for lodging the
document has not ended at or before that time.
(13) Where a registered Australian body commences to be wound up, or
is dissolved or deregistered, in its place of origin, the Court must,
on application by the person who is the liquidator for the body’s
place of origin, or by ASIC, appoint a liquidator of the body.
(14) A liquidator of a registered Australian body who is appointed by
the Court:
(a) must, before any distribution of the body’s property is made,
by advertisement in a daily newspaper circulating generally
in each State or Territory where the body carried on business
at any time during the 6 years before the liquidation, invite
all creditors to make their claims against the body within a
reasonable time before the distribution; and
(b) must not, without obtaining an order of the Court, pay out a
creditor of the body to the exclusion of another creditor of
the body; and
(c) must, unless the Court otherwise orders, recover and realise
the property of the body that is located:
(i) in this jurisdiction; and
(ii) outside the body’s place of origin;
and must pay the net amount so recovered and realised to the
liquidator of the body for its place of origin.
(15) If a registered Australian body has been wound up so far as its
property located:
(a) in this jurisdiction; and
(b) outside its place of origin;
is concerned and there is no liquidator for its place of origin, the
liquidator may apply to the Court for directions about the disposal
of the net amount recovered under subsection (14).
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Foreign companies Division 2
Section 601CD
Corporations Act 2001 627
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Division 2—Foreign companies
601CD When a foreign company may carry on business in this
jurisdiction
(1) A foreign company must not carry on business in this jurisdiction
unless:
(a) it is registered under this Division; or
(b) it has applied to be so registered and the application has not
been dealt with.
(2) For the purposes of this Division, a foreign company carries on
business in this jurisdiction if it:
(a) offers debentures in this jurisdiction; or
(b) is a guarantor body for debentures offered in this jurisdiction;
and Part 2L.1 applies to the debentures.
601CDA Limited disclosure if place of origin is a prescribed country
A foreign company is not required to lodge information or a copy
of a document with ASIC under this Division if:
(a) the company’s place of origin is a country prescribed by the
regulations; and
(b) the company has given the information or a copy of the
document to an authority in that country whose functions
under the law of the country include functions equivalent to
any of those of ASIC under this Act.
601CE Application for registration
Subject to this Part, where a foreign company lodges an application
for registration under this Division that is in the prescribed form
and is accompanied by:
(a) a certified copy of a current certificate of its incorporation or
registration in its place of origin, or a document of similar
effect; and
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Section 601CF
628 Corporations Act 2001
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(b) a certified copy of its constitution; and
(c) a list of its directors containing personal details of those
directors that are equivalent to the personal details of
directors referred to in subsection 205B(3); and
(d) if that list includes directors who are:
(i) resident in Australia; and
(ii) members of a local board of directors;
a memorandum that is duly executed by or on behalf of the
foreign company and states the powers of those directors;
and
(f) notice of the address of:
(i) if it has in its place of origin a registered office for the
purposes of a law there in force—that office; or
(ii) otherwise—its principal place of business in its place of
origin; and
(g) notice of the address of its registered office under
section 601CT;
ASIC must:
(h) grant the application and register the foreign company under
this Division by entering the foreign company’s name in a
register kept for the purposes of this Division; and
(j) allot to the foreign company an ARBN distinct from the
ARBN or ACN of each body corporate (other than the
foreign company) already registered as a company or
registered body under this Act.
601CF Appointment of local agent
(1) A foreign company may at any time appoint a person as a local
agent.
(2) ASIC must not register a foreign company under this Division
unless the foreign company has at least one local agent in relation
to whom the foreign company has complied with section 601CG.
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Section 601CG
Corporations Act 2001 629
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(3) Where:
(a) because a person ceased on a particular day to be a local
agent of the foreign company, a registered foreign company
has no local agent; and
(b) the foreign company carries on business, or has a place of
business, in this jurisdiction;
the foreign company must, within 21 days after that day, appoint a
person as a local agent.
601CG Local agent: how appointed
(1) A foreign company that lodges a memorandum of appointment, or
a power of attorney, that is duly executed by or on behalf of the
foreign company and states the name and address of a person who
is:
(a) a natural person or a company; and
(b) resident in this jurisdiction; and
(c) authorised to accept on the foreign company’s behalf service
of process and notices;
is taken to appoint that person as a local agent.
(2) Where a memorandum of appointment, or a power of attorney,
lodged under subsection (1) is executed on the foreign company’s
behalf, the foreign company must, unless it has already done so,
lodge a copy, verified in writing in the prescribed form to be a true
copy, of the document authorising the execution.
(3) A copy lodged under subsection (2) is taken for all purposes to be
the original of the document.
(4) A foreign company that appoints a local agent must lodge a written
statement that is in the prescribed form and is made by the local
agent.
(5) A person whom a foreign company appoints as a local agent is a
local agent of the foreign company until the person:
(a) ceases by virtue of section 601CH to be such a local agent; or
(b) dies or ceases to exist.
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Part 5B.2 Registrable bodies
Division 2 Foreign companies
Section 601CH
630 Corporations Act 2001
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601CH Local agent: how removed
(1) Where a person is a local agent of a foreign company, the foreign
company or the person may lodge a written notice stating that the
person’s appointment as a local agent has terminated, or will
terminate, on a specified day.
(2) Where a notice is lodged under subsection (1), the person ceases to
be a local agent of the foreign company at the end of:
(a) the period of 21 days beginning on the day of lodgment; or
(b) the day specified in the notice;
whichever is the later.
601CJ Liability of local agent
A local agent of a registered foreign company:
(a) is answerable for the doing of all acts, matters and things that
the foreign company is required by or under this Act to do;
and
(b) is personally liable to a penalty imposed on the foreign
company for a contravention of this Act if the court or
tribunal hearing the matter is satisfied that the local agent
should be so liable.
601CK Balance-sheets and other documents
(1) Subject to this section, a registered foreign company must, at least
once in every calendar year and at intervals of not more than 15
months, lodge a copy of its balance-sheet made up to the end of its
last financial year, a copy of its cash flow statement for its last
financial year and a copy of its profit and loss statement for its last
financial year, in such form and containing such particulars and
including copies of such documents as the company is required to
prepare by the law for the time being applicable to that company in
its place of origin, together with a statement in writing in the
prescribed form verifying that the copies are true copies of the
documents so required.
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Section 601CK
Corporations Act 2001 631
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(2) ASIC may extend the period within which subsection (1) requires a
balance-sheet, profit and loss statement, cash flow statement or
other document to be lodged.
(3) ASIC may, if it is of the opinion that the balance-sheet, the profit
and loss statement and the other documents referred to in
subsection (1) do not sufficiently disclose the company’s financial
position:
(a) require the company to lodge a balance-sheet; or
(b) require the company to lodge an audited balance-sheet; or
(ba) require the company to lodge a cash flow statement; or
(bb) require the company to lodge an audited cash flow statement;
or
(c) require the company to lodge a profit and loss statement; or
(d) require the company to lodge an audited profit and loss
statement;
within such period, in such form, containing such particulars and
including such documents as ASIC by notice in writing to the
company requires, but this subsection does not authorise ASIC to
require a balance-sheet or a profit and loss statement to contain any
particulars or include any documents that would not be required to
be given if the company were a public company within the
meaning of this Act.
(4) The registered foreign company must comply with the
requirements set out in the notice.
(5) Where a registered foreign company is not required by the law of
the place of its incorporation or formation to prepare a
balance-sheet, the company must prepare and lodge a
balance-sheet, or, if ASIC so requires, an audited balance-sheet,
within such period, in such form and containing such particulars
and including such documents as the company would have been
required to prepare if the company were a public company
incorporated under this Act.
(5A) If a registered foreign company is not required by the law of the
place of its incorporation or formation to prepare a cash flow
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Section 601CL
632 Corporations Act 2001
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statement, the company must prepare and lodge a cash flow
statement, or, if ASIC so requires, an audited cash flow statement,
within the period, in the form, containing the particulars and
including the documents that the company would have been
required to prepare if the company were a public company
registered under this Act.
(6) Where a registered foreign company is not required by the law of
its place of origin to prepare a profit and loss statement, the
company must prepare and lodge a profit and loss statement or, if
ASIC so requires, an audited profit and loss statement, within such
period, in such form, containing such particulars and including
such documents as the company would have been required to
prepare if the company were a public company incorporated under
this Act.
(7) ASIC may, by Gazette notice, declare that this section does not
apply to specified foreign companies.
(8) Subsections (1) to (6), inclusive, do not apply in relation to a
foreign company in relation to which a notice is in force under
subsection (7).
(9) A registered foreign company in relation to which a notice is in
force under subsection (7) must, at least once in every calendar
year, lodge with ASIC a return in the prescribed form made up to
the date of its annual general meeting.
(10) The return must be lodged within 1 month after the date to which it
is made up, or within such further period as ASIC, in special
circumstances, allows.
601CL Cessation of business etc.
(1) Within 7 days after ceasing to carry on business in this jurisdiction,
a registered foreign company must lodge written notice that it has
so ceased.
(2) Where ASIC receives notice from a local agent of a registered
foreign company that the foreign company has been dissolved or
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Section 601CL
Corporations Act 2001 633
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deregistered, ASIC must remove the foreign company’s name from
the register.
(3) Where ASIC has reasonable cause to believe that a registered
foreign company does not carry on business in this jurisdiction,
ASIC may send to the foreign company in the prescribed manner a
letter to that effect and stating that, if no answer showing cause to
the contrary is received within one month from the date of the
letter, a notice will be published in the Gazette with a view to
striking the foreign company’s name off the register.
(4) Unless ASIC receives, within one month after the date of the letter,
an answer to the effect that the foreign company is still carrying on
business in this jurisdiction, it may publish in the Gazette, and send
to the foreign company in the prescribed manner, a notice that, at
the end of 3 months after the date of the notice, the foreign
company’s name will, unless cause to the contrary is shown, be
struck off the register.
(5) At the end of the period specified in a notice sent under
subsection (4), ASIC may, unless cause to the contrary has been
shown, strike the foreign company’s name off the register and must
publish in the Gazette notice of the striking off.
(6) Nothing in subsection (5) affects the power of the Court to wind up
a foreign company whose name has been struck off the register.
(7) Where a foreign company’s name is struck off the register under
subsection (5), the foreign company ceases to be registered under
this Division.
(8) If ASIC is satisfied that a foreign company’s name was struck off
the register as a result of an error on ASIC’s part, ASIC may
restore the foreign company’s name to the register, and thereupon
the foreign company’s name is taken never to have been struck off
and the foreign company is taken never to have ceased to be
registered under this Division.
(9) A person who is aggrieved by a foreign company’s name having
been struck off the register may, within 15 years after the striking
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Section 601CL
634 Corporations Act 2001
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off, apply to the Court for the foreign company’s name to be
restored to the register.
(10) If, on an application under subsection (9), the Court is satisfied
that:
(a) at the time of the striking off, the foreign company was
carrying on business in this jurisdiction; or
(b) it is otherwise just for the foreign company’s name to be
restored to the register;
the Court may, by order:
(c) direct the foreign company’s name to be restored to the
register; and
(d) give such directions, and make such provision, as it thinks
just for placing the foreign company and all other persons in
the same position, as nearly as practicable, as if the foreign
company’s name had never been struck off.
(11) On the lodging of an office copy of an order under subsection (10),
the foreign company’s name is taken never to have been struck off.
(12) Where a foreign company’s name is restored to the register under
subsection (8) or (10), ASIC must cause notice of that fact to be
published in the Gazette.
(13) Where a foreign company ceases to be registered under this
Division, an obligation to lodge a document that this Act imposes
on the foreign company by virtue of the doing of an act or thing, or
the occurrence of an event, at or before the time when the foreign
company so ceased, being an obligation not discharged at or before
that time, continues to apply in relation to the foreign company
even if the period prescribed for lodging the document has not
ended at or before that time.
(14) Where a registered foreign company commences to be wound up,
or is dissolved or deregistered, in its place of origin:
(a) each person who, on the day when the winding up
proceedings began, was a local agent of the foreign company
must, within the period of 1 month after that day or within
that period as extended by ASIC in special circumstances,
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Section 601CM
Corporations Act 2001 635
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lodge or cause to be lodged notice of that fact and, when a
liquidator is appointed, notice of the appointment; and
(b) the Court must, on application by the person who is the
liquidator for the foreign company’s place of origin, or by
ASIC, appoint a liquidator of the foreign company.
(15) A liquidator of a registered foreign company who is appointed by
the Court:
(a) must, before any distribution of the foreign company’s
property is made, by advertisement in a daily newspaper
circulating generally in each State or Territory where the
foreign company carried on business at any time during the 6
years before the liquidation, invite all creditors to make their
claims against the foreign company within a reasonable time
before the distribution; and
(b) must not, without obtaining an order of the Court, pay out a
creditor of the foreign company to the exclusion of another
creditor of the foreign company; and
(c) must, unless the Court otherwise orders, recover and realise
the property of the foreign company in this jurisdiction and
must pay the net amount so recovered and realised to the
liquidator of the foreign company for its place of origin.
(16) Where a registered foreign company has been wound up so far as
its property in this jurisdiction is concerned and there is no
liquidator for its place of origin, the liquidator may apply to the
Court for directions about the disposal of the net amount recovered
under subsection (15).
601CM Register of members of foreign company
(1) A registered foreign company that has a share capital may cause a
branch register of members to be kept in this jurisdiction.
(2) If a member of a registered foreign company is resident in this
jurisdiction and requests the foreign company in writing to register
in a branch register kept under subsection (1) shares held by the
member, then:
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Section 601CN
636 Corporations Act 2001
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(a) if the foreign company already keeps a register under
subsection (1)—the foreign company must register in that
register the shares held by the member; or
(b) otherwise—the foreign company must, within 1 month after
receiving the request:
(i) keep at its registered office or at some other place in this
jurisdiction a branch register of members; and
(ii) register in that register the shares held by the member.
(3) Subsection (2) does not apply in relation to a foreign company
whose constitution prohibits any invitation to the public to
subscribe for, and any offer to the public to accept subscriptions
for, shares in the foreign company.
(4) Subject to this section, a registered foreign company may
discontinue a register kept under subsection (1) and must, if it does
so, transfer all entries in that register to a register of members kept
outside Australia.
(5) If shares held by a member of a registered foreign company who is
resident in this jurisdiction are registered in a register kept by the
foreign company under subsection (1), the foreign company must
not discontinue that register without that member’s written
consent.
601CN Register kept under section 601CM
(1) This section has effect where a registered foreign company keeps a
register under section 601CM.
(2) The foreign company must keep the register in the same manner as
this Act requires a company to keep its register of members.
(3) Subject to subsection (2), the foreign company must register a
transaction in the register in the same way, and at the same charge,
as it would have registered the transaction in the register of
members that the foreign company keeps in its place of origin.
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Section 601CP
Corporations Act 2001 637
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(4) A transfer of shares in the foreign company that is lodged at the
foreign company’s registered office, or at the place where the
register is kept, is binding on the foreign company.
(5) The Court has the same powers in relation to correction of the
register as it has in relation to correction of a company’s register of
members.
(6) The register is taken to be part of the foreign company’s register of
members.
(7) At the written request of a member who holds shares registered in
the register, the foreign company must remove the shares from the
register and register them in such other register as is specified in
the request.
(8) The register is prima facie evidence of matters that this Act
requires or authorises to be entered in the register.
601CP Notifying ASIC about register kept under section 601CM
Within 14 days after:
(a) beginning to keep a register under section 601CM; or
(b) changing the place where a register is so kept; or
(c) discontinuing a register under section 601CM;
a registered foreign company must lodge a written notice of that
fact specifying, if paragraph (a) or (b) applies, the address or new
address, as the case may be, where the register is kept.
601CQ Effect of right to acquire shares compulsorily
Where:
(a) a law of the place of origin of a foreign company that
corresponds to section 414, 661A or 664A entitles a person
to give notice to another person that the first-mentioned
person wishes to acquire shares in the foreign company that
the other person holds; and
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Section 601CR
638 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) some or all of those shares are registered in a register kept
under section 601CM;
sections 601CM, 601CN and 601CP cease to apply in relation to
the foreign company until the first-mentioned person acquires, or
ceases to be entitled to acquire, the shares so registered.
601CR Index of members and inspection of registers
Subsection 169(2) and sections 173, 174 and 177 apply in relation
to a register kept under section 601CM.
601CS Certificate as to shareholding
A certificate under the seal of a foreign company specifying shares
held by a member of that company and registered in a register kept
under section 601CM is prima facie evidence of the title of the
member to the shares and of the fact that the shares are registered
in the register.
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Bodies registered under this Part Division 3
Section 601CTA
Corporations Act 2001 639
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Division 3—Bodies registered under this Part
601CTA Limited disclosure if place of origin is a prescribed country
A foreign company is not required to lodge information or a copy
of a document with ASIC under this Division if:
(a) the company’s place of origin is a country prescribed by
regulations made for the purposes of section 601CDA; and
(b) the company has given the information or a copy of the
document to an authority in that country whose functions
under the law of the country include functions equivalent to
any of those of ASIC under this Act.
601CT Registered office
(1) A registered body must have a registered office in this jurisdiction
to which all communications and notices may be addressed and
that must be open:
(a) if the body has:
(i) lodged a notice under subsection (2); or
(ii) lodged a notice under subsection (2) and a notice or
notices under subsection (4);
for such hours (being not fewer than 3) between 9 am and 5
pm on each business day as are specified in that notice, or in
the later or last of those notices, as the case may be; or
(b) otherwise—each business day from at least 10 am to 12 noon
and from at least 2 pm to 4 pm;
and at which a representative of the body is present at all times
when the office is open.
(2) A registered body may lodge written notice of the hours (being not
fewer than 3) between 9 am and 5 pm on each business day during
which the body’s registered office is open.
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Division 3 Bodies registered under this Part
Section 601CU
640 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Within 7 days after a change in the situation of its registered office,
a registered body must lodge a written notice of the change and of
the new address of that office.
(4) A registered body that has lodged a notice under subsection (2)
must, within 7 days after a change in the hours during which its
registered office is open, lodge a notice, in the prescribed form, of
the change.
601CU Certificate of registration
(1) On registering a body corporate under Division 1 or 2 or
registering under section 601DH or 601DJ a change in a registered
body’s name, ASIC must issue to the body a certificate, under
ASIC’s common seal and in the prescribed form, of the body’s
registration under that Division.
(2) A certificate under subsection (1) is prima facie evidence of the
matters stated in it.
601CV Notice of certain changes
(1) A registered body must, within 1 month after a change in:
(b) its constitution or any other document lodged in relation to
the body; or
(c) its directors; or
(d) if the body is a foreign company;
(i) the powers of any directors who are resident in
Australia and members of an Australian board of
directors of the foreign company; or
(ii) a local agent or local agents; or
(iii) the name or address of a local agent; or
(e) the situation of:
(i) if it has in its place of origin a registered office for the
purposes of a law (other than this Act) there in force—
that office; or
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Section 601CW
Corporations Act 2001 641
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(ii) otherwise—its principal place of business in its place of
origin;
lodge a written notice of particulars of the change, together with
such documents (if any) as the regulations require.
(2) ASIC may in special circumstances extend the period within which
subsection (1) requires a notice or document to be lodged.
601CW Body’s name etc. must be displayed at office and place of
business
(1) Subject to subsection (2), this section applies to a registrable body.
(2) If the registrable body is a registrable Australian body, this section
does not apply to a place at which the body carries on business if
the place is in the body’s place of origin.
(9) Unless the body is an Australian ADI, it must paint or affix and
keep painted or affixed, in a conspicuous position and in letters
easily legible, on the outside of every office and place (including
its registered office) that is in this jurisdiction, at which its business
is carried on and that is open and accessible to the public:
(a) its name and the name of its place of origin; and
(b) if the liability of its members is limited and the last word of
its name is neither the word “Limited” nor the abbreviation
“Ltd.”—notice of the fact that the liability of its members is
limited; and
(c) in the case of its registered office—the expression
“Registered Office”.
(10) If the body is an Australian ADI, it must paint or affix its name,
and must keep its name painted or affixed, in a conspicuous
position and in letters easily legible, on the outside of every office
or place (including its registered office) that is in this jurisdiction,
at which its business is carried on and that is open and accessible to
the public.
(11) An offence based on subsection (9) or (10) is an offence of strict
liability.
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Division 3 Bodies registered under this Part
Section 601CX
642 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For strict liability, see section 6.1 of the Criminal Code.
601CX Service of documents on registered body
(1) A document may be served on a registered body:
(a) by leaving it at, or by sending it by post to, the registered
office of the body; or
(b) in the case of a registered foreign company—by leaving it at,
or by sending it by post to, the address of a local agent of the
foreign company, being:
(i) in a case to which subparagraph (ii) does not apply—an
address notice of which has been lodged under
subsection 601CG(1); or
(ii) if a notice or notices of a change or alteration in that
address has or have been lodged under
subsection 601CV(1)—the address shown in that
last-mentioned notice or the later or latest of those
last-mentioned notices.
(2) For the purposes of subsection (1), the situation of the registered
office of a registered body:
(a) in a case to which neither paragraph (b) nor paragraph (c)
applies—is taken to be the place notice of the address of
which has been lodged under paragraph 601CB(e) or
601CE(g); or
(b) if only one notice of a change in the situation of the
registered office has been lodged with ASIC under
subsection 601CT(3)—is, on and from:
(i) the day that is 7 days after the day on which the notice
was lodged; or
(ii) the day that is specified in the notice as the day from
which the change is to take effect;
whichever is later, taken to be the place the address of which
is specified in the notice; or
(c) if 2 or more notices of a change in the situation of the
registered office have been lodged under
subsection 601CT(3)—is, on and from:
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(i) the day that is 7 days after the day on which the later or
latest of those notices was lodged; or
(ii) the day that is specified in the later or latest of those
notices as the day from which the change is to take
effect;
whichever is later, taken to be the place the address of which
is specified in the relevant notice;
and is so taken to be that place irrespective of whether the address
of a different place is shown as the address of the registered office
of the registered body in a return or other document (not being a
notice under subsection 601CT(3)) lodged after the notice referred
to in paragraph (a) or (b), or the later or latest of the notices
referred to in paragraph (c), was lodged.
(3) Without limiting the operation of subsection (1), if 2 or more
directors of a registered body reside in Australia or an external
Territory, a document may be served on the body by delivering a
copy of the document personally to each of 2 of those directors.
(3A) Without limiting the operation of subsection (1), a document may
be served on a registered body that is registered as a proprietary
company and has only one director by delivering a copy personally
to that director.
(4) Where a liquidator of a registered body has been appointed, a
document may be served on the body by leaving it at, or by
sending it by post to, the last address of the office of the liquidator
notice of which has been lodged.
(5) Nothing in this section affects the power of the Court to authorise a
document to be served on a registered body in a manner not
provided for by this section.
(6) Subject to subsection 8(4), subsection 8(3) applies in relation to a
reference in this section.
601CY Power to hold land
A registered body has power to hold land in this jurisdiction.
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Division 4 Register of debenture holders for non-companies
Section 601CZA
644 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Register of debenture holders for
non-companies
601CZA Certain documents are debentures
For the purposes of this Division, choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a),
(b), (e) and (f) of the definition of debenture in section 9 must also
be entered into the register of debenture holders.
601CZB Register of debenture holders to be maintained by
non-companies
(1) A body that is not a company must set up and maintain a register of
debenture holders if it issues debentures covered by Chapter 2L.
Note 1: Companies have to keep a register of debenture holders under
sections 168 and 171.
Note 2: The register may be kept on computer (see section 1306).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The register must contain the following information about each
debenture holder:
(a) their name and address;
(b) the amount of the debentures held.
(3) A body’s failure to comply with this section in relation to a
debenture does not affect the debenture itself.
601CZC Location of register
(1) The register must be kept at:
(a) the body’s registered office; or
(b) the body’s principal place of business in this jurisdiction; or
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Section 601CZD
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(c) a place in this jurisdiction (whether of the body or of
someone else) where the work involved in maintaining the
register is done; or
(d) another place approved by ASIC.
(2) The body must lodge with ASIC a notice of the address at which
the register is kept within 7 days after the register is:
(a) established at an office that is neither the body’s registered
office nor at its principal place of business; or
(b) moved from one office to another.
Notice is not required for moving the register between the
registered office and an office at the principal place of business.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
601CZD Application of sections 173 to 177
Sections 173 to 177 apply to a register kept under this Division as
if it were kept under Chapter 2C.
Note: Sections 173 to 177 deal with rights to inspect the register and get
copies, the obligations of agents who maintain the register, correction
of the register, the evidential value of the register and the use of
information on the register.
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Part 5B.3 Names of registrable Australian bodies and foreign companies
Section 601DA
646 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5B.3—Names of registrable Australian bodies
and foreign companies
601DA Reserving a name
(1) A person may lodge an application in the prescribed form with
ASIC to reserve a name for a registrable Australian body or a
foreign company. If the name is available, ASIC must reserve it.
Note: For available names, see section 601DC.
(2) The reservation lasts for 2 months from the date when the
application was lodged. An applicant may ask ASIC in writing for
an extension of the reservation during a period that the name is
reserved, and ASIC may extend the reservation for 2 months.
(3) ASIC must cancel a reservation if the applicant asks ASIC in
writing to do so.
601DB Acceptable abbreviations
(1) The abbreviations set out in the following table may be used:
(a) instead of words that this Act requires to be part of a
registrable Australian body’s or foreign company’s name or
to be included in a document; and
(b) instead of words that are part of a registrable Australian
body’s or foreign company’s name; and
(c) with or without full stops.
Acceptable abbreviations [operative table]
Word Abbreviation
1 Company Co or Coy
2 Proprietary Pty
3 Limited Ltd
4 Australian Aust
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Section 601DC
Corporations Act 2001 647
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Acceptable abbreviations [operative table]
Word Abbreviation
5 Number No
6 and &
7 Australian Registered Body
Number
ARBN
8 Registered Regd
(2) If a registrable Australian body’s or foreign company’s name
includes any of these abbreviations, the word corresponding to the
abbreviation may be used instead.
601DC When a name is available
Name is available unless identical or unacceptable
(1) A name is available to a registrable Australian body or a foreign
company unless the name is:
(a) identical (under rules set out in the regulations) to a name
that is reserved or registered under this Act for another body;
or
(b) identical (under rules set out in the regulations) to a name
that is held or registered on the Business Names Register in
respect of another individual or body who is not the person
applying to have the name; or
(c) unacceptable for registration under the regulations.
Minister may consent to a name being available
(2) The Minister may consent in writing to a name being available to a
registrable Australian body or foreign company even if the name
is:
(a) identical to a name that is reserved or registered under this
Act for another body; or
(b) unacceptable for registration under the regulations.
(3) The Minister’s consent may be given subject to conditions.
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Section 601DD
648 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: If the body or company breaches a condition, ASIC may direct it to
change its name under section 601DJ.
(4) The regulations may specify that a particular unacceptable name is
available to a registrable Australian body or foreign company if:
(a) a specified public authority, or an instrumentality or agency
of the Crown in right of the Commonwealth, a State or an
internal Territory has consented to the body or company
using or assuming the name; or
(b) the body or company is otherwise permitted to use or assume
the name by or under a specified provision of an Act of the
Commonwealth, a State or an internal Territory.
The consent of the authority, instrumentality or agency may be
given subject to conditions.
Note: If the consent is withdrawn, the body or company ceases to be
permitted or it breaches a condition, ASIC may direct it to change its
name under section 601DJ.
601DD Registered Australian bodies and registered foreign companies can carry on business with some names only
(1) A registered Australian body or registered foreign company must
not carry on business under a name in this jurisdiction unless
subsection (2) or (3) authorises the body or company to use the
name.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The body or company may use the name if the company or body is
registered under that name under Part 5B.2.
(3) A registered Australian body may use a name in the State or
Territory that is its place of origin if the name is registered to the
body on the Business Names Register.
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Section 601DE
Corporations Act 2001 649
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601DE Using a name and ARBN
Requirements for bodies that are not Australian ADIs
(1) Subject to sections 601DF and 601DG, a registered Australian
body or registered foreign company must set out the following on
all its public documents and negotiable instruments published or
signed in this jurisdiction:
(a) its name;
(b) either:
(i) the expression “Australian Registered Body Number”
followed by the body’s ARBN; or
(ii) if the last 9 digits of the body’s ABN are the same, and
in the same order, as the last 9 digits of its ARBN—the
words “Australian Business Number” followed by the
body’s ABN;
(c) its place of origin;
(d) if the liability of its members is limited and this is not
apparent from its name—notice of the limited liability of its
members.
Paragraphs (c) and (d) do not apply to an Australian ADI.
Note: In any case where the body’s ARBN would be used, the body’s ABN
may be used instead if section 1344 is satisfied.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Where information to be set out
(2) Subject to sections 601DF and 601DG, the information required by
paragraph (1)(b) must be set out with the company’s or body’s
name, or 1 of the references to its name in the document or
instrument. If the name appears on 2 or more pages of the
document or instrument, this must be done on the first of those
pages.
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Section 601DF
650 Corporations Act 2001
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601DF Exception to requirement to have ARBN on receipts
A registered Australian body or a registered foreign company does
not have to set out the expression “Australian Registered Body
Number” followed by its ARBN on a receipt (for example, a cash
register receipt) that sets out information recorded in the machine
that produced the receipt.
601DG Regulations may exempt from requirement to set out
information on documents
The regulations may exempt a specified registered Australian body
or registered foreign company, or a class of those bodies or
companies, from the requirement in paragraphs 601DE(1)(b), (c)
and (d) to set out information on its public documents and
negotiable instruments. The exemption may relate to specified
documents or instruments, or a class of documents or instruments.
601DH Notice of name change must be given to ASIC
(1) A registered Australian body or a registered foreign company must
give ASIC written notice of a change to its name within 14 days
after the date the change occurred.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If the proposed name is available, ASIC must alter the details of
the body’s or foreign company’s registration to reflect the change.
For the purposes of this Act (other than subsection (1)), the change
of name takes effect when ASIC alters the details of the body’s or
foreign company’s registration.
Note 1: For the reservation of names, see section 601DA.
Note 2: For available names, see section 601DC.
Note 3: ASIC must issue a new certificate reflecting the name change (see
section 601CU).
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Bodies corporate registered as companies, and registrable bodies Chapter 5B
Names of registrable Australian bodies and foreign companies Part 5B.3
Section 601DJ
Corporations Act 2001 651
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601DJ ASIC’s power to direct a registered name be changed
(1) ASIC may direct a registered Australian body or registered foreign
company in writing to change the name under which the body or
company is registered within 2 months if:
(a) the name should not have been registered; or
(b) the body or company has breached a condition under
subsection 601DC(3) on the availability of the name; or
(c) a consent given under subsection 601DC(4) to use or assume
the name has been withdrawn; or
(d) the body or company has breached a condition on a consent
given under subsection 601DC(4); or
(e) the body or company ceases to be permitted to use or assume
the name (as referred to in paragraph 601DC(4)(b)).
(2) The body or company must comply with the direction within 2
months after being given it by doing everything necessary to
change its name for the purposes of this Act under section 601DH.
(3) If the body or company does not comply with subsection (2), ASIC
may change the body’s or company’s name to a name that includes
its ARBN by altering the details of the body’s or company’s
registration to reflect the change.
(4) For the purposes of this Act, a change of name under
subsection (3) takes effect when ASIC alters the details of the
body’s or foreign company’s registration.
Note: ASIC must issue a new certificate reflecting the name change (see
section 601CU).
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Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
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About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Contents
Chapter 5C—Managed investment schemes 1
Part 5C.1—Registration of managed investment schemes 1 601EA Applying for registration ...................................................1
601EB Registration of managed investment scheme.....................2
601EC All documents etc. lodged with ASIC to bear
ARSN or ABN ..................................................................2
601ED When a managed investment scheme must be
registered ...........................................................................3
601EE Unregistered schemes may be wound up...........................4
Part 5C.2—The responsible entity 5
Division 1—Responsibilities and powers 5
601FA Responsible entity to be public company and hold
Australian financial services licence .................................5
601FB Responsible entity to operate scheme................................5
601FC Duties of responsible entity ...............................................6
601FD Duties of officers of responsible entity..............................8
601FE Duties of employees of responsible entity.........................9
601FF Surveillance checks by ASIC ............................................9
601FG Acquisition of interest in scheme by responsible
entity................................................................................10
601FH Liquidator etc. of responsible entity entitled to
exercise indemnity rights.................................................10
Division 2—Changing the responsible entity 12
601FJ Changes only take effect when ASIC alters record
of registration ..................................................................12
601FK Requirements of section 601FA must be met ..................12
601FL Retirement of responsible entity......................................12
601FM Removal of responsible entity by members.....................13
601FN ASIC or scheme member may apply to Court for
appointment of temporary responsible entity ..................14
601FP Appointment of temporary responsible entity by
Court................................................................................14
601FQ Temporary responsible entity to take steps for
appointment of new responsible entity ............................15
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Division 3—Consequences of change of responsible entity 17
601FR Former responsible entity to hand over books and
provide reasonable assistance..........................................17
601FS Rights, obligations and liabilities of former
responsible entity.............................................................17
601FT Effect of change of responsible entity on
documents etc. to which former responsible entity
is party.............................................................................18
Part 5C.3—The constitution 19 601GA Contents of the constitution.............................................19
601GB Constitution must be legally enforceable.........................20
601GC Changing the constitution................................................20
Part 5C.4—The compliance plan 22 601HA Contents of the compliance plan .....................................22
601HB Compliance plan may incorporate provisions from
another scheme’s plan .....................................................23
601HC Directors must sign lodged copy of compliance
plan..................................................................................23
601HD ASIC may require further information about
compliance plan...............................................................23
601HE Changing the compliance plan ........................................24
601HF ASIC may require consolidation of compliance
plan to be lodged .............................................................24
601HG Audit of compliance plan ................................................24
601HH Removal and resignation of auditors ...............................30
601HI Action on change of auditor of compliance plan .............31
Part 5C.5—The compliance committee 32 601JA When is a compliance committee required? ....................32
601JB Membership of compliance committee ...........................33
601JC Functions of compliance committee ................................34
601JD Duties of members ..........................................................35
601JE Compliance committee members have qualified
privilege in certain cases .................................................36
601JF When can responsible entity indemnify
compliance committee members? ...................................36
601JG When can responsible entity pay insurance
premiums for compliance committee members? .............37
601JH Proceedings of compliance committee ............................37
601JJ Disclosure of interests .....................................................38
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Part 5C.6—Members’ rights to withdraw from a scheme 39 601KA Members’ rights to withdraw ..........................................39
601KB Non-liquid schemes—offers............................................40
601KC Non-liquid schemes—only one withdrawal offer to
be open at any time..........................................................41
601KD Non-liquid schemes—how payments are to be
made ................................................................................41
601KE Non-liquid schemes—responsible entity may
cancel withdrawal offer ...................................................41
Part 5C.7—Related party transactions 43 601LA Chapter 2E applies with modifications............................43
601LB Replacement section 207.................................................43
601LC Replacement section 208.................................................44
601LD Omission of sections 213, 214 and 224 ...........................45
601LE Modification of section 225.............................................45
Part 5C.8—Effect of contraventions (civil liability and voidable
contracts) 46 601MA Civil liability of responsible entity to members...............46
601MB Voidable contracts where subscription offers and
invitations contravene this Act ........................................46
Part 5C.9—Winding up 48 601NA Winding up required by scheme’s constitution ...............48
601NB Winding up at direction of members ...............................48
601NC Winding up if scheme’s purpose accomplished or
cannot be accomplished...................................................48
601ND Winding up ordered by Court..........................................49
601NE The winding up of the scheme.........................................50
601NF Other orders about winding up ........................................50
601NG Unclaimed money to be paid to ASIC.............................51
Part 5C.10—Deregistration 52 601PA Deregistration—voluntary...............................................52
601PB Deregistration by ASIC ...................................................52
601PC Reinstatement ..................................................................54
Part 5C.11—Exemptions and modifications 55 601QA ASIC’s power to make exemption and
modification orders..........................................................55
601QB Modification by regulations ............................................56
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Chapter 5D—Licensed trustee companies 57
Part 5D.1—Preliminary 57 601RAA Definitions.......................................................................57
601RAB Meaning of trustee company and client of trustee
company ..........................................................................58
601RAC Meaning of traditional trustee company services
and estate management functions ....................................59
601RAD Meaning of person with a proper interest .......................60
601RAE Interaction between trustee company provisions
and State and Territory laws............................................61
Part 5D.2—Powers etc. of licensed trustee companies 64
Division 1—General provisions 64
601SAA Jurisdiction of courts not affected etc. .............................64
601SAB Regulations may prescribe other powers etc. ..................64
601SAC Powers etc. conferred by or under this Chapter are
in addition to other powers etc. .......................................64
Division 2—Accounts 66
601SBA Licensed trustee company not required to file
accounts...........................................................................66
601SBB Licensed trustee company may be required to
provide account in relation to estate ................................66
601SBC Court may order audit......................................................67
Division 3—Common funds 69
601SCA Common funds of licensed trustee companies ................69
601SCAA Common funds that are also registered schemes .............69
601SCB Obligations relating to common funds ............................70
601SCC Regulations relating to establishment or operation
of common funds.............................................................70
601SCD Arm’s length transactions................................................70
Part 5D.3—Regulation of fees charged by licensed trustee
companies 72
Division 1—Disclosure of fees 72
601TAA Schedule of fees to be published and available ...............72
601TAB Disclosure to clients of changed fees...............................72
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Division 2—General provisions about charging fees 74
601TBA Charging of fees for the provision of traditional
trustee company services .................................................74
601TBB Part does not prevent charging of fees as agreed
etc. ...................................................................................74
601TBC Part does not prevent charging fee for provision of
account ............................................................................75
601TBD Part does not prevent reimbursement ..............................75
601TBE Estate management functions: payment of fees out
of estate ...........................................................................75
Division 3—Fees otherwise than for being trustee or manager of
a charitable trust 76
601TCA Fees otherwise than for being the trustee or
manager of a charitable trust ...........................................76
601TCB Additional amount for preparation of returns etc. ...........76
Division 4—Fees for being trustee or manager of a charitable
trust 77
Subdivision A—New client charitable trusts 77
601TDA Subdivision applies to new client charitable trusts ..........77
601TDB What the trustee company may charge ............................77
601TDC Option 1: capital commission and income
commission .....................................................................78
601TDD Option 2: annual management fee ...................................78
601TDE Additional amount if trust money is in a common
fund .................................................................................79
601TDF Additional amount for preparation of returns etc. ...........79
Subdivision B—Existing client charitable trusts 80
601TDG Subdivision applies to existing client charitable
trusts ................................................................................80
601TDH Trustee company not to charge more than was
being charged before section commenced .......................80
601TDI Additional amount if trust money is in a common
fund .................................................................................80
601TDJ Additional amount for preparation of returns etc. ...........81
Division 5—Miscellaneous 82
601TEA Power of the Court with respect to excessive fees...........82
601TEB Directors’ fees .................................................................83
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Part 5D.4—Duties of officers and employees of licensed trustee
companies 84 601UAA Duties of officers of licensed trustee company................84
601UAB Duties of employees of licensed trustee company...........85
Part 5D.5—Limit on control of licensed trustee companies 87
Division 1—15% voting power limit 87
601VAA Meaning of unacceptable control situation .....................87
601VAB Acquisitions of shares .....................................................87
601VAC Remedial orders...............................................................88
601VAD Injunctions.......................................................................89
Division 2—Approval to exceed 15% voting power limit 90
601VBA Application for approval to exceed 15% voting
power limit ......................................................................90
601VBB Approval of application...................................................90
601VBC Duration of approval .......................................................91
601VBD Conditions of approval ....................................................92
601VBE Varying percentage approved..........................................93
601VBF Revoking an approval......................................................94
601VBG Minister may require further information from
applicants.........................................................................95
601VBH Minister may seek views of licensed trustee
company and its clients ...................................................95
601VBI Time limit for Minister’s decision ...................................95
Division 3—Other matters 97
601VCA Acquisition of property ...................................................97
601VCB Interests of clients to be viewed as a group .....................97
601VCC Anti-avoidance ................................................................97
Part 5D.6—ASIC-approved transfers of estate assets and
liabilities 99
Division 1—Preliminary 99
601WAA Definitions.......................................................................99
Division 2—Transfer of estate assets and liabilities 102
601WBA Transfer determinations.................................................102
601WBB When consent of receiving company is in force ............104
601WBC Complementary State or Territory legislation ...............104
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601WBD Minister’s power to decide that his or her consent
is not required................................................................105
601WBE Determinations may impose conditions.........................105
601WBF Notice of determination.................................................106
601WBG Certificate of transfer.....................................................106
601WBH Notice of certificate .......................................................107
601WBI Time and effect of transfer ............................................108
601WBJ Substitution of trustee company ....................................109
601WBK Liabilities for breach of trust and other matters not
affected by this Part.......................................................109
Division 3—Other matters related to the transfer of estate assets
and liabilities 110
601WCA Certificates evidencing operation of Act etc..................110
601WCB Certificates in relation to land and interests in land.......110
601WCC Certificates in relation to other assets ............................110
601WCD Documents purporting to be certificates........................111
601WCE Construction of references to transferring company......111
601WCF Income or other distribution received by
transferring company.....................................................111
601WCG Access to books.............................................................112
601WCH Minister or ASIC may seek views of trustee
company and its clients .................................................112
Division 4—Miscellaneous 113
601WDA Transferring company required to contact certain
persons ..........................................................................113
Part 5D.7—Contraventions and holding out 115 601XAA Civil liability of licensed trustee companies..................115
601XAB Prohibition on holding out.............................................115
Part 5D.8—Exemptions and modifications 116 601YAA Exemptions and modifications by ASIC .......................116
601YAB Exemptions and modifications by regulations...............117
Chapter 6—Takeovers 119 602 Purposes of Chapter.......................................................119
602A Substantial interest concept ...........................................120
603 Chapter extends to some listed bodies that are not
companies......................................................................120
604 Chapter extends to listed managed investment
schemes .........................................................................121
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605 Classes of securities.......................................................121
Part 6.1—Prohibited acquisitions of relevant interests in voting
shares 122 606 Prohibition on certain acquisitions of relevant
interests in voting shares ...............................................122
607 Effect on transactions ....................................................125
608 Relevant interests in securities ......................................125
609 Situations not giving rise to relevant interests ...............128
610 Voting power in a body or managed investment
scheme...........................................................................131
Part 6.2—Exceptions to the prohibition 134 611 Exceptions to the prohibition.........................................134
612 Effect of non-compliance with takeover rules for
exceptions 1 to 4............................................................139
613 Bidder not to exercise voting rights if failure to
send bids for off-market acquisition—exception 2
or 3 ................................................................................139
615 Treatment of foreign holders under equal access
issue—exception 10 ......................................................140
Part 6.3—The different types of takeover bid 141 616 Off-market bids and market bids ...................................141
Part 6.4—Formulating the takeover offer 142
Division 1—General 142
617 Securities covered by the bid.........................................142
618 Offers must be for all or a proportion of securities
in the bid class ...............................................................143
619 General terms of the offer..............................................143
620 Off-market bid (offer formalities) .................................144
Division 2—Consideration for the offer 146
621 Consideration offered ....................................................146
622 Escalation agreements ...................................................147
623 Collateral benefits not allowed ......................................148
Division 3—The offer period 150
624 Offer period...................................................................150
Division 4—Conditional offers 151
625 Conditional offers—general ..........................................151
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626 Maximum acceptance conditions in off-market
bids................................................................................151
627 Discriminatory conditions not allowed for
off-market bids ..............................................................152
628 Conditions requiring payments to officers of target
not allowed in off-market bids.......................................153
629 Conditions turning on bidder’s or associate’s
opinion not allowed in off-market bids .........................153
630 Defeating conditions......................................................154
Part 6.5—The takeover procedure 156
Division 1—The overall procedure 156
631 Proposing or announcing a bid ......................................156
632 Overview of steps in an off-market bid .........................157
633 Detailed steps in an off-market bid................................158
634 Overview of steps in a market bid .................................162
635 Detailed steps in a market bid .......................................163
Division 2—The bidder’s statement 167
636 Bidder’s statement content ............................................167
637 Bidder’s statement formalities.......................................170
Division 3—The target’s response 172
638 Target’s statement content.............................................172
639 Target’s statement formalities .......................................173
640 Expert’s report to accompany target’s statement if
bidder connected with target .........................................174
641 Target must inform bidder about securities
holdings.........................................................................175
642 Expenses of directors of target companies ....................176
Division 4—Updating and correcting the bidder’s statement and
target’s statement 178
643 Supplementary bidder’s statement.................................178
644 Supplementary target’s statement..................................179
645 Form of supplementary statement .................................180
646 Consequences of lodging a supplementary
statement .......................................................................181
647 To whom supplementary statement must be sent ..........181
Division 5—General rules on takeover procedure 182
Subdivision A—Experts’ reports 182
648A Experts’ reports .............................................................182
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Subdivision B—Sending documents to holders of securities 183
648B Address at which bidder may send documents to
holders of securities.......................................................183
648C Manner of sending documents to holders of
securities........................................................................183
Subdivision C—Effect of proportional takeover approval
provisions 183
648D Constitution may contain proportional takeover
approval provisions .......................................................183
648E Resolution to be put if proportional bid made ...............185
648F Effect of rejection of approval resolution ......................186
648G Including proportional takeover provisions in
constitution....................................................................186
648H Effect of Subdivision.....................................................189
Part 6.6—Variation of offers 190
Division 1—Market bids 190
649A General ..........................................................................190
649B Market bids—raising bid price ......................................190
649C Market bids—extending the offer period.......................190
Division 2—Off-market bids (express variation by bidder) 192
650A General ..........................................................................192
650B Off-market bids—consideration offered........................192
650C Off-market bids—extension of offer period ..................194
650D Off-market bids—method of making variation .............195
650E Right to withdraw acceptance........................................196
650F Freeing off-market bids from defeating conditions .......197
650G Contracts and acceptances void if defeating
condition not fulfilled....................................................198
Division 3—Off-market bids (automatic variations) 199
651A Off-market bid—effect on bid consideration of
purchases made outside bid ...........................................199
651B How to make an election for new forms of
consideration .................................................................200
651C Returning securities as part of election..........................201
Part 6.7—Withdrawal and suspension of offers 202 652A Withdrawal of unaccepted offers under takeover
bid .................................................................................202
652B Withdrawal of takeover offers with ASIC consent........202
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652C Withdrawal of market bids ............................................202
Part 6.8—Acceptances 204 653A Acceptance of offers made under off-market bid ..........204
653B Acceptances by transferees and nominees of offers
made under off-market bid ............................................204
Part 6.9—Other activities during the bid period 207 654A Bidder not to dispose of securities during the bid
period ............................................................................207
654B Disclosures about substantial shareholdings in
listed companies ............................................................207
654C Disclosures about substantial shareholdings in
unlisted companies ........................................................207
Part 6.10—Review and intervention 209
Division 1—ASIC’s power to exempt and modify 209
655A ASIC’s power to exempt and modify ............................209
655B Notice of decision and review rights .............................210
Division 2—The Takeovers Panel 211
Subdivision A—Review of ASIC’s exercise of its exemption or
modification powers 211
656A Review of exercise of exemption or modification
powers ...........................................................................211
656B Operation and implementation of a decision that is
subject to review............................................................212
Subdivision B—Unacceptable circumstances 214
657A Declaration of unacceptable circumstances ...................214
657B When Panel may make declaration ...............................216
657C Applying for declarations and orders ............................216
657D Orders that Panel may make following declaration .......216
657E Interim orders ................................................................218
657EA Internal Panel reviews ...................................................219
657EB References by Courts.....................................................220
657F Offence to contravene Panel order ................................220
657G Orders by the Court where contravention or
proposed contravention of Panel order ..........................221
657H ASIC may publish report about application to
Panel or Court................................................................221
Subdivision C—General provisions 222
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658A Power of Panel where a proceeding is frivolous or
vexatious .......................................................................222
658B Evidentiary value of findings of fact by Panel ..............222
658C Panel’s power to make rules ..........................................223
658D Inconsistency between Panel rules and ASIC
exemption or declaration ...............................................224
Division 3—Court powers 225
659A Panel may refer questions of law to the Court ...............225
659AA Object of sections 659B and 659C ................................225
659B Court proceedings before end of bid period ..................225
659C Court proceedings after end of bid period .....................227
Chapter 6A—Compulsory acquisitions and buy-outs 229 660A Chapter extends to some listed bodies that are not
companies......................................................................229
660B Chapter extends to listed managed investment
schemes .........................................................................229
Part 6A.1—Compulsory acquisitions and buy-outs following
takeover bid 230
Division 1—Compulsory acquisition of bid class securities 230
661A Compulsory acquisition power following takeover
bid .................................................................................230
661B Compulsory acquisition notice ......................................232
661C Terms on which securities to be acquired......................234
661D Holder may obtain names and addresses of other
holders...........................................................................235
661E Holder may apply to Court to stop acquisition ..............235
661F Signpost—completing the acquisition of the
securities........................................................................236
Division 2—Compulsory buy-out of bid class securities 237
662A Bidder must offer to buy out remaining holders of
bid class securities .........................................................237
662B Bidder to tell remaining holders of their right to be
bought out......................................................................237
662C Right of remaining holder of securities in the bid
class to be bought out ....................................................239
Division 3—Compulsory buy-out of convertible securities 240
663A Bidder must offer to buy out holders of convertible
securities........................................................................240
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663B Bidder to tell holders of convertible securities of
their right to be bought out ............................................240
663C Right of holders of convertible securities to be
bought out......................................................................242
Part 6A.2—General compulsory acquisitions and buy-outs 243
Division 1—Compulsory acquisition of securities by 90% holder 243
664A Threshold for general compulsory acquisition
power.............................................................................243
664AA Time limit on exercising compulsory acquisition
power.............................................................................244
664B The terms for compulsory acquisition ...........................245
664C Compulsory acquisition notice ......................................245
664D Benefits outside compulsory acquisition procedure ......247
664E Holder’s right to object to the acquisition .....................248
664F The Court’s power to approve acquisition.....................249
664G Signpost—completing the acquisition of the
securities........................................................................250
Division 2—Compulsory buy-out of convertible securities by
100% holder 251
665A 100% holder must offer to buy out holders of
convertible securities.....................................................251
665B 100% holder to tell holders of convertible
securities of their right to be bought out ........................251
665C Right of holders of convertible securities to be
bought out......................................................................253
Part 6A.3—Completion of compulsory acquisition of securities 254 666A Completing the acquisition of securities........................254
666B Statutory procedure for completion ...............................255
Part 6A.4—Experts’ reports and valuations 257 667A Expert’s report...............................................................257
667AA Expert to be nominated..................................................257
667B Expert must not be an associate and must disclose
prior dealings and relationships.....................................258
667C Valuation of securities...................................................259
Part 6A.5—Records of unclaimed consideration 260 668A Company’s power to deal with unclaimed
consideration for compulsory acquisition......................260
668B Unclaimed consideration to be transferred to ASIC ......261
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Part 6A.6—ASIC powers 262 669 ASIC’s power to exempt and modify ............................262
Chapter 6B—Rights and liabilities in relation to
Chapter 6 and 6A matters 263 670A Misstatements in, or omissions from, takeover and
compulsory acquisition and buy-out documents............263
670B Right to recover for loss or damage resulting from
contravention.................................................................264
670C People liable on takeover or compulsory
acquisition statement to inform maker about
deficiencies in the statement..........................................267
670D Defences against prosecutions under
subsection 670A(3) and actions under
section 670B..................................................................268
670E Liability for proposing a bid or not carrying
through with bid ............................................................269
670F Defences........................................................................270
Chapter 6C—Information about ownership of listed
companies and managed investment
schemes 271 671A Chapter extends to some listed bodies that are not
companies......................................................................271
Part 6C.1—Substantial holding information 272 671B Information about substantial holdings must be
given to company, responsible entity and relevant
market operator .............................................................272
671C Civil liability .................................................................275
Part 6C.2—Tracing beneficial ownership of shares 276 672A Disclosure notices .........................................................276
672B Disclosure by member of relevant interests and
instructions ....................................................................276
672C ASIC may pass information on to person who
made request..................................................................277
672D Fee for complying with a direction given by a
company or scheme under this Part ...............................278
672DA Register of information about relevant interests in
listed company or listed managed investment
scheme...........................................................................278
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672E No notice of rights.........................................................282
672F Civil liability .................................................................282
Part 6C.3—ASIC powers 283 673 ASIC’s power to exempt and modify ............................283
Chapter 6CA—Continuous disclosure 285 674 Continuous disclosure—listed disclosing entity
bound by a disclosure requirement in market
listing rules ....................................................................285
675 Continuous disclosure—other disclosing entities..........287
676 Sections 674 and 675—when information is
generally available.........................................................288
677 Sections 674 and 675—material effect on price or
value ..............................................................................289
678 Application of Criminal Code to offences based on
subsection 674(2), 674(5) or 675(2) ..............................289
Chapter 6D—Fundraising 290
Part 6D.1—Application of the fundraising provisions 290 700 Coverage of the fundraising rules..................................290
702 Treatment of offers of options over securities ...............291
703 Chapter may not be contracted out of............................291
703A Operating a clearing and settlement facility is not
offering securities etc. ...................................................291
Part 6D.2—Disclosure to investors about securities 292
Division 1—Overview 292
704 When disclosure to investors is needed .........................292
705 Types of disclosure document .......................................292
Division 2—Offers that need disclosure to investors 294
706 Issue offers that need disclosure....................................294
707 Sale offers that need disclosure .....................................294
708 Offers that do not need disclosure .................................297
708AA Rights issues that do not need disclosure ......................304
708A Sale offers that do not need disclosure ..........................307
Division 3—Types of disclosure documents 313
709 Prospectuses, short-form prospectuses, profile
statements and offer information statements .................313
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Division 4—Disclosure requirements 316
710 Prospectus content—general disclosure test..................316
711 Prospectus content—specific disclosures ......................318
712 Prospectus content—short form prospectuses ...............321
713 Special prospectus content rules for continuously
quoted securities............................................................322
713A Offer of simple corporate bonds....................................324
713B Simple corporate bonds—2-part simple corporate
bonds prospectus ...........................................................330
713C Simple corporate bonds—base prospectus ....................331
713D Simple corporate bonds—offer-specific prospectus ......332
713E Simple corporate bonds—prospectus may refer to
other material lodged with ASIC...................................334
714 Contents of profile statement.........................................335
715 Contents of offer information statement ........................336
715A Presentation etc. of disclosure documents .....................337
716 Disclosure document date and consents ........................338
Division 5—Procedure for offering securities 339
717 Overview of procedure for offering securities...............339
718 Lodging of disclosure document ...................................341
719 Lodging supplementary or replacement
document—general .......................................................341
719A Lodging supplementary or replacement
document—2-part simple corporate bonds
prospectus......................................................................344
720 Consents needed for lodgment ......................................347
721 Offer must be made in, or accompanied by, the
disclosure document ......................................................349
722 Application money to be held on trust...........................351
723 Issuing or transferring the securities under a
disclosure document ......................................................351
724 Choices open to person making the offer if
disclosure document condition not met or
disclosure document defective.......................................353
725 Expiration of disclosure document ................................356
Part 6D.3—Prohibitions, liabilities and remedies 357
Division 1—Prohibitions and liabilities 357
726 Offering securities in a body that does not exist............357
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727 Offering securities without a current disclosure
document .......................................................................357
728 Misstatement in, or omission from, disclosure
document .......................................................................359
729 Right to recover for loss or damage resulting from
contravention.................................................................360
730 People liable on disclosure document to inform
person making the offer about deficiencies in the
disclosure document ......................................................362
731 Due diligence defence for prospectuses.........................363
732 Lack of knowledge defence for offer information
statements and profile statements ..................................363
733 General defences for all disclosure documents..............364
734 Restrictions on advertising and publicity.......................365
735 Obligation to keep consents and other documents.........370
736 Securities hawking prohibited .......................................370
Division 2—Remedies 372
737 Remedies for investors ..................................................372
738 Securities may be returned and refund obtained............372
Part 6D.4—ASIC’s powers 373 739 ASIC stop orders ...........................................................373
740 Anti-avoidance determinations......................................375
741 ASIC’s power to exempt and modify ............................376
Part 6D.5—Miscellaneous 377 742 Exemptions and modifications by regulations...............377
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Managed investment schemes Chapter 5C
Registration of managed investment schemes Part 5C.1
Section 601EA
Corporations Act 2001 1
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Chapter 5C—Managed investment schemes
Part 5C.1—Registration of managed investment
schemes
601EA Applying for registration
(1) To register a managed investment scheme, a person must lodge an
application with ASIC.
(2) The application must state:
(a) the name, and the address of the registered office, of the
proposed responsible entity; and
(b) the name and address of a person who has consented to be
the auditor of the compliance plan.
(3) The applicant must have the consent referred to in paragraph (2)(b)
when the application is lodged. After the scheme is registered, the
applicant must give the consent to the responsible entity. The
responsible entity must keep the consent.
(4) The following must be lodged with the application:
(a) a copy of the scheme’s constitution;
(b) a copy of the scheme’s compliance plan;
(c) a statement signed by the directors of the proposed
responsible entity that:
(i) the scheme’s constitution complies with
sections 601GA and 601GB; and
(ii) the scheme’s compliance plan complies with
section 601HA.
Note: Section 601HC requires that the copy of the compliance plan be
signed by the directors of the responsible entity.
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Chapter 5C Managed investment schemes
Part 5C.1 Registration of managed investment schemes
Section 601EB
2 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601EB Registration of managed investment scheme
(1) ASIC must register the scheme within 14 days of lodgment of the
application, unless it appears to ASIC that:
(c) the application does not comply with section 601EA; or
(d) the proposed responsible entity does not meet the
requirements of section 601FA; or
(e) the scheme’s constitution does not meet the requirements of
sections 601GA and 601GB; or
(f) the scheme’s compliance plan does not meet the
requirements of section 601HA; or
(g) the copy of the compliance plan lodged with the application
is not signed as required by section 601HC; or
(h) arrangements are not in place that will satisfy the
requirements of section 601HG in relation to audit of
compliance with the plan.
(2) If ASIC registers the scheme, ASIC must give it an ARSN.
(3) ASIC must keep a record of the registration of the scheme.
(4) For the purpose of determining whether subsection (1) is satisfied
in relation to the scheme:
(a) references in Parts 5C.3, 5C.4 and 5C.5 to a registered
scheme are taken to include a reference to the scheme; and
(b) references in those Parts to the responsible entity of a
registered scheme are taken to include a reference to the
proposed responsible entity of the scheme.
601EC All documents etc. lodged with ASIC to bear ARSN or ABN
After a managed investment scheme is registered, all documents
relating to the scheme that are lodged with ASIC must set out:
(a) the scheme’s ARSN; or
(b) if the last 9 digits of the scheme’s ARSN are the same, and in
the same order, as the last 9 digits of its ABN—the scheme’s
ABN.
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Managed investment schemes Chapter 5C
Registration of managed investment schemes Part 5C.1
Section 601ED
Corporations Act 2001 3
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Note: In any case where the scheme’s ARSN would be used, the scheme’s
ABN may be used instead if section 1344 is satisfied.
601ED When a managed investment scheme must be registered
(1) Subject to subsection (2), a managed investment scheme must be
registered under section 601EB if:
(a) it has more than 20 members; or
(b) it was promoted by a person, or an associate of a person, who
was, when the scheme was promoted, in the business of
promoting managed investment schemes; or
(c) a determination under subsection (3) is in force in relation to
the scheme and the total number of members of all of the
schemes to which the determination relates exceeds 20.
(2) A managed investment scheme does not have to be registered if all
the issues of interests in the scheme that have been made would not
have required the giving of a Product Disclosure Statement under
Division 2 of Part 7.9 if the scheme had been registered when the
issues were made.
(3) ASIC may, in writing, determine that a number of managed
investment schemes are closely related and that each of them has to
be registered at any time when the total number of members of all
of the schemes exceeds 20. ASIC must give written notice of the
determination to the operator of each of the schemes.
(4) For the purpose of this section, when working out how many
members a scheme has:
(a) joint holders of an interest in the scheme count as a single
member; and
(b) an interest in the scheme held on trust for a beneficiary is
taken to be held by the beneficiary (rather than the trustee) if:
(i) the beneficiary is presently entitled to a share of the
trust estate or of the income of the trust estate; or
(ii) the beneficiary is, individually or together with other
beneficiaries, in a position to control the trustee.
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Chapter 5C Managed investment schemes
Part 5C.1 Registration of managed investment schemes
Section 601EE
4 Corporations Act 2001
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(5) A person must not operate in this jurisdiction a managed
investment scheme that this section requires to be registered under
section 601EB unless the scheme is so registered.
(6) For the purpose of subsection (5), a person is not operating a
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 or remedy a
defect that led to the scheme being deregistered.
(7) A person who would otherwise contravene subsection (5) because
an interest in a scheme is held in trust for 2 or more beneficiaries
(see paragraph (4)(b)) does not contravene that subsection if they
prove that they did not know, and had no reason to suspect, that the
interest was held in that way.
601EE Unregistered schemes may be wound up
(1) If a person operates a managed investment scheme in
contravention of subsection 601ED(5), the following may apply to
the Court to have the scheme wound up:
(a) ASIC;
(b) the person operating the scheme;
(c) a member of the scheme.
(2) The Court may make any orders it considers appropriate for the
winding up of the scheme.
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Managed investment schemes Chapter 5C
The responsible entity Part 5C.2
Responsibilities and powers Division 1
Section 601FA
Corporations Act 2001 5
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Part 5C.2—The responsible entity
Division 1—Responsibilities and powers
601FA Responsible entity to be public company and hold Australian
financial services licence
The responsible entity of a registered scheme must be a public
company that holds an Australian financial services licence
authorising it to operate a managed investment scheme.
601FB Responsible entity to operate scheme
(1) The responsible entity of a registered scheme is to operate the
scheme and perform the functions conferred on it by the scheme’s
constitution and this Act.
(2) The responsible entity has power to appoint an agent, or otherwise
engage a person, to do anything that it is authorised to do in
connection with the scheme. For the purpose of determining
whether:
(a) there is a liability to the members; or
(b) the responsible entity has properly performed its duties for
the purposes of subsection 601GA(2);
the responsible entity is taken to have done (or failed to do)
anything that the agent or person has done (or failed to do) because
of the appointment or engagement, even if they were acting
fraudulently or outside the scope of their authority or engagement.
Note: A scheme’s constitution may provide for the responsible entity to
be indemnified for liabilities—see subsection 601GA(2).
(3) An agent appointed, or a person otherwise engaged, by:
(a) the agent or person referred to in subsection (2); or
(b) a person who is taken under this subsection to be an agent of
the responsible entity;
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 1 Responsibilities and powers
Section 601FC
6 Corporations Act 2001
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to do anything that the responsible entity is authorised to do in
connection with the scheme is taken to be an agent appointed by
the responsible entity to do that thing for the purposes of
subsection (2).
(4) If:
(a) an agent holds scheme property on behalf of the responsible
entity; and
(b) the agent is liable to indemnify the responsible entity against
any loss or damage that:
(i) the responsible entity suffers as a result of a wrongful or
negligent act or omission of the agent; and
(ii) relates to a failure by the responsible entity to perform
its duties in relation to the scheme;
any amount recovered under the indemnity forms part of the
scheme property.
601FC Duties of responsible entity
(1) In exercising its powers and carrying out its duties, the responsible
entity of a registered scheme must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable
person would exercise if they were in the responsible entity’s
position; and
(c) act in the best interests of the members and, if there is a
conflict between the members’ interests and its own interests,
give priority to the members’ interests; and
(d) treat the members who hold interests of the same class
equally and members who hold interests of different classes
fairly; and
(e) not make use of information acquired through being the
responsible entity in order to:
(i) gain an improper advantage for itself or another person;
or
(ii) cause detriment to the members of the scheme; and
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The responsible entity Part 5C.2
Responsibilities and powers Division 1
Section 601FC
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(f) ensure that the scheme’s constitution meets the requirements
of sections 601GA and 601GB; and
(g) ensure that the scheme’s compliance plan meets the
requirements of section 601HA; and
(h) comply with the scheme’s compliance plan; and
(i) ensure that scheme property is:
(i) clearly identified as scheme property; and
(ii) held separately from property of the responsible entity
and property of any other scheme; and
(j) ensure that the scheme property is valued at regular intervals
appropriate to the nature of the property; and
(k) ensure that all payments out of the scheme property are made
in accordance with the scheme’s constitution and this Act;
and
(l) report to ASIC any breach of this Act that:
(i) relates to the scheme; and
(ii) has had, or is likely to have, a materially adverse effect
on the interests of members;
as soon as practicable after it becomes aware of the breach;
and
(m) carry out or comply with any other duty, not inconsistent
with this Act, that is conferred on the responsible entity by
the scheme’s constitution.
(2) The responsible entity holds scheme property on trust for scheme
members.
Note: Under subsection 601FB(2), the responsible entity may appoint an
agent to hold scheme property separately from other property.
(3) A duty of the responsible entity under subsection (1) or (2)
overrides any conflicting duty an officer or employee of the
responsible entity has under Part 2D.1.
(5) A responsible entity who contravenes subsection (1), and any
person who is involved in a responsible entity’s contravention of
that subsection, contravenes this subsection.
Note 1: Section 79 defines involved.
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 1 Responsibilities and powers
Section 601FD
8 Corporations Act 2001
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Note 2: Subsection (5) is a civil penalty provision (see section 1317E).
601FD Duties of officers of responsible entity
(1) An officer of the responsible entity of a registered scheme must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable
person would exercise if they were in the officer’s position;
and
(c) act in the best interests of the members and, if there is a
conflict between the members’ interests and the interests of
the responsible entity, give priority to the members’ interests;
and
(d) not make use of information acquired through being an
officer of the responsible entity in order to:
(i) gain an improper advantage for the officer or another
person; or
(ii) cause detriment to the members of the scheme; and
(e) not make improper use of their position as an officer to gain,
directly or indirectly, an advantage for themselves or for any
other person or to cause detriment to the members of the
scheme; and
(f) take all steps that a reasonable person would take, if they
were in the officer’s position, to ensure that the responsible
entity complies with:
(i) this Act; and
(ii) any conditions imposed on the responsible entity’s
Australian financial services licence; and
(iii) the scheme’s constitution; and
(iv) the scheme’s compliance plan.
(2) A duty of an officer of the responsible entity under subsection (1)
overrides any conflicting duty the officer has under Part 2D.1.
(3) A person who contravenes, or is involved in a contravention of,
subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
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The responsible entity Part 5C.2
Responsibilities and powers Division 1
Section 601FE
Corporations Act 2001 9
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Note 2: Subsection (3) is a civil penalty provision (see section 1317E).
(4) A person must not intentionally or recklessly contravene, or be
involved in a contravention of, subsection (1).
601FE Duties of employees of responsible entity
(1) An employee of the responsible entity of a registered scheme must
not:
(a) make use of information acquired through being an employee
of the responsible entity in order to:
(i) gain an improper advantage for the employee or another
person; or
(ii) cause detriment to members of the scheme; or
(b) make improper use of their position as an employee to gain,
directly or indirectly, an advantage for themselves or for any
other person or to cause detriment to the members of the
scheme.
(2) A duty of an employee of the responsible entity under
subsection (1) overrides any conflicting duty the employee has
under Part 2D.1.
(3) A person who contravenes, or is involved in a contravention of,
subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: Subsection (3) is a civil penalty provision (see section 1317E).
(4) A person must not intentionally contravene, or be involved in a
contravention of, subsection (1).
601FF Surveillance checks by ASIC
(1) ASIC may, from time to time, check whether the responsible entity
of a registered scheme is complying with the scheme’s constitution
and compliance plan and with this Act.
Note: For this purpose ASIC may exercise the powers set out in
Division 3 of Part 3 of the ASIC Act.
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 1 Responsibilities and powers
Section 601FG
10 Corporations Act 2001
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(2) The responsible entity and its officers must take all reasonable
steps to assist ASIC in carrying out a check under subsection (1).
(3) A person must not intentionally or recklessly fail to comply with
subsection (2).
601FG Acquisition of interest in scheme by responsible entity
(1) The responsible entity of a registered scheme may acquire and hold
an interest in the scheme, but it must only do so:
(a) for not less than the consideration that would be payable if
the interest were acquired by another person; and
(b) subject to terms and conditions that would not disadvantage
other members.
Note: If the responsible entity holds an interest in the scheme, it does so
subject to section 253E (certain members cannot vote or be
counted).
(2) A responsible entity who contravenes subsection (1), and any
person who is involved in a responsible entity’s contravention of
that subsection, contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: Subsection (2) is a civil penalty provision (see section 1317E).
(3) A person must not intentionally be involved in a responsible
entity’s contravention of subsection (1).
601FH Liquidator etc. of responsible entity entitled to exercise
indemnity rights
If the company that is a registered scheme’s responsible entity is
being wound up, is under administration or has executed a deed of
company arrangement that has not terminated:
(a) a provision of the scheme’s constitution, or of another
instrument, is void against the liquidator, or the administrator
of the company or the deed, if it purports to deny the
company a right to be indemnified out of the scheme
property that the company would have had if it were not
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Managed investment schemes Chapter 5C
The responsible entity Part 5C.2
Responsibilities and powers Division 1
Section 601FH
Corporations Act 2001 11
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being wound up, were not under administration, or had not
executed a deed of company arrangement; and
(b) a right of the company to be indemnified out of the scheme
property may only be exercised by the liquidator or the
administrator of the company or the deed.
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 2 Changing the responsible entity
Section 601FJ
12 Corporations Act 2001
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Division 2—Changing the responsible entity
601FJ Changes only take effect when ASIC alters record of
registration
(1) Despite anything in this Division, the company named in ASIC’s
record of registration as the responsible entity or temporary
responsible entity of a registered scheme remains the scheme’s
responsible entity until the record is altered to name another
company as the scheme’s responsible entity or temporary
responsible entity.
(2) A purported change of the scheme’s responsible entity is
ineffective unless it is in accordance with this Division.
601FK Requirements of section 601FA must be met
A company cannot be chosen or appointed as the responsible entity
or temporary responsible entity of a registered scheme unless it
meets the requirements of section 601FA.
601FL Retirement of responsible entity
(1) If the responsible entity of a registered scheme wants to retire, it
must call a members’ meeting to explain its reason for wanting to
retire and to enable the members to vote on a resolution to choose a
company to be the new responsible entity. The resolution must be
an extraordinary resolution if the scheme is not listed.
(2) If the members choose a company to be the new responsible entity
and that company has consented, in writing, to becoming the
scheme’s responsible entity:
(a) as soon as practicable and in any event within 2 business
days after the resolution is passed, the current responsible
entity must lodge a notice with ASIC asking it to alter the
record of the scheme’s registration to name the chosen
company as the scheme’s responsible entity; and
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The responsible entity Part 5C.2
Changing the responsible entity Division 2
Section 601FM
Corporations Act 2001 13
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(b) if the current responsible entity does not lodge the notice
required by paragraph (a), the company chosen by the
members to be the new responsible entity may lodge that
notice; and
(c) ASIC must comply with the notice when it is lodged.
(3) If the members do not choose a company to be the new responsible
entity, or the company they choose does not consent to becoming
the scheme’s responsible entity, the current responsible entity may
apply to the Court for appointment of a temporary responsible
entity under section 601FP.
(4) A person must not lodge a notice under subsection (2) unless the
consent referred to in that subsection has been given before the
notice is lodged.
601FM Removal of responsible entity by members
(1) If members of a registered scheme want to remove the responsible
entity, they may take action under Division 1 of Part 2G.4 for the
calling of a members’ meeting to consider and vote on a resolution
that the current responsible entity should be removed and a
resolution choosing a company to be the new responsible entity.
The resolutions must be extraordinary resolutions if the scheme is
not listed.
(2) If the members vote to remove the responsible entity and, at the
same meeting, choose a company to be the new responsible entity
that consents, in writing, to becoming the scheme’s responsible
entity:
(a) as soon as practicable and in any event within 2 business
days after the resolution is passed, the current responsible
entity must lodge a notice with ASIC asking it to alter the
record of the scheme’s registration to name the chosen
company as the scheme’s responsible entity; and
(b) if the current responsible entity does not lodge the notice
required by paragraph (a), the company chosen by the
members to be the new responsible entity may lodge that
notice; and
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 2 Changing the responsible entity
Section 601FN
14 Corporations Act 2001
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(c) ASIC must comply with the notice when it is lodged.
(3) A person must not lodge a notice under subsection (2) unless the
consent referred to in that subsection has been given before the
notice is lodged.
Note: If the members vote to remove the responsible entity but do not, at
the same meeting, choose a company to be the new responsible
entity, or the company they choose does not consent to becoming
the scheme’s responsible entity, the scheme must be wound up
(see section 601NE).
601FN ASIC or scheme member may apply to Court for
appointment of temporary responsible entity
ASIC or a member of the registered scheme may apply to the Court
for the appointment of a temporary responsible entity of the
scheme under section 601FP if the scheme does not have a
responsible entity that meets the requirements of section 601FA.
601FP Appointment of temporary responsible entity by Court
(1) On application under section 601FL or 601FN, the Court may, by
order, appoint a company as the temporary responsible entity of a
registered scheme if the Court is satisfied that the appointment is in
the interest of the members.
(2) The Court may make any further orders that it considers necessary.
(3) If the application was made by the current responsible entity, it
must, as soon as practicable after the Court’s order appointing the
temporary responsible entity, lodge a notice with ASIC informing
ASIC of the appointment made by the Court.
(4) As soon as practicable after the appointment, ASIC must alter the
record of the scheme’s registration to name the appointed company
as the scheme’s temporary responsible entity.
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Managed investment schemes Chapter 5C
The responsible entity Part 5C.2
Changing the responsible entity Division 2
Section 601FQ
Corporations Act 2001 15
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601FQ Temporary responsible entity to take steps for appointment
of new responsible entity
(1) The temporary responsible entity of a registered scheme must call a
members’ meeting for the purpose of the members, by resolution,
choosing a company to be the new responsible entity. The
resolution must be an extraordinary resolution if the scheme is not
listed. The temporary responsible entity must call the meeting as
soon as practicable and, in any event, within 3 months of becoming
the temporary responsible entity.
(2) Within that 3 months, the temporary responsible entity may call
further members’ meetings for the purpose of choosing a company
to be the new responsible entity. Before the end of the 3 months, it
may apply to the Court for an extension of that period. If the Court
grants the extension, the temporary responsible entity may, within
the extended period, call further members’ meetings for the
purpose of choosing a company to be the new responsible entity.
(3) Provided it still meets the requirements in section 601FA, nothing
prevents the company that is the temporary responsible entity from
being chosen as the new responsible entity.
(4) If the members choose a company to be the new responsible entity
and that company has consented, in writing, to becoming the
scheme’s responsible entity, the temporary responsible entity must,
as soon as practicable, lodge a notice with ASIC asking it to alter
the record of the scheme’s registration to name the chosen
company as the scheme’s responsible entity. ASIC must comply
with the notice when it is lodged.
(5) The temporary responsible entity must apply to the Court for an
order directing it to wind up the scheme, and the Court may make
the order, if:
(a) no meeting is called within the 3 months or extended period
for the purpose of choosing a new company to be the
responsible entity; or
(b) the meeting or meetings called within that period for that
purpose have not resulted in the members choosing a
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Chapter 5C Managed investment schemes
Part 5C.2 The responsible entity
Division 2 Changing the responsible entity
Section 601FQ
16 Corporations Act 2001
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company to be the new responsible entity that consents to
becoming the scheme’s responsible entity.
ASIC or a member of the scheme may apply for the order if the
temporary responsible entity does not do so.
(6) The temporary responsible entity must not lodge a notice under
subsection (4) unless the consent referred to in that subsection has
been given before the notice is lodged.
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Consequences of change of responsible entity Division 3
Section 601FR
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Division 3—Consequences of change of responsible entity
601FR Former responsible entity to hand over books and provide
reasonable assistance
If the responsible entity of a registered scheme changes, the former
responsible entity must:
(a) as soon as practicable give the new responsible entity any
books in the former responsible entity’s possession or control
that this Act requires to be kept in relation to the scheme; and
(b) give other reasonable assistance to the new responsible entity
to facilitate the change of responsible entity.
601FS Rights, obligations and liabilities of former responsible entity
(1) If the responsible entity of a registered scheme changes, the rights,
obligations and liabilities of the former responsible entity in
relation to the scheme become rights, obligations and liabilities of
the new responsible entity.
(2) Despite subsection (1), the following rights and liabilities remain
rights and liabilities of the former responsible entity:
(a) any right of the former responsible entity to be paid fees for
the performance of its functions before it ceased to be the
responsible entity; and
(b) any right of the former responsible entity to be indemnified
for expenses it incurred before it ceased to be the responsible
entity; and
(c) any right, obligation or liability that the former responsible
entity had as a member of the scheme; and
(d) any liability for which the former responsible entity could not
have been indemnified out of the scheme property if it had
remained the scheme’s responsible entity.
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Part 5C.2 The responsible entity
Division 3 Consequences of change of responsible entity
Section 601FT
18 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601FT Effect of change of responsible entity on documents etc. to
which former responsible entity is party
(1) If the responsible entity of a registered scheme changes, a
document:
(a) to which the former responsible entity is a party, in which a
reference is made to the former responsible entity, or under
which the former responsible entity has acquired or incurred
a right, obligation or liability, or might have acquired or
incurred a right, obligation or liability if it had remained the
responsible entity; and
(b) that is capable of having effect after the change;
has effect as if the new responsible entity (and not the former
responsible entity) were a party to it, were referred to in it or had or
might have acquired or incurred the right, obligation or liability
under it.
(2) Subsection (1) does not apply to a right, obligation or liability that
remains a right, obligation or liability of the former responsible
entity because of subsection 601FS(2).
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The constitution Part 5C.3
Section 601GA
Corporations Act 2001 19
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Part 5C.3—The constitution
601GA Contents of the constitution
(1) The constitution of a registered scheme must make adequate
provision for:
(a) the consideration that is to be paid to acquire an interest in
the scheme; and
(b) the powers of the responsible entity in relation to making
investments of, or otherwise dealing with, scheme property;
and
(c) the method by which complaints made by members in
relation to the scheme are to be dealt with; and
(d) winding up the scheme.
(2) If the responsible entity is to have any rights to be paid fees out of
scheme property, or to be indemnified out of scheme property for
liabilities or expenses incurred in relation to the performance of its
duties, those rights:
(a) must be specified in the scheme’s constitution; and
(b) must be available only in relation to the proper performance
of those duties;
and any other agreement or arrangement has no effect to the extent
that it purports to confer such a right.
(3) If the responsible entity is to have any powers to borrow or raise
money for the purposes of the scheme:
(a) those powers must be specified in the scheme’s constitution;
and
(b) any other agreement or arrangement has no effect to the
extent that it purports to confer such a power.
(4) If members are to have a right to withdraw from the scheme, the
scheme’s constitution must:
(a) specify the right; and
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Section 601GB
20 Corporations Act 2001
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(b) if the right may be exercised while the scheme is liquid (as
defined in section 601KA)—set out adequate procedures for
making and dealing with withdrawal requests; and
(c) if the right may be exercised while the scheme is not liquid
(as defined in section 601KA)—provide for the right to be
exercised in accordance with Part 5C.6 and set out any other
adequate procedures (consistent with that Part) that are to
apply to making and dealing with withdrawal requests.
The right to withdraw, and any provisions in the constitution
setting out procedures for making and dealing with withdrawal
requests, must be fair to all members.
601GB Constitution must be legally enforceable
The constitution of a registered scheme must be contained in a
document that is legally enforceable as between the members and
the responsible entity.
601GC Changing the constitution
(1) The constitution of a registered scheme may be modified, or
repealed and replaced with a new constitution:
(a) by special resolution of the members of the scheme; or
(b) by the responsible entity if the responsible entity reasonably
considers the change will not adversely affect members’
rights.
(2) The responsible entity must lodge with ASIC a copy of the
modification or the new constitution. The modification, or repeal
and replacement, cannot take effect until the copy has been lodged.
(3) The responsible entity must lodge with ASIC a consolidated copy
of the scheme’s constitution if ASIC directs it to do so.
(4) The responsible entity must send a copy of the scheme’s
constitution to a member of the scheme within 7 days if the
member:
(a) asks the responsible entity, in writing, for the copy; and
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(b) pays any fee (up to the prescribed amount) required by the
responsible entity.
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Chapter 5C Managed investment schemes
Part 5C.4 The compliance plan
Section 601HA
22 Corporations Act 2001
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Part 5C.4—The compliance plan
601HA Contents of the compliance plan
(1) The compliance plan of a registered scheme must set out adequate
measures that the responsible entity is to apply in operating the
scheme to ensure compliance with this Act and the scheme’s
constitution, including the arrangements for:
(a) ensuring that all scheme property is clearly identified as
scheme property and held separately from property of the
responsible entity and property of any other scheme (see
paragraph 601FC(1)(i)); and
(b) if the scheme is required to have a compliance committee
(see section 601JA)—ensuring that the compliance
committee functions properly, including adequate
arrangements relating to:
(i) the membership of the committee; and
(ii) how often committee meetings are to be held; and
(iii) the committee’s reports and recommendations to the
responsible entity; and
(iv) the committee’s access to the scheme’s accounting
records and to the auditor of the scheme’s financial
statements; and
(v) the committee’s access to information that is relevant to
the responsible entity’s compliance with this Act; and
(c) ensuring that the scheme property is valued at regular
intervals appropriate to the nature of the property; and
(d) ensuring that compliance with the plan is audited as required
by section 601HG; and
(e) ensuring adequate records of the scheme’s operations are
kept; and
(f) any other matter prescribed by the regulations.
(2) If:
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(a) a registration application is made as a result of a resolution
passed under subparagraph 1457(1)(a)(i); and
(b) the resolution included a direction under
subsection 1457(1A);
the compliance plan lodged with the application must provide for
scheme property to be held by a person other than the responsible
entity, or a person that is not related to the responsible entity, as the
responsible entity’s agent.
601HB Compliance plan may incorporate provisions from another
scheme’s plan
(1) The responsible entity of a registered scheme may lodge with
ASIC a compliance plan for the scheme that is expressed to
incorporate specified provisions, as in force at a specified time, of
a compliance plan of another registered scheme of which it is also
the responsible entity.
(2) The specified provisions, as in force at the specified time, are taken
to be included in the plan.
601HC Directors must sign lodged copy of compliance plan
The copy of a scheme’s compliance plan that is lodged with ASIC
must be signed by all the directors of the responsible entity.
601HD ASIC may require further information about compliance
plan
(1) ASIC may direct the responsible entity of a registered scheme to
give it information about the arrangements contained in the
compliance plan. The direction is to be given by notice in writing
to the responsible entity.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 601HE
24 Corporations Act 2001
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601HE Changing the compliance plan
Responsible entity’s powers
(1) The responsible entity of a registered scheme may modify the
scheme’s compliance plan or repeal it and replace it with a new
compliance plan.
ASIC may require modifications
(2) ASIC may direct the responsible entity of a registered scheme to
modify the scheme’s compliance plan, as set out in the direction, to
ensure that the plan is consistent with section 601HA. The
direction is to be given by notice in writing to the responsible
entity.
Lodgment of modification or new plan
(3) The responsible entity must lodge with ASIC a copy of a
modification of the scheme’s compliance plan or of a new
compliance plan within 14 days after the modification is made or
the old plan is repealed. The copy must be signed by all the
directors of the responsible entity.
601HF ASIC may require consolidation of compliance plan to be
lodged
(1) ASIC may direct the responsible entity of a registered scheme to
lodge a consolidated copy of the scheme’s compliance plan.
(2) The consolidation must set out:
(a) the plan as modified to the time of lodgment; and
(b) if required by ASIC’s direction—the full text of provisions
taken to be included in the plan by subsection 601HB(2).
601HG Audit of compliance plan
(1) The responsible entity of a registered scheme must ensure that at
all times a registered company auditor, an audit firm or an
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authorised audit company is engaged to audit compliance with the
scheme’s compliance plan in accordance with this section. This
auditor, firm or company is referred to as the auditor of the
compliance plan.
(2) A person is not eligible to act as the individual auditor, lead auditor
or review auditor of the compliance plan if the person is:
(a) an associate of the responsible entity; or
(b) an agent holding scheme property on behalf of the
responsible entity or an associate of an agent of that kind; or
(c) the auditor of the responsible entity’s financial statements.
(2A) However:
(a) the auditor of the compliance plan and the auditor of the
responsible entity’s financial statements may work for the
same firm of auditors or audit company; and
(b) the lead auditor or review auditor of the compliance plan (on
the one hand) and the lead auditor or review auditor of the
responsible entity’s financial statements (on the other hand)
may work for the same firm of auditors or audit company.
(3) Within 3 months after the end of a financial year of the scheme, the
auditor of the compliance plan must:
(a) examine the scheme’s compliance plan; and
(b) carry out:
(i) if the scheme has only had one responsible entity during
the financial year—an audit of the responsible entity’s
compliance with the compliance plan during the
financial year; or
(ii) if the scheme has had more than one responsible entity
during the financial year—an audit of each responsible
entity’s compliance with the compliance plan during
that part of the financial year when it was the scheme’s
responsible entity; and
(c) give to the scheme’s current responsible entity a report that
states whether, in the auditor’s opinion:
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(i) the responsible entity, or each responsible entity,
complied with the scheme’s compliance plan during the
financial year or that part of the financial year when it
was the scheme’s responsible entity; and
(ii) the plan continues to meet the requirements of this Part.
Contravention by individual auditor
(4) An individual auditor conducting an audit of a compliance plan
contravenes this subsection if:
(a) the auditor is aware of circumstances that:
(i) the auditor has reasonable grounds to suspect amount to
a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (12)); or
(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(b) if subparagraph (a)(i) applies:
(i) the contravention is a significant one; or
(ii) the contravention is not a significant one and the auditor
believes that the contravention has not been or will not
be adequately dealt with by commenting on it in the
auditor’s report or bringing it to the attention of the
directors; and
(c) the auditor does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the auditor becomes aware of those
circumstances.
Contravention by audit company
(4A) An audit company conducting an audit of a compliance plan
contravenes this subsection if:
(a) the lead auditor for the audit is aware of circumstances that:
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(i) the lead auditor has reasonable grounds to suspect
amount to a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (12)); or
(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(b) if subparagraph (a)(i) applies:
(i) the contravention is a significant one; or
(ii) the contravention is not a significant one and the lead
auditor believes that the contravention has not been or
will not be adequately dealt with by commenting on it in
the auditor’s report or bringing it to the attention of the
directors; and
(c) the lead auditor does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the lead auditor becomes aware of those
circumstances.
Contravention by lead auditor
(4B) A person contravenes this subsection if:
(a) the person is the lead auditor for an audit of a compliance
plan; and
(b) the person is aware of circumstances that:
(i) the person has reasonable grounds to suspect amount to
a contravention of this Act; or
(ii) amount to an attempt, in relation to the audit, by any
person to unduly influence, coerce, manipulate or
mislead a person involved in the conduct of the audit
(see subsection (12)); or
(iii) amount to an attempt, by any person, to otherwise
interfere with the proper conduct of the audit; and
(c) if subparagraph (b)(i) applies:
(i) the contravention is a significant one; or
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(ii) the contravention is not a significant one and the person
believes that the contravention has not been or will not
be adequately dealt with by commenting on it in the
auditor’s report or bringing it to the attention of the
directors; and
(d) the person does not notify ASIC in writing of those
circumstances as soon as practicable, and in any case within
28 days, after the person becomes aware of those
circumstances.
(5) The auditor of the compliance plan:
(a) has a right of access at all reasonable times to the books of
the scheme; and
(b) may require an officer of the responsible entity to give the
auditor information and explanations for the purposes of the
audit.
(6) An officer of the responsible entity must:
(a) allow the auditor of the compliance plan to have access to the
books of the scheme; and
(b) give the auditor information or an explanation required under
subsection (5); and
(c) otherwise assist the conduct of the audit.
(7) The responsible entity must lodge the auditor’s report under
subsection (3) with ASIC at the same time as the financial
statements and reports in respect of the scheme are to be lodged
with ASIC (see sections 292 and 321).
(7A) An offence based on subsection (1), (3), (6) or (7) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(8) The auditor of the compliance plan has qualified privilege in
respect of:
(a) a statement made in a report under subsection (3); or
(b) a notification to ASIC under subsection (4).
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(9) This section does not prevent the responsible entity from arranging
for the auditor of the compliance plan to carry out audits in
addition to those required by this section.
Significant contraventions
(10) In determining for the purposes of this section whether a
contravention of this Act is a significant one, have regard to:
(a) the level of penalty provided for in relation to the
contravention; and
(b) the effect that the contravention has, or may have, on:
(i) the overall financial position of the company, registered
scheme or disclosing entity; or
(ii) the adequacy of the information available about the
overall financial position of the company, registered
scheme or disclosing entity; and
(c) any other relevant matter.
(11) Without limiting paragraph (10)(a), a penalty provided for in
relation to a contravention of a provision of Part 2M.2 or 2M.3, or
section 324DAA, 324DAB or 324DAC, includes a penalty
imposed on a director, because of the operation of section 344, for
failing to take reasonable steps to comply with, or to secure
compliance with, that provision.
Person involved in audit
(12) In this section:
person involved in the conduct of an audit means:
(a) the auditor; or
(b) the lead auditor for the audit; or
(c) the review auditor for the audit; or
(d) a professional member of the audit team for the audit; or
(e) any other person involved in the conduct of the audit.
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Section 601HH
30 Corporations Act 2001
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601HH Removal and resignation of auditors
Removal of auditor by responsible entity
(1) The responsible entity:
(a) must remove the auditor of the compliance plan if the auditor
becomes ineligible under subsection 601HG(2) to act as
auditor of the compliance plan; and
(b) may, with ASIC’s consent, remove the auditor of the
compliance plan.
Resignation of auditor
(2) The auditor of the compliance plan may resign by written notice to
the responsible entity if:
(a) the auditor:
(i) applies to ASIC in writing for its consent to the
resignation; and
(ii) gives the responsible entity written notice of the
application at or about the same time as applying to
ASIC; and
(b) ASIC consents to the resignation.
(3) As soon as practicable after receiving the application, ASIC must
notify the auditor and the responsible entity whether it consents to
the resignation.
(4) A statement by the auditor in the application or in answer to an
inquiry by ASIC relating to the reasons for the application:
(a) is not admissible in evidence in any civil or criminal
proceedings against the auditor (other than proceedings for a
contravention of section 1308); and
(b) may not be made the ground of a prosecution (other than a
prosecution for a contravention of section 1308), action or
suit against the auditor.
A certificate by ASIC that the statement was made in the
application, or in answer to an inquiry by ASIC, is conclusive
evidence that the statement was so made.
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(5) The auditor’s resignation takes effect on the later of:
(a) the day (if any) specified in the notice of resignation; or
(b) the day ASIC consents to the resignation; or
(c) the day (if any) fixed by ASIC for the purpose.
601HI Action on change of auditor of compliance plan
If the auditor of the compliance plan of a registered scheme
changes, the responsible entity must, as soon as practicable after
the change and in writing, ask ASIC to alter the record of the
scheme’s registration to show the name of the new auditor as the
auditor of the scheme’s compliance plan. ASIC must comply with
the request if the change complies with this Act.
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Part 5C.5 The compliance committee
Section 601JA
32 Corporations Act 2001
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Part 5C.5—The compliance committee
601JA When is a compliance committee required?
(1) The responsible entity of a registered scheme must establish a
compliance committee if less than half of the directors of the
responsible entity are external directors.
(2) A director of the responsible entity is an external director if they:
(a) are not, and have not been in the previous 2 years, an
employee of the responsible entity or a related body
corporate; and
(b) are not, and have not been in the previous 2 years, a senior
manager of a related body corporate; and
(c) are not, and have not been in the previous 2 years,
substantially involved in business dealings, or in a
professional capacity, with the responsible entity or a related
body corporate; and
(d) are not a member of a partnership that is, or has been in the
previous 2 years, substantially involved in business dealings,
or in a professional capacity, with the responsible entity or a
related body corporate; and
(e) do not have a material interest in the responsible entity or a
related body corporate; and
(f) are not a relative of a person who has a material interest in
the responsible entity or a related body corporate.
(3) The responsible entity must establish the compliance committee
within 14 days after it is required to do so by subsection (1) or
within any longer period that ASIC has agreed to in writing.
(3A) A person must not intentionally or recklessly fail to comply with
subsection (3).
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(4) In agreeing to a longer period under subsection (3), ASIC may
impose conditions to be complied with and the responsible entity
must comply with them.
(4A) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
601JB Membership of compliance committee
(1) A scheme’s compliance committee must have at least 3 members,
and a majority of them must be external members.
(2) A member of the compliance committee is an external member if
they:
(a) are not, and have not been in the previous 2 years, a
non-external director, a senior manager or an employee of the
responsible entity or a related body corporate; and
(b) are not, and have not been in the previous 2 years,
substantially involved in business dealings, or in a
professional capacity, with the responsible entity or a related
body corporate; and
(c) are not a member of a partnership that is, or has been in the
previous 2 years, substantially involved in business dealings,
or in a professional capacity, with the responsible entity or a
related body corporate; and
(d) do not have a material interest in the responsible entity or a
related body corporate; and
(e) are not a relative of a person who has a material interest in
the responsible entity or a related body corporate.
(3) For the purposes of paragraph (2)(a), a person who is a director of
a related body corporate, but not of the responsible entity itself, is
an external director of the related body corporate if they would
have been an external director of the responsible entity under
subsection 601JA(2) had they been a director of the responsible
entity.
(4) A person who is, or has been, either:
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(a) an external director of the responsible entity; or
(b) a member of a compliance committee for the scheme or
another registered managed investment scheme operated by
the responsible entity;
is not, merely because of that directorship or membership, taken to
be, or to have been, substantially involved in business dealings, or
in a professional capacity, with the responsible entity.
(5) If the membership of the scheme’s compliance committee ceases to
satisfy subsection (1), the responsible entity must make
appointments to the committee to satisfy that subsection within 14
days or within any longer period that ASIC has agreed to in
writing.
(6) In agreeing to a longer period under subsection (5), ASIC may
impose conditions to be complied with and the responsible entity
must comply with them.
(7) An offence based on subsection (5) or (6) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
601JC Functions of compliance committee
(1) The functions of a scheme’s compliance committee are:
(a) to monitor to what extent the responsible entity complies
with the scheme’s compliance plan and to report on its
findings to the responsible entity; and
(b) to report to the responsible entity:
(i) any breach of this Act involving the scheme; or
(ii) any breach of the provisions included in the scheme’s
constitution in accordance with section 601GA;
of which the committee becomes aware or that it suspects;
and
(c) to report to ASIC if the committee is of the view that the
responsible entity has not taken, or does not propose to take,
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Section 601JD
Corporations Act 2001 35
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appropriate action to deal with a matter reported under
paragraph (b); and
(d) to assess at regular intervals whether the compliance plan is
adequate, to report to the responsible entity on the assessment
and to make recommendations to the responsible entity about
any changes that it considers should be made to the plan.
(2) In carrying out its functions, the compliance committee may
commission independent legal, accounting or other professional
advice or assistance, at the reasonable expense of the responsible
entity.
601JD Duties of members
(1) A member of a scheme’s compliance committee must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable
person would exercise if they were in the member’s position;
and
(c) not make use of information acquired through being a
member of the committee in order to:
(i) gain an improper advantage for the member or another
person; or
(ii) cause detriment to the members of the scheme; and
(d) not make improper use of their position as a member of the
committee to gain, directly or indirectly, an advantage for
themselves or for any other person or to cause detriment to
the members of the scheme.
(2) A member of the compliance committee is to take all reasonable
steps to assist ASIC in carrying out a check under
subsection 601FF(1).
(3) A person who contravenes, or is involved in a contravention of,
subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: Subsection (3) is a civil penalty provision (see section 1317E).
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Section 601JE
36 Corporations Act 2001
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(4) A person must not intentionally or recklessly contravene, or be
involved in a contravention of, subsection (1).
601JE Compliance committee members have qualified privilege in
certain cases
A member of a scheme’s compliance committee has qualified
privilege in respect of a statement concerning the operation of the
scheme made by or on behalf of the committee, or a member of the
committee, to the responsible entity or to ASIC.
601JF When can responsible entity indemnify compliance
committee members?
(1) A scheme’s responsible entity or a related body corporate must not:
(a) indemnify a person who is or has been a member of the
scheme’s compliance committee against a liability incurred
by the person as a member; or
(b) exempt the person from such a liability.
(2) A provision of the scheme’s constitution or a body corporate’s
constitution is void in so far as it provides for the responsible entity
or a related body corporate to do something that subsection (1)
prohibits.
(3) Subsection (1) does not prevent a person from being indemnified
against a liability to another person (other than the responsible
entity or a related body corporate) unless the liability arises out of
conduct involving a lack of good faith.
(4) Subsection (1) does not prevent a person from being indemnified
against a liability for costs and expenses incurred by them:
(a) in defending proceedings, whether civil or criminal, in which
judgment is given in favour of them or in which they are
acquitted; or
(b) in connection with an application, in relation to such
proceedings, in which the Court grants relief to them under
this Act.
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Section 601JG
Corporations Act 2001 37
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(5) In this section:
indemnify includes indemnify indirectly through one or more
interposed entities.
601JG When can responsible entity pay insurance premiums for
compliance committee members?
(1) A scheme’s responsible entity or a related body corporate must not
pay, or agree to pay, a premium in respect of a contract insuring a
person who is or has been a member of the scheme’s compliance
committee against a liability:
(a) incurred by the person as a member; and
(b) arising out of conduct involving a wilful breach of a duty
referred to in section 601JD.
(2) If subsection (1) is contravened, the contract is void in so far as it
insures the person against the liability.
(3) Subsections (1) and (2) do not apply to a liability for costs and
expenses incurred by a person in defending proceedings, whether
civil or criminal and whatever their outcome.
(4) In this section:
pay includes pay indirectly through one or more interposed entities.
601JH Proceedings of compliance committee
(1) Subject to the requirements of the compliance plan, a scheme’s
compliance committee may regulate its proceedings as it thinks
appropriate.
(2) The committee must keep:
(a) minutes of its meetings; and
(b) records of its reports and recommendations.
(3) A committee meeting may be held using any technology agreed to
by all the members.
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Part 5C.5 The compliance committee
Section 601JJ
38 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601JJ Disclosure of interests
(1) A member of a scheme’s compliance committee must disclose to
the committee a direct or indirect pecuniary interest that they have
in a matter being considered, or about to be considered, by the
committee if their interest could conflict with the proper
performance of their duties in relation to the consideration of the
matter.
(2) A disclosure under subsection (1) must occur at the first meeting of
the committee after the relevant facts have come to the member’s
knowledge and must be recorded in the minutes of the meeting.
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Members’ rights to withdraw from a scheme Part 5C.6
Section 601KA
Corporations Act 2001 39
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Part 5C.6—Members’ rights to withdraw from a
scheme
601KA Members’ rights to withdraw
Withdrawal from schemes that are liquid
(1) The constitution of a registered scheme may make provision for
members to withdraw from the scheme, wholly or partly, at any
time while the scheme is liquid (see subsection 601GA(4)).
Withdrawal from schemes that are not liquid
(2) The constitution of a registered scheme may make provision for
members to withdraw from the scheme, wholly or partly, in
accordance with this Part while the scheme is not liquid (see
subsection 601GA(4)).
Restrictions on withdrawal from schemes
(3) The responsible entity must not allow a member to withdraw from
the scheme:
(a) if the scheme is liquid—otherwise than in accordance with
the scheme’s constitution; or
(b) if the scheme is not liquid—otherwise than in accordance
with the scheme’s constitution and sections 601KB to
601KE.
(3A) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Liquid schemes
(4) A registered scheme is liquid if liquid assets account for at least
80% of the value of scheme property.
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Section 601KB
40 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Liquid assets
(5) The following are liquid assets unless it is proved that the
responsible entity cannot reasonably expect to realise them within
the period specified in the constitution for satisfying withdrawal
requests while the scheme is liquid:
(a) money in an account or on deposit with a bank;
(b) bank accepted bills;
(c) marketable securities (as defined in section 9);
(d) property of a prescribed kind.
(6) Any other property is a liquid asset if the responsible entity
reasonably expects that the property can be realised for its market
value within the period specified in the constitution for satisfying
withdrawal requests while the scheme is liquid.
601KB Non-liquid schemes—offers
(1) The responsible entity of a registered scheme that is not liquid may
offer members an opportunity to withdraw, wholly or partly, from
the scheme to the extent that particular assets are available and able
to be converted to money in time to satisfy withdrawal requests
that members may make in response to the offer.
(2) The withdrawal offer must be in writing and be made:
(a) if the constitution specifies procedures for making the
offer—in accordance with those procedures; or
(b) otherwise—by giving a copy of the offer to all members of
the scheme or to all members of a particular class.
(3) The withdrawal offer must specify:
(a) the period during which the offer will remain open (this
period must last for at least 21 days after the offer is made);
and
(b) the assets that will be used to satisfy withdrawal requests;
and
(c) the amount of money that is expected to be available when
those assets are converted to money; and
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Section 601KC
Corporations Act 2001 41
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(d) the method for dealing with withdrawal requests if the money
available is insufficient to satisfy all requests.
The method specified under paragraph (d) must comply with
section 601KD.
(4) For joint members, a copy of the withdrawal offer need only be
given to the joint member named first in the register of members.
(5) As soon as practicable after making the withdrawal offer, the
responsible entity must lodge a copy of the offer with ASIC.
601KC Non-liquid schemes—only one withdrawal offer to be open
at any time
Only one withdrawal offer may be open at any time in relation to a
particular interest in a registered scheme that is not liquid.
601KD Non-liquid schemes—how payments are to be made
The responsible entity of a registered scheme that is not liquid
must ensure that withdrawal requests made in response to a
withdrawal offer are satisfied within 21 days after the offer closes.
No request made under the withdrawal offer may be satisfied while
the offer is still open. If an insufficient amount of money is
available from the assets specified in the offer to satisfy all
requests, the requests are to be satisfied proportionately in
accordance with the formula:
601KE Non-liquid schemes—responsible entity may cancel
withdrawal offer
(1) The responsible entity of a registered scheme that is not liquid:
(a) may cancel a withdrawal offer before it closes if the offer
contains a material error; or
Amount member requested to withdraw
Amount of money available Total of all amounts members
request to withdraw
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Section 601KE
42 Corporations Act 2001
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(b) must cancel a withdrawal offer before it closes if it is in the
best interests of members to do so.
(2) The cancellation must be made:
(a) if the constitution specifies procedures for cancelling the
withdrawal offer—in accordance with those procedures; or
(b) otherwise—by notice in writing to the members to whom the
withdrawal offer was made.
(3) The responsible entity must lodge written notice of the cancellation
with ASIC.
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Managed investment schemes Chapter 5C
Related party transactions Part 5C.7
Section 601LA
Corporations Act 2001 43
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Part 5C.7—Related party transactions
601LA Chapter 2E applies with modifications
Chapter 2E applies to a registered scheme with the modifications
set out in sections 601LB to 601LE and as if:
(a) references to a public company were instead references to the
responsible entity of the scheme; and
(b) references to a benefit being given to or received by a related
party of a public company were instead references to a
benefit being given to or received by the responsible entity or
a related party; and
(c) references to a resolution of a public company were instead
references to a resolution of the members of the scheme; and
(d) references to a general meeting were instead references to a
members’ meeting of the scheme; and
(e) references to members of a public company were instead
references to members of the scheme; and
(f) references to the company’s best interests were instead
references to the best interests of the scheme’s members.
601LB Replacement section 207
Chapter 2E applies as if section 207 were replaced by the
following section:
207 Purpose
The rules in this Chapter, as they apply to a registered scheme, are
designed to protect the interests of the scheme’s members as a
whole, by requiring member approval for giving financial benefits
to the responsible entity or its related parties that come out of
scheme property or that could endanger those interests.
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Section 601LC
44 Corporations Act 2001
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601LC Replacement section 208
Chapter 2E applies as if section 208 were replaced by the
following section:
208 Need for member approval for financial benefit
(1) If all the following conditions are satisfied in relation to a financial
benefit:
(a) the benefit is given by:
(i) the responsible entity of a registered scheme; or
(ii) an entity that the responsible entity controls; or
(iii) an agent of, or person engaged by, the responsible entity
(b) the benefit either:
(i) is given out of the scheme property; or
(ii) could endanger the scheme property
(c) the benefit is given to:
(i) the person or a related party; or
(ii) another person referred to in paragraph (a) or a related
party of that person;
then, for the person referred to in paragraph (a) to give the benefit,
either:
(d) the person referred to in paragraph (a) must:
(i) obtain the approval of the scheme’s members in the way
set out in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(e) the giving of the benefit must fall within an exception set out
in sections 210 to 216.
Note: Section 228 defines related party, section 191 defines entity,
section 191 defines control and section 229 affects the meaning of
giving a financial benefit.
(2) If:
(a) the giving of the benefit is required by a contract; and
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Section 601LD
Corporations Act 2001 45
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(b) the making of the contract was approved in accordance with
subparagraph (1)(d)(i) as a financial benefit given to the
entity or related party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on
the approval being obtained;
member approval for the giving of the benefit is taken to have been
given and the benefit need not be given within the 15 months.
(3) Subsection (1) does not prevent the responsible entity from paying
itself fees, and exercising rights to an indemnity, as provided for in
the scheme’s constitution under subsection 601GA(2).
601LD Omission of sections 213, 214 and 224
Chapter 2E applies as if sections 213, 214 and 224 were omitted.
Note: Instead of section 224, the rule in section 253E will apply.
601LE Modification of section 225
Chapter 2E applies as if subsection 225(1) were amended by
omitting “subsection 224(1)” and substituting “section 253E”.
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Part 5C.8 Effect of contraventions (civil liability and voidable contracts)
Section 601MA
46 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5C.8—Effect of contraventions (civil liability
and voidable contracts)
601MA Civil liability of responsible entity to members
(1) A member of a registered scheme who suffers loss or damage
because of conduct of the scheme’s responsible entity that
contravenes a provision of this Chapter may recover the amount of
the loss or damage by action against the responsible entity whether
or not the responsible entity has been convicted of an offence, or
has had a civil penalty order made against it, in respect of the
contravention.
(2) An action under subsection (1) must be begun within 6 years after
the cause of action arises.
(3) This section does not affect any liability that a person has under
other provisions of this Act or under other laws.
601MB Voidable contracts where subscription offers and invitations
contravene this Act
(1) If:
(a) a managed investment scheme is being operated in
contravention of subsection 601ED(5) and a person (the
offeror) offers an interest in the scheme for subscription, or
issues an invitation to subscribe for an interest in the scheme;
or
(b) a person (the offeror) fails to comply with Division 2 of
Part 7.9 when offering an interest in a registered scheme for
subscription or issuing an invitation to subscribe for an
interest in a registered scheme;
a contract entered into by a person (other than the offeror) to
subscribe for the interest as a result of the person accepting the
offer, or of the acceptance of an offer made by the person in
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Section 601MB
Corporations Act 2001 47
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response to the invitation, is voidable at the option of that person
by notice in writing to the offeror.
(2) If the person gives a notice under subsection (1), the obligations of
the parties to the contract are suspended:
(a) during the period of 21 days after the notice is given; and
(b) during the period beginning when an application is made
under subsection (4) in relation to the notice and ending
when the application, and any appeals arising out of it, have
been finally determined or otherwise disposed of.
(3) Subject to subsection (6), the notice takes effect to void the
contract:
(a) at the end of 21 days after the notice is given; or
(b) if, within that 21 days, the offeror applies under
subsection (4)—at the end of the period when the obligations
of the parties are suspended under paragraph (2)(b).
(4) Within 21 days after the notice is given, the offeror may apply to
the Court for an order declaring the notice to have had no effect.
(5) The Court may extend the period within which the offeror may
apply under subsection (4), even if the notice has taken effect.
(6) On application under subsection (4), the Court may declare the
notice to have had no effect if it is satisfied that, in all the
circumstances, it is just and equitable to make the declaration.
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Part 5C.9 Winding up
Section 601NA
48 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5C.9—Winding up
601NA Winding up required by scheme’s constitution
The constitution of a registered scheme may provide that the
scheme is to be wound up:
(a) at a specified time; or
(b) in specified circumstances or on the happening of a specified
event;
but a provision of the constitution that purports to provide that the
scheme is to be wound up if a particular company ceases to be its
responsible entity is of no effect (including for the purposes of
paragraph 601NE(1)(a)).
601NB Winding up at direction of members
If members of a registered scheme want the scheme to be wound
up, they may take action under Division 1 of Part 2G.4 for the
calling of a members’ meeting to consider and vote on an
extraordinary resolution directing the responsible entity to wind up
the scheme.
601NC Winding up if scheme’s purpose accomplished or cannot be
accomplished
(1) If the responsible entity of a registered scheme considers that the
purpose of the scheme:
(a) has been accomplished; or
(b) cannot be accomplished;
it may, in accordance with this section, take steps to wind up the
scheme.
(2) The responsible entity must give to the members of the scheme and
to ASIC a notice in writing:
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Section 601ND
Corporations Act 2001 49
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(a) explaining the proposal to wind up the scheme, including
explaining how the scheme’s purpose has been accomplished
or why that purpose cannot be accomplished; and
(b) informing the members of their rights to take action under
Division 1 of Part 2G.4 for the calling of a members’ meeting
to consider the proposed winding up of the scheme and to
vote on any extraordinary resolution members propose about
the winding up of the scheme; and
(c) informing the members that the responsible entity is
permitted to wind up the scheme unless a meeting is called to
consider the proposed winding up of the scheme within 28
days of the responsible entity giving the notice to the
members.
(3) If no meeting is called within that 28 days to consider the proposed
winding up, the responsible entity may wind up the scheme.
601ND Winding up ordered by Court
(1) The Court may, by order, direct the responsible entity of a
registered scheme to wind up the scheme if:
(a) the Court thinks it is just and equitable to make the order; or
(b) within 3 months before the application for the order was
made, execution or other process was issued on a judgment,
decree or order obtained in a court (whether an Australian
court or not) in favour of a creditor of, and against, the
responsible entity in its capacity as the scheme’s responsible
entity and the execution or process has been returned
unsatisfied.
(2) An order based on paragraph (1)(a) may be made on the
application of:
(a) the responsible entity; or
(b) a director of the responsible entity; or
(c) a member of the scheme; or
(d) ASIC.
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Section 601NE
50 Corporations Act 2001
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(3) An order based on paragraph (1)(b) may be made on the
application of a creditor.
601NE The winding up of the scheme
(1) The responsible entity of a registered scheme must ensure that the
scheme is wound up in accordance with its constitution and any
orders under subsection 601NF(2) if:
(a) the scheme’s constitution provides that the scheme is to be
wound up at a specified time, in specified circumstances or
on the happening of a specified event and that time is
reached, those circumstances occur or that event occurs; or
(b) the members pass an extraordinary resolution directing the
responsible entity to wind up the scheme; or
(c) the Court makes an order directing the responsible entity to
wind up the scheme; or
(d) the members pass a resolution removing the responsible
entity but do not, at the same meeting, pass a resolution
choosing a company to be the new responsible entity that
consents to becoming the scheme’s responsible entity.
Note: For the Court’s power to order winding up, see
subsection 601FQ(5) and section 601ND.
(2) The responsible entity of a registered scheme may wind up the
scheme in accordance with its constitution and any orders under
subsection 601NF(2) if the responsible entity is permitted by
subsection 601NC(3) to wind up the scheme.
(3) Interests must not be issued in a registered scheme at a time after
the responsible entity has become obliged to ensure the scheme is
wound up, or after the scheme has started to be wound up.
601NF Other orders about winding up
(1) The Court may, by order, appoint a person to take responsibility
for ensuring a registered scheme is wound up in accordance with
its constitution and any orders under subsection (2) if the Court
thinks it necessary to do so (including for the reason that the
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Section 601NG
Corporations Act 2001 51
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responsible entity has ceased to exist or is not properly discharging
its obligations in relation to the winding up).
(2) The Court may, by order, give directions about how a registered
scheme is to be wound up if the Court thinks it necessary to do so
(including for the reason that the provisions in the scheme’s
constitution are inadequate or impracticable).
(3) An order under subsection (1) or (2) may be made on the
application of:
(a) the responsible entity; or
(b) a director of the responsible entity; or
(c) a member of the scheme; or
(d) ASIC.
601NG Unclaimed money to be paid to ASIC
If, on completion of the winding up of a registered scheme, the
person who has been winding up the scheme has in their
possession or under their control any unclaimed or undistributed
money or other property that was part of the scheme property, the
person must, as soon as practicable, pay the money or transfer the
property to ASIC to be dealt with under Part 9.7.
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Part 5C.10 Deregistration
Section 601PA
52 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5C.10—Deregistration
601PA Deregistration—voluntary
Responsible entity may apply for deregistration
(1) The responsible entity of a registered scheme may lodge an
application for deregistration of the scheme with ASIC.
(2) The responsible entity may only apply if:
(a) the scheme:
(i) has 20 or less members (calculated in accordance with
subsection 601ED(4)) and all the members agree that
the scheme should be deregistered; and
(ii) is not required to be registered by
paragraph 601ED(1)(b) or (c); or
(b) because of subsection 601ED(2) (exemption based on
Division 2 of Part 7.9 not applying), the scheme is not
required to be registered and all the members agree that the
scheme should be deregistered; or
(c) the scheme is not a managed investment scheme.
(3) If ASIC is satisfied that the application complies with
subsections (1) and (2), it must give notice of the proposed
deregistration:
(a) on the national database; and
(b) in the Gazette.
When 2 months have passed since the Gazette notice, ASIC may
deregister the scheme.
(4) ASIC must give notice of the deregistration to the applicant.
601PB Deregistration by ASIC
(1) ASIC may decide to deregister a registered scheme if:
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(a) the scheme does not have a responsible entity that meets the
requirements of section 601FA; or
(b) the scheme does not have a constitution that meets the
requirements of sections 601GA and 601GB; or
(c) the scheme does not have a compliance plan that meets the
requirements of section 601HA; or
(d) the scheme’s property is not being:
(i) clearly identified as the scheme’s property; and
(ii) held separately from property of the responsible entity
and property of any other scheme;
in accordance with the scheme’s compliance plan; or
(e) the following conditions are satisfied:
(i) the response to a return of particulars given to the
responsible entity of the scheme is at least 6 months
late; and
(ii) no other documents have been lodged by or on behalf of
the scheme in the last 18 months; and
(iii) ASIC has no reason to believe that the scheme is being
operated; or
(ea) the scheme’s review fee in respect of a review date has not
been paid in full at least 12 months after the due date for
payment; or
(f) the scheme has been wound up.
Deregistration procedure
(2) If ASIC decides to deregister a scheme under this section, it must
give notice of the proposed deregistration:
(a) to the scheme’s responsible entity; and
(b) to any other person who is winding up the scheme; and
(c) on the national database; and
(d) in the Gazette.
If the notice is given under paragraph (1)(a), (b), (c) or (d), the
notice must specify the period at the end of which ASIC proposes
to deregister the scheme.
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Section 601PC
54 Corporations Act 2001
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(3) ASIC may deregister the scheme:
(a) if paragraph (1)(a), (b), (c) or (d) applies—at the end of the
period set out in the Gazette notice; or
(b) if paragraph (1)(e) or (f) applies—when 2 months have
passed since the Gazette notice.
(4) ASIC does not have to give a person notice under subsection (2) if
ASIC does not have the necessary information about the person’s
address.
(5) ASIC must give notice of the deregistration to everyone who was
notified of the proposed deregistration under paragraph (2)(a) or
(b).
601PC Reinstatement
(1) ASIC may reinstate the registration of a managed investment
scheme if ASIC is satisfied that the scheme should not have been
deregistered or if the defect that led to the scheme being
deregistered has been remedied.
(2) The Court may make an order that ASIC reinstate the registration
of a managed investment scheme if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; or
(ii) a person who was winding up the scheme; and
(b) the Court is satisfied that it is just that the scheme’s
registration be reinstated.
(3) The Court may give any directions it thinks just for putting the
scheme and other people in the same position, as far as possible, as
if the scheme had not been deregistered.
ASIC to give notice of reinstatement
(4) ASIC must give notice of a reinstatement in the Gazette. If ASIC
exercises its power under subsection (1) in response to an
application by a person, ASIC must also give notice of the
reinstatement to the applicant.
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Section 601QA
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Part 5C.11—Exemptions and modifications
601QA ASIC’s power to make exemption and modification orders
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
Without limiting this, ASIC may declare that this Chapter applies
to a person as if section 601HA included a requirement for scheme
property to be held by a person other than the responsible entity as
the responsible entity’s agent.
(2) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class
of securities; and
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to
references in:
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(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 11 of Part 11.2 transitionals.
601QB Modification by regulations
The regulations may modify the operation of this Chapter or any
other provisions of this Act relating to securities in relation to:
(a) a managed investment scheme; or
(b) all managed investment schemes of a specified class.
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Section 601RAA
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Chapter 5D—Licensed trustee companies
Part 5D.1—Preliminary
601RAA Definitions
In this Chapter:
client, in relation to a trustee company, has the meaning given by
subsection 601RAB(3).
estate management functions has the meaning given by
subsection 601RAC(2).
estate that is administered or managed, in relation to a trustee
company, means all or any of the estate of a person (whether living
or dead) that is administered or managed by the trustee company in
the course of performing estate management functions.
fees means fees in the nature of remuneration (including
commission).
law means a law of the Commonwealth or of a State or Territory,
and includes a rule of common law or equity.
licensed trustee company means a trustee company that holds an
Australian financial services licence covering the provision of one
or more traditional trustee company services.
Note: Traditional trustee company services are financial services for the
purpose of Chapter 7: see subsection 766A(1A).
person with a proper interest, in relation to an estate, has the
meaning given by section 601RAD.
publish: if the regulations prescribe requirements to be complied
with in relation to an obligation in a provision of this Part to
publish something, publish (in that provision) means publish in
accordance with those requirements.
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Section 601RAB
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traditional trustee company services has the meaning given by
subsection 601RAC(1).
trustee company has the meaning given by section 601RAB.
will includes a codicil and any other testamentary writing.
601RAB Meaning of trustee company and client of trustee company
(1) A trustee company is a company:
(a) that is a corporation to which paragraph 51(xx) of the
Constitution applies; and
(b) that is prescribed by the regulations as a trustee company for
the purpose of this Act.
(2) For the purpose of paragraph (1)(b), companies may (for example)
be prescribed:
(a) by setting out a list of companies in the regulations; or
(b) by providing a mechanism in the regulations for the
determination of a list of companies.
(2A) Before the Governor-General makes a regulation that includes a
company in a list set out for the purposes of paragraph (2)(a), the
company must satisfy the Minister of the following:
(a) that it is a corporation to which paragraph 51(xx) of the
Constitution applies;
(b) that its purposes include:
(i) providing services of the kind referred to in
paragraph 601RAC(1)(c); and
(ii) performing functions of a kind referred to in
paragraph 601RAC(2)(b) and at least one other estate
management function;
(c) that it is, and will continue to be, capable of providing the
services, and performing the functions, referred to in
paragraph (b) of this subsection;
(d) that it is a fit and proper person;
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(e) that an unacceptable control situation (as defined in
section 601VAA) does not exist in relation to it in relation to
any person;
(f) any other matter the Minister specifies by written notice to
the company.
Note: Under Division 137 of the Criminal Code it may be an offence for a
company to provide false or misleading information or documents to
the Minister in purported compliance with this requirement.
(3) A client of a trustee company is a person to whom, within the
meaning of Chapter 7, a financial service (being a traditional
trustee company service) is provided by the trustee company.
Note: Regulations made for the purpose of subsection 766A(1B) may
prescribe the person or persons to whom a class of traditional trustee
company services is taken to be provided.
601RAC Meaning of traditional trustee company services and estate
management functions
(1) The following are traditional trustee company services:
(a) performing estate management functions (see subsection (2));
(b) preparing a will, a trust instrument, a power of attorney or an
agency arrangement;
(c) applying for probate of a will, applying for grant of letters of
administration, or electing to administer a deceased estate;
(d) establishing and operating common funds;
(e) any other services prescribed by the regulations for the
purpose of this paragraph.
(2) The following are estate management functions (whether
provided alone or jointly with another person or persons):
(a) acting as a trustee of any kind, or otherwise administering or
managing a trust;
(b) acting as executor or administrator of a deceased estate;
(c) acting as agent, attorney or nominee;
(d) acting as receiver, controller or custodian of property;
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(e) otherwise acting as manager or administrator (including in
the capacity as guardian) of the estate of an individual;
(f) acting in any other capacity prescribed by the regulations for
the purpose of this paragraph.
(3) Subsections (1) and (2) do not apply to:
(a) operating a registered scheme; or
(b) providing a custodial or depository service (within the
meaning of section 766E); or
(c) acting as trustee for debenture holders under Chapter 2L; or
(d) acting as a receiver or other controller of property of a
corporation under Part 5.2; or
(e) acting as trustee of a superannuation fund, an approved
deposit fund or a pooled superannuation trust (within the
meaning of the Superannuation Industry (Supervision) Act
1993); or
(f) acting in any other capacity prescribed by the regulations for
the purpose of this paragraph.
601RAD Meaning of person with a proper interest
(1) A person with a proper interest, in relation to an estate, includes
(but is not limited to) the following:
(a) ASIC;
(b) in relation to a charitable trust:
(i) the settlor, or one of the settlors, of the trust; or
(ii) a person who, under the terms of the trust, has power to
appoint or remove a trustee of the trust or to vary (or
cause to be varied) any of the terms of the trust; or
(iii) a Minister of a State or Territory who has
responsibilities relating to charitable trusts; or
(iv) a person who is named in the instrument establishing
the trust as a person who may receive payments on
behalf of the trust; or
(v) a person who is named in the instrument establishing
the trust as a person who must, or may, be consulted by
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the trustee or trustees before distributing or applying
money or other property for the purposes of the trust; or
(vi) a person of a class that the trust is intended to benefit;
(c) in the case of the estate of a deceased person:
(i) if the person died testate—a beneficiary under the
person’s will; or
(ii) if the person died intestate—a person who, under a law
of a State or Territory, has, or is entitled to, an interest
in the deceased’s estate;
(d) in the case of any other trust:
(i) the settlor, or one of the settlors, of the trust; or
(ii) a person who, under the terms of the trust, has power to
appoint or remove a trustee of the trust or to vary (or
cause to be varied) any of the terms of the trust; or
(iii) a beneficiary of the trust;
(e) in relation to an application to a court relating to the estate—
a person that the court considers, in the circumstances of the
case, has a proper interest in the estate;
(f) a person prescribed by the regulations as having a proper
interest in the estate;
(g) if a person covered by any of the above paragraphs is under a
legal disability—an agent of the person.
(2) None of the paragraphs or subparagraphs of subsection (1) limits,
or is limited by, any of the other paragraphs or subparagraphs of
that subsection.
601RAE Interaction between trustee company provisions and State
and Territory laws
(1) The trustee company provisions are:
(a) the provisions of this Chapter, and regulations or other
instruments made for the purposes of this Chapter; and
(b) the provisions of Chapter 7, and regulations or other
instruments made for the purposes of Chapter 7, as they
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apply in relation to financial services that are traditional
trustee company services.
(2) Subject to subsections (3) and (4), the trustee company provisions
are intended to apply to the exclusion of laws of a State or
Territory of the following kinds:
(a) laws that authorise or license companies to provide
traditional trustee company services generally (as opposed to
laws that authorise or license companies to provide a
particular traditional trustee company service);
(b) laws that regulate the fees that may be charged by companies
for the provision of traditional trustee company services, and
laws that require the disclosure of such fees;
(c) laws that deal with the provision of accounts by companies in
relation to traditional trustee company services that they
provide;
(d) laws that deal with the duties of officers or employees of
companies that provide traditional trustee company services;
(e) laws that regulate the voting power that people may hold in
companies that provide traditional trustee company services,
or that otherwise impose restrictions on the ownership or
control of companies that provide traditional trustee company
services;
(f) laws (other than laws referred to in section 601WBC) that
deal with what happens to assets and liabilities held by a
company, in connection with the provision by the company
of traditional trustee company services, if the company
ceases to be licensed or authorised to provide such services.
(3) Subject to subsection (4), the trustee company provisions are not
intended to apply to the exclusion of laws of a State or Territory
that require a company to have (or to have staff who have)
particular qualifications or experience if the company is to provide
traditional trustee company services of a particular kind.
(4) The regulations may provide:
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(a) that the trustee company provisions are intended to apply to
the exclusion of prescribed State or Territory laws, or
prescribed provisions of State or Territory laws; or
(b) that the trustee company provisions are intended not to apply
to the exclusion of prescribed State or Territory laws, or
prescribed provisions of State or Territory laws.
(5) The provisions of this Chapter have effect subject to this section.
Note: For example, section 601SAC (which provides that the powers etc.
conferred by or under this Chapter are in addition to other powers etc.)
is to be interpreted subject to this section.
(6) Part 1.1A does not apply in relation to the trustee company
provisions.
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Part 5D.2 Powers etc. of licensed trustee companies
Division 1 General provisions
Section 601SAA
64 Corporations Act 2001
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Part 5D.2—Powers etc. of licensed trustee
companies
Division 1—General provisions
601SAA Jurisdiction of courts not affected etc.
(1) Any inherent power or jurisdiction of courts in respect of the
supervision of the performance of traditional trustee company
services is not affected by anything in this Chapter.
(2) A licensed trustee company that is performing traditional trustee
company services of a particular kind is subject in all respects to
the same control and to removal or restraint from acting, and
generally to the jurisdiction of courts, in the same manner as any
other person who performs traditional trustee company services of
that kind.
601SAB Regulations may prescribe other powers etc.
A licensed trustee company also has, in relation to the provision of
traditional trustee company services, such other powers, functions,
liabilities and obligations, and such privileges and immunities, as
are prescribed by the regulations.
601SAC Powers etc. conferred by or under this Chapter are in
addition to other powers etc.
The powers, functions, liabilities and obligations, and the
privileges and immunities, conferred or imposed on licensed
trustee companies by or under this Chapter are in addition to, and
not in derogation of, any powers, functions, liabilities and
obligations, and any privileges and immunities, conferred or
imposed by any other law:
(a) on trustee companies; or
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(b) on persons who perform estate management functions or who
provide other traditional trustee company services.
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Part 5D.2 Powers etc. of licensed trustee companies
Division 2 Accounts
Section 601SBA
66 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Accounts
601SBA Licensed trustee company not required to file accounts
(1) A licensed trustee company, when acting alone in relation to any
estate of a deceased person, is not required to file, or file and pass,
accounts relating to the estate unless the Court, of its own motion
or on application by or on behalf of a person with a proper interest
in the estate, so orders.
(2) If a licensed trustee company is appointed and acts jointly with any
other person in relation to any estate of a deceased person, the
trustee company and that other person are not required to file, or
file and pass, accounts relating to the estate unless:
(a) that other person intends to charge fees for acting in relation
to the estate; or
(b) the Court, of its own motion or on application by or on behalf
of a person with a proper interest in the estate, so orders.
601SBB Licensed trustee company may be required to provide
account in relation to estate
(1) On application by a person with a proper interest in an estate that is
administered or managed by a licensed trustee company, the trustee
company must provide the person with an account of:
(a) the assets and liabilities of the estate; and
(b) the trustee company’s administration or management of the
estate; and
(c) any investment made from the estate; and
(d) any distribution made from the estate; and
(e) any other expenditure (including fees and commissions) from
the estate.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Failure to comply with this subsection may also lead to the
consequences set out in subsection (4) of this section.
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Accounts Division 2
Section 601SBC
Corporations Act 2001 67
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(2) If:
(a) a licensed trustee company has provided an account to a
person under this section; and
(b) the person applies for a further account within 3 months from
the date on which the person was provided with the previous
account;
the trustee company need not provide a further account in response
to that application until the expiration of that period of 3 months.
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) A licensed trustee company may charge a reasonable fee for
providing an account under this section.
(4) If a licensed trustee company fails to provide a proper account
under this section, the Court may, on application by the person
who sought the account or any other person with a proper interest
in the estate, make any order that the Court considers appropriate,
including an order requiring the preparation and delivery of proper
accounts.
601SBC Court may order audit
(1) The Court may, on any application under section 601SBB, in
addition to or in substitution for any account to be provided by the
licensed trustee company under that section, order that a person
named in the order must examine the accounts of the trustee
company relating to the estate in respect of which the order is
made.
(2) On the making of any such order, the trustee company must:
(a) give to the person named in the order a list of all the accounts
kept by the company relating to the estate; and
(b) produce to the person, at an office of the trustee company at
all reasonable times when required, all books in the
company’s possession relating to the estate; and
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Part 5D.2 Powers etc. of licensed trustee companies
Division 2 Accounts
Section 601SBC
68 Corporations Act 2001
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(c) provide the person with all necessary information and all
other necessary facilities for enabling the person to make the
examination.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Common funds Division 3
Section 601SCA
Corporations Act 2001 69
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Division 3—Common funds
601SCA Common funds of licensed trustee companies
(1) A licensed trustee company may, for the purposes of investment,
pool together into a fund or funds money (estate money) from 2 or
more estates that are administered or managed by the trustee
company in the performance of estate management functions.
(2) A fund into which money is pooled as mentioned in subsection (1)
is a common fund.
Note: A common fund may also be regulated under Chapter 5C (if the fund
constitutes a managed investment scheme) but see also
section 601SCAA, which deals with any inconsistencies in regulation
between the Chapters.
(3) A common fund may also include other money.
(4) This section has effect subject to regulations made for the purpose
of section 601SCC.
Note: For example, the regulations may limit the circumstances in which
other money may be pooled together with estate money.
601SCAA Common funds that are also registered schemes
If, in relation to a common fund that is also a registered scheme, a
provision of this Chapter or a regulation or other instrument made
for the purposes of this Chapter is inconsistent with any of the
following (a registered scheme provision):
(a) a provision of Chapter 5C or a regulation or other instrument
made for the purposes of that Chapter;
(b) a provision of Part 7.9 of Chapter 7 or a regulation or other
instrument made for the purposes of that Part;
the registered scheme provision prevails to the extent of the
inconsistency.
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Part 5D.2 Powers etc. of licensed trustee companies
Division 3 Common funds
Section 601SCB
70 Corporations Act 2001
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601SCB Obligations relating to common funds
(1) If a licensed trustee company establishes more than one common
fund, each must be allocated an appropriate distinguishing number.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) For each common fund, the licensed trustee company must keep
accounts showing at all times the current amount for the time being
at credit in the fund on account of each estate.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A licensed trustee company must not put estate money into a
common fund if doing so is contrary to an express provision of the
conditions subject to which the estate money is held by the trustee
company.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
601SCC Regulations relating to establishment or operation of
common funds
The regulations may include provisions relating to the
establishment or operation of common funds.
601SCD Arm’s length transactions
(1) A licensed trustee company that operates a common fund that is
not a registered scheme must not give a financial benefit in relation
to the common fund to a related party.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subsection (1) does not apply if the financial benefit is given on
terms that:
(a) would be reasonable in the circumstances if the trustee
company and the related party were dealing at arm’s length;
or
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Common funds Division 3
Section 601SCD
Corporations Act 2001 71
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(b) are less favourable to the related party than the terms referred
to in paragraph (a).
(3) In this section:
financial benefit has a meaning that is affected by section 229.
related party has the meaning given by section 228, as if references
in that section to a public company were references to a licensed
trustee company.
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Chapter 5D Licensed trustee companies
Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 1 Disclosure of fees
Section 601TAA
72 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5D.3—Regulation of fees charged by licensed
trustee companies
Division 1—Disclosure of fees
601TAA Schedule of fees to be published and available
A licensed trustee company must ensure that an up-to-date
schedule of the fees that it generally charges for the provision of
traditional trustee company services:
(a) is made available to the public at all times on a website
maintained by or on behalf of the trustee company; and
(b) is made available to the public free of charge at offices of the
trustee company during the usual opening hours of those
offices.
Note 1: The schedule is of fees generally charged, and does not include fees
that are agreed to etc. as mentioned in section 601TBB.
Note 2: Failure to comply with this section is an offence (see
subsection 1311(1)).
601TAB Disclosure to clients of changed fees
(1) If, while a licensed trustee company continues to provide a
particular traditional trustee company service to a client or clients,
the trustee company changes the fees that it will charge for the
provision of the service, the trustee company must, within 21 days
of the change of fees taking effect, comply with paragraph (a) or
(b) in relation to the client or each client:
(a) if the client has requested to be sent copies of changed fees—
send the client a copy of the changed fees in accordance with
subsection (2); or
(b) in any other case—directly notify the client, in writing, that
the changed fees are available on the internet on a specified
website maintained by or on behalf of the trustee company.
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Disclosure of fees Division 1
Section 601TAB
Corporations Act 2001 73
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Note 1: Initial disclosure to a client of the fees that a trustee company will
charge for the provision of a trustee company service will generally
occur through the provision to the client of a Financial Services Guide
under Part 7.7. However, this section is not limited just to situations
where there has been an initial disclosure through a Financial Services
Guide.
Note 1A: Other provisions in this Part and in the regulations limit the ability of
licensed trustee companies to increase fees.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A copy of changed fees that is sent to a client under
paragraph (1)(a) must be:
(a) an electronic copy, if that is what the client has requested; or
(b) a hard copy, in any other case.
(3) If a client to whom a traditional trustee company service is
provided is under a legal disability, the following provisions have
effect:
(a) a copy of changed fees required by paragraph (1)(a), or a
notice required by paragraph (1)(b), must instead be given to
an agent of the client;
(b) a request referred to in paragraph (1)(a) or (2)(a) may instead
be made by an agent of the client.
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Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 2 General provisions about charging fees
Section 601TBA
74 Corporations Act 2001
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Division 2—General provisions about charging fees
601TBA Charging of fees for the provision of traditional trustee
company services
(1) Subject to this Part, a licensed trustee company may charge fees for
the provision of traditional trustee company services.
(2) If a provision of this Part limits the fees that a licensed trustee
company may charge for the provision of a particular traditional
trustee company service, the trustee company must not charge fees
for that service in excess of that limit.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Excess fees may also be recovered under section 601XAA.
601TBB Part does not prevent charging of fees as agreed etc.
(1) Nothing in this Part prevents a licensed trustee company from
charging:
(a) any fees that a testator, in his or her will, has directed to be
paid; or
(b) any fees that have been agreed on in accordance with
subsection (2).
(2) An agreement referred to in paragraph (1)(b) that relates to the fees
that may be charged by a licensed trustee company for the
provision of a particular traditional trustee company service must
be between the trustee company and:
(a) subject to paragraph (b) of this subsection—a person or
persons who have authority to deal with the trustee company
on matters relating to the provision of the service; or
(b) if the regulations prescribe the person or persons with whom
the agreement must be made—that person or those persons.
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General provisions about charging fees Division 2
Section 601TBC
Corporations Act 2001 75
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601TBC Part does not prevent charging fee for provision of account
Nothing in the Part prevents a licensed trustee company from
charging a fee permitted by subsection 601SBB(3) for the
provision of an account.
601TBD Part does not prevent reimbursement
Nothing in this Part prevents the reimbursement to a licensed
trustee company of all disbursements properly made by the trustee
company in the provision of a traditional trustee company service.
601TBE Estate management functions: payment of fees out of estate
(1) This section applies to the performance by a licensed trustee
company of an estate management function relating to a particular
estate.
(2) Subject to subsection (3), fees charged by the trustee company, in
accordance with this Part, for the performance of the function are
payable to the trustee company out of the capital or income of the
relevant estate.
(3) Unless ASIC approves it under subsection (4):
(a) a management fee referred to in section 601TDD can only
come out of the income of the relevant estate; and
(b) a common fund administration fee referred to in
section 601TDE or 601TDI can only come out of the income
received by the common fund on the assets of the charitable
trust concerned that are included in the fund.
(4) ASIC may, on application in writing by a licensed trustee
company, approve payment of a proposed fee that, if paid without
the approval, would contravene subsection (3), if ASIC is satisfied
that:
(a) the payment of the fee will not significantly affect the capital
of the relevant estate or charitable trust concerned; and
(b) the fee is a fair reflection of the work and expertise required
to perform the estate management function.
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Chapter 5D Licensed trustee companies
Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 3 Fees otherwise than for being trustee or manager of a charitable trust
Section 601TCA
76 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Fees otherwise than for being trustee or
manager of a charitable trust
601TCA Fees otherwise than for being the trustee or manager of a
charitable trust
(1) This section applies to a particular provision of a traditional trustee
company service by a licensed trustee company, unless:
(a) the service consists of being the trustee or manager of a
charitable trust (see Division 4); or
(b) the provision of the service started before the commencement
of this section.
(2) The trustee company must not charge fees that are in excess of its
schedule of fees that was most recently published as required by
section 601TAA before the trustee company started to provide the
service.
(3) This section does not limit anything in Division 2.
601TCB Additional amount for preparation of returns etc.
A licensed trustee company may charge a reasonable fee for work
involved in the preparation and lodging of returns for the purpose
of, or in connection with, assessments of any duties or taxes (other
than probate, death, succession or estate duties) related to an estate
that is administered or managed by the trustee company.
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Licensed trustee companies Chapter 5D
Regulation of fees charged by licensed trustee companies Part 5D.3
Fees for being trustee or manager of a charitable trust Division 4
Section 601TDA
Corporations Act 2001 77
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Fees for being trustee or manager of a
charitable trust
Subdivision A—New client charitable trusts
601TDA Subdivision applies to new client charitable trusts
This Subdivision applies to a particular provision of a traditional
trustee company service by a licensed trustee company if:
(a) the service consists of being the trustee or manager of a
charitable trust; and
(b) the provision of the service started on or after the
commencement of this section.
601TDB What the trustee company may charge
(1) For the provision of the service, the trustee company must only
charge:
(a) either:
(i) a capital commission, and an income commission, as
provided for in section 601TDC; or
(ii) a management fee as provided for in section 601TDD;
and
(b) if applicable, common fund administration fees under
section 601TDE; and
(c) if applicable, fees permitted by section 601TDF in respect of
the preparation of returns etc.
(2) This section does not limit anything in Division 2.
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Chapter 5D Licensed trustee companies
Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 4 Fees for being trustee or manager of a charitable trust
Section 601TDC
78 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601TDC Option 1: capital commission and income commission
One-off capital commission
(1) The trustee company may charge a capital commission (GST
inclusive) at a rate not exceeding 5.5% of the gross value of the
charitable trust’s assets.
(2) The capital commission must be charged only once during the
period while the trustee company is trustee or manager of the
charitable trust.
(3) The regulations may make provision relating to the capital
commission, including (but not limited to):
(a) the calculation of the commission or of the gross value of the
charitable trust’s assets; and
(b) when, during the period referred to in subsection (2), the
commission may be charged.
Annual income commission
(4) The trustee company may charge an annual income commission
(GST inclusive) at a rate not exceeding 6.6% of the income
received on account of the charitable trust’s assets.
(5) The regulations may make provision relating to the income
commission, including (but not limited to):
(a) the calculation of the commission or of the income received
on the charitable trust’s assets; and
(b) when, during a year, the commission may be charged; and
(c) apportionment of the amount of the commission for
part-years.
601TDD Option 2: annual management fee
(1) Instead of a capital commission and income commission under
section 601TDC, the trustee company may charge an annual
management fee (GST inclusive) at a rate not exceeding 1.056% of
the gross value of the charitable trust’s assets.
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Licensed trustee companies Chapter 5D
Regulation of fees charged by licensed trustee companies Part 5D.3
Fees for being trustee or manager of a charitable trust Division 4
Section 601TDE
Corporations Act 2001 79
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The regulations may make provision relating to the management
fee, including (but not limited to):
(a) the calculation of the management fee or of the gross value of
the charitable trust’s assets; and
(b) when, during a year, the management fee may be charged;
and
(c) apportionment of the amount of the management fee for
part-years.
601TDE Additional amount if trust money is in a common fund
(1) If any of the charitable trust’s assets are included in a common
fund operated by the trustee company, the trustee company may
charge an annual common fund administration fee (GST inclusive)
not exceeding 1.1% of the gross value of the charitable trust’s
assets in the fund.
(2) The regulations may make provision relating to the common fund
administration fee, including (but not limited to):
(a) the calculation of the common fund administration fee or of
the gross value of the charitable trust’s assets in the fund; and
(b) when, during a year, the common fund administration fee
may be charged; and
(c) the apportionment of the common fund administration fee for
part-years.
601TDF Additional amount for preparation of returns etc.
The trustee company may charge a reasonable fee for work
involved in the preparation and lodging of returns for the purpose
of, or in connection with, assessments of any duties or taxes (other
than probate, death, succession or estate duties) related to the trust
estate of the charitable trust.
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Chapter 5D Licensed trustee companies
Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 4 Fees for being trustee or manager of a charitable trust
Section 601TDG
80 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Existing client charitable trusts
601TDG Subdivision applies to existing client charitable trusts
This Subdivision applies to a particular provision of a traditional
trustee company service by a licensed trustee company if:
(a) the service consists of being the trustee or manager of a
charitable trust; and
(b) the provision of the service started before the commencement
of this section.
601TDH Trustee company not to charge more than was being
charged before section commenced
Subject to section 601TDI and 601TDJ, the trustee company must
not charge fees in excess of the fees than it could have charged in
relation to the charitable trust immediately before the
commencement of this section.
601TDI Additional amount if trust money is in a common fund
(1) If any of the charitable trust’s assets are included in a common
fund operated by the trustee company, the trustee company may
charge an annual common fund administration fee (GST inclusive)
not exceeding 1.1% of the gross value of the charitable trust’s
assets in the fund.
(2) The regulations may make provision relating to the common fund
administration fee, including (but not limited to):
(a) the calculation of the common fund administration fee or of
the gross value of the charitable trust’s assets in the fund; and
(b) when, during a year, the common fund administration fee
may be charged; and
(c) the apportionment of the common fund administration fee for
part-years.
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Regulation of fees charged by licensed trustee companies Part 5D.3
Fees for being trustee or manager of a charitable trust Division 4
Section 601TDJ
Corporations Act 2001 81
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601TDJ Additional amount for preparation of returns etc.
The trustee company may charge a reasonable fee for work
involved in the preparation and lodging of returns for the purpose
of, or in connection with, assessments of any duties or taxes (other
than probate, death, succession or estate duties) related to the trust
estate of the charitable trust.
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Chapter 5D Licensed trustee companies
Part 5D.3 Regulation of fees charged by licensed trustee companies
Division 5 Miscellaneous
Section 601TEA
82 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Miscellaneous
601TEA Power of the Court with respect to excessive fees
(1) If the Court is of the opinion that fees charged by a licensed trustee
company in respect of any estate are excessive, the Court may
review the fees and may, on the review, reduce the fees.
(2) Subsection (1) does not apply to fees:
(a) that are charged as permitted by section 601TBB; or
(b) that relate to a charitable trust and that are charged as
permitted by Subdivision A of Division 4.
(3) In considering whether fees are excessive, the Court may consider
any or all of the following matters:
(a) the extent to which the work performed by the trustee
company was reasonably necessary;
(b) the extent to which the work likely to be performed by the
trustee company is likely to be reasonably necessary;
(c) the period during which the work was, or is likely to be,
performed by the trustee company;
(d) the quality of the work performed, or likely to be performed,
by the trustee company;
(e) the complexity (or otherwise) of the work performed, or
likely to be performed, by the trustee company;
(f) the extent (if any) to which the trustee company was, or is
likely to be, required to deal with extraordinary issues;
(g) the extent (if any) to which the trustee company was, or is
likely to be, required to accept a higher level of risk or
responsibility than is usually the case;
(h) the value and nature of any property dealt with, or likely to
be dealt with, by the trustee company;
(i) if the fees are ascertained, in whole or in part, on a time
basis—the time properly taken, or likely to be properly taken,
by the trustee company in performing the work;
(j) any other relevant matters.
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Regulation of fees charged by licensed trustee companies Part 5D.3
Miscellaneous Division 5
Section 601TEB
Corporations Act 2001 83
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) The Court may exercise its powers under subsection (1) either on
its own motion or on the application by or on behalf of a person
with a proper interest in the estate.
(5) If the fees are reduced by more than 10%, the trustee company
must, unless the Court in special circumstances otherwise orders,
pay the costs of the review.
(6) Subject to subsection (5), all questions of costs of the review are in
the discretion of the Court.
601TEB Directors’ fees
(1) This section applies if:
(a) an estate that is administered or managed by a licensed
trustee company has an interest in a corporation; and
(b) an officer of the trustee company, in his or her capacity as
such an officer, acts as a director of the corporation for
purposes connected with the administration or management
of the estate.
(2) The trustee company is entitled to receive from the corporation
(and to retain) any director’s fees that would be payable to the
officer had he or she so acted otherwise than in his or her capacity
as such an officer.
(3) Neither the officer nor the estate is entitled to receive the fees that
the trustee company is entitled to receive under subsection (2).
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Chapter 5D Licensed trustee companies
Part 5D.4 Duties of officers and employees of licensed trustee companies
Section 601UAA
84 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5D.4—Duties of officers and employees of
licensed trustee companies
601UAA Duties of officers of licensed trustee company
(1) An officer of a licensed trustee company must:
(a) act honestly; and
(b) exercise the degree of care and diligence that a reasonable
person would exercise if they were in the officer’s position;
and
(c) not make use of information acquired through being an
officer of the trustee company for the purpose (or for
purposes including the purpose) of:
(i) gaining an improper advantage for the officer or another
person; or
(ii) causing detriment to the clients of the trustee company;
and
(d) not make improper use of their position as an officer for the
purpose (or for purposes including the purpose) of:
(i) gaining, directly or indirectly, an advantage for the
officer or for any other person; or
(ii) causing detriment to the clients of the trustee company;
and
(e) take all steps that a reasonable person would take, if they
were in the officer’s position, to ensure that the trustee
company complies, in relation to the provision of traditional
trustee company services, with:
(i) this Act; and
(ii) any conditions imposed on the trustee company’s
Australian financial services licence.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Licensed trustee companies Chapter 5D
Duties of officers and employees of licensed trustee companies Part 5D.4
Section 601UAB
Corporations Act 2001 85
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A person who contravenes, or is involved in a contravention of,
subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(3) A duty of an officer of the trustee company under subsection (1)
overrides any conflicting duty the officer has under Part 2D.1, but
is subject to any conflicting duty the officer has under Part 5C.2.
(4) A reference in this section to the clients of a licensed trustee
company is a reference to the clients, when viewed as a group.
601UAB Duties of employees of licensed trustee company
(1) An employee of a licensed trustee company must not:
(a) make use of information acquired through being an employee
of the trustee company for the purpose (or for purposes
including the purpose) of:
(i) gaining an improper advantage for the employee or
another person; or
(ii) causing detriment to the clients of the trustee company;
or
(b) make improper use of their position as an employee for the
purpose (or for purposes including the purpose) of:
(i) gaining, directly or indirectly, an advantage for the
employee or for any other person; or
(ii) causing detriment to the clients of the trustee company.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A person who contravenes, or is involved in a contravention of,
subsection (1) contravenes this subsection.
Note 1: Section 79 defines involved.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(3) A duty of an employee of the trustee company under subsection (1)
overrides any conflicting duty the employee has under Part 2D.1,
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Part 5D.4 Duties of officers and employees of licensed trustee companies
Section 601UAB
86 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
but is subject to any conflicting duty the employee has under
Part 5C.2.
(4) A reference in this section to the clients of a licensed trustee
company is a reference to the clients, when viewed as a group.
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Licensed trustee companies Chapter 5D
Limit on control of licensed trustee companies Part 5D.5
15% voting power limit Division 1
Section 601VAA
Corporations Act 2001 87
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5D.5—Limit on control of licensed trustee
companies
Division 1—15% voting power limit
601VAA Meaning of unacceptable control situation
For the purposes of this Part, an unacceptable control situation
exists in relation to a licensed trustee company and in relation to a
particular person if the person’s voting power in the trustee
company is more than:
(a) 15%; or
(b) if an approval of a higher percentage is in force under
Division 2 in relation to the trustee company and in relation
to the person—that higher percentage.
601VAB Acquisitions of shares
If:
(a) a person, or 2 or more persons under an arrangement, acquire
shares in a body corporate; and
(b) the acquisition has the result, in relation to a licensed trustee
company, that:
(i) an unacceptable control situation comes into existence
in relation to the trustee company and in relation to a
person; or
(ii) if an unacceptable control situation already exists in
relation to the trustee company and in relation to a
person—there is an increase in the voting power of the
person in the trustee company;
the person or persons mentioned in paragraph (a) contravene this
section.
Note: A contravention of this section is an offence (see subsection 1311(1)).
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Chapter 5D Licensed trustee companies
Part 5D.5 Limit on control of licensed trustee companies
Division 1 15% voting power limit
Section 601VAC
88 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
601VAC Remedial orders
(1) If an unacceptable control situation exists in relation to a licensed
trustee company, the Court may make such orders as the Court
considers appropriate for the purpose of ensuring that the
unacceptable control situation ceases to exist.
(2) However, the Court may only make orders under this section on
application by:
(a) the Minister; or
(b) ASIC; or
(c) the trustee company; or
(d) a person who has any voting power in the trustee company;
or
(e) a client of the trustee company.
(3) The Court’s orders may include:
(a) an order directing the disposal of shares; or
(b) an order restraining the exercise of any rights attached to
shares; or
(c) an order prohibiting or deferring the payment of any sums
due to a person in respect of shares held by the person; or
(d) an order that any exercise of rights attached to shares be
disregarded; or
(e) an order directing any person to do or refrain from doing a
specified act, for the purpose of securing compliance with
any other order made under this section; or
(f) an order containing such ancillary or consequential
provisions as the Court thinks just.
(4) Subsection (3) does not, by implication, limit subsection (1).
(5) Before making an order under this section, the Court may direct
that notice of the application be given to such persons as the Court
thinks fit or be published in such manner as the Court thinks fit, or
both.
(6) The Court may, by order:
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Limit on control of licensed trustee companies Part 5D.5
15% voting power limit Division 1
Section 601VAD
Corporations Act 2001 89
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) rescind, vary or discharge an order made by the Court under
this section; or
(b) suspend the operation of such an order.
601VAD Injunctions
(1) If any conduct (including a refusal or failure to act) amounts or
would amount to a contravention of this Part in relation to a
particular licensed trustee company, the trustee company is taken,
for the purposes of section 1324, to be a person whose interests are
affected by the conduct.
(2) Subsection (1) does not, by implication, limit the class of persons
whose interests are affected by the conduct.
(3) The Minister has the same powers as ASIC to apply for an
injunction under section 1324 in relation to a contravention of this
Part.
(4) The powers in sections 601VAC and 1324 do not, by implication,
limit each other.
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Chapter 5D Licensed trustee companies
Part 5D.5 Limit on control of licensed trustee companies
Division 2 Approval to exceed 15% voting power limit
Section 601VBA
90 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Approval to exceed 15% voting power limit
601VBA Application for approval to exceed 15% voting power limit
(1) A person may apply for approval to have voting power of more
than 15% in a particular licensed trustee company by lodging with
ASIC an application that:
(a) specifies the percentage of voting power (if any) the person
currently has in the trustee company; and
(b) specifies the percentage of voting power the person is
seeking approval to have in the trustee company; and
(c) sets out the person’s reasons for making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must give the application to the Minister as soon as possible.
601VBB Approval of application
(1) The Minister may grant the application if the Minister is satisfied
that it would be in the interests of the licensed trustee company and
its clients for the application to be granted.
(2) If the Minister grants the application, the Minister must:
(a) give written notice of the approval to the applicant; and
(b) specify the percentage of the voting power the Minister
approves the applicant having in the licensed trustee
company (which may or may not be the percentage the
applicant applied for); and
(c) either:
(i) specify the period during which the approval remains in
force; or
(ii) specify that the approval remains in force indefinitely.
(3) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
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Limit on control of licensed trustee companies Part 5D.5
Approval to exceed 15% voting power limit Division 2
Section 601VBC
Corporations Act 2001 91
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of approval under this section to be:
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
601VBC Duration of approval
(1) An approval under section 601VBB remains in force:
(a) if the notice of approval specifies a period during which the
approval remains in force—until the end of that period, or if
the Minister extends that period, until the end of that
extended period; or
(b) otherwise—indefinitely.
Extension of approval
(2) A person who holds an approval under section 601VBB that is in
force for a specified period may apply to extend that period by
lodging with ASIC an application that sets out the person’s reasons
for making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) ASIC must give the application to the Minister as soon as possible.
(4) The Minister may grant the application if the Minister is satisfied
that it would be in the interests of the licensed trustee company and
its clients for the application to be granted.
(5) If the Minister grants the application, the Minister must:
(a) give written notice of the extension to the applicant; and
(b) specify the extended period during which the approval
remains in force (which may or may not be the period the
applicant applied for).
(6) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
(7) As soon as practicable, the Minister must arrange for a copy of a
notice of extension under this section to be:
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Part 5D.5 Limit on control of licensed trustee companies
Division 2 Approval to exceed 15% voting power limit
Section 601VBD
92 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
601VBD Conditions of approval
(1) An approval under section 601VBB is subject to such conditions
(if any) as are specified in the notice of approval.
(2) The Minister may, by written notice given to a person who holds
an approval under section 601VBB:
(a) impose one or more conditions or further conditions to which
the approval is subject; or
(b) revoke or vary any condition:
(i) imposed under paragraph (a); or
(ii) specified in the notice of approval.
(3) The Minister’s power under subsection (2) may be exercised:
(a) on the Minister’s own initiative; or
(b) on application by the person who holds the approval.
(4) An application made by a person under paragraph (3)(b) must be
lodged with ASIC and must set out the person’s reasons for
making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(5) ASIC must give the application to the Minister as soon as possible.
(6) If the Minister refuses an application under paragraph (3)(b), the
Minister must give written notice of the refusal to the applicant.
(7) As soon as practicable, the Minister must arrange for a copy of a
notice under subsection (2) to be:
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
(8) A person who holds an approval under section 601VBB must give
written notice to ASIC as soon as practicable after they become
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Section 601VBE
Corporations Act 2001 93
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
aware that they have breached a condition to which the approval is
subject.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
601VBE Varying percentage approved
Application by holder of approval
(1) A person who holds an approval under section 601VBB may apply
to vary the percentage specified in the approval by lodging with
ASIC an application that:
(a) specifies the percentage of the voting power the person
currently has in the licensed trustee company concerned; and
(b) specifies the percentage of the voting power the person is
seeking approval to have in the trustee company; and
(c) sets out the person’s reasons for making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must give the application to the Minister as soon as possible.
(3) The Minister may grant the application if the Minister is satisfied
that it would be in the interests of the licensed trustee company and
its clients for the application to be granted.
(4) If the Minister grants the application, the Minister must:
(a) give written notice of the variation to the applicant; and
(b) specify the variation granted (which may or may not be the
variation the applicant applied for).
(5) If the Minister refuses an application, the Minister must give
written notice of the refusal to the applicant.
Minister’s own initiative
(6) The Minister may, by written notice given to a person who holds
an approval under section 601VBB, vary the percentage specified
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Chapter 5D Licensed trustee companies
Part 5D.5 Limit on control of licensed trustee companies
Division 2 Approval to exceed 15% voting power limit
Section 601VBF
94 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
in the approval if the Minister is satisfied that the variation would
be in the interests of the licensed trustee company and its clients.
Percentage varied upwards
(7) If the Minister varies a percentage upwards, the variation takes
effect on the day the notice of variation is given.
Percentage varied downwards
(8) If the Minister varies a percentage downwards, the variation takes
effect on the day specified in the notice of variation. The specified
day must be a day at least 90 days after the day on which the notice
is given.
Notification of variation
(9) As soon as practicable, the Minister must arrange for a copy of a
notice of variation under this section to be:
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
601VBF Revoking an approval
(1) The Minister may, by written notice given to a person who holds
an approval under section 601VBB in relation to a licensed trustee
company, revoke the approval if:
(a) the Minister is satisfied that it would be in the interests of the
trustee company and its clients for the approval to be
revoked; or
(b) the Minister is satisfied that an unacceptable control situation
exists in relation to the trustee company and in relation to the
person; or
(c) the Minister is satisfied that there has been a contravention of
a condition to which the approval is subject.
(2) The revocation takes effect on the day specified in the notice of
revocation. The specified day must be a day at least 90 days after
the day on which the notice is given.
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Limit on control of licensed trustee companies Part 5D.5
Approval to exceed 15% voting power limit Division 2
Section 601VBG
Corporations Act 2001 95
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) If a person who holds an approval under section 601VBB applies
to the Minister for revocation of the approval, the Minister must,
by written notice given to the person, revoke the approval. The
revocation takes effect on the day specified in the notice of
revocation.
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of revocation under this section to be:
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
601VBG Minister may require further information from applicants
(1) If a person has made an application under this Division, the
Minister may, by written notice given to the person, require the
person to give the Minister, within a specified period, further
information about the application.
(2) The Minister may refuse to consider the application until the
person gives the Minister the information.
601VBH Minister may seek views of licensed trustee company and
its clients
For the purpose of making a decision under this Division (whether
or not in response to an application) in relation to a licensed trustee
company, the Minister may seek the views of the trustee company
and its clients.
601VBI Time limit for Minister’s decision
(1) The Minister must make a decision on an application under this
Division within 30 days after receiving the application.
(2) However, before the end of the 30 days, the Minister may decide to
extend the period for considering the application until the end of 60
days after the application was received.
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Division 2 Approval to exceed 15% voting power limit
Section 601VBI
96 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) If the Minister has not made a decision within the 30 days (or the
60 days, if subsection (2) applies), the Minister is taken to have
granted whatever was applied for. As soon as practicable after that
happens, the Minister must arrange for a notice to that effect to be:
(a) published in the Gazette; and
(b) given to the licensed trustee company concerned.
(4) The time for making the decision stops running if the Minister
gives a notice under subsection 601VBG(1) in relation to the
application, and does not start again until the notice is complied
with.
(5) The time limit in this section does not apply to an application under
section 601VBB or 601VBE if an unacceptable control situation
exists in relation to the applicant and in relation to the relevant
licensed trustee company at any time before the Minister makes a
decision.
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Other matters Division 3
Section 601VCA
Corporations Act 2001 97
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Other matters
601VCA Acquisition of property
(1) The Court must not make an order under section 601VAC if:
(a) the order would result in the acquisition of property from a
person otherwise than on just terms; and
(b) the order would be invalid because of paragraph 51(xxxi) of
the Constitution.
(2) Section 1350 does not apply in relation to the making of an order
under section 601VAC.
(3) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
601VCB Interests of clients to be viewed as a group
A reference in this Part to the interests of the clients of a licensed
trustee company is a reference to the interests of the clients, when
viewed as a group.
601VCC Anti-avoidance
(1) If:
(a) one or more persons enter into, begin to carry out or carry out
a scheme; and
(b) it would be concluded that the person, or any of the persons,
who entered into, began to carry out or carried out the
scheme or any part of the scheme did so for the sole or
dominant purpose of avoiding the application of any
provision of Division 1 in relation to any person or persons
(whether or not mentioned in paragraph (a)); and
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Section 601VCC
98 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) as a result of the scheme or a part of the scheme, a person
(the controller) increases the controller’s voting power in a
licensed trustee company;
the Minister may give the controller a written direction to cease
having that voting power within a specified time.
(2) A person who is subject to a direction under subsection (1) must
comply with the direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A direction under subsection (1) is not a legislative instrument.
(4) In this section:
increase voting power includes increasing it from a starting point
of nil.
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Preliminary Division 1
Section 601WAA
Corporations Act 2001 99
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5D.6—ASIC-approved transfers of estate
assets and liabilities
Division 1—Preliminary
601WAA Definitions
(1) In this Part:
asset means property, or a right, of any kind, and includes:
(a) any legal or equitable estate or interest (whether present or
future, vested or contingent, tangible or intangible, in real or
personal property) of any kind; and
(b) any chose in action; and
(c) any right, interest or claim of any kind including rights,
interests or claims in or in relation to property (whether
arising under an instrument or otherwise, and whether
liquidated or unliquidated, certain or contingent, accrued or
accruing); and
(d) any CGT asset within the meaning of the Income Tax
Assessment Act 1997.
authorised ASIC officer, when used in a particular provision of
this Part, means a person authorised under subsection (2) to
perform or exercise the functions or powers of an authorised ASIC
officer under that provision.
cancel, in relation to a licence, means:
(a) cancel the licence under Part 7.6; or
(b) vary the conditions of the licence under Part 7.6 so that the
licence ceases to cover traditional trustee company services.
certificate of transfer has the meaning given by
subsection 601WBG(1).
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Division 1 Preliminary
Section 601WAA
100 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
compulsory transfer determination has the meaning given by
subsection 601WBA(1).
estate assets and liabilities, of a company, means assets (including
assets in common funds) and liabilities of an estate, or incurred in
relation to an estate, in relation to which the company was
performing estate management functions, if the assets and
liabilities were vested in or otherwise belonged to the company:
(a) because of its performance of those functions; and
(b) immediately before:
(i) if ASIC has cancelled the company’s licence—the
cancellation; or
(ii) otherwise—a relevant certificate of transfer comes into
force.
Note: This Part does not apply to liabilities for breach of trust etc.: see
section 601WBK.
interest, in relation to land, includes:
(a) a legal or equitable estate or interest in the land; or
(b) a right, power or privilege over, or in relation to, the land.
liability includes a duty or obligation of any kind (whether arising
under an instrument or otherwise, and whether actual, contingent
or prospective).
licence means an Australian financial services licence that is held
by a trustee company and that covers the provision of one or more
traditional trustee company services.
receiving company has the meaning given by
subsection 601WBA(1).
transfer determination has the meaning given by
subsection 601WBA(1).
transferring company has the meaning given by
subsection 601WBA(1).
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Preliminary Division 1
Section 601WAA
Corporations Act 2001 101
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voluntary transfer determination has the meaning given by
subsection 601WBA(1).
(2) ASIC may, in writing, authorise a person who is a member of
ASIC, or of its staff, to perform or exercise the functions or powers
of an authorised ASIC officer under a particular provision of this
Part.
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Division 2 Transfer of estate assets and liabilities
Section 601WBA
102 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Transfer of estate assets and liabilities
601WBA Transfer determinations
(1) ASIC may, in writing, make a determination (a transfer
determination) that there is to be a transfer of estate assets and
liabilities from a specified company (the transferring company) to
another specified company (the receiving company) if:
(a) ASIC has cancelled the licence of the transferring company
(the determination is a compulsory transfer determination);
or
(b) the transferring company has applied in the prescribed form
for a determination (the determination is a voluntary transfer
determination).
(2) ASIC may make a transfer determination only if:
(aa) for a compulsory transfer determination—the receiving
company is a licensed trustee company or the Public Trustee
of a State or Territory; and
(ab) for a voluntary transfer determination:
(i) the transferring company is a licensed trustee company
or a company that was previously authorised as a trustee
company under a law of a State or Territory; and
(ii) the receiving company is a licensed trustee company;
and
(a) either:
(i) the Minister has consented to the transfer; or
(ii) the Minister’s consent to the transfer is not required (see
section 601WBD); and
(b) ASIC is satisfied that:
(i) the transfer is in the interests of clients of the
transferring company (when viewed as a group); and
(ii) unless the receiving company is a Public Trustee—the
transfer is in the interests of clients of the receiving
company (when viewed as a group); and
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Section 601WBA
Corporations Act 2001 103
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) the board of the receiving company has consented to the
transfer; and
(iv) legislation to facilitate the transfer that satisfies the
requirements of section 601WBC has been enacted in
the State or Territory in which the transferring company
is registered and the State or Territory in which the
receiving company is registered or of which it is the
Public Trustee.
(2A) Even if the Public Trustee of a State or Territory is not a company:
(a) the Public Trustee may still be specified as a receiving
company for the purposes of a compulsory transfer
determination; and
(b) references in this Part (however expressed) to:
(i) a company; or
(ii) the board of a company;
are taken to be references to that Public Trustee.
(3) The determination must include particulars of the transfer,
including:
(a) the names of the transferring company and the receiving
company; and
(b) for a compulsory transfer determination—whether it will be a
total transfer or a partial transfer of the transferring
company’s estate assets and liabilities; and
(c) if it will be a partial transfer—an indication of the part of the
transferring company’s estate assets and liabilities that is to
be transferred; and
(d) for a voluntary transfer determination—that it will be a total
transfer of the transferring company’s estate assets and
liabilities.
(4) The determination must include a statement of the reasons why the
determination has been made.
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Division 2 Transfer of estate assets and liabilities
Section 601WBB
104 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) The determination is not a legislative instrument.
601WBB When consent of receiving company is in force
(1) The consent referred to in subparagraph 601WBA(2)(b)(iii)
remains in force until it is withdrawn by the receiving company’s
board with the agreement of ASIC.
(2) ASIC may agree to the consent being withdrawn if ASIC considers
it appropriate to allow the consent to be withdrawn having regard
to any of the following:
(a) circumstances that have arisen since the consent was given;
(b) circumstances that were in existence at or before the time
when the consent was given but that were not known to the
receiving company’s board when it gave its consent;
(c) any other relevant matter.
601WBC Complementary State or Territory legislation
State or Territory legislation referred to in
subparagraph 601WBA(2)(b)(iv) must include provision to ensure
that, when a certificate of transfer comes into force under this
Division, the receiving company is taken to be the successor in law
in relation to estate assets and liabilities of the transferring
company, to the extent of the transfer. In particular, the legislation
must provide that:
(a) assets of the transferring company become assets of the
receiving company, to the extent of the transfer; and
(b) liabilities of the transferring company become liabilities of
the receiving company, to the extent of the transfer; and
(c) the duties, obligations, immunities, rights and privileges
applying to the transferring company apply to the receiving
company, to the extent of the transfer; and
(d) if the certificate of transfer includes provisions of a kind
referred to in subsection 601WBG(3) specifying:
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Section 601WBD
Corporations Act 2001 105
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(i) that particular things are to happen or are taken to be the
case—those things are taken to happen, or to be the
case, in accordance with those provisions; or
(ii) a mechanism for determining things that are to happen
or are taken to be the case—things determined in
accordance with that mechanism are taken to happen, or
to be the case, as determined in accordance with that
mechanism.
601WBD Minister’s power to decide that his or her consent is not
required
(1) The Minister’s consent to the transfer of estate assets and liabilities
is not required if the Minister has, in writing, determined that his or
her consent is not required in relation to:
(a) the transfer; or
(b) a class of transfers that includes the transfer.
(2) The regulations may prescribe criteria to be taken into account by
the Minister in deciding whether to make a determination.
(3) A determination is a legislative instrument if it is expressed to
apply in relation to a class of transfers (whether or not it is also
expressed to apply in relation to one or more transfers identified
otherwise than by reference to membership of a class).
(4) If subsection (3) does not apply to a determination, the
determination is not a legislative instrument.
601WBE Determinations may impose conditions
(1) The transfer determination may impose conditions of either or both
of the following kinds:
(a) conditions to be complied with by the transferring company
or the receiving company before a certificate of transfer is
issued in relation to the transfer of estate assets and
liabilities;
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Section 601WBF
106 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) conditions to be complied with by the transferring company
or the receiving company after a certificate of transfer has
been issued or has come into force in relation to the transfer
of estate assets and liabilities.
(2) ASIC may, by notice in writing given to the transferring company
or the receiving company, vary or revoke any condition of a
determination if ASIC is satisfied that the variation or revocation is
appropriate.
(3) The transferring company or the receiving company may apply in
writing to ASIC to have a condition of a kind referred in
paragraph (1)(b) that applies to it varied or revoked.
(4) ASIC may, by notice in writing given to the company that made
the application, approve the variation or revocation if ASIC is
satisfied that the variation or revocation is appropriate. A variation
or revocation that is approved by ASIC has effect accordingly.
(5) The transferring company or the receiving company must comply
with any conditions that are imposed under subsection (1) as
conditions to be complied with by that company.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) The transferring company or the receiving company does not
commit an offence against this Act merely because the company is
complying with a condition imposed under subsection (1).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (6), see subsection 13.3(3) of the Criminal Code.
601WBF Notice of determination
ASIC must give a copy of the transfer determination to the
transferring company and the receiving company.
601WBG Certificate of transfer
(1) If:
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Section 601WBH
Corporations Act 2001 107
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) ASIC has made a transfer determination; and
(b) ASIC considers that the transfer should go ahead; and
(c) the consent referred to in subparagraph 601WBA(2)(b)(iii)
has not been withdrawn under section 601WBB;
ASIC must, in writing, issue a certificate (a certificate of transfer)
stating that the transfer is to take effect.
(2) The certificate of transfer must:
(a) include the names of the transferring company and the
receiving company; and
(b) for a compulsory transfer determination—state whether the
transfer is a total transfer or a partial transfer; and
(c) if the transfer is a partial transfer—include, or have attached
to it, a list of the estate assets and liabilities that are being
transferred to the receiving company; and
(ca) for a voluntary transfer determination—state that the transfer
is a total transfer; and
(d) state when the certificate is to come into force (either by
specifying a date as the date it comes into force, or by
specifying that the date it comes into force is a date worked
out in accordance with provisions of the certificate).
(3) The certificate may include provisions specifying, or specifying a
mechanism for determining, other things that are to happen, or that
are taken to be the case, in relation to assets and liabilities that are
to be transferred, or in relation to the transfer of estate assets and
liabilities that is to be effected, whether the transfer is total or
partial.
(4) The certificate comes into force in accordance with the statement
included in the certificate as required by paragraph (2)(d).
(5) The certificate is not a legislative instrument.
601WBH Notice of certificate
ASIC must:
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Section 601WBI
108 Corporations Act 2001
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(a) give a copy of the certificate of transfer to the transferring
company and the receiving company; and
(b) publish notice of the issue of the certificate.
601WBI Time and effect of transfer
(1) When a certificate of transfer comes into force, the receiving
company becomes the successor in law of the transferring
company in relation to estate assets and liabilities of the
transferring company, to the extent of the transfer. In particular:
(a) if the transfer is a total transfer—all the estate assets and
liabilities of the transferring company, wherever those assets
and liabilities are located, become assets and liabilities of the
receiving company (in the same capacity as they were assets
and liabilities of the transferring company) without any
transfer, conveyance or assignment; and
(b) if the transfer is a partial transfer—all the estate assets and
liabilities included in the list referred to in
paragraph 601WBG(2)(c), wherever those assets and
liabilities are located, become assets and liabilities of the
receiving company (in the same capacity as they were assets
and liabilities of the transferring company) without any
transfer, conveyance or assignment; and
(c) to the extent of the transfer, the duties, obligations,
immunities, rights and privileges applying to the transferring
company apply to the receiving company.
(2) If the certificate includes provisions of a kind referred to in
subsection 601WBG(3):
(a) if the provisions specify that particular things are to happen
or are taken to be the case—those things are, by force of this
section, taken to happen, or to be the case, in accordance with
those provisions; and
(b) if the provisions specify a mechanism for determining things
that are to happen or are taken to be the case—things
determined in accordance with the mechanism are, by force
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Section 601WBJ
Corporations Act 2001 109
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
of this section, taken to happen, or to be the case, as
determined in accordance with that mechanism.
601WBJ Substitution of trustee company
When a certificate of transfer comes into force, any appointment or
nomination of the transferring company to a particular capacity
(for example, as trustee, executor or administrator) in relation to
the transferred estate assets and liabilities is taken to be an
appointment or nomination of the receiving company to that
capacity in relation to those assets and liabilities.
601WBK Liabilities for breach of trust and other matters not
affected by this Part
(1) Nothing in this Part applies to or affects liabilities of the
transferring company, or of an officer or employee of the
transferring company, for:
(a) any breach of trust; or
(b) any other misfeasance or nonfeasance; or
(c) any exercise of, or failure to exercise, any discretion.
(2) Nothing in this Part affects any rights of the transferring company,
or of an officer or employee of the transferring company, to
indemnity in respect of such liabilities.
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Section 601WCA
110 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Other matters related to the transfer of estate
assets and liabilities
601WCA Certificates evidencing operation of Act etc.
(1) An authorised ASIC officer, by signed writing, may certify that a
specified asset or liability has become an asset or liability of the
receiving company under this Part.
(2) For all purposes and in all proceedings, a certificate under
subsection (1) is prima facie evidence of the matters certified.
601WCB Certificates in relation to land and interests in land
If:
(a) the receiving company becomes, under this Part, the owner
of land, or of an interest in land, that is situated in a State or
Territory; and
(b) there is lodged with the Registrar of Titles or other
appropriate officer of the State or Territory in which the land
is situated a certificate that:
(i) is signed by an authorised ASIC officer; and
(ii) identifies the land or interest; and
(iii) states that the receiving company has, under this Part,
become the owner of that land or interest;
the officer with whom the certificate is lodged may:
(c) register the matter in the same manner as dealings in land or
interests in land of that kind are registered; and
(d) deal with, and give effect to, the certificate.
601WCC Certificates in relation to other assets
(1) If:
(a) an asset (other than land or an interest in land) becomes,
under this Part, an asset of the receiving company; and
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Section 601WCD
Corporations Act 2001 111
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(b) there is lodged with the person or authority who has, under a
law of the Commonwealth, a State or a Territory,
responsibility for keeping a register in respect of assets of
that kind a certificate that:
(i) is signed by an authorised ASIC officer; and
(ii) identifies the asset; and
(iii) states that the asset has, under this Part, become an asset
of the receiving company;
that person or authority may:
(c) register the matter in the same manner as transactions in
relation to assets of that kind are registered; and
(d) deal with, and give effect to, the certificate.
(2) This section does not affect the operation of:
(a) other provisions of this Act; or
(b) if the regulations prescribe provisions of one or more other
Acts—those provisions of those Acts.
601WCD Documents purporting to be certificates
A document purporting to be a certificate given under this Division
is, unless the contrary is established, taken to be such a certificate
and to have been properly given.
601WCE Construction of references to transferring company
From when a certificate of transfer comes into force, in any
instrument of any kind, a reference to the transferring company, in
relation to assets or liabilities transferred under this Part, is taken to
be a reference to the receiving company.
601WCF Income or other distribution received by transferring
company
The transferring company must promptly account to the receiving
company for any income or other distribution received by the
transferring company after a certificate of transfer comes into
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Section 601WCG
112 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
force, if the income or distribution arises from assets transferred to
the receiving company under this Part.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
601WCG Access to books
The transferring company must, at the request of the receiving
company, give the receiving company access to all books in its
possession that relate to assets or liabilities transferred under this
Part.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
601WCH Minister or ASIC may seek views of trustee company and
its clients
For the purpose of deciding whether to exercise powers under this
Part, the Minister or ASIC may seek the views of a trustee
company or its clients in relation to the possible exercise of the
powers.
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Miscellaneous Division 4
Section 601WDA
Corporations Act 2001 113
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Division 4—Miscellaneous
601WDA Transferring company required to contact certain persons
Notice of cancellation of licence
(1) If the licence of a trustee company is cancelled, the trustee
company must, as soon as practicable:
(a) take all reasonable steps to contact the following persons and
advise them of the cancellation of the licence:
(i) all persons who the trustee company is aware have
executed and lodged instruments, such as wills, that
have not yet come into effect, but will potentially lead
to estate assets and liabilities being held by the trustee
company;
(ii) all persons who the trustee company is aware have
appointed the trustee company as trustee or to some
other capacity; and
(b) publish notice of the cancellation of the licence.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Notice of compulsory transfer determination
(2) If a certificate of transfer for a compulsory transfer determination
comes into force, the transferring company must, as soon as
practicable, take all reasonable steps to contact the persons referred
to in subsection (1) and advise them of the transfer of estate assets
and liabilities.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Notice of voluntary transfer determination
(3) If a certificate of transfer for a voluntary transfer determination
comes into force, the transferring company must, as soon as
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Section 601WDA
114 Corporations Act 2001
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practicable, publish notice of the transfer of estate assets and
liabilities.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 601XAA
Corporations Act 2001 115
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 5D.7—Contraventions and holding out
601XAA Civil liability of licensed trustee companies
(1) A person who suffers loss or damage because of conduct of a
licensed trustee company that contravenes a provision of this
Chapter may recover the amount of the loss or damage by action
against the trustee company, whether or not the trustee company
has been convicted of an offence, or has had a civil penalty order
made against it, in respect of the contravention.
(2) Without limiting subsection (1), if:
(a) a licensed trustee company charges a person a fee in excess
of fees permitted to be charged by this Chapter; and
(b) the person pays the fee;
the amount of the excess is a loss that is recoverable by the person
under subsection (1).
(3) An action under subsection (1) must be begun within 6 years after
the cause of action arises.
(4) This section does not affect any liability that a person has under
other provisions of this Act or under other laws.
601XAB Prohibition on holding out
A person must not hold out that the person is a licensed trustee
company if that is not the case.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
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Part 5D.8 Exemptions and modifications
Section 601YAA
116 Corporations Act 2001
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Part 5D.8—Exemptions and modifications
601YAA Exemptions and modifications by ASIC
(1) ASIC may:
(a) exempt a person or class of persons, or an estate or class of
estates, from all or specified provisions of this Chapter; or
(b) declare that this Chapter applies to a person or class of
persons, or an estate or class of estates, as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(3) An exemption or declaration is a legislative instrument if it is
expressed to apply in relation to a class of persons or a class of
estates (whether or not it is also expressed to apply in relation to
one or more persons or estates identified otherwise than by
reference to membership of a class).
(4) If subsection (3) does not apply to an exemption or declaration, the
exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette. The exemption or determination
is not a legislative instrument.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(b) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the requirements of the Legislative
Instruments Act 2003 (if the declaration is of a kind referred to in
subsection (3)), or with the gazettal requirement of subsection (4),
as the case may be):
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(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(6) For the purpose of this section, the provisions of this Chapter
include:
(a) regulations or other instruments made for the purposes of this
Chapter; and
(b) definitions in this Act or the regulations, as they apply to
references in:
(i) this Chapter; or
(ii) regulations or other instruments made for the purposes
of this Chapter; and
(c) any provisions of Division 2 of Part 10.12 that relate to this
Chapter.
601YAB Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons, or an estate or class of
estates, from all or specified provisions of this Chapter; or
(b) provide that this Chapter applies to a person or class of
persons, or an estate or class of estates, as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) For the purpose of this section, the provisions of this Chapter
include:
(a) regulations or other instruments made for the purposes of this
Chapter; and
(b) definitions in this Act or the regulations, as they apply to
references in:
(i) this Chapter; or
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118 Corporations Act 2001
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(ii) regulations or other instruments made for the purposes
of this Chapter; and
(c) any provisions of Division 2 of Part 10.12 that relate to this
Chapter.
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Section 602
Corporations Act 2001 119
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Chapter 6—Takeovers
602 Purposes of Chapter
The purposes of this Chapter are to ensure that:
(a) the acquisition of control over:
(i) the voting shares in a listed company, or an unlisted
company with more than 50 members; or
(ii) the voting shares in a listed body; or
(iii) the voting interests in a listed managed investment
scheme;
takes place in an efficient, competitive and informed market;
and
(b) the holders of the shares or interests, and the directors of the
company or body or the responsible entity for the scheme:
(i) know the identity of any person who proposes to
acquire a substantial interest in the company, body or
scheme; and
(ii) have a reasonable time to consider the proposal; and
(iii) are given enough information to enable them to assess
the merits of the proposal; and
(c) as far as practicable, the holders of the relevant class of
voting shares or interests all have a reasonable and equal
opportunity to participate in any benefits accruing to the
holders through any proposal under which a person would
acquire a substantial interest in the company, body or
scheme; and
(d) an appropriate procedure is followed as a preliminary to
compulsory acquisition of voting shares or interests or any
other kind of securities under Part 6A.1.
Note 1: To achieve the objectives referred to in paragraphs (a), (b) and (c), the
prohibition in section 606 and the exceptions to it refer to interests in
“voting shares”. To achieve the objective in paragraph (d), the
provisions that deal with the takeover procedure refer more broadly to
interests in “securities”.
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Section 602A
120 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: Subsection 92(3) defines securities for the purposes of this Chapter.
602A Substantial interest concept
(1) A reference in this Chapter to a substantial interest in a company,
listed body or listed managed investment scheme is not to be read
as being limited to an interest that is constituted by one or more of
the following:
(a) a relevant interest in securities in the company, body or
scheme;
(b) a legal or equitable interest in securities in the company,
body or scheme;
(c) a power or right in relation to:
(i) the company, body or scheme; or
(ii) securities in the company, body or scheme.
(2) A person does not have a substantial interest in the company, body
or scheme for the purposes of this Chapter merely because the
person has an interest in, or a relationship with, the company, body
or scheme of a kind prescribed by the regulations for the purposes
of this subsection.
(3) The regulations may provide that an interest of a particular kind is
an interest that may constitute a substantial interest in a company,
listed body or listed managed investment scheme for the purposes
of this Chapter.
603 Chapter extends to some listed bodies that are not companies
This Chapter applies to the acquisition of relevant interests in the
securities of listed bodies that are not companies but are
incorporated or formed in Australia in the same way as it applies to
the acquisition of relevant interests in the securities of companies.
Note: Section 9 defines company and listed.
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Section 604
Corporations Act 2001 121
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604 Chapter extends to listed managed investment schemes
(1) This Chapter applies to the acquisition of relevant interests in the
interests in a registered scheme that is also listed as if:
(a) the scheme were a listed company; and
(b) interests in the scheme were shares in the company; and
(c) voting interests in the scheme were voting shares in the
company; and
(d) a meeting of the members of the scheme were a general
meeting of the company; and
(e) the obligations and powers that are imposed or conferred on
the company were imposed or conferred on the responsible
entity; and
(f) the directors of the responsible entity were the directors of
the company; and
(g) the appointment of a responsible entity for the scheme were
the election of a director of the company; and
(h) the scheme’s constitution were the company’s constitution.
Note 1: Paragraph (g): See subsection 610(2).
Note 2: Section 9 defines voting interest in a managed investment scheme.
(2) The regulations may modify the operation of this Chapter as it
applies in relation to the acquisition of interests in listed managed
investment schemes.
605 Classes of securities
(1) Takeover bids are made for securities within a particular class.
Similarly, compulsory acquisition and buy-out rights operate on
securities within a particular class.
(2) For the purposes of this Chapter and Chapters 6A and 6C,
securities are not taken to be different classes merely because:
(a) some of the securities are fully-paid and others are
partly-paid; or
(b) different amounts are paid up or remain unpaid on the
securities.
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Part 6.1 Prohibited acquisitions of relevant interests in voting shares
Section 606
122 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.1—Prohibited acquisitions of relevant
interests in voting shares
606 Prohibition on certain acquisitions of relevant interests in voting
shares
Acquisition of relevant interests in voting shares through
transaction entered into by or on behalf of person acquiring
relevant interest
(1) A person must not acquire a relevant interest in issued voting
shares in a company if:
(a) the company is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) the person acquiring the interest does so through a
transaction in relation to securities entered into by or on
behalf of the person; and
(c) because of the transaction, that person’s or someone else’s
voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
Note 1: Section 9 defines company as meaning a company registered under
this Act.
Note 2: Section 607 deals with the effect of a contravention of this section on
transactions. Sections 608 and 609 deal with the meaning of relevant
interest. Section 610 deals with the calculation of a person’s voting
power in a company.
Note 3: If the acquisition of relevant interests in an unlisted company with 50
or fewer members leads to the acquisition of a relevant interest in
another company that is an unlisted company with more than 50
members, or a listed company, the acquisition is caught by this section
because of its effect on that other company.
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Section 606
Corporations Act 2001 123
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(1A) However, the person may acquire the relevant interest under one of
the exceptions set out in section 611 without contravening
subsection (1).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
Acquisition of legal or equitable interest giving rise to relevant
interest for someone else
(2) A person must not acquire a legal or equitable interest in securities
of a body corporate if, because of the acquisition:
(a) another person acquires a relevant interest in issued voting
shares in a company that is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) someone’s voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
(2A) However, if the acquisition of the relevant interest is covered by
one of the exceptions set out in section 611, the person may
acquire the legal or equitable interest without contravening
subsection (2).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2A), see subsection 13.3(3) of the Criminal Code.
50 member threshold
(3) In determining whether the company has more than 50 members
for the purposes of subsection (1) or (2), count joint holders of a
particular parcel of shares as 1 person.
Offers and invitations
(4) A person must not:
(a) make an offer, or cause an offer to be made on their behalf, if
the person would contravene subsection (1) or (2) if the offer
were accepted; or
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Section 606
124 Corporations Act 2001
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(b) issue an invitation, or cause an invitation to be issued on their
behalf, if the person would contravene subsection (1) or (2)
if:
(i) an offer were made in response to the invitation; and
(ii) the offer were accepted.
Absolute liability offences
(4A) An offence based on subsection (1), (2) or (4) is an offence of
absolute liability.
Note: For absolute liability, see section 6.2 of the Criminal Code.
Defences
(5) It is a defence to the prosecution of a person for contravening
subsection (1), (2) or (4) if the person proves that they contravened
the subsection:
(a) because of inadvertence or mistake; or
(b) because the person was not aware of a relevant fact or
occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part
concerning, a matter of law.
Note: A defendant bears a legal burden in relation to a matter mentioned in
subsection (5), see section 13.4 of the Criminal Code.
Extended meaning of acquiring relevant interests—conversions
and increases in voting rights
(6) A person is taken for the purposes of subsection (1) or (2) to
acquire a relevant interest in voting shares in a company if:
(a) securities in which the person already had a relevant interest
become voting shares in the company; or
(b) there is an increase in the number of votes that may be cast
on a poll attached to voting shares that the person already had
a relevant interest in.
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Prohibited acquisitions of relevant interests in voting shares Part 6.1
Section 607
Corporations Act 2001 125
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The acquisition occurs when the securities become voting shares or
the number of votes increases.
Note: Some examples of cases to which this subsection applies are:
A person exercises a right to convert a non-voting preference share into an ordinary share that carries votes.
A person pays up partly-paid shares with limited votes and this leads to an increase in the number of votes attached to the shares.
607 Effect on transactions
A transaction is not invalid merely because it involves a
contravention of section 606.
608 Relevant interests in securities
Basic rule—relevant interest is holding, or controlling voting or
disposal of, securities
(1) A person has a relevant interest in securities if they:
(a) are the holder of the securities; or
(b) have power to exercise, or control the exercise of, a right to
vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power
to dispose of, the securities.
It does not matter how remote the relevant interest is or how it
arises. If 2 or more people can jointly exercise one of these powers,
each of them is taken to have that power.
Extension to control exercisable through a trust, agreement or
practice
(2) In this section, power or control includes:
(a) power or control that is indirect; and
(b) power or control that is, or can be, exercised as a result of, by
means of or by the revocation or breach of:
(i) a trust; or
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126 Corporations Act 2001
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(ii) an agreement; or
(iii) a practice; or
(iv) any combination of them;
whether or not they are enforceable; and
(c) power or control that is, or can be made, subject to restraint
or restriction.
It does not matter whether the power or control is express or
implied, formal or informal, exercisable alone or jointly with
someone else. It does not matter that the power or control cannot
be related to a particular security.
Extension to relevant interests held through bodies corporate
(3) A person has the relevant interests in any securities that any of the
following has:
(a) a body corporate, or managed investment scheme, in which
the person’s voting power is above 20%;
(b) a body corporate, or managed investment scheme, that the
person controls.
Paragraph (a) does not apply to a relevant interest that the body
corporate or scheme itself has in the securities merely because of
the operation of that paragraph in relation to another body
corporate or managed investment scheme.
(4) For the purposes of paragraph (3)(b), a person controls a body
corporate if the person has the capacity to determine the outcome
of decisions about the body corporate’s financial and operating
policies.
(5) In determining whether a person has this capacity:
(a) the practical influence the person can exert (rather than the
rights they can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the body
corporate’s financial or operating policies is to be taken into
account (even if it involves a breach of an agreement or a
breach of trust).
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Section 608
Corporations Act 2001 127
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(6) The person does not control the body corporate merely because the
person and an entity that is not an associate jointly have the
capacity to determine the outcome of decisions about the body
corporate’s financial and operating policies.
(7) A person is not taken to control a body corporate merely because
of a capacity they have if they are under a legal obligation to
exercise that capacity for the benefit of:
(a) if the person is an individual—someone else; or
(b) if the person is a body corporate—someone other than its
members.
Extension to control in anticipation of performance of agreements
etc.
(8) If at a particular time all the following conditions are satisfied:
(a) a person has a relevant interest in issued securities;
(b) the person (whether before or after acquiring the relevant
interest):
(i) has entered or enters into an agreement with another
person with respect to the securities; or
(ii) has given or gives another person an enforceable right,
or has been or is given an enforceable right by another
person, in relation to the securities (whether the right is
enforceable presently or in the future and whether or not
on the fulfilment of a condition); or
(iii) has granted or grants an option to, or has been or is
granted an option by, another person with respect to the
securities;
(c) the other person would have a relevant interest in the
securities if the agreement were performed, the right enforced
or the option exercised;
the other person is taken to already have a relevant interest in the
securities.
Note: Subsections 609(6) and (7) deal with specific situations in which the
agreement will not give rise to a relevant interest.
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Part 6.1 Prohibited acquisitions of relevant interests in voting shares
Section 609
128 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Body corporate may have relevant interest in its own securities
(9) This section may result in a body corporate having a relevant
interest in its own securities.
609 Situations not giving rise to relevant interests
Money lending and financial accommodation
(1) A person does not have a relevant interest in securities merely
because of a security interest taken for the purpose of a transaction
entered into by the person if:
(a) the security interest is taken or acquired in the ordinary
course of the person’s business of the provision of financial
accommodation by any means and on ordinary commercial
terms; and
(b) the person whose property is subject to the security interest is
not an associate of the person.
Note: Sections 11 to 17 define associate.
Nominees and other trustees
(2) A person who would otherwise have a relevant interest in securities
as a bare trustee does not have a relevant interest in the securities if
a beneficiary under the trust has a relevant interest in the securities
because of a presently enforceable and unconditional right of the
kind referred to in subsection 608(8).
Note: This subsection will often apply to a person who holds securities as a
nominee.
Holding of securities by financial services licensee
(3) A financial services licensee does not have a relevant interest in
securities merely because they hold securities on behalf of
someone else in the ordinary course of their financial services
business.
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Section 609
Corporations Act 2001 129
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Shares covered by buy-backs
(4) A person does not have a relevant interest in a company’s shares if
the relevant interest would arise merely because the company has
entered into an agreement to buy back the shares.
Proxies
(5) A person does not have a relevant interest in securities merely
because the person has been appointed to vote as a proxy or
representative at a meeting of members, or of a class of members,
of the company, body or managed investment scheme if:
(a) the appointment is for one meeting only; and
(b) neither the person nor any associate gives valuable
consideration for the appointment.
Market traded options and derivatives
(6) A person does not have a relevant interest in securities merely
because of:
(a) an market traded option over the securities; or
(b) a right to acquire the securities given by a derivative.
This subsection stops applying to the relevant interest when the
obligation to make or take delivery of the securities arises.
Note: Without this subsection, subsection 608(8) would create a relevant
interest from the option or contract.
Conditional agreements
(7) A person does not have a relevant interest in securities merely
because of an agreement if the agreement:
(a) is conditional on:
(i) a resolution under item 7 in the table in section 611
being passed; or
(ii) ASIC exempting the acquisition under the agreement
from the provisions of this Chapter under section 655A;
and
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Section 609
130 Corporations Act 2001
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(b) does not confer any control over, or power to substantially
influence, the exercise of a voting right attached to the
securities; and
(c) does not restrict disposal of the securities for more than 3
months from the date when the agreement is entered into.
The person acquires a relevant interest in the securities when the
condition referred to in paragraph (a) is satisfied.
Pre-emptive rights
(8) A member of a company, body or managed investment scheme
does not have a relevant interest in securities of the company, body
or scheme merely because the company’s, body’s or scheme’s
constitution gives members pre-emptive rights on the transfer of
the securities if all members have pre-emptive rights on the same
terms.
Director of body corporate holding securities
(9) A person does not have a relevant interest in securities merely
because:
(a) the person is a director of a body corporate; and
(b) the body corporate has a relevant interest in those securities.
Clearing and settlement facilities
(9A) The operator of a clearing and settlement facility (within the
meaning of Chapter 7) does not have a relevant interest in
securities merely because of its provision of facilities for the
settlement of transactions.
Prescribed exclusions
(10) A person does not have a relevant interest in securities in the
circumstances specified in the regulations. The regulations may
provide that interests in securities are not relevant interests subject
to specified conditions.
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Section 610
Corporations Act 2001 131
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610 Voting power in a body or managed investment scheme
Person’s voting power in a body or managed investment scheme
(1) A person’s voting power in a designated body is:
where:
person’s and associates’ votes is the total number of votes attached
to all the voting shares in the designated body (if any) that the
person or an associate has a relevant interest in.
total votes in designated body is the total number of votes attached
to all voting shares in the designated body.
Note: Even if a person’s relevant interest in voting shares is based on control
over disposal of the shares (rather than control over voting rights
attached to the shares), their voting power in the designated body is
calculated on the basis of the number of votes attached to those shares.
Counting votes
(2) For the purposes of this section, the number of votes attached to a
voting share in a designated body is the maximum number of votes
that can be cast in respect of the share on a poll:
(a) if the election of directors is determined by the casting of
votes attached to voting shares—on the election of a director
of the designated body; or
(b) if the election of directors is not determined by the casting of
votes attached to voting shares—on the adoption of a
constitution for the designated body or the amendment of the
body corporate’s constitution.
Note: The Takeovers Panel may decide that the setting or varying of voting
rights in a way that affects control of a designated body is
unacceptable circumstances under section 657A.
(3) If:
Person’s and associates’ votes 100
Total votes in designated body
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Section 610
132 Corporations Act 2001
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(a) a transaction in relation to, or an acquisition of an interest in,
securities occurs; and
(b) before the transaction or acquisition, a person did not have a
relevant interest in particular voting shares but an associate
of the person did have a relevant interest in those shares; and
(c) because of the transaction or acquisition, the person acquires
a relevant interest in those shares;
then, for the purposes of applying section 606 to the transaction or
acquisition, the person’s voting power is taken to have increased
because of the transaction or acquisition from what it would have
been before the transaction or acquisition if the votes attached to
those shares were disregarded to what it was after the transaction
or acquisition (taking the votes attached to those shares into
account).
(4) Disregard the operation of section 613 in working out a person’s
voting power in a designated body.
When a designated body is a managed investment scheme
(5) For the purposes of the application of this section in relation to a
designated body that is a managed investment scheme:
(a) a reference to voting shares in the designated body is taken to
be a reference to voting interests in the scheme; and
(b) a reference to the election of directors of the designated body
is taken to be a reference to:
(i) if the scheme is a registered scheme—the appointment
of a responsible entity for the scheme; or
(ii) if the scheme is not a registered scheme—the
appointment of a person to the office (by whatever
name it is known) in relation to the scheme that
corresponds most closely to the office of responsible
entity of a registered scheme; and
(c) a reference to the designated body’s constitution is taken to
be a reference to the scheme’s constitution.
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Section 610
Corporations Act 2001 133
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Meaning of designated body
(6) In this section:
designated body means:
(a) a body; or
(b) a managed investment scheme.
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Part 6.2 Exceptions to the prohibition
Section 611
134 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.2—Exceptions to the prohibition
611 Exceptions to the prohibition
The following table sets out:
(a) acquisitions of relevant interests in a company’s voting
shares that are exempt from the prohibition in
subsection 606(1); and
(b) acquisitions of relevant interests in a company’s voting
shares resulting from acquisitions of legal or equitable
interests in securities of a body corporate that are exempt
from the prohibition in subsection 606(2).
Note: Some of the items in the table cover only activities in relation to the
company itself (items 7, 8, 12 and 13) while the other items cover
acquisitions in that company that may occur through activities in
relation to other companies.
Acquisitions that are exempt [operative]
Takeover bids
Acceptance of takeover offer
1 An acquisition that results from the acceptance of an offer under a
takeover bid.
See also section 612.
On-market purchase during bid period
2 An acquisition in relation to bid class securities that results from an
on-market transaction if:
(a) the acquisition is by or on behalf of the bidder under a takeover
bid; and
(b) the acquisition occurs during the bid period; and
(c) the bid is for all the voting shares in the bid class; and
(d) the bid is:
(i) unconditional; or
(ii) conditional only on the happening of an event referred to
in subsection 652C(1) or (2).
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Exceptions to the prohibition Part 6.2
Section 611
Corporations Act 2001 135
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Acquisitions that are exempt [operative]
See also sections 612 and 613.
On-market purchase of convertible securities during bid period
3 An acquisition of bid class securities that results directly from the
exercise of rights attached to convertible securities if:
(a) the acquisition is by or on behalf of the bidder under a takeover
bid; and
(b) the bidder acquired a relevant interest in the convertible securities
through an on-market transaction during the bid period; and
(c) the bid is for all the voting shares in the bid class; and
(d) the bid is:
(i) unconditional; or
(ii) conditional only on the happening of an event referred to
in subsection 652C(1) or (2).
See sections 612 and 613.
Acceptance of scrip offered as takeover consideration
4 An acquisition that results from the acceptance of:
(a) an offer under a takeover bid if the voting shares are included in
the consideration for offers under the bid; or
(b) an offer that results in an acquisition to which item 5 applies.
See also section 612.
Nature of acquirer
6 An acquisition that results from the exercise by a person of a power,
or appointment as a receiver, or receiver and manager, under an
instrument or agreement creating or giving rise to a security interest
if:
(a) the person’s ordinary business includes the provision of financial
accommodation by any means; and
(b) the person took or acquired the security interest in the ordinary
course of their business of the provision of financial
accommodation by any means and on ordinary commercial terms.
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Chapter 6 Takeovers
Part 6.2 Exceptions to the prohibition
Section 611
136 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Acquisitions that are exempt [operative]
Approval by resolution of target
7 An acquisition approved previously by a resolution passed at a general meeting of the company in which the acquisition is made, if:
(a) no votes are cast in favour of the resolution by:
(i) the person proposing to make the acquisition and their
associates; or
(ii) the persons (if any) from whom the acquisition is to be
made and their associates; and
(b) the members of the company were given all information known to
the person proposing to make the acquisition or their associates,
or known to the company, that was material to the decision on
how to vote on the resolution, including:
(i) the identity of the person proposing to make the acquisition
and their associates; and
(ii) the maximum extent of the increase in that person’s voting
power in the company that would result from the
acquisition; and
(iii) the voting power that person would have as a result of the
acquisition; and
(iv) the maximum extent of the increase in the voting power of
each of that person’s associates that would result from the
acquisition; and
(v) the voting power that each of that person’s associates
would have as a result of the acquisition.
Target newly formed
8 An acquisition that results from an issue of securities of the company
in which the acquisition is made if the company has not started to
carry on any business and has not borrowed any money.
Manner of acquisition
3% creep in 6 months
9 An acquisition by a person if:
(a) throughout the 6 months before the acquisition that person, or any
other person, has had voting power in the company of at least
19%; and
(b) as a result of the acquisition, none of the persons referred to in
paragraph (a) would have voting power in the company more than
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Takeovers Chapter 6
Exceptions to the prohibition Part 6.2
Section 611
Corporations Act 2001 137
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Acquisitions that are exempt [operative]
3 percentage points higher than they had 6 months before the
acquisition.
Rights issues
10 An acquisition that results from an issue of securities that satisfies all
of the following conditions:
(a) a company offers to issue securities in a particular class;
(b) offers are made to every person who holds securities in that class
to issue them with the percentage of the securities to be issued
that is the same as the percentage of the securities in that class
that they hold before the issue;
(c) all of those persons have a reasonable opportunity to accept the
offers made to them;
(d) agreements to issue are not entered into until a specified time for
acceptances of offers has closed;
(e) the terms of all the offers are the same.
This extends to an acquisition by a person as underwriter to the issue
or sub-underwriter.
See section 615.
Dividend reinvestment etc.
11 An acquisition that results from an issue of:
(a) shares in a company to existing holders of shares in the company
under a dividend reinvestment plan or bonus share plan; or
(b) interests in a managed investment scheme to existing holders of
interests in the scheme under a distribution reinvestment plan or
switching facility;
if the plan or facility is available to all members.
Disregard any unavailability to foreign holders in determining
whether the plan or facility is available to all members.
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Chapter 6 Takeovers
Part 6.2 Exceptions to the prohibition
Section 611
138 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Acquisitions that are exempt [operative]
Initial public offering (IPO) fundraising
12 An acquisition that results from an issue under a disclosure document
of securities in the company in which the acquisition is made if:
(a) the issue is to a promoter; and
(b) the disclosure document is the first issued by the company; and
(c) the disclosure document disclosed the effect that the acquisition
would have on the promoter’s voting power in the company.
Underwriting of fundraising
13 An acquisition that results from an issue under a disclosure document
of securities in the company in which the acquisition is made if:
(a) the issue is to a person as underwriter to the issue or
sub-underwriter; and
(b) the disclosure document disclosed the effect that the acquisition
would have on the person’s voting power in the company.
Acquisition through listed company
14 An acquisition that results from another acquisition of relevant
interests in voting shares in a body corporate included in the official
list of:
(a) a prescribed financial market; or
(b) a foreign body conducting a financial market that is a body
approved in writing by ASIC for the purposes of this item.
Wills etc.
15 An acquisition through a will or through operation of law.
Forfeiture of shares
16 An acquisition that results from an auction of forfeited shares
conducted on-market.
Compromise, arrangement, liquidation or buy-back
Part 5.1 compromise or arrangement
17 An acquisition that results from a compromise or arrangement
approved by the Court under Part 5.1.
Section 507 arrangement
18 An acquisition that results from an arrangement entered into by a
liquidator under section 507.
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Takeovers Chapter 6
Exceptions to the prohibition Part 6.2
Section 612
Corporations Act 2001 139
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Acquisitions that are exempt [operative]
Buy-back
19 An acquisition that results from a buy-back authorised by
section 257A.
Regulations
20 An acquisition made in a manner or in circumstances prescribed by
the regulations. The circumstances may include acquisitions of
relevant interests in voting shares in a specified body or class of
bodies.
612 Effect of non-compliance with takeover rules for exceptions
1 to 4
The exceptions in items 1 to 4 of the table in section 611 do not
apply to a takeover bid if the bid is carried out in contravention of:
(a) section 618 (full or proportionate bid); or
(b) section 619 (offers to be the same); or
(c) subsection 621(3) (minimum price); or
(d) subsection 624(1) (minimum offer period); or
(e) sections 625 to 630 (conditional offers); or
(f) items 2, 3 and 6 in the table in subsection 633(1) (procedural
steps for off-market bid); or
(g) items 3, 4 and 6 in the table in section 635 (procedural steps
for market bid).
613 Bidder not to exercise voting rights if failure to send bids for
off-market acquisition—exception 2 or 3
If the exception in item 2 or 3 of the table in section 611 applies to
an acquisition on-market during a takeover bid, the bidder is not
entitled to exercise the voting rights attached to the shares if:
(a) the bid is an off-market bid; and
(b) the bidder fails to send offers under the bid within 28 days
after giving the bidder’s statement to the target.
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Chapter 6 Takeovers
Part 6.2 Exceptions to the prohibition
Section 615
140 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
615 Treatment of foreign holders under equal access issue—
exception 10
The exception in item 10 of the table in section 611 applies even
though the conditions set out in the item are not satisfied in respect
of foreign holders of the company’s securities if, under the terms of
the offers:
(a) the company must appoint a nominee for foreign holders of
the company’s securities who is approved by ASIC; and
(b) the company must transfer to the nominee:
(i) the securities that would otherwise be issued to the
foreign holders who accept the offer; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and
distribute to each of those foreign holders their proportion of
the proceeds of the sale net of expenses.
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Takeovers Chapter 6
The different types of takeover bid Part 6.3
Section 616
Corporations Act 2001 141
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.3—The different types of takeover bid
616 Off-market bids and market bids
(1) There are 2 kinds of takeover bid:
(a) an off-market bid (for quoted or unquoted securities); or
(b) a market bid (only available for quoted securities).
Note: Although the prohibition in section 606 is against acquiring relevant
interests in voting shares, a takeover bid may be made for any
securities (for example, as a preliminary to compulsorily acquiring
securities in that class under Part 6A.1).
(2) The following table shows where to find the provisions dealing
with the main features of the offers that may be made under
off-market bids and market bids and the procedures to be followed:
Takeover bids [signpost table]
Feature Off-market bid Market bid
1 people to whom offers made 617(1)-(2) 617(3)
2 securities covered 618(1)-(2) 618(3)
3 consideration offered for the securities 621(1), (3)-(5)
and 651A
621(2), (3)-(5)
4 escalation agreements and collateral
benefits not allowed
622 and 623 622 and 623
5 offer period 624(1)-(2) and
650C
624(1)-(2) and
649C
6 conditional offers 625(2)-(3) and
626-630
625(1)
7 procedure to be followed in making bid 632 and 633 634 and 635
8 acceptances 650E and
653A-653B
-
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 1 General
Section 617
142 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.4—Formulating the takeover offer
Division 1—General
617 Securities covered by the bid
Off-market bid
(1) An off-market bid must relate to securities:
(a) in a class of securities (the bid class); and
(b) that exist or will exist as at the date set by the bidder under
subsection 633(2).
Note: Subsection 92(3) defines securities for the purposes of this Chapter.
(2) If other securities exist or will exist at that date that:
(a) will convert, or may be converted, to securities in the bid
class; or
(b) confer rights to be issued securities in the bid class;
the bid may extend to securities that come to be in the bid class
during the offer period due to a conversion or exercise of the
rights.
Note: The bidder’s statement must say if the bid is extended in this way (see
paragraph 636(1)(j)).
Market bid
(3) A market bid must relate to securities:
(a) in a class of quoted securities (the bid class); and
(b) that exist or will exist at any time during the offer period.
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Takeovers Chapter 6
Formulating the takeover offer Part 6.4
General Division 1
Section 618
Corporations Act 2001 143
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
618 Offers must be for all or a proportion of securities in the bid
class
Off-market bid
(1) An offer for securities under an off-market bid must be an offer to
buy:
(a) all the securities in the bid class; or
(b) a specified proportion of the securities in the bid class.
The proportion specified under paragraph (b) must be the same for
all holders of securities in the bid class.
Off-market bid—non-marketable parcels
(2) If accepting an offer under an off-market bid for quoted securities
would leave a person with a parcel of the securities that is less than
a marketable parcel (within the meaning of the rules of the relevant
financial market), the offer extends to that parcel.
Market bid
(3) An offer for securities under a market bid must be an offer to buy
all the securities in the bid class.
619 General terms of the offer
Off-market bid
(1) All the offers made under an off-market bid must be the same.
Note: The offers may include alternative forms of consideration (see
section 621).
(2) In applying subsection (1), disregard the following:
(a) any differences in the offers attributable to the fact that the
number of securities that may be acquired under each offer is
limited by the number of securities held by the holder;
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 1 General
Section 620
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) any differences in the offers attributable to the fact that the
offers relate to securities having different accrued dividend or
distribution entitlements;
(c) any differences in the offers attributable to the fact that the
offers relate to securities on which different amounts are paid
up or remain unpaid;
(d) any differences in the offers attributable to the fact that the
bidder may issue or transfer only whole numbers of securities
as consideration for the acquisition;
(e) any additional cash amount offered to holders instead of the
fraction of a security that they would otherwise be offered.
Foreign holders
(3) If the consideration for the bid includes an offer of securities, the
securities do not need to be offered to foreign holders of the
target’s securities if under the terms of the bid:
(a) the bidder must appoint a nominee for foreign holders of the
target’s securities who is approved by ASIC; and
(b) the bidder must transfer to the nominee:
(i) the securities that would otherwise be transferred to the
foreign holders who accept the bid for that
consideration; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and
distribute to each of those foreign holders their proportion of
the proceeds of the sale net of expenses.
620 Off-market bid (offer formalities)
(1) Each offer under an off-market bid must:
(a) be in writing; and
(b) have the same date; and
(c) provide that, unless withdrawn, it will remain open until the
end of the offer period (see section 624); and
(d) state how, and when, the bidder is to satisfy their obligations.
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Takeovers Chapter 6
Formulating the takeover offer Part 6.4
General Division 1
Section 620
Corporations Act 2001 145
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Each offer must provide that the bidder is to pay or provide the
consideration for the offer:
(a) if the bidder is given the necessary transfer documents with
the acceptance—by the end of whichever of the following
periods ends earlier:
(i) 1 month after the offer is accepted or, if the offer is
subject to a defeating condition, within 1 month after
the takeover contract becomes unconditional
(ii) 21 days after the end of the offer period; or
(b) if the bidder is given the necessary transfer documents after
the acceptance and before the end of the bid period—within 1
month after the bidder is given the necessary transfer
documents; or
(c) if the bidder is given the necessary transfer documents after
the acceptance and after the end of the bid period—within 21
days after the bidder is given the necessary transfer
documents.
Note: Subsection 630(1) requires an offer that is subject to a defeating
condition to specify a date for declaring whether the condition has
been fulfilled or not.
(3) The offer may provide that the bidder may avoid the takeover
contract if the bidder is not given the necessary transfer documents
within 1 month after the end of the offer period.
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 2 Consideration for the offer
Section 621
146 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Consideration for the offer
621 Consideration offered
Off-market bid—general
(1) A bidder making an off-market bid for securities may offer any
form of consideration for the securities, including:
(a) a cash sum; or
(b) securities (including shares, debentures, interests in a
managed investment scheme or options); or
(c) a combination of a cash sum and securities.
Note: Sections 650B and 651A deal with variations of the consideration
offered under the bid.
Market bid—cash only
(2) As the offers under a market bid for securities are made through a
prescribed financial market, the bidder must offer to acquire the
securities for a cash sum only for each security.
Note: Section 649B deals with variations of the consideration offered under
the bid.
All bids—minimum consideration if bidder purchased securities in
the 4 months before the bid
(3) The consideration offered for securities in the bid class under a
takeover bid must equal or exceed the maximum consideration that
the bidder or an associate provided, or agreed to provide, for a
security in the bid class under any purchase or agreement during
the 4 months before the date of the bid.
(4) For the purposes of subsection (3), the consideration offered or
provided for a security is:
(a) if the consideration offered or provided is a cash sum only—
the amount of that cash sum; or
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Formulating the takeover offer Part 6.4
Consideration for the offer Division 2
Section 622
Corporations Act 2001 147
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if the consideration offered or provided does not include a
cash sum—the value of that consideration; or
(c) if the consideration offered or provided is a cash sum and
other consideration—the sum of the amount of the cash sum
and the value of the other consideration.
The value of consideration that is not a cash sum is to be
ascertained as at the time the relevant offer, purchase or agreement
is made.
(5) If:
(a) a person agrees to buy a security in a company; and
(b) the agreement provides that the price payable for the security
is a price specified in the agreement but may be varied in
accordance with the terms of the agreement;
any variation in price under the agreement is to be disregarded in
working out, for the purposes of subsection (3), the price agreed to
be paid for the security under the agreement.
622 Escalation agreements
Benefits linked to bids and proposed bids not allowed
(1) A person who makes or proposes to make a takeover bid for
securities, or their associate, contravenes this section if:
(a) a person acquires a relevant interest in securities in the bid
class within the 6 months before the bid is made or proposed;
and
(b) at any time whatever, the bidder, proposed bidder or
associate gives or agrees to give a benefit to, or receives or
agrees to receive a benefit from:
(i) a person who had a relevant interest in any of the
paragraph (a) securities immediately before the
acquisition; or
(ii) an associate of a person who had a relevant interest in
any of those securities at that time; and
(c) the benefit is attributable to the acquisition or matters that
include the acquisition; and
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 2 Consideration for the offer
Section 623
148 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) the amount or value of the benefit is, or is to be, determined
by reference to or to matters that include either of the
following:
(i) the amount or value of the consideration for the
securities under the bid or proposed bid;
(ii) the amount or value of the consideration for which the
bidder or proposed bidder acquires, offers or proposes
to offer to acquire, securities in the bid class during the
offer period (whether or not under the bid) or under
Chapter 6A.
Strict liability offences
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Contravening agreements void
(2) An agreement is void to the extent that it purports to provide for:
(a) a person to give a benefit to a person; or
(b) a person to receive a benefit from a person;
in contravention of subsection (1).
623 Collateral benefits not allowed
(1) A bidder, or an associate, must not, during the offer period for a
takeover bid, give, offer to give or agree to give a benefit to a
person if:
(a) the benefit is likely to induce the person or an associate to:
(i) accept an offer under the bid; or
(ii) dispose of securities in the bid class; and
(b) the benefit is not offered to all holders of securities in the bid
class under the bid.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Takeovers Chapter 6
Formulating the takeover offer Part 6.4
Consideration for the offer Division 2
Section 623
Corporations Act 2001 149
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purpose of this section, a person does not receive a benefit
that is not offered under a takeover bid merely because the person
sells bid class securities on-market and the takeover bid is an
off-market bid or a conditional bid.
(3) This section does not prohibit:
(a) the variation of a takeover offer as provided by
sections 649A to 650D; or
(b) an acquisition of securities through an on-market transaction;
or
(c) simultaneous takeover bids for different classes of securities
in the target.
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 3 The offer period
Section 624
150 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—The offer period
624 Offer period
Offer period set in offer
(1) The offers under a takeover bid must remain open for the period
stated in the offer. The period must:
(a) start on the date the first offer under the bid is made; and
(b) last for at least 1 month, and not more than 12 months.
However, the offer may be withdrawn during that period under
section 652B.
Note: Sections 649C (market bids) and 650C (off-market bids) deal with
variation of the offer period.
Automatic extension of offer period if bidder reaches 50% or
consideration increased in last week
(2) If, within the last 7 days of the offer period:
(a) for an off-market bid—the offers under the bid are varied to
improve the consideration offered; or
(b) in any case—the bidder’s voting power in the target increases
to more than 50%;
the offer period is extended so that it ends 14 days after the event
referred to in paragraph (a) or (b). The bidder must give the target
and everyone who has not accepted an offer under the bid written
notice that the extension has occurred within 3 days after that
event.
Note: The consideration for a market bid cannot be increased in the last 5
trading days of the offer period (see section 649B).
Strict liability offences
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Takeovers Chapter 6
Formulating the takeover offer Part 6.4
Conditional offers Division 4
Section 625
Corporations Act 2001 151
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Conditional offers
625 Conditional offers—general
Market bids
(1) Offers under a market bid must be unconditional.
Off-market bids may generally be conditional
(2) Offers under an off-market bid may be subject to conditions that
are not prohibited by sections 626 to 629.
(3) If:
(a) the consideration offered is or includes securities; and
(b) the offer or the bidder’s statement states or implies that the
securities are to be quoted on a financial market (whether in
Australia or elsewhere);
the following rules apply:
(c) the offer is subject to a condition that:
(i) an application for admission to quotation will be made
within 7 days after the start of the bid period; and
(ii) permission for admission to quotation will be granted no
later than 7 days after the end of the bid period;
(d) the offer may not be freed from this condition.
Note: Section 1325A provides that a Court may make a remedial order if the
condition is not satisfied.
626 Maximum acceptance conditions in off-market bids
Maximum acceptance conditions not allowed
(1) Offers under an off-market bid must not be subject to a maximum
acceptance condition. A maximum acceptance condition is one that
provides that the offers will terminate, or the maximum
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 4 Conditional offers
Section 627
152 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
consideration offered under the bid will be reduced, if one or more
of the following occur:
(a) the number of securities for which the bidder receives
acceptances reaches or exceeds a particular number; or
(b) the bidder’s voting power in the company reaches or exceeds
a particular percentage; or
(c) the percentage of securities the bidder has relevant interests
in reaches or exceeds a particular percentage of securities in
that class.
(2) For the purposes of subsection (1), it does not matter:
(a) how the condition is expressed; or
(b) how a particular number or percentage was, or is to be,
determined; or
(c) whether or not a particular number or percentage is specified
in the condition and, if it is so specified, how it is expressed.
(3) For the purposes of subsection (1), an offer under an off-market bid
terminates if:
(a) the offer lapses, is withdrawn or otherwise ceases to have
effect; or
(b) a binding takeover contract will not result from an acceptance
of the offer; or
(c) an obligation of the bidder will not arise under the takeover
contract; or
(d) the takeover contract is rescinded; or
(e) the bidder is entitled to rescind the takeover contract; or
(f) the bidder is relieved of an obligation arising under the
takeover contract.
627 Discriminatory conditions not allowed for off-market bids
Offers under an off-market bid must not be subject to a condition
that allows the bidder to acquire, or may result in the bidder
acquiring, securities from some but not all of the people who
accept the offers. It does not matter how the condition is expressed.
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Takeovers Chapter 6
Formulating the takeover offer Part 6.4
Conditional offers Division 4
Section 628
Corporations Act 2001 153
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
628 Conditions requiring payments to officers of target not allowed
in off-market bids
An offer to a person under an off-market bid must not be made
subject to a condition that requires the person to approve or
consent to a payment or other benefit to an officer or employee of
the target or a related body corporate:
(a) as compensation for loss of; or
(b) as consideration in connection with retirement from;
any office or employment in connection with the management of
the target or of a related body corporate. A purported requirement
of this kind is void.
629 Conditions turning on bidder’s or associate’s opinion not
allowed in off-market bids
(1) Offers under an off-market bid must not be subject to a defeating
condition if the fulfilment of the condition depends on:
(a) the bidder’s, or an associate’s, opinion, belief or other state
of mind; or
(b) the happening of an event that is within the sole control of, or
is a direct result of action by, any of the following:
(i) the bidder (acting alone or together with an associate or
associates);
(ii) an associate (acting alone or together with the bidder or
another associate or associates of the bidder).
A purported condition of this kind is void.
Note: Section 9 defines defeating condition. Sections 630, 650F and 650G
deal with defeating conditions.
(2) For the purposes of paragraph (1)(b):
(a) the target; and
(b) a subsidiary of the target;
are taken not to be associates of the bidder if they would otherwise
be an associate merely because of paragraph 12(2)(a).
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Chapter 6 Takeovers
Part 6.4 Formulating the takeover offer
Division 4 Conditional offers
Section 630
154 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
630 Defeating conditions
Off-market bid may include defeating conditions
(1) Offers under an off-market bid may be made subject to a defeating
condition only if the offers specify a date (not more than 14 days
and not less than 7 days before the end of the offer period) for
giving a notice on the status of the condition.
(2) If the offer period is extended by a period:
(a) the date for giving the notice is taken to be postponed for the
same period; and
(b) as soon as practicable after the extension, the bidder must
give a notice that states:
(i) the new date for giving the notice of the status of the
condition; and
(ii) whether the offers have been freed from the condition
and whether, so far as the bidder knows, the condition
has been fulfilled on the date the notice under this
subsection is given.
Bidder to give notice of status of defeating condition near end of
offer period
(3) On the date determined under subsection (1) or (2), the bidder must
give a notice that states:
(a) whether the offers are free of the condition; and
(b) whether, so far as the bidder knows, the condition was
fulfilled on the date the notice is given; and
(c) the bidder’s voting power in the target.
The bidder must comply with this subsection whether or not the
bidder has given a notice under subsection (4) or 650F(1).
Note: The offers may be freed of the condition by a declaration by the
bidder under subsection 650F(1).
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Formulating the takeover offer Part 6.4
Conditional offers Division 4
Section 630
Corporations Act 2001 155
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Bidder to give notice if defeating condition fulfilled
(4) If the condition is fulfilled (so that the offers become free of the
condition) during the bid period but before the date for publishing
the notice on the status of the condition, the bidder must publish as
soon as practicable a notice that states that the condition has been
fulfilled.
(5) A notice under this section is given by:
(a) giving the notice to the target; and
(b) for quoted bid class securities—giving the notice to the
relevant market operator; and
(c) for unquoted bid class securities—lodging the notice with
ASIC.
Strict liability offences
(6) An offence based on subsection (2), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 631
156 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.5—The takeover procedure
Division 1—The overall procedure
631 Proposing or announcing a bid
(1) A person contravenes this subsection if:
(a) either alone or with other persons, the person publicly
proposes to make a takeover bid for securities in a company;
and
(b) the person does not make offers for the securities under a
takeover bid within 2 months after the proposal.
The terms and conditions of the bid must be the same as or not
substantially less favourable than those in the public proposal.
Note: The Court has power under section 1325B to order a person to
proceed with a bid.
(1A) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (1)(b) and to the requirement that the
terms and conditions of the bid must be the same as or not
substantially less favourable than those in the public proposal.
Note: For strict liability, see section 6.1 of the Criminal Code.
Proposals if takeover bid not intended
(2) A person must not publicly propose, either alone or with other
persons, to make a takeover bid if:
(a) the person knows the proposed bid will not be made, or is
reckless as to whether the proposed bid is made; or
(b) the person is reckless as to whether they will be able to
perform their obligations relating to the takeover bid if a
substantial proportion of the offers under the bid are
accepted.
(3) Section 1314 (continuing offences) and subsection 1324(2)
(injunctions) do not apply in relation to a failure to make a
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Section 632
Corporations Act 2001 157
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
takeover bid in accordance with a public proposal under
subsection (1).
Note: For liability and defences for contraventions of this section, see
sections 670E and 670F.
632 Overview of steps in an off-market bid
The following diagram gives an overview of the steps involved in
an off-market bid.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 633
158 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Overview of steps in an off-market bid
Bidder
Step 1 bidder’s statement (together with offer
document) —— * ASIC
* target
* [market]
Step 2 notice that Step 1 done —— * ASIC
Step 3 bidder’s statement and offers —— * holders of bid
class securities
Step 4 notice that Step 3 done ——
* target
* ASIC
* [market]
Target
Step 5
target’s statement ——
* bidder
* holders of bid
class securities
* ASIC
* [market]
The holders then consider the terms of the offer, and the statements provided by the
bidder and the target, and decide whether to accept the offer under section 653A
before the end of the bid period. A holder may also decide to sell on-market during
the bid period.
633 Detailed steps in an off-market bid
(1) The following table provides for the steps that a bidder must take
to make an effective off-market bid and the steps that a target must
take when an off-market bid is made.
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The takeover procedure Part 6.5
The overall procedure Division 1
Section 633
Corporations Act 2001 159
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Steps in off-market bid [operative table]
Steps Timing and relevant provisions
1 The bidder must prepare:
a bidder’s statement; and
if the bidder’s statement does not
set out all the terms of the offer—
an offer document that sets out
the other terms of the offer.
See section 636 for content of
statement.
2 The bidder must lodge a copy of the
bidder’s statement and offer
document with ASIC.
3 The bidder must send a copy of the
bidder’s statement and offer
document to the target.
To be done on the day the bidder’s
statement is lodged or within 21 days
afterwards
4 The bidder must lodge with ASIC a
notice stating that the bidder’s
statement and offer document have
been sent to the target.
To be done on the day the bidder’s
statement is sent to the target
5 The bidder must send a copy of the
bidder’s statement and offer
document to the operator of each
prescribed financial market on which
the target’s securities are quoted.
To be done on the day the bidder’s
statement is sent to the target
See also subsection (5).
6 The bidder must send the bidder’s
statement and offers to each person
(other than the bidder) who holds:
securities in the bid class; or
if the bid extends to securities that
come to be in the bid class due to
the conversion of or exercise of
rights attached to other securities
(see subsection 617(2))—the
other securities;
as at the date set by the bidder under
subsection (2).
The offers must be made on the terms
To be done:
within a 3 day period; and
within 14-28 days after the bidder’s
statement is sent to the target
The directors of the target may agree
that the offers and accompanying
documents be sent earlier.
See also subsections (5) and (6).
Item 2 of the table in section 611
covers offers made by the bidder
on-market during the period between
the lodgment of the bidder’s statement
and the making of the offers under the
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 633
160 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Steps in off-market bid [operative table]
Steps Timing and relevant provisions
set out in the bidder’s statement and
the offer document lodged with ASIC
under item 2.
bid.
Sections 648B and 648C provide for
the manner in which documents may be
sent to holders.
7 The bidder must send a notice to the
target that the bidder’s statement and
offers have been sent as required by
item 6.
The notice must state the date of the
offers.
To be done on the day all offers have
been sent as required by item 6
See subsection 620(1) on date of offer.
8 The bidder must send a notice that
offers have been sent as required by
item 6 to the operator of each
prescribed financial market on which
the target’s securities are quoted.
To be done on the day all offers have
been sent as required by item 6
9 The bidder must lodge with ASIC a
notice that offers have been sent as
required by item 6.
To be done on the day all offers have
been sent as required by item 6
10 The target must prepare a target’s
statement.
See section 638 for content of
statement.
11 The target must send the target’s
statement (and any accompanying
report) to the bidder.
To be done no later than 15 days after
the target receives a notice that all
offers have been sent as required by
item 6
12 The target must send a copy of the
target’s statement (and any
accompanying report) to each person
who holds:
securities in the bid class; or
if the bid extends to securities that
come to be in the bid class due to
the conversion of or exercise of
rights attached to other securities
(see subsection 617(2))—the
other securities;
To be done:
no earlier than the day on which the
target sends the target’s statement
to the bidder; and
no later than 15 days after the target
receives a notice that all offers have
been sent as required by item 6
Sections 648B and 648C provide for
the manner in which documents may be
sent to holders.
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The takeover procedure Part 6.5
The overall procedure Division 1
Section 633
Corporations Act 2001 161
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Steps in off-market bid [operative table]
Steps Timing and relevant provisions
as at the date set by the bidder under
subsection (2).
13 The target must lodge a copy of the
target’s statement (and any
accompanying report) with ASIC.
To be done on the day the target’s
statement is sent to the bidder
See also subsection (7).
14 The target must send a copy of the
target’s statement (and any
accompanying report) to the operator
of each prescribed financial market
on which the target’s securities are
quoted.
To be done on the day the target’s
statement is sent to the bidder
See also subsection (7)
Date for determining holders of securities
(2) The people to whom information is to be sent under items 6 and 12
of the table in subsection (1) are the holders of the securities
referred to in those items as at the date set by the bidder in:
(a) the bidder’s statement; or
(b) a separate written notice given to the target on or before the
date set by the bidder.
Note: The bidder may set the date when the bidder asks the target for a list
of members under section 641.
(3) The date set by the bidder must be:
(a) on or after the date on which the bidder gives the bidder’s
statement, or the separate written notice, to the target; and
(b) on or before the date on which the first offers under the bid
are made to holders of the securities.
(4) As soon as practicable after setting the day, the bidder must give
notice of it by:
(a) if the securities in the bid class are quoted—giving the notice
to the relevant market operator; or
(b) otherwise—lodging the notice with ASIC.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 634
162 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Information to be sent with bidder’s statement
(5) A bidder’s statement required to be sent under item 5 or 6 in the
table in subsection (1) must be sent together with any other
information sent by the bidder to the target with the statement.
Information to be sent with notices that offers have been sent
(6) If the bidder sends the people to whom the bidder’s statement is
sent under item 6 of the table in subsection (1) additional
information together with the bidder’s statement and the offer, the
bidder must also include that information in any notice under
item 7, 8 or 9 of the table.
Information to be sent with target’s statement
(7) If the target sends the people to whom the target’s statement is sent
under item 12 of the table in subsection (1) additional information
together with the target’s statement, the target must also include
that information in any notice under item 13 or 14 of the table.
Strict liability offences
(8) An offence based on this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
634 Overview of steps in a market bid
The following diagram gives an overview of the steps involved in a
market bid.
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The takeover procedure Part 6.5
The overall procedure Division 1
Section 635
Corporations Act 2001 163
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Overview of steps in a market bid
Bidder
Step 1 announcement of bid to the market
Step 2 bidder’s statement
—— * market * target
* ASIC
Step 3 bidder’s statement and any other documents sent with it to the market
—— * holders of bid class securities
Step 4 copy of documents sent to holders —— * market
* ASIC
Target
Step 5 target’s statement ——
* market
* bidder
* ASIC
* holders of bid
class securities
Bidder
Step 6 make offers on the market
The holders then consider the terms of the offer, and the statements provided by the
bidder and the target, and decide whether to accept the offer on-market before the
end of the bid period.
635 Detailed steps in a market bid
(1) The following table provides for the steps that a bidder must take
to make an effective market bid and the steps that a target must
take when a market bid is made.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 635
164 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Steps in market bid [operative]
Steps Timing and relevant provisions
1 The bidder must prepare a bidder’s
statement.
See section 636 for content of
statement
2 The bidder must have the bid
announced to the relevant financial
market.
3 The bidder must send a copy of the
bidder’s statement to the relevant
market operator
To be done on the day the
announcement is made
4 The bidder must send to the target:
a copy of the bidder’s statement;
and
a copy of any other document that
was sent with the bidder’s
statement to the relevant market
operator.
To be done on the day the
announcement is made
5 The bidder must lodge with ASIC:
a copy of the bidder’s statement;
and
a copy of any other document that
was sent with the bidder’s
statement to the relevant market
operator.
To be done on the day the
announcement is made
6 The bidder must send to each holder
of bid class securities (other than the
bidder):
a copy of the bidder’s statement;
and
a copy of any other document that
was sent with the bidder’s
statement to the relevant market
operator.
Within 14 days after the
announcement is made.
Sections 648B and 648C provide for
the manner in which documents may
be sent to holders.
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Corporations Act 2001 165
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Steps in market bid [operative]
Steps Timing and relevant provisions
7 The bidder must lodge with ASIC a
copy of every other document sent to
holders of bid class securities with
the bidder’s statement.
To be done no later than the day
copies of the bidder’s statement have
been sent to all holders of bid class
securities
8 The bidder must give the relevant
market operator a copy of every other
document sent to holders of bid class
securities with the bidder’s statement.
To be done no later than the day
copies of the bidder’s statement have
been sent to all holders of bid class
securities
9 The target must prepare a target’s
statement.
See section 638 for content of
statement
10 The target must send a copy of the
target’s statement to the relevant
market operator.
Within 14 days after the
announcement is made
11 The target must send to the bidder:
a copy of the target’s statement;
and
a copy of any other document that
was sent with the target’s
statement to the relevant market
operator.
To be done on the day the target
sends a copy of the target’s statement
to the relevant market operator
12 The target must lodge with ASIC:
a copy of the target’s statement;
and
a copy of any other document that
was sent with the target’s
statement to the relevant market
operator.
To be done on the day the target
sends a copy of the target’s statement
to the relevant market operator
13 The target must send each holder of
bid class securities:
a copy of the target’s statement;
and
a copy of any other document that
was sent with the target’s
statement to the relevant market
operator.
Within 14 days after the
announcement is made.
Sections 648B and 648C provide for
the manner in which documents may
be sent to holders.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 1 The overall procedure
Section 635
166 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Steps in market bid [operative]
Steps Timing and relevant provisions
14 The bidder must make offers for the
securities under the bid through the
relevant financial market.
To be done on the next day after the
end of the 14 day period referred to in
item 13.
If the bidder does not make the offers
at that time, the bidder contravenes
this section.
Item 2 of the table in section 611
covers offers made by the bidder on
market during the 14 day period
between the announcement and the
making of the offers under the bid
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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The bidder’s statement Division 2
Section 636
Corporations Act 2001 167
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—The bidder’s statement
636 Bidder’s statement content
(1) A bidder’s statement must include the following:
(a) the identity of the bidder;
(b) the date of the statement;
(c) if the target is a company or body—details of the bidder’s
intentions regarding:
(i) the continuation of the business of the target; and
(ii) any major changes to be made to the business of the
target, including any redeployment of the fixed assets of
the target; and
(iii) the future employment of the present employees of the
target;
(d) if the target is a managed investment scheme—details of the
bidder’s intentions regarding:
(i) the continued operation of the scheme; and
(ii) any major changes to be made to the operation of the
scheme, including any redeployment of scheme
property; and
(iii) any plans to remove the current responsible entity and
appoint a new responsible entity;
(e) for an off-market bid—a statement that the bidder’s
statement has been lodged with ASIC but that ASIC takes no
responsibility for the content of the statement;
(f) in relation to the cash consideration (if any) offered under the
bid—details of:
(i) the cash amounts (if any) held by the bidder for
payment of the consideration; and
(ii) the identity of any other person who is to provide,
directly or indirectly, cash consideration from that
person’s own funds; and
(iii) any arrangements under which cash will be provided by
a person referred to in subparagraph (ii);
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 2 The bidder’s statement
Section 636
168 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(g) if any securities (other than managed investment products)
are offered as consideration under the bid and the bidder is:
(i) the body that has issued or will issue the securities; or
(ii) a person who controls that body;
all material that would be required for a prospectus for an
offer of those securities by the bidder under whichever of the
following is applicable:
(iii) sections 710 to 713;
(iv) sections 713C to 713E;
(ga) if any managed investment products are offered as
consideration under the bid and the bidder is:
(i) the responsible entity of the managed investment
scheme; or
(ii) a person who controls the responsible entity of the
managed investment scheme;
all material that would be required by section 1013C to be
included in a Product Disclosure Statement given to a person
in an issue situation (within the meaning of section 1012B) in
relation to those managed investment products;
(h) if the bidder or an associate provided, or agreed to provide,
consideration for a security in the bid class under a purchase
or agreement during the 4 months before the date of the
bid—the following information about the consideration:
(i) to the extent to which the consideration is a cash sum—
the amount per security of the cash sum;
(ii) to the extent to which the consideration is quoted
securities—the market price per security of those
securities;
(iii) to the extent to which the consideration is neither a cash
sum nor a quoted security—the value per security of
that consideration;
(i) if, during the period of 4 months before the date of the bid,
the bidder or an associate gave, or offered to give or agreed
to give a benefit to another person and the benefit was likely
to induce the other person, or an associate, to:
(i) accept an offer under the bid; or
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The takeover procedure Part 6.5
The bidder’s statement Division 2
Section 636
Corporations Act 2001 169
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(ii) dispose of securities in the bid class;
and the benefit is not offered to all holders of securities in the
bid class under the bid—details of the benefit;
(j) if the bid is to extend to securities that come to be in the bid
class during the offer period due to the conversion of or
exercise of rights attached to other securities (see
subsection 617(2))—a statement to that effect;
(k) for an off-market bid—the following details in relation to
each class of securities in the target:
(i) the total number of securities in the class;
(ii) the number of securities in the class that the bidder had
a relevant interest in immediately before the first offer is
sent (expressed as a number of securities or as a
percentage of the total number of securities in the class);
(l) for an off-market bid—the bidder’s voting power in the
company;
(m) any other information that:
(i) is material to the making of the decision by a holder of
bid class securities whether to accept an offer under the
bid; and
(ii) is known to the bidder; and
(iii) does not relate to the value of securities offered as
consideration under the bid.
The information that the bidder must disclose under
subparagraph (k)(i) and paragraph (l) must be only as up-to-date as
it is reasonable to expect in the circumstances. The bidder does not
have to disclose information under paragraph (m) if it would be
unreasonable to require the bidder to do so because the information
had previously been disclosed to the holders of bid class securities.
Note: Paragraph (b)—See subsection 637(2) for the date of the statement.
Expert’s report on non-cash consideration provided for bid class
securities in last 4 months
(2) If the bidder’s statement includes details of the value per share of
consideration under subparagraph (1)(h)(iii), the statement must
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 2 The bidder’s statement
Section 637
170 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
include, or be accompanied by, a report by an expert that states
whether, in the expert’s opinion, the value stated is fair and
reasonable and gives the reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the independence of the
expert and disclosure of any association between the bidder and the
expert or the target and the expert. A contravention of one of those
subsections results in the bidder’s statement not complying with this
subsection.
Consent of person to whom statement attributed
(3) The bidder’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the bidder’s statement
to be based on a statement by a person, if:
(a) the person has consented to the statement being included in
the bidder’s statement, or accompanying it, in the form and
context in which it is included; and
(b) the bidder’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the bidder’s
statement is lodged with ASIC.
(4) The bidder must keep the consent.
Strict liability offences
(5) An offence based on subsection (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
637 Bidder’s statement formalities
Approval
(1) The copy of the bidder’s statement that is lodged with ASIC must
be approved by:
(a) for a bidder that is a body corporate:
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Section 637
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(i) if the consideration offered under the bid is a cash sum
only—a resolution passed by the directors of the bidder;
or
(ii) otherwise—a unanimous resolution passed by all the
directors of the bidder; or
(b) for a bidder who is an individual—the bidder.
(2) The bidder’s statement must be dated. The date is the date on
which it is lodged with ASIC.
Strict liability offences
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 3 The target’s response
Section 638
172 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—The target’s response
638 Target’s statement content
General requirement
(1) A target’s statement must include all the information that holders
of bid class securities and their professional advisers would
reasonably require to make an informed assessment whether to
accept the offer under the bid.
(1A) However, the statement must contain this information:
(a) only to the extent to which it is reasonable for investors and
their professional advisers to expect to find the information
in the statement; and
(b) only if the information is known to any of the directors of the
target.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(2) In deciding what information should be included under
subsection (1), have regard to:
(a) the nature of the bid class securities; and
(b) if the bid class securities are interests in a managed
investment scheme—the nature of the scheme; and
(c) the matters that the holders of bid class securities may
reasonably be expected to know; and
(d) the fact that certain matters may reasonably be expected to be
known to their professional advisers; and
(e) the time available to the target to prepare the statement.
Director’s recommendations
(3) A target’s statement must contain a statement by each director of
the target:
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Takeovers Chapter 6
The takeover procedure Part 6.5
The target’s response Division 3
Section 639
Corporations Act 2001 173
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(a) recommending that offers under the bid be accepted or not
accepted, and giving reasons for the recommendation; or
(b) giving reasons why a recommendation is not made.
(4) The statement under subsection (3) must be made by:
(a) if the target is under administration—the liquidator or
administrator; or
(b) if the target has executed a deed of company arrangement
that has not yet terminated—the deed’s administrator.
Consent of person to whom statement attributed
(5) The target’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the target’s statement
to be based on a statement by a person, if:
(a) the person has consented to the statement being included in
the target’s statement, or accompanying it, in the form and
context in which it is included; and
(b) the target’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the target’s
statement is lodged with ASIC.
(6) The target must keep the consent.
Strict liability offences
(7) An offence based on subsection (1), (3), (5) or (6) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
639 Target’s statement formalities
Approval
(1) The copy of the target’s statement that is lodged with ASIC must
be approved by:
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Section 640
174 Corporations Act 2001
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(a) if paragraphs (b) and (c) do not apply—a resolution passed
by the directors of the target; or
(b) for a target that is under administration—the liquidator or
administrator; or
(c) for a target that has executed a deed of company arrangement
that has not yet terminated—the deed’s administrator.
Date
(2) The target’s statement must be dated. The date is the date on which
it is lodged with ASIC.
Strict liability offences
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
640 Expert’s report to accompany target’s statement if bidder
connected with target
(1) If:
(a) the bidder’s voting power in the target is 30% or more; or
(b) for a bidder who is, or includes, an individual—the bidder is
a director of the target; or
(c) for a bidder who is, or includes, a body corporate—a director
of the bidder is a director of the target;
a target’s statement given in accordance with section 638 must
include, or be accompanied by, a report by an expert that states
whether, in the expert’s opinion, the takeover offers are fair and
reasonable and gives the reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the independence of the
expert and disclosure of any association between the target and the
expert or the bidder and the expert. A contravention of one of those
subsections results in the target’s statement not complying with this
subsection.
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Section 641
Corporations Act 2001 175
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(2) In determining whether the bidder’s voting power in the target is
30% or more, calculate the bidder’s voting power at the time the
bidder’s statement is sent to the target.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
641 Target must inform bidder about securities holdings
Requirement to inform bidder and information that must be given
(1) If the bidder has given a bidder’s statement to the target and
requested the target to give the bidder information in accordance
with this section, the target must inform the bidder of:
(a) the name and address of each person who, at a time specified
by the bidder under subsection (2), held securities:
(i) in the bid class; or
(ii) convertible into securities in the bid class; and
(b) the type, and number of each type, of those securities held by
the person at the specified time.
(1A) However, the target does not need to give information to the bidder
about a person or their holding of securities unless the target knows
the person’s name.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Time at which target’s information must be correct
(2) The bidder’s request must specify a day as at which the
information must be correct. The day must be one that occurs after
the day on which the bidder makes the request unless the target
agrees to it being the day on which the bidder makes the request.
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Part 6.5 The takeover procedure
Division 3 The target’s response
Section 642
176 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Form in which target must provide information
(3) The target must give the information to the bidder:
(a) in the form that the bidder requests; or
(b) if the target is unable to comply with the request—in writing.
(4) If the target must give the information to the bidder in electronic
form, the information must be readable but the information need
not be formatted for the bidder’s preferred operating system.
Fee for provision of information
(5) The target may require the bidder to pay an amount, not exceeding
the prescribed amount, for the provision of the information to the
bidder.
Time by which target must provide information
(6) The target must give the information to the bidder no later than the
latest of the following times:
(a) the end of the second day after the day on which the bidder
requested the information; or
(b) the end of the next day after the day as at which the
information must be correct; or
(c) the time when the target receives the amount mentioned in
subsection (5).
642 Expenses of directors of target companies
(1) If the target is a company or body, the directors of the target have a
right to recover from the target any expenses they reasonably incur
in the interest of members of the target and in relation to the
takeover bid. The directors have this right regardless of anything
contained in the target’s constitution (if any).
(2) If the target is a managed investment scheme, the responsible
entity for the scheme has a right to recover from scheme property
any expenses it reasonably incurs in the interest of members of the
scheme and in relation to the takeover bid. The responsible entity
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has this right regardless of anything contained in the scheme’s
constitution.
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Chapter 6 Takeovers
Part 6.5 The takeover procedure
Division 4 Updating and correcting the bidder’s statement and target’s statement
Section 643
178 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Updating and correcting the bidder’s
statement and target’s statement
643 Supplementary bidder’s statement
(1) If a bidder becomes aware of:
(a) a misleading or deceptive statement in the bidder’s statement;
or
(b) an omission from the bidder’s statement of information
required by section 636; or
(c) a new circumstance that:
(i) has arisen since the bidder’s statement was lodged; and
(ii) would have been required by section 636 to be included
in the bidder’s statement if it had arisen before the
bidder’s statement was lodged;
that is material from the point of view of a holder of bid class
securities, the bidder must prepare a supplementary bidder’s
statement that remedies this defect.
Note 1: The bidder must then send and lodge the supplementary bidder’s
statement in accordance with section 647.
Note 2: Section 670A makes it an offence to give a bidder’s statement after
the bidder has become aware of a misleading or deceptive statement,
omission or new circumstance that is material from the point of view
of a holder of securities to whom the statement is given (unless the
deficiency is corrected).
Note 3: The power to issue a supplementary bidder’s statement is not limited
to the situations dealt with in this section.
Note 4: This section applies to a bidder’s statement that has already been
previously supplemented.
(2) For an offence based on subsection (1), strict liability applies to the
conduct, that the bidder must prepare a supplementary bidder’s
statement that remedies the defect.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 644
Corporations Act 2001 179
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644 Supplementary target’s statement
(1) If a target becomes aware of:
(a) a misleading or deceptive statement in the target’s statement;
or
(b) an omission from the target’s statement of information
required by section 638; or
(c) a new circumstance that:
(i) has arisen since the target’s statement was lodged; and
(ii) would have been required by section 638 to be included
in the target’s statement if it had arisen before the
target’s statement was lodged;
that is material from the point of view of a holder of bid class
securities, the target must prepare a supplementary target’s
statement that remedies this defect.
Note 1: The target must then send and lodge the supplementary target’s
statement in accordance with section 647.
Note 2: Section 670A makes it an offence to give a target’s statement after the
target has become aware of a misleading or deceptive statement,
omission or new circumstance that is material from the point of view
of a holder of securities to whom the statement is given (unless the
deficiency is corrected).
Note 3: The power to issue a supplementary target’s statement is not limited to
the situations dealt with in this section.
Note 4: This section applies to a target’s statement that has already been
previously supplemented.
(2) For an offence based on subsection (1), strict liability applies to the
conduct, that the target must prepare a supplementary target’s
statement that remedies the defect.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 6.5 The takeover procedure
Division 4 Updating and correcting the bidder’s statement and target’s statement
Section 645
180 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
645 Form of supplementary statement
Identity as a supplementary statement
(1) At the beginning of a supplementary bidder’s or target’s statement
there must be:
(a) a statement that it is a supplementary statement; and
(b) an identification of the statement it supplements; and
(c) an identification of any previous supplementary statements
lodged with ASIC in relation to the bid; and
(d) a statement that it is to be read together with the statement it
supplements and any previous supplementary statements.
Approval of supplementary bidder’s statement
(2) The copy of the supplementary bidder’s statement that is lodged
with ASIC must be approved by:
(a) for a bidder that is a body corporate:
(i) if the consideration offered under the bid is a cash sum
only—a resolution passed by the directors of the bidder;
or
(ii) otherwise—a unanimous resolution passed by all the
directors of the bidder; or
(b) for a bidder who is an individual—the bidder.
Approval of supplementary target’s statement
(3) The copy of a supplementary target’s statement that is lodged with
ASIC must be approved by:
(a) if paragraphs (b) and (c) do not apply—a resolution passed
by the directors of the target; or
(b) for a target that is under administration—the liquidator or
administrator; or
(c) for a target that has executed a deed of company arrangement
that has not yet terminated—the deed’s administrator.
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Section 646
Corporations Act 2001 181
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Date
(4) A supplementary statement must be dated. The date is the date on
which it is lodged with ASIC.
646 Consequences of lodging a supplementary statement
If a supplementary statement is lodged with ASIC, for the purposes
of the application of this Chapter and Chapter 6B to events that
occur after the lodgment, the bidder’s or target’s statement is taken
to be the original statement together with the supplementary
statement.
647 To whom supplementary statement must be sent
(1) A supplementary bidder’s statement must be sent to the target as
soon as practicable.
(2) A supplementary target’s statement must be sent to the bidder as
soon as practicable.
(3) Either kind of supplementary statement must as soon as practicable
be:
(a) lodged with ASIC; and
(b) if the bid class securities are quoted and the target is listed—
sent to the operator of each prescribed financial market on
which the target’s securities are quoted; and
(c) if the bid is an off-market bid and the bid class securities are
not quoted—sent to all holders of bid class securities who
have not accepted an offer under the bid.
Note: Sections 648B and 648C provide for the manner in which documents
may be sent to holders.
(4) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Part 6.5 The takeover procedure
Division 5 General rules on takeover procedure
Section 648A
182 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—General rules on takeover procedure
Subdivision A—Experts’ reports
648A Experts’ reports
(1) If the bidder or target obtains 2 or more reports each of which
could be used for the purposes of subparagraph 636(1)(h)(iii) or
subsection 640(1), the bidder’s or target’s statement must be
accompanied by a copy of each report.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The expert must be someone other than an associate of the bidder
or target.
(3) The report must set out details of:
(a) any relationship between the expert and:
(i) the bidder or an associate of the bidder; or
(ii) the target or an associate of the target;
including any circumstances in which the expert gives them
advice, or acts on their behalf, in the proper performance of
the functions attaching to the expert’s professional capacity
or business relationship with them; and
(b) any financial or other interest of the expert that could
reasonably be regarded as being capable of affecting the
expert’s ability to give an unbiased opinion in relation to the
matter being reported on; and
(c) any fee, payment or other benefit (whether direct or indirect)
that the expert has received or will or may receive in
connection with making the report.
Note: If the statement includes, or is accompanied by, the report, it must
state that the expert has consented to this being done (see
subsections 636(3) and 638(5)).
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Section 648B
Corporations Act 2001 183
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Subdivision B—Sending documents to holders of securities
648B Address at which bidder may send documents to holders of
securities
The bidder may send a document to a holder of securities for the
purposes of this Chapter at the address shown for the holder in the
information given to the bidder by the target under section 641.
This section does not limit the address to which the document may
be sent to the holder.
Note: Section 109X makes general provision for service of documents.
648C Manner of sending documents to holders of securities
If a document must be sent to the holder of securities under this
Chapter, the document must be sent:
(a) if the document is to be sent to the holder outside Australia—
by pre-paid airmail post or by courier; or
(b) if the document is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
Subdivision C—Effect of proportional takeover approval
provisions
648D Constitution may contain proportional takeover approval
provisions
(1) Subject to this Subdivision, the constitution of a company may
contain provisions to the effect that, if offers are made under a
proportional takeover bid for securities of the company:
(a) the registration of a transfer giving effect to a takeover
contract for the bid is prohibited unless and until a resolution
(an approving resolution) to approve the bid is passed in
accordance with the provisions; and
(b) a person (other than the bidder or an associate of the bidder)
who, as at the end of the day on which the first offer under
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Division 5 General rules on takeover procedure
Section 648D
184 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the bid was made, held bid class securities is entitled to vote
on an approving resolution; and
(c) an approving resolution is to be voted on in whichever of the
following ways is specified in the provisions:
(i) at a meeting, convened and conducted by the company,
of the persons entitled to vote on the resolution;
(ii) by means of a postal ballot conducted by the company
in accordance with a procedure set out in the provisions;
or, if the provisions so provide, in whichever of those ways is
determined by the directors of the company; and
(d) an approving resolution that has been voted on is taken to
have been passed if the proportion that the number of votes
in favour of the resolution bears to the total number of votes
on the resolution is greater than the proportion specified in
the provisions, and otherwise is taken to have been rejected.
The proportion specified under paragraph (d) must not exceed
50%.
Note: Section 9 defines proportional takeover bid. See paragraph 618(1)(b).
(2) To be effective, an approving resolution in relation to a
proportional takeover bid must be passed before the approving
resolution deadline. The deadline is the 14th day before the last
day of the bid period.
Note: In certain circumstances, an approving resolution will be taken to have
been passed (see subsection 648E(3)).
(3) Except to the extent to which a company’s constitution provides
otherwise:
(a) the provisions that apply to a general meeting of the company
apply, with such modifications as the circumstances require,
to a meeting convened under the company’s proportional
takeover approval provisions; and
(b) those provisions apply as if the meeting convened under the
proportional takeover provisions were a general meeting of
the company.
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Section 648E
Corporations Act 2001 185
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The provisions referred to in paragraph (a) may be the provisions
of a law, provisions of the company’s constitution or any other
provisions.
648E Resolution to be put if proportional bid made
(1) If:
(a) a company’s constitution contains proportional takeover
approval provisions; and
(b) offers are made under a proportional bid for a class of the
company’s securities;
then:
(c) the company’s directors must ensure that a resolution to
approve the bid is voted on in accordance with those
provisions before the approving resolution deadline; and
(d) if the directors fail to ensure that a resolution of that kind is
voted on before the deadline, each of the directors
contravenes this subsection.
Note: Subsection 648D(2) sets the approving resolution deadline.
(2) If a resolution to approve the bid is voted on in accordance with the
proportional takeover approval provisions before the approving
resolution deadline, the company must, on or before the deadline,
give:
(a) the bidder; and
(b) if the company is listed—each relevant financial market;
a written notice stating that a resolution to approve the bid has been
voted on and whether the resolution was passed or rejected.
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) If no resolution to approve the bid has been voted on in accordance
with the proportional takeover approval provisions as at the end of
the day before the approving resolution deadline, a resolution to
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Part 6.5 The takeover procedure
Division 5 General rules on takeover procedure
Section 648F
186 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
approve the bid is taken, for the purposes of those provisions, to
have been passed in accordance with those provisions.
648F Effect of rejection of approval resolution
If a resolution to approve the bid is voted on, in accordance with
the proportional takeover approval provisions, before the
approving resolution deadline and is rejected:
(a) despite section 652A:
(i) all offers under the bid that have not been accepted as at
the end of deadline; and
(ii) all offers under the bid that have been accepted, and
from whose acceptance binding contracts have not
resulted, as at the end of the deadline;
are taken to be withdrawn at the end of the deadline; and
(b) as soon as practicable after the deadline, the bidder must
return to each person who has accepted an offer referred to in
subparagraph (a)(ii) any documents that the person sent the
bidder with the acceptance of the offer; and
(c) the bidder:
(i) is entitled to rescind; and
(ii) must rescind as soon as practicable after the deadline;
each binding takeover contract for the bid; and
(d) a person who has accepted an offer made under the bid is
entitled to rescind their takeover contract.
648G Including proportional takeover provisions in constitution
(1) A company’s proportional takeover approval provisions, unless
sooner omitted from the constitution of the company, cease to
apply at the end of:
(a) unless paragraph (b) or (c) applies—3 years;
(b) if the constitution provides that the provisions apply for a
specified period of less than 3 years and the provisions have
not been renewed—the specified period; or
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(c) if the provisions have been renewed on at least one occasion
and the resolution, or the most recent resolution, renewing
the provisions states that the provisions are renewed for a
specified period of less than 3 years—the specified period.
(2) The period referred to in subsection (1) starts:
(a) if the provisions were contained in the company’s
constitution when it was incorporated or formed and have not
been renewed—at that time; or
(b) if the provisions were inserted in the company’s constitution
and have not been renewed—when the provisions were
inserted; or
(c) if the provisions have been renewed on at least one
occasion—when the provisions were renewed, or last
renewed.
(3) When the provisions cease to apply, the company’s constitution is,
by force of this subsection, altered by omitting the provisions.
(4) A company may renew its proportional takeover approval
provisions. The provisions are to be renewed in the same manner
as that in which the company could alter its constitution to insert
proportional takeover approval provisions.
(5) With every notice that:
(a) specifies the intention to propose:
(i) a resolution to alter a company’s constitution by
inserting proportional takeover approval provisions; or
(ii) a resolution to renew a company’s proportional takeover
approval provisions; and
(b) is sent to a person who is entitled to vote on the proposed
resolution;
the company must send a statement that:
(c) explains the effect of the proposed provisions, or of the
provisions proposed to be renewed; and
(d) explains the reasons for proposing the resolution and sets out
the factual matters and principles underlying those reasons;
and
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Part 6.5 The takeover procedure
Division 5 General rules on takeover procedure
Section 648G
188 Corporations Act 2001
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(e) states whether, as at the day on which the statement is
prepared, any of the directors of the company is aware of a
proposal by a person to acquire, or to increase the extent of, a
substantial interest in the company and, if so, explains the
extent (if any) to which the proposal has influenced the
decision to propose the resolution; and
(f) for a proposed resolution to renew proportional takeover
approval provisions—reviews both the advantages, and
disadvantages, of the provisions proposed to be renewed for:
(i) the directors; and
(ii) the company’s members;
during the period during which the provisions have been in
effect; and
(g) discusses both the potential advantages, and the potential
disadvantages, of the proposed provisions, or of the
provisions proposed to be renewed, for:
(i) the directors; and
(ii) the company’s members.
(6) If, on a particular day, a company purports to:
(a) alter its constitution by inserting proportional takeover
approval provisions; or
(b) renew its proportional takeover approval provisions;
then:
(c) holders who together hold not less than 10% (by number) of
the issued securities in a class of securities in the company to
which the provisions apply may, within 21 days after that
day, apply to the Court to have the purported alteration or
renewal set aside to the extent to which it relates to that class;
and
(d) unless and until an application made under paragraph (c) is
finally determined by the making of an order setting aside the
purported alteration or renewal to that extent, the company is
taken for all purposes (other than the purposes of an
application of that kind):
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Section 648H
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(i) to have validly altered its constitution by inserting the
provisions referred to in paragraph (a) applying to that
class; or
(ii) to have validly renewed the provisions referred to in
paragraph (b) applying to that class.
(7) An application under paragraph (6)(c) may be made, on behalf of
the holders entitled to make the application, by a holder or holders
appointed by them in writing.
(8) On an application under paragraph (6)(c), the Court may make an
order setting aside the purported alteration or renewal to the extent
to which it applies to that class if it is satisfied that it is appropriate
in all the circumstances to do so. Otherwise the Court must dismiss
the application.
(9) Within 14 days after the day on which the Court makes an order of
the kind referred to in subsection (8) in relation to a company, the
company must lodge a copy of the order with ASIC.
(10) An offence based on subsection (5) or (9) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
648H Effect of Subdivision
This Subdivision applies notwithstanding anything contained in:
(a) the operating rules of a financial market; or
(b) the constitution of a company; or
(c) any agreement.
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 1 Market bids
Section 649A
190 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.6—Variation of offers
Division 1—Market bids
649A General
A bidder may only vary the offers under a market bid in
accordance with section 649B or 649C.
Note: ASIC may allow other variations under section 655A.
649B Market bids—raising bid price
The bidder may increase the current market bid price. They may
not do so, however, during the last 5 trading days of the relevant
financial market in the offer period.
649C Market bids—extending the offer period
(1) The bidder may extend the offer period. The extension must be
announced to the relevant financial market at least 5 trading days
of the market before the end of the offer period. However, the
announcement may be made up to the end of the offer period if
during those 5 trading days:
(a) another person lodges with ASIC a bidder’s statement for a
takeover bid for securities in the bid class; or
(b) another person announces a takeover bid for securities in the
bid class; or
(c) another person makes offers under a takeover bid for
securities in the bid class; or
(d) the consideration for offers under another takeover bid for
securities in the bid class is improved.
The offer period is extended by having the extension announced to
the relevant financial market.
Note: Section 624 provides for an automatic extension of the bid period in
certain circumstances.
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Variation of offers Part 6.6
Market bids Division 1
Section 649C
Corporations Act 2001 191
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On the day on which the announcement is made, the bidder must:
(a) give the target and the relevant market operator a notice
setting out the terms of the announcement; and
(b) lodge a notice setting out the terms of the announcement with
ASIC.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 2 Off-market bids (express variation by bidder)
Section 650A
192 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Off-market bids (express variation by bidder)
650A General
(1) A bidder may only vary the offers under an off-market bid in
accordance with section 650B, 650C or 650D.
Note: ASIC may allow other variations under section 655A.
(2) If the bidder varies the offer under an off-market bid in accordance
with section 650B, 650C or 650D, the bidder must vary all
unaccepted offers under the bid in the same way.
Note: Subsections 650B(2) and (3) deal with the effect of a variation on
takeover contracts that have already resulted from acceptances of
offers under the bid when the variation is made.
650B Off-market bids—consideration offered
Improving the consideration offered
(1) The bidder may vary the offers made under the bid to improve the
consideration offered:
(a) by increasing a cash sum offered; or
(b) by increasing the number of securities offered; or
(c) by increasing the rate of interest payable under debentures
offered; or
(d) by increasing the amount or value of debentures offered; or
(e) by increasing the number of unissued securities that may be
acquired under options offered; or
(f) by offering a cash sum in addition to securities; or
(g) if the securities being acquired include shares to which rights
to accrued dividends are attached—by giving the holders the
right to:
(i) retain the whole or a part of the dividend; or
(ii) be paid an amount equal to the amount of the dividend;
in addition to the consideration already offered; or
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Variation of offers Part 6.6
Off-market bids (express variation by bidder) Division 2
Section 650B
Corporations Act 2001 193
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(h) offering an additional alternative form of consideration.
Note: If the bidder increases the consideration during the last 7 days of the
offer period, subsection 624(2) extends the offer period by a further 14
days.
Effect of increase in consideration on offers already accepted
(2) Improving the consideration has the effects set out in the following
table on the rights of a person who has already accepted an offer
when the variation is made.
Effect of improving consideration [operative]
Improvement Effect on person who has already
accepted bid offer
1 improvement of the only form of
consideration being offered
entitled to the improved consideration
2 2 or more forms of consideration
offered and all forms improved by the
same factor or percentage
entitled to the improvement in the
form of consideration accepted
3 2 or more forms of consideration
offered and improvement in the
consideration is identical for all forms
entitled to the improvement in the
form of consideration accepted
4 addition of a new form of
consideration
entitled to make a fresh election as to
the form of consideration to be taken
5 any other improvement entitled to make a fresh election as to
the form of consideration to be taken
(2A) The person is entitled to receive the improved consideration
immediately, subject to the following paragraphs:
(a) if the time for payment of the consideration in accordance
with subsection 620(2) has not yet occurred, the person is not
entitled to receive the improved consideration until that time;
(b) if the person has to make an election before being entitled to
the improved consideration, the person is not entitled to
receive the improved consideration until the later of:
(i) the time when the election is made; and
(ii) the time applicable under paragraph (a).
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 2 Off-market bids (express variation by bidder)
Section 650C
194 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Fresh election as to the form of consideration
(3) If a person who has already accepted an offer has the right to make
a fresh election as to the form of consideration to be taken, the
bidder must send the person as soon as practicable after the
variation a written notice informing them about their right to make
the election.
Note 1: Section 651B says how the election is to be exercised.
Note 2: Sections 648B and 648C provide for the manner in which documents
may be sent to holders.
Strict liability offences
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
650C Off-market bids—extension of offer period
(1) A bidder making an off-market bid may extend the offer period at
any time before the end of the offer period.
(2) If the bid is subject to a defeating condition, the bidder may extend
the offer period after the publication of the notice under
subsection 630(3) only if one of the following happens after the
publication:
(a) another person lodges with ASIC a bidder’s statement for a
takeover bid for securities in the bid class;
(b) another person announces a takeover bid for securities in the
bid class;
(c) another person makes offers under a takeover bid for
securities in the bid class;
(d) the consideration for offers under another takeover bid for
securities in the bid class is improved.
Note: Section 624 says how long the total offer period can be.
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Variation of offers Part 6.6
Off-market bids (express variation by bidder) Division 2
Section 650D
Corporations Act 2001 195
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
650D Off-market bids—method of making variation
Variation to be made by notice to the target and holders
(1) To vary offers under an off-market bid, the bidder must:
(a) prepare a notice that:
(i) sets out the terms of the proposed variation; and
(ii) if the bid is subject to a defeating condition and the
proposed variation postpones for more than 1 month the
time by which the bidder must satisfy their obligations
under the bid—informs people about the right to
withdraw acceptances under section 650E; and
(b) lodge the notice with ASIC; and
(c) after the notice is lodged, give the notice to:
(i) the target; and
(ii) everyone to whom offers were made under the bid.
Note: Sections 648B and 648C provide for the manner in which documents
may be sent to holders.
(2) A person must be sent a copy of the notice under
subparagraph (1)(c)(ii) even if they have already accepted the
offer. However, they need not be sent a copy if:
(a) the variation merely extends the offer period; and
(b) the bid is not subject to a defeating condition at the time the
notice is given to the target.
(3) A notice under subsection (1) must be signed by:
(a) if the bidder is, or includes, an individual—the individual;
and
(b) if the bidder is, or includes, a body corporate with 2 or more
directors—not fewer than 2 of the directors who are
authorised to sign the notice by a resolution passed at a
directors’ meeting; and
(c) if the bidder is, or includes, a body corporate that has only
one director—that director.
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 2 Off-market bids (express variation by bidder)
Section 650E
196 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) A copy of a notice given to a person under subparagraph (1)(c)(ii)
must include a statement that:
(a) a copy of the notice was lodged with ASIC on a specified
date; and
(b) ASIC takes no responsibility for the contents of the notice.
650E Right to withdraw acceptance
(1) A person who accepts an offer made under an off-market bid may
withdraw their acceptance of the offer if:
(a) the bid is subject to a defeating condition; and
(b) the bidder varies the offers under the bid in a way that
postpones for more than 1 month the time when the bidder
has to meet their obligations under the bid; and
(c) the person is entitled to be given a notice of the variation
under subsection 650D(1).
(2) To withdraw their acceptance, the person must:
(a) give the bidder notice within 1 month beginning on the day
after the day on which the copy of the notice of the variation
was received; and
(b) return any consideration received by the person for accepting
the offer.
(3) A notice under paragraph (2)(a) must:
(a) comply with the conditions specified in regulations made for
the purposes of this paragraph; or
(b) if no such regulations are made—be in writing.
(4) To return consideration that includes securities, the person must:
(a) take any actions that are specified in regulations made for the
purposes of this paragraph in relation to the return of those
securities; or
(b) if no such regulations are made—give the bidder any transfer
documents needed to effect the return of the securities.
(5) If the person withdraws their acceptance, the bidder must:
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Takeovers Chapter 6
Variation of offers Part 6.6
Off-market bids (express variation by bidder) Division 2
Section 650F
Corporations Act 2001 197
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) take any actions that are specified in regulations made for the
purposes of this paragraph in relation to the withdrawal of
acceptance; and
(b) return any documents that the person sent the bidder with the
acceptance of the offer;
within 14 days after:
(c) if the person does the things referred to in subsection (2) on
the same day—that day; or
(d) if the person does those things on different days—the last of
those days.
(6) If under this section a person returns to a company any certificates
(together with any necessary transfer documents) in respect of the
securities issued by the company, the company must cancel those
securities as soon as possible. Any reduction in share capital is
authorised by this subsection.
(7) An offence based on subsection (5) or (6) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
650F Freeing off-market bids from defeating conditions
(1) If the offers under an off-market bid are subject to a defeating
condition, the bidder may free the offers, and the takeover
contracts, from the condition only by giving the target a notice
declaring the offers to be free from the condition in accordance
with this section:
(a) if the condition is that the bidder may withdraw unaccepted
offers if an event or circumstance referred to in
subsection 652C(1) or (2) occurs in relation to the target—
not later than 3 business days after the end of the offer
period; or
(b) in any other case—not less than 7 days before the end of the
offer period.
(2) The notice must:
(a) state that the offers are free from the condition; and
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 2 Off-market bids (express variation by bidder)
Section 650G
198 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) specify the bidder’s voting power in the company.
(3) The notice must be:
(a) if the securities in the bid class are quoted—given to the
relevant market operator; and
(b) if those securities are not quoted—lodged with ASIC.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
650G Contracts and acceptances void if defeating condition not
fulfilled
All takeover contracts, and all acceptances that have not resulted in
binding takeover contracts, for an off-market bid are void if:
(a) offers made under the bid have at any time been subject to a
defeating condition; and
(b) the bidder has not declared the offers to be free from the
condition within the period before the date applicable under
subsection 630(1) or (2); and
(c) the condition has not been fulfilled at the end of the offer
period.
A transfer of securities based on an acceptance or contract that is
void under this section must not be registered.
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Takeovers Chapter 6
Variation of offers Part 6.6
Off-market bids (automatic variations) Division 3
Section 651A
Corporations Act 2001 199
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Off-market bids (automatic variations)
651A Off-market bid—effect on bid consideration of purchases
made outside bid
Effect of purchases outside bid on offers made under the bid
(1) The offers made under an off-market bid, and the takeover
contracts, are varied under this section if:
(a) the bidder purchases securities in the bid class outside the bid
during the bid period; and:
(b) the consideration for that purchase consists solely of a cash
sum; and
(c) either:
(i) the consideration, or 1 of the forms of consideration,
payable under the bid consists of a cash sum only and
the consideration referred to in paragraph (b) is higher
than the cash sum payable for the securities under the
bid; or
(ii) a cash sum only is not the consideration, or 1 of the
forms of consideration, payable under the bid.
Note 1: Section 9 defines takeover contract.
Note 2: The effect of section 623 is that the purchase outside the bid has to be
made through an on-market transaction (see subsection 623(1) and
paragraph 623(3)(b)).
Effect on unaccepted cash offers
(2) If:
(a) one of the forms of consideration offered to a person under
an off-market bid is a cash sum only; and
(b) the person has not accepted the offer before the purchase
outside the bid occurs;
the cash sum is taken to be increased to the highest outside
purchase price before the offer is accepted.
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Chapter 6 Takeovers
Part 6.6 Variation of offers
Division 3 Off-market bids (automatic variations)
Section 651B
200 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Effect on cash offers already accepted
(3) The consideration payable for each security covered by a takeover
contract arising from the acceptance of an offer for a cash sum only
is increased to the highest outside purchase price. If the person who
accepted the offer has already received the whole or any part of the
consideration under the contract, they are entitled to receive the
increase in consideration immediately.
Effect on non-cash offers accepted at any time during bid period
(4) If:
(a) a person accepts an offer under a bid at any time during the
bid period; and
(b) the consideration paid or provided, or to be paid or provided,
under the takeover contract arising from the acceptance of the
offer does not consist of a cash sum only;
then:
(c) the person may elect to take as consideration for each
security covered by the takeover contract a cash sum equal to
the highest outside purchase price instead of the
consideration they originally accepted; and
(d) the bidder must give the person a written notice of their right
to make the election within 14 days after the end of the offer
period.
Note: Section 651B says how the election is to be exercised.
(5) An offence based on subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
651B How to make an election for new forms of consideration
(1) An election under section 650B or 651A to take a new form of
consideration must be made:
(a) by written notice to the bidder; and
(b) within 1 month after the person receives the notice from the
bidder of their right to make the election.
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Variation of offers Part 6.6
Off-market bids (automatic variations) Division 3
Section 651C
Corporations Act 2001 201
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The person becomes entitled to the new form of consideration if
they:
(a) make the election; and
(b) return to the bidder:
(i) any consideration they have already received; and
(ii) any necessary transfer documents.
651C Returning securities as part of election
(1) If under section 651B a person returns to a company any
certificates (together with any necessary transfer documents) in
respect of the securities issued by a company, the company must
cancel those securities as soon as possible.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 6 Takeovers
Part 6.7 Withdrawal and suspension of offers
Section 652A
202 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.7—Withdrawal and suspension of offers
652A Withdrawal of unaccepted offers under takeover bid
Unaccepted offers under a takeover bid may only be withdrawn
under section 652B or 652C.
652B Withdrawal of takeover offers with ASIC consent
Unaccepted offers under a takeover bid may be withdrawn with the
written consent of ASIC. ASIC may consent subject to conditions.
652C Withdrawal of market bids
Bidder entitled to withdraw if certain events happen during the
offer period
(1) The bidder may withdraw unaccepted offers made under a market
bid if 1 of the following happens during the bid period, but only if
the bidder’s voting power in the target is at or below 50% when the
event happens:
(a) the target converts all or any of its shares into a larger or
smaller number of shares (see section 254H);
(b) the target or a subsidiary resolves to reduce its share capital
in any way;
(c) the target or a subsidiary:
(i) enters into a buy-back agreement; or
(ii) resolves to approve the terms of a buy-back agreement
under subsection 257C(1) or 257D(1);
(d) the target or a subsidiary issues shares, or grants an option
over its shares, or agrees to make such an issue or grant such
an option;
(e) the target or a subsidiary issues, or agrees to issue,
convertible notes;
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Withdrawal and suspension of offers Part 6.7
Section 652C
Corporations Act 2001 203
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(f) the target or a subsidiary disposes, or agrees to dispose, of
the whole, or a substantial part, of its business or property;
(g) the target or a subsidiary grants, or agrees to grant, a security
interest in the whole, or a substantial part, of its business or
property;
(h) the target or a subsidiary resolves to be wound up.
(2) The bidder may also withdraw unaccepted offers made under a
market bid if 1 of the following happens during the bid period:
(a) a liquidator or provisional liquidator of the target or of a
subsidiary is appointed;
(b) a court makes an order for the winding up of the target or of a
subsidiary;
(c) an administrator of the target, or of a subsidiary, is appointed
under section 436A, 436B or 436C;
(d) the target or a subsidiary executes a deed of company
arrangement;
(e) a receiver, or a receiver and manager, is appointed in relation
to the whole, or a substantial part, of the property of the
target or of a subsidiary.
This is so regardless of the bidder’s voting power at the time.
(3) Notice of the withdrawal must be given to each relevant market
operator.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Chapter 6 Takeovers
Part 6.8 Acceptances
Section 653A
204 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.8—Acceptances
653A Acceptance of offers made under off-market bid
If:
(a) an offer is made under an off-market bid for quoted
securities; and
(b) regulations made for the purposes of this paragraph set out
any requirements for the manner in which the acceptance of
the offer, so far as it relates to those securities, must be
complied with;
an acceptance of the offer for those securities is effective only if it
is made in that way.
653B Acceptances by transferees and nominees of offers made under
off-market bid
(1) If an off-market bid is made for securities:
(a) a person who:
(i) is able during the offer period to give good title to a
parcel of those securities; and
(ii) has not already accepted an offer under the bid for those
securities;
may accept as if an offer on terms identical with the other
offers made under the bid had been made to that person in
relation to those securities; and
(b) a person who holds 1 or more parcels of those securities as
trustee or nominee for, or otherwise on account of, another
person may accept as if a separate offer had been made in
relation to:
(i) each of those parcels; and
(ii) any parcel they hold in their own right.
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Acceptances Part 6.8
Section 653B
Corporations Act 2001 205
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
If a person accepts an offer under a proportional takeover bid for
securities, no-one else may accept an offer under the bid in respect
of those securities.
Note: Section 9 defines proportional takeover bid. See paragraph 618(1)(b).
(2) For the purposes of this section:
(a) a person is taken to hold securities if the person is, or is
entitled to be registered as, the holder of the securities; and
(b) a person is taken to hold the securities on trust for, as
nominee for or on account of another person if they:
(i) are entitled to be registered as the holder of particular
securities; and
(ii) hold their interest in the securities on trust for, as
nominee for or on account of that other person; and
(c) in determining under subsection (1) whether a person has
accepted an offer for particular securities under a takeover
bid, a person who accepts an offer under a proportional
takeover bid is taken to have accepted the offer for all the
securities in the bid class that they hold at the time they
accept the offer.
(3) If under paragraph (1)(b) a person may accept as if a separate offer
is taken to be made to a person for a parcel of securities within a
holding, an acceptance of that offer is ineffective unless:
(a) the person gives the bidder a notice stating that the securities
consist of a separate parcel; and
(b) the acceptance specifies the number of securities in the
parcel.
(4) A notice under subsection (3) must:
(a) comply with the conditions specified in regulations made for
the purposes of this paragraph that provide for the manner of
giving the notice; or
(b) if no such regulations are made—be in writing.
(5) A person contravenes this subsection if:
(a) they purport to accept an offer under this section; and
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Chapter 6 Takeovers
Part 6.8 Acceptances
Section 653B
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the acceptance is not made in accordance with this section.
The acceptance is, however, as valid as it would have been if it had
been made in accordance with this section.
(6) A person may, at the one time, accept for 2 or more parcels under
this section as if there had been a single offer for a separate parcel
consisting of those parcels.
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Takeovers Chapter 6
Other activities during the bid period Part 6.9
Section 654A
Corporations Act 2001 207
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.9—Other activities during the bid period
654A Bidder not to dispose of securities during the bid period
(1) The bidder must not dispose of any securities in the bid class
during the bid period.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) Subsection (1) does not apply to a disposal of securities by the
bidder if:
(a) someone else who is not an associate of the bidder makes an
offer, or improves the consideration offered, under a takeover
bid for securities in the bid class after the bidder’s statement
is given to the target; and
(b) the bidder disposes of the securities after the offer is made or
the consideration is improved.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2), see subsection 13.3(3) of the Criminal Code.
654B Disclosures about substantial shareholdings in listed
companies
During the bid period, substantial shareholding notices that need to
be lodged under section 671B must be lodged by 9.30 am the next
business day (rather than the usual 2 business days).
654C Disclosures about substantial shareholdings in unlisted
companies
(1) A bidder making a bid for securities of an unlisted company must
give the target a notice stating the bidder’s voting power in the
target if, at a particular time during the bid period, the bidder’s
voting power in the target rises from below a percentage in the
following list to that percentage or higher:
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Chapter 6 Takeovers
Part 6.9 Other activities during the bid period
Section 654C
208 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) 25%;
(b) 50%;
(c) 75%;
(d) 90%.
(2) The notice must be given as soon as practicable, and in any event
within 2 business days, after the rise in voting power occurred.
(3) The target must:
(a) make the notice available at its registered office for
inspection without charge by any holder of bid class
securities during the bid period; and
(b) lodge the notice with ASIC.
(4) An offence based on subsection (1) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Takeovers Chapter 6
Review and intervention Part 6.10
ASIC’s power to exempt and modify Division 1
Section 655A
Corporations Act 2001 209
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6.10—Review and intervention
Division 1—ASIC’s power to exempt and modify
655A ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
Note: Under section 656A, the Panel has power to review the exercise by
ASIC of its powers under this section.
(2) In deciding whether to give the exemption or declaration, ASIC
must consider the purposes of this Chapter set out in section 602.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class
of securities; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
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Chapter 6 Takeovers
Part 6.10 Review and intervention
Division 1 ASIC’s power to exempt and modify
Section 655B
210 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) definitions in this Act or the regulations as they apply to
references in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
655B Notice of decision and review rights
(1) Subject to subsection (2), ASIC must take such steps as are
reasonable in the circumstances to give to each person whose
interests are affected by a decision under section 655A a notice, in
writing or otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the
Panel under section 656A.
(2) Subsection (1) does not require ASIC to give notice to a person
affected by the decision or to the persons in a class of persons
affected by the decision, if ASIC determines that giving notice to
the person or persons is not warranted, having regard to:
(a) the cost of giving notice to the person or persons; and
(b) the way in which the interests of the person or persons are
affected by the decision.
(3) A failure to comply with this section does not affect the validity of
the decision.
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Division 2—The Takeovers Panel
Subdivision A—Review of ASIC’s exercise of its exemption or
modification powers
656A Review of exercise of exemption or modification powers
(1) The Panel may review:
(a) a decision of ASIC under section 655A; or
(b) a decision of ASIC under section 673 in relation to securities
of the target of a takeover bid during the bid period.
For these purposes, decision has the same meaning as in the
Administrative Appeals Tribunal Act 1975.
(2) An application to the Panel for review of the decision may be made
by any person whose interests are affected by the decision.
(3) For the purpose of reviewing the decision, the Panel may exercise
all the powers and discretions conferred on ASIC by this Chapter
or Chapter 6C. The Panel must make a decision:
(a) affirming the decision; or
(b) varying the decision; or
(c) setting aside the decision and:
(i) making a decision in substitution for the decision under
review; or
(ii) remitting the matter for reconsideration by ASIC in
accordance with any directions or recommendations of
the Panel.
(4) The decision must be in writing and published in the Gazette.
(5) If the Panel varies an ASIC decision, or makes a decision in
substitution for an ASIC decision:
(a) the ASIC decision as varied, or the substituted decision, is
taken for all purposes (other than the purposes of applications
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to the Panel for review in accordance with this section) to be
a decision of ASIC under section 655A; and
(b) when the Panel’s determination on the review comes into
operation, the ASIC decision as varied, or the substituted
decision, has effect, or is taken to have had effect, on and
from the day on which the ASIC decision has or had effect.
Paragraph (b) applies unless the Panel otherwise orders.
656B Operation and implementation of a decision that is subject to
review
(1) Subject to this section, applying to the Panel under section 656A
for review of an ASIC decision does not:
(a) affect the operation of the decision; or
(b) prevent the taking of action to implement the decision.
(2) On application by a party to the proceedings before the Panel, the
Panel may:
(a) make an order staying, or otherwise affecting the operation or
implementation of, the whole or a part of the decision if the
Panel considers that:
(i) it is desirable to make the order after taking into account
the interests of any person who may be affected by the
review; and
(ii) the order is appropriate for the purpose of securing the
effectiveness of the hearing and determination of the
application for review; or
(b) make an order varying or revoking an order made under
paragraph (a) (including an order that has previously been
varied on one or more occasions under this paragraph).
(3) Subject to subsection (4), the Panel must not:
(a) make an order under paragraph (2)(a) unless ASIC has been
given a reasonable opportunity to make a submission to the
Panel in relation to the matter; or
(b) make an order under paragraph (2)(b) unless:
(i) ASIC; and
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(ii) the person who requested the making of the order under
paragraph (2)(a); and
(iii) if the order under paragraph (2)(a) has previously been
varied by an order or orders under paragraph (2)(b)—
the person or persons who applied for the
last-mentioned order or orders;
have been given a reasonable opportunity to make
submissions to the Panel in relation to the matter.
(4) Subsection (3) does not prohibit the Panel from making an order
without giving to a person referred to in that subsection a
reasonable opportunity to make a submission to the Panel in
relation to a matter if the Panel is satisfied that, by reason of the
urgency of the case or otherwise, it is not practicable to give that
person such an opportunity. If an order is so made without giving
such an opportunity to ASIC, the order does not come into
operation until a notice setting out the terms of the order is served
on ASIC.
(5) An order in force under paragraph (2)(a) (including an order that
has previously been varied on one or more occasions under
paragraph (2)(b)):
(a) is subject to the conditions that are specified in the order; and
(b) has effect until:
(i) if a period for the operation of the order is specified in
the order—the end of that period or, if the application
for review is decided by the Panel before the end of that
period, the decision of the Panel on the application for
review comes into operation; or
(ii) if a period for the operation of the order is not specified
in the order—the decision of the Panel on the
application for review comes into operation.
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Subdivision B—Unacceptable circumstances
657A Declaration of unacceptable circumstances
(1) The Panel may declare circumstances in relation to the affairs of a
company to be unacceptable circumstances. Without limiting this,
the Panel may declare circumstances to be unacceptable
circumstances whether or not the circumstances constitute a
contravention of a provision of this Act.
Note: Sections 659B and 659C deal with court proceedings during and after
a takeover bid.
(2) The Panel may only declare circumstances to be unacceptable
circumstances if it appears to the Panel that the circumstances:
(a) are unacceptable having regard to the effect that the Panel is
satisfied the circumstances have had, are having, will have or
are likely to have on:
(i) the control, or potential control, of the company or
another company; or
(ii) the acquisition, or proposed acquisition, by a person of a
substantial interest in the company or another company;
or
(b) are otherwise unacceptable (whether in relation to the effect
that the Panel is satisfied the circumstances have had, are
having, will have or are likely to have in relation to the
company or another company or in relation to securities of
the company or another company) having regard to the
purposes of this Chapter set out in section 602; or
(c) are unacceptable because they:
(i) constituted, constitute, will constitute or are likely to
constitute a contravention of a provision of this Chapter
or of Chapter 6A, 6B or 6C; or
(ii) gave or give rise to, or will or are likely to give rise to, a
contravention of a provision of this Chapter or of
Chapter 6A, 6B or 6C.
The Panel may only make a declaration under this subsection, or
only decline to make a declaration under this subsection, if it
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considers that doing so is not against the public interest after taking
into account any policy considerations that the Panel considers
relevant.
(3) In exercising its powers under this section, the Panel:
(a) must have regard to:
(i) the purposes of this Chapter set out in section 602; and
(ii) the other provisions of this Chapter; and
(iii) the rules made under section 658C; and
(iv) the matters specified in regulations made for the
purposes of paragraph 195(3)(c) of the ASIC Act; and
(b) may have regard to any other matters it considers relevant.
In having regard to the purpose set out in paragraph 602(c) in
relation to an acquisition, or proposed acquisition, of a substantial
interest in a company, body or scheme, the Panel must take into
account the actions of the directors of the company or body or the
responsible entity for a scheme (including actions that caused the
acquisition or proposed acquisition not to proceed or contributed to
it not proceeding).
(4) The Panel must give an opportunity to make submissions in
relation to the matter to:
(a) each person to whom a proposed declaration relates; and
(b) each party to the proceedings; and
(c) ASIC.
(5) The declaration must be in writing and published in the Gazette.
(6) As soon as practicable, the Panel must give each person to whom
the declaration relates:
(a) a copy of the declaration; and
(b) a written statement of the Panel’s reasons for making the
declaration.
(7) This section does not require the Panel to perform a function, or
exercise a power, in a particular way in a particular case.
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216 Corporations Act 2001
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657B When Panel may make declaration
The Panel can only make a declaration under section 657A within:
(a) 3 months after the circumstances occur; or
(b) 1 month after the application under section 657C for the
declaration was made;
whichever ends last. The Court may extend the period on
application by the Panel.
657C Applying for declarations and orders
(1) The Panel may make a declaration under section 657A, or an order
under section 657D or 657E, only on an application made under
this section.
(2) An application for a declaration under section 657A or an order
under section 657D or 657E may be made by:
(a) the bidder; or
(b) the target; or
(c) ASIC; or
(d) any other person whose interests are affected by the relevant
circumstances.
Note: The Administrative Appeals Tribunal cannot review ASIC’s decision
whether to apply to the Panel (see paragraph 1317C(gc)).
(3) An application for a declaration under section 657A can be made
only within:
(a) 2 months after the circumstances have occurred; or
(b) a longer period determined by the Panel.
657D Orders that Panel may make following declaration
(1) The Panel may make an order under subsection (2) if it has
declared circumstances to be unacceptable under section 657A. It
must not make an order if it is satisfied that the order would
unfairly prejudice any person. Before making the order, the Panel
must give:
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(a) each person to whom the proposed order would be directed;
and
(b) each party to the proceedings; and
(c) ASIC;
an opportunity to make submissions to the Panel about the matter
(2) The Panel may make any order (including a remedial order but not
including an order directing a person to comply with a requirement
of Chapter 6, 6A, 6B or 6C) that it thinks appropriate to:
(a) if the Panel is satisfied that the rights or interests of any
person, or group of persons, have been or are being affected,
or will be or are likely to be affected, by the circumstances—
protect those rights or interests, or any other rights or
interests, of that person or group of persons; or
(b) ensure that a takeover bid or proposed takeover bid in
relation to securities proceeds (as far as possible) in a way
that it would have proceeded if the circumstances had not
occurred; or
(c) specify in greater detail the requirements of an order made
under this subsection; or
(d) determine who is to bear the costs of the parties to the
proceedings before the Panel;
regardless of whether it has previously made an order under this
subsection or section 657E in relation to the declaration. The Panel
may also make any ancillary or consequential orders that it thinks
appropriate.
Note: Section 9 defines remedial order.
(3) The Panel may vary, revoke or suspend an order made under this
section. Before doing so, it must give an opportunity to make
submissions in relation to the matter to:
(a) each person to whom the order is directed; and
(b) each party to the proceedings in which the order was made;
and
(c) ASIC.
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218 Corporations Act 2001
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(4) If the Panel makes an order under this section, the Panel must give
a copy of the order, and a written statement of its reasons for
making the order, to:
(a) each party to the proceedings before the Panel; and
(b) each person to whom the order is directed if they are not a
party to the proceedings; and
(c) for an order relating to specified securities of a company—
the company; and
(d) ASIC.
The Panel must also publish the order in the Gazette. The order
takes effect as soon as it is made and not when all the requirements
of this subsection are met.
(5) If the Panel makes an order of the kind referred to in paragraph (j)
of the definition of remedial order, the exercise of rights attached
to shares is to be disregarded as provided in the order.
(6) If the Panel makes an order of the kind referred to in paragraph (k)
of the definition of remedial order, then, by force of this
subsection, the agreement or offer specified in the order is
cancelled, or becomes voidable, as from the making of the order or
any later time that is specified in the order.
657E Interim orders
(1) The Panel, or the President of the Panel, may make an interim
order of a kind referred to in subsection 657D(2) in relation to
circumstances even if:
(a) there is no declaration under section 657A that the
circumstances are unacceptable; or
(b) no application to the Panel for a declaration of that kind has
been made.
The order must specify the period (not exceeding 2 months) for
which it is to have effect.
(2) The order ceases to have effect:
(a) at the end of the period specified in the order; or
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(b) if, before the end of that period, proceedings for a declaration
under section 657A in relation to the circumstances (and all
related proceedings for an order under section 657D) are
determined—when those proceedings are determined.
657EA Internal Panel reviews
(1) The following may apply under this section for review by the Panel
of a decision of the Panel made on an application under
section 657C:
(a) a party to the proceedings in which the decision was made; or
(b) ASIC.
For these purposes, decision has the same meaning as in the
Administrative Appeals Tribunal Act 1975.
(2) If the decision is not:
(a) a decision to make a declaration under section 657A; or
(b) a decision to make an order under section 657D or 657E;
the person may apply for review only with the consent of the
President of the Panel.
(3) The regulations may provide for the time limits within which an
application may be made for review of a decision.
Note: Regulations made under the ASIC Act deal with the constitution of
the Panel for the purposes of conducting a review under this section
and the procedures to be followed in conducting the review.
(4) After conducting a review under this section, the Panel may:
(a) vary the decision reviewed; or
(b) set aside the decision reviewed; or
(c) set aside the decision reviewed and substitute a new decision.
In conducting the review, the Panel has the same power to make a
declaration under section 657A, or an order under section 657D or
657E, as it has when it is considering an application under
section 657C.
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220 Corporations Act 2001
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(5) Despite section 657B, the Panel can only make a declaration under
section 657A after conducting a review under this section if the
declaration is made within:
(a) 3 months after the circumstances in relation to which the
declaration is made occur; or
(b) 1 month after the application for review was made;
whichever ends last. The Court may extend the period on
application by the Panel.
657EB References by Courts
(1) A Court hearing proceedings in relation to a decision of the Panel
made on an application under section 657C may refer the decision
to the Panel for review.
Note: Regulations made under the ASIC Act deal with the constitution of
the Panel for the purposes of conducting a review under this section
and the procedures to be followed in conducting the review.
(2) After conducting a review under this section, the Panel may:
(a) vary the decision reviewed; or
(b) set aside the decision reviewed; or
(c) set aside the decision reviewed and substitute a new decision.
In conducting the review, the Panel has the same powers to make a
declaration under section 657A, or an order under section 657D or
657E, as it has when it is considering an application under
section 657C.
657F Offence to contravene Panel order
(1) A person who contravenes an order made under section 657D or
657E commits an offence.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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657G Orders by the Court where contravention or proposed
contravention of Panel order
(1) If a person contravenes, or proposes to engage in conduct that
would contravene, an order made by the Panel under section 657D
or 657E, the Court may make any orders it considers appropriate to
secure compliance with the Panel’s order, including:
(a) 1 or more remedial orders; and
(b) an order directing a person to do, or to refrain from doing, a
specified act.
Note: Section 9 defines remedial order.
(2) An application for an order under this section may only be made
by:
(a) ASIC; or
(b) the President of the Panel; or
(c) a person to whom the Panel’s order relates; or
(d) a person who was a party to the proceedings in which the
Panel’s order was made.
657H ASIC may publish report about application to Panel or Court
(1) ASIC may publish a report, statement or notice in relation to an
application it has made for:
(a) a declaration of unacceptable circumstances under
section 657A; or
(b) an order under subsection 657D(2); or
(c) an order under section 657E; or
(d) review under section 657EA of a decision of the Panel; or
(e) an order under section 657G to secure compliance with an
order made under subsection 657D(2) or section 657E.
(2) The report, statement or notice must:
(a) state that the application has been made; and
(b) name the company; and
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(c) if ASIC considers that the report, statement or notice should
name any other person to whom the declaration would relate
or the order would be directed—name that other person.
(3) The report, statement or notice may be published in any way that
ASIC thinks appropriate. It need not be in writing.
(4) This section does not limit a function or power of ASIC, the Panel
or any other person or body.
Subdivision C—General provisions
658A Power of Panel where a proceeding is frivolous or vexatious
(1) If an application is made to the Panel under this Division, the Panel
may, at any stage of the proceeding, if it is satisfied that the
application is frivolous or vexatious:
(a) dismiss the application; or
(b) if the Panel considers it appropriate, on the application of a
party to the proceedings, direct that the person who made the
application must not, without leave of the Panel, make a
subsequent application to the Panel of a kind or kinds
specified in the direction.
(2) A direction given by the Panel under paragraph (1)(b) has effect
despite any other provision of this Act or a provision of any other
Act.
(3) The Panel may revoke or vary the direction.
658B Evidentiary value of findings of fact by Panel
(1) A finding of fact recorded in an order by the Panel, or a written
statement of the reasons for an order of the Panel, is proof of the
fact in the absence of evidence to the contrary.
(2) A certificate signed by the President of the Panel that states a
finding of fact made in proceedings before the Panel is proof of the
fact in the absence of evidence to the contrary.
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658C Panel’s power to make rules
(1) The President of the Panel may, after consultation with members of
the Panel, make rules, not inconsistent with this Act or the
Regulations, to clarify or supplement the operation of the
provisions of this Chapter.
(2) In making rules under this section, the President of the Panel must
consider the purposes of this Chapter set out in section 602.
(3) A rule under this section must be in writing and the President of
the Panel must:
(a) publish notice of it in the Gazette; and
(b) give the Minister, and ASIC, a copy of the rule as soon as
practicable after it is published in the Gazette.
(4) Within 28 days after receiving the copy, the Minister may disallow
the whole or a specified part of the rule.
(5) If a person contravenes a rule made under this section, the Court
may give directions for compliance with the rule to:
(a) that person; or
(b) if that person is a body corporate—the directors of the body
corporate.
The Court must give the person against whom the order is sought,
and any person aggrieved by the contravention, an opportunity to
be heard before giving directions under this subsection.
(6) The Court may give a direction under subsection (5) only on
application by:
(a) ASIC; or
(b) the President of the Panel; or
(c) a person aggrieved by the contravention.
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Section 658D
224 Corporations Act 2001
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658D Inconsistency between Panel rules and ASIC exemption or
declaration
If there is an inconsistency between a rule made under
section 658C and an exemption given, or declaration made, by
ASIC under section 655A, the rule made under section 658C
prevails to the extent of the inconsistency.
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Section 659A
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Division 3—Court powers
659A Panel may refer questions of law to the Court
The Panel may, of its own motion, refer a question of law arising
in a proceeding before the Panel to the Court for decision.
659AA Object of sections 659B and 659C
The object of sections 659B and 659C is to make the Panel the
main forum for resolving disputes about a takeover bid until the
bid period has ended.
659B Court proceedings before end of bid period
Delay in commencing court proceedings until after end of bid
period
(1) Only the following may commence court proceedings in relation to
a takeover bid, or proposed takeover bid, before the end of the bid
period:
(a) ASIC;
(b) a Minister of the Commonwealth;
(c) a Minister of a State or Territory in this jurisdiction;
(d) the holder of an office established by a law of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
(e) a body corporate incorporated for a public purpose by a law
of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
to the extent to which it is exercising a power conferred by a
law of the Commonwealth or a State or Territory in this
jurisdiction.
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Section 659B
226 Corporations Act 2001
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Note: This restriction starts to apply as soon as there is a takeover bid, or a
proposed takeover bid; it does not start to apply only when the bid
period commences.
Court power to stay proceedings that have already commenced
(2) A court may stay:
(a) court proceedings in relation to a takeover bid or proposed
takeover bid; or
(b) court proceedings that would have a significant effect on the
progress of a takeover bid;
until the end of the bid period.
(3) In deciding whether to exercise its powers under subsection (2), the
court is to have regard to:
(a) the purposes of this Chapter; and
(b) the availability of review by the Panel under Division 2.
(4) For the purposes of this section:
court proceedings in relation to a takeover bid or proposed
takeover bid:
(a) means any proceedings before a court in relation to:
(i) an action taken or to be taken as part of, or for the
purposes of, the bid or the target’s response to the bid;
or
(ii) a document prepared or to be prepared, or a notice given
or to be given, under this Chapter; and
(b) includes:
(i) proceedings to enforce an obligation imposed by this
Chapter; or
(ii) proceedings for the review of a decision, or the exercise
of a power or discretion, under this Chapter; or
(iii) proceedings for the review of a decision, or the exercise
of a power or discretion, under Chapter 6C in relation to
securities of the target of a takeover bid during the bid
period; and
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(iv) proceedings under Part 2F.1A for leave to bring, or to
intervene in, proceedings referred to in paragraph (a) or
subparagraph (b)(i), (ii) or (iii).
This is not limited to proceedings brought under this Chapter or
this Act but includes proceedings under other Commonwealth and
State or Territory laws (including the general law).
(5) Nothing in this section is intended to affect the jurisdiction of the
High Court under section 75 of the Constitution.
659C Court proceedings after end of bid period
(1) If:
(a) an application is made to the Panel for a declaration under
section 657A that particular conduct amounts to, or leads to,
circumstances that are unacceptable; and
(b) the Panel refuses to make the declaration; and
(c) a Court finds after the end of the bid period that the conduct
contravenes this Act;
the Court’s powers under this Act in relation to the conduct are
limited to the following:
(d) the Court may:
(i) determine whether a person is guilty of an offence
against this Act because they engaged in or were
involved in the conduct; and
(ii) impose a penalty if the person is found guilty;
(e) the Court may:
(i) determine whether a person who engaged in, or was
involved in, the conduct contravened a provision of this
Act; and
(ii) order the person to pay an amount of money to another
person (whether by way of damages, account of profits,
pecuniary penalty or otherwise);
(f) the Court may make an order under section 1318 or 1322 in
relation to the conduct.
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Section 659C
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This subsection does not confer power or jurisdiction on a court
that it does not have apart from this subsection.
(2) Without limiting subsection (1), the only kind of remedial order
that the Court may make is one that requires the person to pay
money to another person.
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Chapter 6A—Compulsory acquisitions and
buy-outs
660A Chapter extends to some listed bodies that are not companies
This Chapter extends to the acquisition of securities of listed
bodies that are not companies but are incorporated or formed in
Australia in the same way as it applies to the acquisition of
securities of companies.
Note: Section 9 defines company and listed.
660B Chapter extends to listed managed investment schemes
(1) This Chapter extends to the acquisition of interests in a registered
scheme that is also listed as if:
(a) the scheme were a company; and
(b) interests in the scheme were shares in the company; and
(c) voting interests in the scheme were voting shares in the
company.
(2) If Part 6A.1 applies to a scheme at the end of the bid period for a
takeover, that Part continues to apply to the scheme in relation to
the takeover bid even if the scheme ceases to be listed.
(3) If Part 6A.2 applies to a scheme when a compulsory acquisition
notice under section 664C is lodged, that Part (including Division 2
of that Part) continues to apply to the scheme in relation to the
notice even if the scheme ceases to be listed.
(4) The regulations may modify the operation of this Chapter as it
applies in relation to the acquisition of interests in listed managed
investment schemes.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 1 Compulsory acquisition of bid class securities
Section 661A
230 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.1—Compulsory acquisitions and buy-outs
following takeover bid
Division 1—Compulsory acquisition of bid class securities
661A Compulsory acquisition power following takeover bid
Threshold for compulsory acquisition power
(1) Under this subsection, the bidder under a takeover bid may
compulsorily acquire any securities in the bid class if:
(a) the bid is:
(i) an off-market bid to acquire all the securities in the bid
class; or
(ii) a market bid; and
(b) during, or at the end of, the offer period:
(i) the bidder and their associates have relevant interests in
at least 90% (by number) of the securities in the bid
class; and
(ii) the bidder and their associates have acquired at least
75% (by number) of the securities that the bidder
offered to acquire under the bid (whether the
acquisitions happened under the bid or otherwise).
This is so even if the bidder subsequently ceases to satisfy
subparagraph (b)(i) because of the issue of further securities in the
bid class.
Note: Subsection 92(3) defines securities for the purposes of this Chapter.
(2) For the purposes of subsection (1), disregard any relevant interests
that the bidder has merely because of the operation of
subsection 608(3) (relevant interest by 20% interest in body
corporate).
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Compulsory acquisition of bid class securities Division 1
Section 661A
Corporations Act 2001 231
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Court may allow compulsory acquisition even if threshold not
reached
(3) Under this subsection, the bidder under a takeover bid may
compulsorily acquire securities in the bid class with the approval of
the Court.
Securities to be acquired
(4) If the bidder compulsorily acquires securities in the bid class under
subsection (1) or (3), the bidder:
(a) must acquire all the securities in the bid class:
(i) which were issued or granted before the end of the offer
period; and
(ii) in which the bidder does not have a relevant interest;
and
(b) may elect to acquire all securities in the bid class:
(i) that were issued or granted after the end of the offer
period and before the notice under section 661B is
issued; and
(ii) in which the bidder does not have a relevant interest;
but only if the bidder and their associates have relevant
interests in at least 90% (by number) of the securities in the
bid class when the bidder gives notice under section 661B;
and
(c) if securities exist when the bidder gives the notice under
section 661B that:
(i) will convert, or may be converted, to securities in the
bid class; or
(ii) confer rights to be issued securities in the bid class that
may be exercised;
within the period of 6 weeks after the notice is given—may
elect to acquire securities that come to be in the bid class
during that period due to a conversion or exercise of the
rights but only if the bidder and their associates have relevant
interests in at least 90% of the securities (by number) in the
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Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 1 Compulsory acquisition of bid class securities
Section 661B
232 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
bid class when the bidder gives notice under section 661B;
and
(d) may elect to acquire any securities in the bid class in which
the bidder has a relevant interest (no matter when they were
issued or granted).
(5) This section has effect despite anything in the constitution of the
company whose securities are to be acquired.
661B Compulsory acquisition notice
Compulsory acquisition notice
(1) To compulsorily acquire securities under subsection 661A(1) or
(3), the bidder must:
(a) prepare a notice in the prescribed form that:
(i) informs the holders of the securities that the bidder is
entitled to acquire their securities under that subsection;
and
(ii) informs the holders about the compulsory acquisition
procedure under this Part, including:
(A) their right under section 661D to obtain the
names and addresses of everyone else the
bidder has given the notice to; and
(B) their right under section 661E to apply to the
Court for an order that the securities not be
compulsorily acquired; and
(b) lodge the notice with ASIC; and
(c) give the notice to each other person who is:
(i) a holder of securities in the bid class; or
(ii) if the bidder elects under paragraph 661A(4)(c) to
acquire securities that come to be in the bid class after
the notice is given—a holder of the convertible
securities referred to in that paragraph; and
(d) give a copy to each relevant market operator on the same day
as it is lodged with ASIC if the target is listed.
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Compulsory acquisitions and buy-outs following takeover bid Part 6A.1
Compulsory acquisition of bid class securities Division 1
Section 661B
Corporations Act 2001 233
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
If alternative forms of consideration were offered under the
takeover bid, the notice must specify which of those forms of
consideration will apply to the acquisition of the holder’s securities
if the holder does not elect one of the forms under
paragraph 661C(2)(a).
Note: Everyone who holds bid class securities on the day on which the
notice is lodged with ASIC is entitled notice. Under section 661E,
anyone who holds the securities after that day may apply to the Court
to stop the acquisition.
Time for dispatching notices to holders
(2) The bidder must dispatch the notices under paragraph (1)(c):
(a) during the offer period, or within 1 month after:
(i) the end of offer period if the acquisition is under
subsection 661A(1); or
(ii) the court approval if the acquisition is under
subsection 661A(3); and
(b) on the day the bidder lodges the notice with ASIC or on the
next business day.
The notices cannot be withdrawn.
Strict liability offences
(2A) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Manner of giving notice to holders
(3) The bidder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the
register of members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is posted.
(4) The notice may be sent:
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Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 1 Compulsory acquisition of bid class securities
Section 661C
234 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This section does not limit the manner in which the notice may be
sent to the holder.
Note: Section 109X makes general provision for service of documents.
661C Terms on which securities to be acquired
Same terms as takeover bid
(1) The bidder may acquire the securities only on the terms that
applied to the acquisition of securities under the takeover bid
immediately before:
(a) the notice under section 661B is given if it is given before the
end of the offer period; or
(b) the end of the offer period if it is not.
Alternative forms of consideration under takeover bid
(2) If alternative forms of consideration were offered under the
takeover bid, the form of consideration that applies to the
acquisition of the holder’s securities is:
(a) the form that the holder elects; or
(b) the form set out in the compulsory acquisition notice under
subsection 661B(1).
(3) The holder makes an election under subsection (2) by giving the
bidder a notice of the election by the later of:
(a) 1 month after the compulsory acquisition notice is given
under section 661B; or
(b) 14 days after the holder is given a statement under
section 661D if the holder asks for it.
(4) The election must:
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Compulsory acquisition of bid class securities Division 1
Section 661D
Corporations Act 2001 235
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) comply with the conditions specified in regulations made for
the purposes of this paragraph that provide for the manner of
making the election; or
(b) if no such regulations are made—be in writing.
661D Holder may obtain names and addresses of other holders
(1) Within 1 month after a compulsory acquisition notice in relation to
securities in the bid class is lodged with ASIC under section 661B,
the holder of the securities may ask the bidder in writing for a
written statement of the names and addresses of everyone else the
bidder has given the notice to. The bidder must give the holder the
statement within 7 days after the request.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
661E Holder may apply to Court to stop acquisition
(1) The holder of securities covered by a compulsory acquisition
notice under section 661B may apply to the Court for an order that
the securities not be compulsorily acquired under
subsection 661A(1). The application must be made before the later
of:
(a) the end of 1 month after the holder is given notice under
section 661B; or
(b) the end of 14 days after the holder is given a statement under
section 661D if the holder asks for it.
(2) The Court may order that the securities not be compulsorily
acquired under subsection 661A(1) only if the Court is satisfied
that the consideration is not fair value for the securities.
Note: See section 667C on valuation.
(3) If the Court makes an order under this section in relation to an
acquisition of securities, the order applies to all holders who have
applications to the Court pending for an order under this section in
relation to the acquisition.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 1 Compulsory acquisition of bid class securities
Section 661F
236 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
661F Signpost—completing the acquisition of the securities
See section 666A to find out how to complete the acquisition.
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Compulsory acquisitions and buy-outs following takeover bid Part 6A.1
Compulsory buy-out of bid class securities Division 2
Section 662A
Corporations Act 2001 237
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Compulsory buy-out of bid class securities
662A Bidder must offer to buy out remaining holders of bid class
securities
(1) If the bidder and their associates have relevant interests in at least
90% of the securities (by number) in the bid class at the end of the
offer period, the bidder must offer to buy out the remaining holders
of bid class securities in accordance with sections 662B and 662C.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) This section does not apply to securities that are issued:
(a) if the takeover bid was not subject to a defeating condition—
after the end of the offer period; or
(b) if the takeover bid was subject to a defeating condition—
after the notice whether the bid is free from a defeating
condition or not is given under subsection 630(3).
662B Bidder to tell remaining holders of their right to be bought out
Notice to remaining holders of bid class securities
(1) The bidder must:
(a) prepare a notice in the prescribed form that:
(i) states that the bidder and their associates have relevant
interests in at least 90% (by number) of the securities in
the bid class; and
(ii) informs the holder of bid class securities about their
right to be bought out under this Part; and
(iii) sets out the terms on which the holder may be bought
out; and
(b) lodge the notice with ASIC; and
(c) give the notice to each other person who:
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Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 2 Compulsory buy-out of bid class securities
Section 662B
238 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) is a holder of securities in the bid class on the day on
which the notice is lodged with ASIC; and
(ii) has not been given a compulsory acquisition notice
under section 661B when the notice under
subsection (2) is given; and
(d) give the notice to each relevant market operator on the same
day as it is lodged with ASIC if the target is listed.
If alternative forms of consideration were offered under the
takeover bid, the notice must specify which of those forms will
apply to the acquisition of the holder’s securities if the holder does
not give the bidder an election notice under subsection 662C(1).
Note: The notice is be given to everyone who holds bid class securities on
the day on which the notice is lodged with ASIC. Under section 662C,
anyone who acquires the securities after that day may require the
bidder to acquire the securities.
Time for dispatching notice to holders
(2) The bidder must dispatch the notices under paragraph (1)(c):
(a) during, or within 1 month after the end of, the offer period;
and
(b) on the day the bidder lodges the notice with ASIC or on the
next business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The bidder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the
register of members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
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Compulsory acquisitions and buy-outs following takeover bid Part 6A.1
Compulsory buy-out of bid class securities Division 2
Section 662C
Corporations Act 2001 239
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This subsection does not limit the manner in which the document
may be sent to the holder.
Note: Section 109X makes general provision for service of documents.
662C Right of remaining holder of securities in the bid class to be
bought out
(1) Within 1 month after notice is given in relation to securities under
section 662B, the holder of the securities may give the bidder
written notice requiring the bidder to acquire the securities. If
alternative forms of consideration were offered under the takeover
bid, the holder may elect in the notice which of those forms will
apply to the acquisition of the holder’s securities.
(2) The notice by the holder gives rise to a contract between the holder
and the bidder for the sale of the securities on:
(a) the terms that applied to the acquisition of securities under
the bid immediately before the end of the offer period; or
(b) if alternative forms of consideration applied at that time—on
the terms that the bidder will provide:
(i) the alternative specified by the holder in the notice
under subsection (1); or
(ii) if the holder has not made an election under that
subsection—the alternative set out in the bidder’s notice
under section 662B; or
(c) if the holder and the bidder agree on other terms—those
terms.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 3 Compulsory buy-out of convertible securities
Section 663A
240 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Compulsory buy-out of convertible securities
663A Bidder must offer to buy out holders of convertible securities
(1) If the bidder and their associates have relevant interests in at least
90% of the securities (by number) in the bid class at the end of the
offer period, the bidder must offer to buy out the holders of
securities that are convertible into bid class securities in
accordance with sections 663B and 663C. This section does not
apply to securities if a takeover bid has been made for the
convertible securities and a notice has been given under
section 661B or 662B in relation to the convertible securities.
Note: For when securities are convertible into bid class securities, see the
definition of convertible securities in section 9.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
663B Bidder to tell holders of convertible securities of their right to
be bought out
Notice to holders of convertible securities
(1) The bidder must:
(a) prepare a notice in the prescribed form that:
(i) states that the bidder and their associates have relevant
interests in at least 90% of the securities (by number) in
the bid class; and
(ii) informs the holder of convertible securities about their
right to be bought out under this Part; and
(iii) sets out the terms on which the holder may be bought
out; and
(b) lodge the notice with ASIC; and
(c) give each other person who is a holder of convertible
securities:
(i) the notice; and
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Compulsory buy-out of convertible securities Division 3
Section 663B
Corporations Act 2001 241
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) a copy of the expert’s report, or of all the experts’
reports, under section 667A; and
(d) give a copy of those documents to each relevant market
operator on the same day as it is lodged with ASIC if the
target is listed.
Note 1: Subparagraph (a)(iii)—Section 667A deals with the contents of an
expert’s report.
Note 2: The notice is to be given to everyone who holds convertible securities
on the day on which the notice is lodged with ASIC. Under
section 663C, anyone who acquires the securities after that day may
require the bidder to acquire the securities.
Time for dispatching notice to holders
(2) The bidder must dispatch the notices and reports under
paragraph (1)(c):
(a) during, or within 1 month after the end of, the offer period;
and
(b) on the day the bidder lodges the notice with ASIC or on the
next business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The bidder may give the notice or report to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the
register of members, debenture holders or option holders.
A notice or report sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document
may be sent to the holder.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.1 Compulsory acquisitions and buy-outs following takeover bid
Division 3 Compulsory buy-out of convertible securities
Section 663C
242 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Section 109X makes general provision for service of documents.
663C Right of holders of convertible securities to be bought out
(1) Within 1 month after notice under section 663B is given in relation
to convertible securities, the holder of the convertible securities
may give the bidder a notice requiring the bidder to acquire the
securities.
(2) The holder’s notice gives rise to a contract between the holder and
the bidder for the sale of the securities on:
(a) the terms agreed to by the bidder and the holder; or
(b) the terms determined by the Court on application by the
holder.
(3) If the Court makes a determination under paragraph (2)(b) in
relation to the terms of sale for a holder’s securities of a particular
class, the determination applies to all holders of securities in that
class who have applications to the Court pending for a
determination under that paragraph in relation to the terms of sale
of their securities.
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General compulsory acquisitions and buy-outs Part 6A.2
Compulsory acquisition of securities by 90% holder Division 1
Section 664A
Corporations Act 2001 243
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.2—General compulsory acquisitions and
buy-outs
Division 1—Compulsory acquisition of securities by 90%
holder
664A Threshold for general compulsory acquisition power
90% holder—holder of 90% of securities in particular class
(1) A person is a 90% holder in relation to a class of securities of a
company if the person holds, either alone or with a related body
corporate, full beneficial interests in at least 90% of the securities
(by number) in that class.
90% holder—holder with 90% voting power and 90% of whole
company or scheme
(2) A person is also a 90% holder in relation to a class of securities of
a company if:
(a) the securities in the class are shares or convertible into
shares; and
(b) the person’s voting power in the company is at least 90%;
and
(c) the person holds, either alone or with a related body
corporate, full beneficial interests in at least 90% by value of
all the securities of the company that are either shares or
convertible into shares.
Note: Subsection 667A(2) provides that the expert’s report that accompanies
the compulsory acquisition notice must support the paragraph (c)
condition.
90% holder may acquire remainder of securities in class
(3) Under this section, a 90% holder in relation to a class of securities
of a company may compulsorily acquire all the securities in that
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Part 6A.2 General compulsory acquisitions and buy-outs
Division 1 Compulsory acquisition of securities by 90% holder
Section 664AA
244 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
class in which neither the person nor any related bodies corporate
has full beneficial interests if either:
(a) the holders of securities in that class (if any) who have
objected to the acquisition between them hold less than 10%
by value of those remaining securities at the end of the
objection period set out in the notice under
paragraph 664C(1)(b); or
(b) the Court approves the acquisition under section 664F.
If subsection (2) applies to the 90% holder, the holder may
compulsorily acquire securities in a class only if the holder gives
compulsory acquisition notices in relation to all classes of shares
and securities convertible into shares of which they do not already
have full beneficial ownership.
Note: Subsection 92(3) defines securities for the purposes of this Chapter.
(4) This section has effect despite anything in the constitution of the
company whose securities are to be acquired.
(5) This Part does not apply to shares that give the shareholder, as a
shareholder, a right to occupy or use real property that the
company owns or holds under lease, whether the right is a lease or
licence or a contractual right.
(6) The 90% holder’s power to compulsorily acquire securities under a
notice given under section 664C ends if the 90% holder
contravenes section 664D by offering benefits outside the terms
proposed in the compulsory acquisition notice under section 664C.
664AA Time limit on exercising compulsory acquisition power
The 90% holder in relation to a class of securities of a company
may compulsorily acquire securities in that class under
section 664A only if the holder lodges the compulsory acquisition
notice for the acquisition with ASIC under paragraph 664C(2)(a)
within whichever of the following periods ends last:
(a) the period of 12 months that started on 13 March 2000; or
(b) the period of 6 months after the 90% holder becomes the
90% holder in relation to that class.
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General compulsory acquisitions and buy-outs Part 6A.2
Compulsory acquisition of securities by 90% holder Division 1
Section 664B
Corporations Act 2001 245
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
664B The terms for compulsory acquisition
(1) The 90% holder may acquire the securities in the class for a cash
sum only and, subject to subsection (2), must pay the same amount
for each security in the class acquired.
(2) The 90% holder may pay different amounts for the securities in the
class acquired if the differences are attributable to either or both of
the following:
(a) the fact that there are differences in the accrued dividend or
distribution entitlements of the securities;
(b) the fact that there are differences in the amounts paid up, or
that remain unpaid, on the securities.
664C Compulsory acquisition notice
Compulsory acquisition notice
(1) To compulsorily acquire securities under section 664A, the 90%
holder must prepare a notice in the prescribed form that:
(a) sets out the cash sum for which the 90% holder proposes to
acquire the securities; and
(b) specifies a period of at least 1 month during which the
holders may return the objection forms; and
(c) informs the holders about the compulsory acquisition
procedure under this Part, including:
(i) their right to obtain the names and addresses of the other
holders of securities in that class from the company
register; and
(ii) their right to object to the acquisition by returning the
objection form that accompanies the notice within the
period specified in the notice; and
(d) gives details of the consideration given for any securities in
that class that the 90% holder or an associate has purchased
within the last 12 months; and
(e) discloses any other information that is:
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Part 6A.2 General compulsory acquisitions and buy-outs
Division 1 Compulsory acquisition of securities by 90% holder
Section 664C
246 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) known to the 90% holder or any related bodies
corporate; and
(ii) material to deciding whether to object to the acquisition;
and
(iii) not disclosed in an expert’s report under section 667A.
(2) The 90% holder must then:
(a) lodge the notice with ASIC; and
(b) give each other person (other than a related body corporate)
who is a holder of securities in the class on the day on which
the notice is lodged with ASIC:
(i) the notice; and
(ii) a copy of the expert’s report, or of all experts’ reports,
under section 667A; and
(iii) an objection form; and
(c) give the company copies of those documents; and
(d) give copies of those documents to the relevant market
operator if the company is listed.
Note: Everyone who holds the securities on the day on which the notice is
lodged with ASIC is entitled to notice. Under subsection 664E(1),
anyone who acquires the securities during the objection period may
object to the acquisition.
Time for dispatching notice to holders
(3) The 90% holder must dispatch the notices under paragraph (2)(b)
on the day the 90% holder lodges the notice with ASIC or on the
next business day.
Manner of giving notice to holders
(4) The 90% holder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the
register of members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is posted.
(5) The notice may be sent:
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General compulsory acquisitions and buy-outs Part 6A.2
Compulsory acquisition of securities by 90% holder Division 1
Section 664D
Corporations Act 2001 247
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document
may be sent to the holder.
Note: Section 109X makes general provision for service of documents.
Notice not to be withdrawn
(6) The 90% holder may not:
(a) withdraw a notice under this section; or
(b) if the 90% holder has given a notice under this section in
relation to those securities and the objection period for that
notice has not ended—give another notice under this section
in relation to securities.
664D Benefits outside compulsory acquisition procedure
(1) If the 90% holder gives a notice under section 664C to
compulsorily acquire securities, the 90% holder or an associate
must not offer, give or agree to give a benefit to a person during
the objection period if:
(a) the benefit is likely to induce the person, or an associate of
the person, to:
(i) dispose of securities in that class; or
(ii) not object to the acquisition of those securities under the
notice; and
(b) the benefit is not provided for in the notice.
(2) If the 90% holder proposes to give a notice under section 664C to
acquire securities within the next 4 months, the 90% holder or an
associate must not offer, give or agree to give a benefit to a person
if:
(a) the benefit is likely to induce the person, or an associate of
the person, to:
(i) dispose of securities in that class; or
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Part 6A.2 General compulsory acquisitions and buy-outs
Division 1 Compulsory acquisition of securities by 90% holder
Section 664E
248 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) not object to the acquisition of those securities under the
notice; and
(b) the benefit is not proposed to be provided for in the notice.
(3) If the 90% holder gives a notice under section 664C to
compulsorily acquire securities, the 90% holder or an associate
must not give a benefit to a person:
(a) within 1 month after the end of the objection period (see
subsection 664F(2)); or
(b) during any proceedings by the Court to determine an
application under subsection 664F(1) by the 90% holder;
if:
(c) the benefit is likely to induce the person, or an associate of
the person, to:
(i) not object, or pursue an objection, to the acquisition of
those securities under the notice; or
(ii) dispose of securities in that class; and
(d) the benefit is not offered to all holders of securities in that
class under the notice.
(3A) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) This section does not prohibit simultaneous notices under
section 664C to compulsorily acquire different classes of securities
in the company.
664E Holder’s right to object to the acquisition
(1) A person who holds securities covered by the compulsory
acquisition notice may object to the acquisition of the securities by
signing an objection form and returning it to the 90% holder. The
objection:
(a) relates to all securities that are covered by the notice and are
held by the person at the end of the objection period; and
(b) cannot be withdrawn.
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General compulsory acquisitions and buy-outs Part 6A.2
Compulsory acquisition of securities by 90% holder Division 1
Section 664F
Corporations Act 2001 249
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The 90% holder must lodge with ASIC a copy of any objection
form returned under subsection (1) as soon as practicable after it is
returned.
(3) As soon as practicable after the end of the objection period, the
90% holder must:
(a) prepare a list that sets out:
(i) the names of people who hold securities covered by the
compulsory acquisition notice and have objected to the
acquisition; and
(ii) details of the securities they hold; and
(b) lodge the list with ASIC; and
(c) give a copy of the list to the company; and
(d) if the company is listed—give a copy to the relevant market
operator.
(4) If people who hold at least 10% of the securities covered by the
compulsory acquisition notice object to the acquisition before the
end of the objection period, the 90% holder must give everyone to
whom the compulsory acquisition notice was sent under
section 664C:
(a) a notice that the proposed acquisition will not occur; or
(b) a notice that the 90% holder has applied to the Court for
approval of the acquisition under section 664F;
within 1 month after the end of the objection period.
(5) An offence based on subsection (2), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
664F The Court’s power to approve acquisition
(1) If people who hold at least 10% of the securities covered by the
compulsory acquisition notice object to the acquisition before the
end of the objection period, the 90% holder may apply to the Court
for approval of the acquisition of the securities covered by the
notice.
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Part 6A.2 General compulsory acquisitions and buy-outs
Division 1 Compulsory acquisition of securities by 90% holder
Section 664G
250 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The 90% holder must apply within 1 month after the end of the
objection period.
(3) If the 90% holder establishes that the terms set out in the
compulsory acquisition notice give a fair value for the securities,
the Court must approve the acquisition of the securities on those
terms. Otherwise it must confirm that the acquisition will not take
place.
Note: See section 667C on valuation.
(4) The 90% holder must bear the costs that a person incurs on legal
proceedings in relation to the application unless the Court is
satisfied that the person acted improperly, vexatiously or otherwise
unreasonably. The 90% holder must bear their own costs.
664G Signpost—completing the acquisition of the securities
See section 666A for how to complete the acquisition.
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General compulsory acquisitions and buy-outs Part 6A.2
Compulsory buy-out of convertible securities by 100% holder Division 2
Section 665A
Corporations Act 2001 251
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Compulsory buy-out of convertible securities
by 100% holder
665A 100% holder must offer to buy out holders of convertible
securities
(1) A person is a 100% holder of securities in a class if the person,
either alone or with a related body corporate, holds full beneficial
interests in all the securities in the class.
(2) A 100% holder in relation to a class of securities (the main class)
who becomes a 100% holder through compulsory acquisitions
under this Part must offer to buy out the holders of securities in
another class that are convertible into main class securities in
accordance with sections 665B and 665C. This subsection does not
apply to securities if a notice is given in relation to the securities
under section 661B, 662B or 664C.
Note: For when securities are convertible into main class securities, see the
definition of convertible securities in section 9.
(3) An offence based on subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
665B 100% holder to tell holders of convertible securities of their
right to be bought out
Notice to holders of convertible securities
(1) The 100% holder must:
(a) prepare a notice in the prescribed form that:
(i) states that the person giving the notice has acquired all
the securities in the main class; and
(ii) sets out the information that was included in the
compulsory acquisition notice given in relation to
securities in the main class under paragraphs 664C(1)(d)
and (e); and
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Part 6A.2 General compulsory acquisitions and buy-outs
Division 2 Compulsory buy-out of convertible securities by 100% holder
Section 665B
252 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) sets out the cash sum for which they are willing to
acquire the convertible securities; and
(iv) informs the holder of convertible securities about their
right to be bought out under this Part; and
(b) lodge the notice with ASIC; and
(c) give each other person who is a holder of convertible
securities on the day on which the notice is lodged with
ASIC:
(i) the notice; and
(ii) a copy of the expert’s report, or all experts’ reports,
under section 667A; and
(d) give a copy of the documents to the company that issued the
securities; and
(e) give a copy of the documents to each relevant market
operator on the same day as it is lodged with ASIC if the
company is listed.
Note 1: Subparagraph (a)(iv)—Section 667A deals with the contents of an
expert’s report.
Note 2: The notice is to be given to everyone who holds convertible securities
on the day on which the notice is lodged with ASIC. Under
section 665C, anyone who holds the securities after that day may
require the 100% holder to acquire the securities.
Time for dispatching notice to holders
(2) The 100% holder must dispatch the notices and reports under
paragraph (1)(c):
(a) within 1 month after they become the 100% holder; and
(b) on the day the 100% holder lodges the notice with ASIC or
on the next business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The 100% holder may give the notice or report to a holder:
(a) personally; or
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Compulsory buy-out of convertible securities by 100% holder Division 2
Section 665C
Corporations Act 2001 253
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) by sending it by post to the address for the holder in the
register of members, debenture holders or option holders.
A notice or report sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document
may be sent to the holder.
Note: Section 109X makes general provision for service of documents.
665C Right of holders of convertible securities to be bought out
(1) Within 1 month after notice under section 665B is given in relation
to convertible securities, the holder of the convertible securities
may give the 100% holder a notice requiring the 100% holder to
acquire the securities.
(2) The notice by the holder of convertible securities gives rise to a
contract between the holder and the 100% holder for the sale of the
securities on:
(a) terms agreed to by the 100% holder and the holder of the
convertible securities; or
(b) the terms determined by the Court on application by the
holder of the convertible securities.
(3) If the Court makes a determination under paragraph (2)(b) in
relation to the terms of sale for a holder’s convertible securities of
a particular class, the determination applies to all holders of
convertible securities in that class who have applications to the
Court pending for a determination under that paragraph in relation
to the terms of sale of their convertible securities.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.3 Completion of compulsory acquisition of securities
Section 666A
254 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.3—Completion of compulsory acquisition
of securities
666A Completing the acquisition of securities
Completion to be by private treaty or statutory procedure
(1) A person entitled to acquire securities under section 661A or 664A
must either:
(a) pay, issue or transfer the consideration to the holder, take a
transfer of the securities from the holder and have the
company that issued the securities register the transfer; or
(b) complete the procedure laid down in section 666B;
by the end of the period referred to in subsection (2) or (3).
Strict liability offences
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Time for completing compulsory acquisition following takeover
(2) For an acquisition under section 661A, the period ends 14 days
after the later of:
(a) the end of 1 month after the compulsory acquisition notice
was lodged with ASIC under section 661B; or
(b) the end of 14 days after the last statement under section 661D
was given if a request is made under that section; or
(c) if an application to stop the acquisition is made to the Court
under section 661E—the application is finally determined.
Time for completing compulsory acquisition under Part 6A.2
(3) For an acquisition under section 664A or 664F, the period ends 14
days after the later of:
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Completion of compulsory acquisition of securities Part 6A.3
Section 666B
Corporations Act 2001 255
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the end of the objection period; or
(b) if an application for approval of the acquisition is made to the
Court under section 664F in relation to the securities—the
application is finally determined.
666B Statutory procedure for completion
(1) Under this section, the person acquiring the securities must:
(a) give the company that issued the securities a copy of the
compulsory acquisition notice under section 661B or 664C
together with a transfer of the securities:
(i) signed as transferor by someone appointed by the
person acquiring the securities; and
(ii) signed as transferee by the person acquiring the
securities; and
(b) pay, issue or transfer the consideration for the transfer to the
company that issued the securities.
The person appointed under subparagraph (a)(i) has authority to
sign the transfer on behalf of the holder of the securities.
(2) If the person acquiring the securities complies with subsection (1),
the company that issued the securities must:
(a) register the person as the holder of the securities; and
(b) hold the consideration received under subsection (1) in trust
for the person who held the securities immediately before
registration; and
(c) give written notice to the person referred to in paragraph (b)
as soon as practicable that the consideration has been
received and is being held by the company pending their
instructions as to how it is to be dealt with.
(3) If the consideration held under subsection (2) consists of, or
includes, money, that money must be paid into a bank account
opened and maintained for that purpose only.
(4) An offence based on subsection (2) or (3) is an offence of strict
liability.
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Part 6A.3 Completion of compulsory acquisition of securities
Section 666B
256 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For strict liability, see section 6.1 of the Criminal Code.
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Experts’ reports and valuations Part 6A.4
Section 667A
Corporations Act 2001 257
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.4—Experts’ reports and valuations
667A Expert’s report
(1) An expert’s report under section 663B, 664C or 665B must:
(a) be prepared by a person nominated by ASIC under
section 667AA; and
(b) state whether, in the expert’s opinion, the terms proposed in
the notice give a fair value for the securities concerned; and
(c) set out the reasons for forming that opinion.
Note: See section 667C on valuation.
(2) If the person giving the compulsory acquisition notice is relying on
paragraph 664A(2)(c) to give the notice, the expert’s report under
section 664C must also:
(a) state whether, in the expert’s opinion, the person (either
alone or together with a related body corporate) has full
beneficial ownership in at least 90% by value of all the
securities of the company that are shares or convertible into
shares; and
(b) set out the reasons for forming that opinion.
(3) If the person giving the compulsory acquisition notice obtains 2 or
more reports, each of which were obtained for the purposes of that
notice, a copy of each report must be given to the holder of the
securities.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
667AA Expert to be nominated
(1) A person who proposes to obtain an expert’s report for the
purposes of section 663B, 664C or 665B must request ASIC in
writing to nominate a person to prepare the expert’s report.
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Part 6A.4 Experts’ reports and valuations
Section 667B
258 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Within 14 days after receiving a request under subsection (1),
ASIC must nominate:
(a) an appropriate person to prepare the report; or
(b) up to 5 appropriate persons, one of whom the person making
the request may choose to prepare the report.
(3) In determining whether a person is an appropriate person to
prepare an expert’s report, and without limiting the matters that
ASIC may consider, ASIC must consider the nature of the
company to be valued.
667B Expert must not be an associate and must disclose prior
dealings and relationships
(1) The expert who provides the report must not be an associate of:
(a) the person giving the notice; or
(b) the company that issued the securities.
(2) The report must set out details of:
(a) any relationship between the expert and:
(i) the person giving the notice or an associate of the
person giving the notice; or
(ii) the company that issued the securities or an associate of
the company;
including any circumstances in which the expert gives them
advice, or acts on their behalf, in the proper performance of
the functions attaching to the expert’s professional capacity
or business relationship with them; and
(b) any financial or other interest of the expert that could
reasonably be regarded as being capable of affecting the
expert’s ability to give an unbiased opinion in relation to the
matter being reported on; and
(c) any fee, payment or other benefit (whether direct or indirect)
that the expert has received or will or may receive in
connection with the report.
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Experts’ reports and valuations Part 6A.4
Section 667C
Corporations Act 2001 259
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
667C Valuation of securities
(1) To determine what is fair value for securities for the purposes of
this Chapter:
(a) first, assess the value of the company as a whole; and
(b) then allocate that value among the classes of issued securities
in the company (taking into account the relative financial
risk, and voting and distribution rights, of the classes); and
(c) then allocate the value of each class pro rata among the
securities in that class (without allowing a premium or
applying a discount for particular securities in that class).
(2) Without limiting subsection (1), in determining what is fair value
for securities for the purposes of this Chapter, the consideration (if
any) paid for securities in that class within the previous 6 months
must be taken into account.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.5 Records of unclaimed consideration
Section 668A
260 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.5—Records of unclaimed consideration
668A Company’s power to deal with unclaimed consideration for
compulsory acquisition
Records of unclaimed compulsory acquisition consideration
(1) If a company is paid consideration in respect of securities that are
compulsorily acquired under Part 6A.1 or 6A.3, the company must
maintain records of:
(a) the consideration paid (including any benefit accruing from
the consideration and any property substituted for the whole
or any part of that consideration); and
(b) the people who are entitled to that consideration; and
(c) any transfers of the consideration to the people entitled to it.
(2) The company must keep the records at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3) A person may ask the company to let the person inspect all or any
of the records kept by the company under this section. The
company must let the person inspect the records:
(a) if the company requires payment of an amount not exceeding
the prescribed amount—within 7 days after the day on which
the company receives that amount; or
(b) in any other case—within 7 days after the day on which the
request is made.
(4) By the end of February each year, the company must publish in the
Gazette a copy of the records kept under subsection (1) as at the
end of the previous December.
(5) An offence based on subsection (1), (2), (3) or (4) is an offence of
strict liability.
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Records of unclaimed consideration Part 6A.5
Section 668B
Corporations Act 2001 261
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: For strict liability, see section 6.1 of the Criminal Code.
668B Unclaimed consideration to be transferred to ASIC
(1) If the company has not transferred the unclaimed consideration to
the person entitled to it within 12 months after the publication of a
copy of the records in the Gazette, the company must transfer the
consideration to ASIC within 1 month after the end of that 12
month period.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The company is then discharged from liability to any person in
respect of the consideration.
(3) ASIC must deal with the consideration under Part 9.7.
(4) Except as provided by subsection (2), this Part does not deprive a
person of any right or remedy to which the person is entitled
against a liquidator or company.
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Chapter 6A Compulsory acquisitions and buy-outs
Part 6A.6 ASIC powers
Section 669
262 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6A.6—ASIC powers
669 ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class
of securities; and
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to
references in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
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Rights and liabilities in relation to Chapter 6 and 6A matters Chapter 6B
Section 670A
Corporations Act 2001 263
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 6B—Rights and liabilities in relation
to Chapter 6 and 6A matters
670A Misstatements in, or omissions from, takeover and compulsory
acquisition and buy-out documents
(1) A person must not give:
(a) a bidder’s statement;
(b) a takeover offer document;
(c) a notice of variation of a takeover offer;
(d) a target’s statement;
(e) a compulsory acquisition notice under section 661B or 664C;
(f) a compulsory buy-out notice under section 662B, 663B or
665B;
(g) a report that is included in, or accompanies, a statement or
notice referred to in paragraphs (a) to (f);
if there is:
(h) for all documents—a misleading or deceptive statement in
the document; or
(i) for a bidder’s statement or target’s statement—an omission
from the document of material required by section 636 or
638; or
(j) for a bidder’s statement or a target’s statement—a new
circumstance that:
(i) has arisen since the document was lodged; and
(ii) would have been required by section 636 or 638 to be
included in the document if it had arisen before the
document was lodged; or
(k) for an expert’s report under subsection 636(2) or section 640,
663B, 664C or 665B—an omission from the report of
material required by subsection 648A(3) or 667B(2).
Note 1: See section 670D for defences.
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Section 670B
264 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: Section 1041H imposes liabilities in respect of other conduct related
to the dealings in securities.
Forecasts and other forward-looking statement
(2) A person is taken to make a misleading statement about a future
matter (including the doing of, or refusing to do, an act) if they do
not have reasonable grounds for making the statement. This
subsection does not limit the meaning of a reference to a
misleading statement or a statement that is misleading in a material
particular.
Offence if statement, omission or new matter materially adverse
(3) A person commits an offence if they contravene subsection (1)
and:
(a) the misleading or deceptive statement; or
(b) the omission or new circumstance;
is materially adverse from the point of view of the holder of
securities to whom the document is given.
670B Right to recover for loss or damage resulting from
contravention
(1) A person who suffers loss or damage that results from a
contravention of subsection 670A(1) may recover the amount of
the loss or damage from a person referred to in the following table
if the loss or damage is one that the table makes the person liable
for. This is so even if the person did not commit, and was not
involved in, the contravention.
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Section 670B
Corporations Act 2001 265
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
People liable on the document [operative table]
For these documents
these people… ...are liable for loss or damages
caused by
bidder’s statement or takeover offer document
1 the bidder any contravention of
subsection 670A(1) in relation to the
document
2 each director of a bidder that is a
body if the consideration offered
under the bid is not a cash sum only
any contravention of
subsection 670A(1) in relation to the
document
3 a director of a bidder that is a body
unless the director proves that they:
(a) were not present when the
directors resolved to adopt the
statement or offer document; or
(b) voted against the resolution;
if the consideration offered under
the bid is a cash sum only
any contravention of
subsection 670A(1) in relation to the
document
See also items 10 and 11.
notice of variation of a takeover offer
4 the bidder any contravention of
subsection 670A(1) in relation to the
document
5 a director of a bidder that is a body any contravention of
subsection 670A(1) in relation to the
document
See also items 10 and 11.
a target’s statement
6 the target any contravention of
subsection 670A(1) in relation to the
document
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Section 670B
266 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
People liable on the document [operative table]
For these documents
these people… ...are liable for loss or damages
caused by
7 a director of the target unless the
director proves that they:
(a) were not present when the
directors resolved to adopt the
statement; or
(b) voted against the resolution
any contravention of
subsection 670A(1) in relation to the
document
See also items 10 and 11.
a compulsory acquisition or compulsory buy-out notice
8 the person giving the notice any contravention of
subsection 670A(1) in relation to the
document
9 a director of a body corporate
giving the notice unless the director
proves that they:
(a) were not present when the
directors resolved to give the
notice; or
(b) voted against the resolution
any contravention of
subsection 670A(1) in relation to the
document
See also items 10 and 11.
10 all documents
a person named in the document,
with their consent, as having made
a statement:
(a) that is included in the document;
or
(b) on which a statement made in
the document is based
the inclusion of the statement in the
document
11 a person who contravenes, or is
involved in a contravention of,
subsection 670A(1)
that contravention
(2) An action under subsection (1) may begin at any time within 6
years after the day on which the cause of action arose.
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(3) This Chapter does not affect any liability that a person has under
any other law.
Note: Conduct that contravenes subsection 670A(1) is expressly excluded
from the operation of section 1041H.
670C People liable on takeover or compulsory acquisition statement
to inform maker about deficiencies in the statement
(1) A person referred to in the table in subsection 670B(1) in relation
to a document must notify the issuer of the document in writing as
soon as practicable if they become aware during the bid period or
objection period that:
(a) a material statement in the document is misleading or
deceptive; or
(b) there is a material omission from the document of
information required by section 636, 638 or 640; or
(c) a material new circumstance that:
(i) has arisen since the document was lodged; and
(ii) would have been required by section 636, 638 or 640 to
be included in the document if it had arisen before the
document was lodged.
(2) An expert whose report accompanies, or is included in, a target’s
statement under section 640 must notify the target in writing as
soon as practicable if they become aware during the bid period or
objection period that:
(a) a material statement in the report is misleading or deceptive;
or
(b) there has been a significant change affecting information
included in the report.
(3) An expert whose report accompanies, or is included in, a bidder’s
statement under subsection 636(2) must notify the bidder in writing
as soon as practicable if they become aware during the bid period
or objection period that:
(a) a material statement in the report is misleading or deceptive;
or
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(b) there has been a significant change affecting information
included in the report.
(4) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
670D Defences against prosecutions under subsection 670A(3) and
actions under section 670B
Not knowing statement misleading or deceptive
(1) A person does not commit an offence against subsection 670A(3),
and is not liable under section 670B for a contravention of
subsection 670A(1), because of a misleading or deceptive
statement in a document if the person proves that they did not
know that the statement was misleading or deceptive.
Not knowing there was an omission
(2) A person does not commit an offence against subsection 670A(3),
and is not liable under section 670B for a contravention of
subsection 670A(1), because of an omission from a document in
relation to a particular matter if the person proves that they did not
know that there was an omission from the document in relation to
that matter.
Reasonable reliance on information given by someone else—
statements and omissions
(3) A person does not commit an offence against subsection 670A(3),
and is not liable under section 670B for a contravention against
subsection 670A(1), because of a misleading or deceptive
statement in, or an omission from, a document if the person proves
that they placed reasonable reliance on information given to them
by:
(a) if the person is a body—someone other than a director,
employee or agent of the body; or
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(b) if the person is an individual—someone other than an
employee or agent of the individual.
(4) For the purposes of subsection (3), a person is not the agent of a
body or individual merely because they perform a particular
professional or advisory function for the body or individual.
Withdrawal of consent—statements and omissions
(5) A person who is named in a document as:
(a) making a statement included in the document; or
(b) making a statement on the basis of which a statement is
included in the document;
does not commit an offence against subsection 670A(3), and is not
liable under section 670B for a contravention against
subsection 670A(1), because of a misleading or deceptive
statement in, or an omission from, a document if the person proves
that they publicly withdrew their consent to being named in the
document in that way.
Unawareness of new matter
(6) A person does not commit an offence against subsection 670A(3),
and is not liable under section 670B for a contravention of
subsection 670A(1), because of a new circumstance that has arisen
since the document was lodged if the person proves that they were
not aware of the matter.
670E Liability for proposing a bid or not carrying through with bid
(1) A person who:
(a) enters into a transaction relating to securities in reliance on:
(i) a public proposal for a takeover bid; or
(ii) an announcement of a market bid; and
(b) suffers loss or damage that results from a contravention of
section 631:
may recover the amount of the loss or damage from:
(c) the person who contravened the section; or
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(d) any person involved in the contravention.
(2) To determine the amount of compensation payable under
subsection (1), deduct the price of the securities at which the
transaction was entered into from the price of the securities at
which the transaction would have been likely to be entered into if
the proposal or announcement had not been made.
670F Defences
A person does not commit an offence under subsection 631(1) or
(2), and is not liable under section 670E for a contravention of
those subsections if the person proves that they could not
reasonably have been expected to comply with those subsections
because:
(a) at the time of the proposal or announcement, circumstances
existed that the person did not know of and could not
reasonably have been expected to know of; or
(b) after the proposal or announcement, a change in
circumstances occurred that was not caused, directly or
indirectly, by the person.
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Chapter 6C—Information about ownership
of listed companies and managed
investment schemes
671A Chapter extends to some listed bodies that are not companies
This Chapter applies to the acquisition of relevant interests in the
securities of listed bodies that are not companies but are
incorporated or formed in Australia in the same way as it applies to
the acquisition of relevant interests in the securities of companies.
Note: Section 9 defines company and listed.
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Part 6C.1 Substantial holding information
Section 671B
272 Corporations Act 2001
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Part 6C.1—Substantial holding information
671B Information about substantial holdings must be given to
company, responsible entity and relevant market
operator
Requirement to give information
(1) A person must give the information referred to in subsection (3) to
a listed company, or the responsible entity for a listed registered
managed investment scheme, if:
(a) the person begins to have, or ceases to have, a substantial
holding in the company or scheme; or
(b) the person has a substantial holding in the company or
scheme and there is a movement of at least 1% in their
holding; or
(c) the person makes a takeover bid for securities of the
company or scheme.
The person must also give the information to each relevant market
operator.
Note 1: Section 9 defines substantial holding and associate.
Note 2: The information must be given even if the situation changes by the
time the information is to be given.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) For the purposes of this section, there is a movement of at least 1%
in a person’s holding if the percentage worked out using the
following formula increases or decreases by 1 or more percentage
points from the percentage they last disclosed under this Part in
relation to the company or scheme:
Person’s and associates’ votes 100
Total votes in company or scheme
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where:
person’s and associates’ votes is the total number of votes attached
to all the voting shares in the company or interests in the scheme
(if any) that the person or an associate has a relevant interest in.
total votes in company or scheme is the total number of votes
attached to all voting shares in the company or interests in the
scheme.
Note: Subsection (7) expands the normal concept of relevant interest to take
account of market traded options and conditional agreements.
Information that must be given
(3) The information to be given is:
(a) the person’s name and address; and
(b) details of their relevant interest in:
(i) voting shares in the company; or
(ii) interests in the scheme; and
(c) details of any relevant agreement through which they would
have a relevant interest in:
(i) voting shares in the company; or
(ii) interests in the scheme; and
(d) the name of each associate who has a relevant interest in
voting shares in the company or interests in the scheme,
together with details of:
(i) the nature of their association with the associate; and
(ii) the relevant interest of the associate; and
(iii) any relevant agreement through which the associate has
the relevant interest; and
(e) if the information is being given because of a movement in
their holding—the size and date of that movement; and
(f) if the information is being given because a person has ceased
to be an associate—the name of the person; and
(g) any other particulars that are prescribed.
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Note: Subsection (7) expands the normal concept of relevant interest to take
account of market traded options and conditional agreements.
Information to be in prescribed form and accompanied by certain
documents
(4) The information must be given in the prescribed form and must be
accompanied by:
(a) a copy of any document setting out the terms of any relevant
agreement that:
(i) contributed to the situation giving rise to the person
needing to provide the information; and
(ii) is in writing and readily available to the person; and
(b) a statement by the person giving full and accurate details of
any contract, scheme or arrangement that:
(i) contributed to the situation giving rise to the person
needing to provide the information; and
(ii) is not both in writing and readily available to the person.
If the person is required to give a copy of a contract, scheme or
arrangement, the copy must be endorsed with a statement that the
copy is a true copy.
(5) The information does not need to be accompanied by the
documents referred to in subsection (4) if the transaction that gives
rise to the person needing to provide the information takes place on
a prescribed financial market.
Deadline for giving information
(6) The person must give the information:
(a) within 2 business days after they become aware of the
information; or
(b) by 9.30 am on the next trading day of the relevant financial
market after they become aware of the information if:
(i) a takeover bid is made for voting shares in the company
or voting interests in the scheme; and
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(ii) the person becomes aware of the information during the
bid period.
Relevant interests—exchange traded options and conditional
agreements
(7) For the purposes of this section, a person has a relevant interest in
securities if the person would have a relevant interest in the
securities but for subsection 609(6) (market traded options) or
609(7) (conditional agreements).
671C Civil liability
(1) A person who contravenes section 671B is liable to compensate a
person for any loss or damage the person suffers because of the
contravention.
(2) It is a defence in proceedings brought under this section if the
person who contravenes section 671B proves that they contravened
that section:
(a) because of inadvertence or mistake; or
(b) because they were not aware of a relevant fact or occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part
concerning, a matter of law.
(3) If 2 or more persons each contravene section 671B because of the
same act or omission, their liability under this section for the
contravention is joint and individual.
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Section 672A
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Part 6C.2—Tracing beneficial ownership of shares
672A Disclosure notices
(1) ASIC, a listed company or the responsible entity for a listed
managed investment scheme, may direct:
(a) a member of the company or scheme; or
(b) a person named in a previous disclosure under section 672B
as having a relevant interest in, or having given instructions
about, voting shares in the company or interests in the
scheme;
to make the disclosure required by section 672B.
(2) ASIC must exercise its powers under this section if requested to do
so by a member of the company or scheme unless it considers that
it would be unreasonable to do so in all the circumstances.
672B Disclosure by member of relevant interests and instructions
(1) A person given a direction under section 672A must disclose to the
person giving the direction:
(a) full details of their own relevant interest in the shares or
interests in the scheme and of the circumstances that give rise
to that interest; and
(b) the name and address of each other person who has a relevant
interest in any of the shares or interests together with full
details of:
(i) the nature and extent of the interest; and
(ii) the circumstances that give rise to the other person’s
interest; and
(c) the name and address of each person who has given the
person instructions about:
(i) the acquisition or disposal of the shares or interests; or
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(ii) the exercise of any voting or other rights attached to the
shares or interests; or
(iii) any other matter relating to the shares or interests;
together with full details of those instructions (including the
date or dates on which they were given).
(1A) However, a matter referred to in paragraph (1)(b) or (c) need only
be disclosed to the extent to which it is known to the person
required to make the disclosure.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The disclosure must be made within 2 business days after:
(a) the person is given the direction; or
(b) if the person applies for an exemption under section 673 from
the obligation to make the disclosure and ASIC refuses to
grant the exemption—ASIC notifies the person of its
decision on the application; or
(c) if the direction is given by a company or responsible entity—
the company or responsible entity pays any fee payable under
the regulations made for the purposes of section 672D.
(3) The person does not have to comply with a direction given by the
company or the responsible entity if the person proves that the
giving of the direction is vexatious.
672C ASIC may pass information on to person who made request
If ASIC receives information in response to a direction under
section 672A about shares in a company or interests in a listed
managed investment scheme, ASIC:
(a) may pass the information on to the company or the
responsible entity for the scheme; and
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Section 672D
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(b) if ASIC gave the direction in response to a request under
subsection 672A(2)—must pass the information on to the
person who made the request unless ASIC considers it would
be unreasonable in all the circumstances to do so.
672D Fee for complying with a direction given by a company or
scheme under this Part
(1) The regulations may prescribe fees that companies and responsible
entities are to pay to persons for complying with directions given
under this Part.
(2) A person is liable to repay a fee paid to the person for complying
with a direction under section 672A if the person does not comply
with the direction on time even if the person does so later. The fee
may be recovered as a debt due to the company or responsible
entity that paid it to the person.
672DA Register of information about relevant interests in listed
company or listed managed investment scheme
(1) A listed company, or the responsible entity for a listed managed
investment scheme, must keep a register of the following
information that it receives under this Part on or after 1 January
2005 (whether the information is received pursuant to a direction
the company, or responsible entity, itself gives under section 672A
or is received from ASIC under section 672C):
(a) details of the nature and extent of a person’s relevant interest
in shares in the company or interests in the scheme;
(b) details of the circumstances that give rise to a person’s
relevant interest in shares in the company or interests in the
scheme;
(c) the name and address of a person who has a relevant interest
in shares in the company or interests in the scheme;
(d) details of instructions that a person has given about:
(i) the acquisition or disposal of shares in the company or
interests in the scheme; or
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(ii) the exercise of any voting or other rights attached to
shares in the company or interests in the scheme; or
(iii) any other matter relating to shares in the company or
interests in the scheme;
(e) the name and address of a person who has given instructions
of the kind referred to in paragraph (d).
The register must be kept in accordance with this section.
(2) A register kept under this section by a listed company must be kept
at:
(a) the company’s registered office; or
(b) the company’s principal place of business in this jurisdiction;
or
(c) a place in this jurisdiction (whether or not an office of the
company) where the work involved in maintaining the
register is done; or
(d) another place in this jurisdiction approved by ASIC.
(3) A register kept under this section by the responsible entity of a
listed managed investment scheme must be kept at:
(a) the responsible entity’s registered office; or
(b) the responsible entity’s principal place of business in this
jurisdiction; or
(c) a place in this jurisdiction (whether or not an office of the
responsible entity) where the work involved in maintaining
the register is done; or
(d) another place in this jurisdiction approved by ASIC.
(4) The company, or the responsible entity, must lodge with ASIC a
notice of the address at which the register is kept within 7 days
after the register is:
(a) established at a place that:
(i) is not the registered office of the company or
responsible entity; and
(ii) is not at the principal place of business of the company
or responsible entity in this jurisdiction; or
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(b) moved from one place to another.
Notice is not required for moving the register between the
registered office and the principal place of business in this
jurisdiction.
Note: The obligation to notify ASIC under this subsection is a continuing
obligation and the company or responsible entity is guilty of an
offence for each day, after the 7 day period, until ASIC is notified (see
section 4K of the Crimes Act 1914).
(5) An offence based on subsection (2), (3) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) The register must either contain:
(a) the name of each holder of shares in the company, or
interests in the scheme, to whom the information relates; and
(b) against the name of each such holder:
(i) the name and address of each other person (if any) who,
according to information the company, or the
responsible entity, has received under this Part on or
after 1 January 2005, has a relevant interest in any of the
shares or interests (together with details of the relevant
interest and of the circumstances because of which the
other person has the relevant interest); and
(ii) the name and address of each person who, according to
information received by the company, or the responsible
entity, under this Part on or after 1 January 2005, has
given relevant instructions in relation to any of the
shares or interests (together with details of those
relevant instructions); and
(c) in relation to each item of information entered in the register,
the date on which the item was entered in the register;
or be in such other form as ASIC approves in writing.
(7) The register must be open for inspection:
(a) by any member of the company or scheme—without charge;
and
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(b) by any other person:
(i) if the company, or the responsible entity, requires the
payment of a fee for the inspection—on payment of the
fee; or
(ii) if the company, or the responsible entity, does not
require the payment of a fee for the inspection—without
charge.
The amount of the fee required by the company, or the responsible
entity, under subparagraph (b)(i) must not exceed the amount
prescribed by the regulations for the purposes of this subsection.
(8) A person may request the company, or the responsible entity, to
give to the person a copy of the register (or any part of the register)
and, if such a request is made, the company, or the responsible
entity, must give the person the copy:
(a) if the company, or the responsible entity, requires payment of
a fee for the copy:
(i) before the end of 21 days after the day on which the
payment of the fee is received by the company or the
responsible entity; or
(ii) within such longer period as ASIC approves in writing;
or
(b) if the company, or the responsible entity, does not require
payment of a fee for the copy:
(i) before the end of 21 days after the day on which the
request is made; or
(ii) within such longer period as ASIC approves in writing.
The amount of the fee required by the company, or the responsible
entity, under paragraph (a) must not exceed the amount prescribed
by the regulations for the purposes of this subsection.
Note: The obligation to give the copy under this subsection is a continuing
obligation and the company or responsible entity is guilty of an
offence for each day, after the period referred to in paragraph (a) or
(b), until the copy is given (see section 4K of the Crimes Act 1914).
(9) The information that subsection (6) requires to be entered in the
register must be entered in the register by the company, or the
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Section 672E
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responsible entity, before the end of 2 business days after the day
on which the company, or the responsible entity, receives the
information.
Note: The obligation to enter the details in the register under this subsection
is a continuing obligation and the company or responsible entity is
guilty of an offence for each day, after the 2 business day period, until
the details are entered in the register (see section 4K of the Crimes Act
1914).
672E No notice of rights
A company or responsible entity is not, because of anything done
under this Part:
(a) taken for any purpose to have notice of; or
(b) put on inquiry as to;
a person’s right in relation to a share in the company or an interest
in the listed managed investment scheme.
672F Civil liability
(1) A person who contravenes section 672B is liable to compensate a
person for any loss or damage the person suffers because of the
contravention.
(2) It is a defence in proceedings brought under this section if the
person who contravenes section 672B proves that they contravened
that section:
(a) because of inadvertence or mistake; or
(b) because they were not aware of a relevant fact or occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part
concerning, a matter of law.
(3) If 2 or more persons each contravene section 672B because of the
same act or omission, their liability under this section for the
contravention is joint and individual.
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ASIC powers Part 6C.3
Section 673
Corporations Act 2001 283
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Part 6C.3—ASIC powers
673 ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) In deciding whether to give the exemption or declaration, ASIC
must consider the purposes of Chapter 6 set out in section 602.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class
of securities; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to
references in:
(i) this Chapter; or
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Section 673
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(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
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Section 674
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Chapter 6CA—Continuous disclosure
674 Continuous disclosure—listed disclosing entity bound by a
disclosure requirement in market listing rules
Obligation to disclose in accordance with listing rules
(1) Subsection (2) applies to a listed disclosing entity if provisions of
the listing rules of a listing market in relation to that entity require
the entity to notify the market operator of information about
specified events or matters as they arise for the purpose of the
operator making that information available to participants in the
market.
(2) If:
(a) this subsection applies to a listed disclosing entity; and
(b) the entity has information that those provisions require the
entity to notify to the market operator; and
(c) that information:
(i) is not generally available; and
(ii) is information that a reasonable person would expect, if
it were generally available, to have a material effect on
the price or value of ED securities of the entity;
the entity must notify the market operator of that information in
accordance with those provisions.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see section 1317S.
Note 3: An infringement notice may be issued for an alleged contravention of
this subsection, see section 1317DAC.
(2A) A person who is involved in a listed disclosing entity’s
contravention of subsection (2) contravenes this subsection.
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Chapter 6CA Continuous disclosure
Section 674
286 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: This subsection is a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this subsection, see
section 1317S.
Note 2: Section 79 defines involved.
(2B) A person does not contravene subsection (2A) if the person proves
that they:
(a) took all steps (if any) that were reasonable in the
circumstances to ensure that the listed disclosing entity
complied with its obligations under subsection (2); and
(b) after doing so, believed on reasonable grounds that the listed
disclosing entity was complying with its obligations under
that subsection.
(3) For the purposes of the application of subsection (2) to a listed
disclosing entity that is an undertaking to which interests in a
registered scheme relate, the obligation of the entity to notify the
market operator of information is an obligation of the responsible
entity.
(4) Nothing in subsection (2) is intended to affect or limit the
situations in which action can be taken (otherwise than by way of a
prosecution for an offence based on subsection (2)) in respect of a
failure to comply with provisions referred to in subsection (1).
Obligation to make provisions of listing rules available
(5) If the listing rules of a listing market in relation to a listed
disclosing entity contain provisions of a kind referred to in
subsection (1), the market operator must ensure that those
provisions are available, on reasonable terms, to:
(a) the entity; or
(b) if the entity is an undertaking to which interests in a
registered scheme relate—the undertaking’s responsible
entity.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Continuous disclosure Chapter 6CA
Section 675
Corporations Act 2001 287
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
675 Continuous disclosure—other disclosing entities
(1) This section applies to:
(a) a listed disclosing entity if:
(i) there is only one listing market in relation to the entity
and the listing rules of that market do not contain
provisions of a kind referred to in subsection 674(1); or
(ii) there is more than one listing market in relation to the
entity and none of those markets have listing rules that
contain provisions of a kind referred to in
subsection 674(1); or
(b) an unlisted disclosing entity.
(2) If the disclosing entity becomes aware of information:
(a) that is not generally available; and
(b) that a reasonable person would expect, if it were generally
available, to have a material effect on the price or value of
ED securities of the entity; and
(c) either:
(i) if those securities are not managed investment
products—the information is not required to be included
in a supplementary disclosure document or a
replacement disclosure document in relation to the
entity; or
(ii) if those securities are managed investment products—
the information has not been included in a Product
Disclosure Statement, a Supplementary Product
Disclosure Statement, or a Replacement Product
Disclosure Statement, a copy of which has been lodged
with ASIC; and
(d) regulations made for the purposes of this paragraph do not
provide that disclosure under this section is not required in
the circumstances;
the disclosing entity must, as soon as practicable, lodge a document
with ASIC containing the information.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Chapter 6CA Continuous disclosure
Section 676
288 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see section 1317S.
Note 3: An infringement notice may be issued for an alleged contravention of
this subsection, see section 1317DAC.
Note 4: Subsection (2) has an extended operation in relation to disclosing
entities that have made recognised offers of securities under Chapter 8
(see section 1200K).
(2A) A person who is involved in a disclosing entity’s contravention of
subsection (2) contravenes this subsection.
Note 1: This subsection is a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this subsection, see
section 1317S.
Note 2: Section 79 defines involved.
(2B) A person does not contravene subsection (2A) if the person proves
that they:
(a) took all steps (if any) that were reasonable in the
circumstances to ensure that the disclosing entity complied
with its obligations under subsection (2); and
(b) after doing so, believed on reasonable grounds that the
disclosing entity was complying with its obligations under
that subsection.
(3) For the purposes of the application of this section to a disclosing
entity that is an undertaking to which interests in a registered
scheme relate:
(a) the entity is aware of information if, and only if, the
responsible entity is aware of the information; and
(b) the obligation of the entity to lodge a document under
subsection (2) is an obligation of the responsible entity.
676 Sections 674 and 675—when information is generally available
(1) This section has effect for the purposes of sections 674 and 675.
(2) Information is generally available if:
(a) it consists of readily observable matter; or
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Section 677
Corporations Act 2001 289
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) without limiting the generality of paragraph (a), both of the
following subparagraphs apply:
(i) it has been made known in a manner that would, or
would be likely to, bring it to the attention of persons
who commonly invest in securities of a kind whose
price or value might be affected by the information; and
(ii) since it was so made known, a reasonable period for it
to be disseminated among such persons has elapsed.
(3) Information is also generally available if it consists of deductions,
conclusions or inferences made or drawn from either or both of the
following:
(a) information referred to in paragraph (2)(a);
(b) information made known as mentioned in
subparagraph (2)(b)(i).
677 Sections 674 and 675—material effect on price or value
For the purposes of sections 674 and 675, a reasonable person
would be taken to expect information to have a material effect on
the price or value of ED securities of a disclosing entity if the
information would, or would be likely to, influence persons who
commonly invest in securities in deciding whether to acquire or
dispose of the ED securities.
678 Application of Criminal Code to offences based on
subsection 674(2), 674(5) or 675(2)
The Criminal Code applies to an offence based on
subsection 674(2), 674(5) or 675(2).
Note 1: Chapter 2 of the Criminal Code sets out the general principles of
criminal responsibility.
Note 2: For the meaning of offence based on a provision, see the definition in
section 9.
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Chapter 6D Fundraising
Part 6D.1 Application of the fundraising provisions
Section 700
290 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 6D—Fundraising
Part 6D.1—Application of the fundraising
provisions
700 Coverage of the fundraising rules
(1) In this Chapter, securities has the same meaning as it has in
Chapter 7, but does not include:
(a) a security referred to in paragraph (e) or (f) of the definition
of security in section 761A; or
(b) a simple corporate bonds depository interest in simple
corporate bonds, where the simple corporate bonds were
issued under a 2-part simple corporate bonds prospectus.
Offers and invitations both covered
(2) For the purposes of this Chapter:
(a) offering securities for issue includes inviting applications for
the issue of the securities; and
(b) offering securities for sale includes inviting offers to
purchase the securities.
Person offering securities
(3) For the purposes of this Chapter, the person who offers securities is
the person who has the capacity, or who agrees, to issue or transfer
the securities if the offer is accepted.
Geographical coverage of Chapter
(4) This Chapter applies to offers of securities that are received in this
jurisdiction, regardless of where any resulting issue, sale or transfer
occurs.
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Section 702
Corporations Act 2001 291
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
702 Treatment of offers of options over securities
For the purposes of this Chapter:
(a) an offer of an option over securities is not taken to be an
offer of the underlying securities; and
(b) the grant of an option without an offer of the option is taken
to be an offer of the option; and
(c) an offer to grant an option is taken to be an offer to issue the
security constituted by the option.
Note 1: If a disclosure document is needed for the option and there is no
further offer involved in exercising the option, the issue or sale of the
underlying securities on the exercise of the option does not need a
disclosure document.
Note 2: Paragraph (b)—the grant of the option will not require a disclosure
document if no consideration is payable on the grant or the exercise of
the option (see subsections 708(15) and (16)).
703 Chapter may not be contracted out of
A condition of a contract for the sale or issue of securities is void if
it provides that a party to the contract is:
(a) required or bound to waive compliance with any requirement
of this Chapter; or
(b) taken to have notice of any contract, document or matter not
specifically referred to in the disclosure document for the
offer.
703A Operating a clearing and settlement facility is not offering
securities etc.
Nothing that the operator of a clearing and settlement facility
(within the meaning of Chapter 7) does in the course of, or in
connection with, providing facilities for the settlement of
transactions constitutes, for the purposes of this Chapter:
(a) an offer of securities for subscription or purchase; or
(b) an invitation to subscribe for or buy securities.
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 1 Overview
Section 704
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6D.2—Disclosure to investors about securities
Division 1—Overview
704 When disclosure to investors is needed
Sections 706, 707, 708, 708AA and 708A say when an offer of
securities needs disclosure to investors under this Part.
Note 1: Section 727 prohibits offering securities without disclosure.
Note 2: If the offer needs disclosure, section 734 applies advertising
restrictions. These continue throughout the whole offer process.
Different restrictions apply before and after the disclosure document is
lodged.
Note 3: The way the offers are made to people must not breach the securities
hawking prohibition in section 736.
705 Types of disclosure document
The following table shows what disclosure documents to use if an
offer of securities needs disclosure to investors under this Part.
Disclosure document
Type Sections
1 prospectus
The standard full-disclosure
document.
content [710, 711, 713]
procedure [717]
liability [728 and 729]
defences [731, 733]
2 short form prospectus
May be used for any offer.
Section 712 allows a prospectus
to refer to material lodged with
ASIC instead of setting it out.
Investors are entitled to a copy
content [712]
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Overview Division 1
Section 705
Corporations Act 2001 293
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Disclosure document
Type Sections
of this material if they ask for it.
2A 2-part simple corporate bonds
prospectus
Must be used for any offer of
simple corporate bonds.
content [713C, 713D, 713E]
procedure [717]
liability [728 and 729]
defences [731 and 733]
3 profile statement
Section 721 allows a brief
profile statement (rather than
the prospectus) to be sent out
with offers with ASIC approval.
The prospectus must still be
prepared and lodged with ASIC.
Investors are entitled to a copy
of the prospectus if they ask for
it.
content [714]
procedure [717]
liability [728 and 729]
defences [732, 733]
4 offer information statement
Section 709 allows an offer
information statement to be
used instead of a prospectus for
an offer to issue securities if the
amount raised from issues of
securities is $10 million or less.
content [715]
procedure [717]
liability [728 and 729]
defences [732, 733]
Note: Subsection 709(1A) provides that if the offer period for an offer of
simple corporate bonds begins during the 2-year period beginning at
the commencement of that subsection, a prospectus (other than a
2-part simple corporate bonds prospectus) may be prepared.
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 2 Offers that need disclosure to investors
Section 706
294 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Offers that need disclosure to investors
706 Issue offers that need disclosure
An offer of securities for issue needs disclosure to investors under
this Part unless section 708 or 708AA says otherwise.
707 Sale offers that need disclosure
Only some sales need disclosure
(1) An offer of securities for sale needs disclosure to investors under
this Part only if disclosure is required by subsection (2), (3) or (5).
Off-market sale by controller
(2) An offer of a body’s securities for sale needs disclosure to
investors under this Part if:
(a) the person making the offer controls the body; and
(b) either:
(i) the securities are not quoted; or
(ii) although the securities are quoted, they are not offered
for sale in the ordinary course of trading on a relevant
financial market;
and section 708 does not say otherwise.
Note: See section 50AA for when a person controls a body.
Sale amounting to indirect issue
(3) An offer of a body’s securities for sale within 12 months after their
issue needs disclosure to investors under this Part if:
(a) the body issued the securities without disclosure to investors
under this Part; and
(b) either:
(i) the body issued the securities with the purpose of the
person to whom they were issued selling or transferring
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Offers that need disclosure to investors Division 2
Section 707
Corporations Act 2001 295
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
the securities, or granting, issuing or transferring
interests in, or options over, them; or
(ii) the person to whom the securities were issued acquired
them with the purpose of selling or transferring the
securities, or granting, issuing or transferring interests
in, or options over, them;
and section 708 or 708A does not say otherwise.
Note 1: Section 706 normally requires disclosure for the issue of securities.
This subsection is intended to prevent avoidance of section 706.
However, to establish a contravention of this subsection, the only
purpose that needs to be shown is that referred to in paragraph (b).
Note 2: The issuer and the seller must both consent to the disclosure document
(see section 720).
The purpose test in subsection (3)
(4) For the purposes of subsection (3):
(a) securities are taken to be:
(i) issued with the purpose referred to in
subparagraph (3)(b)(i); or
(ii) acquired with the purpose referred to in
subparagraph (3)(b)(ii);
if there are reasonable grounds for concluding that the
securities were issued or acquired with that purpose (whether
or not there may have been other purposes for the issue or
acquisition); and
(b) without limiting paragraph (a), securities are taken to be:
(i) issued with the purpose referred to in
subparagraph (3)(b)(i); or
(ii) acquired with the purpose referred to in
subparagraph (3)(b)(ii);
if any of the securities are subsequently sold, or offered for
sale, within 12 months after issue, unless it is proved that the
circumstances of the issue and the subsequent sale or offer
are not such as to give rise to reasonable grounds for
concluding that the securities were issued or acquired with
that purpose.
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 2 Offers that need disclosure to investors
Section 707
296 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Sale amounting to indirect off-market sale by controller
(5) An offer of a body’s securities for sale within 12 months after their
sale by a person who controlled the body at the time of the sale
needs disclosure to investors under this Part if:
(a) at the time of the sale by the controller either:
(i) the securities were not quoted; or
(ii) although the securities were quoted, they were not
offered for sale in the ordinary course of trading on a
relevant financial market on which they were quoted;
and
(b) the controller sold the securities without disclosure to
investors under this Part; and
(c) either:
(i) the controller sold the securities with the purpose of the
person to whom they were sold selling or transferring
the securities, or granting, issuing or transferring
interests in, or options over, them; or
(ii) the person to whom the securities were sold acquired
them with the purpose of selling or transferring the
securities, or granting, issuing or transferring interests
in, or options over, them;
and section 708 does not say otherwise.
Note 1: Subsection (2) normally requires disclosure for a sale by a controller.
This subsection is intended to prevent avoidance of subsection (2).
However, to establish a contravention of this subsection, the only
purpose that needs to be shown is that referred to in paragraph (c).
Note 2: See section 50AA for when a person controls a body.
Note 3: The controller and the seller must both consent to the disclosure
document (see section 720).
The purpose test in subsection (5)
(6) For the purposes of subsection (5):
(a) securities are taken to be:
(i) sold with the purpose referred to in
subparagraph (5)(c)(i); or
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Offers that need disclosure to investors Division 2
Section 708
Corporations Act 2001 297
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(ii) acquired with the purpose referred to in
subparagraph (5)(c)(ii);
if there are reasonable grounds for concluding that the
securities were sold or acquired with that purpose (whether
or not there may have been other purposes for the sale or
acquisition); and
(b) without limiting paragraph (a), securities are taken to be:
(i) sold with the purpose referred to in
subparagraph (5)(c)(i); or
(ii) acquired with the purpose referred to in
subparagraph (5)(c)(ii);
if any of the securities are subsequently sold, or offered for
sale, within 12 months after their sale by the controller,
unless it is proved that the circumstances of the initial sale
and the subsequent sale or offer are not such as to give rise to
reasonable grounds for concluding that the securities were
sold or acquired (in the initial sale) with that purpose.
708 Offers that do not need disclosure
Small scale offerings (20 issues or sales in 12 months)
(1) Personal offers of a body’s securities by a person do not need
disclosure to investors under this Part if:
(a) none of the offers results in a breach of the 20 investors
ceiling (see subsections (3) and (4)); and
(b) none of the offers results in a breach of the $2 million ceiling
(see subsections (3) and (4)).
This subsection does not apply to an offer for sale to which
subsection 707(3) (sale amounting to indirect issue) or (5) (sale
amounting to indirect sale by controller) applies.
Note 1: Subsection 727(4) makes it an offence to issue or transfer securities
without disclosure to investors once 20 issues or transfers have
occurred or $2 million has been raised.
Note 2: Under section 740 ASIC may make a determination aggregating the
transactions of bodies that ASIC considers to be closely related.
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 2 Offers that need disclosure to investors
Section 708
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purposes of subsection (1), a personal offer is one that:
(a) may only be accepted by the person to whom it is made; and
(b) is made to a person who is likely to be interested in the offer,
having regard to:
(i) previous contact between the person making the offer
and that person; or
(ii) some professional or other connection between the
person making the offer and that person; or
(iii) statements or actions by that person that indicate that
they are interested in offers of that kind.
(3) An offer by a body to issue securities:
(a) results in a breach of the 20 investors ceiling if it results in
the number of people to whom securities of the body have
been issued exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the body by issuing securities exceeding $2
million in any 12 month period.
(4) An offer by a person to transfer a body’s securities:
(a) results in a breach of the 20 investors ceiling if it results in
the number of people to whom the person sells securities of
the body exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the person from selling the body’s
securities exceeding $2 million in any 12 month period.
(5) In counting issues and sales of the body’s securities, and the
amount raised from issues and sales, for the purposes of
subsection (1), disregard issues and sales that result from offers
that:
(a) do not need a disclosure document because of any other
subsection of this section; or
(b) are not received in Australia; or
(c) are made under a disclosure document.
Note: Also see provisions on restrictions on advertising (section 734) and
securities hawking provisions (Part 6D.3).
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Disclosure to investors about securities Part 6D.2
Offers that need disclosure to investors Division 2
Section 708
Corporations Act 2001 299
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(7) In working out the amount of money raised by the body by issuing
securities, include the following:
(a) the amount payable for the securities at the time when they
are issued;
(b) if the securities are shares issued partly-paid—any amount
payable at a future time if a call is made;
(c) if the security is an option—any amount payable on the
exercise of the option;
(d) if the securities carry a right to convert the securities into
other securities—any amount payable on the exercise of that
right.
Sophisticated investors
(8) An offer of a body’s securities does not need disclosure to
investors under this Part if:
(a) the minimum amount payable for the securities on
acceptance of the offer by the person to whom the offer is
made is at least $500,000; or
(b) the amount payable for the securities on acceptance by the
person to whom the offer is made and the amounts previously
paid by the person for the body’s securities of the same class
that are held by the person add up to at least $500,000; or
(c) it appears from a certificate given by a qualified accountant
no more than 6 months before the offer is made that the
person to whom the offer is made:
(i) has net assets of at least the amount specified in
regulations made for the purposes of this subparagraph;
or
(ii) has a gross income for each of the last 2 financial years
of at least the amount specified in regulations made for
the purposes of this subparagraph a year; or
(d) the offer is made to a company or trust controlled by a person
who meets the requirements of subparagraph (c)(i) or (ii).
Note 1: Section 9 defines qualified accountant.
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 2 Offers that need disclosure to investors
Section 708
300 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: A financial services licensee has obligations under Division 3 of
Part 7.7 when providing financial advice. ASIC has a power under
section 915C to suspend or cancel a licensee’s licence.
(9) In calculating the amount payable, or paid, for securities for the
purposes of paragraph (8)(a) or (b), disregard any amount payable,
or paid, to the extent to which it is to be paid, or was paid, out of
money lent by the person offering the securities or an associate.
(9A) In addition to specifying amounts for the purposes of
subparagraphs (8)(c)(i) and (ii), the regulations may do either or
both of the following:
(a) deal with how net assets referred to in subparagraph (8)(c)(i)
are to be determined and valued, either generally or in
specified circumstances;
(b) deal with how gross income referred to in
subparagraph (8)(c)(ii) is to be calculated, either generally or
in specified circumstances.
(9B) In determining the net assets of a person under
subparagraph (8)(c)(i), the net assets of a company or trust
controlled by the person may be included.
Note: Control is defined in section 50AA.
(9C) In determining the gross income of a person under
subparagraph (8)(c)(ii), the gross income of a company or trust
controlled by the person may be included.
Note: Control is defined in section 50AA.
(10) An offer of a body’s securities does not need disclosure to
investors under this Part if:
(a) the offer is made through a financial services licensee; and
(b) the licensee is satisfied on reasonable grounds that the person
to whom the offer is made has previous experience in
investing in securities that allows them to assess:
(i) the merits of the offer; and
(ii) the value of the securities; and
(iii) the risks involved in accepting the offer; and
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Disclosure to investors about securities Part 6D.2
Offers that need disclosure to investors Division 2
Section 708
Corporations Act 2001 301
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(iv) their own information needs; and
(v) the adequacy of the information given by the person
making the offer; and
(c) the licensee gives the person before, or at the time when, the
offer is made a written statement of the licensee’s reasons for
being satisfied as to those matters; and
(d) the person to whom the offer is made signs a written
acknowledgment before, or at the time when, the offer is
made that the licensee has not given the person a disclosure
document under this Part in relation to the offer.
Professional investors
(11) An offer of securities does not need disclosure to investors under
this Part if it is made to:
(a) a person covered by the definition of professional investor in
section 9 (except a person mentioned in paragraph (e) of the
definition); or
(b) a person who has or controls gross assets of at least $10
million (including any assets held by an associate or under a
trust that the person manages).
Offers of securities to people associated with the body
(12) An offer of a body’s securities does not need disclosure to
investors under this Part if it is made to:
(a) a senior manager of the body or a related body or their
spouse, parent, child, brother or sister; or
(b) a body corporate controlled by a person referred to in
paragraph (a).
Certain offers to present holder of securities
(13) An offer of securities for issue does not need disclosure to
investors under this Part if it is:
(a) an offer of fully-paid shares in a body to 1 or more existing
holders of shares in the body under a dividend reinvestment
plan or bonus share plan; or
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 2 Offers that need disclosure to investors
Section 708
302 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) an offer of interests in a managed investment scheme to 1 or
more existing holders of interests in the scheme if:
(i) the offer is made under a distribution reinvestment plan
or switching facility; or
(ii) the scheme is of a kind commonly known as a cash
common fund or cash management trust.
(14) An offer of a disclosing entity’s debentures for issue does not need
disclosure to investors under this Part if the offer is made to 1 or
more existing debenture holders.
(14A) Subsection (14) does not apply to:
(a) an offer of simple corporate bonds; or
(b) an offer of debentures (other than simple corporate bonds), if
the offer is made to holders of simple corporate bonds.
Issues or sales for no consideration
(15) An offer of securities (other than options) does not need disclosure
to investors under this Part if no consideration is to be provided for
the issue or transfer of the securities.
(16) An offer of options does not need disclosure to investors under this
Part if:
(a) no consideration is to be provided for the issue or transfer of
the options; and
(b) no consideration is to be provided for the underlying
securities on the exercise of the option.
Compromise or arrangement under Part 5.1
(17) An offer of securities does not need disclosure to investors under
this Part if it is made under a compromise or arrangement under
Part 5.1 approved at a meeting held as a result of an order under
subsection 411(1) or (1A).
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Section 708
Corporations Act 2001 303
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Deed of company arrangement
(17A) An offer of securities does not need disclosure to investors under
this Part if:
(a) it is made to any or all of the company’s creditors under a
deed of company arrangement; and
(b) it does not require the provision of consideration other than
the release of the company from a debt or debts; and
(c) before the offer was specified in the deed, the administrator
gave as many creditors as reasonably practicable a statement:
(i) that set out all relevant information about the offer that
was within the knowledge of the administrator of the
deed; and
(ii) that stated that the statement is not a prospectus and
may contain less information than a prospectus.
Takeovers
(18) An offer of securities does not need disclosure to investors under
this Part if it is:
(a) made as consideration for an offer to acquire securities under
a takeover bid under Chapter 6; and
(b) accompanied by a bidder’s statement.
Note: Although this offer does not need a disclosure document, similar
disclosures must be made about the securities in the bidder’s statement
under section 636.
Debentures of certain bodies
(19) An offer of a body’s debentures for issue or sale does not need
disclosure to investors under this Part if the body is:
(a) an Australian ADI; or
(b) registered under section 21 of the Life Insurance Act 1995.
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Section 708AA
304 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offers by exempt bodies
(20) An offer of a body’s securities in a State or Territory in this
jurisdiction does not need disclosure to investors under this Part if
the body is an exempt body of that State or Territory.
Note: Section 66A defines exempt body.
(21) An offer of a body’s securities for issue does not need disclosure to
investors under this Part if the body is an exempt public authority
of a State or Territory.
Note: Debentures, stock or bonds issued by a government are not securities
for the purposes of this Chapter (see subsection 92(3)).
708AA Rights issues that do not need disclosure
(1) This section applies to an offer of a body’s securities (the relevant
securities) for issue if:
(a) but for subsection (2), disclosure to investors under this Part
would be required by section 706; and
(b) a determination under subsection (3) is not in force in
relation to the body at the time when the relevant securities
are offered.
Conditions required for rights issue
(2) The offer does not need disclosure to investors under this Part if:
(a) the relevant securities are being offered under a rights issue;
and
(b) the class of the relevant securities are quoted securities at the
time at which the offer is made; and
(c) trading in that class of securities on a prescribed financial
market on which they are quoted was not suspended for more
than a total of 5 days during the shorter of the following
periods:
(i) the period during which the class of securities is quoted;
(ii) the period of 12 months before the day on which the
offer is made; and
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Section 708AA
Corporations Act 2001 305
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) no exemption under section 111AS or 111AT covered the
body, or any person as director or auditor of the body, at any
time during the relevant period referred to in paragraph (c);
and
(e) no order under section 340 or 341 covered the body, or any
person as director or auditor of the body, at any time during
the relevant period referred to in paragraph (c); and
(f) the body gives the relevant market operator for the body a
notice that complies with subsection (7) within the 24 hour
period before the offer is made.
Determination by ASIC
(3) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the body contravened any
of the following provisions:
(a) subsection 283AA(1), 283AB(1) or 283AC(1);
(b) the provisions of Chapter 2M as they apply to the body;
(c) section 674 or 675;
(d) section 724 or 728;
(e) subsection (10) of this section;
(f) section 1308 as that section applies to a notice under
subsection (2) of this section.
(4) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(5) The determination made under subsection (3) is not a legislative
instrument.
(6) A failure to publish a copy of the determination does not affect the
validity of the determination.
Requirements for notice
(7) A notice complies with this subsection if the notice:
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Section 708AA
306 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) states that the body will offer the relevant securities for issue
without disclosure to investors under this Part; and
(b) states that the notice is being given under paragraph (2)(f);
and
(c) states that, as at the date of the notice, the body has complied
with:
(i) the provisions of Chapter 2M as they apply to the body;
and
(ii) section 674; and
(d) sets out any information that is excluded information as at the
date of the notice (see subsections (8) and (9)); and
(e) states:
(i) the potential effect the issue of the relevant securities
will have on the control of the body; and
(ii) the consequences of that effect.
Note 1: A person is taken not to contravene section 727 if a notice purports to
comply with this subsection but does not actually comply with this
subsection: see subsection 727(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
see sections 1308 and 1309. The body has an obligation to correct a
defective notice: see subsection (10) of this section.
(8) For the purposes of subsection (7), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that investors and their professional advisers would
reasonably require for the purpose of making an informed
assessment of:
(i) the assets and liabilities, financial position and
performance, profits and losses and prospects of the
body; or
(ii) the rights and liabilities attaching to the relevant
securities.
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Section 708A
Corporations Act 2001 307
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(9) The notice given under subsection (2) must contain any excluded
information only to the extent to which it is reasonable for
investors and their professional advisers to expect to find the
information in a disclosure document.
Obligation to correct defective notice
(10) The body contravenes this subsection if:
(a) the notice given under subsection (2) is defective; and
(b) the body becomes aware of the defect in the notice within 12
months after the relevant securities are issued; and
(c) the body does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
notice that sets out the information necessary to correct the
defect.
(11) For the purposes of subsection (10), the notice under subsection (2)
is defective if the notice:
(a) does not comply with paragraph (2)(f); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing, the omission of which
renders the notice misleading in a material respect.
708A Sale offers that do not need disclosure
Sale offers to which this section applies
(1) This section applies to an offer (the sale offer) of a body’s
securities (the relevant securities) for sale by a person if:
(a) but for subsection (5), (11) or (12), disclosure to investors
under this Part would be required by subsection 707(3) for
the sale offer; and
(b) the securities were not issued by the body with the purpose
referred to in subparagraph 707(3)(b)(i); and
(c) a determination under subsection (2) was not in force in
relation to the body at the time when the relevant securities
were issued.
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Division 2 Offers that need disclosure to investors
Section 708A
308 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1A) This section also applies to an offer (the sale offer) of a body’s
securities (the relevant securities) for sale by a person if:
(a) but for subsection (5), disclosure to investors under this Part
would be required by subsection 707(5) for the sale offer;
and
(b) the securities were not sold by the controller with the purpose
referred to in subparagraph 707(5)(c)(i); and
(c) a determination under subsection (2) was not in force in
relation to the body at the time when the relevant securities
were issued.
Determination by ASIC
(2) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the body contravened any
of the following provisions:
(a) subsection 283AA(1), 283AB(1) or 283AC(1);
(b) the provisions of Chapter 2M as they apply to the body;
(c) section 674 or 675;
(d) section 724 or 728;
(e) subsection (9) of this section; or
(f) section 1308 as that section applies to a notice under
subsection (5) of this section.
(3) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(4) A failure to publish a copy of the determination does not affect the
validity of the determination.
Sale offer of quoted securities—case 1
(5) The sale offer does not need disclosure to investors under this Part
if:
(a) the relevant securities are in a class of securities that were
quoted securities at all times in the 3 months before the day
on which the relevant securities were issued; and
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Corporations Act 2001 309
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(b) trading in that class of securities on a prescribed financial
market on which they were quoted was not suspended for
more than a total of 5 days during the shorter of the period
during which the class of securities were quoted, and the
period of 12 months before the day on which the relevant
securities were issued; and
(c) no exemption under section 111AS or 111AT covered the
body, or any person as director or auditor of the body, at any
time during the relevant period referred to in paragraph (b);
and
(d) no order under section 340 or 341 covered the body, or any
person as director or auditor of the body, at any time during
the relevant period referred to in paragraph (b); and
(e) either:
(i) if this section applies because of subsection (1)—the
body gives the relevant market operator for the body a
notice that complies with subsection (6) before the sale
offer is made; or
(ii) if this section applies because of subsection (1A)—both
the body, and the controller, give the relevant market
operator for the body a notice that complies with
subsection (6) before the sale offer is made.
(6) A notice complies with this subsection if the notice:
(a) is given within 5 business days after the day on which the
relevant securities were issued by the body; and
(b) states that the body issued the relevant securities without
disclosure to investors under this Part; and
(c) states that the notice is being given under paragraph (5)(e);
and
(d) states that, as at the date of the notice, the body has complied
with:
(i) the provisions of Chapter 2M as they apply to the body;
and
(ii) section 674; and
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Section 708A
310 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) sets out any information that is excluded information as at the
date of the notice (see subsections (7) and (8)).
Note 1: A person is taken not to contravene section 727 if a notice purports to
comply with this subsection but does not actually comply with this
subsection: see subsection 727(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
see sections 1308 and 1309. The body has an obligation to correct a
defective notice: see subsection (9) of this section.
(7) For the purposes of subsection (6), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that investors and their professional advisers would
reasonably require for the purpose of making an informed
assessment of:
(i) the assets and liabilities, financial position and
performance, profits and losses and prospects of the
body; or
(ii) the rights and liabilities attaching to the relevant
securities.
(8) The notice given under subsection (5) must contain any excluded
information only to the extent to which it is reasonable for
investors and their professional advisers to expect to find the
information in a disclosure document.
Obligation to correct defective notice
(9) The body contravenes this subsection if:
(a) the notice given under subsection (5) is defective; and
(b) the body becomes aware of the defect in the notice within 12
months after the relevant securities are issued; and
(c) the body does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
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Section 708A
Corporations Act 2001 311
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notice that sets out the information necessary to correct the
defect.
(10) For the purposes of subsection (9), the notice under subsection (5)
is defective if the notice:
(a) does not comply with paragraph (6)(e); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing the omission of which
renders the notice misleading in a material respect.
Sale offer of quoted securities—case 2
(11) The sale offer does not need disclosure to investors under this Part
if:
(a) the relevant securities are in a class of securities that are
quoted securities of the body; and
(b) either:
(i) a prospectus is lodged with ASIC on or after the day on
which the relevant securities were issued but before the
day on which the sale offer is made; or
(ii) a prospectus is lodged with ASIC before the day on
which the relevant securities are issued and offers of
securities that have been made under the prospectus are
still open for acceptance on the day on which the
relevant securities were issued; and
(c) the prospectus is for an offer of securities issued by the body
that are in the same class of securities as the relevant
securities.
Sale offer of quoted securities—case 3
(12) This subsection is satisfied if:
(a) the body offered to issue securities under a prospectus; and
(b) the body issued the relevant securities to:
(i) a person (the underwriter) named in that prospectus as
an underwriter of the issue; or
(ii) a person nominated by the underwriter; and
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Section 708A
312 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the relevant securities were issued to the underwriter, or the
person nominated by the underwriter, at or about the time
that persons who applied for securities under the prospectus
were issued with those securities; and
(d) the relevant securities are in a class of securities that were
quoted securities of the body.
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Types of disclosure documents Division 3
Section 709
Corporations Act 2001 313
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Types of disclosure documents
709 Prospectuses, short-form prospectuses, profile statements and
offer information statements
Prospectus or short-form prospectus
(1) If an offer of securities (other than an offer of simple corporate
bonds) needs disclosure to investors under this Part, a prospectus
must be prepared for the offer unless subsection (4) allows an offer
information statement to be used instead. Under section 712, the
prospectus may simply refer to material already lodged with ASIC
instead of including it.
Note: See sections 710 to 713 for the contents of a prospectus.
(1A) If:
(a) an offer of simple corporate bonds needs disclosure to
investors under this Part; and
(b) the offer period begins during the 2-year period beginning at
the commencement of this subsection;
either of the following must be prepared for the offer:
(c) a prospectus (other than a 2-part simple corporate bonds
prospectus) unless subsection (4) allows an offer information
statement to be used instead;
(d) a 2-part simple corporate bonds prospectus.
Note: See sections 713B to 713E for the contents of a 2-part simple
corporate bonds prospectus.
(1B) If a prospectus is prepared under paragraph (1A)(c), then, under
section 712, the prospectus may simply refer to material already
lodged with ASIC instead of including it.
(1C) If:
(a) an offer of simple corporate bonds needs disclosure to
investors under this Part; and
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Section 709
314 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the offer period begins after the 2-year period beginning at
the commencement of this subsection;
a 2-part simple corporate bonds prospectus must be prepared for
the offer.
Note: See sections 713B to 713E for the contents of a 2-part simple
corporate bonds prospectus.
Profile statement
(2) A profile statement for an offer may be prepared in addition to the
prospectus if ASIC has approved the making of offers of that kind
with a profile statement instead of a disclosure document.
Note 1: See section 714 for the contents of a profile statement.
Note 2: Subsection 729(2) provides that there is still liability to investors on
the prospectus when a profile statement is used.
(2A) Subsection (2) does not apply to an offer of simple corporate
bonds.
(3) ASIC may approve the use of profile statements for offers of
securities of a particular kind. The approval may specify
information to be included in the profile statement (including
information about a matter referred to in paragraphs 714(1)(a) to
(d)).
Offer information statement
(4) A body offering to issue securities may use an offer information
statement for the offer instead of a prospectus (other than a 2-part
simple corporate bonds prospectus) if the amount of money to be
raised by the body by issuing the securities, when added to all
amounts previously raised by:
(a) the body; or
(b) a related body corporate; or
(c) an entity controlled by:
(i) a person who controls the body; or
(ii) an associate of that person;
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Section 709
Corporations Act 2001 315
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by issuing securities under an offer information statement is
$10 million or less.
Note 1: See section 715 for the contents of an offer information statement. The
statement must include financial statements that are less than 6 months
old.
Note 2: Under section 740, ASIC may make a determination aggregating the
transactions of bodies that ASIC considers to be closely related.
(5) In working out the amount of money to be raised by a body or
entity by issuing securities, include the following:
(a) the amount payable for the securities at the time when they
are issued;
(b) if the securities are issued partly-paid—any amount payable
at a future time if a call is made;
(c) if the securities are options—any amount payable on the
exercise of the options;
(d) if the securities carry a right to convert the securities into
other securities—any amount payable on the exercise of that
right.
However, do not include an amount payable for securities, or
payable on the exercise of options, if the securities or options are
issued under an eligible employee share scheme.
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Division 4 Disclosure requirements
Section 710
316 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Disclosure requirements
710 Prospectus content—general disclosure test
(1) A prospectus for a body’s securities must contain all the
information that investors and their professional advisers would
reasonably require to make an informed assessment of the matters
set out in the table below. The prospectus must contain this
information:
(a) only to the extent to which it is reasonable for investors and
their professional advisers to expect to find the information
in the prospectus; and
(b) only if a person whose knowledge is relevant (see
subsection (3)):
(i) actually knows the information; or
(ii) in the circumstances ought reasonably to have obtained
the information by making enquiries.
Disclosures [operative]
Offer Matters
1 offer to issue (or transfer)
shares, debentures or
interests in a managed
investment scheme
the rights and liabilities attaching to the
securities offered
the assets and liabilities, financial
position and performance, profits and
losses and prospects of the body that is
to issue (or issued) the shares,
debentures or interests
2 offer to grant (or transfer) a
legal or equitable interest in
securities or grant (or
transfer) an option over
securities
the rights and liabilities attaching to:
- the interest or option
- the underlying securities
for an option—the capacity of the
person making the offer to issue or
deliver the underlying securities
if the person making the offer is:
- the body that issued or is to issue the
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Section 710
Corporations Act 2001 317
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Disclosures [operative]
Offer Matters
underlying securities; or
- a person who controls that body; the assets and liabilities, financial
position and performance, profits and
losses and prospects of that body
if subsection 707(3) or (5) applies to the
offer—the assets and liabilities,
financial position and performance,
profits and losses and prospects of the
body whose securities are offered
Note: Section 713 makes special provision for prospectuses for continuously
quoted securities.
(2) In deciding what information should be included under
subsection (1), have regard to:
(a) the nature of the securities and of the body; and
(b) if the securities are investments in a managed investment
scheme—the nature of the scheme; and
(c) the matters that likely investors may reasonably be expected
to know; and
(d) the fact that certain matters may reasonably be expected to be
known to their professional advisers.
(3) For the purposes of this section, a person’s knowledge is relevant
only if they are one of the following:
(a) the person offering the securities;
(b) if the person offering the securities is a body—a director of
the body;
(c) a proposed director of the body whose securities will be
issued under the offer;
(d) a person named in the prospectus as an underwriter of the
issue or sale;
(e) a person named in the prospectus as a a person named in the
prospectus as a financial services licensee involved in the
issue or sale;
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Section 711
318 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(f) a person named in the prospectus with their consent as
having made a statement:
(i) that is included in the prospectus; or
(ii) on which a statement made in the prospectus is based;
(g) a person named in the prospectus with their consent as
having performed a particular professional or advisory
function.
Note: Section 729 says who is liable for misstatements in, and omissions
from, a disclosure document.
(4) This section does not apply to a 2-part simple corporate bonds
prospectus.
711 Prospectus content—specific disclosures
Terms and conditions of offer
(1) The prospectus must set out the terms and conditions of the offer.
Disclosure of interests and fees of certain people involved in the
offer
(2) The prospectus must set out the nature and extent of the interests
(if any) that each person referred to in subsection (4) holds, or held
at any time during the last 2 years, in:
(a) the formation or promotion of the body; or
(b) property acquired or proposed to be acquired by the body in
connection with:
(i) its formation or promotion; or
(ii) the offer of the securities; or
(c) the offer of the securities.
(3) The prospectus must set out the amount that anyone has paid or
agreed to pay, or the nature and value of any benefit anyone has
given or agreed to give:
(a) to a director, or proposed director, to induce them to become,
or to qualify as, a director of the body; and
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Section 711
Corporations Act 2001 319
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(b) for services provided by a person referred to in subsection (4)
in connection with:
(i) the formation or promotion of the body; or
(ii) the offer of the securities; and
(c) if the prospectus is for interests in a managed investment
scheme—to the responsible entity:
(i) to procure acquisitions of interests in the scheme; or
(ii) for services provided under the constitution of the
scheme.
To comply with this subsection it is not sufficient merely to state in
the prospectus that a person has been paid or will be paid normal,
usual or standard fees.
(4) Disclosures need to be made under subsections (2) and (3) in
relation to:
(a) any directors and proposed directors of the body;
(b) a person named in the prospectus as performing a function in
a professional, advisory or other capacity in connection with
the preparation or distribution of the prospectus;
(d) a promoter of the body;
(e) an underwriter (but not a sub-underwriter) to the issue or sale
or a financial services licensee named in the prospectus as a
financial services licensee involved in the issue or sale.
Quotation of securities
(5) If the prospectus for an offer of securities states or implies that the
securities will be able to be traded on a financial market (whether
in Australia or elsewhere), the prospectus must state that:
(a) the securities have been admitted to quotation on that
financial market; or
(b) an application for admission of the securities to quotation on
that financial market has been made to the operator of that
market; or
(c) an application for admission of the securities to quotation on
that financial market will be made to the operator of that
market within 7 days after the date of the prospectus.
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Part 6D.2 Disclosure to investors about securities
Division 4 Disclosure requirements
Section 711
320 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: Paragraph 724(1)(b) gives times within which the person should seek
and obtain admission to quotation.
Note 2: Subsection 716(1) requires the prospectus to be dated.
Expiry date
(6) The prospectus must state that no securities will be issued on the
basis of the prospectus after the expiry date specified in the
prospectus. The expiry date must not be later than 13 months after
the date of the prospectus. The expiry date of a replacement
prospectus must be the same as that of the original prospectus it
replaces.
Note 1: Subsection 716(1) requires the prospectus to be dated.
Note 2: Section 719 deals with replacement prospectuses.
Lodgment with ASIC
(7) The prospectus must state that:
(a) a copy of the prospectus has been lodged with ASIC; and
(b) ASIC takes no responsibility for the content of the
prospectus.
Prescribed information
(8) The prospectus must set out the information required by the
regulations.
Section does not apply to 2-part simple corporate bonds
prospectus
(9) This section does not apply to a 2-part simple corporate bonds
prospectus.
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Section 712
Corporations Act 2001 321
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712 Prospectus content—short form prospectuses
Prospectus may simply refer to material lodged with ASIC
(1) Instead of setting out information that is contained in a document
that has been lodged with ASIC, a prospectus may simply refer to
the document. The reference must:
(a) identify the document or the part of the document that
contains the information; and
(b) inform people of their right to obtain a copy of the document
(or part) under subsection (5).
(2) The reference must also include:
(a) if the information is primarily of interest to professional
analysts or advisers or investors with similar specialist
information needs:
(i) a description of the contents of the document (or part);
and
(ii) a statement to the effect that the information in the
document (or part) is primarily of interest to those
people; or
(b) in any other case—sufficient information about the contents
of the document to allow a person to whom the offer is made
to decide whether to obtain a copy of the document (or part).
(3) The document (or part) referred to under subsection (1) is taken to
be included in the prospectus.
(4) A person who wishes to take advantage of subsection (1) may
lodge a document with ASIC even if this Act does not require the
document to be lodged.
(5) If the prospectus is taken to include a document, or part of a
document, under subsection (1), the person making the offer must
give a copy of the document (or part) free of charge to anyone who
asks for it during the application period of the prospectus.
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Part 6D.2 Disclosure to investors about securities
Division 4 Disclosure requirements
Section 713
322 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Section does not apply to 2-part simple corporate bonds
prospectus
(6) This section does not apply to a 2-part simple corporate bonds
prospectus.
713 Special prospectus content rules for continuously quoted
securities
Alternative general disclosure test
(1) A prospectus for an offer of:
(a) continuously quoted securities of a body; or
(b) options to acquire continuously quoted securities of a body;
satisfies section 710 if it complies with subsections (2), (3) and (4)
of this section.
(2) The prospectus must contain all the information investors and their
professional advisers would reasonably require to make an
informed assessment of:
(a) the effect of the offer on the body; and
(c) the rights and liabilities attaching to the securities offered;
and
(d) if the securities are options—the rights and liabilities
attaching to:
(i) the options themselves; and
(ii) the underlying securities.
The prospectus must contain this information only to the extent to
which it is reasonable for investors and their professional advisers
to expect to find the information in the prospectus.
(3) The prospectus must state that:
(a) as a disclosing entity, the body is subject to regular reporting
and disclosure obligations; and
(b) copies of documents lodged with ASIC in relation to the
body may be obtained from, or inspected at, an ASIC office.
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(4) The prospectus must either:
(a) inform people of their right to obtain a copy of any of the
following documents:
(i) the annual financial report most recently lodged with
ASIC by the body;
(ii) any half-year financial report lodged with ASIC by the
body after the lodgment of that annual financial report
and before the lodgment of the copy of the prospectus
with ASIC;
(iii) any continuous disclosure notices given by the body
after the lodgment of that annual financial report and
before the lodgment of the copy of the prospectus with
ASIC; or
(b) include, or be accompanied by, a copy of the document.
If the prospectus informs people of their right to obtain a copy of
the document, the person making the offer must give a copy of the
document free of charge to anyone who asks for it during the
application period for the prospectus.
Information excluded from continuous disclosure notice
(5) Information about the offer must also be set out in the prospectus if
the information:
(a) has been excluded from a continuous disclosure notice in
accordance with the listing rules of the prescribed financial
market whose operator was given the notice; and
(b) is information that investors and their professional advisers
would reasonably require for the purpose of making an
informed assessment of:
(i) the assets and liabilities, financial position and
performance, profits and losses and prospects of the
body; and
(ii) the rights and liabilities attaching to the securities being
offered.
The prospectus must contain this information only to the extent to
which it is reasonable for investors and their professional advisers
to expect to find the information in the prospectus.
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Section 713A
324 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
ASIC power to exclude entity from this section
(6) ASIC may determine in writing that a body may not rely on this
section if it is satisfied that, in the previous 12 months, any of the
following provisions were contravened in relation to the body:
(a) the provisions of Chapter 2M;
(aa) subsection 674(2) or 675(2);
(ab) subsection 708AA(10) or 708A(9);
(b) section 724;
(c) section 728;
(d) section 1308 as it applies to a notice under
subsection 708AA(2) or 708A(5);
ASIC must publish a copy of the determination in the Gazette.
While the determination is in force, section 710 and not this section
applies to securities of the body.
Section does not apply to 2-part simple corporate bonds
prospectus
(7) This section does not apply to a 2-part simple corporate bonds
prospectus.
713A Offer of simple corporate bonds
Simple corporate bonds
(1) If the conditions set out in this section are satisfied in relation to an
offer of securities for issue by a body:
(a) the offer is an offer of simple corporate bonds; and
(b) the securities are simple corporate bonds.
Securities must be debentures
(2) The securities must be debentures.
Securities must be quoted on a prescribed financial market
(3) The securities must be offered on the basis that:
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(a) the securities have been admitted to quotation on a prescribed
financial market; or
(b) an application for admission of the securities to quotation on
a prescribed financial market has been made to the operator
of that market; or
(c) an application for admission of the securities to quotation on
a prescribed financial market will be made to the operator of
that market within 7 days after the date of the prospectus.
(4) If, at a particular time, there is no prospectus, then, for the purposes
of paragraph (3)(c), assume that:
(a) there is a prospectus; and
(b) the date of the prospectus is the first day of the offer period.
Securities must be in Australian currency
(5) The securities must be denominated in Australian currency.
Securities for fixed term
(6) The securities must be for a fixed term of not more than 15 years.
Principal payable at end of fixed term
(7) The principal in respect of the securities must be repaid by the
issuing body to the holder at the end of the fixed term.
Interest rate must be fixed or floating
(8) The rate at which interest is payable on the securities must be:
(a) a fixed rate; or
(b) a floating rate that is comprised of a reference rate and a
fixed margin.
Fixed rate etc. must not be decreased
(9) If a fixed rate of interest is payable on the securities, the rate must
not be decreased during the term of the securities.
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326 Corporations Act 2001
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(10) If a floating rate of interest is payable on the securities, the fixed
margin of the rate must not be decreased during the term of the
securities.
Interest to be paid periodically etc.
(11) Interest payments on the securities:
(a) must be paid periodically; and
(b) must be paid no later than the end of the fixed term; and
(c) cannot be deferred or capitalised by the issuing body.
Security must not exceed $1,000
(12) The price payable for each security must not exceed $1,000.
Securities may only be redeemed before fixed term in specified
circumstances
(13) The securities must not be redeemable (other than at the end of the
fixed term) except in one or more of the following circumstances:
(a) at the option of the holders of the securities;
(b) as a result of the acceptance of offers made to the holders by
the issuing body to buy back the securities;
(c) a change in a law, or in the application or interpretation of a
law, with the effect that interest payable on the securities is
not, or may not be, deductible by the issuing body for the
purposes of calculating its taxation liability;
(d) a change in a law, or in the application or interpretation of a
law, with the effect that:
(i) the issuing body, or any guarantor for the body, would
be required to deduct or withhold an amount in respect
of taxes from a payment to the holders; and
(ii) under the terms of the securities, that deduction or
withholding would result in the body, or any guarantor,
being required to pay an additional amount to the
holders in relation to the amount deducted or withheld;
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(e) there is a change of control of the issuing body (as defined in
the terms of the securities) and the redemption does not take
effect unless all securities issued under the offer are
redeemed;
(f) fewer than 10% of the securities issued under the offer
remain on issue and the redemption does not take effect
unless all securities issued under the offer are redeemed.
Debt to security holders is not subordinated to debts to unsecured
creditors
(14) The issuing body’s debts to holders of the securities must not be
subordinated to any of the issuing body’s debts to unsecured
creditors.
Securities not convertible
(15) The securities must not be convertible into another class of
securities.
Securities are offered at single price
(16) The price payable for the securities must be the same for all
persons who accept the offer.
Continuously quoted securities
(17) The issuing body must be a body that:
(a) has continuously quoted securities; or
(b) is a wholly-owned subsidiary of a body corporate that:
(i) has continuously quoted securities; and
(ii) has guaranteed, or agreed to guarantee, the repayment of
any money deposited or lent to the borrower under the
securities; and
(iii) has guaranteed, or agreed to guarantee, the payment of
any interest payable on the securities;
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328 Corporations Act 2001
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where trading in the securities on a prescribed financial market on
which the securities are quoted was not suspended for more than a
total of 5 days during the shorter of the following periods:
(c) the period during which the class of securities is quoted;
(d) the period of 12 months before the day on which the offer is
made.
(18) If, at a particular time, there is no prospectus, then, in determining,
for the purposes of subsection (17), whether a body has
continuously quoted securities at that time, assume that:
(a) there is a prospectus; and
(b) the date of the prospectus is the first day of the offer period.
Auditor’s reports have not been modified
(19) If the condition in subsection (17) is satisfied because of the
application of paragraph (17)(a) to the issuing body, the auditor’s
report on:
(a) the issuing body’s financial report for the most recent
financial year; or
(b) if a half-year financial report was prepared by the issuing
body after the issuing body’s financial report for the most
recent financial year—the half-year financial report;
must not include:
(c) a statement to the effect that the auditor is of the opinion that
the financial report, or the half-year financial report, as the
case may be, is not in accordance with this Act; or
(d) a description of a defect or an irregularity in the financial
report or the half-year financial report, as the case may be; or
(e) a description of a deficiency, failure or shortcoming in
respect of the matters referred to in paragraph 307(b), (c) or
(d); or
(f) an emphasis of matter paragraph related to going concern.
(20) If:
(a) the issuing body is a wholly-owned subsidiary of a body
corporate; and
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(b) the condition in subsection (17) is satisfied because of the
application of paragraph (17)(b) to the body corporate;
the auditor’s report on:
(c) the body corporate’s financial report for the most recent
financial year; or
(d) if a half-year financial report was prepared by the body
corporate after the body corporate’s financial report for the
most recent financial year—the half-year financial report;
must not include:
(e) a statement to the effect that the auditor is of the opinion that
the financial report, or the half-year financial report, as the
case may be, is not in accordance with this Act; or
(f) a description of a defect or an irregularity in the financial
report or the half-year financial report, as the case may be; or
(g) a description of a deficiency, failure or shortcoming in
respect of the matters referred to in paragraph 307(b), (c) or
(d); or
(h) an emphasis of matter paragraph related to going concern.
ASIC power to exclude body from this section
(21) The issuing body must not be a body in relation to which a
determination is in force under subsection (23).
(22) If the issuing body is a wholly-owned subsidiary of a body
corporate, the body corporate must not be a body in relation to
which a determination is in force under subsection (23).
(23) ASIC may determine that a body is a body to which this subsection
applies if ASIC is satisfied that, in the previous 12 months, any of
the following provisions were contravened in relation to the body:
(a) subsection 283AA(1), 283AB(1) or 283AC(1);
(b) the provisions of Chapter 2M as they apply to the issuing
body;
(c) section 674 or 675;
(d) section 724 or 728.
ASIC must publish a copy of the determination in the Gazette.
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Section 713B
330 Corporations Act 2001
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Regulations
(24) The securities must comply with such other conditions (if any) as
are specified in the regulations.
(25) The offer must comply with such other conditions (if any) as are
specified in the regulations.
(26) The issuing body must comply with such other conditions (if any)
as are specified in the regulations.
(27) If the issuing body is a wholly-owned subsidiary of a body
corporate, the body corporate must comply with such other
conditions (if any) as are specified in the regulations.
713B Simple corporate bonds—2-part simple corporate bonds
prospectus
(1) A 2-part simple corporate bonds prospectus for an offer of simple
corporate bonds for issue by a body is the combination of the
following documents prepared by the issuing body:
(a) the base prospectus that covers the period during which the
offer is made;
(b) the offer-specific prospectus for the offer.
Prospectus
(2) A 2-part simple corporate bonds prospectus is taken to be a
prospectus for the purposes of this Act.
Base prospectus is not taken to be a prospectus in its own right
(3) For the purposes of this Act, a base prospectus is taken not to be a
prospectus in its own right.
Offer-specific prospectus is not taken to be a prospectus in its own
right
(4) For the purposes of this Act, an offer-specific prospectus is taken
not to be a prospectus in its own right.
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Corporations Act 2001 331
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Lodgement of prospectus
(5) For the purposes of this Act, a 2-part simple corporate bonds
prospectus for an offer of simple corporate bonds is taken to have
been lodged with ASIC on the day the offer-specific prospectus for
the offer is lodged with ASIC.
Expiry date of prospectus
(6) For the purposes of this Act, the expiry date of a 2-part simple
corporate bonds prospectus for an offer of simple corporate bonds
is taken to be the expiry date for the offer-specific prospectus for
the offer.
Prospectus must be published on body’s website
(7) A base prospectus must be available on the issuing body’s website
throughout the covered period for the base prospectus (within the
meaning of section 713C).
(8) An offer-specific prospectus must be available on the issuing
body’s website throughout the application period for the
offer-specific prospectus.
713C Simple corporate bonds—base prospectus
Base prospectus
(1) If a body prepares and lodges with ASIC a document that satisfies
the conditions set out in subsections (2) and (3), the document is a
base prospectus for simple corporate bonds offered by the body
during the 3-year period (the covered period) beginning on the date
on which the document is lodged with ASIC.
Document must be expressed to be the base prospectus
(2) The document must state that it is the base prospectus for all offers
of simple corporate bonds made by the body during the covered
period.
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Section 713D
332 Corporations Act 2001
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Document to be read with offer-specific prospectus
(3) The document must state that:
(a) there will be an offer-specific prospectus for each offer of
simple corporate bonds during the covered period; and
(b) the disclosure document for each such offer will consist of:
(i) a base prospectus; and
(ii) the offer-specific prospectus for the offer.
Note: See also section 713B (2-part simple corporate bonds prospectus).
Replacement document
(4) If the document is a replacement document, the covered period is
the period:
(a) beginning on the date on which the replacement document is
lodged with ASIC; and
(b) ending at the end of the covered period for the original base
prospectus.
Content of base prospectus
(5) A base prospectus must contain the information specified in the
regulations.
(6) A base prospectus must set out the statements specified in the
regulations.
713D Simple corporate bonds—offer-specific prospectus
Offer-specific prospectus
(1) If:
(a) a body proposes to make a particular offer of simple
corporate bonds; and
(b) the body prepares and lodges with ASIC a document that
satisfies:
(i) the conditions set out in subsections (2), (3) and (4); and
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(ii) if the condition set out in subsection (5) is applicable—
that condition;
the document is an offer-specific prospectus for the offer.
Document must be expressed to be the offer-specific prospectus
(2) The document must state that it is the offer-specific prospectus for
the offer.
Expiry date
(3) The document must state that no simple corporate bonds will be
issued under the offer after the expiry date specified in the
document. The expiry date must not be later than 13 months after
the date the document is lodged with ASIC. The expiry date of a
replacement document must be the same as that of the original
document it replaces.
Note: Section 719A deals with replacement documents.
Document to be read with base prospectus
(4) The document must state that:
(a) there is a base prospectus that is applicable to the offer; and
(b) the disclosure document for each such offer will consist of:
(i) the offer-specific prospectus for the offer; and
(ii) the base prospectus.
Note: See also section 713B (2-part simple corporate bonds prospectus).
Minimum subscription—first offer
(5) If the offer is the first offer of simple corporate bonds made by the
issuing body during:
(a) if the base prospectus that is applicable to the offer is not a
replacement document—the covered period (within the
meaning of subsection 713C(1)) for the base prospectus; or
(b) if the base prospectus that is applicable to the offer is a
replacement document for the original base prospectus—the
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covered period (within the meaning of subsection 713C(1))
for the original base prospectus;
the document must state that the simple corporate bonds will not be
issued under the offer unless a minimum amount of $50 million is
raised under the offer. For the purpose of working out whether this
condition has been satisfied, a person who has agreed to take
simple corporate bonds as an underwriter is taken to have applied
for those simple corporate bonds.
Content of offer-specific prospectus
(6) An offer-specific prospectus must contain the information
specified in the regulations.
(7) An offer-specific prospectus must set out the statements specified
in the regulations.
Offer-specific prospectus may amend applicable base prospectus
(8) An offer-specific prospectus may include material that modifies or
supplements the applicable base prospectus.
713E Simple corporate bonds—prospectus may refer to other
material lodged with ASIC
(1) Instead of setting out information that is contained in a document
(the lodged document) that has been lodged with ASIC, a base
prospectus or an offer-specific prospectus may simply refer to the
lodged document. The reference must:
(a) identify the lodged document or the part of the lodged
document that contains the information; and
(b) inform people of their right to obtain a copy of the lodged
document (or part) under subsection (5).
(2) The reference must also include:
(a) if the information is primarily of interest to professional
analysts or advisers or investors with similar specialist
information needs:
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(i) a description of the contents of the lodged document (or
part); and
(ii) a statement to the effect that the information in the
lodged document (or part) is primarily of interest to
those people; or
(b) in any other case—sufficient information about the contents
of the lodged document to allow a person to whom the offer
is made to decide whether to obtain a copy of the lodged
document (or part).
(3) The lodged document (or part) referred to under subsection (1) is
taken to be included in the base prospectus, or the offer-specific
prospectus, as the case may be.
(4) A person who wishes to take advantage of subsection (1) may
lodge a document with ASIC even if this Act does not require the
document to be lodged.
(5) If the base prospectus, or the offer-specific prospectus, as the case
may be, is taken to include a lodged document, or part of a lodged
document, under subsection (1), the person making the offer must
give a copy of the lodged document (or part) free of charge to
anyone who asks for it during:
(a) in the case of a base prospectus—the covered period for the
base prospectus (within the meaning of section 713C); or
(b) in the case of an offer-specific prospectus—the application
period for the offer-specific prospectus.
714 Contents of profile statement
(1) A profile statement must:
(a) identify the body and the nature of the securities; and
(b) state the nature of the risks involved in investing in the
securities; and
(c) give details of all amounts payable in respect of the securities
(including any amounts by way of fee, commission or
charge); and
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(d) state that the person given the profile statement is entitled to
a copy of the prospectus free of charge; and
(e) state that:
(i) a copy of the statement has been lodged with ASIC; and
(ii) ASIC takes no responsibility for the content of the
statement; and
(f) give any other information required by the regulations or by
ASIC approval under subsection 709(3).
(2) The profile statement must state that no securities will be issued on
the basis of the statement after the expiry date specified in the
statement. The expiry date must not be later than 13 months after
the date of the prospectus. The expiry date of a replacement
statement must be the same as that of the original statement it
replaces.
Note 1: Subsection 716(1) requires the profile statement to be dated.
Note 2: Section 719 deals with supplementary and replacement profile
statements.
715 Contents of offer information statement
(1) An offer information statement for the issue of a body’s securities
must:
(a) identify the body and the nature of the securities; and
(b) describe the body’s business; and
(c) describe what the funds raised by the offers are to be used
for; and
(d) state the nature of the risks involved in investing in the
securities; and
(e) give details of all amounts payable in respect of the securities
(including any amounts by way of fee, commission or
charge); and
(f) state that:
(i) a copy of the statement has been lodged with ASIC; and
(ii) ASIC takes no responsibility for the content of the
statement; and
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(g) state that the statement is not a prospectus and that it has a
lower level of disclosure requirements than a prospectus; and
(h) state that investors should obtain professional investment
advice before accepting the offer; and
(i) include a copy of a financial report for the body; and
(j) include any other information that the regulations require to
be included in the statement.
(2) The financial report included under paragraph (1)(i) must:
(a) be a report for a 12 month period and have a balance date that
occurs within the last 6 months before the securities are first
offered under the statement; and
(b) be prepared in accordance with the accounting standards; and
(c) be audited.
(3) The statement must state that no securities will be issued on the
basis of the statement after the expiry date specified in the
statement. The expiry date must not be later than 13 months after
the date of the statement. The expiry date of a replacement
statement must be the same as that of the original statement it
replaces.
Note 1: Subsection 716(1) requires the statement to be dated.
Note 2: Section 719 deals with replacement statements.
715A Presentation etc. of disclosure documents
(1) The information in a disclosure document must be worded and
presented in a clear, concise and effective manner.
Note: If this subsection is contravened, ASIC may make a stop order under
section 739.
(2) A contravention of subsection (1) is not an offence.
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Part 6D.2 Disclosure to investors about securities
Division 4 Disclosure requirements
Section 716
338 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
716 Disclosure document date and consents
Date of disclosure document
(1) A disclosure document must be dated. The date is the date on
which it is lodged with ASIC.
Date for 2-part simple corporate bonds prospectus
(1A) Subsection (1) does not apply to a 2-part simple corporate bonds
prospectus.
(1B) For the purposes of this Act, the date of a 2-part simple corporate
bonds prospectus for an offer of simple corporate bonds is taken to
be the date on which the offer-specific prospectus for the offer is
lodged with ASIC.
Consent of person to whom statement attributed
(2) A disclosure document may only include a statement by a person,
or a statement said in the document to be based on a statement by a
person, if:
(a) the person has consented to the statement being included in
the document in the form and context in which it is included;
and
(b) the document states that the person has given this consent;
and
(c) the person has not withdrawn this consent before the
document is lodged with ASIC.
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Section 717
Corporations Act 2001 339
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Procedure for offering securities
717 Overview of procedure for offering securities
The following table summarises what a person who wants to offer
securities must do to make an offer of securities that needs
disclosure to investors under this Part and gives signposts to
relevant sections:
Offering securities (disclosure documents and procedure)
Action required Sections Comments and related sections
1 Prepare disclosure
document, making sure that
it:
sets out all the
information required
does not contain any
misleading or deceptive
statements
is dated
and that the directors
consent to the disclosure
document.
710
711
712
713
713C
713D
713E
714
715
716
Section 728 prohibits offering
securities under a disclosure
document that is materially
deficient.
Section 729 deals with the
liability for breaches of this
prohibition.
Sections 731, 732 and 733 set out
defences.
2 Lodge the disclosure
document with ASIC
718 Subsection 727(3) prohibits
processing applications for
non-quoted securities for 7 days
after the disclosure document is
lodged.
3 Offer the securities, making
sure that the offer and any
application form is either
included in or
accompanies:
the disclosure
document; or
a profile statement if
721 Sections 727 and 728 make it an
offence to:
offer securities without a
disclosure document
offer securities if the
disclosure document is
materially deficient.
Subsection 729(3) deals with
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Part 6D.2 Disclosure to investors about securities
Division 5 Procedure for offering securities
Section 717
340 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offering securities (disclosure documents and procedure)
Action required Sections Comments and related sections
ASIC has approved the
use of a profile
statement for offers of
that kind.
liability on the prospectus if a
profile statement is used.
The securities hawking provisions
(section 736) restrict the way in
which the securities can be
offered.
4 If it is found that the
disclosure document
lodged was deficient or a
significant new matter
arises, either:
lodge a supplementary
or replacement
document under
section 719 or 719A; or
return money to
applicants under
section 724.
719
719A
724
Section 728 prohibits making
offers after becoming aware of a
material deficiency in the
disclosure document or a
significant new matter.
Section 730 requires people liable
on the disclosure document to
inform the person making the
offer about material deficiencies
and new matters.
5 Hold application money
received on trust until the
securities are issued or
transferred or the money
returned.
722 Investors may have a right to have
their money returned if certain
events occur (see sections 724,
737 and 738).
6 Issue or transfer the
securities, making sure
that:
the investor used an
application form
distributed with the
disclosure document;
and
the disclosure document
is current and not
materially deficient;
and
any minimum
723 Section 721 says which disclosure
document must be distributed
with the application form.
Section 729 identifies the people
who may be liable if:
securities are issued in
response to an improper
application form; or
the disclosure document is not
current or is materially
deficient.
Sections 731, 732 and 733
provide defences for the
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Section 718
Corporations Act 2001 341
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offering securities (disclosure documents and procedure)
Action required Sections Comments and related sections
subscription condition
has been satisfied.
contraventions.
Section 737 provides remedies for
an investor.
718 Lodging of disclosure document
(1) A disclosure document to be used for an offer of securities must be
lodged with ASIC.
Note 1: Subsection 727(3) makes it an offence to process applications for
non-quoted securities under an offer that needs a disclosure document
until 7 days after the disclosure document is lodged.
Note 2: See section 720 for the consents that need to be obtained before
lodgment.
Note 3: Section 351 says what signatures are necessary for documents that are
to be lodged with ASIC.
(2) This section does not apply to a 2-part simple corporate bonds
prospectus.
Note: See section 713B (2-part simple corporate bonds prospectus).
719 Lodging supplementary or replacement document—general
Need for a supplementary or replacement document
(1) If the person making the offer becomes aware of:
(a) a misleading or deceptive statement in the disclosure
document; or
(b) an omission from the disclosure document of information
required by section 710, 711, 712, 713, 714 or 715; or
(c) a new circumstance that:
(i) has arisen since the disclosure document was lodged;
and
(ii) would have been required by section 710, 711, 712,
713, 714 or 715 to be included in the disclosure
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Section 719
342 Corporations Act 2001
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document if it had arisen before the disclosure
document was lodged;
that is materially adverse from the point of view of an investor, the
person may lodge a supplementary or replacement document with
ASIC.
Note 1: Section 728 makes it an offence to continue making offers after the
person has become aware of a misleading or deceptive statement,
omission or new circumstance that is materially adverse from the
point of view of an investor unless the deficiency is corrected.
Note 2: Because of section 712, a prospectus may be taken to include
information in another document. This should be taken into account
when considering whether the prospectus is deficient.
Note 3: The power to issue a supplementary or replacement document is not
limited to the situations dealt with in this section.
Note 4: This section applies to a document that has already been previously
supplemented or replaced.
Note 5: See section 720 for the consents that need to be obtained before
lodgment.
(1A) If the person making the offer becomes aware that information in
the disclosure document is not worded and presented in a clear,
concise and effective manner, the person may lodge a
supplementary or replacement document with ASIC.
Form of supplementary document
(2) At the beginning of a supplementary document, there must be:
(a) a statement that it is a supplementary document; and
(b) an identification of the disclosure document it supplements;
and
(c) an identification of any previous supplementary documents
lodged with ASIC in relation to the offer; and
(d) a statement that it is to be read together with the disclosure
document it supplements and any previous supplementary
documents.
The supplementary document must be dated. The date is the date
on which it is lodged with ASIC.
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Section 719
Corporations Act 2001 343
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Form of replacement document
(3) At the beginning of a replacement document, there must be:
(a) a statement that it is a replacement document; and
(b) an identification of the disclosure document it replaces.
The replacement document must be dated. The date is the date on
which it is lodged with ASIC.
Consequences of lodging a supplementary document
(4) If a supplementary document is lodged with ASIC, the disclosure
document is taken to be the disclosure document together with the
supplementary document for the purposes of the application of this
Chapter to events that occur after the lodgment.
Note: This subsection means, for example, that offers made after lodgment
of the supplementary document must be accompanied by copies of
both the original disclosure document and the supplementary
document.
Consequences of lodging a replacement document
(5) If a replacement document is lodged with ASIC, the disclosure
document is taken to be the replacement document for the purposes
of the application of this Chapter to events that occur after the
lodgment.
Note: This subsection means, for example, that offers made after lodgment
of the replacement document must be accompanied by copies of the
replacement document and not the original disclosure document.
Section does not apply to 2-part simple corporate bonds
prospectus
(6) This section does not apply to a 2-part simple corporate bonds
prospectus.
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Division 5 Procedure for offering securities
Section 719A
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
719A Lodging supplementary or replacement document—2-part
simple corporate bonds prospectus
Need for a supplementary or replacement document
(1) If the person making an offer of simple corporate bonds under a
2-part simple corporate bonds prospectus becomes aware of:
(a) a misleading or deceptive statement in the 2-part simple
corporate bonds prospectus; or
(b) an omission from the 2-part simple corporate bonds
prospectus of information required by section 713C, 713D or
713E; or
(c) a new circumstance that:
(i) has arisen since the 2-part simple corporate bonds
prospectus was lodged with ASIC; and
(ii) would have been required by section 713C, 713D or
713E to be included in the 2-part simple corporate
bonds prospectus if it had arisen before the 2-part
simple corporate bonds prospectus was lodged;
that is materially adverse from the point of view of an investor, the
person may:
(d) if the statement, omission or circumstance relates to the base
prospectus component of the 2-part simple corporate bonds
prospectus:
(i) include material in an offer-specific prospectus that
supplements or modifies the base prospectus; or
(ii) lodge a replacement document with ASIC; or
(e) if the statement, omission or circumstance relates to the
offer-specific prospectus component of the 2-part simple
corporate bonds prospectus—lodge a supplementary or
replacement document with ASIC.
Note 1: Section 728 makes it an offence to continue making offers after the
person has become aware of a misleading or deceptive statement,
omission or new circumstance that is materially adverse from the
point of view of an investor unless the deficiency is corrected.
Note 2: Because of section 713E, a 2-part simple corporate bonds prospectus
may be taken to include information in another document. This should
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Section 719A
Corporations Act 2001 345
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be taken into account when considering whether the prospectus is
deficient.
Note 3: A base prospectus may be supplemented or modified by the
offer-specific prospectus for a particular offer, see
subsection 713D(7).
Note 4: The power to issue a supplementary or replacement document is not
limited to the situations dealt with in this section.
Note 5: This section applies to a document that has already been previously
supplemented or replaced.
Note 6: See section 720 for the consents that need to be obtained before
lodgement.
(2) If the person making the offer becomes aware that information in
the base prospectus component of the 2-part simple corporate
bonds prospectus is not worded and presented in a clear, concise
and effective manner, the person may lodge a replacement
document with ASIC.
Note: A base prospectus may be supplemented or modified by the
offer-specific prospectus for a particular offer, see
subsection 713D(7).
(3) If the person making the offer becomes aware that information in
the offer-specific prospectus component of the 2-part simple
corporate bonds prospectus is not worded and presented in a clear,
concise and effective manner, the person may lodge a
supplementary or replacement document with ASIC.
Form of supplementary document for offer-specific prospectus
(4) At the beginning of a supplementary document for an
offer-specific prospectus, there must be:
(a) a statement that it is a supplementary document; and
(b) an identification of the offer-specific prospectus it
supplements; and
(c) an identification of any previous supplementary documents
lodged with ASIC in relation to the offer; and
(d) a statement that it is to be read together with:
(i) the offer-specific prospectus it supplements; and
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Section 719A
346 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) any previous supplementary documents; and
(iii) the base prospectus that covers the period during which
the offer is made.
The supplementary document must be dated. The date is the date
on which the document is lodged with ASIC.
Form of replacement document for a base prospectus
(5) At the beginning of a replacement document for a base prospectus,
there must be:
(a) a statement that it is a replacement document; and
(b) an identification of the base prospectus it replaces.
The replacement document must be dated. The date is the date on
which the document is lodged with ASIC.
Form of replacement document for an offer-specific prospectus
(6) At the beginning of a replacement document for an offer-specific
prospectus, there must be:
(a) a statement that it is a replacement document; and
(b) an identification of the offer-specific prospectus it replaces.
The replacement document must be dated. The date is the date on
which the document is lodged with ASIC.
Consequences of lodging a supplementary document for an
offer-specific prospectus
(7) If a supplementary document is lodged with ASIC in relation to an
offer-specific prospectus, the offer-specific prospectus is taken to
be the offer-specific prospectus together with the supplementary
document for the purposes of the application of this Chapter to
events that occur after the lodgement.
Note: This subsection means, for example, that offers made after lodgement
of the supplementary document must be accompanied by copies of
both the original offer-specific prospectus and the supplementary
document.
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Section 720
Corporations Act 2001 347
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Consequences of lodging a replacement document for a base
prospectus
(8) If a replacement document is lodged with ASIC in relation to a
base prospectus, the base prospectus is taken to be the replacement
document for the purposes of the application of this Chapter to
events that occur after the lodgement.
Note: This subsection means, for example, that offers made after lodgement
of the replacement document must be accompanied by copies of the
replacement document and not the original base prospectus.
Consequences of lodging a replacement document for an
offer-specific prospectus
(9) If a replacement document is lodged with ASIC in relation to an
offer-specific prospectus, the offer-specific prospectus is taken to
be the replacement document for the purposes of the application of
this Chapter to events that occur after the lodgement.
Note: This subsection means, for example, that offers made after lodgement
of the replacement document must be accompanied by copies of the
replacement document and not the original offer-specific prospectus.
720 Consents needed for lodgment
The lodgment of a disclosure document, or a supplementary or
replacement document, for the offer of a body’s securities requires
the consent of:
Consents required for lodgment [operative]
Type of offer People whose consent is
required
1
Issue offers
offer of securities for issue
(other than an offer of simple
corporate bonds under a 2-part
simple corporate bonds
prospectus)
every director of the body
every person named in the
document as a proposed
director of the body
if securities interests in a
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348 Corporations Act 2001
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Consents required for lodgment [operative]
Type of offer People whose consent is
required
managed investment scheme
made available by a body—
every director of that body
if securities interests in a
managed investment scheme
made available by an
individual—that individual
1A
Simple corporate bonds issue
offers
offer of simple corporate bonds
under a 2-part simple corporate
bonds prospectus
every director of the body
every person named in the
document as a proposed
director of the body
if simple corporate bonds in a
managed investment scheme
made available by a body—
every director of that body
if simple corporate bonds in a
managed investment scheme
made available by an
individual—that individual
2
sale offers (sale by controller)
offer of securities for sale that
needs a disclosure document
because of subsection 707(2)
if seller an individual—that
individual
if seller a body—every
director of the body
3
sale offers (sale amounting to
indirect issue)
offer of securities for sale that
needs a disclosure document
because of subsection 707(3)
every director of the body
whose securities are offered
for sale
if seller an individual—that
individual
if seller a body—every
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Section 721
Corporations Act 2001 349
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Consents required for lodgment [operative]
Type of offer People whose consent is
required
director of the body
4
sale offers (sale amounting to
indirect sale by controller)
offer of securities for sale that
needs a disclosure document
because of subsection 707(5)
if seller an individual—that
individual
if seller a body—every
director of the body
if individual controls the body
whose securities are offered
for sale—that individual
if body controls the body
whose securities are offered
for sale—every director of the
controlling body
721 Offer must be made in, or accompanied by, the disclosure
document
Offers using prospectus alone
(1) Offers of securities for which a prospectus is being used must be
made in, or accompanied by, the prospectus.
Note 1: Subsection 727(1) makes it an offence to make an offer of securities
unless the offer is made in or accompanied by the disclosure
document and subsection 723(1) makes it an offence to issue
securities unless they are applied for on a form that was issued in or
together with the disclosure document.
Note 2: Section 736 makes it an offence to make unsolicited offers in a way
that amounts to securities hawking.
Note 3: Section 728 makes it an offence for a person to offer securities if the
disclosure document is deficient in a way that is material from the
point of view of an investor.
(1A) Subsection (1) does not apply to the extent that subsection (2)
allows a profile statement to be used instead of a prospectus.
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Section 721
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
Offers using prospectus and profile statement
(2) An offer of securities may be made in, or accompanied by, a
profile statement if:
(a) under subsection 709(3), ASIC has approved the making of
offers of that kind with a profile statement instead of a
prospectus; and
(b) the profile statement complies with the requirements
specified in ASIC approval.
(3) If the offer that is made to a person is made in or accompanied by a
profile statement, the person making the offer must give the person
a copy of the prospectus free of charge if the person asks for it.
Offers using offer information statement
(4) Offers for which an offer information statement is being used must
be made in, or accompanied by, the offer information statement.
Note 1: Subsection 727(1) makes it an offence to make an offer of securities
unless the offer is made in or accompanied by the disclosure
document and subsection 723(1) makes it an offence to issue
securities unless they are applied for on a form that was issued in or
together with the disclosure document.
Note 2: Section 736 makes it an offence to make unsolicited offers in a way
that amounts to securities hawking.
Note 3: Section 728 makes it an offence for a person to offer securities if the
disclosure document is deficient in a way that is material from the
point of view of an investor.
Offence
(5) A person commits an offence if the person intentionally or
recklessly contravenes subsection (1) or (4).
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Section 722
Corporations Act 2001 351
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722 Application money to be held on trust
(1) If a person offers securities for issue or sale under a disclosure
document, the person must hold:
(a) all application money received from people applying for
securities under the disclosure document; and
(b) all other money paid by them on account of the securities
before they are issued or transferred;
in trust under this section for the applicants until:
(c) the securities are issued or transferred; or
(d) the money is returned to the applicants.
(2) If the application money needs to be returned to an applicant, the
person must return the money as soon as practicable.
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
723 Issuing or transferring the securities under a disclosure
document
Applications must be made on form included in, or accompanied
by, disclosure document
(1) If an offer of securities needs a disclosure document, the securities
may only be issued or transferred in response to an application
form. The securities may only be issued or transferred if the person
issuing or transferring them has reasonable grounds to believe that:
(a) the form was included in, or accompanied by:
(i) the disclosure document; or
(ii) if subsection 721(2) allows a profile statement to be
used—the prospectus or the profile statement;
when the form was distributed by the person issuing or
transferring the securities; or
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(b) the form was copied, or directly derived, by the person
making the application from a form referred to in
paragraph (a).
Minimum subscription condition must be fulfilled before issue or
transfer
(2) If a disclosure document for an offer of securities states that the
securities will not be issued or transferred unless:
(a) applications for a minimum number of the securities are
received; or
(b) a minimum amount is raised;
the person making the offer must not issue or transfer any of the
securities until that condition is satisfied. For the purpose of
working out whether the condition has been satisfied, a person who
has agreed to take securities as underwriter is taken to have applied
for those securities.
Note 1: Under section 722, the application money must be held in trust until
the issue or transfer of the securities.
Note 2: This subsection prevents the issue or transfer of the securities not only
to those who apply for them in response to the disclosure document
but also to those who do not need to apply for them (for example,
because they are to take the securities under an underwriting
agreement).
Issue or transfer void if quotation condition not fulfilled
(3) If a disclosure document for an offer of securities states or implies
that the securities are to be quoted on a financial market (whether
in Australia or elsewhere) and:
(a) an application for the admission of the securities to quotation
is not made within 7 days after the date of the disclosure
document; or
(b) the securities are not admitted to quotation within 3 months
after the date of the disclosure document;
then:
(c) an issue or transfer of securities in response to an application
made under the disclosure document is void; and
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Section 724
Corporations Act 2001 353
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(d) the person offering the securities must return the money
received by the person from the applicants as soon as
practicable.
Strict liability offences
(4) An offence based on subsection (1), (2) or (3) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
724 Choices open to person making the offer if disclosure document
condition not met or disclosure document defective
(1) If a person offers securities under a disclosure document and:
(a) the disclosure document states that the securities will not be
issued or transferred unless:
(i) applications for a minimum number of the securities are
received; or
(ii) a minimum amount raised;
and that condition is not satisfied within 4 months after the
date of the disclosure document; or
(b) the disclosure document states or implies that the securities
are to be quoted on a financial market (whether in Australia
or elsewhere) and:
(i) an application for the admission to quotation is not
made within 7 days after the date of the disclosure
document; or
(ii) the securities are not admitted to quotation within 3
months after the date of the disclosure document; or
(c) the person becomes aware that:
(i) the disclosure document contains a misleading or
deceptive statement; or
(ii) there is an omission from the disclosure document of
information required by section 710, 711, 712, 713,
713C, 713D, 713E, 714 or 715;
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that is materially adverse from the point of view of an
investor; or
(d) the person becomes aware of a new circumstance that:
(i) has arisen since the disclosure document was lodged;
and
(ii) would have been required by section 710, 711, 712,
713, 713C, 713D, 713E, 714 or 715 to be included in
the disclosure document if it had arisen before the
disclosure document was lodged; and
(iii) is materially adverse from the point of view of an
investor;
the person must deal under subsection (2) with any applications for
the securities made under the disclosure document that have not
resulted in an issue or transfer of the securities. For the purpose of
working out whether a condition referred to in paragraph (a) has
been satisfied, a person who has agreed to take securities as
underwriter is taken to have applied for those securities.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The person must either:
(a) repay the money received by the person from the applicants;
or
(b) give the applicants:
(i) the documents required by subsection (3); and
(ii) 1 month to withdraw their application and be repaid; or
(c) issue or transfer the securities to the applicants and give
them:
(i) the documents required by subsection (3); and
(ii) 1 month to withdraw their application and be repaid.
Note: Sections 719 and 719A deal with lodging supplementary and
replacement documents. Section 728 makes it an offence for a person
to offer securities if the disclosure document is deficient in a way that
is material from the point of view of an investor.
(3) The documents to be given are set out in the following table:
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Fundraising Chapter 6D
Disclosure to investors about securities Part 6D.2
Procedure for offering securities Division 5
Section 724
Corporations Act 2001 355
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Documents to be given [operative]
Circumstances Documents
1 the sole disclosure document is a
prospectus (other than a 2-part simple
corporate bonds prospectus)
a supplementary or
replacement prospectus
that corrects the
deficiency or changes
the terms of the offer
1A the disclosure document is a 2-part
simple corporate bonds prospectus
a supplementary or
replacement document
that corrects the
deficiencies or changes
the terms of the offer
2 the disclosure documents are a
prospectus and a profile statement
and subsection (1) applies to the
prospectus
a statement that sets
out the changes needed
to the prospectus to
correct the deficiency
or change the terms of
offer; and
a statement that the
person is entitled to a
copy of the prospectus
free of charge
3 the disclosure documents are a
prospectus and a profile statement
and subsection (1) applies to the
profile statement
Note that item 2 and this item may
both apply to the offer.
a supplementary or
replacement profile
statement that corrects
the deficiency or
changes the terms of
the offer
4 the disclosure document is an offer
information statement
a supplementary or
replacement offer
information statement
that corrects the
deficiency or changes
the terms of the offer
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Chapter 6D Fundraising
Part 6D.2 Disclosure to investors about securities
Division 5 Procedure for offering securities
Section 725
356 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
725 Expiration of disclosure document
(1) If a person offers securities under a disclosure document and the
disclosure document passes its expiry date, the person must deal
with applications for the securities under the document in
accordance with subsections (2) and (3).
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) If an application is received on or before the expiry date, the
person may issue or transfer securities to the applicant.
Note: Subsection 723(1) (when read with subsections 719(4) and (5))
requires the person issuing or transferring the securities to have
reasonable grounds to believe that the application form was included
in, or accompanied by, a disclosure document that was current at the
time.
(3) If an application is received after the expiry date, the person must
either:
(a) return any money received by the person from the applicant;
or
(b) give the applicant:
(i) a new disclosure document; and
(ii) 1 month to withdraw their application and be repaid; or
(c) issue or transfer the securities to the applicant and give them:
(i) a new disclosure document; and
(ii) 1 month to withdraw their application and be repaid.
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Fundraising Chapter 6D
Prohibitions, liabilities and remedies Part 6D.3
Prohibitions and liabilities Division 1
Section 726
Corporations Act 2001 357
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 6D.3—Prohibitions, liabilities and remedies
Division 1—Prohibitions and liabilities
726 Offering securities in a body that does not exist
A person must not offer securities of a body that has not been
formed or does not exist if the offer would need disclosure to
investors under Part 6D.2 if the body did exist. This is so even if it
is proposed to form or incorporate the body.
727 Offering securities without a current disclosure document
Offer of securities needs lodged disclosure document
(1) A person must not make an offer of securities, or distribute an
application form for an offer of securities, that needs disclosure to
investors under Part 6D.2 unless a disclosure document for the
offer has been lodged with ASIC.
Offer form to be included in or accompanied by disclosure
document
(2) A person must not make an offer of securities, or distribute an
application form for an offer of securities, that needs disclosure to
investors under Part 6D.2 unless:
(a) if a prospectus is used for the offer—the offer or form is:
(i) included in the prospectus; or
(ii) accompanied by a copy of the prospectus; or
(b) if both a prospectus and a profile statement are used for the
offer—the offer or form is:
(i) included in the prospectus or profile statement; or
(ii) accompanied by a copy of the prospectus or profile
statement; or
(c) if an offer information statement is used for the offer—the
offer or form is:
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Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 727
358 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) included in the statement; or
(ii) accompanied by a copy of the statement.
Note: Sections 706, 707, 708, 708AA and 708A say when the offer needs
disclosure to investors under Part 6D.2.
Non-quoted securities—waiting period after lodgment before
processing applications for securities
(3) A person must not accept an application for, or issue or transfer,
non-quoted securities offered under a disclosure document until the
period of 7 days after lodgment of the disclosure document has
ended. ASIC may extend the period by notice in writing to the
person offering the securities. The period as extended must end no
more than 14 days after lodgment.
Simple corporate bonds
(3A) Subsection (3) does not apply in relation to an offer of securities
under a 2-part simple corporate bonds prospectus if the securities
are in the same class as existing securities that are quoted on a
prescribed financial market immediately before the application
period for the prospectus but for differences as to:
(a) the fixed term of the securities (if any); or
(b) the rate at which interest is payable under the securities; or
(c) the dates on which the holders are to be paid interest under
the securities.
Issue or transfer not to breach section 708 ceiling
(4) If a person relies on subsection 708(1) to make offers of securities
without disclosure to investors under Part 6D.2, the person must
not issue or transfer securities without disclosure to investors under
that Part if the issue or transfer would result in a breach of the 20
investors ceiling or the $2 million ceiling (see subsections 708(3),
(4), (5), (6) and (7)).
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Fundraising Chapter 6D
Prohibitions, liabilities and remedies Part 6D.3
Prohibitions and liabilities Division 1
Section 728
Corporations Act 2001 359
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Circumstances in which a person is taken not to contravene this
section
(5) If:
(a) a person relies on subsection 708AA(2) or 708A(5) to make
offers of securities for issue or sale without disclosure to
investors under Part 6D.2; and
(b) the notice given under that subsection purported to comply
with subsection 708AA(7) or 708A(6) but did not actually
comply with subsection 708AA(7) or 708A(6);
the person is taken not to contravene this section.
728 Misstatement in, or omission from, disclosure document
Misleading or deceptive statements, omissions and new matters
(1) A person must not offer securities under a disclosure document if
there is:
(a) a misleading or deceptive statement in:
(i) the disclosure document; or
(ii) any application form that accompanies the disclosure
document; or
(iii) any document that contains the offer if the offer is not in
the disclosure document or the application form; or
(b) an omission from the disclosure document of material
required by section 710, 711, 712, 713, 713C, 713D, 713E,
714 or 715; or
(c) a new circumstance that:
(i) has arisen since the disclosure document was lodged;
and
(ii) would have been required by section 710, 711, 712,
713, 713C, 713D, 713E, 714 or 715 to be included in
the disclosure document if it had arisen before the
disclosure document was lodged.
Note 1: The person may make further offers after making up the deficiency in
the current disclosure document by lodging a supplementary or
replacement document.
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 729
360 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: See sections 731, 732 and 733 for defences.
Note 3: Section 1041H imposes liabilities in respect of other conduct related
to the offering of the securities.
Forecasts and other forward-looking statements
(2) A person is taken to make a misleading statement about a future
matter (including the doing of, or refusing to do, an act) if they do
not have reasonable grounds for making the statement. This
subsection does not limit the meaning of a reference to a
misleading statement or a statement that is misleading in a material
particular.
Offence if statement, omission or new matter materially adverse
(3) A person commits an offence if they contravene subsection (1)
and:
(a) the misleading or deceptive statement; or
(b) the omission or new circumstance;
is materially adverse from the point of view of an investor.
729 Right to recover for loss or damage resulting from
contravention
Right to compensation
(1) A person who suffers loss or damage because an offer of securities
under a disclosure document contravenes subsection 728(1) may
recover the amount of the loss or damage from a person referred to
in the following table if the loss or damage is one that the table
makes the person liable for. This is so even if the person did not
commit, and was not involved in, the contravention.
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Fundraising Chapter 6D
Prohibitions, liabilities and remedies Part 6D.3
Prohibitions and liabilities Division 1
Section 729
Corporations Act 2001 361
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
People liable on disclosure document [operative]
These people... are liable for loss or damage caused
by...
1 the person making the offer any contravention of subsection 728(1)
in relation to the disclosure document
2 each director of the body making
the offer if the offer is made by a
body
any contravention of subsection 728(1)
in relation to the disclosure document
3 a person named in the disclosure
document with their consent as a
proposed director of the body
whose securities are being offered
any contravention of subsection 728(1)
in relation to the disclosure document
4 an underwriter (but not a
sub-underwriter) to the issue or
sale named in the disclosure
document with their consent
any contravention of subsection 728(1)
in relation to the disclosure document
5 a person named in the disclosure
document with their consent as
having made a statement:
(a) that is included in the
disclosure document; or
(b) on which a statement made in
the disclosure document is
based
the inclusion of the statement in the
disclosure document
6 a person who contravenes, or is
involved in the contravention of,
subsection 728(1)
that contravention
Note: Item 2—director includes a shadow director (see section 9).
(1A) Table items 2 and 3 in subsection (1) do not apply to an offer of
simple corporate bonds under a 2-part simple corporate bonds
prospectus.
(2) A person who acquires securities as a result of an offer that was
accompanied by a profile statement is taken to have acquired the
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 730
362 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
securities in reliance on both the profile statement and the
prospectus for the offer.
(3) An action under subsection (1) may begin at any time within 6
years after the day on which the cause of action arose.
(4) This Part does not affect any liability that a person has under any
other law.
Note: Conduct that contravenes subsection 728(1) is expressly excluded
from the operation of section 1041H.
730 People liable on disclosure document to inform person making
the offer about deficiencies in the disclosure document
(1) A person referred to in the table in section 729 must notify the
person making the offer in writing as soon as practicable if they
become aware during the application period that:
(a) a material statement in the disclosure document is misleading
or deceptive; or
(b) there is a material omission from the disclosure document of
material required by section 710, 711, 712, 713, 713C, 713D,
713E, 714 or 715; or
(c) a material new circumstance that:
(i) has arisen since the disclosure document was lodged;
and
(ii) would have been required by section 710, 711, 712,
713, 713C, 713D, 713E, 714 or 715 to be included in
the disclosure document if it had arisen before the
disclosure document was lodged.
(1A) For the purposes of subsection (1) of this section, disregard
subsection 729(1A).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Fundraising Chapter 6D
Prohibitions, liabilities and remedies Part 6D.3
Prohibitions and liabilities Division 1
Section 731
Corporations Act 2001 363
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
731 Due diligence defence for prospectuses
Reasonable inquiries and reasonable belief—statements
(1) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention of
subsection 728(1), because of a misleading or deceptive statement
in a prospectus if the person proves that they:
(a) made all inquiries (if any) that were reasonable in the
circumstances; and
(b) after doing so, believed on reasonable grounds that the
statement was not misleading or deceptive.
Reasonable inquiries and reasonable belief—omissions
(2) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention of
subsection 728(1), because of an omission from a prospectus in
relation to a particular matter if the person proves that they:
(a) made all inquiries (if any) that were reasonable in the
circumstances; and
(b) after doing so, believed on reasonable grounds that there was
no omission from the prospectus in relation to that matter.
732 Lack of knowledge defence for offer information statements and
profile statements
Not knowing statement misleading or deceptive
(1) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention of
subsection 728(1), because of a misleading or deceptive statement
in an offer information statement or profile statement if the person
proves that they did not know that the statement was misleading or
deceptive.
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 733
364 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Not knowing there was an omission
(2) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention of
subsection 728(1), because of an omission from an offer
information statement or profile statement in relation to a particular
matter if the person proves that they did not know that there was an
omission from the statement in relation to that matter.
733 General defences for all disclosure documents
Reasonable reliance on information given by someone else—
statements and omissions
(1) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention against
subsection 728(1), because of a misleading or deceptive statement
in, or an omission from, a disclosure document if the person proves
that they placed reasonable reliance on information given to them
by:
(a) if the person is a body—someone other than a director,
employee or agent of the body; or
(b) if the person is an individual—someone other than an
employee or agent of the individual.
(2) For the purposes of subsection (1), a person is not the agent of a
body or individual merely because they perform a particular
professional or advisory function for the body or individual.
Withdrawal of consent—statements and omissions
(3) A person who is named in a disclosure document as:
(a) being a proposed director or underwriter; or
(b) making a statement included in the document; or
(c) making a statement on the basis of which a statement is
included in the document;
does not commit an offence against subsection 728(3), and is not
liable under section 729 for a contravention against
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Prohibitions and liabilities Division 1
Section 734
Corporations Act 2001 365
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
subsection 728(1), because of a misleading or deceptive statement
in, or an omission from, a disclosure document if the person proves
that they publicly withdrew their consent to being named in the
document in that way.
Unawareness of new matter
(4) A person does not commit an offence against subsection 728(3),
and is not liable under section 729 for a contravention of
subsection 728(1), because of a new circumstance that has arisen
since the disclosure document was lodged if the person proves that
they were not aware of the matter.
734 Restrictions on advertising and publicity
No advertising or publicity for offers covered by the exception for
20 issues in 12 months
(1) A person must not:
(a) advertise; or
(b) publish a statement that directly or indirectly refers to;
an offer, or intended offer, of securities that would need a
disclosure document but for subsection 708(1) (exception for 20
issues in 12 months).
Advertising or publicity for offers that need a disclosure document
(2) If an offer, or intended offer, of securities needs a disclosure
document, a person must not:
(a) advertise the offer or intended offer; or
(b) publish a statement that:
(i) directly or indirectly refers to the offer or intended
offer; or
(ii) is reasonably likely to induce people to apply for the
securities.
(2A) Subsection (2) does not apply if the advertisement or publication is
authorised by subsection (4), (5), (6) or (7).
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Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 734
366 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2A), see subsection 13.3(3) of the Criminal Code.
Strict liability offences
(2B) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Image advertising
(3) In deciding whether a statement:
(a) indirectly refers to an offer, or intended offer, of securities; or
(b) is reasonably likely to induce people to apply for securities;
have regard to whether the statement:
(c) forms part of the normal advertising of a body’s products or
services and is genuinely directed at maintaining its existing
customers, or attracting new customers, for those products or
services; and
(d) communicates information that materially deals with the
affairs of the body; and
(e) is likely to encourage investment decisions being made on
the basis of the statement rather than on the basis of
information contained in a disclosure document.
Dissemination of disclosure document
(4) A person may disseminate a disclosure document that has been
lodged with ASIC without contravening subsection (2). This does
not apply if an order under section 739 is in force in relation to the
offer.
Note: Subsection (4) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(1)).
Advertising and publicity before the disclosure document is lodged
(5) Before the disclosure document is lodged, an advertisement or
publication does not contravene subsection (2) if it:
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Prohibitions and liabilities Division 1
Section 734
Corporations Act 2001 367
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) if the offer is of securities in a class already quoted—includes
a statement that:
(i) if the securities are likely to be offered by way of
issue—identifies the issuer of the securities; and
(ii) if the securities are likely to be offered pursuant to sale
offers to which section 707 will apply—identifies the
issuer of the securities and the seller of the securities;
and
(iii) in any case—a disclosure document for the offer will be
made available when the securities are offered; and
(iv) indicates when and where the disclosure document is
expected to be made available; and
(v) a person should consider the disclosure document in
deciding whether to acquire the securities; and
(vi) anyone who wants to acquire the securities will need to
complete the application form that will be in or will
accompany the disclosure document; and
(b) in any other case—contains the following but nothing more:
(i) a statement that identifies the offeror and the securities;
(ii) a statement that a disclosure document for the offer will
be made available when the securities are offered;
(iii) a statement that anyone who wants to acquire the
securities will need to complete the application form
that will be in or will accompany the disclosure
document;
(iv) a statement of how to arrange to receive a copy of the
disclosure document.
To satisfy paragraph (b), the advertisement or publication must
include all of the statements referred to in subparagraphs (i), (ii)
and (iii). It may include the statement referred to in
subparagraph (iv).
Note: Subsection (5) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(2)).
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 734
368 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Advertising and publicity after the disclosure document is lodged
(6) After the disclosure document is lodged, an advertisement or
publication does not contravene subsection (2) if it includes a
statement that:
(a) identifies:
(i) if the securities are offered by way of issue—the issuer
of the securities; or
(ii) if the securities are offered pursuant to sale offers to
which section 707 applies or will apply—the issuer of
the securities and the seller of the securities; and
(b) indicates that the disclosure document for the offer is
available and where it can be obtained; and
(c) the offers of the securities will be made in, or accompanied
by, a copy of the disclosure document; and
(d) a person should consider the disclosure document in deciding
whether to acquire the securities; and
(e) anyone who wants to acquire the securities will need to
complete the application form that will be in or will
accompany the disclosure document.
Note: Subsection (6) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(3)).
General exceptions
(7) An advertisement or publication does not contravene subsection (2)
if it:
(a) relates to an offer of securities of a listed body and consists
of a notice or report by the body, or one of its officers, about
its affairs to the relevant market operator; or
(b) consists solely of a notice or report of a general meeting of
the body; or
(c) consists solely of a report about the body that is published by
the body and:
(i) does not contain information that materially affects
affairs of the body other than information previously
made available in a disclosure document that has been
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Prohibitions, liabilities and remedies Part 6D.3
Prohibitions and liabilities Division 1
Section 734
Corporations Act 2001 369
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
lodged, an annual report or a report referred to in
paragraph (a) or (b); and
(ii) does not refer (whether directly or indirectly) to the
offer; or
(d) is a news report or is genuine comment, in a newspaper or
periodical or on radio or television relating to:
(i) a disclosure document that has been lodged or
information contained in such a disclosure document; or
(ii) a notice or report covered by paragraph (a), (b) or (c); or
(e) is a report about the securities of a body or proposed body
published by someone who is not:
(i) the body; or
(ii) acting at the instigation of, or by arrangement with, the
body; or
(iii) a director of the body; or
(iv) a person who has an interest in the success of the issue
or sale of the securities.
Paragraphs (d) and (e) do not apply if anyone gives consideration
or another benefit for publishing the report.
Liability of publishers
(8) A person does not contravene subsection (1) or (2) by publishing
an advertisement or statement if they publish it in the ordinary
course of a business of:
(a) publishing a newspaper or magazine; or
(b) broadcasting by radio or television;
and the person did not know and had no reason to suspect that its
publication would amount to a contravention of a provision of this
Chapter.
Note: Depending on the circumstances of the publication, the person may,
however, commit an offence by being involved in someone else’s
contravention of subsection (1) or (2).
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 1 Prohibitions and liabilities
Section 735
370 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Pathfinder documents
(9) A person does not contravene subsection (1) or (2) by sending a
draft disclosure document for securities to a person if an offer of
the securities to the person would not require a disclosure
document because of subsection 708(8) or (10) (sophisticated
investors) or 708(11) (professional investors).
735 Obligation to keep consents and other documents
(1) A person who offers securities under a disclosure document must
keep a consent required in respect of the document by
subsection 716(2) or section 720.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
736 Securities hawking prohibited
(1) A person must not offer securities for issue or sale in the course of,
or because of, an unsolicited:
(a) meeting with another person; or
(b) telephone call to another person.
(1A) Subsection (1) does not apply if the offer is exempted under
subsection (2).
Note: A defendant bears an evidential burden in relation to the matter in
subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1B) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) Subsection (1) does not prohibit an offer of securities if:
(a) the offer does not need a disclosure document because of
subsection 708(8) or (10) (sophisticated investors); or
(b) the offer does not need a disclosure document because of
subsection 708(11) (professional investors); or
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Prohibitions and liabilities Division 1
Section 736
Corporations Act 2001 371
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the offer is an offer of listed securities made by telephone by
a licensed securities dealer; or
(d) the offer is made to a client by a licensed securities dealer
through whom the client has bought or sold securities in the
last 12 months; or
(e) the offer is made under an eligible employee share scheme.
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Chapter 6D Fundraising
Part 6D.3 Prohibitions, liabilities and remedies
Division 2 Remedies
Section 737
372 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Remedies
737 Remedies for investors
Right to withdraw and have money returned
(1) If securities are issued to a person in contravention of section 724
(situation calling for a supplementary or replacement document),
the person has the right to return the securities and to have their
application money repaid. This is so even if the company that
issued the securities is being wound up.
(2) A right referred to in subsection (1) is exercisable by written notice
given to the company within 1 month after the date of the issue.
(3) If the body or the seller does not repay the money as required by
subsection (1), the directors of the body or seller are personally
liable to repay the money.
738 Securities may be returned and refund obtained
If securities are issued or transferred to a person as a result of an
offer that contravenes section 736, the person may return the
securities within 1 month after the issue or transfer. If they do so,
they are entitled to be repaid the amount they paid for the
securities.
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ASIC’s powers Part 6D.4
Section 739
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Part 6D.4—ASIC’s powers
739 ASIC stop orders
Power to make orders
(1) This section applies if ASIC is satisfied that:
(a) information in a disclosure document lodged with ASIC is
not worded and presented in a clear, concise and effective
manner (see section 715A); or
(b) an offer of securities under a disclosure document lodged
with ASIC would contravene section 728; or
(c) an advertisement or publication of a kind referred to in
subsection 734(5) or (6) that relates to securities is defective
(see subsection (6) of this section).
(1A) ASIC may order that:
(a) if paragraph (1)(a) or (b) applies—no offers, issues, sales or
transfers of the securities be made while the order is in force;
or
(b) if paragraph (1)(c) applies—specified conduct in respect of
the securities to which the advertisement or publication
relates must not be engaged in.
(1B) An order under paragraph (1A)(b) may include a statement that
specified conduct engaged in contrary to the order will be regarded
as not complying with the requirements of a specified provision of
this Chapter.
(2) Before making an order under subsection (1A), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
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Part 6D.4 ASIC’s powers
Section 739
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(3) If ASIC considers that any delay in making an order under
subsection (1A) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order may be made
without holding a hearing and lasts for 21 days after the day on
which it is made unless revoked before then.
(4) At any time during the hearing, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order lasts until:
(a) ASIC makes an order under subsection (1A) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
(5) An order under subsection (1A), (3) or (4) must be in writing and
must be served on the person who is ordered not to offer, issue, sell
or transfer securities under the disclosure document.
Defective advertisements or statements
(6) For the purposes of this section, an advertisement or publication of
a kind referred to in subsection 734(5) or (6) is defective if:
(a) there is a misleading or deceptive statement in the
advertisement or publication; or
(b) there is an omission from the advertisement or publication of
material required by the relevant subsection to be included in
the advertisement or publication; or
(c) if the advertisement or publication relates to an offer of
securities in a class that is not already quoted, and is
published before a disclosure document in relation to the
offer is lodged—the advertisement or publication includes
material that is not referred to in paragraph 734(5)(b).
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Forecasts and other forward-looking statements
(7) For the purposes of the definition of defective in subsection (6), a
person is taken to make a misleading statement about a future
matter (including the doing of, or refusing to do, an act) if they do
not have reasonable grounds for making the statement.
(8) Subsection (7) does not limit the circumstances in which a
statement may be misleading.
740 Anti-avoidance determinations
(1) ASIC may determine in writing that a number of different bodies
are closely related and that their transactions should be aggregated
for the purposes of this Chapter. If ASIC does so:
(a) an issue, sale or transfer of securities in any other bodies is
taken to also be an issue, sale or transfer of the securities of
each of the other bodies by those bodies; and
(b) any money received from an issue, sale or transfer of
securities in any of the bodies is taken to also be received by
each of the other bodies from an issue, sale or transfer of its
own securities.
ASIC must give written notice of the determination to each of the
bodies.
(2) ASIC may determine in writing that the transactions of a body and
of a person who controls the body should be aggregated for the
purposes of this Chapter. If ASIC does so:
(a) an issue of securities in the body is taken to also be the
transfer of the securities by the controller; and
(b) any money received from an issue of securities in the body is
taken to also be received by the controller from a transfer of
the securities; and
(c) a sale or transfer of securities in the body by the controller is
taken to also be the issue of the securities by the body; and
(d) any money received from a sale or transfer of securities in the
body by the controller is taken to also be received by the
body from an issue of the securities.
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ASIC must give written notice of the determination to the body and
the controller.
741 ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) The exemption or declaration may do all or any of the following:
(a) apply to all or specified provisions of this Chapter;
(b) apply to all persons, specified persons, or a specified class of
persons;
(c) relate to all securities, specified securities or a specified class
of securities;
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this Chapter
include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to
references in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
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Miscellaneous Part 6D.5
Section 742
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Part 6D.5—Miscellaneous
742 Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Chapter; or
(b) exempt a security or class of securities from all or specified
provisions of this Chapter; or
(c) provide that this Chapter applies as if specified provisions
were omitted, modified or varied as specified in the
regulations.
(2) Without limiting subsection (1), regulations made for the purposes
of this section may:
(a) declare that provisions of this Chapter are modified so that
they apply (with or without further modifications) in relation
to persons, securities, financial products or situations to
which they would not otherwise apply; or
(b) declare that provisions of this Chapter are modified so that
they apply (whether with or without further modifications) in
a way that changes the person by whom or to whom a
document or information is required to be given by a
provision of this Chapter.
(3) For the purpose of this section, the provisions of this Chapter
include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Chapter; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Chapter.
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Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
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About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Contents
Chapter 7—Financial services and markets 1
Part 7.1—Preliminary 1
Division 1—Object of Chapter and outline of Chapter 1
760A Object of Chapter ..............................................................................1
760B Outline of Chapter .............................................................................1
Division 2—Definitions 3
761A Definitions.........................................................................................3
761B Meaning of arrangement—2 or more arrangements that
together form a derivative or other financial product ......................17
761C Meaning of carry on a financial services business ..........................17
761CA Meaning of class and kind of financial products and financial
services ............................................................................................17
761D Meaning of derivative......................................................................17
761E Meaning of issued, issuer, acquire and provide in relation to
financial products ............................................................................19
761EA Meaning of margin lending facility, margin call and
associated expressions .....................................................................22
761F Meaning of person—generally includes a partnership ....................25
761FA Meaning of person—generally includes multiple trustees...............26
761G Meaning of retail client and wholesale client ..................................28
761GA Meaning of retail client—sophisticated investors ...........................33
761H References to this Chapter include references to regulations
or other instruments made for the purposes of this Chapter ............34
Division 3—What is a financial product? 36
Subdivision A—Preliminary 36
762A Overview of approach to defining what a financial product is ........36
762B What if a financial product is part of a broader facility? .................36
762C Meaning of facility ..........................................................................37
Subdivision B—The general definition 37
763A General definition of financial product ...........................................37
763B When a person makes a financial investment ..................................38
763C When a person manages financial risk ............................................39
763D When a person makes non-cash payments.......................................39
763E What if a financial product is only incidental? ................................40
Subdivision C—Specific inclusions 41
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764A Specific things that are financial products (subject to
Subdivision D).................................................................................41
Subdivision D—Specific exclusions 44
765A Specific things that are not financial products .................................44
Division 4—When does a person provide a financial service? 48
766A When does a person provide a financial service? ............................48
766B Meaning of financial product advice ...............................................49
766C Meaning of dealing..........................................................................52
766D Meaning of makes a market for a financial product ........................54
766E Meaning of provide a custodial or depository service .....................54
Division 5—What is a financial market? 56
767A What is a financial market? .............................................................56
Division 6—What is a clearing and settlement facility? 57
768A What is a clearing and settlement facility? ......................................57
Division 7—General provisions relating to civil and criminal
liability 59
769A Part 2.5 of Criminal Code does not apply........................................59
769B People are generally responsible for the conduct of their
agents, employees etc. .....................................................................59
769C Representations about future matters taken to be misleading
if made without reasonable grounds ................................................62
Part 7.2—Licensing of financial markets 64
Division 1—Preliminary 64
790A Definition ........................................................................................64
Division 2—Requirement to be licensed 65
791A Need for a licence............................................................................65
791B Other prohibitions on holding out....................................................65
791C Exemptions by Minister...................................................................65
791D When a market is taken to be operated in this jurisdiction ..............67
Division 3—Regulation of market licensees 68
Subdivision A—Licensee’s obligations 68
792A General obligations..........................................................................68
792B Obligation to notify ASIC of certain matters...................................69
792C Giving ASIC information about a listed disclosing entity ...............71
792D Obligation to assist ASIC ................................................................71
792E Obligation to give ASIC access to market facilities ........................72
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792F Annual report...................................................................................72
792G Obligations to notify people about clearing and settlement
arrangements in certain circumstances ............................................73
792H Change of country by foreign licensee ............................................74
792I Making information about compensation arrangements
publicly available.............................................................................75
Subdivision B—The market’s operating rules and procedures 75
793A Content of the operating rules and procedures.................................75
793B Legal effect of operating rules .........................................................75
793C Enforcement of operating rules .......................................................76
793D Changing the operating rules ...........................................................77
793E Disallowance of changes to operating rules.....................................78
Subdivision C—Powers of the Minister and ASIC 79
794A Minister’s power to give directions .................................................79
794B Minister’s power to require special report .......................................79
794C ASIC assessment of licensee’s compliance .....................................80
794D ASIC’s power to give directions......................................................81
794E Additional directions to clearing and settlement facilities ...............82
Division 4—The Australian market licence 84
Subdivision A—How to get a licence 84
795A How to apply for a licence...............................................................84
795B When a licence may be granted .......................................................84
795C Publication of notice of licence grant ..............................................86
795D More than one licence in the same document ..................................87
795E More than one market covered by the same licence ........................87
Subdivision B—The conditions on the licence 87
796A The conditions on the licence ..........................................................87
Subdivision C—When a licence can be varied, suspended or
cancelled 89
797A Varying licences ..............................................................................89
797B Immediate suspension or cancellation .............................................89
797C Suspension or cancellation following hearing and report ................90
797D Effect of suspension ........................................................................91
797E Variation or revocation of suspension .............................................91
797F Publication of notice of licence suspension or cancellation.............91
797G Suspension and cancellation only in accordance with this
Subdivision......................................................................................92
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Division 5—Other matters 93
798A Matters to be taken into account by the Minister.............................93
798B ASIC may give advice to Minister ..................................................94
798C Market licensee or related body corporate etc. listing on
market..............................................................................................94
798D Exemptions and modifications for self-listing licensees or
related bodies corporate etc. ............................................................96
798DA Market licensee, related body corporate etc. or competitor
participating in market.....................................................................97
798E Other potential conflict situations....................................................99
Part 7.2A—Supervision of financial markets 100 798F ASIC to supervise financial markets .............................................100
798G Market integrity rules ....................................................................100
798H Complying with market integrity rules ..........................................101
798J Directions by ASIC .......................................................................101
798K Alternatives to civil proceedings ...................................................103
798L Exemptions and modifications by regulations ...............................103
798M Exemptions by Minister.................................................................104
Part 7.3—Licensing of clearing and settlement facilities 106
Division 1—Requirement to be licensed 106
820A Need for a licence..........................................................................106
820B Other prohibitions on holding out..................................................106
820C Exemptions by Minister.................................................................107
820D When a clearing and settlement facility is taken to be
operated in this jurisdiction ...........................................................108
Division 2—Regulation of CS facility licensees 109
Subdivision A—Licensee’s obligations 109
821A General obligations........................................................................109
821B Obligation to notify ASIC of certain matters.................................110
821BA Obligation to notify Reserve Bank of certain matters....................112
821C Obligation to assist ........................................................................112
821D Obligation to give ASIC access to the facility...............................113
821E Annual report.................................................................................113
821F Change of country by foreign licensee ..........................................114
Subdivision B—The facility’s operating rules and procedures 115
822A Content of the operating rules and procedures...............................115
822B Legal effect of operating rules .......................................................115
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822C Enforcement of operating rules .....................................................116
822D Changing the operating rules .........................................................117
822E Disallowance of changes to operating rules...................................117
Subdivision C—Powers of the Minister, ASIC and the Reserve
Bank in relation to licensees 118
823A Minister’s power to give directions ...............................................118
823B Minister’s power to require special report .....................................119
823C ASIC assessment of licensee’s compliance ...................................119
823CA Reserve Bank assessment of licensee’s compliance ......................120
823D Directions power—protecting dealings in financial products
and ensuring fair and effective provision of services by CS
facilities .........................................................................................121
823E Directions power—reduction of systemic risk...............................123
Division 3—The Australian CS facility licence 125
Subdivision A—How to get a licence 125
824A How to apply for a licence.............................................................125
824B When a licence may be granted .....................................................125
824C Publication of notice of licence grant ............................................127
824D More than one licence in the same document ................................128
824E More than one CS facility covered by the same licence ................128
Subdivision B—The conditions on the licence 128
825A The conditions on the licence ........................................................128
Subdivision C—When a licence can be varied, suspended or
cancelled 130
826A Varying licences ............................................................................130
826B Immediate suspension or cancellation ...........................................130
826C Suspension or cancellation following hearing and report ..............131
826D Effect of suspension ......................................................................132
826E Variation or revocation of suspension ...........................................132
826F Publication of notice of licence suspension or cancellation...........132
826G Suspension and cancellation only in accordance with this
Subdivision....................................................................................132
Division 4—Other matters 134
827A Matters to be taken into account by the Minister...........................134
827B ASIC may give advice to Minister ................................................135
827C Reserve Bank may give advice to Minister ...................................135
827D Reserve Bank may determine financial stability standards............136
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Part 7.4—Limits on involvement with licensees 138
Division 1—Limit on control of certain licensees 138
Subdivision A—15% voting power limit 138
850A Scope of Division ..........................................................................138
850B Meaning of unacceptable control situation ....................................138
850C Acquisitions of shares....................................................................139
850D Remedial orders.............................................................................139
850E Injunctions.....................................................................................140
Subdivision B—Approval to exceed 15% voting power limit 141
851A Application for approval to exceed 15% voting power limit .........141
851B Approval of application .................................................................141
851C Duration of approval......................................................................142
851D Conditions of approval ..................................................................143
851E Varying percentage approved ........................................................144
851F Revoking an approval....................................................................145
851G Further information about applications..........................................146
851H Time limit for Minister’s decision .................................................146
851I Preservation of voting power in relation to bodies specified
in regulations made for section 850A............................................147
Subdivision C—Other matters 148
852A Acquisition of property..................................................................148
852B Anti-avoidance ..............................................................................148
Division 2—Individuals who are not fit and proper are
disqualified 150
853A Who is disqualified........................................................................150
853B When an individual is involved in an operator...............................150
853C Declaration by ASIC .....................................................................150
853D Procedure for declaration...............................................................151
853E Revoking a declaration ..................................................................152
853F Obligations on disqualified individuals .........................................152
853G Notification by ASIC.....................................................................153
Division 3—Miscellaneous 154
854A Record-keeping and giving of information....................................154
854B Exemptions and modifications by regulations ...............................155
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Part 7.5—Compensation regimes for financial markets 156
Division 1—Preliminary 156
880A Part does not apply to markets licensed under special
provisions about overseas markets ................................................156
880B Definitions.....................................................................................156
Division 2—When there must be a compensation regime 158
881A Licensed markets through which participants provide
services for retail clients must generally have a
compensation regime.....................................................................158
881B Additional requirements for the licence application ......................158
881C What happens if an application contains information in
accordance with paragraph 881B(2)(c)..........................................159
881D What happens if an application contains a statement in
accordance with paragraph 881B(2)(d) .........................................159
Division 3—Approved compensation arrangements 160
Subdivision A—Approval of compensation arrangements 160
882A How to get compensation arrangements approved with grant
of licence .......................................................................................160
882B How to get compensation arrangements approved after
licence is granted ...........................................................................161
882C Revocation of approval..................................................................162
882D Minister’s power to give directions ...............................................162
Subdivision B—Effect of compensation rules forming part of
Division 3 arrangements 162
883A Legal effect of compensation rules ................................................162
883B Enforcement of compensation rules ..............................................162
883C Other sources of funds for compensation ......................................163
883D Payment of levies ..........................................................................164
Subdivision C—Changing Division 3 arrangements 165
884A Division 3 arrangements must generally only be changed in
accordance with this Subdivision ..................................................165
884B Changing Division 3 arrangements—matters required to be
dealt with in the compensation rules..............................................165
884C Changing Division 3 arrangements—matters not required to
be dealt with in the compensation rules.........................................166
Subdivision D—Are compensation arrangements adequate? 168
885A Purpose of this Subdivision ...........................................................168
885B Requirements to be complied with for arrangements to be
adequate.........................................................................................168
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885C The losses to be covered................................................................169
885D Certain losses that are not Division 3 losses ..................................170
885E The amount of compensation.........................................................171
885F Method of payment of compensation ............................................172
885G Making and determination of claims .............................................173
885H The source of funds—general........................................................173
885I Administration and monitoring......................................................173
885J The losses to be covered—other matters to be taken into
account ..........................................................................................174
Subdivision E—Other provisions about Division 3 arrangements 174
886A Only one claim in respect of the same loss....................................174
886B Regulations relating to fidelity funds.............................................175
Division 4—NGF Compensation regime 176
Subdivision A—Application of Division 176
887A Markets to which this Division applies..........................................176
Subdivision B—Claims for and payment of compensation 176
888A The situations in which compensation may be claimed.................176
888B Kinds of compensation available...................................................176
888C Amount of compensation payable .................................................176
888D Payment of compensation..............................................................177
888E Making and determination of claims .............................................178
888F The SEGC has power to determine claims ....................................178
888G Allowing a claim does not constitute an admission of any
other liability .................................................................................178
888H Claimant may apply to Court if claim disallowed .........................179
888I Non-NGF property of the SEGC not available to meet claims ......179
888J The SEGC may enter into contracts of insurance or
indemnity.......................................................................................179
888K NGF may be used to acquire financial products to be
transferred as compensation ..........................................................180
Subdivision C—The NGF 180
889A Continuation of the National Guarantee Fund ...............................180
889B Compensation to be provided out of the NGF ...............................181
889C The SEGC to keep the NGF ..........................................................181
889D What the NGF consists of..............................................................181
889E Power to borrow etc. for purposes of the NGF..............................182
889F Money borrowed and paid to the SEGC ........................................182
889G Money borrowed and not paid to the SEGC..................................183
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889H Payments out of the NGF ..............................................................183
889I Minimum amount of the NGF .......................................................184
889J Levy by the SEGC.........................................................................184
889K Levy by market operator................................................................186
Subdivision D—The SEGC 188
890A Minister to nominate the SEGC.....................................................188
890B The SEGC’s functions and powers ................................................189
890C Delegation .....................................................................................189
890D Operating rules of the SEGC .........................................................190
890E Legal effect of the SEGC’s operating rules ...................................190
890F Enforcement of the SEGC’s operating rules..................................190
890G Changing the SEGC’s operating rules ...........................................191
890H Disallowance of changes to the SEGC’s operating rules ...............191
Subdivision E—Other provisions relating to compensation under
this Division 192
891A Payment out of the NGF to prescribed body with
arrangements covering clearing and settlement facility
support...........................................................................................192
891B Markets operated by bodies corporate that become members
of the SEGC—regulations may deal with transitional
provisions and other matters ..........................................................192
891C Regulations may make different provision in respect of
different markets etc. .....................................................................193
Division 5—Provisions common to both kinds of compensation
arrangements 194
892A Definitions.....................................................................................194
892B How regulated funds are to be kept ...............................................194
892C Money in regulated funds may be invested ...................................195
892D Powers of relevant authority to require production or
delivery of documents or statements .............................................196
892E Power to require assistance for purpose of dealing with a
claim..............................................................................................197
892F Relevant authority’s right of subrogation if compensation is
paid................................................................................................198
892G Excess money in compensation funds ...........................................198
892H Accounting and reporting for regulated funds ...............................199
892I Division 3 arrangements—reporting in situations where
compensation does not come out of a regulated fund ....................201
892J Regulations may provide for qualified privilege in respect of
certain matters ...............................................................................201
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892K Risk assessment report...................................................................201
Division 6—Miscellaneous 203
893A Exemptions and modifications by regulations ...............................203
893B Exemptions by Minister.................................................................203
Part 7.5A—Regulation of derivative transactions and
derivative trade repositories 205
Division 1—Application of Part 205
900A Derivatives and transactions etc. to which this Part applies...........205
Division 2—Regulation of derivative transactions: derivative
transaction rules 206
Subdivision A—Power to make derivative transaction rules 206
901A ASIC may make derivative transaction rules.................................206
901B Derivatives in relation to which rules may impose
requirements ..................................................................................209
901C Regulations may limit the transactions in relation to which
rules may impose requirements .....................................................212
901D Regulations may limit the persons on whom requirements
may be imposed.............................................................................212
Subdivision B—Compliance with derivative transaction rules 213
901E Obligation to comply with derivative transaction rules .................213
901F Alternatives to civil proceedings ...................................................213
901G Failure to comply with derivative transaction rules does not
invalidate transaction etc. ..............................................................214
Subdivision C——The process of making of derivative transaction
rules 214
901H Matters to which ASIC must have regard when making rules.......214
901J ASIC to consult before making rules.............................................215
901K Ministerial consent to rules required .............................................215
901L Emergency rules: consultation and consent not required...............216
901M Amendment and revocation of derivative transaction rules...........216
Division 3—Regulation of licensed derivative trade repositories:
supervision by ASIC 217
902A ASIC to supervise licensed derivative trade repositories...............217
Division 4—Regulation of licensed derivative trade repositories:
derivative trade repository rules 218
Subdivision A—Power to make derivative trade repository rules 218
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903A ASIC may make derivative trade repository rules .........................218
903B Rules may only impose requirements on operators and
officers of licensed derivative trade repositories ...........................221
903C Regulations may limit how rules may deal with matters
related to derivative trade data.......................................................221
Subdivision B—Compliance with derivative trade repository rules 221
903D Obligation to comply with derivative trade repository rules..........221
903E Alternatives to civil proceedings ...................................................222
Subdivision C—The process of making derivative trade repository
rules 222
903F Matters to which ASIC has regard when making rules..................222
903G ASIC to consult before making rules.............................................223
903H Ministerial consent to rules required .............................................223
903J Emergency rules: consultation and consent not required...............224
903K Amendment and revocation of derivative trade repository
rules ...............................................................................................224
Division 5—Regulation of licensed derivative trade repositories:
other obligations and powers 225
Subdivision A—Obligations 225
904A General obligations........................................................................225
904B Obligations relating to derivative trade data ..................................225
904C Obligation to notify ASIC of certain matters.................................227
904D Obligation to assist ASIC, APRA and the Reserve Bank ..............228
904E Obligation to give ASIC access to derivative trade repository
facilities .........................................................................................229
Subdivision B—Powers of Minister and ASIC to give directions
etc. 229
904F Minister’s power to give directions to licensee not
complying with obligations ...........................................................229
904G ASIC’s power to give directions to licensee not complying
with obligations .............................................................................229
904H ASIC’s power to give directions requiring special reports ............231
904J ASIC may assess licensee’s compliance........................................231
904K Directions relating to derivative trade data if repository
ceases to be licensed......................................................................232
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Division 6—Regulation of licensed derivative trade repositories:
licensing 234
Subdivision A—Requirement for some trade repositories to be
licensed 234
905A Regulations may identify derivative trade repositories as
being required to be licensed .........................................................234
Subdivision B—Granting of licences 234
905B How to apply for a licence.............................................................234
905C When a licence may be granted .....................................................235
905D Publication of notice of licence grant ............................................235
905E More than one derivative trade repository covered by the
same licence ..................................................................................236
Subdivision C—The conditions on a licence 236
905F The conditions on the licence ........................................................236
Subdivision D—When a licence can be varied, suspended or
cancelled 238
905G Varying licences ............................................................................238
905H Immediate suspension or cancellation ...........................................238
905J Suspension or cancellation following hearing and report ..............239
905K Effect of suspension ......................................................................240
905L Variation or revocation of suspension ...........................................240
905M Publication of notice of licence suspension or cancellation...........240
905N Suspension and cancellation only in accordance with this
Subdivision....................................................................................240
Subdivision E—Other matters 240
905P Matters to be taken into account by ASIC .....................................240
Division 7—Regulation of prescribed derivative trade
repositories 242
906A Regulations may impose obligations and confer powers ...............242
Division 8—Other matters 243
907A Other prohibitions on holding out..................................................243
907B Making provision by reference to instruments as in force
from time to time ...........................................................................243
907C Compliance with requirements to provide derivative trade
data or other information: protection from liability .......................244
907D Exemptions by ASIC.....................................................................244
907E Exemptions and modifications by regulations ...............................245
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Part 7.6—Licensing of providers of financial services 247
Division 1—Preliminary 247
910A Definitions.....................................................................................247
Division 2—Requirement to be licensed or authorised 251
911A Need for an Australian financial services licence ..........................251
911B Providing financial services on behalf of a person who
carries on a financial services business..........................................256
911C Prohibition on holding out .............................................................258
911D When a financial services business is taken to be carried on
in this jurisdiction ..........................................................................259
Division 3—Obligations of financial services licensees 260
912A General obligations........................................................................260
912B Compensation arrangements if financial services provided to
persons as retail clients ..................................................................262
912C Direction to provide a statement....................................................263
912CA Regulations may require information to be provided ....................264
912D Obligation to notify ASIC of certain matters.................................264
912E Surveillance checks by ASIC ........................................................266
912F Obligation to cite licence number in documents............................266
Division 4—Australian financial services licences 267
Subdivision A—How to get a licence 267
913A Applying for a licence ...................................................................267
913B When a licence may be granted .....................................................267
913C Licence numbers............................................................................269
Subdivision B—The conditions on the licence 269
914A The conditions on the licence ........................................................269
Subdivision C—When a licence can be varied, suspended or
cancelled 272
915A Varying licences ............................................................................272
915B Immediate suspension or cancellation ...........................................272
915C Suspension or cancellation after offering a hearing .......................275
915D Effect of suspension ......................................................................276
915E Revocation of suspension ..............................................................277
915F Date of effect and publication of cancellation or suspension.........277
915G Statement of reasons......................................................................277
915H ASIC may allow licence to continue in effect ...............................277
915I Special procedures for APRA-regulated bodies ............................278
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915J Variation, suspension and cancellation only under this
Subdivision....................................................................................279
Division 5—Authorised representatives 280
916A How representatives are authorised ...............................................280
916B Sub-authorisations .........................................................................280
916C Authorised representative of 2 or more licensees ..........................282
916D Licensees cannot authorise other licensees....................................282
916E Licensees acting under a binder.....................................................283
916F Obligation to notify ASIC etc. about authorised
representatives ...............................................................................283
916G ASIC may give licensee information about representatives ..........285
Division 6—Liability of financial services licensees for
representatives 288
917A Application of Division .................................................................288
917B Responsibility if representative of only one licensee.....................289
917C Representatives of multiple licensees ............................................289
917D Exception if lack of authority is disclosed to client .......................290
917E Responsibility extends to loss or damage suffered by client .........291
917F Effect of Division ..........................................................................291
Division 8—Banning or disqualification of persons from
providing financial services 293
Subdivision A—Banning orders 293
920A ASIC’s power to make a banning order.........................................293
920B What is a banning order? ..............................................................295
920C Effect of banning orders ................................................................296
920D Variation or cancellation of banning orders...................................296
920E Date of effect and publication of banning order, variation or
cancellation....................................................................................297
920F Statement of reasons......................................................................297
Subdivision B—Disqualification by the Court 298
921A Disqualification by the Court.........................................................298
Division 8A—Professional standards for relevant providers 299
Subdivision A—Education and training standards 299
921B Meaning of education and training standards...............................299
921C Limitation on authorisation to provide personal advice unless
conditions met ...............................................................................300
921D Relevant providers to meet continuing professional
development standard ....................................................................301
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Subdivision B—Ethical standards 302
921E Relevant providers to comply with the Code of Ethics..................302
Subdivision C—Provisional relevant providers 302
921F Requirements relating to provisional relevant providers ...............302
Division 8B—Compliance schemes 305
Subdivision A—Compliance schemes to cover relevant providers 305
921G Meaning of compliance scheme.....................................................305
921H Financial services licensees to ensure compliance scheme
covers relevant providers...............................................................306
921J When a compliance scheme covers a relevant provider ................306
Subdivision B—Approval of compliance schemes 307
921K Approval of compliance schemes ..................................................307
Subdivision C—Investigations by monitoring body 310
921L Investigations by monitoring body ................................................310
921M Offences relating to investigations by monitoring body ................312
921N Obligation to notify licensee of failure to comply with Code
of Ethics.........................................................................................313
Subdivision D—Other provisions 314
921P Obligation to ensure that compliance scheme is publicly
available ........................................................................................314
921Q Obligation to provide ASIC with information ...............................314
921R Modification of compliance scheme..............................................314
921S Obligation to review compliance scheme ......................................315
921T Obligation to notify ASIC of changes to monitoring body............316
Division 8C—The standards body 317
Subdivision A—Functions of the standards body 317
921U Functions of the standards body ....................................................317
921V Approval of foreign qualifications.................................................319
921W Commencement of Code of Ethics and amendments of Code
of Ethics.........................................................................................321
Subdivision B—Declaration of the standards body 321
921X Minister to declare a body corporate to be the standards body ......321
921Y Minister may revoke declaration under section 921X ...................322
Subdivision C—Other provisions relating to the standards body 324
921Z Modification of the standards body’s constitution.........................324
921ZA Disallowance of modifications of the standards body’s
constitution ....................................................................................324
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921ZB Minister may direct the standards body to do certain things..........324
921ZC Annual report.................................................................................325
Division 9—Registers relating to financial services 326
Subdivision A—Registers generally 326
922A Registers relating to financial services ..........................................326
922B Fees for searching registers ...........................................................326
Subdivision B—Notice requirements relating to the Register of
Relevant Providers 327
922D Obligation to notify ASIC about a person who becomes a
relevant provider............................................................................327
922E Information about a relevant provider who is a financial
services licensee ............................................................................327
922F Information about a relevant provider who is not a financial
services licensee ............................................................................328
922G Meaning of recent advising history ...............................................331
922H Ongoing obligation to notify ASIC when there is a change in
a matter for a relevant provider .....................................................331
922HA Obligation to notify ASIC of financial services licensee’s
CPD year .......................................................................................332
922HB Obligation to notify ASIC of non-compliance with
continuing professional development standard..............................333
922HC Requirement to retain information.................................................333
922HD Obligation to notify ASIC in relation to failures to comply
with the Code of Ethics .................................................................334
922J Obligation to notify ASIC about a person who starts to have
control of a body corporate licensee ..............................................335
922K Obligation to notify ASIC about a person who ceases to have
control of a body corporate licensee ..............................................335
922L Requirement for notice to be lodged..............................................336
922M Offence for failing to comply with obligation to notify ASIC.......337
922N Obligation for relevant providers to provide information to
financial services licensees ............................................................338
922P Change in matter within 30 business days .....................................339
Subdivision C—Register of Relevant Providers 340
922Q Register of Relevant Providers ......................................................340
922R Relevant provider number .............................................................343
922S Correcting the Register..................................................................343
Division 10—Restrictions on use of terminology 344
923A Restriction on use of certain words or expressions........................344
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923B Restriction on use of certain words or expressions unless
authorised in licence conditions.....................................................346
923C Restriction on use of terms “financial adviser” and “financial
planner” .........................................................................................349
Division 11—Agreements with unlicensed persons relating to the
provision of financial services 353
Subdivision A—Agreements affected 353
924A Agreements with certain unlicensed persons .................................353
Subdivision B—Effect on agreements 353
925A Client may give notice of rescission ..............................................353
925B Effect of notice under section 925A ..............................................354
925C Client may apply to Court for partial rescission ............................355
925D Court may make consequential orders...........................................355
925E Agreement unenforceable against client........................................356
925F Non-licensee not entitled to recover commission ..........................356
925G Onus of establishing non-application of section 925E or
925F...............................................................................................357
925H Client may recover commission paid to non-licensee....................357
925I Remedies under this Division additional to other remedies...........357
Division 12—Miscellaneous 358
926A Exemptions and modifications by ASIC........................................358
926B Exemptions and modifications by regulations ...............................359
Part 7.7—Financial services disclosure 360
Division 1—Preliminary 360
940A How Part applies if a financial services licensee is acting as
authorised representative ...............................................................360
940B What if there is no reasonable opportunity to give a
document, information or statement required by this Part? ...........360
940C How documents, information and statements are to be given........361
940D General approach to offence provisions ........................................363
Division 2—Person provided with financial service as retail
client to be given a Financial Services Guide 364
Subdivision A—Requirement for a Financial Services Guide to be
given 364
941A Obligation on financial services licensee to give a Financial
Services Guide if financial service provided to person as a
retail client.....................................................................................364
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941B Obligation on authorised representative to give a Financial
Services Guide if financial service provided to person as a
retail client.....................................................................................364
941C Situations in which a Financial Services Guide is not
required..........................................................................................365
941D Timing of giving Financial Services Guide ...................................367
941E Information must be up to date......................................................367
941F Obligation to give updated Financial Services Guide....................368
Subdivision B—Content and authorisation of Financial Services
Guide 368
942A Title of Financial Services Guide ..................................................368
942B Financial Services Guide given by financial services
licensee—main requirements.........................................................369
942C Financial Services Guide given by authorised
representative—main requirements ...............................................372
942D Financial Services Guide may consist of 2 or more separate
documents given at same time .......................................................376
942DA Combining a Financial Services Guide and a Product
Disclosure Statement in a single document ...................................377
942E Altering a Financial Services Guide after its preparation and
before giving it to a person ............................................................377
Subdivision C—Supplementary Financial Services Guides 378
943A What a Supplementary Financial Services Guide is ......................378
943B Title of Supplementary Financial Services Guide .........................378
943C Form of Supplementary Financial Services Guide ........................379
943D Effect of giving a person a Supplementary Financial Services
Guide .............................................................................................379
943E Situation in which only a Supplementary Financial Services
Guide need be given ......................................................................380
943F Altering a Supplementary Financial Services Guide after its
preparation and before giving it to a person ..................................380
Division 3—Additional requirements for personal advice
provided to a retail client 381
Subdivision A—When this Division applies 381
944A Situation in which Division applies ...............................................381
Subdivision C—Requirement for a Statement of Advice to be
given 381
946A Obligation to give client a Statement of Advice ............................381
946AA Small investments—Statement of Advice not required .................382
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946B Other situations in which a Statement of Advice is not
required..........................................................................................384
946C Timing of giving Statement of Advice ..........................................388
Subdivision D—Content of Statement of Advice 389
947A Title of Statement of Advice..........................................................389
947B Statement of Advice given by financial services licensee—
main requirements .........................................................................389
947C Statement of Advice given by authorised representative—
main requirements .........................................................................391
947D Additional requirements when advice recommends
replacement of one product with another.......................................393
947E Statement of Advice not to be combined with Financial
Services Guide or Product Disclosure Statement ..........................395
Subdivision E—Other matters 395
948A Qualified privilege if providing entity complies with this
Division .........................................................................................395
Division 4—Other disclosure requirements 396
949A General advice provided to retail client—obligation to warn
client that advice does not take account of client’s objectives,
financial situation or needs ............................................................396
949B Regulations may impose disclosure requirements in certain
situations........................................................................................397
Division 6—Miscellaneous 400
951A Part cannot be contracted out of ....................................................400
951B Exemptions and modifications by ASIC........................................400
951C Exemptions and modifications by regulations ...............................401
Division 7—Enforcement 402
Subdivision A—Offences 402
952A Overview .......................................................................................402
952B Definitions.....................................................................................402
952C Offence of failing to give a disclosure document or statement ......404
952D Offence of giving a disclosure document or statement
knowing it to be defective .............................................................406
952E Offence of giving a defective disclosure document or
statement (whether or not known to be defective) .........................407
952F Offences of financial services licensee knowingly providing
defective disclosure material to an authorised representative ........409
952G Offences of financial services licensee providing disclosure
material to an authorised representative (whether or not
known to be defective) ..................................................................410
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952H Offence of financial services licensee failing to ensure
authorised representative gives disclosure documents or
statements as required....................................................................413
952I Offences if a Financial Services Guide (or Supplementary
FSG) does not comply with certain requirements..........................413
952J Offence if a Statement of Advice does not comply with
certain requirements ......................................................................415
952K Offence if authorised representative gives out unauthorised
Financial Services Guide (or Supplementary FSG) .......................415
952L Offences if financial services licensee or authorised
representative becomes aware that a Financial Services
Guide (or Supplementary FSG) is defective ..................................416
952M Offence of unauthorised alteration of Financial Services
Guide or Supplementary Financial Services Guide .......................417
Subdivision B—Civil liability 418
953A Definitions.....................................................................................418
953B Civil action for loss or damage ......................................................420
953C Additional powers of court to make orders....................................422
Part 7.7A—Best interests obligations and remuneration 424
Division 1—Preliminary 424
960 Definitions.....................................................................................424
960A No contracting out .........................................................................425
960B Obligations under this Part in addition to other obligations...........426
Division 2—Best interests obligations 427
Subdivision A—Preliminary 427
961 Application of this Division ..........................................................427
961A Application to a financial services licensee acting as an
authorised representative ...............................................................427
Subdivision B—Provider must act in the best interests of the client 428
961B Provider must act in the best interests of the client........................428
961C When is something reasonably apparent?.....................................430
961D What is a reasonable investigation? ..............................................430
961E What would reasonably be regarded as in the best interests of
the client? ......................................................................................431
961F What is a basic banking product?..................................................431
Subdivision C—Resulting advice must be appropriate to the client 431
961G Resulting advice must be appropriate to the client ........................431
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Subdivision D—Where resulting advice still based on incomplete
or inaccurate information 432
961H Resulting advice still based on incomplete or inaccurate
information ....................................................................................432
Subdivision E—Provider to give priority to the client’s interests 433
961J Conflict between client’s interests and those of provider,
licensee, authorised representative or associates ...........................433
Subdivision F—Responsibilities of licensees under this Division 434
961K Civil penalty provision—sections 961B, 961G, 961H and
961J ...............................................................................................434
961L Licensees must ensure compliance ................................................434
961M Civil action for loss or damage ......................................................434
961N Additional powers of Court to make orders...................................436
961P Responsible licensee ......................................................................436
Subdivision G—Responsibilities of authorised representatives
under this Division 437
961Q Civil penalty provision—sections 961B, 961G, 961H and
961J ...............................................................................................437
Division 3—Charging ongoing fees to clients 438
Subdivision A—Preliminary 438
962 Application of this Division ..........................................................438
962A Ongoing fee arrangements.............................................................438
962B Ongoing fees..................................................................................440
962C Fee recipients.................................................................................440
962CA Exemption from application of opt-in requirement .......................440
Subdivision B—Termination, disclosure and renewal 441
962D Application of this Subdivision .....................................................441
962E Client may terminate arrangement at any time ..............................442
962F Arrangement terminates if this Subdivision not complied
with................................................................................................442
962G Fee recipient must give fee disclosure statement ...........................443
962H Fee disclosure statements ..............................................................443
962J Disclosure day ...............................................................................444
962K Fee recipient must give renewal notice..........................................444
962L Renewal notice day and renewal period ........................................445
962M If client notifies fee recipient that client does not wish to
renew .............................................................................................445
962N If client does not notify fee recipient that client wishes to
renew .............................................................................................446
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962P Civil penalty provision—charging ongoing fees after
arrangement terminated .................................................................446
962Q Effect of termination......................................................................446
Subdivision C—Disclosure for arrangements to which Subdivision
B does not apply 446
962R Application of this Subdivision .....................................................446
962S Fee recipient must give fee disclosure statement ...........................447
Division 4—Conflicted remuneration 449
Subdivision A—Preliminary 449
963 Application to a financial services licensee acting as an
authorised representative ...............................................................449
Subdivision B—What is conflicted remuneration? 449
963A Conflicted remuneration................................................................449
963B Monetary benefit given in certain circumstances not
conflicted remuneration.................................................................449
963C Non-monetary benefit given in certain circumstances not
conflicted remuneration.................................................................452
963D Benefits for employees etc. of ADIs..............................................453
Subdivision C—Ban on conflicted remuneration 454
963E Licensee must not accept conflicted remuneration ........................454
963F Licensee must ensure compliance..................................................454
963G Authorised representative must not accept conflicted
remuneration..................................................................................454
963H Other representatives must not accept conflicted
remuneration..................................................................................455
963J Employer must not give employees conflicted remuneration ........455
963K Product issuer or seller must not give conflicted
remuneration..................................................................................455
963L Volume-based benefits presumed to be conflicted
remuneration..................................................................................456
Division 5—Other banned remuneration 457
Subdivision A—Volume-based shelf-space fees 457
964 Application ....................................................................................457
964A Platform operator must not accept volume-based shelf-space
fees ................................................................................................458
Subdivision B—Asset-based fees on borrowed amounts 459
964B Application ....................................................................................459
964C Application to a financial services licensee acting as an
authorised representative ...............................................................459
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964D Financial services licensees must not charge asset-based fees
on borrowed amounts ....................................................................459
964E Authorised representatives must not charge asset-based fees
on borrowed amounts ....................................................................460
964F What is an asset-based fee? ...........................................................461
964G Meaning of borrowed ....................................................................461
964H When is something reasonably apparent?.....................................461
Division 6—Anti-avoidance 462
965 Anti-avoidance ..............................................................................462
Division 7—Transition 463
966 Transition period ...........................................................................463
967 Best interests obligations and remuneration provisions to
apply during transition period........................................................463
968 Notice to clients in transition period..............................................464
Part 7.8—Other provisions relating to conduct etc. connected
with financial products and financial services, other
than financial product disclosure 466
Division 1—Preliminary 466
980A Matters covered by this Part ..........................................................466
980B General approach to offence provisions ........................................466
Division 2—Dealing with clients’ money 467
Subdivision A—Money other than loans 467
981A Money to which Subdivision applies.............................................467
981B Obligation to pay money into an account ......................................468
981C Regulations may deal with various matters relating to
accounts maintained for the purposes of section 981B..................469
981D Money related to derivatives may be used for general
margining etc. purposes.................................................................470
981E Protection of money from attachment etc. .....................................470
981F Regulations may deal with how money to be dealt with if
licensee ceases to be licensed etc...................................................471
981G Account provider not liable merely because of licensee’s
contravention .................................................................................471
981H Money to which Subdivision applies taken to be held in trust.......471
Subdivision B—Loan money 472
982A Money to which this Subdivision applies ......................................472
982B Obligation to pay money into an account ......................................472
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982C Licensee to give client statement setting out terms of loan
etc. .................................................................................................473
982D Permitted use of loan .....................................................................473
Subdivision C—Powers of Court 474
983A Court may freeze certain accounts.................................................474
983B Interim order freezing accounts .....................................................475
983C Duty of person to whom order directed to make full
disclosure.......................................................................................475
983D Further orders and directions .........................................................475
983E Power of Court to make order relating to payment of money........476
Division 3—Dealing with other property of clients 478
984A Property to which Division applies................................................478
984B How property to which this Division applies is to be dealt
with................................................................................................479
Division 4—Special provisions relating to insurance 480
985A Definitions etc. ..............................................................................480
985B Status of amounts paid to financial services licensees in
respect of contracts of insurance....................................................480
985C Regulations may impose other requirements etc. if financial
services licensee is not the insurer.................................................481
985D Financial services licensees etc. not to deal in general
insurance products from unauthorised insurers etc. .......................482
Division 4A—Special provisions relating to margin lending
facilities 484
Subdivision A—Responsible lending conduct for margin lending
facilities 484
985EA Application of this Subdivision .....................................................484
985E Requirements before issuing etc. margin lending facility..............484
985F Assessment of unsuitability of margin lending facility..................485
985G Reasonable inquiries etc. about the retail client.............................486
985H When margin lending facility must be assessed as unsuitable .......487
985J Giving the retail client the assessment...........................................488
985K Unsuitable margin lending facilities ..............................................489
Subdivision B—Notice of margin calls under margin lending
facilities 491
985L Issue of margin lending facility must not be conditional on
agreement to receive communications through agent ....................491
985M Notification of margin calls ...........................................................492
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Division 5—Obligations to report 494
986A Reporting in relation to money to which Subdivision A or B
of Division 2 applies or property to which Division 3 applies.......494
986B Reporting in relation to dealings in derivatives .............................494
Division 6—Financial records, statements and audit 495
Subdivision A—Preliminary 495
987A Application of Division .................................................................495
Subdivision B—Financial records of financial services licensees 495
988A Obligation to keep financial records..............................................495
988B Records to be kept so that profit and loss statements and
balance sheet can be prepared and audited ....................................496
988C Language of records ......................................................................496
988D Location of records........................................................................496
988E Particular categories of information to be shown in records..........497
988F Regulations may impose additional requirements .........................497
988G Records taken to be made with licensee’s authority ......................498
Subdivision C—Financial statements of financial services licensees 498
989A Meaning of financial year .............................................................498
989B Financial services licensee to prepare and lodge annual profit
and loss statement and balance sheet .............................................498
989C Requirements as to contents and applicable accounting
principles .......................................................................................499
989CA Audit to be conducted in accordance with auditing standards .......499
989D Time of lodgment ..........................................................................500
Subdivision D—Appointment etc. of auditors 500
990A Sections 990B to 990H not to apply to public companies .............500
990B Appointment of auditor by licensee...............................................501
990C When a person or firm is ineligible to act as auditor .....................502
990D Ineligible person or firm must not consent to act or
disqualify themselves etc. ..............................................................503
990E Duration of appointment of auditors..............................................503
990F Removal of auditors ......................................................................504
990G Resignation of auditors—requirements for resignation .................504
990H Resignation of auditors—when resignation takes effect ................505
990I Auditor’s right of access to records, information etc. ....................505
990J Auditor’s fees and expenses ..........................................................506
990K Auditor to report on certain matters...............................................506
990L Qualified privilege for auditor etc. ................................................507
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Division 7—Other rules about conduct 509
991A Financial services licensee not to engage in unconscionable
conduct ..........................................................................................509
991B Financial services licensee to give priority to clients’ orders ........509
991C Regulations may deal with various matters relating to
instructions to deal through licensed markets ................................510
991D Regulations may require records to be kept in relation to
instructions to deal on licensed markets and foreign markets........511
991E Obligations of financial services licensee in relation to
dealings with non-licensees ...........................................................511
991F Dealings involving employees of financial services licensees.......513
Division 8—Miscellaneous 515
992A Prohibition on hawking of certain financial products ....................515
992AA Prohibition of hawking of managed investment products..............517
992B Exemptions and modifications by ASIC........................................518
992C Exemptions and modifications by regulations ...............................519
Division 9—Enforcement 520
993A Overview .......................................................................................520
993B Offence of failing to pay client money into an account as
required..........................................................................................520
993C Offence of failing to comply with requirements relating to
client money account .....................................................................521
993D Offence of failing to pay loan money into an account as
required..........................................................................................521
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Chapter 7—Financial services and markets
Part 7.1—Preliminary
Division 1—Object of Chapter and outline of Chapter
760A Object of Chapter
The main object of this Chapter is to promote:
(a) confident and informed decision making by consumers of
financial products and services while facilitating efficiency,
flexibility and innovation in the provision of those products
and services; and
(b) fairness, honesty and professionalism by those who provide
financial services; and
(c) fair, orderly and transparent markets for financial products;
and
(d) the reduction of systemic risk and the provision of fair and
effective services by clearing and settlement facilities.
760B Outline of Chapter
An outline of this Chapter is set out in the table below.
Part-by-Part outline of Chapter 7
Part... Covers...
1 7.1 definitions of key concepts and of commonly occurring expressions
2 7.2 licensing of financial markets
other matters relating to financial markets
2A 7.2A supervision of financial markets
3 7.3 licensing of clearing and settlement facilities
other matters relating to clearing and settlement facilities
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Part-by-Part outline of Chapter 7
Part... Covers...
4 7.4 limitation on ownership of certain licensees
individuals who are disqualified from being involved in certain
licensees
5 7.5 compensation regimes for financial markets
5A 7.5A regulation of derivative transactions and derivative trade
repositories
6 7.6 licensing of providers of financial services
other related matters (e.g. restrictions on use of terminology;
agreements with unlicensed persons relating to provision of
financial services)
7 7.7 disclosure requirements for financial services licensees and their
authorised representatives
disclosure requirements for certain people who are not required to
be licensed
7A 7.7A best interests obligations
charging ongoing fees to clients
ban on conflicted remuneration and other remuneration
8 7.8 other conduct requirements for financial services licensees (e.g.
dealing with client money and property; financial records,
statements and audit)
special provisions relating to insurance
special provisions relating to margin lending facilities
9 7.9 financial product disclosure requirements
other requirements relating to issue, sale and purchase of financial
products
10 7.10 market misconduct and other prohibited conduct relating to
financial products and services
11 7.11 title to, and transfer of, certain securities and other financial
products
12 7.12 qualified privilege in certain situations
other miscellaneous matters
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Division 2—Definitions
761A Definitions
In this Chapter:
able to be traded, in relation to a market, includes (but is not
limited to) admitted to quotation on the market.
acquire, in relation to a financial product, has a meaning affected
by section 761E.
annual turnover, of a body corporate during a 12-month period,
means the sum of the values of all the supplies that the body
corporate, and any body corporate related to the body corporate,
have made, or are likely to make, during the 12-month period,
other than:
(a) supplies made from any of those bodies corporate to any
other of those bodies corporate; or
(b) supplies that are input taxed; or
(c) 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); or
(d) supplies that are not made in connection with an enterprise
that the body corporate carries on; or
(e) supplies that are not connected with Australia.
Expressions used in this definition that are also used in the A New
Tax System (Goods and Services Tax) Act 1999 have the same
meaning as in that Act.
arrangement means, subject to section 761B, a contract,
agreement, understanding, scheme or other arrangement (as
existing from time to time):
(a) whether formal or informal, or partly formal and partly
informal; and
(b) whether written or oral, or partly written and partly oral; and
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(c) whether or not enforceable, or intended to be enforceable, by
legal proceedings and whether or not based on legal or
equitable rights.
Australian CS facility licence means a licence under section 824B
that authorises a person to operate a clearing and settlement
facility.
Australian derivative trade repository licence: see section 905B.
Australian financial services licence means a licence under
section 913B that authorises a person who carries on a financial
services business to provide financial services.
Australian market licence means a licence under section 795B that
authorises a person to operate a financial market.
authorised representative of a financial services licensee means a
person authorised in accordance with section 916A or 916B to
provide a financial service or financial services on behalf of the
licensee.
basic deposit product means a deposit product that is a facility in
relation to which the following conditions are satisfied:
(a) the terms applicable to the facility (the governing terms) do
not permit the amount from time to time standing to the
credit of the facility to be reduced otherwise than in
consequence of one or more of the following:
(i) a withdrawal, transfer or debit on the instruction of, or
by authority of, the depositor, not being on account of
entry fees, exit fees or charges for the management of
the funds (but this does not exclude charges for the
maintenance of the facility itself);
(ii) a payment of charges or duties on deposits into, or
withdrawals from, the facility that are payable under a
law of the Commonwealth or of a State or Territory;
(iii) a payment that a law of the Commonwealth, or of a
State or Territory, requires to be made out of the
facility;
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(iv) a payment that an order of a court requires to be made
out of the facility;
(v) the exercise of a right to combine accounts;
(vi) the correction of an error;
(vii) any other circumstances specified in regulations made
for the purposes of this subparagraph; and
(b) any return to be generated for the depositor on the amount
from time to time standing to the credit of the facility is an
amount that is set out in, or that is calculated by reference to
a rate or rates that are set out in, the governing terms; and
(c) either:
(i) there is no minimum period before which funds cannot
be withdrawn or transferred from the facility without a
reduction in the return generated for the depositor; or
(ii) if there is such a period, it expires on or before the end
of the period of 5 years starting on the day on which
funds were first deposited in the facility; and
(d) unless subparagraph (c)(ii) applies and the period referred to
in that subparagraph expires on or before the end of the
period of 2 years starting on the day on which funds were
first deposited in the facility—funds are able to be withdrawn
or transferred from the facility on the instruction of, or by
authority of, the depositor:
(i) without any prior notice to the ADI that makes the
facility available; or
(ii) if the ADI that makes the facility available is included
in a class of ADIs specified in regulations made for the
purposes of this subparagraph—subject to a prior notice
requirement that does not exceed the period specified in
those regulations in relation to that class of ADIs;
whether or not the withdrawal or transfer will attract a
reduction in the return generated for the depositor as
mentioned in subparagraph (c)(i); and
(e) any other conditions specified in regulations made for the
purposes of this paragraph.
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binder means an authorisation given to a person by a financial
services licensee who is an insurer to do either or both of the
following:
(a) enter into contracts that are risk insurance products on behalf
of the insurer as insurer; or
(b) deal with and settle, on behalf of the insurer, claims relating
to risk insurance products against the insurer as insurer;
but does not include an authorisation of a kind referred to in
paragraph (a) that is limited to effecting contracts of insurance by
way of interim cover unless there is also in existence an authority
given by the insurer to the person to enter into, on behalf of the
insurer and otherwise than by way of interim cover, contracts of
insurance.
carried on in this jurisdiction, in relation to a financial services
business, has a meaning affected by section 911D.
certificate cancellation provisions, in relation to a prescribed CS
facility, means the provisions of the facility’s operating rules that
deal with:
(a) the cancellation of documents of title to financial products
transferred through the facility; and
(b) matters incidental to the cancellation of those documents.
CGS depository interest means a depository interest, as defined in
the Commonwealth Inscribed Stock Act 1911, that can be
transferred through a licensed CS facility.
class, in relation to financial products or financial services, has a
meaning affected by regulations made for the purposes of
section 761CA.
clearing and settlement facility has the meaning given by
Division 6.
clearing requirements (in relation to derivative transactions): see
subsection 901A(7).
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CS facility licensee means a person who holds an Australian CS
facility licence.
current LVR:
(a) in relation to a standard margin lending facility—has the
meaning given by subsection 761EA(3); and
(b) in relation to a non-standard margin lending facility—has the
meaning given by subsection 761EA(6).
custodial or depository service that a person provides has the
meaning given by section 766E.
dealing in a financial product has the meaning given by
section 766C (and deal has a corresponding meaning).
deposit product means a financial product described in
paragraph 764A(1)(i).
derivative has the meaning given by section 761D.
derivative trade data means:
(a) information about derivative transactions, or about positions
relating to derivative transactions; or
(b) information (including statistical data) that is created or
derived from information referred to in paragraph (a).
derivative trade repository means a facility to which information
about derivative transactions, or about positions relating to
derivative transactions, can be reported (whether or not other
information or data can also be reported to the facility).
derivative trade repository licensee means a person who holds an
Australian derivative trade repository licence.
derivative trade repository rules: see subsection 903A(1).
derivative transaction means:
(a) the entry into of an arrangement that is a derivative; or
(b) the modification or termination of such an arrangement; or
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(c) the assignment, by a party to such an arrangement, of some
or all of the party’s rights and obligations under the
arrangement; or
(d) any other transaction that relates to a derivative and that is in
a class of transactions prescribed by the regulations for the
purpose of this paragraph.
derivative transaction rules: see subsection 901A(1).
dispose, in relation to a financial product, includes terminate or
close out the legal relationship that constitutes the financial
product.
disqualified individual means an individual who is disqualified
within the meaning given by section 853A.
employer-sponsor has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
execution requirements (in relation to derivative transactions): see
subsection 901A(5).
financial market has the meaning given by Division 5.
financial product has the meaning given by Division 3.
Note: References in this Chapter to financial products have effect subject to
particular express exclusions for particular purposes—see e.g.
sections 1010A and 1074A.
financial product advice has the meaning given by section 766B.
financial product advice law means:
(a) a provision of Chapter 7 that covers conduct relating to the
provision of financial product advice (whether or not it also
covers other conduct), but only in so far as it covers conduct
relating to the provision of financial product advice; or
(b) a provision of Chapter 9 as it applies in relation to a
provision referred to in paragraph (a); or
(c) a provision of Division 2 of Part 2 of the ASIC Act that
covers conduct relating to the provision of financial product
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advice (whether or not it also covers other conduct), but only
in so far as it covers conduct relating to the provision of
financial product advice; or
(d) any other Commonwealth, State or Territory legislation that
covers conduct relating to the provision of financial product
advice (whether or not it also covers other conduct), but only
in so far as it covers conduct relating to the provision of
financial product advice.
financial service has the meaning given by Division 4.
financial services business means a business of providing financial
services.
Note: The meaning of carry on a financial services business is affected by
section 761C.
Financial Services Guide means a Financial Services Guide
required by section 941A or 941B to be given in accordance with
Division 2 of Part 7.7.
financial services law means:
(a) a provision of this Chapter or of Chapter 5C, 5D, 6, 6A, 6B,
6C or 6D; or
(b) a provision of Chapter 9 as it applies in relation to a
provision referred to in paragraph (a); or
(c) a provision of Division 2 of Part 2 of the ASIC Act; or
(d) any other Commonwealth, State or Territory legislation that
covers conduct relating to the provision of financial services
(whether or not it also covers other conduct), but only in so
far as it covers conduct relating to the provision of financial
services; or
(e) in relation to a financial services licensee that is a licensed
trustee company (in addition to paragraphs (a) to (d))—any
rule of common law or equity that covers conduct relating to
the provision of financial services that are traditional trustee
company services (whether or not it also covers other
conduct), but only in so far as it covers conduct relating to
the provision of such services.
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financial services licensee means a person who holds an
Australian financial services licence.
foreign exchange contract means a contract:
(a) to buy or sell currency (whether Australian or not); or
(b) to exchange one currency (whether Australian or not) for
another (whether Australian or not).
funeral benefit means a benefit that consists of the provision of
funeral, burial or cremation services, with or without the supply of
goods connected with such services.
further market-related advice means advice to which
subsection 946B(1) applies.
general advice has the meaning given by subsection 766B(4).
general insurance product means a financial product described in
paragraph 764A(1)(d).
holder, in relation to a financial product, means the person to
whom the financial product was issued, or if it has (since issue)
been disposed of to another person who has not themselves
disposed of it, that other person (and hold has a corresponding
meaning).
insurance product means a financial product described in
paragraph 764A(1)(d), (e) or (f).
investment life insurance product means a financial product
described in paragraph 764A(1)(f).
involved in a market licensee, CS facility licensee or derivative
trade repository licensee, or in an applicant for such a licence, has
the meaning given by section 853B.
issue, in relation to a financial product, has a meaning affected by
section 761E.
issuer, in relation to a financial product, has a meaning affected by
section 761E.
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kind, in relation to financial products or financial services, has a
meaning affected by regulations made for the purposes of
section 761CA.
licensed CS facility means a clearing and settlement facility the
operation of which is authorised by an Australian CS facility
licence.
licensed derivative trade repository means a derivative trade
repository the operation of which is authorised by an Australian
derivative trade repository licence.
licensed market means a financial market the operation of which is
authorised by an Australian market licence.
licensed trustee company has the same meaning as in Chapter 5D.
life risk insurance product means a financial product described in
paragraph 764A(1)(e).
limit, in relation to a margin lending facility, has the meaning
given by subsection 761EA(11).
listing rules of a financial market, or proposed financial market,
means any rules (however described) that are made by the operator
of the market, or contained in the operator’s constitution, and that
deal with:
(a) admitting entities to, or removing entities from, the market’s
official list, whether for the purpose of enabling financial
products of those entities to be traded on the market or for
other purposes; or
(b) the activities or conduct of entities that are included on that
list.
lodge with ASIC, when used in a provision of this Chapter in
relation to which regulations made for the purposes of this
definition state that the lodgment is to be in a prescribed form,
means lodge with ASIC in a prescribed form.
Note: See section 350 for the meaning of lodge in a prescribed form.
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makes a market for a financial product has the meaning given by
section 766D.
managed investment product means a financial product described
in paragraph 764A(1)(b).
margin call:
(a) in relation to a standard margin lending facility—has the
meaning given by subsection 761EA(4); and
(b) in relation to a non-standard margin lending facility—has the
meaning given by subsection 761EA(7); and
(c) in relation to a facility that ASIC has declared to be a margin
lending facility under subsection 761EA(8)—has the
meaning given in the declaration.
margin lending facility has the meaning given by
subsection 761EA(1).
market integrity rules means the rules made by ASIC under
section 798G.
market licensee means a person who holds an Australian market
licence.
non-standard margin lending facility has the meaning given by
subsection 761EA(5).
operated in this jurisdiction:
(a) in relation to a financial market, has a meaning affected by
section 791D; and
(b) in relation to a clearing and settlement facility, has a meaning
affected by section 820D.
operating rules:
(a) of a clearing and settlement facility, or proposed clearing and
settlement facility, means any rules (however described)
made by the operator of the facility, or contained in the
operator’s constitution, that deal with:
(i) the activities or conduct of the facility; or
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(ii) the activities or conduct of persons in relation to the
facility;
but does not include any such rules that deal with matters in
respect of which licensed CS facilities must have written
procedures under regulations made for the purposes of
subsection 822A(2); or
(b) of a financial market, or proposed financial market, means
any rules (however described), including the market’s listing
rules (if any), that are made by the operator of the market, or
contained in the operator’s constitution, and that deal with:
(i) the activities or conduct of the market; or
(ii) the activities or conduct of persons in relation to the
market;
but does not include:
(iii) any such rules that deal with matters in respect of which
licensed markets must have written procedures under
regulations made for the purposes of
subsection 793A(2); or
(iv) compensation rules within the meaning of Part 7.5.
participant:
(a) in relation to a clearing and settlement facility, means a
person who is allowed to directly participate in the facility
under the facility’s operating rules and, when used in any of
the following provisions, also includes a recognised affiliate
in relation to the facility:
(i) paragraph 821B(2)(b);
(ii) section 822B;
(iii) subsection 915F(2);
(iv) any other provisions prescribed by regulations made for
the purposes of this subparagraph; and
(b) in relation to a financial market, means a person who is
allowed to directly participate in the market under the
market’s operating rules and, when used in any of the
following provisions, also includes a recognised affiliate in
relation to the market:
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(i) paragraph 792B(2)(b);
(ii) section 793B;
(iii) section 883A;
(iv) subsection 915F(2);
(v) paragraphs 923B(3)(a) and (b);
(vi) any other provisions prescribed by regulations made for
the purposes of this subparagraph.
person has a meaning affected by section 761F (which deals with
partnerships) and section 761FA (which deals with multiple
trustees).
personal advice has the meaning given by subsection 766B(3).
prescribed CS facility means a licensed CS facility that is
prescribed by regulations made for the purposes of this definition.
prescribed derivative trade repository means a facility that is (or
that is in a class that is) prescribed by the regulations for the
purpose of paragraph 901A(6)(b).
Product Disclosure Statement means a Product Disclosure
Statement:
(a) required by section 1012A, 1012B, 1012C or 1012I to be
given in accordance with Division 2 of Part 7.9; or
(b) that section 1012H requires an issuer of a financial product to
take reasonable steps to ensure is given to a new group
member in accordance with Division 2 of Part 7.9.
Note: For the effect of the lodgment of a Replacement Product Disclosure
Statement, see section 1014J.
provide, in relation to a financial product, has a meaning affected
by section 761E.
recognised affiliate, in relation to a clearing and settlement facility
or a financial market, means a person who is:
(a) recognised by the operating rules of the facility or market as
a suitably qualified affiliate of the facility or market; and
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(b) involved in the carrying on of a financial services business
(including as an employee, director or in some other
capacity).
registrable superannuation entity has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
relevant personal circumstances, in relation to advice provided or
to be provided to a person in relation to a matter, are such of the
person’s objectives, financial situation and needs as would
reasonably be considered to be relevant to the advice.
Replacement Product Disclosure Statement has the meaning
given by section 1014H.
reporting requirements (in relation to derivative transactions): see
subsection 901A(6).
retail client has the meaning given by sections 761G and 761GA.
risk insurance product means a financial product described in
paragraph 764A(1)(d) or (e).
RSA product means a financial product described in
paragraph 764A(1)(h).
security means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) a legal or equitable right or interest in a security covered by
paragraph (a) or (b); or
(d) an option to acquire, by way of issue, a security covered by
paragraph (a), (b) or (c); or
(e) a right (whether existing or future and whether contingent or
not) to acquire, by way of issue, the following under a rights
issue:
(i) a security covered by paragraph (a), (b), (c) or (d);
(ii) an interest or right covered by paragraph 764A(1)(b) or
(ba); or
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(f) a CGS depository interest; or
(g) a simple corporate bonds depository interest;
but does not include an excluded security. In Part 7.11, it also
includes a managed investment product.
self-managed superannuation fund has the same meaning as in
the Superannuation Industry (Supervision) Act 1993.
standard margin lending facility has the meaning given by
subsection 761EA(2).
Statement of Advice means a Statement of Advice required by
section 946A to be given in accordance with Subdivisions C and D
of Division 3 of Part 7.7.
superannuation entity has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
superannuation product means a financial product described in
paragraph 764A(1)(g).
Supplementary Financial Services Guide has the meaning given
by section 943A.
Supplementary Product Disclosure Statement has the meaning
given by section 1014A.
title document, for a financial product, means a certificate or other
document evidencing ownership of the financial product.
traditional trustee company services has the same meaning as in
Chapter 5D.
trustee company has the same meaning as in Chapter 5D.
wholesale client has the meaning given by section 761G.
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761B Meaning of arrangement—2 or more arrangements that
together form a derivative or other financial product
If:
(a) an arrangement, when considered by itself, does not
constitute a derivative, or some other kind of financial
product; and
(b) that arrangement, and one or more other arrangements, if
they had instead been a single arrangement, would have
constituted a derivative or other financial product; and
(c) it is reasonable to assume that the parties to the arrangements
regard them as constituting a single scheme;
the arrangements are, for the purposes of this Part, to be treated as
if they together constituted a single arrangement.
761C Meaning of carry on a financial services business
In working out whether someone carries on a financial services
business, Division 3 of Part 1.2 needs to be taken into account.
However, paragraph 21(3)(e) does not apply for the purposes of
this Chapter.
761CA Meaning of class and kind of financial products and financial
services
The regulations may include provisions identifying, or providing
for the identification of, what constitutes a class or kind of
financial products or financial services for the purposes of a
provision or provisions of this Chapter.
761D Meaning of derivative
(1) For the purposes of this Chapter, subject to subsections (2), (3) and
(4), a derivative is an arrangement in relation to which the
following conditions are satisfied:
(a) under the arrangement, a party to the arrangement must, or
may be required to, provide at some future time consideration
of a particular kind or kinds to someone; and
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(b) that future time is not less than the number of days,
prescribed by regulations made for the purposes of this
paragraph, after the day on which the arrangement is entered
into; and
(c) the amount of the consideration, or the value of the
arrangement, is ultimately determined, derived from or varies
by reference to (wholly or in part) the value or amount of
something else (of any nature whatsoever and whether or not
deliverable), including, for example, one or more of the
following:
(i) an asset;
(ii) a rate (including an interest rate or exchange rate);
(iii) an index;
(iv) a commodity.
(2) Without limiting subsection (1), anything declared by the
regulations to be a derivative for the purposes of this section is a
derivative for the purposes of this Chapter. A thing so declared is a
derivative despite anything in subsections (3) and (4).
(3) Subject to subsection (2), the following are not derivatives for the
purposes of this Chapter even if they are covered by the definition
in subsection (1):
(a) an arrangement in relation to which subparagraphs (i), (ii)
and (iii) are satisfied:
(i) a party has, or may have, an obligation to buy, and
another party has, or may have, an obligation to sell,
tangible property (other than Australian or foreign
currency) at a price and on a date in the future; and
(ii) the arrangement does not permit the seller’s obligations
to be wholly settled by cash, or by set-off between the
parties, rather than by delivery of the property; and
(iii) neither usual market practice, nor the rules of a licensed
market or a licensed CS facility, permits the seller’s
obligations to be closed out by the matching up of the
arrangement with another arrangement of the same kind
under which the seller has offsetting obligations to buy;
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but only to the extent that the arrangement deals with that
purchase and sale;
(b) a contract for the future provision of services;
(c) anything that is covered by a paragraph of
subsection 764A(1), other than paragraph (c) of that
subsection;
(d) anything declared by the regulations not to be a derivative for
the purposes of this Chapter.
(4) Subject to subsection (2), an arrangement under which one party
has an obligation to buy, and the other has an obligation to sell,
property is not a derivative for the purposes of this Chapter merely
because the arrangement provides for the consideration to be
varied by reference to a general inflation index such as the
Consumer Price Index.
761E Meaning of issued, issuer, acquire and provide in relation to
financial products
General
(1) This section defines when a financial product is issued to a person.
It also defines who the issuer of a financial product is. If a
financial product is issued to a person:
(a) the person acquires the product from the issuer; and
(b) the issuer provides the product to the person.
Note: Some financial products can also be acquired from, or provided by,
someone other than the issuer (e.g. on secondary trading in financial
products).
Issuing a financial product
(2) Subject to this section, a financial product is issued to a person
when it is first issued, granted or otherwise made available to a
person.
(3) Subject to this section, a financial product specified in the table is
issued to a person when the event specified for that product occurs:
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When particular financial products are issued
Item Financial product Event
1 superannuation
product
the person becomes a member of the
fund concerned
2 RSA product the account concerned is opened in
the person’s name
3 derivative the person enters into the legal
relationship that constitutes the
financial product
4 margin lending
facility
the person enters into the legal
relationship that constitutes the
margin lending facility, as the client
under the facility
(3A) For the avoidance of doubt, none of the following are taken to give
rise to the issue of a financial product to a person (the client):
(a) the client making a further contribution to a superannuation
fund of which the client is already a member;
(aa) an employer of the client making a further contribution, for
the benefit of the client, to a superannuation fund of which
the client is already a member;
(b) the client making a further deposit into an RSA maintained in
the client’s name;
(c) the client making a further payment under a life insurance
investment product;
(d) the client making a further deposit into a deposit product;
(e) the client engaging in conduct specified in regulations made
for the purposes of this paragraph in relation to a financial
product already held by the client.
Issuer of a financial product
(4) Subject to this section, the issuer, in relation to a financial product
issued to a person (the client), is the person responsible for the
obligations owed, under the terms of the facility that is the product:
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(a) to, or to a person nominated by, the client; or
(b) if the product has been transferred from the client to another
person and is now held by that person or another person to
whom it has subsequently been transferred—to, or to a
person nominated by, that person or that other person.
Note: For example, the issuer of a direct debit facility is the financial
institution with which the account to be debited is held, rather than the
persons to whom payments can be made using the facility.
(5) Subject to subsection (7), each person who is a party to a financial
product that:
(a) is a derivative; and
(b) is not entered into, or acquired, on a financial market;
is taken to be an issuer of the product.
Note 1: Under paragraph (1)(a), each person who is a party to the derivative
will also acquire the financial product at the time of its issue as
specified in subsection (3).
Note 2: Although each party to the derivative is an issuer, whether any
particular party has disclosure or other obligations under this Chapter
will depend on the circumstances (e.g. whether the issue occurs in the
course of a business of issuing financial products and whether any of
the other parties is a retail client).
(6) Subject to subsection (7), the issuer of a financial product that:
(a) is a derivative; and
(b) is entered into, or acquired, on a financial market;
is taken to be:
(c) if the product is entered into, or acquired, on the market
through an arrangement made by a financial services licensee
acting on behalf of another person—the financial services
licensee; or
(d) if the product is entered into, or acquired, on the market
through an arrangement made by an authorised representative
of a financial services licensee acting on behalf of another
person (not being the licensee)—the financial services
licensee; or
(e) if neither paragraph (c) nor (d) applies—the market operator.
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(7) The regulations may make provision determining all or any of the
following for the purposes of this Chapter:
(a) the meaning of issue (and/or related parts of speech,
including issuer) in relation to a class of financial products;
(b) the meaning of acquire (and/or related parts of speech) in
relation to a class of financial products;
(c) the meaning of provide (and/or related parts of speech) in
relation to a class of financial products.
Regulations made for the purposes of this subsection have effect
despite anything else in this section.
761EA Meaning of margin lending facility, margin call and
associated expressions
(1) A margin lending facility is:
(a) a standard margin lending facility; or
(b) a non-standard margin lending facility; or
(c) a facility of a kind that has been declared by ASIC to be a
margin lending facility under subsection (8);
unless the facility is of a kind that has been declared by ASIC not
to be a margin lending facility under subsection (9).
Standard margin lending facilities
(2) A standard margin lending facility is a facility under the terms of
which:
(a) credit is, or may be, provided by a person (the provider) to a
natural person (the client); and
(b) the credit provided is, or must be, applied wholly or partly:
(i) to acquire one or more financial products, or a
beneficial interest in one or more financial products; or
(ii) to repay, wholly or partly, another credit facility (within
the meaning of subparagraph 765A(1)(h)(i)), the credit
provided under which was applied, wholly or partly, to
acquire one or more financial products, or a beneficial
interest in one or more financial products; and
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(c) the credit provided is, or must be, secured by property (the
secured property); and
(d) the secured property consists, or must consist, wholly or
partly of one or more marketable securities, or a beneficial
interest in one or more marketable securities; and
(e) if the current LVR of the facility exceeds a ratio, percentage,
proportion or level (however described) determined under the
terms of the facility, then:
(i) the client becomes required to take action; or
(ii) the provider becomes entitled to take action; or
(iii) another person becomes required or entitled to take
action;
in accordance with the terms of the facility to reduce the
current LVR of the facility.
(3) The current LVR of a standard margin lending facility at a
particular time is the ratio, percentage, proportion or level
(however described) that:
(a) is determined under the terms of the facility; and
(b) under the terms of the facility, represents a particular
relationship between:
(i) the amount of the debt owing by the client, or credit
provided by the provider, or both, under the facility at
that time; and
(ii) the value of the secured property determined at that time
under the terms of the facility.
(4) A standard margin lending facility is in margin call when
paragraph (2)(e) applies in relation to the facility.
Non-standard margin lending facilities
(5) A non-standard margin lending facility is a facility under the
terms of which:
(a) a natural person (the client) transfers one or more marketable
securities, or a beneficial interest in one or more marketable
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securities (the transferred securities) to another person (the
provider); and
(b) the provider transfers property to the client (the transferred
property) as consideration or security for the transferred
securities; and
(c) the transferred property is, or must be, applied wholly or
partly to acquire one or more financial products, or a
beneficial interest in one or more financial products; and
(d) the client has a right, in the circumstances determined under
the terms of the facility, to be given marketable securities
equivalent to the transferred securities; and
(e) if the current LVR of the facility exceeds a ratio, percentage,
proportion or level (however described) determined under the
terms of the facility, then:
(i) the client becomes required to take action; or
(ii) the provider becomes entitled to take action; or
(iii) another person becomes required or entitled to take
action;
in accordance with the terms of the facility to reduce the
current LVR of the facility.
(6) The current LVR of a non-standard margin lending facility at a
particular time is the ratio, percentage, proportion or level
(however described) that:
(a) is determined under the terms of the facility; and
(b) under the terms of the facility, represents a particular
relationship between:
(i) an amount determined at that time under the terms of
the facility by reference to the value of the transferred
property and any amount owing by the client to the
provider; and
(ii) the value of the transferred securities determined at that
time under the terms of the facility.
(7) A non-standard margin lending facility is in margin call when
paragraph (5)(e) applies in relation to the facility.
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ASIC declarations in relation to margin lending facilities
(8) ASIC may declare that a particular kind of facility is a margin
lending facility. The declaration must give the meanings of margin
call and limit in relation to that kind of facility.
(9) ASIC may declare that a particular kind of facility is not a margin
lending facility.
(10) A declaration made under subsection (8) or (9):
(a) must be in writing; and
(b) is a legislative instrument for the purposes of the Legislative
Instruments Act 2003.
Meaning of limit of a margin lending facility
(11) The limit of a margin lending facility:
(a) in relation to a standard margin lending facility—means the
maximum amount of credit that may be provided by the
provider to the client under the facility; and
(b) in relation to a non-standard margin lending facility—means
the maximum amount of property that may be transferred by
the provider to the client under the facility; and
(c) in relation to a facility of a kind that ASIC has declared to be
a margin lending facility under subsection (8)—has the
meaning given in the declaration.
761F Meaning of person—generally includes a partnership
(1) This Chapter applies to a partnership as if the partnership were a
person, but it applies with the following changes:
(a) obligations that would be imposed on the partnership are
imposed instead on each partner, but may be discharged by
any of the partners;
(b) any contravention of a provision of this Chapter, or a
provision of this Act that relates to a requirement in a
provision of this Chapter, that would otherwise be a
contravention by the partnership is taken (whether for the
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purposes of criminal or civil liability) to have been a
contravention by each partner who:
(i) aided, abetted, counselled or procured the relevant act or
omission; or
(ii) was in any way knowingly concerned in, or party to, the
relevant act or omission (whether directly or indirectly
and whether by any act or omission of the partner).
(2) For the purposes of this Chapter, a change in the composition of a
partnership does not affect the continuity of the partnership.
(3) Subsections (1) and (2) have effect subject to:
(a) an express or implied contrary intention in a provision or
provisions of this Chapter; and
(b) the regulations, which may exclude or modify the effect of
those subsections in relation to specified provisions.
761FA Meaning of person—generally includes multiple trustees
(1) This section applies in relation to a trust while the trust continues
to have:
(a) 2 or more trustees; or
(b) a single trustee who was a trustee of the trust at a time when
it had 2 or more trustees.
(2) Subject to subsections (3) and (4), during a period while this
section applies to a trust, this Chapter applies to the trust as if the
trustee or trustees of the trust from time to time during the period
constituted a single legal entity (the notional entity) that remained
the same for the duration of that period.
Note: So, for example, while this section applies to a trust, a licence granted
under this Chapter to the trustees of the trust will continue in force,
despite a change in the persons who are the trustees.
(3) During any period or part of a period while this section applies to a
trust and the trust has 2 or more trustees, this Chapter applies to the
trustees as mentioned in subsection (2), but it applies with the
following changes:
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(a) obligations that would be imposed on the notional entity are
imposed instead on each trustee, but may be discharged by
any of the trustees;
(b) any contravention of a provision of this Chapter, or a
provision of this Act that relates to a requirement in a
provision of this Chapter, that would otherwise be a
contravention by the notional entity is taken (whether for the
purposes of criminal or civil liability) to have been a
contravention by each trustee who:
(i) aided, abetted, counselled or procured the relevant act or
omission; or
(ii) was in any way knowingly concerned in, or party to, the
relevant act or omission (whether directly or indirectly
and whether by any act or omission of the trustee).
(4) During any period or part of a period while this section applies to a
trust and the trust has only one trustee, this Chapter applies to the
trustee as mentioned in subsection (2), but it applies with the
following changes:
(a) obligations that would be imposed on the notional entity are
imposed instead on that single trustee;
(b) any contravention of a provision of this Chapter, or a
provision of this Act that relates to a requirement in a
provision of this Chapter, that would otherwise be a
contravention by the notional entity is taken (whether for the
purposes of criminal or civil liability) to have been a
contravention by that single trustee.
(5) Subsections (2), (3) and (4) have effect subject to:
(a) an express or implied contrary intention in a provision or
provisions of this Chapter; and
(b) the regulations, which may exclude or modify the effect of
those subsections in relation to specified provisions.
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761G Meaning of retail client and wholesale client
Providing a financial product or financial service to a person as a
retail client
(1) For the purposes of this Chapter, a financial product or a financial
service is provided to a person as a retail client unless
subsection (5), (6), (6A) or (7), or section 761GA, provides
otherwise.
Note: The references in this section to providing a financial product to a
person are not to be taken to imply that the provision of a financial
product is not also the provision of a financial service (see the
meaning of dealing in section 766C).
Acquiring a financial product or financial service as a retail client
(2) For the purposes of this Chapter, a person to whom a financial
product or financial service is provided as a retail client is taken to
acquire the product or service as a retail client.
Disposing of a financial product as a retail client
(3) If a financial product is provided to a person as a retail client, any
subsequent disposal of all or part of that product by the person is,
for the purposes of this Chapter, a disposal by the person as a retail
client.
Wholesale clients
(4) For the purposes of this Chapter, a financial product or a financial
service is provided to, or acquired by, a person as a wholesale
client if it is not provided to, or acquired by, the person as a retail
client.
General insurance products
(5) For the purposes of this Chapter, if a financial product is, or a
financial service provided to a person relates to, a general
insurance product, the product or service is provided to the person
as a retail client if:
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(a) either:
(i) the person is an individual; or
(ii) the insurance product is or would be for use in
connection with a small business (see subsection (12));
and
(b) the general insurance product is:
(i) a motor vehicle insurance product (as defined in the
regulations); or
(ii) a home building insurance product (as defined in the
regulations); or
(iii) a home contents insurance product (as defined in the
regulations); or
(iv) a sickness and accident insurance product (as defined in
the regulations); or
(v) a consumer credit insurance product (as defined in the
regulations); or
(vi) a travel insurance product (as defined in the
regulations); or
(vii) a personal and domestic property insurance product (as
defined in the regulations); or
(viii) a kind of general insurance product prescribed by
regulations made for the purposes of this subparagraph.
In any other cases, the provision to a person of a financial product
that is, or a financial service that relates to, a general insurance
product does not constitute the provision of a financial product or
financial service to the person as a retail client.
Superannuation products and RSA products
(6) For the purposes of this Chapter:
(a) if a financial product provided to a person is a
superannuation product or an RSA product, the product is
provided to the person as a retail client; and
(aa) however, if a trustee of a pooled superannuation trust (within
the meaning of the Superannuation Industry (Supervision)
Act 1993) provides a financial product that is an interest in
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the trust to a person covered by subparagraph (c)(i), the
product is not provided to the person as a retail client; and
(b) if a financial service (other than the provision of a financial
product) provided to a person who is not covered by
subparagraph (c)(i) or (ii) relates to a superannuation product
or an RSA product, the service is provided to the person as a
retail client; and
(c) if a financial service (other than the provision of a financial
product) provided to a person who is:
(i) the trustee of a superannuation fund, an approved
deposit fund, a pooled superannuation trust or a public
sector superannuation scheme (within the meaning of
the Superannuation Industry (Supervision) Act 1993)
that has net assets of at least $10 million; or
(ii) an RSA provider (within the meaning of the Retirement
Savings Accounts Act 1997);
relates to a superannuation product or an RSA product, that
does not constitute the provision of a financial service to the
person as a retail client.
Traditional trustee company services
(6A) For the purpose of this Chapter, if a financial service provided to a
person is a traditional trustee company service, the service is
provided to the person as a retail client unless regulations made for
the purpose of this subsection provide otherwise.
Other kinds of financial product
(7) For the purposes of this Chapter, if a financial product is not, or a
financial service (other than a traditional trustee company service)
provided to a person does not relate to, a general insurance
product, a superannuation product or an RSA product, the product
or service is provided to the person as a retail client unless one or
more of the following paragraphs apply:
(a) the price for the provision of the financial product, or the
value of the financial product to which the financial service
relates, equals or exceeds the amount specified in regulations
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made for the purposes of this paragraph as being applicable
in the circumstances (but see also subsection (10)); or
(b) the financial product, or the financial service, is provided for
use in connection with a business that is not a small business
(see subsection (12));
(c) the financial product, or the financial service, is not provided
for use in connection with a business, and the person who
acquires the product or service gives the provider of the
product or service, before the provision of the product or
service, a copy of a certificate given within the preceding 6
months by a qualified accountant (as defined in section 9)
that states that the person:
(i) has net assets of at least the amount specified in
regulations made for the purposes of this subparagraph;
or
(ii) has a gross income for each of the last 2 financial years
of at least the amount specified in regulations made for
the purposes of this subparagraph a year;
(d) the person is a professional investor.
Offence proceedings—defendant bears evidential burden in
relation to matters referred to in paragraphs (7)(a) to (d)
(8) In a prosecution for an offence based on a provision of this
Chapter, a defendant bears an evidential burden in relation to the
matters in paragraphs (7)(a) to (d) as if those matters were
exceptions for the purposes of subsection 13.3(3) of the Criminal
Code.
Other proceedings relating to subsection (7) products—
presumption in non-criminal proceedings of retail client unless
contrary established
(9) If:
(a) it is alleged in a proceeding under this Chapter (not being a
prosecution for an offence), or in any other proceeding (not
being a prosecution for an offence) in respect of a matter
arising under this Chapter, that a particular financial product
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or financial service was provided to a person as a retail client;
and
(b) the product or the service is one to which subsection (7)
applies;
it is presumed that the product or service was provided to the
person as a retail client unless the contrary is established.
Note 1: There is no such presumption in relation to the provision of a product
or service that is or relates to a general insurance product, a
superannuation product or an RSA product. Whether or not such a
product, or a service relating to such a product, was provided to a
person as a retail client is to be resolved as provided in subsection (5)
or (6), as the case requires.
Note 2: In criminal proceedings, a defendant bears an evidential burden in
relation to the matters in paragraphs (7)(a) to (d) (see subsection (8)).
Regulations and paragraph (7)(a)
(10) In addition to specifying an amount or amounts for the purposes of
paragraph (7)(a), the regulations may do either or both of the
following:
(a) deal with how a price or value referred to in that paragraph is
to be calculated, either generally or in relation to a specified
class of financial products;
(b) modify the way in which that paragraph applies in particular
circumstances.
Regulations and paragraph (7)(c)
(10A) In addition to specifying amounts for the purposes of
subparagraphs (7)(c)(i) and (ii), the regulations may do either or
both of the following:
(a) deal with how net assets referred to in subparagraph (7)(c)(i)
are to be determined and valued, either generally or in
specified circumstances;
(b) deal with how gross income referred to in
subparagraph (7)(c)(ii) is to be calculated, either generally or
in specified circumstances.
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What happens if a package of general insurance products and
other kinds of financial products is provided?
(11) If:
(a) either:
(i) in a single transaction, 2 or more financial products are
provided to a person; or
(ii) a single financial service provided to a person relates to
2 or more financial products; and
(b) one or more, but not all, of the financial products are general
insurance products;
subsection (5) applies to the transaction or service so far as it
relates to the general insurance products, and subsection (6) or (7),
as the case requires, applies to the transaction or service so far as it
relates to other financial products.
Definition
(12) In this section:
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.
761GA Meaning of retail client—sophisticated investors
For the purposes of this Chapter, a financial product, or a financial
service (other than a traditional trustee company service) in
relation to a financial product, is not provided by one person to
another person as a retail client if:
(a) the first person (the licensee) is a financial services licensee;
and
(b) the financial product is not a general insurance product, a
superannuation product or an RSA product; and
(c) the financial product or service is not provided for use in
connection with a business; and
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Section 761H
34 Corporations Act 2001
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(d) the licensee is satisfied on reasonable grounds that the other
person (the client) has previous experience in using financial
services and investing in financial products that allows the
client to assess:
(i) the merits of the product or service; and
(ii) the value of the product or service; and
(iii) the risks associated with holding the product; and
(iv) the client’s own information needs; and
(v) the adequacy of the information given by the licensee
and the product issuer; and
(e) the licensee gives the client before, or at the time when, the
product or advice is provided a written statement of the
licensee’s reasons for being satisfied as to those matters; and
(f) the client signs a written acknowledgment before, or at the
time when, the product or service is provided that:
(i) the licensee has not given the client a Product
Disclosure Statement; and
(ii) the licensee has not given the client any other document
that would be required to be given to the client under
this Chapter if the product or service were provided to
the client as a retail client; and
(iii) the licensee does not have any other obligation to the
client under this Chapter that the licensee would have if
the product or service were provided to the client as a
retail client.
761H References to this Chapter include references to regulations or
other instruments made for the purposes of this Chapter
(1) A reference in a provision of this Chapter to this Chapter, or to a
particular provision or group of provisions of this Chapter, includes
(unless a contrary intention appears) a reference to regulations, or
other instruments, made for the purposes of this Chapter, or for the
purposes of that provision or any of those provisions, as the case
requires.
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(2) Subsection (1) has effect as if provisions in Part 10.2 (transitional
provisions) that relate to matters dealt with in this Chapter were
part of this Chapter.
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Division 3 What is a financial product?
Section 762A
36 Corporations Act 2001
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Division 3—What is a financial product?
Subdivision A—Preliminary
762A Overview of approach to defining what a financial product is
General definition
(1) Subdivision B sets out a general definition of financial product.
Subject to subsections (2) and (3), a facility is a financial product if
it falls within that definition.
Specific inclusions
(2) Subdivision C identifies, or provides for the identification of, kinds
of facilities that, subject to subsection (3), are financial products
(whether or not they are within the general definition).
Overriding exclusions
(3) Subdivision D identifies, or provides for the identification of, kinds
of facilities that are not financial products. These facilities are not
financial products:
(a) even if they are within the general definition; and
(b) even if they are within a class of facilities identified as
mentioned in subsection (2).
762B What if a financial product is part of a broader facility?
If a financial product is a component of a facility that also has
other components, this Chapter, in applying to the financial
product, only applies in relation to the facility to the extent it
consists of the component that is the financial product.
Note: So, e.g., Part 7.9 does not require disclosures to be made in relation to
those other components.
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762C Meaning of facility
In this Division:
facility includes:
(a) intangible property; or
(b) an arrangement or a term of an arrangement (including a term
that is implied by law or that is required by law to be
included); or
(c) a combination of intangible property and an arrangement or
term of an arrangement.
Note: 2 or more arrangements may be taken to constitute a single
arrangement—see section 761B.
Subdivision B—The general definition
763A General definition of financial product
(1) For the purposes of this Chapter, 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 section 763B);
(b) manages financial risk (see section 763C);
(c) makes non-cash payments (see section 763D).
This has effect subject to section 763E.
(2) For the purposes of this Chapter, 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.
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Section 763B
38 Corporations Act 2001
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763B When a person makes a financial investment
For the purposes of this Chapter, 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 (even if no return or benefit is in fact
generated); 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
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mere act of giving the money to the licensee will not of itself constitute making a financial investment).
763C When a person manages financial risk
For the purposes of this Chapter, 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).
763D When a person makes non-cash payments
(1) For the purposes of this Chapter, a person makes non-cash
payments if they make payments, or cause payments to be made,
otherwise than by the physical delivery of Australian or foreign
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 (whether denominated in Australian or foreign currency).
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Section 763E
40 Corporations Act 2001
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(2) For the purposes of this Chapter, the following are not making
non-cash payments, even if they might otherwise be covered by
subsection (1):
(a) making payments by means of a facility in relation to which
one of the following applies:
(i) there is only one person to whom payments can be made
by means of the facility;
(ii) the facility is, or is of a kind, specified in the regulations
as being a facility that is not to be covered by this
section because of restrictions relating to the number of
people to whom payments can be made by means of the
facility, or relating to the number of persons who can
use the facility to make payments;
(b) making payments by means of:
(i) a letter of credit from a financial institution; or
(ii) a cheque drawn by a financial institution on itself; or
(iii) a guarantee given by a financial institution.
763E What if a financial product is only incidental?
(1) If:
(a) something (the incidental product) that, but for this section,
would be a financial product because of this Subdivision is:
(i) an incidental component of a facility that also has other
components; or
(ii) a facility that is incidental to one or more other
facilities; and
(b) it is reasonable to assume that the main purpose of:
(i) if subparagraph (a)(i) applies—the facility referred to in
that subparagraph, when considered as a whole; or
(ii) if subparagraph (a)(ii) applies—the incidental product,
and the other facilities referred to in that subparagraph,
when considered as a whole;
is not a financial product purpose;
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the incidental product is not a financial product because of this
Subdivision (however, it may still be a financial product because of
Subdivision C).
(2) In this section:
financial product purpose means a purpose of:
(a) making a financial investment; or
(b) managing financial risk; or
(c) making non-cash payments.
Subdivision C—Specific inclusions
764A Specific things that are financial products (subject to
Subdivision D)
(1) Subject to Subdivision D, the following are financial products for
the purposes of this Chapter:
(a) a security;
(b) any of the following in relation to a registered 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);
(ba) any of the following in relation to a managed investment
scheme that is not a registered scheme, other than a scheme
(whether or not operated in this jurisdiction) in relation to
which none of paragraphs 601ED(1)(a), (b) and (c) are
satisfied:
(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;
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(d) a contract of insurance that is not a life policy, or a sinking
fund policy, within the meaning of the Life Insurance Act
1995, but not including such a contract of insurance:
(i) to the extent that it provides for a benefit to be provided
by an association of employees that is registered as an
organisation, or recognised, under the Fair Work
(Registered Organisations) Act 2009 for a member of
the association or a dependant of a member; or
(ii) to the extent that it provides for benefits, pensions or
payments described in paragraph 11(3)(c) of the Life
Insurance Act 1995; or
(iii) to the extent that it provides for the provision of a
funeral benefit; or
(iv) issued by an employer to an employee of the employer;
(e) a life policy, or a sinking fund policy, within the meaning of
the Life Insurance Act 1995, that is a contract of insurance,
but not including such a policy:
(i) to the extent that it provides for a benefit to be provided
by an association of employees that is registered as an
organisation, or recognised, under the Fair Work
(Registered Organisations) Act 2009 for a member of
the association or a dependant of a member; or
(ii) to the extent that it provides for benefits, pensions or
payments described in paragraph 11(3)(c) of the Life
Insurance Act 1995; or
(iii) to the extent that it provides for the provision of a
funeral benefit; or
(iv) issued by an employer to an employee of the employer;
(f) a life policy, or a sinking fund policy, within the meaning of
the Life Insurance Act 1995, that is not a contract of
insurance, but not including such a policy:
(i) to the extent that it provides for a benefit to be provided
by an association of employees that is registered as an
organisation, or recognised, under the Fair Work
(Registered Organisations) Act 2009 for a member of
the association or a dependant of a member; or
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(ii) to the extent that it provides for benefits, pensions or
payments described in paragraph 11(3)(c) of the Life
Insurance Act 1995; or
(iii) to the extent that it provides for the provision of a
funeral benefit; or
(iv) issued by an employer to an employee of the employer;
(g) a superannuation interest within the meaning of the
Superannuation Industry (Supervision) Act 1993;
(h) an RSA (retirement savings account) within the meaning of
the Retirement Savings Accounts Act 1997;
(i) 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 (h));
(j) a debenture, stock or bond issued or proposed to be issued by
a government;
(k) a foreign exchange contract that is not:
(i) a derivative (derivatives are covered by paragraph (c));
or
(ii) a contract to exchange one currency (whether Australian
or not) for another that is to be settled immediately;
(ka) an Australian carbon credit unit;
(kb) an eligible international emissions unit;
(l) a margin lending facility;
(m) anything declared by the regulations to be a financial product
for the purposes of this section.
Note: Even though something is expressly excluded from one of these
paragraphs, it may still be a financial product (subject to Subdivision
D) either because:
(a) it is covered by another of these paragraphs; or
(b) it is covered by the general definition in Subdivision B.
(1A) If a single contract of insurance provides 2 or more kinds of cover,
paragraph (1)(d) applies separately in relation to that contract, in
relation to each of those kinds of cover, as if the contract only
provided that kind of cover.
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Division 3 What is a financial product?
Section 765A
44 Corporations Act 2001
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Note: Because of this subsection (including as it is affected by
subsection (1B)), a single contract of insurance may constitute 2 or
more separate general insurance products.
(1B) If a contract of insurance provides a kind of cover in relation to 2
or more kinds of asset, subsection (1A) applies to the contract, in
relation to each of those kinds of asset, as if the cover provided by
the contract in relation to that kind of asset constituted a separate
kind of cover.
(2) For the purpose of paragraphs (1)(d), (e) and (f) and
subsections (1A) and (1B), 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.
Subdivision D—Specific exclusions
765A Specific things that are not financial products
(1) Despite anything in Subdivision B or Subdivision C, the following
are not financial products for the purposes of this Chapter:
(a) an excluded security;
(b) an undertaking by a body corporate to pay money to a related
body corporate;
(c) health insurance provided as part of a health insurance
business (as defined in Division 121 of the Private Health
Insurance Act 2007);
(ca) 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);
(d) insurance provided by the Commonwealth;
(e) State insurance or Northern Territory insurance, including
insurance entered into by:
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(i) a State or the Northern Territory; and
(ii) some other insurer;
as joint insurers;
(f) insurance entered into by the Export Finance and Insurance
Corporation, other than a short-term insurance contract
within the meaning of the Export Finance and Insurance
Corporation Act 1991;
(g) reinsurance;
(h) any of the following:
(i) a credit facility within the meaning of the regulations
(other than a margin lending facility);
(ii) a facility for making non-cash payments (see
section 763D), if payments made using the facility will
all be debited to a credit facility covered by
subparagraph (i);
(i) a facility:
(i) that is an approved RTGS system within the meaning of
the Payment Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non-cash
payments (see section 763D), and the establishment of
final positions, for settlement through an approved
RTGS system within the meaning of the Payment
Systems and Netting Act 1998;
(j) a facility that is a designated payment system for the
purposes of the Payment Systems (Regulation) Act 1998;
(k) a facility for the exchange and settlement of non-cash
payments (see section 763D) between providers of non-cash
payment facilities;
(l) 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;
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(m) a contract to exchange one currency (whether Australian or
not) for another that is to be settled immediately;
(n) so much of an arrangement as is not a derivative because of
paragraph 761D(3)(a);
(p) an arrangement that is not a derivative because of
subsection 761D(4);
(q) an interest in a superannuation fund of a kind prescribed by
regulations made for the purposes of this paragraph;
(r) 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;
(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);
(s) any of the following in relation to a managed investment
scheme (whether or not operated in this jurisdiction) in
relation to which none of paragraphs 601ED(1)(a), (b) and
(c) are satisfied and that is not a registered 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);
(t) a deposit-taking facility that is, or is used for, State banking;
(u) a benefit provided by an association of employees that is
registered as an organisation, or recognised, under the Fair
Work (Registered Organisations) Act 2009 for a member of
the association or a dependant of a member;
(v) either of the following:
(i) a contract of insurance; or
(ii) a life policy or a sinking fund policy, within the
meaning of the Life Insurance Act 1995, that is not a
contract of insurance;
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issued by an employer to an employee of the employer;
(w) a funeral benefit;
(x) physical equipment or physical infrastructure by which
something else that is a financial product is provided;
(y) a facility, interest or other thing declared by regulations made
for the purposes of this subsection not to be a financial
product;
(z) a facility, interest or other thing declared by ASIC under
subsection (2) not to be a financial product.
(2) ASIC may declare that a specified facility, interest or other thing is
not a financial product for the purposes of this Chapter. The
declaration must be in writing and ASIC must publish notice of it
in the Gazette.
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Division 4 When does a person provide a financial service?
Section 766A
48 Corporations Act 2001
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Division 4—When does a person provide a financial
service?
766A When does a person provide a financial service?
General
(1) For the purposes of this Chapter, subject to paragraph (2)(b), a
person provides a financial service if they:
(a) provide financial product advice (see section 766B); or
(b) deal in a financial product (see section 766C); or
(c) make a market for a financial product (see section 766D); or
(d) operate a registered scheme; or
(e) provide a custodial or depository service (see section 766E);
or
(f) engage in conduct of a kind prescribed by regulations made
for the purposes of this paragraph.
Provision of traditional trustee company services by trustee
company
(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.
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. This
subsection does not limit (and is not limited by) subsection (2).
Note: A traditional trustee company service is provided to a person as a
retail client unless regulations provide otherwise (see
subsection 761G(6A)).
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Regulations may deal with various matters
(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.
Exception for work ordinarily done by clerks or cashiers
(3) To avoid doubt, a person’s conduct is not the provision of a
financial service if it is done in the course of work of a kind
ordinarily done by clerks or cashiers.
Meaning of operating a registered scheme
(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.
766B Meaning of financial product advice
(1) For the purposes of this Chapter, 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.
(1A) However, subject to subsection (1B), the provision or giving of an
exempt document or statement does not constitute the provision of
financial product advice.
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Section 766B
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(1B) Subsection (1A) does not apply for the purpose of determining
whether a recommendation or statement of opinion made by an
outside expert, or a report of such a recommendation or statement
of opinion, that is included in an exempt document or statement is
financial product advice provided by the outside expert.
(2) There are 2 types of financial product advice: personal advice and
general advice.
(3) For the purposes of this Chapter, personal advice is financial
product advice that is given or directed to a person (including by
electronic means) in circumstances where:
(a) the provider of the advice has considered one or more of the
person’s objectives, financial situation and needs (otherwise
than for the purposes of compliance with the Anti-Money
Laundering and Counter-Terrorism Financing Act 2006 or
with regulations, or AML/CTF Rules, under that Act); or
(b) a reasonable person might expect the provider to have
considered one or more of those matters.
(4) For the purposes of this Chapter, general advice is financial
product advice that is not personal advice.
(5) The following advice is not financial product advice:
(a) 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;
(b) except as may be prescribed by the regulations—any other
advice given by a lawyer in the ordinary course of activities
as a lawyer, that is reasonably regarded as a necessary part of
those activities;
(c) except as may be prescribed by the regulations—advice
given by a registered tax agent or BAS agent (within the
meaning of the Tax Agent Services Act 2009), that is given in
the ordinary course of activities as such an agent and that is
reasonably regarded as a necessary part of those activities.
(6) If:
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(a) in response to a request made by a person (the inquirer) to
another person (the provider), the provider tells the inquirer
the cost, or an estimate of the likely cost, of a financial
product (for example, an insurance product); and
(b) that cost or estimate is worked out, or said by the provider to
be worked out, by reference to a valuation of an item (for
example, a house or car to which an insurance policy would
relate), being a valuation that the provider suggests or
recommends to the inquirer;
the acts of telling the inquirer the cost, or estimated cost, and
suggesting or recommending the valuation, do not, of themselves,
constitute the making of a recommendation (or the provision of any
other kind of financial product advice) relating to the financial
product.
(7) If:
(a) in response to a request made by a person (the inquirer) to
another person (the provider), the provider tells the inquirer
information about:
(i) the cost of a financial product; or
(ii) the rate of return on a financial product; or
(iii) any other matter identified in regulations made for the
purposes of this subparagraph; and
(b) the request could also have been complied with (but was not
also so complied with) by telling the inquirer equivalent
information about one or more other financial products;
the act of telling the inquirer the information does not, of itself,
constitute the making of a recommendation (or the provision of any
other kind of financial product advice) in relation to the financial
product referred to in paragraph (a).
(8) Subsections (5), (6) and (7) are not intended to affect, in any way,
the determination of whether situations not covered by those
subsections do, or do not, constitute the provision of financial
product advice.
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Division 4 When does a person provide a financial service?
Section 766C
52 Corporations Act 2001
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(9) In this section:
exempt document or statement means:
(a) a document prepared, or a statement given, in accordance
with requirements of this Chapter, other than:
(i) a Statement of Advice; or
(ii) a document or statement of a kind prescribed by
regulations made for the purposes of this subparagraph;
or
(b) any other document or statement of a kind prescribed by
regulations made for the purposes of this paragraph.
outside expert, in relation to an exempt document or statement,
means an expert who is not:
(a) the person by whom, or on whose behalf, the exempt
document or statement was prepared; or
(b) an employee or director of that person.
766C Meaning of dealing
(1) For the purposes of this Chapter, the following conduct (whether
engaged in as principal or agent) 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 managed investment interests—
underwriting the securities or interests;
(d) varying a financial product;
(e) disposing of a financial product.
(2) Arranging for a person to engage in conduct referred to in
subsection (1) is also dealing in a financial product, unless the
actions concerned amount to providing financial product advice.
(3) A person is taken not to deal in a financial product if the person
deals in the product on their own behalf (whether directly or
through an agent or other representative), unless:
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(a) the person is an issuer of financial products; and
(b) the dealing is in relation to one or more of those products.
(3A) For the purposes of subsection (3), a person (the agent) who deals
in a product as an agent or representative of another person (the
principal) is not taken to deal in the product on the agent’s own
behalf, even if that dealing, when considered as a dealing by the
principal, is a dealing by the principal on the principal’s own
behalf.
(4) Also, a transaction entered into by a person who is, or who
encompasses or constitutes in whole or in part, any of the
following entities:
(a) a government or local government authority;
(b) a public authority or instrumentality or agency of the Crown;
(c) a body corporate or an unincorporated body;
is taken not to be dealing in a financial product by that person if
the transaction relates only to:
(d) securities of that entity; or
(e) if the entity is a government—debentures, stocks or bonds
issued or proposed to be issued by that government.
(5) Paragraph (4)(c) does not apply if the entity:
(a) carries on a business of investment in securities, interests in
land or other investments; and
(b) in the course of carrying on that business, invests funds
subscribed, whether directly or indirectly, after an offer or
invitation to the public (within the meaning of section 82)
made on terms that the funds subscribed would be invested.
(6) A transaction entered into by a sub-underwriter of an issue of
securities that relates only to the sub-underwriting is taken not to
be dealing in a financial product.
(7) 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.
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Section 766D
54 Corporations Act 2001
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766D Meaning of makes a market for a financial product
(1) For the purposes of this Chapter, 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 767A(2)(a).
(2) Paragraph (1)(a) does not apply to a person stating prices at which
they propose to acquire or dispose of financial products if:
(a) the person is the issuer of the products; and
(b) the products are superannuation products, managed
investment products or financial products referred to in
paragraph 764A(1)(ba) (which relates to unregistered
managed investment schemes).
766E Meaning of provide a custodial or depository service
(1) For the purposes of this Chapter, 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.
(2) The following provisions apply in relation to a custodial or
depository service:
(a) subject to paragraph (b), for the purposes of this Chapter, the
time at which a custodial or depository service is provided is
the time when the financial product or beneficial interest
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concerned is first held by the provider as mentioned in
subsection (1);
(b) for the purposes of Part 7.6, and of any other provisions of
this Act prescribed by regulations made for the purposes of
this paragraph, the continued holding of the financial product
or beneficial interest concerned by the provider as mentioned
in subsection (1) also constitutes the provision of a custodial
or depository service.
Note: Because of paragraph (a) (subject to regulations made for the purposes
of paragraph (b)), the requirements of Part 7.7 relating to financial
services disclosure need only be complied with before the product or
interest is first held by the provider. However, because of
paragraph (b), the provider will be subject to the licensing and related
requirements of Part 7.6 for so long as they continue to hold the
product or interest.
(3) 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;
(c) the operation of a regulated superannuation fund, an
approved deposit fund or a pooled superannuation trust
(within the meaning of the Superannuation Industry
(Supervision) Act 1993) by the trustees of that fund or trust;
(ca) the operation of a statutory fund by a life company (within
the meaning of the Life Insurance Act 1995);
(d) the provision of services to a related body corporate;
(e) any other conduct of a kind prescribed by regulations made
for the purposes of this paragraph.
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Division 5 What is a financial market?
Section 767A
56 Corporations Act 2001
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Division 5—What is a financial market?
767A What is a financial market?
(1) For the purposes of this Chapter, 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.
(2) However, the following conduct does not constitute operating a
financial market for the purposes of this Chapter:
(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, unless the
regulations specify circumstances in which such conduct
does constitute operating a financial market and the person’s
conduct occurs in circumstances so specified;
(b) conducting treasury operations between related bodies
corporate;
(c) a person, being the holder of a licence under an Australian
law relating to the licensing of auctioneers, conducting an
auction of forfeited shares;
(d) any other conduct of a kind prescribed by regulations made
for the purposes of this paragraph.
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Division 6—What is a clearing and settlement facility?
768A What is a clearing and settlement facility?
(1) For the purposes of this Chapter, 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.
Example 1: A facility that provides a regular mechanism for stockbrokers to pay
for the shares they buy and to be paid for the shares they sell, and for
records of those transactions to be processed to facilitate registration
of the new ownership of the shares, would be a clearing and
settlement facility (assuming that the relevant obligations are of a kind
prescribed by regulations made for the purposes of this section).
Example 2: A facility that provides a regular mechanism for registering trade in
derivatives on a futures market and that enables the calculation of
payments that market participants owe by way of margins would also
be a clearing and settlement facility (assuming that the relevant
obligations are of a kind prescribed by regulations made for the
purposes of this section).
(2) However, the following conduct does not constitute operating a
clearing and settlement facility for the purposes of this Chapter:
(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
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Section 768A
58 Corporations Act 2001
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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 (see section 763D) between providers of
non-cash payment facilities;
(i) any other conduct of a kind prescribed by regulations made
for the purposes of this paragraph.
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Section 769A
Corporations Act 2001 59
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Division 7—General provisions relating to civil and
criminal liability
769A Part 2.5 of Criminal Code does not apply
Despite section 1308A, Part 2.5 of the Criminal Code does not
apply to any offences based on the provisions of this Chapter.
Note: For the purposes of offences based on provisions of this Chapter,
corporate criminal responsibility is dealt with by section 769B, rather
than by Part 2.5 of the Criminal Code.
769B People are generally responsible for the conduct of their
agents, employees etc.
(1) Subject to subsections (7) and (8), conduct engaged in on behalf of
a body corporate:
(a) by a director, employee or agent of the body, 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, where 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 a provision of this Chapter, or a
proceeding under this Chapter, to have been engaged in also by the
body corporate.
(2) Conduct engaged in by a person (for example, the giving of money
or property) in relation to:
(a) a director, employee or agent of a body corporate, acting
within the scope of their actual or apparent authority; or
(b) any other person acting at the direction or with the consent or
agreement (whether express or implied) of a director,
employee or agent of a body corporate, where the giving of
the direction, consent or agreement is within the scope of the
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actual or apparent authority of the director, employee or
agent;
is taken, for the purposes of a provision of this Chapter, or a
proceeding under this Chapter, to have been engaged in also in
relation to the body corporate.
(3) If, in a proceeding under this Chapter in respect of conduct
engaged in by a body corporate, it is necessary to establish the state
of mind of the body, it is sufficient to show that a director,
employee or agent of the body, 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. For
this purpose, a person acting as mentioned in paragraph (1)(b) is
taken to be an agent of the body corporate concerned.
(4) Subject to subsections (7) and (8), conduct engaged in on behalf of
a person other than a body corporate:
(a) by an employee or agent of the person, acting within the
scope of the actual or apparent authority of the employee or
agent; or
(b) by any other person acting at the direction or with the
consent or agreement (whether express or implied) of an
employee or agent of the first-mentioned person, where 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 a provision of this Chapter, or of a
proceeding under this Chapter, to have been engaged in also by the
first-mentioned person.
(5) Conduct engaged in by a person (for example, the giving of money
or property) in relation to:
(a) an employee or agent of a person (the principal) other than a
body corporate, acting within the scope of their actual or
apparent authority; or
(b) any other person acting at the direction or with the consent or
agreement (whether express or implied) of an employee or
agent of a person (the principal) other than a body corporate,
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where 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 a provision of this Chapter, or of a
proceeding under this Chapter, to have been engaged in also in
relation to the principal.
(6) If, in a proceeding under this Chapter in respect of conduct
engaged in by a person other than a body corporate, 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. For this purpose, a person acting as mentioned in
paragraph (4)(b) is taken to be an agent of the person first referred
to in subsection (4).
(7) Nothing in this section, or in any other law (including the common
law), has the effect that, for the purposes of a provision of Part 7.7
or 7.7A, or a proceeding under this Chapter that relates to a
provision of Part 7.7 or 7.7A, a financial service provided by
person in their capacity as an authorised representative of a
financial services licensee is taken, or taken also, to have been
provided by that financial services licensee.
(8) Nothing in this section, or in any other law (including the common
law), has the effect that, for the purposes of a provision of
Division 2 of Part 7.9, or a proceeding under this Chapter that
relates to a provision of Division 2 of Part 7.9, conduct engaged in
by a person in their capacity as a regulated person (within the
meaning of section 1011B) is taken, or taken also, to have been
engaged in by another such regulated person.
(8A) Nothing in this section, other than subsections (7) and (8), excludes
or limits the operation of subsection 601FB(2) in relation to the
provisions of this Chapter or to proceedings under this Chapter.
(9) The regulations may provide that this section, or a particular
provision of this section, has effect for specified purposes subject
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to modifications specified in the regulations. The regulations have
effect accordingly.
(10) In this section:
(a) a reference to a proceeding under this Chapter includes a
reference to:
(i) a prosecution for an offence based on a provision of this
Chapter; and
(ii) a proceeding under a provision of Part 9.4B that relates
to a provision of this Chapter; and
(iii) any other proceeding under any other provision of
Chapter 9 that relates to a provision of this Chapter; and
(b) a reference to conduct is a reference to an act, an omission to
perform an act, or a state of affairs; and
(c) a reference 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.
Note: For the meaning of offence based on a provision, see the definition in
section 9.
769C Representations about future matters taken to be misleading if
made without reasonable grounds
(1) For the purposes of this Chapter, or of a proceeding under this
Chapter, if:
(a) a person makes a representation with respect to any future
matter (including the doing of, or refusing to do, any act);
and
(b) the person does not have reasonable grounds for making the
representation;
the representation is taken to be misleading.
(2) Subsection (1) does not limit the circumstances in which a
representation may be misleading.
(3) In this section:
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proceeding under this Chapter has the same meaning as it has in
section 769B.
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Part 7.2 Licensing of financial markets
Division 1 Preliminary
Section 790A
64 Corporations Act 2001
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Part 7.2—Licensing of financial markets
Division 1—Preliminary
790A Definition
In this Part:
clearing and settlement arrangements, for transactions effected
through a financial market, means arrangements for the clearing
and settlement of those transactions. The arrangements may be part
of the market’s operating rules or be separate from those operating
rules.
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Division 2—Requirement to be licensed
791A Need for a licence
(1) A person must only operate, or hold out that the person operates, a
financial market in this jurisdiction if:
(a) the person has an Australian market licence that authorises
the person to operate the market in this jurisdiction; or
(b) the market is exempt from the operation of this Part.
Note 1: A market licensee may also provide financial services incidental to the
operation of the market: see paragraph 911A(2)(d).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (1)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
791B Other prohibitions on holding out
A person must not hold out:
(a) that the person has an Australian market licence; or
(b) that the operation of a financial market by the person in this
jurisdiction is authorised by an Australian market licence; or
(c) that a financial market is exempt from the operation of this
Part; or
(d) that the person is a participant in a licensed market;
if that is not the case.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
791C Exemptions by Minister
(1) The Minister may exempt a particular financial market, or a class
of financial market, from all or specified provisions of this Part. An
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exemption may be unconditional, or subject to conditions specified
in the exemption.
Note: The provisions of this Part include regulations made for the purposes
of this Part (see section 761H).
(2) The Minister may, at any time:
(a) vary an exemption to:
(i) impose conditions, or additional conditions, on the
exemption; or
(ii) vary or revoke any of the conditions on the exemption;
or
(b) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the
proposed action, to the operator of each financial market
known by the Minister to be covered by the exemption; and
(b) if the exemption covers a class of financial markets—a notice
has been published on ASIC’s website allowing a reasonable
period within which the operator of each financial market
covered by the exemption may make submissions on the
proposed action, and that period has ended.
(4) If an exemption is expressed to apply in relation to a class of
financial markets (whether or not it is also expressed to apply in
relation to one or more financial markets otherwise than by
reference to membership of a class), then the exemption, and any
variation or revocation of the exemption, is a legislative
instrument.
(5) If subsection (4) does not apply to an exemption, then the
exemption, and any variation or revocation of the exemption, must
be in writing and the Minister must publish notice of it in the
Gazette.
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Section 791D
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791D When a market is taken to be operated in this jurisdiction
(1) For the purposes of this Chapter, a financial market is taken to be
operated in this jurisdiction if it is operated by a body corporate
that is registered under Chapter 2A.
(2) Subsection (1) does not limit the circumstances in which a
financial market is operated in this jurisdiction for the purposes of
this Chapter.
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Part 7.2 Licensing of financial markets
Division 3 Regulation of market licensees
Section 792A
68 Corporations Act 2001
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Division 3—Regulation of market licensees
Subdivision A—Licensee’s obligations
792A General obligations
A market licensee must:
(a) to the extent that it is reasonably practicable to do so, do all
things necessary to ensure that the market is a fair, orderly
and transparent market; and
(b) comply with the conditions on the licence; and
(c) have adequate arrangements (which may involve the
appointment of an independent person or related entity) for
operating the market, including arrangements for:
(i) handling conflicts between the commercial interests of
the licensee and the need for the licensee to ensure that
the market operates in the way mentioned in
paragraph (a); and
(ii) monitoring and enforcing compliance with the market’s
operating rules; and
(d) have sufficient resources (including financial, technological
and human resources) to operate the market properly; and
(e) if section 881A requires there to be compensation
arrangements in relation to the market that are approved in
accordance with Division 3 of Part 7.5—ensure that there are
such approved compensation arrangements in relation to the
market; and
(f) if the licensee is a foreign body corporate—be registered
under Division 2 of Part 5B.2; and
(g) if the licence was granted under subsection 795B(2)
(overseas markets)—both:
(i) remain authorised to operate a financial market in the
foreign country in which the licensee’s principal place
of business is located; and
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(ii) get the Minister’s approval under section 792H before
that principal place of business becomes located in any
other foreign country; and
(h) if the licensee, or a holding company of the licensee, is a
widely held market body (within the meaning of Division 1
of Part 7.4)—take all reasonable steps to ensure that an
unacceptable control situation (within the meaning of that
Division) does not exist in relation to the body; and
(i) take all reasonable steps to ensure that no disqualified
individual becomes, or remains, involved in the licensee (see
Division 2 of Part 7.4).
792B Obligation to notify ASIC of certain matters
(1) A market licensee must give written notice to ASIC, as soon as
practicable, if it becomes aware that it may no longer be able to
meet, or has breached, an obligation under section 792A. If ASIC
considers it appropriate to do so, ASIC may give the Minister
advice about the matter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A market licensee must give written notice to ASIC, as soon as
practicable, as required by the following paragraphs:
(a) if the licensee provides a new class of financial service
incidental to the operation of the market, the licensee must
give notice that includes details of the new class;
(b) if the licensee takes any kind of disciplinary action against a
participant in the market, the licensee must give notice that
includes:
(i) the participant’s name; and
(ii) the reason for and nature of the action taken;
(c) if the licensee has reason to suspect that a person has
committed, is committing, or is about to commit a significant
contravention of the market’s operating rules or this Act, the
licensee must give notice that includes:
(i) the person’s name; and
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(ii) details of the contravention or impending contravention;
and
(iii) the licensee’s reasons for that belief.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) If a market licensee becomes aware of:
(a) a matter that the licensee considers has adversely affected, is
adversely affecting, or may adversely affect the ability of a
participant in the market, who is a financial services licensee,
to meet the participant’s obligations as a financial services
licensee; or
(b) a matter, concerning a participant in the market who is a
financial services licensee, that is of a kind prescribed by
regulations made for the purposes of this paragraph;
the market licensee must give a written report to ASIC on the
matter and send a copy of it to the participant.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) A market licensee whose licence was granted under
subsection 795B(2) (overseas markets) must, as soon as
practicable, give written notice to ASIC if:
(a) the licensee ceases to be authorised to operate a financial
market in the foreign country in which the licensee’s
principal place of business is located; or
(b) there is a significant change to the regulatory regime
applying in relation to the market in the foreign country in
which the licensee’s principal place of business is located.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) As soon as practicable after:
(a) a person becomes or ceases to be a director, secretary or
senior manager of a market licensee or of a holding company
of a market licensee (including when a person changes from
one of those positions to another); or
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(b) a market licensee becomes aware that a person has come to
have, or has ceased to have, more than 15% of the voting
power in the licensee or in a holding company of the
licensee;
the licensee must give written notice of this to ASIC. The notice
must include such other information about the matter as is
prescribed by regulations made for the purposes of this subsection.
Note 1: To the extent that the licensee is required to give the notice and
information under any other provision of this Act, the licensee may
comply with this subsection by doing so. It need not provide the same
information twice.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
792C Giving ASIC information about a listed disclosing entity
(1) If a market licensee makes information about a listed disclosing
entity available to participants in the market (whether or not the
licensee also makes the information available to anyone else), the
licensee must give ASIC the same information as soon as
practicable.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) However, the licensee is not required to give ASIC any
information of a kind that is excluded by the regulations.
(3) ASIC may require the information to be given in a particular form.
792D Obligation to assist ASIC
(1) A market licensee must give such assistance to ASIC, or a person
authorised by ASIC, as ASIC or the authorised person reasonably
requests in relation to the performance of ASIC’s functions.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
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Part 7.2 Licensing of financial markets
Division 3 Regulation of market licensees
Section 792E
72 Corporations Act 2001
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792E Obligation to give ASIC access to market facilities
A market licensee must give a person authorised by ASIC such
reasonable access to the market’s facilities as the person requests
for any of the purposes of this Chapter.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
792F Annual report
(1) A market licensee must, within 3 months after the end of its
financial year, give ASIC an annual report on the extent to which
the licensee complied with its obligations as a market licensee
under this Chapter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The licensee must ensure that the annual report is accompanied by
any information and statements prescribed by regulations made for
the purposes of this subsection.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The licensee must also ensure that the annual report is
accompanied by any audit report that the Minister requires under
subsection (4).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The Minister may, by giving written notice to a market licensee,
require the licensee to obtain an audit report on the annual report
and on any information or statements accompanying it. The
Minister must nominate to prepare the audit report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(5) ASIC must give the annual report and accompanying material to
the Minister.
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Corporations Act 2001 73
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792G Obligations to notify people about clearing and settlement
arrangements in certain circumstances
(1) If, in relation to a category of transactions, being all transactions or
a class of transactions effected through a licensed market, the
market licensee:
(a) does not have any clearing and settlement arrangements for
transactions in that category; or
(b) has clearing and settlement arrangements for transactions in
that category, but they are not arrangements with the operator
of a clearing and settlement facility for the clearing and
settlement of such transactions through the facility;
the market licensee must, before a person becomes a participant in
the market, give the person written advice:
(c) if paragraph (a) applies—that the licensee does not have any
clearing and settlement arrangements for transactions in that
category, and that it is the responsibility of the parties to such
transactions to make their own arrangements for the clearing
and settlement of such transactions; or
(d) if paragraph (b) applies—setting out particulars of the
clearing and settlement arrangements for transactions in that
category.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Within a reasonable time before a market licensee ceases, in
relation to a category of transactions, being all transactions or a
class of transactions effected through a licensed market, to have
clearing and settlement arrangements (the terminating
arrangements) with the operator of a particular clearing and
settlement facility for the clearing and settlement of such
transactions through the facility, the market licensee must give the
participants in the market written advice:
(a) if the terminating arrangements are not being replaced by any
other clearing and settlement arrangements—that the licensee
will no longer have clearing and settlement arrangements for
that category of transactions, and that it will be the
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74 Corporations Act 2001
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responsibility of the parties to such transactions to make their
own arrangements for the clearing and settlement of such
transactions; or
(b) if the terminating arrangements are being replaced by new
clearing and settlement arrangements—setting out particulars
of the new arrangements.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
792H Change of country by foreign licensee
(1) In the case of a licence granted under subsection 795B(2), the
Minister may approve the location of the licensee’s principal place
of business in a new country only if:
(a) the new country is not Australia; and
(b) the operation of the market in that country will be subject to
requirements and supervision that are sufficiently equivalent,
in relation to the degree of investor protection and market
integrity they achieve, to the requirements and supervision to
which financial markets are subject under this Act in relation
to those matters.
(2) If, in relation to a licence granted under subsection 795B(2), the
licensee’s principal place of business changes to become a place in
Australia:
(a) the licence ceases to be in force from the time of the change;
and
(b) if the licensee wishes the market to continue to be licensed,
the licensee may apply for the grant of a new licence under
subsection 795B(1); and
(c) the application must be assessed in accordance with
Subdivision A of Division 4, subject to such modifications (if
any) of that Subdivision as are set out in regulations made for
the purposes of this paragraph.
(3) An application referred to in paragraph (2)(b) may be made in
advance of the change of location of the principal place of
business, and a decision on the application may be made before
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that time. However, any licence granted pursuant to the application
does not come into force until the change occurs.
792I Making information about compensation arrangements
publicly available
A market licensee must take reasonable steps to ensure that
information about the compensation arrangements that are in place
under Part 7.5 is available to the public free of charge.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
Subdivision B—The market’s operating rules and procedures
793A Content of the operating rules and procedures
(1) The operating rules of a licensed market must deal with the matters
prescribed by regulations made for the purposes of this subsection.
(2) The regulations may also prescribe matters in respect of which a
licensed market must have written procedures.
(3) However, subsections (1) and (2) do not apply if the licensee is
also authorised to operate the market in the foreign country in
which its principal place of business is located and the licence was
granted under subsection 795B(2) (overseas markets).
(4) In a subsection (3) case, ASIC may determine, by giving written
notice to the licensee, matters in respect of which the licensed
market must have written procedures.
793B Legal effect of operating rules
(1) The operating rules (other than listing rules) of a licensed market
have effect as a contract under seal:
(a) between the licensee and each participant in the market; and
(b) between a participant and each other participant;
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under which each of those persons agrees to observe the operating
rules to the extent that they apply to the person and to engage in
conduct that the person is required by the operating rules to engage
in.
(2) However, if there is an inconsistency between the operating rules
of a financial market, and any of the following other rules:
(a) the market integrity rules;
(b) the derivative transaction rules;
(c) the derivative trade repository rules;
those other rules prevail over the operating rules to the extent of
the inconsistency.
Note 1: If there is an inconsistency between the market integrity rules and the
derivative transaction rules or the derivative trade repository rules, the
market integrity rules prevail: see subsection 798H(3).
Note 2: If there is an inconsistency between the derivative transaction rules
and the derivative trade repository rules, the derivative transaction
rules prevail: see subsection 901E(2).
(3) Subsection (2) does not apply in relation to a financial market the
operator of which is licensed under subsection 795B(2) (overseas
markets).
793C Enforcement of operating rules
(1) If a person who is under an obligation to comply with or enforce
any of a licensed market’s operating rules fails to meet that
obligation, an application to the Court may be made by:
(a) ASIC; or
(b) the licensee; or
(c) the operator of a clearing and settlement facility with which
the licensee has clearing and settlement arrangements; or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an
order giving directions to:
(a) the person against whom the order is sought; or
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(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
(3) For the purposes of this section, a body corporate that is, with its
acquiescence, included in the official list of a licensed market, or
an associate of such a body corporate, is taken to be under an
obligation to comply with the operating rules of that market to the
extent to which those rules purport to apply to the body corporate
or associate.
(4) For the purposes of this section, if a disclosing entity that is an
undertaking to which interests in a registered scheme relate is, with
the responsible entity’s acquiescence, included in the official list of
a licensed market, the responsible entity, or an associate of the
responsible entity, is taken to be under an obligation to comply
with the operating rules of that market to the extent to which those
rules purport to apply to the responsible entity or associate.
(5) For the purposes of this section, if a body corporate fails to comply
with or enforce provisions of the operating rules of a licensed
market, a person who holds financial products of the body
corporate that are able to be traded on the market is taken to be a
person aggrieved by the failure.
(6) There may be other circumstances in which a person may be
aggrieved by a failure for the purposes of this section.
793D Changing the operating rules
Licensed markets other than subsection 795B(2) markets
(1) As soon as practicable after a change is made to the operating rules
of a licensed market, other than a market licensed under
subsection 795B(2) (overseas markets), the licensee must lodge
with ASIC written notice of the change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
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Section 793E
78 Corporations Act 2001
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(2) If no notice is lodged as required by subsection (1) with ASIC
within 21 days after the change is made, the change ceases to have
effect at the end of that period.
Subsection 795B(2) markets
(3) As soon as practicable after a change is made to the operating rules
of a market the operation of which is licensed under
subsection 795B(2) (overseas markets), the licensee must lodge
with ASIC written notice of the change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
793E Disallowance of changes to operating rules
(1) This section does not apply in respect of an Australian market
licence granted under subsection 795B(2) (overseas markets).
(2) As soon as practicable after receiving a notice under section 793D
from a market licensee, ASIC must send a copy of the notice to the
Minister.
(3) Within 28 days after ASIC receives the notice from the licensee,
the Minister may disallow all or a specified part of the change to
the operating rules.
(4) In deciding whether to do so, the Minister must have regard to the
consistency of the change with the licensee’s obligations under this
Part (including in particular the obligation mentioned in
paragraph 792A(a)).
Note: The Minister must also have regard to the matters in section 798A.
(5) As soon as practicable after all or a part of a change is disallowed,
ASIC must give notice of the disallowance to the licensee. The
change ceases to have effect, to the extent of the disallowance,
when the licensee receives the notice.
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Subdivision C—Powers of the Minister and ASIC
794A Minister’s power to give directions
(1) If the Minister considers that a market licensee is not complying
with its obligations as a market licensee under this Chapter, the
Minister may give the licensee a written direction to do specified
things that the Minister believes will promote compliance by the
licensee with those obligations.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
794B Minister’s power to require special report
(1) The Minister may give a market licensee a written notice requiring
the licensee to give ASIC a special report on specified matters.
ASIC must give the report to the Minister.
(2) The notice may also require the licensee to give ASIC an audit
report on the special report. The Minister must nominate to prepare
the audit report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(3) The licensee must give the special report, and audit report (if any),
to ASIC within the time required by the notice.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 3 Regulation of market licensees
Section 794C
80 Corporations Act 2001
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794C ASIC assessment of licensee’s compliance
(1) ASIC may do an assessment of how well a market licensee is
complying with any or all of its obligations as a market licensee
under this Chapter. In doing the assessment, ASIC may take
account of any information and reports that it thinks appropriate,
including information and reports from an overseas regulatory
authority.
(2) If the market licensee is prescribed by the regulations for the
purpose of this subsection, ASIC must, in respect of the obligation
in paragraph 792A(c), do such an assessment at least once a year.
(3) As soon as practicable after doing an assessment under this section,
ASIC must give a written report on the assessment to the licensee
and to the Minister.
(4) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, ASIC may, at the person’s
request or of its own motion, give the person a copy of the written
report on the assessment or the relevant part of the report.
(5) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or
Territory, ASIC may give a copy of the written report on the
assessment, or the relevant part of the report, to:
(a) the Australian Federal Police; or
(b) the Chief Executive Officer of the Australian Crime
Commission or a member of the staff of the ACC (within the
meaning of the Australian Crime Commission Act 2002); or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of
this paragraph.
(6) Either the Minister or ASIC may cause the written report on an
assessment, or part of the report on an assessment, to be printed
and published.
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Corporations Act 2001 81
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794D ASIC’s power to give directions
(1) If ASIC is of the opinion that it is necessary, or in the public
interest, to protect people dealing in a financial product or class of
financial products by:
(a) giving a direction to a market licensee to suspend dealings in
the financial product or class of financial products; or
(b) giving some other direction in relation to those dealings;
ASIC may give written advice to the licensee of that opinion and
the reasons for it.
Example: Under paragraph (b), ASIC could give a direction to limit the kinds of
dealings that are allowed in the financial product or class of financial
products or to require a participant in the market to act in a specified
manner in relation to dealings in the financial product or class of
financial products.
(2) If, after receiving ASIC’s advice and reasons, the licensee does not
take:
(a) in the case of a proposed direction to suspend dealings in the
financial products—action to prevent such dealings; or
(b) in any other case—such other action as in ASIC’s view is
adequate to address the situation raised in the advice;
and ASIC still considers that it is appropriate to give the direction
to the licensee, ASIC may give the licensee the written direction
with a statement setting out its reasons for making the direction.
(3) The direction has effect for the period specified in it (which may be
up to 21 days). During that period, the licensee must comply with
the direction and must not allow any dealings to take place
contrary to it.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(5) As soon as practicable after making or varying (see subsection (7))
a direction, ASIC must:
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(a) give a copy of the direction or variation to the operator of
each clearing and settlement facility with which the market
licensee has clearing and settlement arrangements for
transactions effected through the market; and
(b) give a written report to the Minister setting out ASIC’s
reasons for making the direction or variation; and
(c) give a copy of the report to the licensee.
(6) If, at any time after the licensee receives ASIC’s advice under
subsection (1), the licensee requests in writing that ASIC refer the
matter to the Minister, ASIC must do so immediately. In that event,
the Minister may, if he or she considers it appropriate, require
ASIC not to make, or to revoke, the direction. ASIC must
immediately comply with such a requirement.
(7) ASIC may vary a direction by giving written notice to the licensee
if ASIC is of the opinion that the variation is necessary, or in the
public interest, to protect people dealing in a financial product or
class of financial products.
(8) ASIC may revoke a direction by giving written notice to the
licensee. ASIC must also give written notice of the revocation to
the operator of each clearing and settlement facility with which the
market licensee has clearing and settlement arrangements for
transactions effected through the market.
794E Additional directions to clearing and settlement facilities
(1) If ASIC gives a direction under section 794D, it may also give a
written direction to the operator of each clearing and settlement
facility with which the market licensee has clearing and settlement
arrangements for transactions effected through the market:
(a) prohibiting the operator from acting in a manner inconsistent
with the section 794D direction; and
(b) requiring the operator to do all that the operator is reasonably
capable of doing to give effect to the section 794D direction.
(2) The operator must comply with the direction given to it under this
section.
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Corporations Act 2001 83
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) If the operator fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the
operator comply with the direction.
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Part 7.2 Licensing of financial markets
Division 4 The Australian market licence
Section 795A
84 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—The Australian market licence
Subdivision A—How to get a licence
795A How to apply for a licence
(1) A body corporate may apply for an Australian market licence by
lodging with ASIC an application that:
(a) includes the information required by regulations made for the
purposes of this paragraph; and
(b) is accompanied by the documents (if any) required by
regulations made for the purposes of this paragraph; and
(c) complies with the requirements of section 881B (relating to
compensation arrangements).
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must, within a reasonable time, give the application to the
Minister with advice about the application.
795B When a licence may be granted
General
(1) The Minister may grant an applicant an Australian market licence
if the Minister is satisfied that:
(a) the application was made in accordance with section 795A;
and
(b) the applicant will comply with the obligations that will apply
if the licence is granted; and
(c) the applicant has adequate operating rules, and procedures,
(see Subdivision B of Division 3) to ensure, as far as is
reasonably practicable, that the market will operate as
mentioned in paragraph 792A(a); and
(d) the applicant has adequate arrangements (which may involve
the appointment of an independent person or related entity)
for operating the market, including arrangements for:
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(i) handling conflicts between the commercial interests of
the licensee and the need for the licensee to ensure that
the market operates in the way mentioned in
paragraph 792A(a); and
(ii) monitoring and enforcing compliance with the market’s
operating rules; and
(e) the applicant has adequate clearing and settlement
arrangements for transactions effected through the market, if
the Minister considers that the applicant should have such
arrangements; and
(f) neither subsection 881D(2) nor 882A(2) (relating to
compensation arrangements) requires the Minister to reject
the application; and
(g) no unacceptable control situation (see Division 1 of Part 7.4)
is likely to result if the licence is granted; and
(h) no disqualified individual appears to be involved in the
applicant (see Division 2 of Part 7.4).
This subsection has effect subject to subsections (3) and (4).
Note: The Minister must also have regard to the matters in section 798A in
deciding whether to grant a licence.
Alternative criteria for granting licence for overseas market
(2) If an applicant is authorised to operate a financial market in the
foreign country in which its principal place of business is located,
the Minister may grant the applicant an Australian market licence
authorising the applicant to operate the same market in this
jurisdiction. The Minister must be satisfied that:
(a) the application was made in accordance with section 795A;
and
(b) the applicant will comply with the obligations that will apply
if the licence is granted; and
(c) the operation of the market in that country is subject to
requirements and supervision that are sufficiently equivalent,
in relation to the degree of investor protection and market
integrity they achieve, to the requirements and supervision to
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which financial markets are subject under this Act in relation
to those matters; and
(d) the applicant undertakes to cooperate with ASIC by sharing
information and in other appropriate ways; and
(e) no unacceptable control situation (see Division 1 of Part 7.4)
is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the
applicant (see Division 2 of Part 7.4); and
(g) any other requirements that are prescribed by regulations
made for the purposes of this paragraph are satisfied.
This subsection has effect subject to subsections (3) and (4).
Note: The Minister must also have regard to the matters in section 798A in
deciding whether to grant a licence.
Foreign bodies
(3) If the applicant is a foreign body corporate, the Minister:
(a) must not grant the applicant a licence unless the applicant is
registered under Division 2 of Part 5B.2; and
(b) may otherwise grant a licence under either subsection (1) or
(2) (if the relevant criteria are satisfied).
Disqualified individuals
(4) The Minister must not grant the applicant a licence unless:
(a) ASIC has notified the Minister that, as far as ASIC is aware,
no disqualified individual is involved in the applicant (see
Division 2 of Part 7.4); or
(b) 42 days have passed since the application was made and
ASIC has not given a notice under subsection 853D(2) to the
applicant within that 42 days.
795C Publication of notice of licence grant
If the Minister grants an Australian market licence, the Minister
must publish a notice in the Gazette stating:
(a) the name of the licensee; and
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(b) when the licence was granted; and
(c) the conditions on the licence.
795D More than one licence in the same document
If the Minister grants a person 2 or more of the following:
(a) an Australian market licence;
(b) an Australian CS facility licence;
they may be included in the same document.
795E More than one market covered by the same licence
(1) The same Australian market licence may authorise the licensee to
operate 2 or more financial markets.
(2) In that case, a reference in this Chapter to the market to which an
Australian market licence relates is taken instead to be a reference
to each of those financial markets severally.
(3) Before varying the conditions on an Australian market licence so
as to add another market that the licensee is authorised to operate,
the Minister must be satisfied of the matters listed in
subsection 795B(1) or (2) (as appropriate) in relation to the market.
(4) An Australian market licence that authorises the licensee to operate
2 or more financial markets may be suspended or cancelled under
Subdivision C in respect of one or some of those markets only, as
if the licensee held a separate licence for each of the markets.
Subdivision B—The conditions on the licence
796A The conditions on the licence
(1) The Minister may, at any time:
(a) impose conditions, or additional conditions, on an Australian
market licence; or
(b) vary or revoke conditions imposed on such a licence;
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by giving written notice to the licensee. The Minister must also
publish a notice in the Gazette with details of the action and when
it took effect.
Note: As well as the requirements in this section, the Minister must also
have regard to the matters in section 798A.
(2) The Minister may do so:
(a) on his or her own initiative, subject to subsection (3); or
(b) if the licensee lodges with ASIC an application for the
Minister to do so, which is accompanied by the prescribed
documents, if any.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) The Minister may only impose conditions or additional conditions,
or vary the conditions, on the licence on his or her own initiative if:
(a) he or she considers it appropriate to do so having regard to:
(i) the licensee’s obligations as a market licensee under this
Chapter; and
(ii) any change in market operations or the conditions in
which the market is operating; and
(b) the Minister gives the licensee written notice of the proposed
action and an opportunity to make a submission before it
takes effect.
This subsection does not apply to the Minister imposing conditions
when a licence is granted.
(4) The Minister must ensure that each Australian market licence is
subject to conditions that specify:
(a) the particular market that the licensee is authorised to
operate; and
(b) the class or classes of financial products that can be dealt
with on the market; and
(c) if the Minister considers that the licensee should have
clearing and settlement arrangements for transactions
effected through the market—the type of clearing and
settlement arrangements that are adequate.
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Note: If compensation arrangements in relation to the market are approved
under Division 3 of Part 7.5, there must also be conditions as required
by subsection 882A(4) or paragraph 882B(4)(b).
(6) ASIC must give the Minister any application and documents
lodged under subsection (2).
Subdivision C—When a licence can be varied, suspended or
cancelled
797A Varying licences
(1) The Minister may vary an Australian market licence to take
account of a change in the licensee’s name if the licensee lodges
with ASIC an application for the variation, accompanied by the
prescribed documents, if any.
Note 1: The conditions on the licence can be varied under section 796A.
Note 2: For fees in respect of lodging applications, see Part 9.10.
(2) The Minister must give written notice of the variation to the
licensee.
(3) ASIC must give the Minister any application and documents
lodged under subsection (1).
797B Immediate suspension or cancellation
The Minister may, by giving written notice to a market licensee,
suspend the licence for a specified period, or cancel it, if:
(a) the licensee ceases to carry on the business of operating the
market; or
(b) the licensee becomes a Chapter 5 body corporate; or
(c) the licensee asks the Minister to do so; or
(d) in the case of a licence granted under subsection 795B(2)
(overseas markets):
(i) the licensee ceases to be authorised to operate a
financial market in the foreign country in which the
licensee’s principal place of business is located; or
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(ii) there is a change to the regulatory regime applying in
relation to the market to which the licence relates in the
country in which the licensee’s principal place of
business is located, and, because of that change, the
Minister is no longer satisfied as mentioned in
paragraph 795B(2)(c); or
(e) in the case of a licensee that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
licensee;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
797C Suspension or cancellation following hearing and report
(1) If the Minister considers that a market licensee has breached, or is
in breach of, one or more of its obligations as a market licensee
under this Chapter, the Minister may give the licensee a written
notice that requires the licensee to show cause, at a hearing before
a specified person, why the licence should not be suspended or
cancelled.
(2) The notice must specify:
(a) the grounds on which it is proposed to suspend or cancel the
licence; and
(b) a reasonable time and place at which the hearing is to be
held.
However, if the licensee consents, the person conducting the
hearing may fix a different time or place.
(3) The person conducting the hearing must:
(a) give the licensee an opportunity to be heard at the hearing;
and
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(b) give the Minister:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on
which it is proposed to suspend or cancel the licence.
(4) After considering the report and recommendation, the Minister
may:
(a) decide to take no further action in relation to the matter and
give written advice of that decision to the licensee; or
(b) suspend the licence for a specified period, or cancel the
licence, by giving written notice to the licensee.
Note: The Minister must also have regard to the matters in section 798A.
797D Effect of suspension
(1) A person whose Australian market licence is suspended is taken
not to hold that licence while it is suspended.
(2) However, the Minister may specify in the written notice to the
licensee that subsection (1) does not apply for specified purposes.
797E Variation or revocation of suspension
The Minister may at any time vary or revoke a suspension of an
Australian market licence by giving written notice to the licensee.
797F Publication of notice of licence suspension or cancellation
(1) If the Minister:
(a) suspends, or varies or revokes a suspension of, an Australian
market licence; or
(b) cancels an Australian market licence;
the Minister must publish a notice in the Gazette to that effect.
(2) The notice must state when the action took effect.
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797G Suspension and cancellation only in accordance with this
Subdivision
An Australian market licence cannot be varied, suspended or
cancelled otherwise than in accordance with this Subdivision.
Note: The conditions on the licence can be varied under section 796A.
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Division 5—Other matters
798A Matters to be taken into account by the Minister
(1) The Minister must have regard to certain matters in deciding
whether to:
(a) grant an applicant an Australian market licence under
section 795B; or
(b) impose, vary or revoke conditions on such a licence under
section 796A; or
(c) suspend or cancel such a licence under section 797C; or
(d) disallow a change to the operating rules of a licensed market
under section 793E.
(2) These are the matters the Minister must have regard to:
(a) the structure, or proposed structure, of the market;
(b) the nature of the activities conducted, or proposed to be
conducted, on the market;
(c) the size, or proposed size, of the market;
(d) the nature of the financial products dealt with, or proposed to
be dealt with, on the market;
(e) the participants, or proposed participants, in the market and:
(i) whether those participants, in effecting transactions
through the market, are, or will be, providing financial
services to other persons; and
(ii) whether those participants acquire or dispose, or will
acquire or dispose, of financial products through the
market as retail clients or as wholesale clients; and
(iii) whether those participants are also, or will also be,
participants in any other financial markets;
(f) the technology used, or proposed to be used, in the operation
of the market;
(g) whether it would be in the public interest to take the action
referred to in subsection (1);
(h) any relevant advice received from ASIC.
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The Minister may also have regard to any other matter that the
Minister considers relevant.
(3) If the Minister is deciding whether to take the action referred to in
paragraph (1)(a), (b) or (c) in respect of an Australian market
licence granted under subsection 795B(2) (overseas markets), the
Minister must also have regard to:
(a) the criteria that the licensee or applicant satisfied to obtain an
authorisation to operate the same market in the foreign
country in which their principal place of business is located;
and
(b) the obligations they must continue to satisfy to keep the
authorisation; and
(c) the level of supervision to which the operation of the market
in that country is subject; and
(d) whether adequate arrangements exist for cooperation
between ASIC and the authority that is responsible for that
supervision.
798B ASIC may give advice to Minister
ASIC may give advice to the Minister in relation to:
(a) any matter in respect of which the Minister has a discretion
under this Part; or
(b) any other matter concerning financial markets.
Note: In some cases, the Minister must have regard to ASIC’s advice: see
paragraph 798A(2)(h).
798C Market licensee or related body corporate etc. listing on
market
(1) Any of the following kinds of entity or scheme (the listed entity)
may be included in a market’s official list:
(a) the market licensee for the market;
(b) a related body corporate of the market licensee;
(c) a managed investment scheme whose responsible entity is a
related body corporate of the market licensee;
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(d) a trust whose trustee is a related body corporate of the market
licensee.
Note: There are certain matters that must be included in the market’s listing
rules before such an entity or scheme is included in the official list
(see subsection (4)).
(2) In such a case, the financial products of the listed entity may be
traded on the market, if either or both the listed entity and the
market licensee have entered into such arrangements as ASIC
requires:
(a) for dealing with possible conflicts of interest that might arise
from the listed entity’s financial products being able to be
traded on the market; and
(b) for the purposes of ensuring the integrity of trading in the
listed entity’s financial products.
Note: For fees in respect of ASIC performing functions under such
arrangements, see Part 9.10.
(3) The listed entity, and the market licensee (if applicable), with
whom ASIC has entered into arrangements for the purposes of
subsection (2) must comply with the arrangements.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) Before, and at all times while, the listed entity is included in the
market’s official list, the market’s listing rules must provide for
ASIC, instead of the market licensee, to make decisions and to take
action (or to require the market licensee to take action on ASIC’s
behalf) in relation to these matters, and matters related to these
matters:
(a) the admission of the listed entity to the market’s official list;
and
(b) the removal of the listed entity from that list; and
(c) allowing, stopping or suspending the trading on the market of
the listed entity’s financial products.
Note: For fees in respect of ASIC performing this function, see Part 9.10.
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(5) ASIC has the powers and functions that are provided for it in any
listing rules or arrangements made for the purposes of this section.
(6) The products of an entity or scheme referred to in subsection (1)
must not be traded on the market licensee’s market otherwise than
as allowed by this section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) This section does not apply if the licence of the market licensee
was granted under subsection 795B(2) (overseas markets). Instead,
the law of the country in which the market licensee’s principal
place of business is located applies for all purposes connected with
the inclusion of the listed entity in the market’s official list.
798D Exemptions and modifications for self-listing licensees or
related bodies corporate etc.
(1) ASIC may:
(a) exempt an entity or scheme referred to in subsection 798C(1)
whose financial products are able to be traded on the market
from a modifiable provision (see subsection (7)); or
(b) declare that a modifiable provision applies to an entity or
scheme referred to in subsection 798C(1) whose financial
products are able to be traded on the market as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(3) An exemption may apply unconditionally or subject to specified
conditions.
(4) If an exemption is granted subject to specified conditions, the
entity or scheme must comply with those conditions.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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(5) If an exemption is granted subject to specified conditions, the
Court may, on ASIC’s application, order the entity or scheme to
comply with one or more of those conditions in a specified way.
(6) If conduct (including an omission) of a person would not have
constituted an offence if:
(a) a particular condition had not been imposed on an exemption
under paragraph (1)(a); or
(b) a particular declaration under paragraph (1)(b) had not been
made;
that conduct does not constitute an offence unless, before the
conduct occurred (in addition to complying with the gazettal
requirement of subsection (2)), ASIC gave written notice setting
out the text of the condition or the declaration to the person. In a
prosecution for an offence to which this subsection applies, the
prosecution must prove that this additional notification requirement
was complied with before the conduct occurred.
(7) In this section:
modifiable provision means:
(a) section 205G and any of the provisions of Chapter 6, 6A, 6B,
6C, 6CA or 7; or
(b) regulations made for the purposes of that section or any of
those provisions.
798DA Market licensee, related body corporate etc. or competitor
participating in market
(1) This section applies if any of the following is a participant (the
participant) in a market:
(a) the market licensee;
(b) a related body corporate of the market licensee;
(c) a partnership if a partner in the partnership is a related entity
of the market licensee;
(d) an entity if:
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(i) the entity conducts, or participates in, a business that is
in competition with a business conducted by the market
licensee, or by a related body corporate of the market
licensee; and
(ii) the entity requests that ASIC make decisions and take
action in relation to the matters referred to in
subsection (2).
(2) Before, and at all times while, the participant is participating in the
market, the market’s operating rules must provide for ASIC,
instead of the market licensee, to make decisions and to take action
(or to require the market licensee to take action on ASIC’s behalf)
in relation to these matters, and matters related to these matters:
(a) the admission of the participant to the market; and
(b) the expulsion and suspension of the participant from the
market; and
(c) the disciplining of the participant; and
(d) the participant’s compliance with the operating rules or this
Act, including:
(i) the method of determining whether the participant has
complied with those rules or this Act; and
(ii) any action (including the imposition of a fine or
penalty) to be taken in respect of contraventions of
those rules or this Act.
Note: For fees in respect of ASIC performing this function, see Part 9.10.
(3) ASIC has the powers and functions that are provided for it in any
operating rules made for the purposes of this section.
(4) A participant referred to in subsection (1) must not participate in
the market licensee’s market otherwise than as allowed by this
section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) This section does not apply if the licence of the market licensee
was granted under subsection 795B(2) (overseas markets). Instead,
the law of the country in which the market licensee’s principal
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place of business is located applies for all purposes connected with
the participation of the participant in the market.
(6) To avoid doubt, subsection (1) does not authorise a market licensee
to participate in its own market.
798E Other potential conflict situations
(1) The regulations may make provision in relation to the rules and
procedures that are to apply in the case of conflicts, or potential
conflicts, between the commercial interests of the licensee and the
need for the licensee to ensure that the market operates in the way
mentioned in paragraph 792A(a).
(2) In particular, such regulations may deal with the following:
(a) identifying when such a conflict, or potential conflict, is
taken to arise;
(b) empowering ASIC, instead of the licensee, to make decisions
and to take action under the market’s operating rules in
relation to such a conflict or potential conflict;
(c) empowering ASIC to require the licensee to take action
under the market’s operating rules (whether or not on ASIC’s
behalf) in relation to such a conflict or potential conflict.
Note: For fees in respect of ASIC performing this function, see Part 9.10.
(3) Subsection (2) does not limit the generality of subsection (1).
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798F ASIC to supervise financial markets
ASIC has the function of supervising financial markets the
operators of which are licensed under subsection 795B(1).
798G Market integrity rules
(1) ASIC may, by legislative instrument, make rules (the market
integrity rules) that deal with the following:
(a) the activities or conduct of licensed markets;
(b) the activities or conduct of persons in relation to licensed
markets;
(c) the activities or conduct of persons in relation to financial
products traded on licensed markets.
Note: The market integrity rules will not apply in relation to all licensed
markets: see subsection 798H(2).
(2) The market integrity rules may include a penalty amount for a rule.
A penalty amount must not exceed $1,000,000.
(3) ASIC must not make a market integrity rule unless the Minister has
consented, in writing, to the making of the rule.
Emergency rules
(4) Despite subsection (3), ASIC may make a market integrity rule
without the consent of the Minister if ASIC is of the opinion that it
is necessary, or in the public interest, to protect people dealing in a
financial product or class of financial products.
(5) However, if ASIC does so, ASIC must:
(a) provide the Minister, on the following day, with a written
explanation of the need for the rule; and
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(b) amend or revoke the rule in accordance with any written
directions of the Minister.
Minister’s instruments are not legislative instruments
(6) None of the following is a legislative instrument:
(a) a consent given under subsection (3);
(b) a direction given under paragraph (5)(b).
798H Complying with market integrity rules
(1) The following entities must comply with the market integrity rules:
(a) operators of licensed markets;
(b) participants in licensed markets;
(c) entities prescribed by the regulations for the purposes of this
paragraph.
Note: This subsection is a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this subsection, see
section 1317S.
(2) Subsection (1) does not apply in relation to a financial market the
operator of which is licensed under subsection 795B(2) (overseas
markets).
(3) If there is an inconsistency between the market integrity rules and
the derivative transaction rules or the derivative trade repository
rules, the market integrity rules prevail to the extent of the
inconsistency.
798J Directions by ASIC
(1) If ASIC is of the opinion that it is necessary, or in the public
interest, to protect people dealing in a financial product or class of
financial products by:
(a) giving a direction to an entity to suspend dealings in the
financial product or class of financial products; or
(b) giving some other direction in relation to those dealings;
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ASIC may give written advice to the entity of that opinion and the
reasons for it.
Note: ASIC may also give directions to entities that are market licensees
under section 794D. A failure to comply with a direction under that
section is an offence (see subsection 1311(1)).
(2) If, after receiving ASIC’s advice and reasons, the entity does not
take:
(a) in the case of a proposed direction to suspend dealings in the
financial products—action to prevent such dealings; or
(b) in any other case—such other action as in ASIC’s view is
adequate to address the situation raised in the advice;
and ASIC still considers that it is appropriate to give the direction
to the entity, ASIC may give the entity the written direction with a
statement setting out its reasons for making the direction.
(3) The direction has effect for the period specified in it (which may be
up to 21 days). During that period, the entity must comply with the
direction and must not allow any dealings to take place contrary to
it.
(4) If the entity fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the entity
comply with the direction.
(5) If, at any time after the entity receives ASIC’s advice under
subsection (1), the entity requests in writing that ASIC refer the
matter to the Minister, ASIC must do so immediately. In that event,
the Minister may, if he or she considers it appropriate, require
ASIC not to make, or to revoke, the direction. ASIC must
immediately comply with such a requirement.
(6) ASIC may vary a direction by giving written notice to the entity if
ASIC is of the opinion that the variation is necessary, or in the
public interest, to protect people dealing in a financial product or
class of financial products.
(7) ASIC may revoke a direction by giving written notice to the entity.
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(8) A direction given under subsection (2) is not a legislative
instrument.
798K Alternatives to civil proceedings
(1) The regulations may provide for a person who is alleged to have
contravened subsection 798H(1) (complying with market integrity
rules) to do one or more of the following as an alternative to civil
proceedings:
(a) pay a penalty to the Commonwealth;
(b) undertake or institute remedial measures (including education
programs);
(c) accept sanctions other than the payment of a penalty to the
Commonwealth;
(d) enter into a legally enforceable undertaking.
(2) The penalty payable under regulations made under paragraph (1)(a)
in relation to a market integrity rule must not exceed three-fifths of
the penalty amount set out in the market integrity rules for the rule.
(3) Without limiting regulations that may be made under
paragraph (1)(d), those regulations may provide for one or more of
the following kinds of undertakings:
(a) an undertaking to take specified action within a specified
period;
(b) an undertaking to refrain from taking specified action;
(c) an undertaking to pay a specified amount within a specified
period to the Commonwealth or to some other specified
person.
798L Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial market or class of financial markets from
all or specified provisions of this Part; or
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(c) provide that this Part applies in relation to a person or a
financial market, or a class of persons or financial markets, as
if specified provisions were omitted, modified or varied as
specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include
definitions in this Act, or in the regulations, as they apply to
references in this Part.
798M Exemptions by Minister
(1) The Minister may exempt a particular financial market, or class of
financial markets, from all or specified provisions of this Part. An
exemption may be unconditional, or subject to conditions specified
in the exemption.
Note: The provisions of this Part include regulations made for the purposes
of this Part (see section 761H).
(2) The Minister may, at any time:
(a) vary an exemption to:
(i) impose conditions, or additional conditions, on the
exemption; or
(ii) vary or revoke any of the conditions on the exemption;
or
(b) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the
proposed action, to the operator of each financial market
known by the Minister to be covered by the exemption; and
(b) if the exemption covers a class of financial markets—a notice
has been published on ASIC’s website allowing a reasonable
period within which the operator of each financial market
covered by the exemption may make submissions on the
proposed action, and that period has ended.
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(4) If an exemption is expressed to apply in relation to a class of
financial markets (whether or not it is also expressed to apply in
relation to one or more financial markets otherwise than by
reference to membership of a class), then the exemption, and any
variation or revocation of the exemption, is a legislative
instrument.
(5) If subsection (4) does not apply to an exemption, then the
exemption, and any variation or revocation of the exemption, must
be in writing and the Minister must publish notice of it in the
Gazette.
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Chapter 7 Financial services and markets
Part 7.3 Licensing of clearing and settlement facilities
Division 1 Requirement to be licensed
Section 820A
106 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.3—Licensing of clearing and settlement
facilities
Division 1—Requirement to be licensed
820A Need for a licence
(1) A person must only operate, or hold out that the person operates, a
clearing and settlement facility in this jurisdiction if:
(a) the person has an Australian CS facility licence that
authorises the person to operate the facility in this
jurisdiction; or
(b) the facility is exempt from the operation of this Part.
Note 1: A CS facility licensee may also provide financial services incidental to
the operation of the facility: see paragraph 911A(2)(d).
Note 2: Failure to comply with this subsection is an offence: see
subsection 1311(1).
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (1)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
820B Other prohibitions on holding out
A person must not hold out:
(a) that the person has an Australian CS facility licence; or
(b) that the operation of a clearing and settlement facility by the
person in this jurisdiction is authorised by an Australian CS
facility licence; or
(c) that a clearing and settlement facility is exempt from the
operation of this Part;
if that is not the case.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 820C
Corporations Act 2001 107
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820C Exemptions by Minister
(1) The Minister may exempt a particular clearing and settlement
facility, or class of clearing and settlement facilities, from all or
specified provisions of this Part. An exemption may be
unconditional, or subject to conditions specified in the exemption.
Note: The provisions of this Part include regulations made for the purposes
of this Part (see section 761H).
(2) The Minister may, at any time:
(a) vary an exemption to:
(i) impose conditions, or additional conditions, on the
exemption; or
(ii) vary or revoke any of the conditions on the exemption;
or
(b) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the
proposed action, to the operator of each clearing and
settlement facility known by the Minister to be covered by
the exemption; and
(b) if the exemption covers a class of clearing and settlement
facilities—a notice has been published on ASIC’s website
allowing a reasonable period within which the operator of
each clearing and settlement facility covered by the
exemption may make submissions on the proposed action,
and that period has ended.
(4) If an exemption is expressed to apply in relation to a class of
clearing and settlement facilities (whether or not it is also
expressed to apply in relation to one or more clearing and
settlement facilities otherwise than by reference to membership of
a class), then the exemption, and any variation or revocation of the
exemption, is a legislative instrument.
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Division 1 Requirement to be licensed
Section 820D
108 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) If subsection (4) does not apply to an exemption, then the
exemption, and any variation or revocation of the exemption, must
be in writing and the Minister must publish notice of it in the
Gazette.
820D When a clearing and settlement facility is taken to be operated
in this jurisdiction
(1) For the purposes of this Chapter, a clearing and settlement facility
is taken to be operated in this jurisdiction if it is operated by a
body corporate that is registered under Chapter 2A.
(2) Subsection (1) does not limit the circumstances in which a clearing
and settlement facility is operated in this jurisdiction for the
purposes of this Chapter.
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Regulation of CS facility licensees Division 2
Section 821A
Corporations Act 2001 109
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Division 2—Regulation of CS facility licensees
Subdivision A—Licensee’s obligations
821A General obligations
A CS facility licensee must:
(aa) to the extent that it is reasonably practicable to do so:
(i) comply with standards determined under section 827D;
and
(ii) do all other things necessary to reduce systemic risk;
and
(a) to the extent that it is reasonably practicable to do so, do all
things necessary to ensure that the facility’s services are
provided in a fair and effective way; and
(b) comply with the conditions on the licence; and
(c) have adequate arrangements (whether they involve a
self-regulatory structure or the appointment of an
independent person or related entity) for supervising the
facility, including arrangements for:
(i) handling conflicts between the commercial interests of
the licensee and the need for the licensee to ensure that
the facility’s services are provided in a fair and effective
way; and
(ii) enforcing compliance with the facility’s operating rules;
and
(d) have sufficient resources (including financial, technological
and human resources) to operate the facility properly and for
the required supervisory arrangements to be provided; and
(e) if the licensee is a foreign body corporate—be registered
under Division 2 of Part 5B.2; and
(f) if the licence was granted under subsection 824B(2)
(overseas clearing and settlement facilities)—both:
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110 Corporations Act 2001
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(i) remain authorised to operate a clearing and settlement
facility in the foreign country in which the licensee’s
principal place of business is located; and
(ii) get the Minister’s approval under section 821F before
that principal place of business becomes located in any
other foreign country; and
(g) if the licensee, or a holding company of the licensee, is a
widely held market body (within the meaning of Division 1
of Part 7.4)—take all reasonable steps to ensure that an
unacceptable control situation (within the meaning of that
Division) does not exist in relation to the body; and
(h) take all reasonable steps to ensure that no disqualified
individual becomes, or remains, involved in the licensee (see
Division 2 of Part 7.4).
821B Obligation to notify ASIC of certain matters
(1) A CS facility licensee must give written notice to ASIC, as soon as
practicable, if it becomes aware that it may no longer be able to
meet, or has breached, an obligation under section 821A. If ASIC
considers it appropriate to do so, ASIC may give the Minister
advice about the matter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A CS facility licensee must give written notice to ASIC, as soon as
practicable, as required by the following paragraphs:
(a) if the licensee provides a new class of financial service
incidental to the operation of the facility, the licensee must
give notice that includes details of the new class;
(b) if the licensee takes any kind of disciplinary action against a
participant in the facility, the licensee must give notice that
includes:
(i) the participant’s name; and
(ii) the reason for and nature of the action taken;
(c) if the licensee has reason to suspect that a person has
committed, is committing, or is about to commit a significant
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Section 821B
Corporations Act 2001 111
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contravention of the facility’s operating rules or this Act, the
licensee must give notice that includes:
(i) the person’s name; and
(ii) details of the contravention or impending contravention;
and
(iii) the licensee’s reasons for that belief.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A CS facility licensee whose licence was granted under
subsection 824B(2) (overseas clearing and settlement facilities)
must, as soon as practicable, give written notice to ASIC if:
(a) the licensee ceases to be authorised to operate a clearing and
settlement facility in the foreign country in which the
licensee’s principal place of business is located; or
(b) there is a significant change to the regulatory regime
applying in relation to the facility in the foreign country in
which the licensee’s principal place of business is located.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) As soon as practicable after:
(a) a person becomes or ceases to be a director, secretary or
senior manager of a CS facility licensee or of a holding
company of a CS facility licensee (including when a person
changes from one of those positions to another); or
(b) a CS facility licensee becomes aware that a person has come
to have, or has ceased to have, more than 15% of the voting
power in the licensee or in a holding company of the
licensee;
the licensee must give written notice of this to ASIC. The notice
must include such other information about the matter as is
prescribed by regulations made for the purposes of this subsection.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: To the extent that the licensee is required to give the notice and
information under any other provision of this Act, the licensee may
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Section 821BA
112 Corporations Act 2001
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comply with this subsection by doing so. It need not provide the same
information twice.
821BA Obligation to notify Reserve Bank of certain matters
(1) A CS facility licensee must give written notice to the Reserve Bank
of Australia (the Reserve Bank), as soon as practicable, if:
(a) the licensee becomes aware that it has failed to comply with
standards determined under section 827D, or is likely to fail
to comply with such standards; or
(b) the licensee becomes aware that it may no longer be able to
meet, or has breached, its obligation under
subparagraph 821A(aa)(ii).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) If the Reserve Bank considers it appropriate to do so, the Reserve
Bank may give the Minister advice about the matter.
821C Obligation to assist
ASIC
(1) A CS facility licensee must give such assistance to ASIC, or a
person authorised by ASIC, as ASIC or the authorised person
reasonably requests in relation to the performance of ASIC’s
functions.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
Reserve Bank
(3) A CS facility licensee must give such assistance to the Reserve
Bank of Australia (the Reserve Bank), or a person authorised by
the Reserve Bank, as the Reserve Bank or the authorised person
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Corporations Act 2001 113
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reasonably requests in relation to the performance of the Reserve
Bank’s functions under this Part.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) Such assistance may include showing the Reserve Bank the
licensee’s books or giving the Reserve Bank other information.
821D Obligation to give ASIC access to the facility
A CS facility licensee must give a person authorised by ASIC such
reasonable access to the facility as the person requests for any of
the purposes of this Chapter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
821E Annual report
(1) A CS facility licensee must, within 3 months after the end of its
financial year, give ASIC an annual report on the extent to which
the licensee complied with its obligations as a CS facility licensee
under this Chapter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The licensee must ensure that the annual report is accompanied by
any information and statements prescribed by regulations made for
the purposes of this subsection.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The licensee must also ensure that the annual report is
accompanied by any audit report that the Minister requires under
subsection (4).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The Minister may, by giving written notice to a CS facility
licensee, require the licensee to obtain an audit report on the annual
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Section 821F
114 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
report and on any information or statements accompanying it. The
Minister must nominate to prepare the audit report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(5) ASIC must give the annual report and accompanying material to
the Minister.
821F Change of country by foreign licensee
(1) In the case of a licence granted under subsection 824B(2), the
Minister may approve the location of the licensee’s principal place
of business in a new country only if:
(a) the new country is not Australia; and
(b) the operation of the facility in that country will be subject to
requirements and supervision that are sufficiently equivalent,
in relation to the degree of protection from systemic risk and
the level of effectiveness and fairness of services they
achieve, to the requirements and supervision to which
clearing and settlement facilities are subject under this Act in
relation to those matters.
(2) If, in relation to a licence granted under subsection 824B(2), the
licensee’s principal place of business changes to become a place in
Australia:
(a) the licence ceases to be in force from the time of the change;
and
(b) if the licensee wishes the facility to continue to be licensed,
the licensee may apply for the grant of a new licence under
subsection 824B(1); and
(c) the application must be assessed in accordance with
Subdivision A of Division 3, subject to such modifications (if
any) of that Subdivision as are set out in regulations made for
the purposes of this paragraph.
(3) An application referred to in paragraph (2)(b) may be made in
advance of the change of location of the principal place of
business, and a decision on the application may be made before
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Section 822A
Corporations Act 2001 115
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that time. However, any licence granted pursuant to the application
does not come into force until the change occurs.
Subdivision B—The facility’s operating rules and procedures
822A Content of the operating rules and procedures
(1) The operating rules of a licensed CS facility must deal with the
matters prescribed by regulations made for the purposes of this
subsection.
(2) The regulations may also prescribe matters in respect of which a
licensed CS facility must have written procedures.
(3) However, subsections (1) and (2) do not apply if the licensee is
also authorised to operate the facility in the foreign country in
which its principal place of business is located and the licence was
granted under subsection 824B(2) (overseas clearing and
settlement facilities).
(4) In a subsection (3) case, ASIC may determine, by giving written
notice to the licensee, matters in respect of which the licensed CS
facility must have written procedures.
822B Legal effect of operating rules
(1) The operating rules of a licensed CS facility have effect as a
contract under seal:
(a) between the licensee and each issuer of financial products in
respect of which the facility provides its services; and
(b) between the licensee and each participant in the facility; and
(c) between each issuer of financial products in respect of which
the facility provides its services and each participant in the
facility; and
(d) between a participant in the facility and each other participant
in the facility;
under which each of those persons agrees to observe the operating
rules to the extent that they apply to the person and to engage in
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116 Corporations Act 2001
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conduct that the person is required by the operating rules to engage
in.
(2) However, if there is an inconsistency between the operating rules
of a licensed CS facility and any of the following other rules:
(a) the derivative transaction rules;
(b) the derivative trade repository rules;
those other rules prevail over the operating rules to the extent of
the inconsistency.
Note: If there is an inconsistency between the derivative transaction rules
and the derivative trade repository rules, the derivative transaction
rules prevail: see subsection 901E(2).
822C Enforcement of operating rules
(1) If a person who is under an obligation to comply with or enforce
any of a licensed CS facility’s operating rules fails to meet that
obligation, an application to the Court may be made by:
(a) ASIC; or
(b) the licensee; or
(c) the operator of a financial market with which the facility has
arrangements to provide services for transactions effected
through the market; or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an
order giving directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
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Section 822D
Corporations Act 2001 117
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822D Changing the operating rules
Licensed CS facilities other than subsection 824B(2) facilities
(1) As soon as practicable after a change is made to the operating rules
of a licensed CS facility, other than a facility licensed under
subsection 824B(2) (overseas clearing and settlement facilities),
the licensee must lodge with ASIC written notice of the change.
The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(2) If no notice is lodged with ASIC, as required by subsection (1),
within 21 days after the change is made, the change ceases to have
effect at the end of that period.
Subsection 824B(2) facilities
(3) As soon as practicable after a change is made to the operating rules
of a clearing and settlement facility the operation of which is
licensed under subsection 824B(2) (overseas clearing and
settlement facilities), the licensee must lodge with ASIC written
notice of the change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
822E Disallowance of changes to operating rules
(1) This section does not apply in respect of an Australian CS facility
licence granted under subsection 824B(2) (overseas clearing and
settlement facilities).
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Section 823A
118 Corporations Act 2001
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(2) As soon as practicable after receiving a notice under section 822D
from a CS facility licensee, ASIC must send a copy of the notice to
the Minister.
(3) Within 28 days after ASIC receives the notice from the licensee,
the Minister may disallow all or a specified part of the change to
the operating rules.
(4) In deciding whether to do so, the Minister must have regard to the
consistency of the change with the licensee’s obligations under this
Part (including in particular the obligations mentioned in
paragraphs 821A(aa) and (a)).
Note: The Minister must also have regard to the matters in section 827A.
(5) As soon as practicable after all or a part of a change is disallowed,
ASIC must give notice of the disallowance to the licensee. The
change ceases to have effect, to the extent of the disallowance,
when the licensee receives the notice.
Subdivision C—Powers of the Minister, ASIC and the Reserve
Bank in relation to licensees
823A Minister’s power to give directions
(1) If the Minister considers that a CS facility licensee is not
complying with its obligations as a CS facility licensee under this
Chapter, the Minister may give the licensee a written direction to
do specified things that the Minister believes will promote
compliance by the licensee with those obligations.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
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Section 823B
Corporations Act 2001 119
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823B Minister’s power to require special report
(1) The Minister may give a CS facility licensee a written notice
requiring the licensee to give ASIC a special report on specified
matters. ASIC must give the report to the Minister.
(2) The notice may also require the licensee to give ASIC an audit
report on the special report. The Minister must nominate to prepare
the report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(3) The licensee must give the special report, and audit report (if any),
to ASIC within the time required by the notice.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
823C ASIC assessment of licensee’s compliance
(1) ASIC may do an assessment of how well a CS facility licensee is
complying with its obligations as a CS facility licensee under this
Chapter (other than its obligation under paragraph 821A(aa)). In
doing the assessment, ASIC may take account of any information
and reports that it thinks appropriate, including information and
reports from an overseas regulatory authority.
(2) If the CS facility licensee is prescribed by the regulations for the
purpose of this subsection, ASIC must, in respect of the obligation
in paragraph 821A(c), do such an assessment at least once a year.
(3) As soon as practicable after doing an assessment under this section,
ASIC must give a written report on the assessment to the Minister
and a copy of the written report to the Reserve Bank of Australia.
(4) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, ASIC may, at the person’s
request or of its own motion, give the person a copy of the written
report on the assessment or the relevant part of the report.
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(5) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or
Territory, ASIC may give a copy of the written report on the
assessment, or the relevant part of the report, to:
(a) the Australian Federal Police; or
(b) the Chief Executive Officer of the Australian Crime
Commission or a member of the staff of the ACC (within the
meaning of the Australian Crime Commission Act 2002); or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of
this paragraph.
(6) Either the Minister or ASIC may cause the written report on an
assessment, or part of the report on an assessment, to be printed
and published.
823CA Reserve Bank assessment of licensee’s compliance
(1) The Reserve Bank of Australia (the Reserve Bank) may do an
assessment of how well a CS facility licensee is complying with its
obligation under paragraph 821A(aa). In doing the assessment, the
Reserve Bank may take account of any information and reports that
it thinks appropriate, including information and reports from an
overseas regulatory authority.
(1A) If the CS facility licensee is prescribed by the regulations for the
purpose of this subsection, the Reserve Bank must do such an
assessment at least once a year.
(2) As soon as practicable after doing an assessment under this section,
the Reserve Bank must give a written report on the assessment to
the Minister and a copy of the written report to ASIC.
(3) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, the Reserve Bank may, at the
person’s request or of its own motion, give the person a copy of the
written report on the assessment or the relevant part of the report.
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Section 823D
Corporations Act 2001 121
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(4) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or
Territory, the Reserve Bank may give a copy of the written report
on the assessment, or the relevant part of the report, to:
(a) the Australian Federal Police; or
(b) the Chief Executive Officer of the Australian Crime
Commission or a member of the staff of the ACC (within the
meaning of the Australian Crime Commission Act 2002); or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of
this paragraph.
(5) Either the Minister or the Reserve Bank may cause the written
report on an assessment, or part of the report on an assessment, to
be printed and published.
823D Directions power—protecting dealings in financial products
and ensuring fair and effective provision of services by
CS facilities
(1) If ASIC:
(a) considers that it is necessary, or in the public interest, to
protect people dealing in a financial product or class of
financial products; or
(b) considers that a CS facility licensee has not done all things
reasonably practicable to ensure the facility’s services are
provided in a fair and effective way;
ASIC may give the licensee written advice that it intends to give
the licensee a specified direction under this section. The advice
must include the reasons for ASIC’s intention to give the direction.
(2) As soon as practicable after giving the advice to the licensee, ASIC
must give notice of the advice to the operator of each financial
market with which the facility has arrangements to provide
services for transactions effected through the market.
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Section 823D
122 Corporations Act 2001
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(3) For the purpose of remedying the matter mentioned in
subsection (1), ASIC may give the following directions to the
licensee under this section:
(a) a direction not to provide the licensee’s services in relation to
any transactions, of which the licensee receives notice after
the direction takes effect, that relate to a specified financial
product or class of financial products;
(b) any other direction concerning dealings with transactions that
relate to a specified financial product or class of financial
products.
(4) If, after receiving ASIC’s advice and reasons:
(a) the licensee does not take steps that in ASIC’s view are
adequate to address the situation; and
(b) ASIC still considers that it is appropriate to give the direction
to the licensee;
ASIC may give the licensee the direction, in writing, with a
statement setting out the reasons for giving the direction.
(5) The direction has effect until the earlier of the following times:
(a) the time ASIC revokes the direction in accordance with
subsection (10);
(b) the end of the period (which may be up to 21 days) specified
in the direction as the period during which the direction is
effective ends.
While the direction has effect, the licensee must comply with the
direction and must not provide any services contrary to it.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(7) As soon as practicable after making or varying (see subsection (9))
a direction, ASIC must:
(a) give a copy of the direction or variation to:
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(i) if the direction relates to a specified financial product—
the issuer of that product; and
(ii) each of the operators mentioned in subsection (2); and
(b) give a written report to the Minister setting out ASIC’s
reasons for making the direction or variation; and
(c) give a copy of the report to the licensee.
(8) If, at any time after the licensee receives ASIC’s advice under
subsection (1), the licensee requests in writing that ASIC refer the
matter to the Minister, ASIC must do so immediately. In that event,
the Minister may, if he or she considers it appropriate, require
ASIC not to make, or to revoke, the direction. ASIC must
immediately comply with such a requirement.
(9) ASIC may vary a direction by giving written notice to the licensee.
(10) ASIC may revoke a direction by giving written notice to the
licensee. ASIC must also give written notice of the revocation to
each of the operators mentioned in subsection (2).
823E Directions power—reduction of systemic risk
(1) If ASIC considers that a CS facility licensee has not done all things
reasonably practicable to reduce systemic risk in the provision of
the facility’s services, ASIC may give the licensee a direction, in
writing, to take:
(a) specified measures to comply with the whole or a part of a
standard determined under section 827D; or
(b) any other action that ASIC considers will reduce systemic
risk in the provision of the facility’s services.
(2) The direction may deal with the time by which, or period during
which, it is to be complied with. The time or period must be
reasonable.
(3) The licensee must comply with the direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 823E
124 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3A) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(4) ASIC may vary the direction by giving written notice to the
licensee.
(5) The direction has effect until ASIC revokes it by giving written
notice to the licensee.
(6) ASIC may revoke the direction if, at the time of revocation, it
considers that the direction is no longer necessary or appropriate.
(7) Before giving, varying or revoking the direction, ASIC must
consult the Reserve Bank of Australia. However, a failure to
consult the Reserve Bank of Australia does not invalidate the
direction, variation or revocation.
(8) The Reserve Bank of Australia may at any time request ASIC to
make a direction under this section. However, ASIC is not required
to comply with the request.
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Section 824A
Corporations Act 2001 125
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Division 3—The Australian CS facility licence
Subdivision A—How to get a licence
824A How to apply for a licence
(1) A body corporate may apply for an Australian CS facility licence
by lodging with ASIC an application that:
(a) includes the information required by regulations made for the
purposes of this paragraph; and
(b) is accompanied by the documents (if any) required by
regulations made for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must, within a reasonable time, give the application to the
Minister with advice about the application.
824B When a licence may be granted
General
(1) The Minister may grant an applicant an Australian CS facility
licence if the Minister is satisfied that:
(a) the application was made in accordance with section 824A;
and
(b) the applicant will comply with the obligations that will apply
if the licence is granted; and
(c) the applicant has adequate operating rules, and procedures,
(see Subdivision B of Division 2) for the facility to ensure, as
far as is reasonably practicable, that systemic risk is reduced
and the facility is operated in a fair and effective way; and
(d) the applicant has adequate arrangements (whether they
involve a self-regulatory structure or the appointment of an
independent person or related entity) for supervising the
facility, including arrangements for:
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Section 824B
126 Corporations Act 2001
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(i) handling conflicts between the commercial interests of
the licensee and the need for the licensee to reduce
systemic risk and ensure that the facility’s services are
provided in a fair and effective way; and
(ii) enforcing compliance with the facility’s operating rules;
and
(e) no unacceptable control situation (see Division 1 of Part 7.4)
is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the
applicant (see Division 2 of Part 7.4).
This subsection has effect subject to subsections (3) and (4).
Note: The Minister must also have regard to the matters in section 827A in
deciding whether to grant a licence.
Alternative criteria for granting licence to overseas clearing and
settlement facility
(2) If an applicant is authorised to operate a clearing and settlement
facility in the foreign country in which its principal place of
business is located, the Minister may grant the applicant an
Australian CS facility licence authorising the applicant to operate
the same facility in this jurisdiction. The Minister must be satisfied
that:
(a) the application was made in accordance with section 824A;
and
(b) the applicant will comply with the obligations that will apply
if the licence is granted; and
(c) the operation of the facility in that country is subject to
requirements and supervision that are sufficiently equivalent,
in relation to the degree of protection from systemic risk and
the level of effectiveness and fairness of services they
achieve, to the requirements and supervision to which
clearing and settlement facilities are subject under this Act in
relation to those matters; and
(d) the applicant undertakes to cooperate with ASIC and the
Reserve Bank of Australia by sharing information and in
other ways; and
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(e) no unacceptable control situation (see Division 1 of Part 7.4)
is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the
applicant (see Division 2 of Part 7.4); and
(g) any other requirements that are prescribed by regulations
made for the purposes of this subsection are satisfied.
This subsection has effect subject to subsections (3) and (4).
Note: The Minister must also have regard to the matters in section 827A in
deciding whether to grant a licence.
Foreign bodies
(3) If the applicant is a foreign body corporate, the Minister:
(a) must not grant the applicant a licence unless the applicant is
registered under Division 2 of Part 5B.2; and
(b) may otherwise grant a licence under either subsection (1) or
(2) (subject to the relevant criteria being satisfied).
Disqualified individuals
(4) The Minister must not grant the applicant a licence unless:
(a) ASIC has notified the Minister that, as far as ASIC is aware,
no disqualified individual is involved in the applicant (see
Division 2 of Part 7.4); or
(b) 42 days have passed since the application was made and
ASIC has not given a notice under subsection 853D(2) to the
applicant within that 42 days.
824C Publication of notice of licence grant
If the Minister grants an Australian CS facility licence, the
Minister must publish a notice in the Gazette stating:
(a) the name of the licensee; and
(b) the date on which the licence was granted; and
(c) the conditions on the licence.
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Section 824D
128 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
824D More than one licence in the same document
If the Minister grants a person 2 or more of the following:
(a) an Australian CS facility licence;
(b) an Australian market licence;
they may be included in the same document.
824E More than one CS facility covered by the same licence
(1) The same Australian CS facility licence may authorise the licensee
to operate 2 or more clearing and settlement facilities.
(2) In that case, a reference in this Chapter to the clearing and
settlement facility to which an Australian CS facility licence relates
is taken instead to be a reference to each of those facilities
severally.
(3) Before varying the conditions on an Australian CS facility licence
so as to add another facility that the licensee is authorised to
operate, the Minister must be satisfied of the matters listed in
subsection 824B(1) or (2) (as appropriate) in relation to the facility.
(4) An Australian CS facility licence that authorises the licensee to
operate 2 or more clearing and settlement facilities may be
suspended or cancelled under Subdivision C in respect of one or
some of those facilities only, as if the licensee held a separate
licence for each of the facilities.
Subdivision B—The conditions on the licence
825A The conditions on the licence
(1) The Minister may, at any time:
(a) impose conditions, or additional conditions, on an Australian
CS facility licence; or
(b) vary or revoke conditions imposed on such a licence;
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by giving written notice to the licensee. The Minister must also
publish a notice in the Gazette with details of the action and when
it took effect.
Note: As well as the requirements in this section, the Minister must also
have regard to the matters in section 827A.
(2) The Minister may do so:
(a) on the Minister’s own initiative, subject to subsection (3); or
(b) if the licensee lodges with ASIC an application for the
Minister to do so, which is accompanied by the documents, if
any, required by regulations made for the purposes of this
paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) The Minister may only impose conditions or additional conditions,
or vary the conditions, on the licence on his or her own initiative if:
(a) he or she considers it appropriate to do so having regard to:
(i) the licensee’s obligations as a CS facility licensee under
this Chapter; and
(ii) any change in the facility’s operations or the conditions
in which the facility is operating; and
(b) the Minister gives the licensee written notice of the proposed
action and an opportunity to make a submission before it
takes effect.
This subsection does not apply to the Minister imposing conditions
when a licence is granted.
(4) The Minister must ensure that each Australian CS facility licence is
subject to conditions that specify:
(a) the particular facility that the licensee is authorised to
operate; and
(b) the class or classes of financial products in respect of which
the facility can provide services.
(5) ASIC must give the Minister any application and documents
lodged under subsection (2).
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Section 826A
130 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—When a licence can be varied, suspended or
cancelled
826A Varying licences
(1) The Minister may vary an Australian CS facility licence to take
account of a change in the licensee’s name if the licensee lodges
with ASIC an application for the variation, accompanied by the
documents, if any, required by regulations made for the purposes
of this subsection.
Note 1: The conditions on the licence can be varied under section 825A.
Note 2: For fees in respect of lodging applications, see Part 9.10.
(2) The Minister must give written notice of the variation to the
licensee.
(3) ASIC must give the Minister any application and documents
lodged under subsection (1).
826B Immediate suspension or cancellation
The Minister may, by giving written notice to a CS facility
licensee, suspend the licence for a specified period, or cancel it, if:
(a) the licensee ceases to carry on the business of operating the
facility; or
(b) the licensee becomes a Chapter 5 body corporate; or
(c) the licensee asks the Minister to do so; or
(d) in the case of a licence granted under subsection 824B(2)
(overseas clearing and settlement facilities):
(i) the licensee ceases to be authorised to operate a clearing
and settlement facility in the foreign country in which
the licensee’s principal place of business is located; or
(ii) there is a change to the regulatory regime applying in
relation to the facility to which the licence relates in the
country in which the licensee’s principal place of
business is located, and, because of that change, the
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Minister is no longer satisfied as mentioned in
paragraph 824B(2)(c); or
(e) in the case of a licensee that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
licensee;
(ii) the amount of late payment penalty payable (if any) in
relation to the levy;
(iii) the amount of shortfall penalty payable (if any) in
relation to the levy.
826C Suspension or cancellation following hearing and report
(1) If the Minister considers that a CS facility licensee has breached
one or more of its obligations as a CS facility licensee under this
Chapter, the Minister may give the licensee a written notice that
requires the licensee to show cause, at a hearing before a specified
person, why the licence should not be suspended or cancelled.
(2) The notice must specify:
(a) the grounds on which it is proposed to suspend or cancel the
licence; and
(b) a reasonable time and place at which the hearing is to be
held.
However, if the licensee consents, the person conducting the
hearing may fix a different time or place.
(3) The person conducting the hearing must:
(a) give the licensee an opportunity to be heard at the hearing;
and
(b) give the Minister:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on
which it is proposed to suspend or cancel the licence.
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Section 826D
132 Corporations Act 2001
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(4) After considering the report and recommendation, the Minister
may:
(a) decide to take no further action in relation to the matter and
give written advice of that decision to the licensee; or
(b) suspend the licence for a specified period, or cancel the
licence, by giving written notice to the licensee.
Note: The Minister must have regard to the matters in section 827A.
826D Effect of suspension
(1) A person whose Australian CS facility licence is suspended is
taken not to hold that licence while it is suspended.
(2) However, the Minister may specify in the written notice to the
licensee that subsection (1) does not apply for specified purposes.
826E Variation or revocation of suspension
The Minister may at any time vary or revoke a suspension of an
Australian CS facility licence by giving written notice to the
licensee.
826F Publication of notice of licence suspension or cancellation
(1) If the Minister:
(a) suspends, or varies or revokes a suspension of, an Australian
CS facility licence; or
(b) cancels an Australian CS facility licence;
the Minister must publish a notice in the Gazette to that effect.
(2) The notice must state when the action took effect.
826G Suspension and cancellation only in accordance with this
Subdivision
An Australian CS facility licence cannot be varied, suspended or
cancelled otherwise than in accordance with this Subdivision.
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Note: The conditions on the licence can be varied under section 825A.
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Section 827A
134 Corporations Act 2001
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Division 4—Other matters
827A Matters to be taken into account by the Minister
(1) The Minister must have regard to certain matters in deciding
whether to:
(a) grant an applicant an Australian CS facility licence under
section 824B; or
(b) impose, vary or revoke conditions on such a licence under
section 825A; or
(c) suspend or cancel such a licence under section 826C; or
(d) disallow a change to the operating rules of a licensed CS
facility under section 822E.
(2) These are the matters the Minister must have regard to:
(a) the structure, or proposed structure, of the facility;
(b) the nature of the services provided, or proposed to be
provided, by the facility;
(c) the size, or proposed size, of the facility;
(d) the nature of the financial products in respect of which the
facility provides services or proposes to provide services;
(e) the participants, or proposed participants, in the facility and
whether those participants:
(i) in using the facility’s services, are, or will be, providing
financial services to other persons; or
(ii) use, or will use, the facility’s services in respect of
financial products they acquire or dispose of as retail
clients or as wholesale clients; or
(iii) are, or will be, participants in a financial market, or
other clearing and settlement facilities, as well;
(f) the technology used, or proposed to be used, in the operation
of the facility;
(g) whether it would be in the public interest to take the action
referred to in subsection (1);
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(h) any relevant advice received from ASIC or the Reserve Bank
of Australia.
The Minister may also have regard to any other matter that the
Minister considers relevant.
(3) If the Minister is deciding whether to take the action mentioned in
paragraph (1)(a), (b) or (c) in respect of an Australian CS facility
licence granted under subsection 824B(2) (overseas clearing and
settlement facilities), the Minister must also have regard to:
(a) the criteria that the licensee or applicant satisfied to obtain an
authorisation to operate the same facility in the foreign
country in which their principal place of business is located;
and
(b) the obligations they must continue to satisfy to keep the
authorisation; and
(c) the level of supervision to which the facility is subject in that
country; and
(d) whether adequate arrangements exist for cooperation
between ASIC, the Reserve Bank of Australia and the
authority, or authorities, that are responsible for that
supervision.
827B ASIC may give advice to Minister
ASIC may give advice to the Minister in relation to:
(a) any matter in respect of which the Minister has a discretion
under this Part; or
(b) any other matter concerning clearing and settlement facilities.
Note: In some cases, the Minister must have regard to ASIC’s advice: see
paragraph 827A(2)(h).
827C Reserve Bank may give advice to Minister
The Reserve Bank of Australia may give advice to the Minister in
relation to any matter concerning clearing and settlement facilities.
Note: In some cases, the Minister must have regard to the Reserve Bank’s
advice: see paragraph 827A(2)(h).
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Section 827D
136 Corporations Act 2001
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827D Reserve Bank may determine financial stability standards
(1) The Reserve Bank of Australia (the Reserve Bank) may, in
writing, determine standards for the purposes of ensuring that CS
facility licensees conduct their affairs in a way that causes or
promotes overall stability in the Australian financial system.
(2) The standards are to be complied with by:
(a) all CS facility licensees; or
(b) a specified class of CS facility licensees, in the case of a
standard that is expressed to apply only in relation to that
class.
(2A) If there is an inconsistency between the standards and the
derivative transaction rules or the derivative trade repository rules,
the standards prevail to the extent of the inconsistency.
(3) Before the Reserve Bank determines a standard, it must consult
with:
(a) the CS facility licensees that will be required to comply with
the standard; and
(b) ASIC.
(4) A standard may impose different requirements to be complied with
in different situations or in respect of different activities.
(5) A standard:
(a) comes into force:
(i) unless subparagraph (ii) applies—on the day on which
the determination of the standard is made; or
(ii) if that determination specifies a later day as the day on
which the standard comes into force—on the day so
specified; and
(b) continues in force until it is revoked.
(6) The Reserve Bank may vary a standard in writing. Before it does
so, it must consult with:
(a) the CS facility licensees that will be required to comply with
the standard if it is varied as proposed; and
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(b) ASIC.
(7) If the Reserve Bank determines or varies a standard, it must, as
soon as practicable:
(a) cause a notice advising of the determination of the standard,
or of the variation of the standard, and summarising the
purpose and effect of the standard or variation, to be
published in the Gazette; and
(b) make the text of the notice available on the internet; and
(c) give a copy of the standard, or of the variation, to the
following:
(i) each CS facility licensee to which the standard applies;
(ii) the Minister;
(iii) ASIC.
(8) The Reserve Bank may revoke a standard in writing. Before it does
so, it must consult with ASIC.
(9) If the Reserve Bank revokes a standard, it must, as soon as
practicable:
(a) cause a notice advising of the revocation of the standard to be
published in the Gazette; and
(b) make the text of the notice available on the internet; and
(c) give notice of the revocation of the standard to the following:
(i) each CS facility licensee to which the standard applied;
(ii) the Minister;
(iii) ASIC.
(10) The Reserve Bank must take reasonable steps to ensure that copies
of the current text of the standards are available for inspection and
purchase.
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Chapter 7 Financial services and markets
Part 7.4 Limits on involvement with licensees
Division 1 Limit on control of certain licensees
Section 850A
138 Corporations Act 2001
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Part 7.4—Limits on involvement with licensees
Division 1—Limit on control of certain licensees
Subdivision A—15% voting power limit
850A Scope of Division
(1) This Division applies in relation to a body corporate that:
(a) has an Australian market licence or an Australian CS facility
licence; or
(b) is the holding company of a body corporate that has an
Australian market licence or an Australian CS facility
licence;
and that is specified in regulations made for the purposes of this
section.
(2) In this Division, such a body is called a widely held market body.
850B Meaning of unacceptable control situation
(1) For the purposes of this Division, an unacceptable control
situation exists in relation to a widely held market body and in
relation to a particular person if the person’s voting power in the
body is more than:
(a) 15%; or
(b) in relation to a body other than the Australian Stock
Exchange Limited—if an approval of a higher percentage is
in force under Subdivision B in relation to the body and in
relation to the person, that higher percentage; or
(c) in relation to the Australian Stock Exchange Limited—if the
regulations prescribe a higher percentage in relation to the
Australian Stock Exchange Limited in relation to the person,
that higher percentage.
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Section 850C
Corporations Act 2001 139
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(2) Regulations made for the purposes of paragraph (1)(c) may not
take effect earlier than the day after the last day on which the
regulations may be disallowed under Part 5 of the Legislative
Instruments Act 2003.
850C Acquisitions of shares
If:
(a) a person, or 2 or more persons under an arrangement, acquire
shares in a body corporate; and
(b) the acquisition has the result, in relation to a widely held
market body, that:
(i) an unacceptable control situation comes into existence
in relation to the body and in relation to a person; or
(ii) if an unacceptable control situation already exists in
relation to the body and in relation to a person—there is
an increase in the voting power of the person in the
body;
the person or persons mentioned in paragraph (a) contravene this
section.
Note: A contravention of this section is an offence (see subsection 1311(1)).
850D Remedial orders
(1) If an unacceptable control situation exists in relation to a widely
held market body, the Court may make such orders as the Court
considers appropriate for the purpose of ensuring that the
unacceptable control situation ceases to exist.
(2) However, the Court may only make orders under this section on
application by:
(a) the Minister; or
(b) ASIC; or
(c) the body; or
(d) a person who has any voting power in the body.
(3) The Court’s orders may include:
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(a) an order directing the disposal of shares; or
(b) an order restraining the exercise of any rights attached to
shares; or
(c) an order prohibiting or deferring the payment of any sums
due to a person in respect of shares held by the person; or
(d) an order that any exercise of rights attached to shares be
disregarded; or
(e) an order directing any person to do or refrain from doing a
specified act, for the purpose of securing compliance with
any other order made under this section; or
(f) an order containing such ancillary or consequential
provisions as the Court thinks just.
(4) Subsection (3) does not, by implication, limit subsection (1).
(5) Before making an order under this section, the Court may direct
that notice of the application be given to such persons as the Court
thinks fit or be published in such manner as the Court thinks fit, or
both.
(6) The Court may, by order:
(a) rescind, vary or discharge an order made by the Court under
this section; or
(b) suspend the operation of such an order.
850E Injunctions
(1) If any conduct (including a refusal or failure to act) amounts or
would amount to a contravention of this Division in relation to a
particular widely held market body, the body is taken, for the
purposes of section 1324, to be a person whose interests are
affected by the conduct.
(2) Subsection (1) does not, by implication, limit the class of persons
whose interests are affected by the conduct.
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Section 851A
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(3) The Minister has the same powers as ASIC to apply for an
injunction under section 1324 in relation to a contravention of this
Division.
(4) The powers in sections 850D and 1324 do not, by implication,
limit each other.
Subdivision B—Approval to exceed 15% voting power limit
851A Application for approval to exceed 15% voting power limit
(1) A person may apply for approval to have voting power of more
than 15% in a particular widely held market body (other than the
Australian Stock Exchange Limited) by lodging with ASIC an
application that:
(a) specifies the percentage of voting power (if any) the person
currently has in the widely held market body; and
(b) specifies the percentage of voting power the person is
seeking approval to have in the body; and
(c) sets out the person’s reasons for making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must give the application to the Minister as soon as possible.
851B Approval of application
(1) If the Minister is satisfied that it is in the national interest to
approve the applicant having voting power in the widely held
market body of more than 15%, the Minister may grant the
application.
(2) If the Minister grants the application, the Minister must:
(a) give written notice of the approval to the applicant; and
(b) specify the percentage of the voting power the Minister
approves the applicant having in the widely held market body
(which may or may not be the percentage the applicant
applied for); and
(c) either:
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(i) specify the period during which the approval remains in
force; or
(ii) specify that the approval remains in force indefinitely.
(3) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of approval under this section to be:
(a) published in the Gazette; and
(b) given to the body concerned.
851C Duration of approval
(1) An approval under section 851B remains in force:
(a) if the notice of approval specifies a period during which the
approval remains in force—until the end of that period, or if
the Minister extends that period, until the end of that
extended period; or
(b) otherwise—indefinitely.
Extension of approval
(2) A person who holds an approval under section 851B that is in force
for a specified period may apply to extend that period by lodging
with ASIC an application that sets out the person’s reasons for
making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) ASIC must give the application to the Minister as soon as possible.
(4) If the Minister is satisfied that it is in the national interest to grant
the extension, the Minister may grant the application.
(5) If the Minister grants the application, the Minister must:
(a) give written notice of the extension to the applicant; and
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(b) specify the extended period during which the approval
remains in force (which may or may not be the period the
applicant applied for).
(6) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
(7) As soon as practicable, the Minister must arrange for a copy of a
notice of extension under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
851D Conditions of approval
(1) An approval under section 851B is subject to such conditions (if
any) as are specified in the notice of approval.
(2) The Minister may, by written notice given to a person who holds
an approval under section 851B:
(a) impose one or more conditions or further conditions to which
the approval is subject; or
(b) revoke or vary any condition:
(i) imposed under paragraph (a); or
(ii) specified in the notice of approval.
(3) The Minister’s power under subsection (2) may be exercised:
(a) on the Minister’s own initiative; or
(b) on application by the person who holds the approval.
(4) An application made by a person under paragraph (3)(b) must be
lodged with ASIC and must set out the person’s reasons for
making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(5) ASIC must give the application to the Minister as soon as possible.
(6) If the Minister refuses an application under paragraph (3)(b), the
Minister must give written notice of the refusal to the applicant.
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Section 851E
144 Corporations Act 2001
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(7) As soon as practicable, the Minister must arrange for a copy of a
notice under subsection (2) to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(8) A person who holds an approval under section 851B must give
written notice to ASIC if they become aware that they have
breached a condition to which the approval is subject.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
851E Varying percentage approved
Application by holder of approval
(1) A person who holds an approval under section 851B may apply to
vary the percentage specified in the approval by lodging with ASIC
an application that:
(a) specifies the percentage of the voting power the person
currently has in the widely held market body concerned; and
(b) specifies the percentage of the voting power the person is
seeking approval to have in the body; and
(c) sets out the person’s reasons for making the application.
Note: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must give the application to the Minister as soon as possible.
(3) If the Minister is satisfied that it is in the national interest to vary
the percentage, the Minister may grant the application.
(4) If the Minister grants the application, the Minister must:
(a) give written notice of the variation to the applicant; and
(b) specify the variation granted (which may or may not be the
variation the applicant applied for).
(5) If the Minister refuses an application, the Minister must give
written notice of the refusal to the applicant.
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Section 851F
Corporations Act 2001 145
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Minister’s own initiative
(6) The Minister may, by written notice given to a person who holds
an approval under section 851B, vary the percentage specified in
the approval if the Minister is satisfied that it is in the national
interest to do so.
Percentage varied upwards
(7) If the Minister varies a percentage upwards, the variation takes
effect on the day the notice of variation is given.
Percentage varied downwards
(8) If the Minister varies a percentage downwards, the variation takes
effect on the day specified in the notice of variation. The specified
day must be a day at least 90 days after the day on which the notice
is given.
Notification of variation
(9) As soon as practicable, the Minister must arrange for a copy of a
notice of variation under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
851F Revoking an approval
(1) The Minister may, by written notice given to a person who holds
an approval under section 851B in relation to a widely held market
body, revoke the approval if the Minister is satisfied that:
(a) it is in the national interest to do so; or
(b) an unacceptable control situation exists in relation to the
widely held market body and in relation to the person; or
(c) there has been a contravention of a condition to which the
approval is subject.
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Section 851G
146 Corporations Act 2001
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(2) The revocation takes effect on the day specified in the notice of
revocation. The specified day must be a day at least 90 days after
the day on which the notice is given.
(3) If a person who holds an approval under section 851B requests the
Minister to revoke the approval, the Minister must, by written
notice given to the person, revoke the approval. The revocation
takes effect on the day specified in the notice of revocation.
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of revocation under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
851G Further information about applications
(1) This section applies to an application under this Subdivision.
(2) The Minister may, by written notice given to the applicant, require
the applicant to give the Minister, within a specified period, further
information about the application.
(3) The Minister may refuse to consider the application until the
applicant gives the Minister the information.
851H Time limit for Minister’s decision
(1) The Minister must make a decision on an application under this
Subdivision within 30 days after receiving the application.
(2) However, before the end of the 30 days, the Minister may decide to
extend the period for considering the application until the end of 60
days after the application was received.
(3) If the Minister has not made a decision within the 30 days (or the
60 days, if subsection (2) applies), the Minister is taken to have
granted whatever was applied for. As soon as practicable after that
happens, the Minister must arrange for a notice to that effect to be:
(a) published in the Gazette; and
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(b) given to the widely held market body concerned.
(4) The time for making the decision stops running if the Minister
gives a notice under section 851G in relation to the application, and
does not start again until the notice is complied with.
(5) The time limit in this section does not apply to an application under
section 851A or 851E if an unacceptable control situation exists in
relation to the applicant and in relation to the relevant widely held
market body at any time before the Minister makes a decision.
851I Preservation of voting power in relation to bodies specified in
regulations made for section 850A
(1) A person holding a particular percentage of voting power in a body
at its specification time (see subsection (3)) is taken at that time to
be granted an approval under section 851B to hold that percentage
of voting power in the body if:
(a) in a case where the body’s specification time occurs at the
same time as the commencement of this section—the person
holding the percentage of voting power in the body
immediately before the specification time did not, to any
extent, constitute a contravention of previous law (see
subsection (3)); and
(b) whether the body’s specification time occurs at the same time
as, or after, the commencement of this section—on the
body’s specification time, the person holding that percentage
of voting power in the body would (apart from this section)
constitute an unacceptable control situation.
Note: Conditions can be imposed on the approval under section 851D and
then varied or revoked in accordance with that section.
(2) The Minister is taken to have complied with the Minister’s
obligations under section 851B in relation to the granting of the
approval to the person.
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Section 852A
148 Corporations Act 2001
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(3) In this section:
contravention of previous law means a contravention of a
provision of Part 7.1A of this Act as in force immediately before
the commencement of this section.
specification time, in relation to a body, means the time a body
first becomes specified in regulations made for the purposes of
section 850A.
Subdivision C—Other matters
852A Acquisition of property
(1) The Court must not make an order under section 850D if:
(a) the order would result in the acquisition of property from a
person otherwise than on just terms; and
(b) the order would be invalid because of paragraph 51(xxxi) of
the Constitution.
(2) Section 1350 does not apply in relation to the making of an order
under section 850D.
(3) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
852B Anti-avoidance
(1) If:
(a) one or more persons enter into, begin to carry out or carry out
a scheme; and
(b) it would be concluded that the person, or any of the persons,
who entered into, began to carry out or carried out the
scheme or any part of the scheme did so for the sole or
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dominant purpose of avoiding the application of any
provision of Subdivision A in relation to any person or
persons (whether or not mentioned in paragraph (a)); and
(c) as a result of the scheme or a part of the scheme, a person
(the controller) increases the controller’s voting power in a
widely held market body;
the Minister may give the controller a written direction to cease
having that voting power within a specified time.
(2) A person who is subject to a written direction under subsection (1)
must comply with the direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) In this section:
increase voting power includes increasing it from a starting point
of nil.
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Division 2 Individuals who are not fit and proper are disqualified
Section 853A
150 Corporations Act 2001
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Division 2—Individuals who are not fit and proper are
disqualified
853A Who is disqualified
For the purposes of this Division, an individual is disqualified if:
(a) a declaration by ASIC that the individual is disqualified is in
effect under section 853C; or
(b) the individual is disqualified from managing a corporation
under section 206B; or
(c) the individual is on the Register that ASIC must keep under
section 1274AA.
853B When an individual is involved in an operator
For the purposes of this Division, an individual is involved in a
market licensee, a CS facility licensee or a derivative trade
repository licensee, or an applicant for such a licence, if:
(a) the individual is a director, secretary or senior manager of the
licensee or applicant, or in a holding company of the licensee
or applicant; or
(b) the individual has more than 15% of the total voting power in
the licensee or applicant, or in a holding company of the
licensee or applicant.
853C Declaration by ASIC
(1) ASIC may declare in writing that an individual who is involved in
a market licensee, a CS facility licensee or a derivative trade
repository licensee, or in an applicant for a licence of any of those
kinds, is disqualified for the purposes of this Division.
(2) ASIC may make such a declaration only if ASIC is satisfied that,
because the individual is unfit to be involved in the licensee or
applicant, there is a risk that the licensee or applicant will breach
its obligations under this Chapter if the declaration is not made.
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Section 853D
Corporations Act 2001 151
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(3) In deciding whether an individual is unfit as mentioned in
subsection (2), ASIC must take into account such matters as the
individual’s fame, character and integrity, rather than his or her
competence, experience, knowledge or other such attributes.
(4) A declaration may be expressed to remain in effect for a specified
period or until a specified event occurs. Otherwise, it remains in
effect indefinitely (unless it is revoked under section 853E).
853D Procedure for declaration
(1) ASIC must not make a declaration under section 853C unless it has
followed the procedure in this section.
(2) Within 42 days after:
(a) a body corporate applies for an Australian market licence, an
Australian CS facility licence or an Australian derivative
trade repository licence; or
(b) ASIC receives other information that may be relevant to
deciding whether to make a declaration under section 853C
about an individual who is involved in an applicant for an
Australian market licence, an Australian CS facility licence
or an Australian derivative trade repository licence, or in an
existing licensee;
ASIC may give the applicant or licensee written notice that ASIC
proposes to make a declaration under section 853C about the
individual in question.
(3) ASIC must give a copy of the notice to the individual and to the
Minister.
(4) The notice must:
(a) state the grounds on which ASIC proposes to make the
declaration; and
(b) require the applicant or licensee, and the individual, to show,
at a hearing before a specified person, why the declaration
should not be made; and
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Section 853E
152 Corporations Act 2001
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(c) specify a reasonable time and place at which the hearing is to
be held.
However, if the applicant or licensee, and the individual, consent,
the person conducting the hearing may fix a different time or place.
(5) The person conducting the hearing must:
(a) give the applicant or licensee, and the individual, an
opportunity to be heard at the hearing; and
(b) give ASIC:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on
which it is proposed to make the declaration.
(6) As soon as practicable after the hearing, ASIC must:
(a) decide whether to make the declaration; and
(b) give each of the following persons a copy of the declaration,
or a written notice of its decision not to make the declaration:
(i) the applicant or licensee;
(ii) the individual;
(iii) the Minister.
853E Revoking a declaration
(1) ASIC may, in writing, revoke a declaration under section 853C if it
is no longer satisfied as mentioned in subsection 853C(2) in
relation to the individual in question.
(2) ASIC must give a copy of the revocation to the relevant applicant
or licensee, the individual and the Minister.
853F Obligations on disqualified individuals
(1) A disqualified individual must not become involved in a market
licensee, a CS facility licensee or a derivative trade repository
licensee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 853G
Corporations Act 2001 153
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(2) A disqualified individual who is involved in a market licensee, a
CS facility licensee or a derivative trade repository licensee must
take all reasonable steps to ensure that he or she ceases to be
involved in the licensee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
853G Notification by ASIC
If ASIC becomes aware that an individual who is involved in a
market licensee, a CS facility licensee or a derivative trade
repository licensee is disqualified because of paragraph 853A(b) or
(c), ASIC must notify the individual, the licensee and the Minister
as soon as practicable.
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Division 3 Miscellaneous
Section 854A
154 Corporations Act 2001
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Division 3—Miscellaneous
854A Record-keeping and giving of information
(1) The regulations may make provision for and in relation to requiring
a person:
(a) to keep and retain records that are relevant to whether a
person has voting power in a widely held market body and, if
so, how much; and
(b) to keep and retain records that are relevant to determining
whether any disqualified individual is involved in a market
licensee, a CS facility licensee or a derivative trade
repository licensee; and
(c) to give the Minister or ASIC information that is relevant to
the matters mentioned in paragraphs (a) and (b); and
(d) to give a widely held market body information that is
relevant to the matter mentioned in paragraph (a).
(2) The regulations may provide that information given in accordance
with a requirement covered by paragraph (1)(c) or (d) must be
verified by statutory declaration.
(3) However, an individual is not required to give information in
accordance with a requirement covered by paragraph (1)(c) or (d)
if the information might tend to incriminate the individual or
expose the individual to a penalty.
(4) A person contravenes this section if:
(a) the person makes or keeps a record in compliance, or
purported compliance, with a requirement covered by
subsection (1); and
(b) the person does so knowing that the record:
(i) is false or misleading; or
(ii) omits any matter or thing without which the record is
misleading.
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Section 854B
Corporations Act 2001 155
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Note: A contravention of this subsection is an offence (see
subsection 1311(1)).
(5) Regulations made for the purposes of this section may make
provision for or in relation to a matter by conferring a power on the
Minister.
854B Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(3) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Chapter 7 Financial services and markets
Part 7.5 Compensation regimes for financial markets
Division 1 Preliminary
Section 880A
156 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.5—Compensation regimes for financial
markets
Division 1—Preliminary
880A Part does not apply to markets licensed under special
provisions about overseas markets
Nothing in this Part applies in relation to:
(a) a financial market the operation of which is licensed under
subsection 795B(2); or
(b) an application for the grant of a licence under that subsection.
880B Definitions
(1) In this Part:
adequate has a meaning affected by subsection (2).
borrowing includes obtaining credit.
compensation arrangements are arrangements that consist of:
(a) a set of rules about compensation; and
(b) a source of funds from which compensation is payable; and
(c) associated administrative and monitoring arrangements.
compensation rules means rules referred to in paragraph (a) of the
definition of compensation arrangements.
Division 3 arrangements means compensation arrangements
approved under Division 3.
Division 3 loss means a loss described in section 885C, other than
a loss that section 885D provides is to be taken not to be a
Division 3 loss.
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Section 880B
Corporations Act 2001 157
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Division 4 arrangements means the arrangements constituted by
Division 4.
fidelity fund, in relation to a financial market, means a fund
consisting principally of contributions made by:
(a) participants and past participants in the market; or
(b) participants and past participants in:
(i) the market; and
(ii) one or more other financial markets;
the purpose, or the main purpose, of which is to provide a source of
funds for the payment of compensation to clients of participants.
Any investments made using money in the fund are taken to form
part of the fund.
NGF means the National Guarantee Fund that continues in
existence under section 889A.
operating rules, in relation to the SEGC, means the rules referred
to in section 890D.
Part 7.5 arrangements means Division 3 arrangements or
Division 4 arrangements.
pay compensation includes provide compensation in a form other
than money.
SEGC means the body corporate in relation to which a nomination
as the Securities Exchanges Guarantee Corporation is in force
under section 890A.
(2) For the purposes of this Part, the question whether proposed
compensation arrangements, compensation arrangements as
proposed to be changed, or compensation arrangements that have
been approved, are adequate is to be determined in accordance
with Subdivision D of Division 3.
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Chapter 7 Financial services and markets
Part 7.5 Compensation regimes for financial markets
Division 2 When there must be a compensation regime
Section 881A
158 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—When there must be a compensation regime
881A Licensed markets through which participants provide services
for retail clients must generally have a compensation
regime
(1) If:
(a) any of the participants in a licensed market, in effecting
transactions through the market, provide financial services
for persons as retail clients; and
(b) in connection with the provision of those financial services,
those persons will or may give money or other property, or
authority over property, to those participants; and
(c) the market is not a financial market to which Division 4
applies;
there must be compensation arrangements in relation to the market
that are approved in accordance with Division 3.
(2) The compensation regime applicable in relation to financial
markets to which Division 4 applies is as constituted by that
Division.
881B Additional requirements for the licence application
(1) A person who is applying for an Australian market licence must
state in their application:
(a) whether any of the participants in the market, in effecting
transactions through the market, will provide financial
services for persons as retail clients; and
(b) if any participants will so provide financial services to
persons as retail clients—whether, in connection with the
provision of those financial services, those persons will or
may give money or other property, or authority over
property, to those participants.
(2) If:
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(a) participants in the market will provide financial services to
persons as retail clients as mentioned in paragraph (1)(a); and
(b) in connection with the provision of those financial services,
those persons will or may give money or property, or
authority over property, to those participants;
the application must:
(c) contain the information, in relation to the proposed
compensation arrangements, required by regulations made
for the purposes of this paragraph and be accompanied by a
copy of the proposed compensation rules; or
(d) state that the market is or will be covered by Division 4, and
set out evidence, in accordance with the requirements (if any)
of the regulations, in support of that statement.
881C What happens if an application contains information in
accordance with paragraph 881B(2)(c)
If a licence application contains information in relation to proposed
compensation arrangements as required by paragraph 881B(2)(c),
the Minister must deal with the application in accordance with
section 882A.
881D What happens if an application contains a statement in
accordance with paragraph 881B(2)(d)
(1) If a licence application contains a statement in accordance with
paragraph 881B(2)(d), the Minister must consider whether he or
she is satisfied that the market will be covered by Division 4.
(2) If the Minister is not so satisfied, the application for the licence
must be rejected.
(3) If the Minister is so satisfied, the Minister may (subject to the other
provisions about granting licences) grant the licence.
Note: The other provisions about granting licences are in Subdivision A of
Division 4 of Part 7.2.
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Part 7.5 Compensation regimes for financial markets
Division 3 Approved compensation arrangements
Section 882A
160 Corporations Act 2001
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Division 3—Approved compensation arrangements
Subdivision A—Approval of compensation arrangements
882A How to get compensation arrangements approved with grant
of licence
(1) If an application for an Australian market licence contains
information in relation to proposed compensation arrangements in
accordance with paragraph 881B(2)(c), the Minister must treat the
application as also being an application for approval of the
compensation arrangements and, for that purpose, must consider
whether the proposed arrangements are adequate.
(2) If the Minister does not consider that the proposed compensation
arrangements are adequate, the application for the licence must be
rejected.
(3) If the Minister considers that the proposed compensation
arrangements are adequate, the Minister may (subject to the other
provisions about granting licences) grant the licence. On the
granting of the licence, the Minister is taken to have approved the
compensation arrangements.
Note: The other provisions about granting licences are in Subdivision A of
Division 4 of Part 7.2.
(4) In the conditions of the licence, the Minister must:
(a) deal with the minimum amount of cover required in relation
to the compensation arrangements in such manner as the
Minister thinks appropriate; and
(b) identify the source of funds available to cover claims, on the
basis of which the Minister approves the arrangements (see
section 885H).
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Corporations Act 2001 161
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882B How to get compensation arrangements approved after licence
is granted
(1) If the operator of a licensed market wants to have compensation
arrangements for the market approved after the licence has been
granted, the operator must apply for approval in accordance with
this section.
(2) The application must:
(a) contain the information, in relation to the proposed
compensation arrangements, required by regulations made
for the purposes of this paragraph and be accompanied by a
copy of the proposed compensation rules; and
(b) be made to the Minister by lodging the application with
ASIC.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) If the Minister does not consider that the proposed compensation
arrangements are adequate, the application for approval must be
rejected.
(4) If the Minister considers that the proposed compensation
arrangements are adequate, the Minister must:
(a) approve the compensation arrangements in writing; and
(b) vary the conditions of the operator’s licence so as to:
(i) deal with the minimum amount of cover required in
relation to the compensation arrangements in such
manner as the Minister thinks appropriate; and
(ii) identify the source of funds available to cover claims,
on the basis of which the Minister approves the
arrangements (see section 885H).
(5) In varying licence conditions as mentioned in paragraph (4)(b), the
Minister must proceed under section 796A as though the licensee
had applied for the variation to be made.
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Division 3 Approved compensation arrangements
Section 882C
162 Corporations Act 2001
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882C Revocation of approval
The Minister may at any time revoke an approval of compensation
arrangements if the Minister considers that the arrangements are
not adequate.
882D Minister’s power to give directions
(1) If the Minister considers that a market licensee’s approved
compensation arrangements are no longer adequate, the Minister
may give the licensee a written direction to do specified things that
the Minister believes will ensure that the arrangements become
adequate once more.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
Subdivision B—Effect of compensation rules forming part of
Division 3 arrangements
883A Legal effect of compensation rules
Compensation rules forming part of Division 3 arrangements for a
financial market have effect as a contract under seal between the
operator of the market and each participant in the market under
which each of those persons agrees to observe the rules to the
extent that they apply to the person and engage in conduct that the
person is required by the rules to engage in.
883B Enforcement of compensation rules
(1) If a person who is under an obligation to comply with or enforce
any of the compensation rules forming part of Division 3
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arrangements for a financial market fails to meet that obligation, an
application to the Court may be made by:
(a) ASIC; or
(b) the operator of the market; or
(c) the operator of a clearing and settlement facility, if:
(i) there are clearing and settlement arrangements (as
defined in section 790A) for some or all transactions
effected through the market; and
(ii) those arrangements are with the operator of the facility;
or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an
order giving directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the compensation rules.
(3) For the purposes of this section, if the operator of the market fails
to comply with or enforce provisions of the compensation rules, a
person who is, under the rules, entitled to make a claim for
compensation is (whether or not they have actually made a claim)
taken to be a person aggrieved by the failure.
(4) There may be other circumstances in which a person may be
aggrieved by a failure for the purposes of this section.
883C Other sources of funds for compensation
Nothing in this Division makes the operator of a financial market
liable to pay compensation from any source of funds other than the
source identified in the licence conditions under
paragraph 882A(4)(b) or subparagraph 882B(4)(b)(ii).
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Division 3 Approved compensation arrangements
Section 883D
164 Corporations Act 2001
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883D Payment of levies
(1) This section applies if, under the compensation rules forming part
of Division 3 arrangements for a particular financial market, a levy
is payable by all or some of the participants in the market in order
to ensure that adequate funds are available for the purposes of the
arrangements.
(2) The levy is payable to the operator of the market, as agent for the
Commonwealth, by each of the participants affected.
Note: For the imposition and amount of the levy, see the Corporations
(Compensation Arrangements Levies) Act 2001.
(3) An amount of levy payable under subsection (2) must be paid
within the time and in the manner specified by the operator either
generally or in relation to a particular case.
(4) Whenever an amount of levy (the levy amount) is paid under this
section, or under section 6 of the Corporations (Compensation
Arrangements Levies) Act 2001, to the operator of a market as
agent for the Commonwealth:
(a) the operator must pay an amount equal to the levy amount to
the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that
amount for the purpose of payment to the operator; and
(c) the Commonwealth must pay the amount so appropriated to
the operator; and
(d) the operator must deal with the amount it receives under
paragraph (c) in accordance with the compensation rules.
(5) A payment of an amount to the operator of a market as required by
paragraph (4)(c) in respect of a particular levy amount is subject to
a condition that, if the Commonwealth becomes liable to refund the
whole or a part of the levy amount, the operator must pay the
Commonwealth an amount equal to the amount that the
Commonwealth is liable to refund.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this
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section to the operator of a market as agent for the Commonwealth.
However, the operation of that Act in relation to the following
payments is not affected:
(a) the payment of an amount to the Commonwealth as required
by paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required
by paragraph (4)(c).
The operator must, in accordance with the regulations, notify the
Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(7) An amount payable by an operator as required by paragraph (4)(a)
may be set off against an amount payable to the operator as
required by paragraph (4)(c).
Subdivision C—Changing Division 3 arrangements
884A Division 3 arrangements must generally only be changed in
accordance with this Subdivision
(1) The operator of a financial market in relation to which there are
Division 3 arrangements must not change those arrangements
except in accordance with this Subdivision.
(2) However, a change may be made to Division 3 arrangements
otherwise than in accordance with this Subdivision if:
(a) the change is not to a matter required by section 885B to be
dealt with in the compensation rules; and
(b) the change is merely a minor administrative change.
884B Changing Division 3 arrangements—matters required to be
dealt with in the compensation rules
(1) If the proposed change is to a matter required by section 885B to
be dealt with in the compensation rules, the change may only be
made by changing the rules.
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Section 884C
166 Corporations Act 2001
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(2) As soon as practicable after the change is made, the operator must
lodge with ASIC written notice of the change.
(3) The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(4) If no notice is lodged with ASIC within 21 days after the change is
made, the change ceases to have effect.
(5) As soon as practicable after receiving a notice under
subsection (2), ASIC must send a copy of the notice to the
Minister.
(6) Within 28 days after receiving the copy of the notice, the Minister
may disallow all or a specified part of the change to the
compensation rules.
(7) The Minister must not disallow all or part of the change unless the
Minister considers that, because of the change, or that part of the
change, the compensation arrangements are not adequate.
(8) As soon as practicable after all or part of a change is disallowed,
ASIC must give notice of the disallowance to the operator of the
market concerned. The change ceases to have effect, to the extent
of the disallowance, when the operator receives the notice.
884C Changing Division 3 arrangements—matters not required to
be dealt with in the compensation rules
(1) If:
(a) the proposed change is to a matter that is not required by
section 885B to be dealt with in the compensation rules
(including a matter that is dealt with in the compensation
rules even though it is not required to be dealt with in those
rules); and
(b) the change is not merely a minor administrative change;
the operator must not make the change unless:
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(c) the operator has applied for approval of the change; and
(d) the change has been approved by the Minister.
(2) The application for approval must:
(a) include the information, required by regulations made for the
purposes of this paragraph, in relation to the proposed
change; and
(b) be made to the Minister by lodging the application with
ASIC.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) If the Minister does not consider that the compensation
arrangements as proposed to be changed are adequate, the
application for approval must be rejected.
(4) If the Minister considers that the compensation arrangements as
proposed to be changed are adequate, the Minister must approve
the change.
(5) If:
(a) the proposed change is to a matter that is dealt with in the
compensation rules even though it is not required to be dealt
with in those rules; and
(b) the change is approved;
the operator may make any change to the compensation rules that
is necessary to give effect to the change that has been approved or
that is incidental to giving effect to that change.
(6) If a change to the compensation rules is made as permitted by
subsection (5), the operator must, as soon as practicable after the
change is made, give ASIC written notice of the change.
(7) A notice required by subsection (6) must:
(a) set out the text of the change; and
(b) specify the date on which it was made; and
(c) contain an explanation of why it is a change that is permitted
to be made by subsection (5).
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Division 3 Approved compensation arrangements
Section 885A
168 Corporations Act 2001
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Subdivision D—Are compensation arrangements adequate?
885A Purpose of this Subdivision
(1) This Subdivision applies for the purpose of determining, for the
purposes of a provision of this Division:
(a) whether:
(i) proposed compensation arrangements are adequate; or
(ii) compensation arrangements as proposed to be changed
are adequate; or
(b) whether compensation arrangements that have been approved
are adequate.
(2) A reference in this Subdivision to the arrangements is a reference
to the proposed arrangements, the arrangements as proposed to be
changed, or the arrangements that have been approved, as the case
requires.
(3) A reference in this Subdivision to the compensation rules is a
reference to the compensation rules, or the proposed compensation
rules, forming part of the arrangements under consideration.
885B Requirements to be complied with for arrangements to be
adequate
(1) The arrangements are adequate if, and only if, the Minister is
satisfied that:
(a) the compensation rules provide adequate coverage for
Division 3 losses (see sections 885C and 885D); and
(b) the compensation rules provide for adequate compensation to
be paid in respect of Division 3 losses (see section 885E);
and
(c) the compensation rules deal adequately with how
compensation in respect of Division 3 losses is to be paid
(see section 885F); and
(d) the compensation rules deal adequately with the making and
determination of claims in respect of Division 3 losses, and
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with the notification of the outcome of such claims (see
section 885G); and
(e) the arrangements provide for an adequate source of funds for
paying compensation in respect of Division 3 losses and in
respect of any other losses covered by the arrangements (see
section 885H); and
(f) the arrangements include adequate arrangements for
administration and monitoring (see section 885I); and
(g) under the arrangements, potential claimants have reasonable
and timely access to the compensation regime; and
(h) if the licensee ceases (for whatever reason) to be required to
have Division 3 arrangements, the rights of people to seek
compensation under the arrangements, being rights that
accrued while the licensee was required to have such
arrangements, will be adequately protected.
(2) In considering the matters mentioned in subsection (1), the
Minister must also have regard to the matters mentioned in
section 885J.
(3) The matters that may be dealt with in compensation rules are not
limited to matters mentioned in this section.
885C The losses to be covered
(1) Subject to section 885D, the compensation rules must cover losses
(Division 3 losses) of a kind described in the following paragraphs:
(a) a person (the client) gave money or other property, or
authority over property, to a person (the participant):
(i) who was a participant in the market at that time; or
(ii) who the client reasonably believed to be a participant in
the market at that time and who was a participant in the
market at some earlier time; and
(b) the money or other property, or the authority, was given to
the participant in connection with effecting a transaction, or
proposed transaction, covered by provisions of the operating
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Section 885D
170 Corporations Act 2001
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rules of the market relating to transactions effected through
the market; and
(c) the effecting of the transaction through the market constitutes
or would constitute the provision of a financial service to the
client as a retail client; and
(d) the client suffers a loss because of:
(i) if the client gave the participant money or other
property—the defalcation or fraudulent misuse of the
money or other property by the participant; or
(ii) if the client gave the participant authority over
property—the fraudulent misuse of that authority by the
participant.
(2) The compensation rules must provide that a claim relating to an
alleged loss caused by defalcation or fraudulent misuse may be
allowed even if:
(a) the person against whom the defalcation or misuse is alleged
has not been convicted or prosecuted; and
(b) the evidence on which the claim is allowed would not be
sufficient to establish the guilt of that person on a criminal
trial in respect of the defalcation or fraudulent misuse.
(3) The compensation rules may exclude losses of a kind described
above that occur in specified situations. However, the
compensation arrangements will not be adequate unless the
Minister is satisfied that those exclusions are appropriate.
885D Certain losses that are not Division 3 losses
(1) If, in relation to a loss suffered by a person:
(a) the requirements of subsection 885C(1) are satisfied in
relation to a participant and 2 or more financial markets; and
(b) the person did not (expressly or impliedly) instruct the
participant to use a particular one of those markets; and
(c) it is not reasonably apparent from the usual business practice
of the participant which of those markets the participant
would use when acting for the person;
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the loss is taken not to be a Division 3 loss.
(2) If, in relation to a loss suffered by a person:
(a) the requirements of subsection 885C(1) are satisfied in
relation to a participant and a financial market; and
(b) the loss is also connected (see section 888A) with a financial
market to which Division 4 applies; and
(c) the person did not (expressly or impliedly) instruct the
participant to use a particular one of those markets; and
(d) it is not reasonably apparent from the usual business practice
of the participant which of those markets the participant
would use when acting for the person;
the loss is taken not to be a Division 3 loss.
(3) If, in relation to a loss suffered by a person:
(a) the transaction referred to in paragraph 885C(1)(b) could
have been effected otherwise than through a financial market;
and
(b) the person did not (expressly or impliedly) instruct the
participant concerned to effect the transaction through a
financial market; and
(c) it is not reasonably apparent from the usual business practice
of the participant that the transaction would be effected
through a financial market;
the loss is taken not to be a Division 3 loss.
885E The amount of compensation
(1) Subject to this section, the compensation rules must provide that
the amount of compensation to be paid in respect of a Division 3
loss is to be not less than the sum of:
(a) the actual pecuniary loss suffered by the claimant, calculated
by reference to the market value of any relevant assets or
liabilities as at the date on which the loss was suffered; and
(b) the claimant’s reasonable costs of, and disbursements
incidental to, the making and proof of the claim.
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Section 885F
172 Corporations Act 2001
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(2) The compensation rules may provide for the amount of
compensation payable in respect of a Division 3 loss to be reduced
by reference to a right of set-off available to the claimant.
(3) The compensation rules may impose an upper limit on the amount
of compensation to which a person is entitled in respect of a claim
in particular circumstances, or an upper limit on the total amount of
compensation to which persons are entitled in respect of claims
referable to a particular event or circumstance.
(4) That upper limit may be specified in the compensation rules or
determined by a method specified in the rules.
(5) The compensation rules must also provide for the payment to the
claimant of interest at the rate applicable under the regulations on
the amount of the actual pecuniary loss, or so much of that loss as
from time to time has not been compensated by an instalment or
instalments of compensation, in respect of the period starting on
the day when the loss was suffered and ending on the day when the
compensation, or the last instalment of compensation, is paid.
(6) The compensation rules may provide for what is to happen if there
are insufficient funds to meet claims in respect of Division 3 losses
and in respect of any other losses covered by the arrangements. For
example, they may provide for the prioritisation of claims, or the
apportionment of available funds between claims.
(7) In other provisions of this Division a reference to compensation in
respect of a Division 3 loss includes (unless the contrary intention
appears) a reference to interest referred to in subsection (5).
885F Method of payment of compensation
(1) The compensation rules must deal with how compensation in
respect of Division 3 losses is to be paid.
(2) Without limiting subsection (1), the compensation rules may
provide for compensation to be paid in a lump sum or by
instalments.
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885G Making and determination of claims
(1) The compensation rules must provide for how claims in respect of
Division 3 losses are to be made and determined, and for how
claimants are notified of the outcome of their claims.
(2) Without limiting subsection (1), the compensation rules may:
(a) require a person making a claim to pay money, or transfer
other property, in support of a claim; and
(b) provide for claims to be disallowed unless persons exercise
rights of set-off; and
(c) set time limits for the making of claims; and
(d) provide for claims to be partially allowed (including, for
example, in a case where the operator considers that the
claimant’s conduct contributed to the loss).
885H The source of funds—general
There must be an adequate source of funds available to cover
claims made under the compensation arrangements in respect of
Division 3 losses and in respect of any other losses covered by the
arrangements.
Note 1: For example, the source of funds may consist of:
(a) a fidelity fund; or
(b) insurance arrangements; or
(c) an irrevocable letter of credit.
Note 2: The source of funds does not have to consist of a single thing. It may
consist of a combination of different things.
885I Administration and monitoring
(1) The arrangements must include arrangements for:
(a) the administration of the compensation arrangements; and
(b) monitoring compliance with the compensation arrangements
and reporting breaches of the arrangements to the board of
the operator of the market; and
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Section 885J
174 Corporations Act 2001
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(c) monitoring the adequacy of the arrangements and reporting
to the board of the operator of the market on the need for, or
desirability of, changes to the compensation arrangements.
(2) Without limiting subsection (1), the arrangements may give
responsibilities to:
(a) the operator of the market, or a related company, or a director
or employee of the operator or a related company; or
(b) a committee; or
(c) another person acting under an arrangement with the
operator.
(3) The people who may be members of a committee referred to in
paragraph (2)(b) include, but are not limited to:
(a) participants in the market, or representatives of such
participants; and
(b) members of the board of the operator of the market.
885J The losses to be covered—other matters to be taken into
account
(1) In considering whether the arrangements are adequate, the Minister
must also have regard to:
(a) the services provided by the market and by the participants in
the market; and
(b) any risk assessment report in relation to the market given to
the Minister under section 892K.
(2) The Minister may take into account such other matters as the
Minister thinks appropriate.
Subdivision E—Other provisions about Division 3
arrangements
886A Only one claim in respect of the same loss
If:
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(a) a claim by a person for compensation in respect of a
particular Division 3 loss suffered by the person has been
allowed under Division 3 arrangements; and
(b) the person makes or has made another claim under those
Division 3 arrangements, or under other Division 3
arrangements, in respect of the same loss;
that other claim must not be allowed.
886B Regulations relating to fidelity funds
The regulations may include provisions relating to how a fidelity
fund, or part of a fidelity fund, is to be dealt with if:
(a) the operator of a financial market becomes insolvent, within
the meaning of the regulations; or
(b) a financial market merges with another financial market; or
(c) a financial market ceases to operate (otherwise than because
of a merger), or ceases to be required by subsection 881A(1)
to have approved compensation arrangements.
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Section 887A
176 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—NGF Compensation regime
Subdivision A—Application of Division
887A Markets to which this Division applies
This Division applies to a financial market that is operated by:
(a) a body corporate that is a member of the SEGC; or
(b) a body corporate that is a subsidiary of such a member;
other than any such market that the regulations state is not covered
by this Division.
Subdivision B—Claims for and payment of compensation
888A The situations in which compensation may be claimed
(1) The situations in which compensation may be claimed in respect of
a loss that is connected with a financial market to which this
Division applies are as specified in the regulations.
(2) Without limiting subsection (1), a loss is connected with a financial
market if it is caused by a participant, or past participant, in the
market.
888B Kinds of compensation available
The regulations may provide that compensation under this Division
is to take the form of a payment of money or some other form (for
example, a transfer of financial products).
888C Amount of compensation payable
(1) The amount of compensation (including the value of any
non-monetary compensation) to which a person is entitled in
respect of a claim that is allowed is to be as determined in
accordance with the regulations.
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Section 888D
Corporations Act 2001 177
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(2) Without limiting subsection (1), the regulations may do all or any
of the following:
(a) provide for the amount of compensation to be determined by
agreement with the claimant, or by arbitration if agreement
cannot be reached; and
(b) provide for the payment of interest on the amount of the
claimant’s loss; and
(c) provide for the amount of compensation to be reduced by
reference to a right of set-off available to the claimant or by
reference to the extent to which the claimant was responsible
for causing the loss; and
(d) impose an upper limit on the amount of compensation to
which a person is entitled in respect of a claim in particular
circumstances, or an upper limit on the total amount of
compensation to which persons are entitled in respect of
claims referable to a particular event or circumstance.
(3) An upper limit referred to in paragraph (2)(d) may be specified in
the regulations or determined by a method specified in the
regulations.
(4) The regulations may also provide for a claimant to be paid an
amount in respect of the claimant’s reasonable costs of, and
disbursements incidental to, the making and proof of the claim
(whether or not the claim is allowed in whole or in part).
(5) The regulations may also provide for a claimant to be paid an
amount in respect of the claimant’s reasonable costs of, and
disbursements incidental to, attempting to recover the loss
(whether or not the claim is allowed in whole or in part).
888D Payment of compensation
(1) The regulations may provide for the compensation to be paid in a
lump sum or by instalments.
(2) The regulations may make other provisions in relation to how
compensation is to be paid.
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Section 888E
178 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
888E Making and determination of claims
(1) Claims are to be made and determined in accordance with:
(a) the regulations; and
(b) any relevant provisions of the SEGC’s operating rules.
(2) Without limiting subsection (1), the regulations, or the SEGC’s
operating rules, may do all or any of the following:
(a) require a person making a claim to pay money, or transfer
other property, to the SEGC in support of a claim;
(b) provide for claims to be disallowed unless persons exercise
rights of set-off;
(c) set time limits for the making of claims;
(d) provide for claims to be partially allowed (including, for
example, in a case where the SEGC considers that the
claimant’s conduct contributed to the loss).
(3) The regulations, or the SEGC’s operating rules, may impose other
requirements to be complied with by the SEGC in relation to
claims (including, for example, requirements to notify claimants
whether their claims have been allowed).
(4) If a provision of the SEGC’s operating rules is wholly or partly
inconsistent with regulations made for the purposes of this section,
the provision of the SEGC’s operating rules is, to the extent of the
inconsistency, of no effect.
888F The SEGC has power to determine claims
The SEGC has power to determine claims in accordance with this
Division.
888G Allowing a claim does not constitute an admission of any other
liability
If the SEGC allows a claim, neither the allowance of the claim, nor
any other act done by SEGC as a result of allowing the claim,
constitutes an admission (by anyone) of any liability, other than the
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Section 888H
Corporations Act 2001 179
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liability to provide compensation in respect of the claim in
accordance with this Division.
888H Claimant may apply to Court if claim disallowed
(1) If the SEGC has disallowed a claim, the claimant may bring
proceedings in the Court to establish the claim. The proceedings
must be brought within 3 months of notice of the disallowance of
the claim.
(2) If the SEGC has neither allowed nor disallowed a claim within a
reasonable period after it was made, the claimant may bring
proceedings in the Court to establish the claim.
(3) If, in proceedings under subsection (1) or (2), the Court is satisfied
that the claim should be allowed, the Court:
(a) must, by order, make a declaration accordingly and direct the
SEGC to allow the claim and deal with it in accordance with
this Division; and
(b) may, at any time after the order is made, on application made
(whether before or after the order is made) by the claimant or
the SEGC, give such directions relating to the claim as the
Court thinks just and reasonable.
(4) In proceedings to establish a claim, all questions of costs are in the
discretion of the Court.
888I Non-NGF property of the SEGC not available to meet claims
Money or other property of the SEGC that is not part of the NGF is
not available to be applied in respect of a claim that has been
allowed by the SEGC, whether or not under an order of the Court.
888J The SEGC may enter into contracts of insurance or indemnity
(1) The SEGC may enter into a contract with a person (the insurer)
carrying on a fidelity insurance business under which the SEGC
will be insured or indemnified against liability in respect of claims
to the extent and in the manner provided by the contract.
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Section 888K
180 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The contract may relate to all claims or only to certain claims as
specified in the contract. The contract may, for example, exclude
claims relating to the conduct of a particular financial services
licensee.
(3) The following persons each have qualified privilege in respect of
the publication of a statement that the contract does not apply with
respect to claims relating to the conduct of a particular financial
services licensee:
(a) the SEGC and the members of its board;
(b) any body corporate that is a member of the SEGC;
(c) any subsidiary of such a member;
(d) any employee of a body covered by paragraph (a), (b) or (c).
(4) A person who has made a claim does not have a right of action
against the insurer in respect of the contract or a right or claim in
respect of money paid by the insurer in accordance with the
contract.
888K NGF may be used to acquire financial products to be
transferred as compensation
The SEGC may pay money out of the NGF to acquire financial
products for the purpose of providing compensation (in accordance
with the regulations) that takes the form of a transfer of financial
products.
Subdivision C—The NGF
889A Continuation of the National Guarantee Fund
The National Guarantee Fund that continued to exist under
section 928B of this Act before the repeal of that section by the
Financial Services Reform Act 2001 continues in existence as the
National Guarantee Fund for the purposes of this Part.
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Section 889B
Corporations Act 2001 181
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889B Compensation to be provided out of the NGF
Compensation payable under this Division is to be paid out of the
NGF.
889C The SEGC to keep the NGF
(1) The SEGC must keep and administer the NGF.
(2) The assets of the NGF are the property of SEGC, but must be kept
separate from all other property and must be held on trust by the
SEGC for the purposes of this Division.
889D What the NGF consists of
The NGF consists of:
(a) money and other property constituting the NGF before the
commencement of this Chapter; and
(b) money paid into the NGF in accordance with section 889J or
889K; and
(c) money paid to the SEGC in accordance with regulations
referred to in section 888E in support of a claim; and
(d) money paid to the SEGC under a contract of insurance or
indemnity referred to in section 888J; and
(e) money paid into the NGF under subsection 889F(2); and
(f) the interest and profits from time to time accruing from the
investment of the NGF; and
(g) money recovered by or on behalf of the SEGC in the exercise
of a right of action that the SEGC has by virtue of a provision
of this Part; and
(h) money and other property paid or transferred to the SEGC for
inclusion in the NGF in accordance with regulations referred
to in section 891B; and
(i) all other money and other property lawfully paid into, or
forming part of, the NGF.
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Section 889E
182 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
889E Power to borrow etc. for purposes of the NGF
(1) If the SEGC considers that, in the interests of the sound financial
management of the NGF, money should be borrowed for the
purpose of meeting a payment due out of the NGF, the SEGC may
borrow money for that purpose on such terms and conditions as the
SEGC thinks appropriate.
(2) The SEGC may give security, including over the assets of the
NGF, in respect of the SEGC’s obligations in relation to a
borrowing under subsection (1).
(3) If:
(a) money borrowed under subsection (1) is a loan from a body
corporate that is a member of the SEGC; and
(b) the body corporate borrowed money for the purpose of
making the loan to the SEGC;
the SEGC may give security, including over the assets of the NGF,
in relation to the body corporate’s obligations in respect of the
borrowing referred to in paragraph (b).
889F Money borrowed and paid to the SEGC
(1) This section applies if money borrowed by the SEGC under
subsection 889E(1) is paid to the SEGC.
(2) The SEGC must pay the money into the NGF.
(3) If:
(a) the money was borrowed for the purpose of meeting a
payment due out of the NGF; and
(b) the borrowed money has been paid into the NGF; and
(c) the payment due out of the NGF has not yet been made;
then, for the purposes of section 889J, the amount in the NGF is
taken to be reduced by the amount of the borrowed money.
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Section 889G
Corporations Act 2001 183
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889G Money borrowed and not paid to the SEGC
(1) This section applies if money borrowed by the SEGC under
subsection 889E(1) is not paid to the SEGC but is payable to other
persons at the direction of the SEGC.
(2) The SEGC must not direct that any of the money be paid to a
person unless the payment is of a kind that can, under
section 889H, be made out of the NGF.
889H Payments out of the NGF
Subject to regulations made for the purposes of this section, the
following are to be paid out of the NGF, in such order as the SEGC
considers appropriate:
(a) amounts, including costs, disbursements and interest, that any
provision of this Part requires to be paid in connection with
claims;
(b) all legal and other expenses incurred:
(i) in investigating or defending claims; or
(ii) in relation to the NGF; or
(iii) in the exercise by the SEGC of the rights and powers
vested in it by any provision of this Part in relation to
the NGF;
(c) money payable out of the NGF under regulations referred to
in subsection 892G(2);
(d) amounts to be paid to acquire financial products as
mentioned in section 888K;
(e) premiums payable in respect of contracts of insurance or
indemnity entered into by the SEGC under section 888J;
(f) payments of principal, interest and other amounts payable by
the SEGC in respect of money borrowed, and security given,
under section 889E;
(g) the expenses incurred in the administration of the NGF,
including the salaries and wages of persons employed by the
SEGC in relation to the NGF;
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Section 889I
184 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(h) amounts to be paid to a body corporate in accordance with a
direction of the Minister under section 891A;
(i) any other money payable out of the NGF in accordance with
a provision of this Part.
889I Minimum amount of the NGF
(1) The minimum amount in relation to the NGF is:
(a) unless paragraph (b) applies—$80,000,000; or
(b) if a determination is in force under subsection (2)—the
amount specified in the determination.
(2) The SEGC may, in writing, determine an amount (whether greater
than, or less than, $80,000,000) to be the minimum amount in
relation to the NGF. The determination does not come into force
until it has been approved by the Minister.
(3) The SEGC must publish in the Gazette notice of a determination
that has come into force under subsection (2). The notice must
specify the date when the determination came into force.
(4) If the amount in the NGF falls below the minimum amount, the
SEGC must consider what action needs to be taken.
889J Levy by the SEGC
(1) If the amount in the NGF is less than the minimum amount
applicable under section 889I, the SEGC may determine in writing
that:
(a) the operators of all, or a class, of the financial markets to
which this Division applies; or
(b) all, or a class, of the participants in any of these markets;
must pay a levy to the SEGC.
(2) The levy is payable to the SEGC, as agent for the Commonwealth,
in accordance with this section.
Note: For the imposition and amount of the levy, see the Corporations
(National Guarantee Fund Levies) Act 2001. There is a limit on the
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Section 889J
Corporations Act 2001 185
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amount of levy that is payable to the SEGC in a financial year under
that Act.
(3) A levy payable under this section must be paid within the period
and in the manner determined in writing by the SEGC.
(4) Whenever an amount of levy (the levy amount) is paid under this
section, or under subsection 6(2) of the Corporations (National
Guarantee Fund Levies) Act 2001, to the SEGC as agent for the
Commonwealth:
(a) the SEGC must pay an amount equal to the levy amount to
the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that
amount for the purpose of payment to the SEGC; and
(c) the Commonwealth must pay the amount so appropriated to
the SEGC; and
(d) the SEGC must pay the amount it receives under
paragraph (c) into the NGF.
(5) Whenever an amount of levy (the levy amount) is paid under
subsection 6(1) of the Corporations (National Guarantee Fund
Levies) Act 2001, to the operator of a financial market as agent for
the Commonwealth:
(a) the operator must pay an amount equal to the levy amount to
the SEGC; and
(b) the SEGC must pay an amount equal to the amount so paid to
it to the Commonwealth; and
(c) the Consolidated Revenue Fund is appropriated by that
amount for the purpose of payment to the SEGC; and
(d) the Commonwealth must pay the amount so appropriated to
the SEGC; and
(e) the SEGC must pay the amount it receives under
paragraph (d) into the NGF.
(6) A payment of an amount to the SEGC as required by
paragraph (4)(c) or (5)(d) in respect of a particular levy amount is
subject to a condition that, if the Commonwealth becomes liable to
refund the whole or a part of the levy amount, the SEGC must pay
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Section 889K
186 Corporations Act 2001
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the Commonwealth an amount equal to the amount that the
Commonwealth is liable to refund. The SEGC may pay, out of the
NGF, any amount so required to be paid to the Commonwealth.
(7) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this
section to the SEGC, or the operator of a financial products market,
as agent for the Commonwealth. However, the operation of that
Act in relation to the following payments is not affected:
(a) the payment of an amount to the Commonwealth as required
by paragraph (4)(a) or (5)(b); or
(b) the payment of an amount by the Commonwealth as required
by paragraph (4)(c) or (5)(d).
The SEGC must, in accordance with the regulations, notify the
Commonwealth of payments of levy it receives as agent for the
Commonwealth, and the operator of a financial market must, in
accordance with the regulations, notify the Commonwealth of
payments it receives as agent for the Commonwealth as mentioned
in paragraph (5)(a).
(8) An amount payable by the SEGC as required by paragraph (4)(a)
may be set off against an amount payable to the SEGC as required
by paragraph (4)(c), and an amount payable by the SEGC as
required by paragraph (5)(b) may be set off against an amount
payable to the SEGC as required by paragraph (5)(d).
889K Levy by market operator
(1) An operator of a financial market who must pay an amount of levy
(the primary levy amount) under section 889J may determine in
writing that participants in the market must pay a levy (the
contributory levy). The determination must be such that the total of
the amounts of contributory levy payable by the participants does
not exceed the primary levy amount. The contributory levy is
payable to the operator as agent for the Commonwealth.
Note: For the imposition and amount of the levy, see the Corporations
(National Guarantee Fund Levies) Act 2001.
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Section 889K
Corporations Act 2001 187
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(2) If a determination is made under subsection (1), the contributory
levy is payable by each participant in the market who, when the
determination is made, is in a class of participants in the market
determined in writing by the operator for the purposes of the levy.
(3) The amount of contributory levy payable by a participant under a
determination under subsection (1) must be paid within the period,
and in the manner, specified in writing by the operator either
generally or in relation to particular participants or classes of
participants.
(4) Whenever an amount of levy (the levy amount) is paid under this
section, or under subsection 6(3) of the Corporations (National
Guarantee Fund Levies) Act 2001, to the operator of a financial
market as agent for the Commonwealth:
(a) the operator must pay an amount equal to the levy amount to
the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that
amount for the purpose of payment to the SEGC; and
(c) the Commonwealth must pay the amount so appropriated to
the SEGC; and
(d) the SEGC must pay the amount it receives under
paragraph (c) into the NGF; and
(e) the operator’s liability to pay the primary levy amount is
reduced by the amount paid into the NGF under
paragraph (d).
(5) A payment of an amount to the SEGC as required by
paragraph (4)(c) in respect of a particular contributory levy amount
is subject to a condition that, if the Commonwealth becomes liable
to refund the whole or a part of the contributory levy amount, the
SEGC must pay the Commonwealth an amount equal to the
amount that the Commonwealth is liable to refund. The SEGC may
pay, out of the NGF, any amount so required to be paid to the
Commonwealth.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this
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Section 890A
188 Corporations Act 2001
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section to the operator of a financial market as agent for the
Commonwealth. However, the operation of that Act in relation to
the following payments is not affected:
(a) the payment of an amount to the Commonwealth as required
by paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required
by paragraph (4)(c).
The operator must, in accordance with the regulations, notify the
Commonwealth of payments of levy it receives as agent for the
Commonwealth.
Subdivision D—The SEGC
890A Minister to nominate the SEGC
(1) Subject to subsection (3), the Minister may nominate in writing as
the Securities Exchanges Guarantee Corporation a body
corporate (whenever incorporated) that is, for the purposes of the
national corporate laws, a company limited by guarantee.
(2) ASIC must cause a copy of a nomination by the Minister under
subsection (1) to be published in the Gazette.
(3) The Minister may only nominate a body corporate under
subsection (1) if he or she is satisfied that:
(a) the Australian Stock Exchange Limited is a member of the
body corporate; and
(b) each of the other members of the body corporate is a market
licensee; and
(c) the body corporate’s constitution provides that only market
licensees may become or remain members of the body
corporate; and
(d) the body corporate will, if nominated under subsection (1),
be able to perform and exercise the SEGC’s functions and
powers under this Division adequately and with due regard to
the interests of the public; and
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Section 890B
Corporations Act 2001 189
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(e) the body corporate has obtained, or will within a reasonable
period after being nominated under subsection (1) obtain,
indemnity insurance in respect of its liabilities for:
(i) negligence in; and
(ii) defalcation, or fraudulent misuse of property, by an
officer, employee or agent of the body corporate in
connection with;
the performance or exercise of the SEGC’s functions or
powers under this Division, or has made or will make other
satisfactory provisions for meeting those liabilities; and
(f) the body corporate’s business rules make satisfactory
provision:
(i) for ensuring the safety of property received by the body
corporate; and
(ii) generally for the protection of the interests of the public.
890B The SEGC’s functions and powers
(1) In addition to the legal capacity and powers it has because of
section 124, the SEGC has such functions and powers as are
conferred, or expressed to be conferred, on it by or under this Part.
(2) Section 125 does not apply in relation to a function or power
conferred, or expressed to be conferred, as mentioned in
subsection (1) of this section.
(3) The SEGC is to perform the functions, and may exercise the
powers, that are conferred on it by or under this Part.
(4) The SEGC is to administer the arrangements constituted by this
Division.
890C Delegation
(1) Subject to this section, all decisions of the SEGC in relation to the
performance of its functions, and the exercise of its powers, under
this Part must be made by the board of the SEGC.
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Section 890D
190 Corporations Act 2001
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(2) The board of the SEGC must not delegate any of the following
powers of the SEGC:
(a) the power to borrow under section 889E;
(b) the power to determine the order of payments under
section 889H;
(c) the power to determine a minimum amount under
section 889I;
(d) the power to make operating rules under section 890D;
(e) the power (or duty) to make a payment under section 891A.
(3) Otherwise, the board of the SEGC may delegate any of their
powers under this Part in accordance with section 198D.
890D Operating rules of the SEGC
The SEGC may make rules (operating rules) relating to the
performance or exercise of its powers or duties under this Part, or
relating to matters permitted by this Part to be dealt with in its
operating rules.
890E Legal effect of the SEGC’s operating rules
The SEGC’s operating rules have effect as a contract under seal
between the SEGC and each member of the SEGC under which
each of those persons agrees to observe the operating rules to the
extent that they apply to the person and engage in conduct that the
person is required by the operating rules to engage in.
890F Enforcement of the SEGC’s operating rules
(1) If a person who is under an obligation to comply with or enforce
any of the SEGC’s operating rules fails to meet that obligation, an
application to the Court may be made by:
(a) ASIC; or
(b) the SEGC; or
(c) a member of the SEGC; or
(d) a person aggrieved by the failure.
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Section 890G
Corporations Act 2001 191
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(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an
order giving directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
890G Changing the SEGC’s operating rules
(1) As soon as practicable after a change is made to the SEGC’s
operating rules, the SEGC must lodge with ASIC written notice of
the change.
(2) The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(3) If no notice is lodged with ASIC within 21 days after the change is
made, the change ceases to have effect.
890H Disallowance of changes to the SEGC’s operating rules
(1) As soon as practicable after receiving a notice under section 890G,
ASIC must send a copy of the notice to the Minister.
(2) Within 28 days after ASIC received the notice under section 890G,
the Minister may disallow all or a specified part of the change to
the SEGC’s operating rules.
(3) As soon as practicable after all or part of a change is disallowed,
ASIC must give notice of the disallowance to the SEGC. The
change ceases to have effect, to the extent of the disallowance,
when the SEGC receives the notice.
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Division 4 NGF Compensation regime
Section 891A
192 Corporations Act 2001
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Subdivision E—Other provisions relating to compensation
under this Division
891A Payment out of the NGF to prescribed body with
arrangements covering clearing and settlement facility
support
(1) If the Minister is satisfied that a body corporate specified in
regulations made for the purposes of this section has made
adequate arrangements covering all or part of the clearing and
settlement system support that this Division provides for, the
Minister may, in writing, direct the SEGC to pay a specified
amount to that body corporate out of the NGF.
(2) The Minister may, in writing, impose conditions to be complied
with by the SEGC or the body corporate, or both, in relation to the
payment.
(3) The SEGC and the body corporate must comply with the direction
and with any applicable conditions to which the direction is
subject.
(4) Before giving a direction under subsection (1), the Minister must
be satisfied that, after the payment is made, the NGF will still have
an adequate amount of assets to meet claims.
891B Markets operated by bodies corporate that become members
of the SEGC—regulations may deal with transitional
provisions and other matters
(1) In this section:
joining market means a financial market that:
(a) is operated by a body corporate that becomes a member of
the SEGC after the commencement of this Division, or by a
subsidiary of such a body corporate; and
(b) is a financial market to which this Division applies.
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Section 891C
Corporations Act 2001 193
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(2) The regulations may make provisions of a transitional or saving
nature dealing with the transition, in relation to a joining market,
from the compensation regime previously applicable in relation to
the market to the arrangements constituted by this Division.
(3) Without limiting subsection (2), the regulations may require money
or other property (including money or other property in a fidelity
fund) to be paid or transferred to the SEGC for inclusion in the
NGF.
(4) The regulations may also provide for the allocation of part of the
NGF as being for use for the purposes of claims arising in
connection with the joining market.
(5) The regulations may make modifications of provisions of this
Division and Division 5 that are necessary or convenient to take
account of allocations of a kind referred to in subsection (4).
891C Regulations may make different provision in respect of
different markets etc.
Regulations made for the purposes of a provision of this Division
may make different provision in respect of different financial
markets to which this Division applies and in respect of different
circumstances.
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Division 5 Provisions common to both kinds of compensation arrangements
Section 892A
194 Corporations Act 2001
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Division 5—Provisions common to both kinds of
compensation arrangements
892A Definitions
In this Division:
regulated fund means:
(a) a fidelity fund that is the source, or a source, of funds under
Division 3 arrangements; or
(b) the NGF; or
(c) an account kept as required by subsection 892B(3).
relevant authority, in relation to Part 7.5 arrangements, means:
(a) if the arrangements are Division 3 arrangements of a
financial market—the operator of the market; or
(b) if the arrangements are Division 4 arrangements—the SEGC.
892B How regulated funds are to be kept
(1) Money in:
(a) a fidelity fund that is the source, or a source, of funds under
Division 3 arrangements; or
(b) the NGF;
must, until applied in paying claims or otherwise spent for the
purposes of this Part, or invested in accordance with section 892C,
be kept by the relevant authority in an account or accounts:
(c) with an Australian ADI; or
(d) of a kind prescribed by regulations made for the purposes of
this paragraph;
separate from any account or accounts in which other money is
kept.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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(2) The regulations may impose additional requirements to be
complied with in relation to the keeping of a regulated fund that
covers 2 or more financial markets.
(3) If:
(a) a source of funds under Division 3 arrangements for a
financial market is something other than a fidelity fund; and
(b) the operator of the market, or a person involved in the
administration of the arrangements, receives money from that
source of funds;
the money received must, until applied in paying claims or
otherwise spent for the purposes of this Part, or invested in
accordance with section 892C, be kept by the relevant authority in
an account or accounts:
(c) with an Australian ADI; or
(d) of a kind prescribed by regulations made for the purposes of
this paragraph;
separate from any account or accounts in which other money is
kept.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
892C Money in regulated funds may be invested
(1) Money in a regulated fund that is not immediately required for the
purposes of meeting claims may be invested in any way in which
trustees are for the time being authorised by law in force in a State
or Territory in this jurisdiction to invest trust funds.
(2) The relevant authority may, with the approval of ASIC, appoint a
person to invest on behalf of the relevant authority money to which
subsection (1) applies.
(3) ASIC must not grant approval to the appointment of a person under
subsection (2) unless it is satisfied that:
(a) the person has appropriate qualifications and expertise to
perform the duties of the appointment; and
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Section 892D
196 Corporations Act 2001
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(b) the relevant authority has adequate indemnity insurance in
respect of its liabilities for any negligence, or any defalcation
or fraudulent misuse of property, by the person in the
performance of those duties, or has made other satisfactory
provisions for meeting those liabilities.
(4) A person appointed under subsection (2) must perform the duties
of the appointment in accordance with the directions of the relevant
authority and subject to such conditions (if any) as the relevant
authority imposes.
892D Powers of relevant authority to require production or delivery
of documents or statements
(1) The relevant authority in relation to Part 7.5 arrangements may
require a person:
(a) to deliver to the relevant authority documents or copies of
documents, including documents of, or evidencing, title to
financial products; or
(b) to make out and deliver to the relevant authority a statement
of evidence;
that the relevant authority considers will assist it in determining a
claim for compensation that has been made, or that the relevant
authority considers are necessary for the purpose of exercising the
subrogated rights and remedies it has in relation to a claim (see
section 892F).
(2) The requirement must be made by notice in writing given to the
person. The notice must:
(a) so far as it requires documents or copies referred to in
paragraph (1)(a)—identify or describe the documents or
copies that are required; and
(b) so far as it requires a statement referred to in
paragraph (1)(b)—describe the matters in relation to which
the person’s evidence is required, and set out any
requirements to be complied with in relation to how the
statement is made out.
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Section 892E
Corporations Act 2001 197
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(3) The person must comply with the requirement.
(4) If the person fails, without reasonable excuse, to comply with the
requirement, the relevant authority may apply to the Court for, and
the Court may make, an order that the person comply with the
direction.
(5) If the person fails, without reasonable excuse, to comply with the
requirement, the relevant authority may disallow a claim made by
the person.
Note: This subsection would not apply if the person subject to the
requirement were someone other than a claimant.
(6) The relevant authority may, in writing, delegate the power given by
this section to a person involved in the administration of the
Part 7.5 arrangements.
(7) The relevant authority must return any documents (other than
copies of documents) provided to it under this section as soon as
practicable after the claim referred to in subsection (1) has been
determined, and any proceedings relating to the determination of
the claim (including any arising from the subrogation of the
relevant authority for the claimant) have been completed.
(8) Subsection (7) does not apply if:
(a) another law prohibits or prevents the return of the
documents; or
(b) the documents are no longer in the custody of the relevant
authority; or
(c) the person tells the relevant authority that the person does not
want the documents back.
892E Power to require assistance for purpose of dealing with a claim
(1) If Division 3 arrangements give responsibilities (as mentioned in
paragraph 885I(2)(c)) to a person acting under an arrangement with
the operator of the market concerned, the person may give the
operator a written request to give such assistance as the person
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Section 892F
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requires for the purpose of fulfilling the person’s responsibilities
under the arrangement.
(2) The SEGC may give a member of the SEGC, or a subsidiary of a
member of the SEGC, a written request to give such assistance as
the SEGC requires for the purpose of:
(a) dealing with a claim; or
(b) the assessment of risks to the NGF.
(3) A requirement for assistance under subsection (1) or (2) must be
reasonable.
(4) A person who is required under this section to give assistance must
give the assistance.
(5) If the person fails to give the assistance, the person who required
the assistance may apply to the Court for, and the Court may make,
an order that the other person give the assistance.
892F Relevant authority’s right of subrogation if compensation is
paid
(1) If compensation in respect of a claim is paid under Part 7.5
arrangements, the relevant authority in relation to the arrangements
is subrogated, to the extent of that payment, to all the claimant’s
rights and remedies in relation to the loss to which the claim
relates.
(2) The relevant authority may also recover from the participant or
participants who caused the loss the costs it incurred in
determining the claim.
892G Excess money in compensation funds
(1) The regulations may determine, or provide a method for
determining, when there is excess money in a regulated fund.
(2) The regulations may make provision in relation to how excess
money in a regulated fund may be, or is to be, dealt with. The
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Corporations Act 2001 199
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regulations may make different provision in relation to different
funds.
892H Accounting and reporting for regulated funds
(1) The relevant authority in relation to Part 7.5 arrangements must, in
relation to each regulated fund established in connection with the
arrangements, keep written financial records that:
(a) correctly record and explain the fund’s transactions and
financial position and performance; and
(b) would enable true and fair financial statements to be prepared
and audited;
and must retain the financial records for 7 years after the
transactions covered by the records are completed.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Within 2 months after the end of each financial year of the relevant
authority, the authority must cause financial statements and notes
to those financial statements (within the meaning of section 295)
for the regulated fund to be made out as at the end of that financial
year.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A registered company auditor, or authorised audit company, must
be appointed to audit the accounts of the regulated fund in
accordance with whichever of the following paragraphs applies:
(a) if there is only one relevant authority for the fund, that
relevant authority must appoint a registered company auditor,
or authorised audit company, to audit the fund’s accounts;
(b) if there is more than one relevant authority for the fund:
(i) each of those relevant authorities must ensure that a
registered company auditor, or authorised audit
company, is appointed in accordance with
subparagraph (ii) to audit the fund’s accounts; and
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(ii) the appointment is to be made by one or more of the
relevant authorities, with the consent of such of the
relevant authorities (if any) as do not make the
appointment; and
(iii) a relevant authority must not purport to appoint a person
to audit the fund’s accounts unless each other relevant
authority (if any) who has not also made the
appointment has consented to the appointment.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) If there is more than one relevant authority for a fund and they
cannot agree on which auditor to appoint, ASIC may, on the
written application of any of the authorities, appoint an auditor
who consents to being so appointed.
(5) The auditor must:
(a) audit the accounts of the regulated fund and the financial
statements; and
(b) do the things required by sections 307 and 308 in relation to
those documents, as if the audit were being done under
Chapter 2M.
(6) The relevant authority for the regulated fund must, within 14 days
after receiving the auditor’s report, lodge with ASIC a copy of the
report and a copy of the financial statements. If there is more than
one relevant authority for the regulated fund, the copy must be
given to ASIC by at least one of those authorities, or else they all
contravene this subsection.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) If the regulated fund is the NGF, the relevant authority (being the
SEGC) must:
(a) give a copy of the audited financial statements to each
member of the SEGC; and
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(b) cause a copy of the audited financial statements to be laid
before the annual general meeting of each member of the
SEGC next following the making of that report.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
892I Division 3 arrangements—reporting in situations where
compensation does not come out of a regulated fund
The regulations may impose reporting requirements to be complied
with by the relevant authority in relation to Division 3
arrangements in relation to situations in which compensation under
the arrangements is provided otherwise than out of a regulated
fund.
892J Regulations may provide for qualified privilege in respect of
certain matters
The regulations may provide for specified persons to have
qualified privilege in respect of specified things done:
(a) under compensation rules forming part of Division 3
arrangements; or
(b) under regulations made for the purposes of a provision or
provisions of Subdivision B of Division 4.
892K Risk assessment report
(1) For the purposes of monitoring compliance with, and the operation
of, this Part, the Minister may, by giving the operator of a financial
market written notice, require the operator:
(a) to cause a risk assessment report to be prepared in relation to
the market in accordance with the requirements specified in
the notice; and
(b) to give that report to the Minister by the time specified in the
notice.
(2) The operator must comply with the notice.
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Section 892K
202 Corporations Act 2001
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 893A
Corporations Act 2001 203
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Division 6—Miscellaneous
893A Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial market or class of financial markets from
all or specified provisions of this Part; or
(c) provide that this Part applies in relation to a person or a
financial market, or a class of persons or financial markets, as
if specified provisions were omitted, modified or varied as
specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 7.2 that refer to provisions of this Part;
and
(c) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
893B Exemptions by Minister
(1) The Minister may exempt a particular financial market, or class of
financial markets, from all or specified provisions of this Part. An
exemption may be unconditional, or subject to conditions specified
in the exemption.
Note: The provisions of this Part include regulations made for the purposes
of this Part (see section 761H).
(2) The Minister may, at any time:
(a) vary an exemption to:
(i) impose conditions, or additional conditions, on the
exemption; or
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(ii) vary or revoke any of the conditions on the exemption;
or
(b) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the
proposed action, to the operator of each financial market
known by the Minister to be covered by the exemption; and
(b) if the exemption covers a class of financial markets—a notice
has been published on ASIC’s website allowing a reasonable
period within which the operator of each financial market
covered by the exemption may make submissions on the
proposed action, and that period has ended.
(4) If an exemption is expressed to apply in relation to a class of
financial markets (whether or not it is also expressed to apply in
relation to one or more financial markets otherwise than by
reference to membership of a class), then the exemption, and any
variation or revocation of the exemption, is a legislative
instrument.
(5) If subsection (4) does not apply to an exemption, then the
exemption, and any variation or revocation of the exemption, must
be in writing and the Minister must publish notice of it in the
Gazette.
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Application of Part Division 1
Section 900A
Corporations Act 2001 205
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Part 7.5A—Regulation of derivative transactions
and derivative trade repositories
Division 1—Application of Part
900A Derivatives and transactions etc. to which this Part applies
(1) Unless an express contrary intention appears, this Part applies, on
the basis specified in section 3, to derivatives, derivative
transactions, facilities, persons, bodies and other matters located in
or otherwise connected with:
(a) a referring State; or
(b) the Northern Territory or the Capital Territory; or
(c) a place outside Australia.
(2) This section does not, by implication, affect the interpretation of
provisions of this Act outside this Part (except to the extent
appropriate for any provisions outside this Part apply or relate to
matters covered by this Part).
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Part 7.5A Regulation of derivative transactions and derivative trade repositories
Division 2 Regulation of derivative transactions: derivative transaction rules
Section 901A
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Division 2—Regulation of derivative transactions:
derivative transaction rules
Subdivision A—Power to make derivative transaction rules
901A ASIC may make derivative transaction rules
Power to make derivative transaction rules
(1) Subject to this Division, ASIC may, by legislative instrument,
make rules (derivative transaction rules) dealing with matters as
permitted by this section.
Note: Subdivision C deals with the process of making derivative transaction
rules.
Main matters that may be dealt with in derivative transaction rules
(2) The derivative transaction rules may (subject to this Division)
impose any of the following kinds of requirements:
(a) execution requirements (see subsection (5));
(b) reporting requirements (see subsection (6));
(c) clearing requirements (see subsection (7));
(d) requirements that are incidental or related to execution
requirements, reporting requirements or clearing
requirements.
Note: Paragraph (2)(d): the derivative transaction rules may (for example)
impose requirements on the operator of a licensed derivative trade
repository to facilitate compliance, by other persons, with reporting
requirements.
Other matters that may be dealt with in derivative transaction rules
(3) The derivative transaction rules may also (subject to this Division)
deal with matters incidental or related to requirements referred to
in subsection (2), including any of the following:
(a) specifying the classes of derivative transactions in relation to
which particular requirements apply;
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(b) for execution requirements—specifying the licensed market
or prescribed facility (or the class of licensed market or
prescribed facility) on which derivative transactions in a
particular class must be entered into;
(c) for reporting requirements:
(i) specifying the licensed derivative trade repository or
prescribed derivative trade repository (or the class of
licensed derivative trade repository or prescribed
derivative trade repository), to which information about
derivative transactions, or positions, in a particular class
must be reported; and
(ii) specifying the information that is required to be
reported;
(d) for clearing requirements:
(i) specifying the licensed CS facility or prescribed facility
(or the class of licensed CS facility or prescribed
facility) through which derivative transactions in a
particular class must be cleared; and
(ii) specifying a period within which transactions must be
cleared;
(e) specifying the persons who are required to comply with
requirements imposed by the rules;
(f) the manner and form in which persons must comply with
requirements imposed by the rules;
(g) the circumstances in which persons are, or may be, relieved
from complying with requirements in the rules that would
otherwise apply to them;
(h) the keeping of records, or the provision of records or other
information, relating to compliance with (or determining
whether there has been compliance with) the rules;
(i) any other matters that the provisions of this Act provide may
be dealt with in the derivative transaction rules.
Note: Paragraph (e): subject to section 901D, the persons who are required
to comply with requirements imposed by the rules may (for example)
be:
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(a) persons who are parties to derivative transactions, or who are intermediaries or agents who facilitate or are otherwise involved in derivative transactions; or
(b) operators of financial markets on which derivative transactions are entered into; or
(c) operators of clearing and settlement facilities through which derivative transactions are cleared; or
(d) operators of licensed or prescribed derivative trade repositories.
Penalty amounts
(4) The derivative transaction rules may specify a penalty amount for a
rule. A penalty amount must not exceed 1,000 penalty units.
Meaning of execution requirements
(5) For the purpose of this Chapter, execution requirements are
requirements for derivative transactions not to be entered into
otherwise than on:
(a) a licensed market, the licence for which authorises a class of
financial products that includes the derivatives to which the
transactions relate to be dealt with on the market; or
(b) a facility that is (or that is in a class of facilities that is)
prescribed by the regulations for the purpose of this
paragraph in relation to a class of derivatives that includes
the derivatives to which the transactions relate.
Meaning of reporting requirements
(6) For the purpose of this Chapter, reporting requirements are
requirements for information about derivative transactions, or
about positions relating to derivative transactions, to be reported to:
(a) a licensed derivative trade repository, the licence for which
authorises the repository to provide services in respect of a
class of derivatives that includes the derivatives to which the
transactions relate; or
(b) a facility that is (or that is in a class of facilities that is)
prescribed by the regulations for the purpose of this
paragraph in relation to a class of derivatives that includes
the derivatives to which the transactions relate.
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Meaning of clearing requirements
(7) For the purpose of this Chapter, clearing requirements are
requirements for derivative transactions to be cleared through:
(a) a licensed CS facility, the licence for which authorises the
facility to provide services in respect of a class of financial
products that includes the derivatives to which the
transactions relate; or
(b) a facility that is (or that is in a class of facilities that is)
prescribed by the regulations for the purpose of this
paragraph in relation to a class of derivatives that includes
the derivatives to which the transactions relate.
Rules cannot generally impose requirements retrospectively
(8) The derivative transaction rules:
(a) cannot impose an execution requirement on a person in
relation to a derivative transaction entered into before the
requirement started to apply to the person; and
(b) cannot impose a reporting requirement on a person in relation
to a derivative transaction entered into before the requirement
started to apply to the person, or in relation to a position as it
was at a time before the requirement started to apply to the
person; and
(c) cannot impose a clearing requirement on a person in relation
to a derivative transaction entered into before the requirement
started to apply to the person, unless the transaction has not
been cleared by the time the requirement starts to apply to the
person.
901B Derivatives in relation to which rules may impose
requirements
Requirements can only be imposed in relation to derivatives
covered by a determination under this section
(1) The derivative transaction rules cannot impose execution
requirements, reporting requirements, or clearing requirements, in
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relation to derivative transactions unless the derivatives to which
the transactions relate are covered by a determination under this
section that relates to requirements of that kind.
Minister may determine classes of derivatives in relation to which
requirements may be imposed
(2) The Minister may, by legislative instrument, determine one or
more classes of derivatives in relation to which execution
requirements, reporting requirements, or clearing requirements,
may be imposed.
Note 1: Different determinations may be made in relation to the different
kinds of requirements.
Note 2: A class of derivatives can be described by reference to any matter,
including (for example):
(a) the kind of asset, rate, index or commodity to which the derivatives relate; or
(b) the time when the derivatives were issued, or their date of maturity.
Making determinations: matters to which the Minister has regard
(3) In considering whether to make a determination under
subsection (2) that would have the effect of allowing the derivative
transaction rules to impose requirements of a particular kind in
relation to certain derivatives, the Minister:
(a) must have regard to:
(i) the likely effect on the Australian economy, and on the
efficiency, integrity and stability of the Australian
financial system, of allowing the derivative transaction
rules to impose requirements of that kind in relation to
those derivatives; and
(ii) the likely regulatory impact of allowing the derivative
transaction rules to impose requirements of that kind in
relation to those derivatives; and
(iii) if those derivatives are or include commodity
derivatives—the likely impact, on any Australian
market or markets on which the commodities concerned
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may be traded, of allowing the derivative transaction
rules to impose requirements of that kind in relation to
those commodity derivatives; and
(b) may have regard to any other matters that the Minister
considers relevant.
Note: Matters that the Minister may have regard to under paragraph (b) may,
for example, include:
(a) any relevant international standards and international commitments; and
(b) matters raised in consultations under subsection (4), or in advice under subsection (6).
Making determinations: obligation to consult
(4) The Minister must not make a determination under subsection (2)
unless the Minister has consulted ASIC, APRA and the Reserve
Bank of Australia about the proposed determination.
(5) A failure to consult as required by subsection (4) does not
invalidate a determination.
ASIC, APRA or Reserve Bank may advise Minister
(6) ASIC, APRA or the Reserve Bank of Australia may (on its own
initiative or at the request of the Minister):
(a) consider whether a determination should be made under
subsection (2) that would have the effect of allowing the
derivative transaction rules to impose requirements of a
particular kind in relation to certain derivatives; and
(b) advise the Minister accordingly.
Amendment and revocation of determinations
(7) The Minister may amend or revoke a determination under
subsection (2) in like manner and subject to like conditions (see
subsections 33(3) and (3AA) of the Acts Interpretation Act 1901).
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Division 2 Regulation of derivative transactions: derivative transaction rules
Section 901C
212 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
901C Regulations may limit the transactions in relation to which
rules may impose requirements
The regulations may provide that the derivative transaction rules:
(a) cannot impose requirements (or certain kinds of
requirements) in relation to certain classes of derivative
transactions; or
(b) can only impose requirements (or certain kinds of
requirements) in relation to certain classes of derivative
transactions in certain circumstances.
Note: A class of derivative transactions can be described by reference to any
matter, including (for example):
(a) the derivatives to which transactions relate; or
(b) the circumstances in which transactions were entered into; or
(c) the time when, or place where, transactions were entered into; or
(d) the parties to transactions.
901D Regulations may limit the persons on whom requirements may
be imposed
The regulations may provide that the derivative transaction rules:
(a) cannot impose requirements (or certain kinds of
requirements) on certain classes of persons; or
(b) can only impose requirements (or certain kinds of
requirements) on certain classes of persons in certain
circumstances.
Note: A class of persons may be described by reference to any matter,
including (for example):
(a) the volume of derivative transactions entered into by persons over a period; or
(b) the characteristics or nature of persons or of their businesses; or
(c) the place of residence or business of persons.
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Section 901E
Corporations Act 2001 213
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Compliance with derivative transaction rules
901E Obligation to comply with derivative transaction rules
(1) A person must comply with provisions of the derivative transaction
rules that apply to the person.
Note: This section is a civil penalty provision (see section 1317E). For relief
from liability to a civil penalty relating to this section, see
section 1317S.
(2) If there is an inconsistency between the derivative transaction rules
and the derivative trade repository rules, the derivative transaction
rules prevail to the extent of the inconsistency.
Note 1: If there is an inconsistency between the market integrity rules and the
derivative transaction rules, the market integrity rules prevail: see
subsection 798H(3).
Note 2: If there is an inconsistency between the standards determined under
section 827D and the derivative transaction rules, the standards
prevail: see subsection 827D(2A).
901F Alternatives to civil proceedings
(1) The regulations may provide for a person who is alleged to have
contravened section 901E to do one or more of the following as an
alternative to civil proceedings:
(a) pay a penalty to the Commonwealth;
(b) undertake or institute remedial measures (including education
programs);
(c) accept sanctions other than the payment of a penalty to the
Commonwealth;
(d) enter into a legally enforceable undertaking.
(2) The penalty payable under regulations made under paragraph (1)(a)
in relation to a derivative transaction rule must not exceed one-fifth
of the penalty amount specified for the rule in the derivative
transaction rules.
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Section 901G
214 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Without limiting regulations that may be made for the purpose of
paragraph (1)(d), those regulations may provide for one or more of
the following kinds of undertakings:
(a) an undertaking to take specified action within a specified
period;
(b) an undertaking to refrain from taking specified action;
(c) an undertaking to pay a specified amount within a specified
period to the Commonwealth or to some other specified
person.
901G Failure to comply with derivative transaction rules does not
invalidate transaction etc.
A failure, in relation to a derivative transaction, to comply with a
requirement of the derivative transaction rules does not invalidate
the transaction or affect any rights or obligations arising under, or
relating to, the transaction.
Subdivision C——The process of making of derivative
transaction rules
901H Matters to which ASIC must have regard when making rules
In considering whether to make a derivative transaction rule,
ASIC:
(a) must have regard to:
(i) the likely effect of the proposed rule on the Australian
economy, and on the efficiency, integrity and stability
of the Australian financial system; and
(ii) the likely regulatory impact of the proposed rule; and
(iii) if the transactions to which the proposed rule would
relate would be or include transactions relating to
commodity derivatives—the likely impact of the
proposed rule on any Australian market or markets on
which the commodities concerned may be traded; and
(b) may have regard to any other matters that ASIC considers
relevant.
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Section 901J
Corporations Act 2001 215
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Matters that ASIC may have regard to under paragraph (b) may, for
example, include:
(a) any relevant international standards and international commitments; and
(b) matters raised in consultations (if any) under section 901J.
901J ASIC to consult before making rules
(1) ASIC must not make a derivative transaction rule unless ASIC:
(a) has consulted the public about the proposed rule; and
(b) has also consulted the following about the proposed rule:
(i) APRA;
(ii) the Reserve Bank of Australia;
(iii) any other person or body as required by regulations
made for the purpose of this subparagraph.
Note: In some situations, consultation is not required: see section 901L.
(2) Without limiting the ways in which ASIC may comply with the
obligation in paragraph (1)(a) to consult the public about a
proposed rule, ASIC is taken to comply with that obligation if
ASIC, on its website:
(a) makes the proposed rule, or a description of the content of
the proposed rule, available; and
(b) invites the public to comment on the proposed rule.
(3) A failure to consult as required by subsection (1) does not
invalidate a derivative transaction rule.
901K Ministerial consent to rules required
(1) ASIC must not make a derivative transaction rule unless the
Minister has consented, in writing, to the making of the rule.
Note: In some situations, consent is not required: see section 901L.
(2) A consent under subsection (1) is not a legislative instrument.
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Division 2 Regulation of derivative transactions: derivative transaction rules
Section 901L
216 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
901L Emergency rules: consultation and consent not required
(1) ASIC may make a derivative transaction rule without consulting as
required by section 901J, and without the consent of the Minister
as required by section 901K, if ASIC is of the opinion that it is
necessary, or in the public interest, to do so in order to protect:
(a) the Australian economy; or
(b) the efficiency, integrity and stability of the Australian
financial system.
(2) However, if ASIC does so, ASIC must:
(a) provide the Minister, on the following day, with a written
explanation of the need for the rule; and
(b) amend or revoke the rule in accordance with any written
directions of the Minister.
(3) A direction under paragraph (2)(b) is not a legislative instrument.
901M Amendment and revocation of derivative transaction rules
(1) ASIC may amend or revoke a derivative transaction rule in like
manner and subject to like conditions (see subsections 33(3) and
(3AA) of the Acts Interpretation Act 1901).
(2) However, the requirements of sections 901H, 901J and 901K do
not apply in relation to an amendment or revocation pursuant to a
direction by the Minister under paragraph 901L(2)(b).
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Section 902A
Corporations Act 2001 217
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Regulation of licensed derivative trade
repositories: supervision by ASIC
902A ASIC to supervise licensed derivative trade repositories
(1) ASIC has the function of supervising licensed derivative trade
repositories.
(2) If a licensed derivative trade repository is wholly or partly operated
in a foreign country, ASIC may, to such extent as ASIC considers
appropriate, perform the function of supervising the repository by
satisfying itself:
(a) that the regulatory regime that applies in relation to the
repository in that country provides for adequate supervision
of the repository; or
(b) that adequate cooperative arrangements are in place with an
appropriate authority of that country to ensure that the
repository will be adequately supervised by that authority.
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Division 4 Regulation of licensed derivative trade repositories: derivative trade
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Section 903A
218 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Regulation of licensed derivative trade
repositories: derivative trade repository rules
Subdivision A—Power to make derivative trade repository
rules
903A ASIC may make derivative trade repository rules
Power to make derivative trade repository rules
(1) Subject to this Division, ASIC may, by legislative instrument,
make rules (derivative trade repository rules) dealing with matters
as permitted by this section.
Note: Subdivision C deals with the process of making derivative trade
repository rules.
Main matters that may be dealt with in derivative trade repository
rules
(2) The derivative trade repository rules may (subject to this Division)
deal with all or any of the following matters (including by
imposing requirements for or relating to any of the following
matters):
(a) the manner in which licensed derivative trade repositories
provide their services;
(b) the handling or use of derivative trade data by licensed
derivative trade repositories and their officers and employees,
including the following:
(i) the acceptance and retention of derivative trade data;
(ii) the creation of statistical data from derivative trade data;
(iii) the use and disclosure of, and provision of access to,
derivative trade data (including statistical data referred
to in subparagraph (ii));
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Section 903A
Corporations Act 2001 219
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(c) the governance, management and resources (including
financial, technological and human resources) of licensed
derivative trade repositories, including the following:
(i) the handling of conflicts of interest;
(ii) the monitoring and enforcement of compliance with
obligations;
(iii) the resources that licensed derivative trade repositories
should have (including requirements relating to the
experience, qualifications or fitness for office of
operators and their officers and employees);
(iv) the integrity and security of computer systems and other
systems;
(v) operational reliability;
(vi) business continuity planning;
(vii) the operational separation of functions;
(viii) the outsourcing of functions to other entities;
(d) the disclosure of conditions (including fees) on which
licensed derivative trade repositories provide their services;
(e) the reporting to ASIC or other regulators of matters related to
licensed derivative trade repositories.
Note: Paragraph (a): the rules may (for example) require licensed derivative
trade repositories to provide open and non-discriminatory access to
their services.
Other matters that may be dealt with in derivative trade repository
rules
(3) The derivative trade repository rules may also (subject to this
Division) deal with matters incidental or related to matters referred
to in subsection (2), including any of the following:
(a) specifying the persons (being persons referred to in
section 903B) who are required to comply with requirements
imposed by the rules;
(b) the manner and form in which persons must comply with
requirements imposed by the rules;
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Section 903A
220 Corporations Act 2001
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(c) the circumstances in which persons are, or may be, relieved
from complying with requirements in the rules that would
otherwise apply to them;
(d) the keeping of records, or the provision of records or other
information, relating to compliance with (or determining
whether there has been compliance with) the rules;
(e) any other matters that the provisions of this Act provide may
be dealt with in the derivative trade repository rules.
Penalty amounts
(4) The derivative trade repository rules may specify a penalty amount
for a rule. A penalty amount must not exceed 1,000 penalty units.
Rules may provide that derivative trade data is taken to be given to
ASIC in confidence
(5) The derivative trade repository rules may provide, either generally
or in circumstances specified in the rules, that information given to
ASIC, by the operator (or an officer of the operator) of a licensed
derivative trade repository, under a provision of:
(a) this Part; or
(b) regulations made for the purpose of this Part; or
(c) the derivative transaction rules or the derivative trade
repository rules;
is to be taken, for the purpose of section 127 (confidentiality) of
the ASIC Act, to be given to ASIC in confidence in connection
with the performance of ASIC’s functions under this Act.
(6) Derivative trade repository rules that provide as mentioned in
subsection (5) have effect accordingly for the purpose of
section 127 of the ASIC Act.
Note: Subsections (5) and (6) do not limit the circumstances in which
information given to ASIC by a licensed derivative trade repository
may, for the purpose of section 127 of the ASIC Act, be regarded as
having been given to ASIC in confidence in connection with the
performance of ASIC’s functions under this Act.
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Section 903B
Corporations Act 2001 221
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
903B Rules may only impose requirements on operators and officers
of licensed derivative trade repositories
The only persons on whom the derivative trade repository rules
may impose requirements are:
(a) operators of licensed derivative trade repositories; and
(b) officers of licensed derivative trade repositories.
Note: Requirements may also be imposed on these persons by the derivative
transaction rules.
903C Regulations may limit how rules may deal with matters related
to derivative trade data
The regulations may prescribe limits on the extent to which, or the
way in which, the derivative trade repository rules may deal with
matters referred to in paragraph 903A(2)(b).
Subdivision B—Compliance with derivative trade repository
rules
903D Obligation to comply with derivative trade repository rules
A person must comply with provisions of the derivative trade
repository rules that apply to the person.
Note 1: This section is a civil penalty provision (see section 1317E). For relief
from liability to a civil penalty relating to this section, see
section 1317S.
Note 2: The only persons on whom derivative trade repository rules may
impose requirements are operators of licensed derivative trade
repositories, and officers of such operators (see section 903B).
Note 3: If there is an inconsistency between the market integrity rules and the
derivative trade repository rules, the market integrity rules prevail: see
subsection 798H(3).
Note 4: If there is an inconsistency between the standards determined under
section 827D and the derivative trade repository rules, the standards
prevail: see subsection 827D(2A).
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Section 903E
222 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 5: If there is an inconsistency between the derivative transaction rules
and the derivative trade repository rules, the derivative transaction
rules prevail: see subsection 901E(2).
903E Alternatives to civil proceedings
(1) The regulations may provide for a person who is alleged to have
contravened section 903D to do one or more of the following as an
alternative to civil proceedings:
(a) pay a penalty to the Commonwealth;
(b) undertake or institute remedial measures (including education
programs);
(c) accept sanctions other than the payment of a penalty to the
Commonwealth;
(d) enter into a legally enforceable undertaking.
(2) The penalty payable under regulations made under paragraph (1)(a)
in relation to a derivative trade repository rule must not exceed
one-fifth of the penalty amount specified for the rule in the
derivative trade repository rules.
(3) Without limiting regulations that may be made for the purpose of
paragraph (1)(d), those regulations may provide for one or more of
the following kinds of undertakings:
(a) an undertaking to take specified action within a specified
period;
(b) an undertaking to refrain from taking specified action;
(c) an undertaking to pay a specified amount within a specified
period to the Commonwealth or to some other specified
person.
Subdivision C—The process of making derivative trade
repository rules
903F Matters to which ASIC has regard when making rules
In considering whether to make a derivative trade repository rule,
ASIC:
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Section 903G
Corporations Act 2001 223
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(a) must have regard to:
(i) the likely effect of the proposed rule on the Australian
economy, and on the efficiency, integrity and stability
of the Australian financial system; and
(ii) the likely regulatory impact of the proposed rule; and
(b) may have regard to any other matters that ASIC considers
relevant.
Note: Matters that ASIC may have regard to under paragraph (b) may, for
example, include:
(a) any relevant international standards and international commitments; and
(b) matters raised in consultations (if any) under section 903G.
903G ASIC to consult before making rules
(1) ASIC must not make a derivative trade repository rule unless
ASIC:
(a) has consulted the public about the proposed rule; and
(b) has also consulted any other person or body as required by
regulations made for the purpose of this paragraph.
Note: In some situations, consultation is not required: see section 903J.
(2) Without limiting the ways in which ASIC may comply with the
obligation in paragraph (1)(a) to consult the public about a
proposed rule, ASIC is taken to comply with that obligation if
ASIC, on its website:
(a) makes the proposed rule, or a description of the content of
the proposed rule, available; and
(b) invites the public to comment on the proposed rule.
(3) A failure to consult as required by subsection (1) does not
invalidate a derivative trade repository rule.
903H Ministerial consent to rules required
(1) ASIC must not make a derivative trade repository rule unless the
Minister has consented, in writing, to the making of the rule.
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Section 903J
224 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: In some situations, consent is not required: see section 903J.
(2) A consent under subsection (1) is not a legislative instrument.
903J Emergency rules: consultation and consent not required
(1) ASIC may make a derivative trade repository rule without
consulting as required by section 903G, and without the consent of
the Minister as required by section 903H, if ASIC is of the opinion
that it is necessary, or in the public interest, to do so in order to
protect:
(a) the Australian economy; or
(b) the efficiency, integrity and stability of the Australian
financial system; or
(c) the security or confidentiality of derivative trade data.
(2) However, if ASIC does so, ASIC must:
(a) provide the Minister, on the following day, with a written
explanation of the need for the rule; and
(b) amend or revoke the rule in accordance with any written
directions of the Minister.
(3) A direction under paragraph (2)(b) is not a legislative instrument.
903K Amendment and revocation of derivative trade repository
rules
(1) ASIC may amend or revoke a derivative trade repository rule in
like manner and subject to like conditions (see subsections 33(3)
and (3AA) of the Acts Interpretation Act 1901).
(2) However, the requirements of sections 903F, 903G and 903H do
not apply in relation to an amendment or revocation pursuant to a
direction by the Minister under paragraph 903J(2)(b).
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Section 904A
Corporations Act 2001 225
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Regulation of licensed derivative trade
repositories: other obligations and powers
Subdivision A—Obligations
904A General obligations
A derivative trade repository licensee must:
(a) comply with the conditions on the licence; and
(b) if the licensee is a foreign body corporate—be registered
under Division 2 of Part 5B.2; and
(c) take all reasonable steps to ensure that no disqualified
individual becomes, or remains, involved in the operator (see
Division 2 of Part 7.4).
Note: Derivative trade repository licensees must also comply with other
provisions of this Part that apply to them.
904B Obligations relating to derivative trade data
Obligation relating to use or disclosure of derivative trade data
(1) A derivative trade repository licensee, or an officer or employee of
a derivative trade repository licensee, may use or disclose
derivative trade data only if:
(a) the use or disclosure:
(i) is for the purpose of, or occurs in the course of, the
provision of the repository’s services, or the
performance of the duties of the officer or employee as
an officer or employee of the licensee; and
(ii) is not excluded by regulations made for the purpose of
this subparagraph; or
(b) the use or disclosure is required or permitted by any of the
following:
(i) another provision of this Act;
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Section 904B
226 Corporations Act 2001
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(ii) the derivative transaction rules or the derivative trade
repository rules;
(iii) another law of the Commonwealth, or a law of a State
or Territory.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Obligation to comply with requests from regulators for derivative
trade data
(2) Any of the following persons or bodies may request a derivative
trade repository licensee to provide the person or body with
derivative trade data that is retained in the derivative trade
repository:
(a) ASIC;
(b) APRA;
(c) the Reserve Bank of Australia;
(d) a person or body prescribed by the regulations for the
purpose of this paragraph;
(e) another derivative trade repository licensee.
(3) Regulations must not be made prescribing a person or body for the
purpose of paragraph (2)(d) unless the Minister is satisfied that
there are adequate controls on the use or disclosure of any
derivative trade data provided to the person or body pursuant to
requests under subsection (2).
(4) The regulations may require that certain information must not be
included in derivative trade data provided pursuant to requests, or a
class of requests, under subsection (2).
(5) If:
(a) a derivative trade repository licensee receives a request for
derivative trade data under subsection (2); and
(b) the licensee is not excused or prohibited from complying
with the request by:
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Section 904C
Corporations Act 2001 227
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(i) regulations made for the purpose of this subparagraph;
or
(ii) the derivative trade repository rules or the derivative
transaction rules;
the licensee must comply with the request, subject to any
requirements of regulations made for the purpose of subsection (4).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Obligations relating to the creation of statistical data
(6) The regulations may:
(a) impose obligations on operators of licensed derivative trade
repositories to:
(i) create statistical information from derivative trade data;
and
(ii) to provide that statistical information to a person or
persons, or to make it available, in accordance with the
regulations; and
(b) provide for offences in relation to those obligations.
Note: For the limit on penalties for offences against the regulations, see
paragraph 1364(2)(w).
904C Obligation to notify ASIC of certain matters
Notification of inability to meet obligations under 904A
(1) A derivative trade repository licensee must give written notice to
ASIC, as soon as practicable, if the licensee becomes aware that it
may no longer be able to meet, or has breached, an obligation
under section 904A.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) If ASIC receives a notice under subsection (1), ASIC may give the
Minister advice about the matter to which the notice relates.
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Section 904D
228 Corporations Act 2001
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Notification of changes to directors, secretaries or senior
managers
(3) As soon as practicable after a person becomes or ceases to be a
director, secretary or senior manager of a derivative trade
repository licensee or of a holding company of a derivative trade
repository licensee (including when a person changes from one of
those positions to another), the licensee must give written notice of
this to ASIC. The notice must include such other information about
the matter as is prescribed by the regulations for the purpose of this
subsection.
Note 1: To the extent that the licensee is required to give the notice and
information under any other provision of this Act, the licensee may
comply with this subsection by doing so. It need not provide the same
information twice.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
904D Obligation to assist ASIC, APRA and the Reserve Bank
(1) Each of the following is a regulator to which this section applies:
(a) ASIC;
(b) APRA;
(c) the Reserve Bank of Australia.
(2) A derivative trade repository licensee must give such assistance to
a regulator to which this section applies as the regulator reasonably
requests in relation to the performance of the regulator’s functions.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) Such assistance may include showing the regulator the licensee’s
books or giving the regulator derivative trade data or other
information.
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Section 904E
Corporations Act 2001 229
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904E Obligation to give ASIC access to derivative trade repository
facilities
A derivative trade repository licensee must give ASIC such
reasonable access to the repository’s facilities as ASIC requests for
any of the purposes of this Part.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
Subdivision B—Powers of Minister and ASIC to give directions
etc.
904F Minister’s power to give directions to licensee not complying
with obligations
(1) If the Minister considers that a derivative trade repository licensee
is not complying with its obligations as a derivative trade
repository licensee under this Part, the Minister may give the
licensee a written direction to do specified things that the Minister
believes will promote compliance by the licensee with those
obligations.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
904G ASIC’s power to give directions to licensee not complying with
obligations
(1) If ASIC considers that a derivative trade repository licensee is not
complying with its obligations as a derivative trade repository
licensee under this Part, ASIC may give the licensee written advice
that it intends to give the licensee a specified direction to do
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Section 904G
230 Corporations Act 2001
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specified things that ASIC believes will promote compliance by
the licensee with those obligations. The advice must include the
reasons for ASIC’s intention to give the direction.
(2) As soon as practicable after giving the advice to the licensee, ASIC
must give notice of the advice to the operator of each financial
market, and of each clearing and settlement facility, with which the
licensed derivative trade repository has arrangements to provide
services relating to derivative trade data.
(3) If:
(a) after receiving ASIC’s advice and reasons, the licensee does
not take steps that in ASIC’s view are adequate to address the
situation; and
(b) ASIC still considers that it is appropriate to give the direction
to the licensee;
ASIC may give the licensee the direction, in writing, with a
statement setting out the reasons for giving the direction.
(4) The direction has effect until the earlier of the following times:
(a) the time ASIC revokes the direction under subsection (9);
(b) the end of the period (which may be up to 21 days) specified
in the direction as the period during which the direction is
effective.
(5) While the direction has effect, the licensee must comply with the
direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) If the licensee fails to comply with the direction, ASIC may apply
to the Court for, and the Court may make, an order that the licensee
comply with the direction.
(7) As soon as practicable after making or varying (see subsection (8))
the direction, ASIC must give a copy of the direction or variation
to each of the operators referred to in subsection (2).
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(8) ASIC may vary the direction by giving written notice to the
licensee.
(9) ASIC may revoke the direction by giving written notice to the
licensee. ASIC must also give written notice of the revocation to
each of the operators mentioned in subsection (2).
904H ASIC’s power to give directions requiring special reports
(1) ASIC may give a derivative trade repository licensee a written
direction requiring the licensee to give ASIC a special report on
specified matters. ASIC may give a copy of the report to the
Minister.
(2) The direction may also require the licensee to give ASIC an audit
report on the special report. ASIC must nominate a specified
person or body that is suitably qualified to prepare the audit report.
(3) The licensee must give the special report, and audit report (if
required), to ASIC within the time required by the direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
904J ASIC may assess licensee’s compliance
(1) ASIC may do an assessment of how well a derivative trade
repository licensee is complying with any or all of its obligations
as a derivative trade repository licensee under this Part. In doing
the assessment, ASIC may take account of any information and
reports that it thinks appropriate.
(2) As soon as practicable after doing an assessment under this section,
ASIC must give a written report on the assessment to the licensee.
ASIC may give a copy of the report to the Minister.
(3) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, ASIC may, at the person’s
request or on its own initiative, give the person a copy of the report
on the assessment or the relevant part of the report.
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Section 904K
232 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or
Territory, ASIC may give a copy of the report on the assessment,
or the relevant part of the report, to:
(a) the Australian Federal Police; or
(b) the Chief Executive Officer of the Australian Crime
Commission or a member of the staff of the ACC (within the
meaning of the Australian Crime Commission Act 2002); or
(c) the Director of Public Prosecutions; or
(d) a person or body prescribed by the regulations for the
purpose of this paragraph.
(5) The written report on an assessment, or part of the report, may be
published in any way that ASIC thinks appropriate.
(6) A report on an assessment is not a legislative instrument.
904K Directions relating to derivative trade data if repository ceases
to be licensed
(1) This section applies to derivative trade data that was being retained
in a derivative trade repository before the repository ceased to be a
licensed derivative trade repository.
(2) ASIC may give a written direction to a person referred to in
subsection (3):
(a) requiring the person to deal, in a specified way, with
derivative trade data to which this section applies; or
(b) imposing limitations on the use or disclosure by the person of
derivative trade data to which this section applies.
Note: A direction could, for example, require the person:
(a) to destroy all records of the data over which the person has control; or
(b) to transfer all records of the data over which the person has control to a licensed derivative trade repository or a prescribed derivative trade repository.
(3) The direction may be given to:
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Corporations Act 2001 233
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(a) the operator, or former operator, of the repository; or
(b) an officer or employee, or a former officer or employee, of
the operator, or former operator, of the repository.
(4) While the direction has effect, the person to whom the direction is
given must comply with the direction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) If the person to whom the direction is given fails to comply with
the direction, ASIC may apply to the Court for, and the Court may
make, an order that the person comply with the direction.
(6) The direction has effect until it is revoked under subsection (7).
(7) ASIC may vary or revoke the direction by giving written notice to
the person to whom the direction was given.
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Part 7.5A Regulation of derivative transactions and derivative trade repositories
Division 6 Regulation of licensed derivative trade repositories: licensing
Section 905A
234 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Regulation of licensed derivative trade
repositories: licensing
Subdivision A—Requirement for some trade repositories to be
licensed
905A Regulations may identify derivative trade repositories as being
required to be licensed
(1) The regulations may identify one or more classes of derivative
trade repositories as being required to be licensed under this Part.
Note: Subject to this Part, derivative trade repositories may be licensed
under this Part even if they are not required to be licensed.
(2) If the regulations identify a class of derivative trade repositories as
being required to be licensed under this Part, a person must not
operate, or hold out that the person operates, a repository in the
class if the person does not have an Australian derivative trade
repository licence that authorises the person to operate the
repository.
Note 1: Failure to comply with this subsection is an offence: see
subsection 1311(1).
Note 2: For other offences dealing with holding out, see section 907A.
Subdivision B—Granting of licences
905B How to apply for a licence
A body corporate may, by lodging an application with ASIC in the
prescribed form, apply for a licence (an Australian derivative trade
repository licence) authorising the body corporate to operate a
derivative trade repository.
Note 1: See section 350 for how to lodge an application in the prescribed
form.
Note 2: For fees in respect of lodging applications, see Part 9.10.
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Section 905C
Corporations Act 2001 235
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905C When a licence may be granted
General
(1) ASIC may grant an applicant an Australian derivative trade
repository licence if ASIC is satisfied that:
(a) the application was made in accordance with section 905B;
and
(b) the applicant will comply with the obligations that will apply
if the licence is granted; and
(c) no disqualified individual appears to be involved in the
applicant (see Division 2 of Part 7.4).
This subsection has effect subject to subsections (2) and (3).
Note: ASIC must also have regard to the matters in section 905P in deciding
whether to grant a licence.
Foreign bodies
(2) If the applicant is a foreign body corporate, ASIC must not grant
the applicant a licence unless the applicant is registered under
Division 2 of Part 5B.2.
Disqualified individuals
(3) ASIC must not grant the applicant a licence unless 42 days have
passed since the application was made and ASIC has not given a
notice under subsection 853D(2) to the applicant within that 42
days.
905D Publication of notice of licence grant
If ASIC grants an Australian derivative trade repository licence,
ASIC must publish a notice in the Gazette stating:
(a) the name of the licensee; and
(b) when the licence was granted; and
(c) the conditions on the licence.
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Section 905E
236 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
905E More than one derivative trade repository covered by the same
licence
(1) The same Australian derivative trade repository licence may
authorise the licensee to operate 2 or more derivative trade
repositories.
(2) In that case, a reference in this Chapter to the derivative trade
repository to which an Australian derivative trade repository
licence relates is taken instead to be a reference to each of those
derivative trade repositories severally.
(3) Before varying the conditions on an Australian derivative trade
repository licence so as to add another derivative trade repository
that the licensee is authorised to operate, ASIC must be satisfied of
the matters listed in subsection 905C(1) in relation to the
repository.
(4) An Australian derivative trade repository licence that authorises the
licensee to operate 2 or more derivative trade repositories may be
suspended or cancelled under Subdivision D in respect of one or
some of those repositories only, as if the licensee held a separate
licence for each of the repositories.
Subdivision C—The conditions on a licence
905F The conditions on the licence
(1) ASIC may, at any time:
(a) impose conditions, or additional conditions, on an Australian
derivative trade repository licence; or
(b) vary or revoke conditions imposed on such a licence;
by giving written notice to the licensee. ASIC must also publish a
notice in the Gazette with details of the action and when it took
effect.
Note: As well as the requirements in this section, ASIC must also have
regard to the matters in section 905P.
(2) ASIC may do so:
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Corporations Act 2001 237
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(a) on its own initiative, subject to subsection (3); or
(b) if the licensee lodges an application with ASIC in the
prescribed form, seeking the imposition of the conditions or
additional conditions, or seeking the variation or revocation
of conditions.
Note 1: See section 350 for how to lodge an application in the prescribed
form.
Note 2: For fees in respect of lodging applications, see Part 9.10.
(3) ASIC may only impose conditions or additional conditions, or vary
or revoke conditions, on the licence on ASIC’s own initiative if:
(a) ASIC considers it appropriate to do so having regard to:
(i) the licensee’s obligations as a derivative trade
repository licensee under this Part; and
(ii) any change in the operations of the derivative trade
repository, or in the conditions in which the repository
is operating; and
(b) ASIC gives the licensee written notice of the proposed action
and an opportunity to make a submission before it takes
effect.
This subsection does not apply to ASIC imposing conditions when
a licence is granted.
(4) ASIC must ensure that each Australian derivative trade repository
licence is subject to conditions that specify:
(a) the particular derivative trade repository that the licensee is
authorised to operate; and
(b) the class or classes of derivatives in respect of which the
repository can provide services for the purposes of this Part.
Note: The licence condition required by paragraph (b) does not apply to
services that a licensed derivative trade repository provides otherwise
than for the purposes of this Part.
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Section 905G
238 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision D—When a licence can be varied, suspended or
cancelled
905G Varying licences
ASIC may vary an Australian derivative trade repository licence to
take account of a change in the licensee’s name if the licensee
lodges an application with ASIC in the prescribed form, seeking
the variation.
Note 1: The conditions on the licence can be varied under section 905F.
Note 2: See section 350 for how to lodge an application in the prescribed
form.
Note 3: For fees in respect of lodging applications, see Part 9.10.
905H Immediate suspension or cancellation
ASIC may, by giving written notice to a derivative trade repository
licensee, suspend the licence for a specified period, or cancel it, if:
(a) the licensee ceases to carry on the business of operating the
derivative trade repository; or
(b) the licensee becomes a Chapter 5 body corporate; or
(c) the licensee asks ASIC to do so; or
(d) in the case of a licensee that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
licensee;
(ii) the amount of late payment penalty payable (if any) in
relation to the levy;
(iii) the amount of shortfall penalty payable (if any) in
relation to the levy.
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Section 905J
Corporations Act 2001 239
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
905J Suspension or cancellation following hearing and report
(1) If ASIC considers that a derivative trade repository licensee has
breached, or is in breach of, one or more of its obligations as a
derivative trade repository licensee under this Part, ASIC may give
the licensee a written notice that requires the licensee to show
cause, at a hearing before a specified person, why the licence
should not be suspended or cancelled.
(2) The notice must specify:
(a) the grounds on which it is proposed to suspend or cancel the
licence; and
(b) a reasonable time and place at which the hearing is to be
held.
However, if the licensee consents, the person conducting the
hearing may fix a different time or place.
(3) The person conducting the hearing must:
(a) give the licensee an opportunity to be heard at the hearing;
and
(b) give ASIC:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on
which it is proposed to suspend or cancel the licence.
(4) After considering the report and recommendation, ASIC may:
(a) decide to take no further action in relation to the matter and
give written advice of that decision to the licensee; or
(b) suspend the licence for a specified period, or cancel the
licence, by giving written notice to the licensee.
Note: ASIC must also have regard to the matters in section 905P.
(5) None of the following is a legislative instrument:
(a) a notice under subsection (1);
(b) a report under subsection (3) (if it is in writing).
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Section 905K
240 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
905K Effect of suspension
(1) A person whose Australian derivative trade repository licence is
suspended is taken not to hold that licence while it is suspended.
(2) However, ASIC may specify in the written notice to the licensee
under section 905H, or paragraph 905J(4)(b), that subsection (1) of
this section does not apply for specified purposes.
905L Variation or revocation of suspension
ASIC may at any time vary or revoke a suspension of an Australian
derivative trade repository licence by giving written notice to the
licensee.
905M Publication of notice of licence suspension or cancellation
(1) If ASIC:
(a) suspends, or varies or revokes a suspension of, an Australian
derivative trade repository licence; or
(b) cancels an Australian derivative trade repository licence;
ASIC must publish a notice in the Gazette to that effect.
(2) The notice must state when the action took effect.
905N Suspension and cancellation only in accordance with this
Subdivision
An Australian derivative trade repository licence cannot be varied,
suspended or cancelled otherwise than in accordance with this
Subdivision.
Note: The conditions on the licence can be varied under section 905F.
Subdivision E—Other matters
905P Matters to be taken into account by ASIC
(1) ASIC must have regard to certain matters in deciding whether to:
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(a) grant an applicant an Australian derivative trade repository
licence under section 905C; or
(b) impose, vary or revoke conditions on such a licence under
section 905F; or
(c) suspend or cancel such a licence under section 905J.
(2) The matters ASIC must have regard to are as follows:
(a) the structure, or proposed structure, of the derivative trade
repository;
(b) the nature of the activities conducted, or proposed to be
conducted, by the derivative trade repository;
(c) the size, or proposed size, of the derivative trade repository;
(d) the persons who are, or may be, required to report derivative
trade data to the derivative trade repository;
(e) the technology used, or proposed to be used, in the operation
of the derivative trade repository;
(f) whether it would be in the public interest to take the action
referred to in subsection (1).
ASIC may also have regard to any other matter that ASIC
considers relevant.
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Division 7 Regulation of prescribed derivative trade repositories
Section 906A
242 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Regulation of prescribed derivative trade
repositories
906A Regulations may impose obligations and confer powers
(1) The regulations may:
(a) impose obligations on operators of prescribed derivative
trade repositories, and on their officers and employees; and
(b) confer powers on ASIC in relation to prescribed derivative
trade repositories; and
(c) provide for offences in relation to those obligations and
powers.
Note: For the limit on penalties for offences against the regulations, see
paragraph 1364(2)(w).
(2) Without limiting the obligations and powers that may be conferred
or imposed, they may include obligations and powers of similar
kinds to those that apply under the derivative trade repository rules,
or under Division 5, in relation to licensed derivative trade
repositories.
(3) The regulations may provide, either generally or in circumstances
specified in the regulations, that information given to ASIC, by the
operator (or an officer of the operator) of a prescribed derivative
trade repository, under a provision of the regulations is to be taken,
for the purpose of section 127 (confidentiality) of the ASIC Act, to
be given to ASIC in confidence in connection with the
performance of ASIC’s functions under this Act.
(4) Regulations that provide as mentioned in subsection (3) have effect
accordingly for the purpose of section 127 of the ASIC Act.
Note: Subsections (3) and (4) do not limit the circumstances in which
information given to ASIC by a prescribed derivative trade repository
may, for the purpose of section 127 of the ASIC Act, be regarded as
having been given to ASIC in confidence in connection with the
performance of ASIC’s functions under this Act.
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Section 907A
Corporations Act 2001 243
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Division 8—Other matters
907A Other prohibitions on holding out
A person must not hold out:
(a) that the person has an Australian derivative trade repository
licence; or
(b) that the operation of a derivative trade repository by the
person is authorised by an Australian derivative trade
repository licence; or
(c) that a facility is prescribed by the regulations for the purpose
of paragraph 901A(5)(b); or
(d) that a facility is prescribed by the regulations for the purpose
of paragraph 901A(6)(b); or
(e) that a facility is prescribed by the regulations for the purpose
of paragraph 901A(7)(b);
if that is not the case.
Note 1: Failure to comply with this subsection is an offence: see
subsection 1311(1).
Note 2: Section 905A contains other offences relating to derivative trade
repositories that are required to be licensed.
907B Making provision by reference to instruments as in force from
time to time
(1) This section applies to the following instruments:
(a) determinations made by the Minister under section 901B;
(b) regulations made for the purpose of a provision of this Part;
(c) derivative transaction rules;
(d) derivative trade repository rules.
(2) An instrument to which this section applies may make provision in
relation to a matter by applying, adopting or incorporating any
matter contained in an instrument or other writing:
(a) as in force or existing at a particular time; or
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Section 907C
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(b) as in force or existing from time to time.
(3) Subsection (2) has effect despite subsection 14(2) of the
Legislative Instruments Act 2003.
907C Compliance with requirements to provide derivative trade
data or other information: protection from liability
If:
(a) a person (the protected person):
(i) provides derivative trade data, or other information, to
another person; or
(ii) otherwise allows another person access to derivative
trade data, or other information; and
(b) the protected person does so, in good faith, in compliance
with a requirement imposed by or under:
(i) a provision of this Part, or of regulations made for the
purpose of a provision of this Part; or
(ii) a provision of the derivative transaction rules or the
derivative trade repository rules;
the protected person is not liable to an action or other proceeding,
whether civil or criminal, for or in relation to that conduct.
907D Exemptions by ASIC
(1) The provisions covered by this section are:
(a) the following provisions:
(i) the provisions of this Part;
(ii) the provisions of regulations made for the purposes of
the provisions of this Part;
(iii) the provisions of the derivative transaction rules and the
derivative trade repository rules; and
(b) definitions in this Act, or in the regulations, as they apply to
references in provisions referred to in paragraph (a).
(2) ASIC may:
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(a) exempt a person or class of persons from all or specified
provisions covered by this section; or
(b) exempt a facility or class of facilities from all or specified
provisions covered by this section; or
(c) exempt a derivative transaction or class of derivative
transactions from all or specified provisions covered by this
section.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) An exemption is a legislative instrument if the exemption is
expressed to apply in relation to a class of persons, a class of
facilities or a class of derivative transactions (whether or not it is
also expressed to apply in relation to one or more persons, facilities
or transactions identified otherwise than by reference to
membership of a class).
(5) If subsection (4) does not apply to an exemption, the exemption
must be in writing and ASIC must publish notice of it in the
Gazette.
907E Exemptions and modifications by regulations
(1) The provisions covered by this section are:
(a) the following provisions:
(i) the provisions of this Part;
(ii) the provisions of regulations made for the purposes of
the provisions of this Part;
(iii) the provisions of the derivative transaction rules and the
derivative trade repository rules; and
(b) definitions in this Act, or in the regulations, as they apply to
references in provisions referred to in paragraph (a).
(2) The regulations may:
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Section 907E
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(a) exempt a person or class of persons from all or specified
provisions covered by this section; or
(b) exempt a facility or class of facilities from all or specified
provisions covered by this section; or
(c) exempt a derivative transaction or class of derivative
transactions from all or specified provisions covered by this
section; or
(d) declare that provisions covered by this section apply in
relation to a person, facility or derivative transaction, or a
class of persons, facilities or derivative transactions, as if
specified provisions were omitted, modified or varied as
specified in the declaration.
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Licensing of providers of financial services Part 7.6
Preliminary Division 1
Section 910A
Corporations Act 2001 247
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.6—Licensing of providers of financial
services
Division 1—Preliminary
910A Definitions
In this Part, unless the contrary intention appears:
basic banking product has the meaning given by section 961F.
body corporate licensee means a body corporate that:
(a) is a financial services licensee; and
(b) is authorised to provide personal advice to retail clients in
relation to relevant financial products.
class of product advice means financial product advice about a
class of products, but does not include a recommendation about a
specific product in the class.
Code of Ethics means the Code of Ethics, as in force from time to
time, made by the standards body under paragraph 921U(2)(b).
compliance scheme has the meaning given by section 921G.
consumer credit insurance has the meaning given by section 11 of
the Insurance Contracts Act 1984.
control, in relation to a body corporate licensee, means:
(a) having the capacity to cast, or control the casting of, more
than one half of the maximum number of votes that might be
cast at a general meeting of the licensee; or
(b) directly or indirectly holding more than one half of the issued
share capital of the licensee (not including any part of the
issued share capital that carries no right to participate beyond
a specified amount in a distribution of either profits or
capitan( � or
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(c) the capacity to control the composition of the licensee’s
board or governing body; or
(d) the capacity to determine the outcome of decisions about the
licensee’s financial and operating policies, taking into
account:
(i) the practical influence the person can exert (rather than
the rights it can enforce); and
(ii) any practice or pattern of behaviour affecting the
licensee’s financial or operating policies (whether or not
it involves a breach of an agreement or a breach of
trust).
covers, in relation to a compliance scheme, has the meaning given
by section 921J.
CPD year (short for continuing professional development year): a
financial services licensee’s CPD year is the 12-month period
beginning on the day of the year included in the most recent notice
given by the licensee under section 922HA.
education and training standards has the meaning given by
section 921B.
foreign qualification means a bachelor or higher degree, or
equivalent qualification, awarded by a tertiary education institution
outside Australia.
limited-service time-sharing adviser: a person is a limited-service
time-sharing adviser if:
(a) the person is a relevant provider; and
(b) the only relevant financial product that the person provides
advice in relation to is a time-sharing scheme; and
(c) the person has not met any one or more of the education and
training standards in subsections 921B(2) to (4).
monitoring body for a compliance scheme means the person that
monitors and enforces compliance with the Code of Ethics under
the scheme.
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notice provision means section 922D, 922H, 922HA, 922HB,
922HD, 922J or 922K.
professional association means a body or association that
represents a section of the financial services industry.
provisional relevant provider means a relevant provider who is
undertaking work and training in accordance with
subsection 921B(4).
Note: For rules relating to provisional relevant providers, see Subdivision C
of Division 8A and section 923C.
recent advising history has the meaning given by section 922G.
Register of Relevant Providers means the Register of Relevant
Providers maintained under section 922Q.
relevant financial products means financial products other than:
(a) basic banking products; or
(b) general insurance products; or
(c) consumer credit insurance; or
(d) a combination of any of those products.
relevant provider: a person is a relevant provider if the person:
(a) is an individual; and
(b) is:
(i) a financial services licensee; or
(ii) an authorised representative of a financial services
licensee; or
(iii) an employee or director of a financial services licensee;
or
(iv) an employee or director of a related body corporate of a
financial services licensee; and
(c) is authorised to provide personal advice to retail clients, as
the licensee or on behalf of the licensee, in relation to
relevant financial products.
Note: For rules about when relevant providers can use the expressions
“financial adviser” and “financial planner”, see section 923C.
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representative of a person means:
(a) if the person is a financial services licensee:
(i) an authorised representative of the licensee; or
(ii) an employee or director of the licensee; or
(iii) an employee or director of a related body corporate of
the licensee; or
(iv) any other person acting on behalf of the licensee; or
(b) in any other case:
(i) an employee or director of the person; or
(ii) an employee or director of a related body corporate of
the person; or
(iii) any other person acting on behalf of the person.
standards body means the body corporate in relation to which a
declaration under section 921X is in force.
supervisor of a provisional relevant provider has the meaning
given by subsection 921F(2).
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Division 2—Requirement to be licensed or authorised
911A Need for an Australian financial services licence
(1) Subject to this section, a person who carries on a financial services
business in this jurisdiction must hold an Australian financial
services licence covering the provision of the financial services.
Note 1: Also, a person must not provide a financial service contrary to a
banning order or disqualification order under Division 8.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) However, a person is exempt from the requirement to hold an
Australian financial services licence for a financial service they
provide in any of the following circumstances:
(a) the person provides the service as representative of a second
person who carries on a financial services business and who:
(i) holds an Australian financial services licence that
covers the provision of the service; or
(ii) is exempt under this subsection from the requirement to
hold an Australian financial services licence that covers
the provision of the service;
Note: However, representatives must still comply with section 911B even if they are exempted from this section by this paragraph.
(b) the service is the issue, variation or disposal of a financial
product by the person (the product provider) pursuant to an
arrangement (an intermediary authorisation) between the
product provider and a financial services licensee under
which:
(i) the financial services licensee, or their authorised
representatives, may make offers to people to arrange
for the issue, variation or disposal of financial products
by the product provider; and
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(ii) the product provider is to issue, vary or dispose of
financial products in accordance with such offers, if
they are accepted;
provided that the offer pursuant to which the issue, variation
or disposal is made was covered by the financial services
licensee’s Australian financial services licence;
(ba) the service is the entry into of an intermediary authorisation
referred to in paragraph (b);
(c) all of the following apply:
(i) the service is the variation or disposal of a financial
product by the person;
(ii) the same person issued the original product;
(iii) the person provides the service at the direct request of
the person to whom it is provided (rather than through
an intermediary);
(d) the service is, or is provided incidentally to, the operation of
a licensed market, or a licensed CS facility, operated by the
person;
(ea) the service is the provision of general advice and all of the
following apply:
(i) the advice is provided in a newspaper or periodical of
which the person is the proprietor or publisher;
(ii) the newspaper or periodical is generally available to the
public otherwise than only on subscription;
(iii) the sole or principal purpose of the newspaper or
periodical is not the provision of financial product
advice;
(eb) the service is the provision of general advice and all of the
following apply:
(i) the advice is provided in the course of, or by means of,
transmissions that the person makes by means of an
information service (see subsection (6)), or that are
made by means of an information service that the
person owns, operates or makes available;
(ii) the transmissions are generally available to the public;
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(iii) the sole or principal purpose of the transmissions is not
the provision of financial product advice;
(ec) the service is the provision of general advice and all of the
following apply:
(i) the advice is provided in sound recordings, video
recordings, or data recordings;
(ii) the person makes the recordings available to the public
by supplying copies of them to the public and/or by
causing the recordings (if they are sound recordings) to
be heard by the public, causing the recordings (if they
are video recordings) to be seen and heard by the public,
or the contents of the recordings (if they are data
recordings) to be displayed or reproduced for the public;
(iii) the sole or principal purpose of the recordings is not the
provision of financial product advice;
(ed) both of the following apply:
(i) the service is the provision of general advice by the
person in connection with an offer of financial products
under an eligible employee share scheme;
(ii) the person is the corporation whose financial products
are being issued or sold under the scheme, or an entity
that that corporation controls;
(ee) all of the following apply:
(i) the service is dealing in a financial product by the
person in connection with an offer of the financial
product under an eligible employee share scheme;
(ii) the scheme requires that any purchase or disposal of the
financial product under the scheme occurs through a
person who holds an Australian financial services
licence to deal in financial products, or a person outside
this jurisdiction who is licensed or otherwise authorised
to deal in financial products in that jurisdiction;
(iii) the person is the corporation whose financial products
are being issued or sold under the scheme, or an entity
that that corporation controls;
(ef) both of the following apply:
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(i) the service is, or is provided incidentally to, a custodial
or depository service that is provided by the person in
connection with an eligible employee share scheme;
(ii) the person is the corporation whose financial products
are being issued or sold under the scheme, or an entity
that that corporation controls;
(eg) both of the following apply:
(i) the service is dealing in an interest in a contribution plan
operated by the person in relation to an eligible
employee share scheme;
(ii) the person is the corporation whose financial products
are being issued or sold under the scheme, or an entity
that that corporation controls;
(f) the person provides the service while performing functions,
or exercising powers, in any of the following capacities or
circumstances:
(i) as an official receiver or trustee within the meaning of
the Bankruptcy Act 1966;
(ii) as a receiver, receiver and manager, or liquidator
(whether appointed by a court or otherwise);
(iii) as a person appointed by a court to carry on a financial
services business;
(iv) as the Public Trustee acting under a law, prescribed by
regulations made for the purposes of this paragraph, of a
State or Territory;
(v) as an administrator of a body corporate;
(vi) as an administrator of a deed of company arrangement
executed by a body corporate;
(vii) as a trustee or person administering a compromise or
arrangement between a body corporate and another
person or persons;
(viii) as a personal representative of a deceased person other
than a deceased financial services licensee;
(ix) subject to subsection (3), as a personal representative of
a deceased financial services licensee;
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(x) in the administration of a bankrupt estate or in the
winding up of a body corporate or partnership;
(g) all of the following apply:
(i) the person is a body regulated by APRA;
(ii) the service is one in relation to which APRA has
regulatory or supervisory responsibilities;
(iii) the service is provided only to wholesale clients;
(h) all of the following apply:
(i) the person is regulated by an overseas regulatory
authority;
(ii) the provision of the service by the person is covered by
an exemption specified by ASIC in writing under this
subparagraph and published in the Gazette; and
(iii) the service is provided only to wholesale clients;
(i) the person provides the service only to related bodies
corporate of the person;
(j) the person provides the service in the person’s capacity as
trustee of a self-managed superannuation fund;
(k) the provision of the service is covered by an exemption
prescribed in regulations made for the purposes of this
paragraph;
(l) the provision of the service is covered by an exemption
specified by ASIC in writing and published in the Gazette.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
(3) Subparagraph (2)(f)(ix) only applies until whichever of these
happens first:
(a) the end of 6 months after the death of the licensee;
(b) the removal or discharge of the personal representative;
(c) the final distribution of the licensee’s estate.
(4) A person is not exempt under any paragraph of subsection (2) for a
financial service they provide if the service is:
(a) the operation of a registered scheme; or
(b) a traditional trustee company service.
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Section 911B
256 Corporations Act 2001
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(5) The exemption under paragraph (2)(ea), (eb) or (ec), or an
exemption under subparagraph (2)(h)(ii) or under paragraph (2)(k)
or (l), may apply unconditionally or subject to conditions:
(a) in the case of the exemption under paragraph (2)(ea), (eb) or
(ec), or an exemption under paragraph (2)(k)—specified in
regulations made for the purposes of this paragraph; or
(b) in the case of an exemption under subparagraph (2)(h)(ii) or
under paragraph (2)(l)—specified by ASIC in writing
published in the Gazette.
(5A) Despite paragraph (2)(b), the regulations may provide that the
exemption under that paragraph does not apply in relation to:
(a) a particular financial product or a particular kind of financial
product; or
(b) a particular financial product or a particular kind of financial
product that is issued, varied or disposed of by a particular
person, or a particular kind of person.
(6) In this section:
information service means:
(a) a broadcasting service; or
(b) an interactive or broadcast videotext or teletext service or a
similar service; or
(c) an online database service or a similar service; or
(d) any other service identified in regulations made for the
purposes of this paragraph.
911B Providing financial services on behalf of a person who carries
on a financial services business
(1) A person (the provider) must only provide a financial service in
this jurisdiction on behalf of another person (the principal) who
carries on a financial services business if one or more of the
following paragraphs apply:
(a) these conditions are satisfied:
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(i) the principal holds an Australian financial services
licence covering the provision of the service; and
(ii) the provider is an employee or director of the principal
or of a related body corporate of the principal; and
(iii) the provider is not an employee or director, or
authorised representative, of any other person who
carries on a financial services business and who is not a
related body corporate of the principal; and
(iv) the provider is not an employee or director, or
authorised representative, of a related body corporate of
a person of the kind mentioned in subparagraph (iii);
(b) these conditions are satisfied:
(i) the principal holds an Australian financial services
licence covering the provision of the service; and
(ii) the provider is an authorised representative of the
principal; and
(iii) the authorisation covers the provision of the service by
the provider; and
(iv) in the case of a provider who is an employee or director
of any other person (the second principal) who carries
on a financial services business, or of a related body
corporate of such a second principal—if the provider
provides any financial services in this jurisdiction on
behalf of the second principal, the provider does so as
an authorised representative of the second principal;
(c) these conditions are satisfied:
(i) the principal holds an Australian financial services
licence covering the provision of the service; and
(ii) the provider is an employee of an authorised
representative of the principal; and
(iii) the authorisation covers the provision of the service by
the authorised representative; and
(iv) the service is the provision of a basic deposit product or
of a facility for making non-cash payments (see
section 763D) that is related to a basic deposit product,
or is the provision of a financial product of a kind
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prescribed by regulations made for the purposes of this
subparagraph;
(d) the provider holds their own Australian financial services
licence covering the provision of the service;
Note: However, in general a financial services licensee cannot be the authorised representative of another financial services licensee: see sections 916D and 916E.
(e) if the principal (rather than the provider) provided the
service, the principal would not need an Australian financial
services licence because the provision of the service would
be exempt under subsection 911A(2).
Note 1: Also, a person must not provide a financial service on behalf of
another person contrary to a banning order or disqualification order
under Division 8.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Paragraphs (1)(a), (b) and (c) do not apply if the provider is a
financial services licensee, unless the principal is an insurer and the
provider is acting under a binder given by the principal.
(3) If, as mentioned in paragraph (1)(d), the provider holds their own
Australian financial services licence covering the provision of the
service, then, for the purposes of the other provisions of this
Chapter, the service is taken to be provided by the provider (and
not by the principal) unless regulations made for the purposes of
this subsection provide otherwise.
911C Prohibition on holding out
A person must not hold out:
(a) that the person has an Australian financial services licence; or
(b) that a financial service provided by the person or by someone
else is exempt from the requirement to hold an Australian
financial services licence; or
(c) that, in providing a financial service, the person acts on
behalf of another person; or
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(d) that conduct, or proposed conduct, of the person is within
authority (within the meaning of Division 6) in relation to a
particular financial services licensee;
if that is not the case.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
911D When a financial services business is taken to be carried on in
this jurisdiction
(1) For the purposes of this Chapter, a financial services business is
taken to be carried on in this jurisdiction by a person if, in the
course of the person carrying on the business, the person engages
in conduct that is:
(a) intended to induce people in this jurisdiction to use the
financial services the person provides; or
(b) is likely to have that effect;
whether or not the conduct is intended, or likely, to have that effect
in other places as well.
(2) This section does not limit the circumstances in which a financial
services business is carried on in this jurisdiction for the purposes
of this Chapter.
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Division 3 Obligations of financial services licensees
Section 912A
260 Corporations Act 2001
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Division 3—Obligations of financial services licensees
912A General obligations
(1) A financial services licensee must:
(a) do all things necessary to ensure that the financial services
covered by the licence are provided efficiently, honestly and
fairly; and
(aa) have in place adequate arrangements for the management of
conflicts of interest that may arise wholly, or partially, in
relation to activities undertaken by the licensee or a
representative of the licensee in the provision of financial
services as part of the financial services business of the
licensee or the representative; and
(b) comply with the conditions on the licence; and
(c) comply with the financial services laws; and
(ca) take reasonable steps to ensure that its representatives
comply with the financial services laws; and
(d) subject to subsection (4)——have available adequate
resources (including financial, technological and human
resources) to provide the financial services covered by the
licence and to carry out supervisory arrangements; and
(e) maintain the competence to provide those financial services;
and
(f) ensure that its representatives are adequately trained
(including by complying with section 921D), and are
competent, to provide those financial services; and
(g) if those financial services are provided to persons as retail
clients—have a dispute resolution system complying with
subsection (2); and
(h) subject to subsection (5)—have adequate risk management
systems; and
(j) comply with any other obligations that are prescribed by
regulations made for the purposes of this paragraph.
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(2) To comply with this subsection, a dispute resolution system must
consist of:
(a) an internal dispute resolution procedure that:
(i) complies with standards, and requirements, made or
approved by ASIC in accordance with regulations made
for the purposes of this subparagraph; and
(ii) covers complaints against the licensee made by retail
clients in connection with the provision of all financial
services covered by the licence; and
(b) membership of one or more external dispute resolution
schemes that:
(i) is, or are, approved by ASIC in accordance with
regulations made for the purposes of this subparagraph;
and
(ii) covers, or together cover, complaints (other than
complaints that may be dealt with by the
Superannuation Complaints Tribunal established by
section 6 of the Superannuation (Resolution of
Complaints) Act 1993) against the licensee made by
retail clients in connection with the provision of all
financial services covered by the licence.
(3) Regulations made for the purposes of subparagraph (2)(a)(i) or
(2)(b)(i) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
(b) approvals given by ASIC.
(4) Paragraph (1)(d):
(a) does not apply to a body regulated by APRA, unless the body
is an RSE licensee; and
(b) does not apply to an RSE licensee, unless the RSE licensee is
also the responsible entity of a registered scheme.
(5) Paragraph (1)(h):
(a) does not apply to a body regulated by APRA, unless the body
is an RSE licensee that is also the responsible entity of a
registered scheme; and
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Section 912B
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(b) does not apply to an RSE licensee that is also the responsible
entity of a registered scheme, to the extent that the risk
relates solely to the operation of a regulated superannuation
fund by the RSE licensee.
(6) In subsections (4) and (5):
regulated superannuation fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
RSE licensee has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
912B Compensation arrangements if financial services provided to
persons as retail clients
(1) If a financial services licensee provides a financial service to
persons as retail clients, the licensee must have arrangements for
compensating those persons for loss or damage suffered because of
breaches of the relevant obligations under this Chapter by the
licensee or its representatives. The arrangements must meet the
requirements of subsection (2).
(2) The arrangements must:
(a) if the regulations specify requirements that are applicable to
all arrangements, or to arrangements of that kind—satisfy
those requirements; or
(b) be approved in writing by ASIC.
(3) Before approving arrangements under paragraph (2)(b), ASIC must
have regard to:
(a) the financial services covered by the licence; and
(b) whether the arrangements will continue to cover persons after
the licensee ceases carrying on the business of providing
financial services, and the length of time for which that cover
will continue; and
(c) any other matters that are prescribed by regulations made for
the purposes of this paragraph.
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(4) Regulations made for the purposes of paragraph (3)(c) may, in
particular, prescribe additional details in relation to the matters to
which ASIC must have regard under paragraphs (3)(a) and (b).
912C Direction to provide a statement
(1) ASIC may, by giving written notice to a financial services licensee,
direct the licensee to give to ASIC a written statement containing
the specified information about:
(a) the financial services provided by the licensee or its
representatives; or
(b) the financial services business carried on by the licensee.
(1A) Notices under subsection (1):
(a) may be sent out at any time; and
(b) may be sent to one or more particular licensees, or to each
licensee in one or more classes of licensee, or to all licensees;
and
(c) may all require the same information, or may contain
differences as to the information they require; and
(d) may require a statement containing information to be
provided on a periodic basis, or each time a particular event
or circumstance occurs, without ASIC having to give a
further written notice.
(2) ASIC may also, by giving written notice to the licensee, direct the
licensee to obtain an audit report, prepared by a suitably qualified
person specified in the notice, on a statement, or each statement in
a class of statements, under subsection (1) before the statement is
given to ASIC.
(3) The licensee must comply with a direction given under this section:
(a) within the time specified in the direction if that is a
reasonable time; or
(b) in any other case—within a reasonable time.
ASIC may extend the time within which the licensee must comply
with the direction by giving written notice to the licensee.
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Section 912CA
264 Corporations Act 2001
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Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
912CA Regulations may require information to be provided
The regulations may require a financial services licensee, or each
financial services licensee in a class of financial services licensees,
to provide ASIC with specified information about:
(a) the financial services provided by the licensee or its
representatives; or
(b) the financial services business carried on by the licensee.
912D Obligation to notify ASIC of certain matters
(1) A financial services licensee must comply with subsection (1B) if:
(a) the licensee breaches, or is likely to breach:
(i) any of the obligations under section 912A or 912B,
other than the obligation under paragraph 912A(1)(c);
or
(ii) the obligation under paragraph 912A(1)(c), so far as it
relates to provisions of this Act or the ASIC Act
referred to in paragraphs (a), (b) and (c) of the definition
of financial services law in section 761A; or
(iii) in relation to financial services, other than traditional
trustee company services provided by a licensed trustee
company—the obligation under paragraph 912A(1)(c),
so far as it relates to Commonwealth legislation that is
covered by paragraph (d) of that definition and that is
specified in regulations made for the purposes of this
subparagraph; or
(iv) in relation to traditional trustee company services
provided by a licensed trustee company—the obligation
under paragraph 912A(1)(c), so far as it relates to
Commonwealth, State or Territory legislation, or a rule
of common law or equity, that is covered by
paragraph (d) or (e) of that definition; and
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(b) the breach, or likely breach, is significant, having regard to
the following:
(i) the number or frequency of similar previous breaches;
(ii) the impact of the breach or likely breach on the
licensee’s ability to provide the financial services
covered by the licence;
(iii) the extent to which the breach or likely breach indicates
that the licensee’s arrangements to ensure compliance
with those obligations is inadequate;
(iv) the actual or potential financial loss to clients of the
licensee, or the licensee itself, arising from the breach or
likely breach;
(v) any other matters prescribed by regulations made for the
purposes of this paragraph.
(1A) For the purposes of subsection (1), a financial services licensee is
likely to breach an obligation referred to in that subsection if, and
only if, the person is no longer able to comply with the obligation.
(1B) The financial services licensee must, as soon as practicable and in
any case within 10 business days after becoming aware of the
breach or likely breach mentioned in subsection (1), lodge a
written report on the matter with ASIC.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(1C) A report that a licensee is required to lodge under subsection (1B)
is taken to have been lodged with ASIC if:
(a) the licensee is a body regulated by APRA; and
(b) the report is received by APRA in accordance with the terms
of an agreement between APRA and ASIC under which
APRA is to act as ASIC’s agent in relation to such reports.
(1D) Subsection (1B) does not apply to a financial services licensee that
is a body regulated by APRA in relation to a breach if:
(a) the auditor or actuary of the licensee gives APRA a written
report about the breach; and
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(b) the report is given before, or within 10 business days after,
the licensee becomes aware of the breach.
(2) A financial services licensee must give written notice to ASIC, as
soon as practicable, if the licensee becomes a participant in a
licensed market or a licensed CS facility, or ceases to be such a
participant. The notice must say when this happened and identify
the market or facility.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
912E Surveillance checks by ASIC
(1) A financial services licensee and its representatives must give such
assistance to ASIC, or a person authorised by ASIC, as ASIC or
the authorised person reasonably requests in relation to whether the
licensee and its representatives are complying with the financial
services laws, and in relation to the performance of ASIC’s other
functions.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
912F Obligation to cite licence number in documents
(1) Whenever a financial services licensee identifies itself in a
document of a kind specified in regulations made for the purposes
of this subsection, the document must include the licensee’s licence
number (see section 913C).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Division 4—Australian financial services licences
Subdivision A—How to get a licence
913A Applying for a licence
A person may apply for an Australian financial services licence by
lodging an application with ASIC that:
(a) includes the information required by regulations made for the
purposes of this paragraph; and
(b) is accompanied by the documents (if any) required by
regulations made for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
913B When a licence may be granted
(1) ASIC must grant an applicant an Australian financial services
licence if (and must not grant such a licence unless):
(a) the application was made in accordance with section 913A;
and
(b) ASIC has no reason to believe that the applicant is likely to
contravene the obligations that will apply under section 912A
if the licence is granted; and
(c) the requirement in whichever of subsection (2) or (3) of this
section applies is satisfied; and
(ca) the applicant has provided ASIC with any additional
information requested by ASIC in relation to matters that,
under this section, can be taken into account in deciding
whether to grant the licence; and
(d) the applicant meets any other requirements prescribed by
regulations made for the purposes of this paragraph.
Note 1: ASIC must not grant an Australian financial services licence to a
person contrary to a banning order or disqualification order (see
Division 8).
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Section 913B
268 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: There are limitations on ASIC granting an individual an Australian
financial services licence that covers the provision of certain personal
advice if the individual does not meet the education and training
standards in subsections 921B(2) to (4) (see section 921C).
(2) If the applicant is a natural person, ASIC must be satisfied that
there is no reason to believe that the applicant is not of good fame
or character.
(3) If the applicant is not a single natural person, ASIC must be
satisfied:
(a) that:
(i) if the applicant is a body corporate—there is no reason
to believe that any of the applicant’s responsible officers
are not of good fame or character; or
(ii) if the applicant is a partnership or the trustees of a
trust—there is no reason to believe that any of the
partners or trustees who would perform duties in
connection with the holding of the licence are not of
good fame or character; or
(b) if ASIC is not satisfied of the matter in paragraph (a)—that
the applicant’s ability to provide the financial services
covered by the licence would nevertheless not be
significantly impaired.
(4) In considering whether there is reason to believe that a person is
not of good fame or character, ASIC must (subject to Part VIIC of
the Crimes Act 1914) have regard to:
(a) any conviction of the person, within 10 years before the
application was made, for an offence that involves dishonesty
and is punishable by imprisonment for at least 3 months; and
(b) whether the person has held an Australian financial services
licence that was suspended or cancelled; and
(c) whether a banning order or disqualification order under
Division 8 has previously been made against the person; and
(d) any other matter ASIC considers relevant.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
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convictions and require persons aware of such convictions to
disregard them.
(5) However, ASIC may only refuse to grant a licence after giving the
applicant an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC in relation to the matter.
913C Licence numbers
(1) ASIC must give each Australian financial services licence a unique
licence number when it is granted, and must notify the licensee of
that number.
(2) If:
(a) a person is granted an Australian financial services licence;
and
(b) the person holds an Australian credit licence (within the
meaning of the National Consumer Credit Protection Act
2009);
the licence number that ASIC gives to the Australian financial
services licence held by that person must be the same number as
the person’s Australian credit licence number (within the meaning
of that Act).
Subdivision B—The conditions on the licence
914A The conditions on the licence
(1) Subject to this section, ASIC may, at any time, by giving written
notice to a financial services licensee:
(a) impose conditions, or additional conditions, on the licence;
and
(b) vary or revoke conditions imposed on the licence.
Note: Subsection 923B(3) restricts the circumstances in which ASIC can
impose a condition authorising a person to assume or use a restricted
word or expression under that section.
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Section 914A
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(2) ASIC may do so:
(a) on its own initiative; or
(b) if the licensee lodges with ASIC an application for ASIC to
do so, which is accompanied by the documents, if any,
required by regulations made for the purposes of this
paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) ASIC may only impose conditions or additional conditions, or vary
the conditions, on the licence after giving the licensee an
opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC in relation to the matter.
This subsection does not apply to ASIC imposing conditions when
a licence is granted.
(4) If the licensee, or a related body corporate, is a body (the APRA
body) regulated by APRA, other than an ADI (within the meaning
of the Banking Act 1959), then the following provisions apply:
(a) ASIC cannot:
(i) impose, vary or revoke a condition on the licence that,
in ASIC’s opinion, has or would have the result of
preventing the APRA body from being able to carry on
all or any of its usual activities (being activities in
relation to which APRA has regulatory or supervisory
responsibilities); or
(ii) vary a condition so that it would, in ASIC’s opinion,
become a condition that would have a result as
described in subparagraph (i);
unless ASIC has first consulted APRA about the proposed
action;
(b) if ASIC imposes, varies or revokes a condition on the licence
and paragraph (a) does not apply to that action, ASIC must,
within one week, inform APRA of the action that has been
taken.
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(5) If the licensee, or a related body corporate, is an ADI (within the
meaning of the Banking Act 1959), then the following provisions
apply:
(a) subject to paragraphs (b) and (c), the powers that ASIC
would otherwise have under this section:
(i) to impose, vary or revoke a condition on the licence
that, in ASIC’s opinion, has or would have the result of
preventing the ADI from being able to carry on all or
any of its banking business (within the meaning of the
Banking Act 1959); or
(ii) to vary a condition so that it would, in ASIC’s opinion,
become a condition that would have a result as
described in subparagraph (i);
are instead powers of the Minister;
(b) the following provisions apply in relation to a power to
which paragraph (a) applies:
(i) the procedures for the exercise of the power are the
same as would apply if ASIC could exercise the power,
except that the Minister must not exercise the power
unless he or she has first considered advice from ASIC
on the proposed action, being advice given after ASIC
has consulted APRA about the proposed action;
(ii) ASIC (rather than the Minister) must still conduct any
hearing required under paragraph (3)(a) and receive any
submissions under paragraph (3)(b);
(c) if ASIC imposes, varies or revokes a condition on the licence
and paragraph (a) does not apply to that action, ASIC must,
within one week, inform APRA of the action that has been
taken.
(5A) A failure to comply with a requirement of subsection (4) or (5) to
consult or inform APRA about, or to consider advice from ASIC
about, an imposition, variation or revocation of a condition does
not invalidate the action taken.
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Section 915A
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(6) ASIC must ensure that the licence is subject to a condition that
specifies the particular financial services or class of financial
services that the licensee is authorised to provide.
(7) The financial services or class of financial services may be
specified by reference to particular financial products, or classes of
financial products.
(8) The licence is subject to such other conditions as are prescribed by
regulations made for the purposes of this subsection. However,
ASIC cannot vary or revoke those conditions.
Subdivision C—When a licence can be varied, suspended or
cancelled
915A Varying licences
(1) ASIC may vary an Australian financial services licence to take
account of a change in the licensee’s name if the licensee lodges
with ASIC an application for the variation, accompanied by the
documents, if any, required by regulations made for the purposes
of this subsection.
Note 1: The conditions on the licence can be varied under section 914A.
Note 2: For fees in respect of lodging applications, see Part 9.10.
(2) ASIC must give written notice of the variation to the licensee.
915B Immediate suspension or cancellation
Licence held by a natural person
(1) ASIC may suspend or cancel an Australian financial services
licence held by a natural person, by giving written notice to the
person, if the person:
(a) ceases to carry on the financial services business; or
(b) becomes an insolvent under administration; or
(c) is convicted of serious fraud; or
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(d) becomes incapable of managing their affairs because of
mental or physical incapacity; or
(e) lodges with ASIC an application for ASIC to do so, which is
accompanied by the documents, if any, required by
regulations made for the purposes of this paragraph; or
(f) is liable to pay levy imposed by the ASIC Supervisory Cost
Recovery Levy Act 2017 and has not paid in full at least 12
months after the due date for payment:
(i) the amount of levy; and
(ii) the amount of any late payment penalty payable in
relation to the levy; and
(iii) the amount of any shortfall penalty payable in relation
to the levy.
Note: For fees in respect of lodging applications, see Part 9.10.
Licence held by a partnership
(2) ASIC may suspend or cancel an Australian financial services
licence held by a partnership, by giving written notice to the
partnership, if:
(a) the partnership ceases to carry on the financial services
business; or
(b) a creditor’s petition or a debtor’s petition is presented under
Division 2 or 3 of Part IV of the Bankruptcy Act 1966 against
the partnership; or
(c) one or more of the partners is convicted of serious fraud; or
(d) the partnership lodges with ASIC an application for ASIC to
do so, which is accompanied by the documents, if any,
required by regulations made for the purposes of this
paragraph; or
(e) in the case of a partnership that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
licensee;
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(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note: For fees in respect of lodging applications, see Part 9.10.
Licence held by a body corporate
(3) ASIC may suspend or cancel an Australian financial services
licence held by a body corporate, by giving written notice to the
body, if the body:
(a) ceases to carry on the financial services business; or
(b) becomes a Chapter 5 body corporate; or
(c) is a responsible entity of a registered scheme whose members
have suffered, or are likely to suffer, loss or damage because
the body has breached this Act; or
(ca) is a trustee company whose clients have suffered, or are
likely to suffer, loss or damage because the company has
breached:
(i) this Act; or
(ii) a financial services law referred to in paragraph (e) of
the definition of financial services law in section 761A;
or
(d) lodges with ASIC an application for ASIC to do so, which is
accompanied by the documents, if any, required by
regulations made for the purposes of this paragraph; or
(e) is liable to pay levy imposed by the ASIC Supervisory Cost
Recovery Levy Act 2017 and has not paid in full at least 12
months after the due date for payment:
(i) the amount of levy; and
(ii) the amount of any late payment penalty payable in
relation to the levy; and
(iii) the amount of any shortfall penalty payable in relation
to the levy.
Note: For fees in respect of lodging applications, see Part 9.10.
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(4) ASIC may suspend or cancel an Australian financial services
licence held by the trustees of a trust, by giving written notice to
the trustees, if:
(a) the trustees of the trust cease to carry on the financial
services business; or
(b) a trustee who is a natural person:
(i) becomes an insolvent under administration; or
(ii) is convicted of serious fraud; or
(iii) becomes incapable of managing their affairs because of
physical or mental incapacity; or
(c) a trustee that is a body corporate becomes a Chapter 5 body
corporate; or
(d) the trustees lodge with ASIC an application for ASIC to do
so, which is accompanied by the documents, if any, required
by regulations made for the purposes of this paragraph; or
(e) in the case of a licensee that is a single legal entity under
section 761FA and also a leviable entity (within the meaning
of the ASIC Supervisory Cost Recovery Levy Act 2017)—the
following have not been paid in full at least 12 months after
the due date for payment:
(i) an amount of levy (if any) payable in respect of the
licensee;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note 1: For fees in respect of lodging applications, see Part 9.10.
Note 2: If there is only one trustee, subsection (1) will apply (if the trustee is a
natural person), and subsection (3) will apply (if the trustee is a body
corporate).
915C Suspension or cancellation after offering a hearing
(1) ASIC may suspend or cancel an Australian financial services
licence (subject to complying with subsection (4)) in any of the
following cases:
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(a) the licensee has not complied with their obligations under
section 912A;
(aa) ASIC has reason to believe that the licensee is likely to
contravene their obligations under section 912A;
(b) ASIC is no longer satisfied of the matter in whichever of
subsection 913B(2) or (3) applied at the time the licence was
granted (about whether the licensee, or the licensee’s
representatives, are of good fame or character);
(c) a banning order or disqualification order under Division 8 is
made against the licensee;
(d) a banning order or disqualification order under Division 8 is
made against a representative of the licensee and ASIC
considers that the representative’s involvement in the
provision of the licensee’s financial services will
significantly impair the licensee’s ability to meet its
obligations under this Chapter.
(2) ASIC may also cancel an Australian financial services licence
(subject to complying with subsection (4)) if:
(a) the application for the licence was false in a material
particular or materially misleading; or
(b) there was an omission of a material matter from the
application.
(3) An Australian financial services licence is suspended or cancelled
by ASIC giving written notice to the licensee.
(4) However, ASIC may only suspend or cancel an Australian
financial services licence under this section after giving the
licensee an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC on the matter.
915D Effect of suspension
(1) A suspended Australian financial services licence has no effect
while it remains suspended.
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(2) Subsection (1) has effect subject to section 915H.
915E Revocation of suspension
ASIC may at any time revoke the suspension of an Australian
financial services licence by giving written notice to the licensee.
915F Date of effect and publication of cancellation or suspension
(1) A variation, suspension, revocation of a suspension, or
cancellation, of an Australian financial services licence takes effect
when the written notice of that action is given to the licensee.
(2) As soon as practicable after the notice is given to the licensee,
ASIC must:
(a) publish a notice of the action in the Gazette; and
(b) if the licensee is a participant in a licensed market or a
licensed CS facility—give written notice of the action to the
operator of the market or facility.
A notice under this subsection must state when the action took
effect.
915G Statement of reasons
A notice of suspension or cancellation given to a licensee under
this Subdivision must be accompanied by a statement of reasons
for the action taken.
915H ASIC may allow licence to continue in effect
In the written notice of suspension or cancellation that ASIC gives
to the licensee, ASIC may specify that the licence continues in
effect as though the suspension or cancellation had not happened
for the purposes of specified provisions of this Act in relation to
specified matters, a specified period, or both.
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Section 915I
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915I Special procedures for APRA-regulated bodies
(1) If a financial services licensee, or a related body corporate, is a
body (the APRA body) regulated by APRA, other than an ADI
(within the meaning of the Banking Act 1959), the following
provisions apply:
(a) ASIC cannot suspend or cancel the licensee’s licence if doing
so would, in ASIC’s opinion, have the result of preventing
the APRA body from being able to carry on all or any of its
usual activities (being activities in relation to which APRA
has regulatory or supervisory responsibilities), unless ASIC
has first consulted APRA about the proposed action;
(b) if ASIC suspends or cancels the licensee’s licence and
paragraph (a) does not apply to that action, ASIC must,
within one week, inform APRA of the action that has been
taken.
(2) If:
(a) a financial services licensee is an ADI (within the meaning of
the Banking Act 1959); or
(b) a related body corporate of a financial services licensee is an
ADI (within the meaning of the Banking Act 1959), and
cancellation or suspension of the licensee’s licence would, in
ASIC’s opinion, have the result of preventing the ADI from
being able to carry on all or any of its banking business
(within the meaning of the Banking Act 1959);
the following provisions have effect:
(c) subject to paragraph (d), the powers that ASIC would
otherwise have under this Subdivision to cancel or suspend
the licensee’s licence, or to subsequently revoke a suspension
to which this subsection applied, are instead powers of the
Minister;
(d) the procedures for the exercise of a power to which
paragraph (c) applies are the same as would apply if ASIC
could exercise the power, except that the Minister must not
exercise the power unless he or she has first considered
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advice from ASIC on the proposed action, being advice given
after ASIC has consulted APRA about the proposed action;
(e) ASIC (rather than the Minister) must still conduct any
hearing required under paragraph 915C(4)(a) and receive any
submissions under paragraph 915C(4)(b).
(3) A failure to comply with a requirement of subsection (1) or (2) to
consult or inform APRA about, or to consider advice from ASIC
about, a cancellation or suspension, or a revocation of a
suspension, of a licence does not invalidate the action taken.
915J Variation, suspension and cancellation only under this
Subdivision
An Australian financial services licence cannot be varied,
suspended or cancelled otherwise than under this Subdivision.
Note: The conditions on the licence can be varied under section 914A.
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Division 5 Authorised representatives
Section 916A
280 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Authorised representatives
916A How representatives are authorised
(1) A financial services licensee may give a person (the authorised
representative) a written notice authorising the person, for the
purposes of this Chapter, to provide a specified financial service or
financial services on behalf of the licensee.
Note: There are limitations on a financial services licensee authorising an
individual to provide certain personal advice if the individual does not
meet the education and training standards in subsections 921B(2) to
(4) (see section 921C).
(2) The financial services specified may be some or all of the financial
services covered by the licensee’s licence.
(3) An authorisation under subsection (1) is void to the extent that it
purports to authorise a person to provide a financial service:
(a) that is not covered by the licensee’s licence; or
(b) contrary to a banning order or disqualification order under
Division 8; or
(c) in contravention of subsection 921C(2).
(3A) A person must not give a purported authorisation if that purported
authorisation is void to any extent under subsection (3).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) An authorisation may be revoked at any time by the licensee giving
written notice to the authorised representative.
916B Sub-authorisations
(1) Subject to subsection (3), an authorised representative of a
financial services licensee cannot, in that capacity, make a person
their authorised representative or an authorised representative of
the licensee.
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(2) A purported authorisation contrary to this section or
subsection 921C(3) is void.
(2A) A person must not give a purported authorisation if that purported
authorisation is contrary to this section or subsection 921C(3).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A body corporate that is an authorised representative of a financial
services licensee may, in that capacity, give an individual a written
notice authorising that individual, for the purposes of this Chapter,
to provide a specified financial service or financial services on
behalf of the licensee, but only if the licensee consents in writing
given to the body corporate.
Note: There are limitations on sub-authorising an individual to provide
certain personal advice if the individual does not meet the education
and training standards in subsections 921B(2) to (4) (see
section 921C).
(4) The financial services specified may be some or all of the financial
services covered by the licensee’s licence.
(5) The licensee may give consent under subsection (3) in respect of
either a specified individual or a specified class of individuals (the
membership of which might change from time to time).
(5A) If a licensee gives consent under subsection (3) to a body
corporate, the licensee must keep a copy of the consent for 5 years
after the day on which it ceases to have effect.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) An individual who is authorised as mentioned in subsection (3) is
an authorised representative of the relevant licensee.
(7) An authorisation of an individual as mentioned in subsection (3)
may be revoked at any time by:
(a) the licensee; or
(b) the body corporate that gave the individual the authorisation;
giving written notice to the individual.
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Part 7.6 Licensing of providers of financial services
Division 5 Authorised representatives
Section 916C
282 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) If a person revokes the authorisation of an individual under
subsection (7), that person must inform, in writing, the other
person who could have revoked the authorisation.
(9) To avoid doubt, an authorisation given as mentioned in
subsection (3) is taken, for the purposes of sections 916C to 916F,
to be given by the body corporate, not the licensee.
916C Authorised representative of 2 or more licensees
(1) One person can be the authorised representative of 2 or more
financial services licensees, but only if:
(a) each of those licensees has consented to the person also being
the authorised representative of each of the other licensees; or
(b) each of those licensees is a related body corporate of each of
the other licensees.
(2) A purported authorisation given in breach of this requirement is
void.
(3) A person must not give a purported authorisation if that purported
authorisation is in breach of this requirement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
916D Licensees cannot authorise other licensees
(1) A financial services licensee cannot be the authorised
representative of another financial services licensee.
Note 1: Instead, the first licensee could use their own licence to provide
financial services on behalf of the second licensee (assuming that the
first licensee’s licence covered the provision of those services). See
paragraph 911B(1)(d).
Note 2: There is an exception to this rule in section 916E.
(2) A purported authorisation given in breach of this requirement is
void.
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Section 916E
Corporations Act 2001 283
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(2A) A person must not give a purported authorisation if that purported
authorisation is given in breach of this requirement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2B) The requirement in subsection (1) does not prohibit a financial
services licensee from being an authorised representative in
circumstances covered by section 916E.
Note: In a prosecution for an offence based on subsection (2A), a defendant
bears an evidential burden in relation to the matters in this subsection.
See subsection 13.3(3) of the Criminal Code.
(3) As well, an authorisation that starts to breach this requirement,
because the person authorised is subsequently granted an
Australian financial services licence, is void.
916E Licensees acting under a binder
(1) Despite section 916D, a financial services licensee (the authorised
licensee) may be the authorised representative of another financial
services licensee who is an insurer, if the authorised licensee acts
under a binder given by the insurer.
(2) For all purposes connected with contracts that are risk insurance
products, or with claims against the insurer, in respect of which the
authorised licensee acts under the binder:
(a) the authorised licensee is taken to act on behalf of the insurer
and not the insured; and
(b) if the insured in fact relied in good faith on the conduct of the
authorised licensee, the authorised licensee is taken to act on
behalf of the insurer regardless of the fact that the authorised
licensee did not act within the scope of the binder.
916F Obligation to notify ASIC etc. about authorised
representatives
(1) A person must lodge with ASIC a written notice (in accordance
with subsection (2)), within 15 business days, if the person
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Division 5 Authorised representatives
Section 916F
284 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
authorises a representative to provide a financial service as
mentioned in section 916A or 916B.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(1AA) Subsection (1) does not apply to an authorisation of a
representative if:
(a) the authorisation is by a body corporate and is given as
mentioned in section 916B; and
(b) the relevant consent under subsection 916B(5) was given in
respect of a specified class of individuals of which the
representative is a member; and
(c) the representative is an employee of the body corporate; and
(d) the only financial services that the representative is
authorised to provide are either or both of the following:
(i) general advice that relates to financial products covered
by regulations made for the purposes of this paragraph;
(ii) dealing in financial products covered by regulations
made for the purposes of this paragraph.
Note 1: Regulations made for the purposes of paragraph (d) may be expressed
to cover all financial products, or only one or more specified kinds of
financial products.
Note 2: A defendant bears an evidential burden in relation to the matters in
subsection (1AA). See subsection 13.3(3) of the Criminal Code.
(1A) A person who authorises an individual to provide a financial
service on behalf of a financial services licensee as mentioned in
section 916B must give the licensee written notice (in accordance
with subsection (2)), within 15 business days of the individual
being authorised to provide the financial service, if the licensee’s
consent to the authorisation was given in respect of a specified
class of individuals.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The notice must include the following details:
(a) the name and business address of the representative;
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Section 916G
Corporations Act 2001 285
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(b) details of the authorisation, including the date on which it
was made and what the representative is authorised to do on
behalf of the relevant licensee;
(c) details of each other financial services licensee on behalf of
whom the representative is an authorised representative.
(3) A person must notify ASIC, by lodging a written notice, within 10
business days if:
(a) the person authorised a representative under section 916A or
916B and there is a change in any details relating to the
representative that are required to be included under
subsection (2); or
(b) the person revokes an authorisation to which subsection (1)
applied.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of circumstance of the
offence, that the details mentioned in subsection (3) changed.
Note: For strict liability, see section 6.1 of the Criminal Code.
916G ASIC may give licensee information about representatives
(1) If ASIC considers it appropriate to do so, it may give information
to a financial services licensee about a person who ASIC believes
is, or will be, a representative of the licensee. However, ASIC may
only do so if it believes, on reasonable grounds, that the
information is true.
(2) A financial services licensee to whom the information is given may
only make use of, make a record of, or give to another person, the
information for a purpose connected with:
(a) the licensee making a decision about what action (if any) to
take in relation to the representative, as a consequence of
receiving the information; or
(b) the licensee taking action pursuant to such a decision.
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Division 5 Authorised representatives
Section 916G
286 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) A person to whom information has been given for a purpose or
purposes under subsection (2) or this subsection, may only make
use of, make a record of, or give to another person, that
information for that purpose or any of those purposes.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) A person has qualified privilege in respect of an act done by the
person under subsection (2) or (3).
(5) A person to whom information is given in accordance with this
section must not give any of the information to a court, or produce
in a court a document that sets out some or all of the information,
except:
(a) for a purpose connected with:
(i) a financial services licensee making a decision about
what action (if any) to take in relation to the
representative, as a consequence of receiving some or
all of the information; or
(ii) a financial services licensee taking action pursuant to
that decision; or
(iii) proving in a proceeding in that court that particular
action taken by a financial services licensee in relation
to the representative was taken pursuant to that decision;
or
(b) in a proceeding in that court, in so far as the proceeding
relates to an alleged breach of this section; or
(c) in a proceeding in respect of an ancillary offence relating to
an offence based on this section; or
(d) in a proceeding about giving to a court false information
some, at least, of which was the information given under this
section.
(6) A reference in this section to a financial services licensee taking
action in relation to a representative is a reference to the licensee:
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(a) taking action by way of making, terminating or varying the
terms and conditions of an agreement; or
(b) otherwise taking action in relation to an agreement;
to the extent that the agreement relates to the representative acting
on behalf of the licensee.
(7) Subsection (5) also has the effect it would have if:
(a) a reference in it to a court were a reference to a court of an
external Territory or of a country outside Australia and the
external Territories; and
(b) paragraphs (5)(b) and (c) were omitted.
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Division 6 Liability of financial services licensees for representatives
Section 917A
288 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Liability of financial services licensees for
representatives
917A Application of Division
(1) This Division applies to any conduct of a representative of a
financial services licensee:
(a) that relates to the provision of a financial service; and
(b) on which a third person (the client) could reasonably be
expected to rely; and
(c) on which the client in fact relied in good faith.
(2) In this Division, a reference to a representative’s conduct being
within authority in relation to a particular financial services
licensee is, subject to subsection (3), a reference to:
(a) if the representative is an employee of the licensee or of a
related body corporate of the licensee—conduct being within
the scope of the employee’s employment; or
(b) if the representative is a director of the licensee or of a
related body corporate of the licensee—conduct being within
the scope of the director’s duties as director; or
(c) in any other case—conduct being within the scope of the
authority given by the licensee.
(3) If:
(a) a person is the representative of more than one financial
services licensee in respect of a particular class of financial
service; and
(b) the person engages in conduct relating to that class of
service; and
(ba) the conduct relates to a particular kind of financial product
prescribed by regulations made for the purposes of
paragraph 917C(3)(ba); and
(c) any one or more of the licensees issues or transfers a
financial product of that kind as a result of the conduct;
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Section 917B
Corporations Act 2001 289
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
then, for the purposes of this Division:
(d) the person is taken, in respect of the conduct, to have acted
within authority in relation to the licensee or to each licensee
who issued or transferred a financial product of that kind as a
result of the conduct; and
(e) the person is, in respect of the conduct, taken not to have
acted within authority in relation to any licensee who did not
issue or transfer a financial product of that kind as a result of
the conduct.
917B Responsibility if representative of only one licensee
If the representative is the representative of only one financial
services licensee, the licensee is responsible, as between the
licensee and the client, for the conduct of the representative,
whether or not the representative’s conduct is within authority.
917C Representatives of multiple licensees
(1) This section applies if the representative is the representative of
more than one financial services licensee.
Financial service covered by only one authority
(2) If:
(a) the representative is the representative of one of the licensees
only in respect of a particular class of financial service; and
(b) the conduct relates to that class of service;
that licensee is responsible for the conduct, as between that
licensee and the client, whether or not the conduct is within
authority.
Financial service covered by multiple authorities: conduct within
authority for one or more of them
(3) If:
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Section 917D
290 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the representative is the representative of more than one of
the licensees in respect of a particular class of financial
service; and
(b) the conduct relates to that class of service; and
(ba) the conduct relates to a particular kind of financial product
prescribed by regulations made for the purposes of this
paragraph; and
(c) the conduct is within authority in relation to:
(i) only one of those licensees (the authorising licensee);
or
(ii) two or more of those licensees (the authorising
licensees);
then:
(d) if subparagraph (c)(i) applies—the authorising licensee is
responsible for the conduct, as between that licensee and the
client; or
(e) if subparagraph (c)(ii) applies—the authorising licensees are
jointly and severally responsible for the conduct, as between
themselves and the client.
All other cases
(4) In any other case, all of the licensees are jointly and severally
responsible for the conduct, as between themselves and the client,
whether or not the representative’s conduct is within authority in
relation to any of them.
917D Exception if lack of authority is disclosed to client
A financial services licensee is not responsible under section 917B
or 917C for the conduct of their representative if:
(a) the conduct is not within authority in relation to the licensee
(or in relation to any of the licensees, if there were more than
one); and
(b) the representative disclosed that fact to the client before the
client relied on the conduct; and
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Section 917E
Corporations Act 2001 291
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the clarity and the prominence of the disclosure was such as a
person would reasonably require for the purpose of deciding
whether to acquire the relevant financial service.
Note: A person must not hold out that conduct, or proposed conduct, of the
person is within authority in relation to a particular financial services
licensee, unless that is the case. See section 911C.
917E Responsibility extends to loss or damage suffered by client
The responsibility of a financial services licensee under this
Division extends so as to make the licensee liable to the client in
respect of any loss or damage suffered by the client as a result of
the representative’s conduct.
917F Effect of Division
(1) If a financial services licensee is responsible for the conduct of
their representative under this Division, the client has the same
remedies against the licensee that the client has against the
representative.
(2) The licensee and the representative (along with any other licensees
who are also responsible) are all jointly and severally liable to the
client in respect of those remedies.
(3) However, nothing in this Division imposes:
(a) any criminal responsibility; or
(b) any civil liability under a provision of this Act apart from this
Division;
on a financial services licensee that would not otherwise be
imposed on the licensee.
(4) This Division does not relieve a representative of a financial
services licensee of any liability they have to the client or the
licensee.
(5) An agreement is void in so far as it purports to alter or restrict the
operation of section 917B, 917C, 917D or 917E.
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Section 917F
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) However, subsection (5) does not apply to the extent that the
agreement:
(a) provides for a representative of a financial services licensee
to indemnify the licensee for a liability of the licensee in
respect of the representative; or
(b) provides for a financial services licensee, for whom a
representative acts, to indemnify another financial services
licensee for a liability in respect of the representative.
(7) A financial services licensee must not make, or offer to make, an
agreement that is, or would be, void under subsection (5).
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Section 920A
Corporations Act 2001 293
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8—Banning or disqualification of persons from
providing financial services
Subdivision A—Banning orders
920A ASIC’s power to make a banning order
(1) ASIC may make a banning order against a person, by giving
written notice to the person, if:
(a) ASIC suspends or cancels an Australian financial services
licence held by the person; or
(b) the person has not complied with their obligations under
section 912A; or
(ba) ASIC has reason to believe that the person is likely to
contravene their obligations under section 912A; or
(bb) the person becomes an insolvent under administration; or
(c) the person is convicted of fraud; or
(d) ASIC has reason to believe that the person is not of good
fame or character; or
(da) ASIC has reason to believe that the person is not adequately
trained, or is not competent, to provide a financial service or
financial services; or
(db) the person has not complied with any one or more of his or
her obligations under section 921F (requirements relating to
provisional relevant providers); or
(dc) both of the following apply:
(i) a supervisor referred to in section 921F has not
complied with any one or more of his or her obligations
under that section in relation to a provisional relevant
provider;
(ii) both the supervisor and the provisional relevant
provider are authorised to provide personal advice to
retail clients, on behalf of the person, in relation to
relevant financial products; or
(dd) both of the following apply:
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Section 920A
294 Corporations Act 2001
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(i) a provisional relevant provider has not complied with
his or her obligations under subsection 921F(7);
(ii) the provisional relevant provider is authorised to
provide personal advice to retail clients, on behalf of the
person, in relation to relevant financial products; or
(de) ASIC has reason to believe that the person was authorised, in
contravention of subsection 921C(2), (3) or (4), to provide
personal advice to retail clients in relation to relevant
financial products; or
(e) the person has not complied with a financial services law
(other than section 921E (relevant providers to comply with
the Code of Ethics)); or
(f) ASIC has reason to believe that the person is likely to
contravene a financial services law; or
(g) the person has been involved in the contravention of a
financial services law by another person; or
(h) ASIC has reason to believe that the person is likely to
become involved in the contravention of a financial services
law by another person.
(1A) In considering whether, at a particular time, there is reason to
believe that a person is not of good fame or character, ASIC must
(subject to Part VIIC of the Crimes Act 1914) have regard to:
(a) any conviction of the person, within 10 years before that
time, for an offence that involves dishonesty and is
punishable by imprisonment for at least 3 months; and
(b) whether the person has held an Australian financial services
licence that was suspended or cancelled; and
(c) whether a banning order or disqualification order under
Division 8 has previously been made against the person; and
(d) any other matter ASIC considers relevant.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain
circumstances, relieve persons from the requirement to disclose spent
convictions and require persons aware of such convictions to
disregard them.
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Section 920B
Corporations Act 2001 295
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(1B) To avoid doubt, a person contravenes a financial services law if a
person fails to comply with a duty imposed under that law, even if
the provision imposing the duty is not an offence provision or a
civil penalty provision.
(2) However, ASIC may only make a banning order against a person
after giving the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC on the matter.
(3) Subsection (2) does not apply in so far as ASIC’s grounds for
making the banning order are or include the following:
(a) that the suspension or cancellation of the relevant licence
took place under section 915B;
(b) that the person has been convicted of serious fraud.
920B What is a banning order?
(1) A banning order is a written order that prohibits a person from
providing any financial services or specified financial services in
specified circumstances or capacities.
(2) The order may prohibit the person against whom it is made from
providing a financial service:
(a) permanently; or
(b) for a specified period, unless ASIC has reason to believe that
the person is not of good fame or character.
(3) A banning order may include a provision allowing the person
against whom it was made, subject to any specified conditions:
(a) to do specified acts; or
(b) to do specified acts in specified circumstances;
that the order would otherwise prohibit them from doing.
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Division 8 Banning or disqualification of persons from providing financial services
Section 920C
296 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
920C Effect of banning orders
(1) A person against whom a banning order is made cannot be granted
an Australian financial services licence contrary to the banning
order.
(2) A person contravenes this subsection if:
(a) the person engages in conduct; and
(b) the conduct breaches a banning order that has been made
against the person.
Note: A contravention of this subsection is an offence (see
subsection 1311(1)).
920D Variation or cancellation of banning orders
(1) ASIC may vary or cancel a banning order, by giving written notice
to the person against whom the order was made, if ASIC is
satisfied that it is appropriate to do so because of a change in any
of the circumstances based on which ASIC made the order.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the person against whom the order was made lodges with
ASIC an application for ASIC to do so, which is
accompanied by the documents, if any, required by
regulations made for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) If ASIC proposes not to vary or cancel a banning order in
accordance with an application lodged by a person under
paragraph (2)(b), ASIC must give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC on the matter.
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Section 920E
Corporations Act 2001 297
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
920E Date of effect and publication of banning order, variation or
cancellation
(1) A banning order, or variation or cancellation of a banning order,
takes effect when it is given to the person against whom the order
is or was made.
(2) ASIC must publish a notice in the Gazette as soon as practicable
after making, varying or cancelling a banning order. The notice
must state when the action took effect and:
(a) in the case of the making of a banning order—set out a copy
of the banning order; or
(b) in the case of the variation of a banning order—set out a copy
of the banning order as varied.
(3) However, if the banning order contains a provision of the kind
referred to in subsection 920B(3) and ASIC considers that the
Gazette notice would be unreasonably long if that provision were
included, the notice may instead set out a summary of the
provision’s effect.
(4) If ASIC makes a banning order against a person who is a
participant in a licensed market or a licensed CS facility, or varies
a banning order against such a person, ASIC must give the operator
of the market or facility written notice of the making of the order
or the variation.
920F Statement of reasons
(1) A banning order given to a person must be accompanied by a
statement of reasons for the order.
(2) If ASIC varies a banning order made against a person, ASIC must,
on request by the person, give the person a statement of reasons for
the variation.
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Division 8 Banning or disqualification of persons from providing financial services
Section 921A
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Disqualification by the Court
921A Disqualification by the Court
(1) ASIC may apply to the Court for an order or orders under this
section in relation to a person if ASIC:
(a) cancels an Australian financial services licence held by the
person; or
(b) makes a banning order against the person that is to operate
permanently.
(2) The Court may make:
(a) an order disqualifying the person, permanently or for a
specified period, from providing any financial services, or
specified financial services, in specified circumstances or
capacities; or
(b) any other order the Court considers appropriate.
(3) The Court may revoke or vary an order made under subsection (2).
(4) A person against whom such an order is made cannot be granted an
Australian financial services licence contrary to the order.
(5) If the Court makes or varies an order under this section in relation
to a person who is a participant in a licensed market or a licensed
CS facility, ASIC must give the operator of the market or facility
written notice of the making of the order or the variation.
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Section 921B
Corporations Act 2001 299
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8A—Professional standards for relevant providers
Subdivision A—Education and training standards
921B Meaning of education and training standards
(1) This section sets out the education and training standards for a
person who is, or is to be, a relevant provider.
Conditions for relevant providers
(2) The first standard is that:
(a) the person has completed a bachelor or higher degree, or
equivalent qualification, approved by the standards body
under section 921U; or
(b) both of the following conditions are satisfied:
(i) the person has completed a foreign qualification;
(ii) the standards body has approved the foreign
qualification under section 921V.
(3) The second standard is that the person has passed an exam
approved by the standards body.
(4) The third standard is that the person has undertaken at least 1 year
of work and training that meets the requirements set by the
standards body.
Note: A relevant provider who is undertaking work and training in
accordance with this subsection is a provisional relevant provider (see
the definition of provisional relevant provider in section 910A). For
rules relating to provisional relevant providers, see Subdivision C.
Continuing standard for relevant providers
(5) The fourth standard is that the person meets the requirements for
continuing professional development set by the standards body.
Note: A provisional relevant provider is not required to meet this standard
(see section 921D).
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Chapter 7 Financial services and markets
Part 7.6 Licensing of providers of financial services
Division 8A Professional standards for relevant providers
Section 921C
300 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
921C Limitation on authorisation to provide personal advice unless
conditions met
Financial services licensees
(1) ASIC must not grant an applicant an Australian financial services
licence that covers the provision of personal advice to retail clients
in relation to relevant financial products if:
(a) the applicant is an individual; and
(b) the applicant has not met any one or more of the education
and training standards in subsections 921B(2) to (4).
Note: Subsections 921B(2) to (4) set out the conditions for education and
training for relevant providers.
Authorised representatives
(2) A financial services licensee must not, under section 916A, give a
person a written notice authorising the person to provide personal
advice to retail clients, on behalf of the licensee, in relation to
relevant financial products if:
(a) the person is an individual; and
(b) either or both of the following subparagraphs apply:
(i) the person has not met either or both of the education
and training standards in subsections 921B(2) and (3);
(ii) the person has not met the education and training
standard in subsection 921B(4), and is not undertaking
work and training in accordance with that subsection.
Sub-authorisations
(3) An authorised representative of a financial services licensee must
not, under subsection 916B(3), give an individual a written notice
authorising that individual to provide personal advice to retail
clients, on behalf of the licensee, in relation to relevant financial
products if either or both of the following paragraphs apply:
(a) the individual has not met either or both of the education and
training standards in subsections 921B(2) and (3);
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Professional standards for relevant providers Division 8A
Section 921D
Corporations Act 2001 301
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the individual has not met the education and training standard
in subsection 921B(4), and is not undertaking work and
training in accordance with that subsection.
Employees and directors
(4) A financial services licensee must not authorise an employee or
director of the licensee, or of a related body corporate of the
licensee, to provide personal advice to retail clients, on behalf of
the licensee, in relation to relevant financial products if either or
both of the following paragraphs apply:
(a) the employee or director has not met either or both of the
education and training standards in subsections 921B(2) and
(3);
(b) the employee or director has not met the education and
training standard in subsection 921B(4), and is not
undertaking work and training in accordance with that
subsection.
Exemption in relation to time-sharing schemes
(5) This section does not apply in relation to a person who is to
provide personal advice to retail clients in relation to relevant
financial products if the only relevant financial product in relation
to which the person is to provide personal advice to retail clients is
a time-sharing scheme.
921D Relevant providers to meet continuing professional
development standard
(1) A relevant provider must comply with subsection 921B(5):
(a) if the relevant provider is a financial services licensee—
during the licensee’s CPD year; or
(b) if the relevant provider is authorised to provide personal
advice to retail clients, on behalf of a financial services
licensee, in relation to relevant financial products—during
the licensee’s CPD year.
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Part 7.6 Licensing of providers of financial services
Division 8A Professional standards for relevant providers
Section 921E
302 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: Subsection 921B(5) requires a relevant provider to meet the
continuing professional development standard.
Note 2: Section 922HB requires a notice to be given at the end of a financial
services licensee’s CPD year if a relevant provider has not complied
with this section during that year.
Exemptions
(2) Subsection (1) does not apply in relation to a person if:
(a) the person is a provisional relevant provider; or
(b) the only relevant financial product in relation to which the
person provides personal advice to retail clients is a
time-sharing scheme.
Subdivision B—Ethical standards
921E Relevant providers to comply with the Code of Ethics
A relevant provider must comply with the Code of Ethics.
Note: A failure to comply with the Code of Ethics must be notified under
section 922HD.
Subdivision C—Provisional relevant providers
921F Requirements relating to provisional relevant providers
(1) This section sets out the requirements in relation to a person who is
a provisional relevant provider.
Meaning of supervisor
(2) A supervisor of a provisional relevant provider is an individual
who:
(a) has supervisory responsibility for the provisional relevant
provider; and
(b) is a relevant provider; and
(c) is not a provisional relevant provider; and
(d) is not a limited-service time-sharing adviser.
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Professional standards for relevant providers Division 8A
Section 921F
Corporations Act 2001 303
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Role of supervisors
(3) A supervisor of a provisional relevant provider must ensure that
appropriate supervision is provided to the provisional relevant
provider.
(4) A supervisor of a provisional relevant provider must approve, in
writing, any Statement of Advice provided by the provisional
relevant provider to a retail client.
Personal advice provided by provisional relevant providers
(5) For the purposes of this Act, personal advice provided (whether
orally or in writing) by a provisional relevant provider at a
particular time to a retail client in relation to a relevant financial
product is taken to have been provided to the client by each person
who is, at that time, a supervisor of the provisional relevant
provider (instead of by the provisional relevant provider).
Retail clients to be informed of certain matters
(6) A supervisor of a provisional relevant provider must ensure that a
retail client is informed:
(a) of the name of each supervisor of the provisional relevant
provider (even if the retail client has been informed of the
name of each previous supervisor); and
(b) that the provisional relevant provider is undertaking work
and training in accordance with subsection 921B(4); and
(c) that each supervisor is responsible for any personal advice
provided by the provisional relevant provider to the client in
relation to a relevant financial product.
Provisional relevant providers not to obstruct or hinder
supervision
(7) A provisional relevant provider must not obstruct or hinder a
supervisor of the provisional relevant provider in ensuring that
appropriate supervision is provided to the provisional relevant
provider.
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Part 7.6 Licensing of providers of financial services
Division 8A Professional standards for relevant providers
Section 921F
304 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Under section 921U, the standards body may provide further for the
purposes of this section.
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Licensing of providers of financial services Part 7.6
Compliance schemes Division 8B
Section 921G
Corporations Act 2001 305
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8B—Compliance schemes
Subdivision A—Compliance schemes to cover relevant
providers
921G Meaning of compliance scheme
(1) A compliance scheme is a scheme:
(a) that meets the requirements of this section; and
(b) under which compliance with the Code of Ethics by relevant
providers covered by the scheme is monitored and enforced.
Monitoring body of compliance scheme
(2) A monitoring body for a compliance scheme must monitor and
enforce compliance with the Code of Ethics by any relevant
provider covered by the scheme.
(3) A monitoring body for a compliance scheme must not be:
(a) a financial services licensee; or
(b) an associate of a financial services licensee.
(4) A compliance scheme must name the monitoring body for the
scheme.
Disputes and complaints
(5) A compliance scheme must set out how a dispute is to be resolved
between the monitoring body for the scheme and a relevant
provider covered by the scheme.
(6) A compliance scheme must set out how a person may make a
complaint to the monitoring body for the scheme in relation to a
failure to comply with, or possible failure to comply with, the Code
of Ethics by a relevant provider covered by the scheme.
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Part 7.6 Licensing of providers of financial services
Division 8B Compliance schemes
Section 921H
306 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Name of compliance scheme
(7) A compliance scheme must have a name.
921H Financial services licensees to ensure compliance scheme
covers relevant providers
(1) A financial services licensee must ensure that a compliance scheme
covers:
(a) if the licensee is a relevant provider—the licensee; and
(b) in any case—any relevant provider authorised to provide
personal advice to retail clients, on behalf of the licensee, in
relation to relevant financial products.
Note: For when a compliance scheme covers a relevant provider, see
section 921J.
(2) A compliance scheme must cover a relevant provider within 30
business days of the following:
(a) the day the person becomes a relevant provider;
(b) if the relevant provider was previously covered by only one
compliance scheme that has ceased to cover the relevant
provider—the day that scheme ceased to cover the relevant
provider.
921J When a compliance scheme covers a relevant provider
(1) A compliance scheme covers a relevant provider if:
(a) an approval is in force under section 921K in relation to the
compliance scheme; and
(b) the condition in subsection (2) of this section is met for the
relevant provider; and
(c) if the monitoring body for the compliance scheme is a
professional association—the relevant provider is a member
of the professional association.
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Compliance schemes Division 8B
Section 921K
Corporations Act 2001 307
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Notifying ASIC of the compliance scheme that covers a relevant
provider
(2) The condition in this subsection is met for a relevant provider in
relation to a compliance scheme if:
(a) both of the following apply:
(i) the notice lodged under section 922D in relation to the
relevant provider stated that the compliance scheme is
to cover the relevant provider;
(ii) no notice has been lodged under section 922H stating
that another compliance scheme is to cover the relevant
provider; or
(b) the most recent notice lodged under section 922H, in relation
to particulars entered on the Register of Relevant Providers
about the compliance scheme that is to cover the relevant
provider, stated that the compliance scheme is to cover the
relevant provider.
Note: A notice must be lodged under section 922H when there is a change in
a matter for a relevant provider.
Subdivision B—Approval of compliance schemes
921K Approval of compliance schemes
(1) A monitoring body for a compliance scheme may apply to ASIC
for approval of the compliance scheme.
Note: A monitoring body for a compliance scheme may propose to modify
the scheme (see section 921R).
(2) The application must set out details of the scheme, including:
(a) the name of the monitoring body for the scheme; and
(b) arrangements for monitoring compliance with the Code of
Ethics by relevant providers covered by the scheme; and
(c) sanctions for failures to comply with the Code of Ethics by
relevant providers covered by the scheme; and
(d) arrangements for resolving disputes between the monitoring
body and relevant providers covered by the scheme; and
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Division 8B Compliance schemes
Section 921K
308 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) arrangements for making complaints to the monitoring body
in relation to failures to comply with, or possible failures to
comply with, the Code of Ethics by relevant providers
covered by the scheme.
(3) The application must include evidence that the monitoring body
has sufficient resources and expertise to appropriately monitor and
enforce compliance with the Code of Ethics under the scheme.
Approval of compliance scheme
(4) ASIC may approve the scheme if it is satisfied that:
(a) compliance with the Code of Ethics will be appropriately
monitored and enforced under the scheme; and
(b) the monitoring body has sufficient resources and expertise to
appropriately monitor and enforce compliance with the Code
of Ethics under the scheme.
(5) ASIC may approve the scheme subject to any one or more
conditions ASIC considers appropriate.
(6) ASIC must, within a reasonable period, decide the application and
notify the monitoring body of:
(a) the decision; and
(b) any condition mentioned in subsection (5).
Revocation of approval, imposition of additional conditions etc.
(7) ASIC may, in accordance with subsection (8), take an action
specified under subsection (9) if ASIC is satisfied:
(a) that compliance with the Code of Ethics is not being
appropriately monitored or enforced under the scheme; or
(b) that the monitoring body has not complied with:
(i) section 921N (obligation to notify licensee of failure to
comply with Code of Ethics); or
(ii) a request under section 921Q (obligation to provide
ASIC with information); or
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Compliance schemes Division 8B
Section 921K
Corporations Act 2001 309
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) section 921T (obligation to notify ASIC of changes to
monitoring body); or
(iv) section 922HD (obligation to notify ASIC in relation to
failures to comply with the Code of Ethics); or
(c) that the monitoring body does not have sufficient resources
or expertise to appropriately monitor or enforce compliance
with the Code of Ethics under the scheme.
(8) ASIC must not take an action specified under subsection (9)
unless:
(a) ASIC gives a written notice to the monitoring body:
(i) providing reasons why ASIC is considering taking the
action; and
(ii) stating that the monitoring body has 90 business days to
make submissions to ASIC, in accordance with the
notice, about the possible action; and
(b) ASIC has considered any submissions made by the
monitoring body in accordance with the notice.
(9) The following actions are specified:
(a) revoking the approval of the scheme;
(b) varying a condition imposed in relation to the approval of the
scheme;
(c) imposing an additional condition in relation to the approval
of the scheme.
Revocation of conditions etc.
(10) ASIC may revoke or vary a condition imposed in relation to the
approval of the scheme if ASIC is satisfied that compliance with
the Code of Ethics will continue to be appropriately monitored and
enforced under the scheme if ASIC revokes or varies the condition.
(11) ASIC must, within a reasonable period, notify the monitoring body
if ASIC revokes or varies a condition under subsection (10).
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Part 7.6 Licensing of providers of financial services
Division 8B Compliance schemes
Section 921L
310 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—Investigations by monitoring body
921L Investigations by monitoring body
Investigation into failure, or possible failure, to comply with Code
of Ethics
(1) The monitoring body for a compliance scheme must determine, in
writing, whether a relevant provider covered by the scheme has
failed to comply with the Code of Ethics if the monitoring body
becomes aware of the failure, or possible failure, by the relevant
provider to comply with the Code of Ethics.
Notifying relevant provider of investigation
(2) Within a reasonable period of becoming so aware, the monitoring
body must notify the relevant provider that the monitoring body:
(a) has become so aware; and
(b) is to make a determination under subsection (1).
Note: A monitoring body that fails to comply with this subsection may
commit an offence (see subsection 921M(1)).
Request for information
(3) After becoming so aware, the monitoring body may request, in
writing, any one or more of the following persons to provide
information, documents or any other reasonable assistance to the
monitoring body, within a reasonable specified period:
(a) if the relevant provider is a financial services licensee—the
licensee;
(b) if the relevant provider is not a financial services licensee:
(i) the relevant provider; or
(ii) the financial services licensee on whose behalf the
relevant provider is authorised to provide personal
advice to retail clients in relation to relevant financial
products; or
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Section 921L
Corporations Act 2001 311
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) if the relevant provider is a relevant provider as a result
of section 916B—the authorised representative who
authorised the relevant provider under that section.
Note: A person who fails to comply with a request under this subsection
may commit an offence (see subsection 921M(2)).
Restriction on relevant provider leaving compliance scheme
(4) The relevant provider must not cause a notice to be lodged under
section 922H stating that another compliance scheme is to cover
the relevant provider before the monitoring body has made a
determination under subsection (1).
Note: A relevant provider who fails to comply with this subsection may
commit an offence (see subsection 921M(3)).
Completion of investigation
(5) The monitoring body must make the determination:
(a) if the relevant provider notifies the monitoring body that the
relevant provider intends to cause a notice to be lodged under
section 922H stating that another compliance scheme is to
cover the relevant provider—within 160 days of receiving the
notice; or
(b) otherwise—within a reasonable period of becoming aware of
the failure, or possible failure, by the relevant provider to
comply with the Code of Ethics.
Note: A monitoring body that fails to comply with this subsection may
commit an offence (see subsection 921M(1)).
Determination by monitoring body not a legislative instrument
(6) The determination is not a legislative instrument.
Offence
(7) A person commits an offence if:
(a) the person is a monitoring body for a compliance scheme;
and
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Part 7.6 Licensing of providers of financial services
Division 8B Compliance schemes
Section 921M
312 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) information is disclosed to the person in accordance with
subsection 70-40(3AA) of the Tax Agent Services Act 2009;
and
(c) the person uses or discloses the information for a purpose
other than monitoring or enforcing compliance with the Code
of Ethics under the scheme.
Penalty: 10 penalty units.
921M Offences relating to investigations by monitoring body
Failure by monitoring body to notify relevant provider of
investigation or complete investigation
(1) A person commits an offence if:
(a) the person is a monitoring body for a compliance scheme;
and
(b) the person fails to comply with subsection 921L(2) or (5).
Penalty: 10 penalty units.
Failure to comply with request for information
(2) A person commits an offence if:
(a) a request is made of the person under subsection 921L(3);
and
(b) the person fails to comply with the request within the period
specified.
Penalty: 10 penalty units.
Leaving compliance scheme before investigation completed
(3) A person commits an offence if:
(a) the person is a relevant provider; and
(b) the person is covered by a compliance scheme; and
(c) the monitoring body for the scheme notifies the person that
the monitoring body has become aware of a failure, or
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Section 921N
Corporations Act 2001 313
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
possible failure, by the person to comply with the Code of
Ethics; and
(d) the person contravenes subsection 921L(4).
Penalty: 10 penalty units.
921N Obligation to notify licensee of failure to comply with Code of
Ethics
(1) A monitoring body for a compliance scheme that covers a relevant
provider must notify a financial services licensee if:
(a) either:
(i) the monitoring body determines under
subsection 921L(1) that the relevant provider has failed
to comply with the Code of Ethics; or
(ii) the monitoring body imposes a sanction on the relevant
provider in relation to a failure to comply with the Code
of Ethics; and
(b) the relevant provider is authorised by the licensee to provide
personal advice to retail clients in relation to relevant
financial products.
(2) The monitoring body must notify the licensee within 30 days after
making the determination or imposing the sanction.
Note 1: The approval for a compliance scheme may be revoked if the
monitoring body for the scheme does not comply with this section
(see subsection 921K(7)).
Note 2: ASIC must be notified if a monitoring body becomes aware of a
failure, or possible failure, to comply with the Code of Ethics by a
relevant provider, or if a sanction is imposed on a relevant provider
under a compliance scheme (see section 922HD).
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Part 7.6 Licensing of providers of financial services
Division 8B Compliance schemes
Section 921P
314 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision D—Other provisions
921P Obligation to ensure that compliance scheme is publicly
available
(1) A monitoring body for a compliance scheme must ensure that the
scheme is publicly available while any approval given under
section 921K is in force in relation to the scheme.
Offence
(2) A person commits an offence if:
(a) the person is a monitoring body for a compliance scheme;
and
(b) an approval given under section 921K is in force in relation
to the scheme; and
(c) the scheme is not publicly available.
Penalty: 10 penalty units.
921Q Obligation to provide ASIC with information
(1) ASIC may request, in writing, a monitoring body for a compliance
scheme to give ASIC any specified information or documents
about the compliance scheme within a reasonable specified period.
(2) The monitoring body must comply with the request within the
period specified.
Note: The approval for a compliance scheme may be revoked if the
monitoring body for the scheme does not comply with this section
(see subsection 921K(7)).
921R Modification of compliance scheme
(1) While an approval given under section 921K is in force in relation
to a compliance scheme, the monitoring body for the scheme may,
by written notice given to ASIC, propose to modify the scheme.
(2) The notice must:
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Section 921S
Corporations Act 2001 315
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(a) set out the text of the proposed modification; and
(b) contain an explanation of the purpose of the proposed
modification.
Disallowance of modification
(3) Within the 28-day period beginning on the day ASIC receives the
notice, ASIC may, by written notice given to the monitoring body,
disallow all or a specified part of the proposed modification if
ASIC is satisfied on reasonable grounds that:
(a) compliance with the Code of Ethics will not be appropriately
monitored or enforced under the scheme as modified; or
(b) if the proposed modification is a new monitoring body for the
scheme—the new monitoring body does not have sufficient
resources or expertise to appropriately monitor or enforce
compliance with the Code of Ethics under the scheme.
Effect of disallowance
(4) If ASIC disallows the proposed modification within the 28-day
period, the proposed modification does not take effect.
(5) If ASIC disallows a specified part of the proposed modification
within the 28-day period:
(a) the specified part does not take effect; and
(b) the proposed modification without the specified part takes
effect at the end of the period.
No disallowance
(6) Otherwise, the proposed modification takes effect at the end of the
28-day period.
921S Obligation to review compliance scheme
(1) A monitoring body for a compliance scheme must cause another
person to complete a review of the scheme before the end of:
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Division 8B Compliance schemes
Section 921T
316 Corporations Act 2001
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(a) the 5-year period beginning on the day ASIC approves the
scheme under section 921K; and
(b) each subsequent 5-year period.
(2) The other person mentioned in subsection (1) must not be:
(a) an associate of the monitoring body; or
(b) a person covered by the scheme; or
(c) if a relevant provider covered by the scheme is authorised to
provide personal advice to retail clients, on behalf of a
financial services licensee, in relation to relevant financial
products—the licensee; or
(d) if a relevant provider covered by the scheme is a member of a
professional association—the professional association.
(3) As soon as reasonably practical after the review has been
completed, the monitoring body must:
(a) make the review publicly available; and
(b) give a copy of the review to ASIC.
921T Obligation to notify ASIC of changes to monitoring body
A monitoring body for a compliance scheme must notify ASIC if
the monitoring body significantly reduces the resources or
expertise that it uses to monitor or enforce compliance with the
Code of Ethics under the scheme.
Note: The approval for a compliance scheme may be revoked if the
monitoring body for the scheme does not comply with this section
(see subsection 921K(7)).
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The standards body Division 8C
Section 921U
Corporations Act 2001 317
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 8C—The standards body
Subdivision A—Functions of the standards body
921U Functions of the standards body
(1) The functions of the standards body are:
(a) to make the legislative instruments mentioned in
subsections (2), (3) and (5); and
(b) to review those instruments regularly; and
(c) if an application is made under subsection 921V(1) for
approval of a foreign qualification—to approve, or refuse to
approve, the foreign qualification; and
(d) if an exam approved for the purposes of subsection 921B(3)
is to be administered by the standards body—to administer
the exam; and
(e) any other function prescribed by this Act.
Legislative instruments
(2) The standards body must, by legislative instrument:
(a) do any or all of the following in one or more determinations:
(i) approve bachelor or higher degrees, or equivalent
qualifications, for the purposes of
paragraph 921B(2)(a);
(ii) approve an exam for the purposes of
subsection 921B(3);
(iii) set requirements for work and training for the purposes
of subsection 921B(4);
(iv) set requirements for continuing professional
development for the purposes of subsection 921B(5) in
relation to the CPD year of a financial services licensee,
the period mentioned in subsection 1546E(5), or any
other period determined by the standards body;
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Division 8C The standards body
Section 921U
318 Corporations Act 2001
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(v) specify a word or expression to refer to a provisional
relevant provider; and
(b) make a Code of Ethics for the purposes of section 921E.
(3) The standards body may, by legislative instrument, in one or more
determinations, modify the operation of a provision in this Part in
relation to a period determined by the standards body under
subparagraph (2)(a)(iv).
(4) A determination made under subsection (3) has effect according to
its terms, despite any other provision of this Act.
(5) The standards body may, by legislative instrument, do either or
both of the following in one or more determinations:
(a) provide further in relation to the requirements set out in
section 921F (requirements relating to provisional relevant
providers);
(b) set other requirements in relation to a person who is a
provisional relevant provider.
Consultation
(6) Before making a legislative instrument under subsection (2), (3) or
(5), or when reviewing a legislative instrument under
paragraph (1)(b), the standards body must consult:
(a) financial services licensees; and
(b) relevant providers; and
(c) associations representing consumers of financial services;
and
(d) professional associations; and
(e) ASIC and the Department; and
(f) any other person or body that the standards body considers it
appropriate to consult.
(7) Without limiting subsection (6), the standards body is taken to
have consulted the persons and bodies mentioned in that subsection
if, on its website, the standards body:
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Section 921V
Corporations Act 2001 319
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(a) before making a legislative instrument under subsection (2),
(3) or (5):
(i) makes the proposed legislative instrument, or a
description of the content of the proposed legislative
instrument, available; and
(ii) invites those persons and bodies to comment on the
proposed legislative instrument; or
(b) when reviewing a legislative instrument under
paragraph (1)(b)—invites those persons and bodies to
comment on the legislative instrument.
(8) A failure to comply with subsection (6) does not affect the validity
or enforceability of a legislative instrument made under
subsection (2), (3) or (5).
Fees
(9) The standards body may charge fees for things done in performing
its functions.
Note: For the treatment of legislative instruments made under this section
when the declaration of a body corporate to be the standards body is
revoked, see section 921Y.
921V Approval of foreign qualifications
Application for approval
(1) A person who has completed a foreign qualification may apply to
the standards body for approval of the foreign qualification.
(2) An application under subsection (1) must be in a form approved, in
writing, by the standards body.
Approval or refusal to approve
(3) The standards body must either:
(a) approve the foreign qualification in accordance with
subsection (4); or
(b) refuse to approve the foreign qualification.
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Section 921V
320 Corporations Act 2001
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(4) The standards body may approve the foreign qualification only if:
(a) the standards body is satisfied that the foreign qualification
gives the person qualifications equivalent to a degree or
qualification approved by the standards body for the purposes
of paragraph 921B(2)(a); or
(b) both of the following apply:
(i) the standards body specifies one or more courses to be
completed by the person under subsection (5) of this
section;
(ii) the person completes each of those courses.
(5) The standards body may specify one or more courses for the
purposes of paragraph (4)(b) only if the standards body is satisfied
that (together with the person’s foreign qualification) the course or
courses will give the person qualifications equivalent to a degree or
qualification approved by the standards body for the purposes of
paragraph 921B(2)(a).
When approval takes effect
(6) An approval under paragraph (3)(a) comes into force:
(a) if the standards body specifies one or more courses to be
completed by the person under subsection (5)—when the
person has completed all of those courses; or
(b) otherwise—when it is given.
Review of decision
(7) A person may apply to the Tribunal for review of:
(a) a decision by the standards body under paragraph (3)(b) to
refuse to approve the person’s foreign qualification; or
(b) a decision by the standards body under subsection (5) to
specify one or more courses to be completed by the person.
Notice of reviewable decision and review rights
(8) Section 1317D applies in relation to a decision mentioned in
paragraph (7)(a) or (b) of this section as if:
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(a) the standards body were a decision maker for the purposes of
section 1317D; and
(b) the decision were a decision to which section 1317B applied.
921W Commencement of Code of Ethics and amendments of Code
of Ethics
(1) The Code of Ethics must not commence earlier than 30 days after
the Code is registered under the Legislation Act 2003.
(2) An amendment of the Code of Ethics must not commence earlier
than 30 days after the amendment is registered under the
Legislation Act 2003.
Subdivision B—Declaration of the standards body
921X Minister to declare a body corporate to be the standards body
(1) The Minister may (subject to subsection (2)), by notifiable
instrument, declare a body corporate to be the standards body.
(2) The Minister may make a declaration under subsection (1) only if
the following requirements are met:
(a) the body is a company limited by guarantee;
(b) the Minister is satisfied that the body is likely to comply with
its obligations under this Act and other laws of the
Commonwealth;
(c) the body’s constitution provides the following:
(i) the functions of the body mentioned in section 921U;
(ii) the body must not be operated for profit;
(iii) the body must have 9 directors;
(iv) at least 3 directors (excluding the chair of the board of
directors) must have experience in carrying on a
financial services business or providing a financial
service;
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Section 921Y
322 Corporations Act 2001
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(v) at least 3 directors (excluding the chair of the board of
directors) must have experience in representing
consumers of financial services;
(vi) at least one director (excluding the chair of the board of
directors) must have experience in the field of ethics;
(vii) at least one director (excluding the chair of the board of
directors) must have experience in designing, or the
requirements of, educational courses or qualifications;
(viii) a director must not hold a managerial or executive
office in a professional association or association
representing consumers of financial services;
(ix) a director must not represent any professional
association, or association representing consumers of
financial services, to which the director belongs;
(x) the Minister must appoint each director;
(xi) a director may resign his or her appointment by giving
the Minister, and the body, a written resignation;
(xii) the resignation takes effect on the day it has been
received by both the Minister and the body or, if a later
day is specified in the resignation, on that later day.
(3) The declaration must specify the time at which it takes effect.
(4) The Minister must table the declaration in each House of the
Parliament as soon as practicable.
921Y Minister may revoke declaration under section 921X
(1) The Minister may, at any time, by notifiable instrument, revoke a
declaration under section 921X.
(2) The revocation must specify:
(a) the time at which it takes effect; and
(b) which legislative instruments made by the standards body
under subsection 921U(2), (3) or (5) continue in force, and
which are taken to be revoked at that time; and
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Section 921Y
Corporations Act 2001 323
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(c) which approvals (if any) given by the standards body under
paragraph 921V(3)(a) continue in force (or are to come into
and continue in force), and which are taken to be revoked at
that time.
(3) A revocation under subsection (1) that specifies that a legislative
instrument, or an approval, is taken to be revoked at a particular
time has effect according to its terms.
Tabling of revocation
(4) The Minister must table the revocation in each House of the
Parliament as soon as practicable.
Performance by Minister of certain functions of standards body
when no declaration is in force
(5) If no declaration under section 921X is in force at a particular time,
the Minister may make a legislative instrument or decision as if the
Minister were performing the functions of the standards body
under paragraph 921U(1)(a) or (c).
Instruments and decisions made by Minister etc.
(6) If a declaration under section 921X comes into force after the
Minister has made a legislative instrument or decision for the
purposes of subsection (5) of this section, the standards body may
vary or revoke the legislative instrument or decision.
Relationship with Acts Interpretation Act 1901
(7) This section does not limit the operation of subsection 33(3) of the
Acts Interpretation Act 1901.
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Division 8C The standards body
Section 921Z
324 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision C—Other provisions relating to the standards body
921Z Modification of the standards body’s constitution
(1) As soon as practicable after a significant modification of the
standards body’s constitution takes effect, the standards body must
notify the Minister in writing of the modification.
(2) The notice must:
(a) set out the text of the modification; and
(b) specify the date on which the modification takes effect; and
(c) contain an explanation of the purpose of the modification.
(3) If no notice is lodged with the Minister within 21 days after the
modification takes effect, the modification ceases to have effect.
(4) A notice made under this section is not a legislative instrument.
921ZA Disallowance of modifications of the standards body’s
constitution
(1) Within 28 days after receiving a notice under section 921Z, the
Minister may disallow all or a specified part of the modification of
the standards body’s constitution.
(2) As soon as practicable after all or part of a modification is
disallowed, the Minister must give notice of the disallowance to
the standards body. The modification ceases to have effect, to the
extent of the disallowance, when the standards body receives the
notice.
921ZB Minister may direct the standards body to do certain things
(1) The Minister may give a written direction to the standards body if
the Minister considers that the standards body is not complying
with its obligations under this Act or under any arrangement it has
with the Commonwealth.
(2) The standards body must comply with the direction.
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Section 921ZC
Corporations Act 2001 325
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(3) The Minister may, at any time, vary or revoke a direction.
(4) Despite paragraph (b) in the definition of director in section 9, the
Minister is not a director of the standards body.
921ZC Annual report
As soon as practicable after the end of a financial year, the
standards body must:
(a) publish on its website the annual report for the financial year
prepared under Chapter 2M; and
(b) give a copy of the report to the Minister.
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Division 9 Registers relating to financial services
Section 922A
326 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 9—Registers relating to financial services
Subdivision A—Registers generally
922A Registers relating to financial services
(1) ASIC must establish and maintain one or more registers relating to
financial services.
(2) The regulations may prescribe the way in which the register or
registers must be established or maintained, including the details
that ASIC must enter in the register or registers in respect of the
following persons or bodies:
(a) financial services licensees;
(b) authorised representatives of financial services licensees;
(c) persons against whom a banning order or disqualification
order under Division 8 is made;
(e) any other persons or bodies that are prescribed by regulations
made for the purposes of this paragraph.
Note: The Register of Relevant Providers is maintained under Subdivision C
of this Division.
922B Fees for searching registers
The regulations may prescribe the fees that a person must pay to
ASIC to do the things mentioned in section 1274A in relation to a
register mentioned in section 922A or the Register of Relevant
Providers.
Note: Section 1274A provides that ASIC may permit a person to search
certain registers kept by ASIC for prescribed information.
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Section 922D
Corporations Act 2001 327
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Subdivision B—Notice requirements relating to the Register of
Relevant Providers
922D Obligation to notify ASIC about a person who becomes a
relevant provider
Notice to include details about relevant provider
(1) A notice must be lodged under this section, in accordance with
section 922L, if a person becomes a relevant provider.
Note: A financial services licensee required to lodge a notice under this
section may obtain information from a relevant provider under
section 922N.
Content of notice
(2) The notice must include:
(a) for a relevant provider who is a financial services licensee—
the information in section 922E; or
(b) for a relevant provider who is not a financial services
licensee—the information in section 922F.
922E Information about a relevant provider who is a financial
services licensee
(1) For the purposes of paragraph 922D(2)(a), the notice must include
the following:
(a) the relevant provider’s name;
(b) the address of the relevant provider’s principal place of
business;
(c) the licence number given to the relevant provider under
subsection 913C(1);
(d) the year in which the relevant provider first provided
personal advice to retail clients in relation to relevant
financial products in accordance with the law (including the
law of a State or Territory);
(e) if applicable, the ABN of the relevant provider;
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Section 922F
328 Corporations Act 2001
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(f) information about both of the following:
(i) the relevant financial products in relation to which the
relevant provider is authorised to provide personal
advice to retail clients;
(ii) whether the relevant provider is authorised to provide
class of product advice in relation to some or all of
those products;
(g) the recent advising history of the relevant provider for the 5
years ending immediately before the time the notice is
lodged;
(h) information about both of the following:
(i) the educational qualifications of, and any training
courses completed by, the relevant provider, to the
extent that the qualifications and training courses are
relevant to the provision of financial services;
(ii) the relevant provider’s membership (if any) of a
professional association if an approval is in force under
section 921K in relation to a compliance scheme
monitored and enforced by the association;
(i) the name of the compliance scheme that is to cover the
relevant provider.
Note: For the meaning of recent advising history, see section 922G.
Educational qualifications and memberships
(2) For the purposes of subparagraph (1)(h)(i), if a relevant provider
has more than 5 educational qualifications or has completed more
than 5 training courses, the notice must include the 5 qualifications
or training courses that the person lodging the notice believes, on
reasonable grounds, are most relevant to the provision of financial
services.
922F Information about a relevant provider who is not a financial
services licensee
(1) For the purposes of paragraph 922D(2)(b), the notice must include
the following:
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(a) the relevant provider’s name;
(b) the address of the relevant provider’s principal place of
business;
(c) the relevant provider’s date and place of birth;
(d) the name of the financial services licensee on whose behalf
the relevant provider is authorised to provide personal advice
to retail clients in relation to relevant financial products;
(e) the licence number given to that licensee under
subsection 913C(1);
(f) if the relevant provider is a provisional relevant provider—
the fact that the relevant provider is a provisional relevant
provider;
(g) if the relevant provider is a provisional relevant provider—
the day the relevant provider began undertaking work and
training in accordance with subsection 921B(4);
(h) except in relation to provisional relevant providers—the year
in which the relevant provider first provided personal advice
to retail clients in relation to relevant financial products in
accordance with the law (including the law of a State or
Territory);
(i) if the relevant provider is a relevant provider as a result of
section 916B—each of the following:
(i) the name of the authorised representative who
authorised the relevant provider under that section;
(ii) the number allocated to the authorised representative by
ASIC;
(j) if applicable, the ABN of any of the following:
(i) the relevant provider;
(ii) the licensee referred to in paragraph (d);
(iii) the authorised representative referred to in
paragraph (i);
(k) details of both of the following:
(i) the relevant financial products in relation to which the
relevant provider is authorised to provide personal
advice to retail clients;
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(ii) whether the relevant provider is authorised to provide
class of product advice in relation to some or all of
those products;
(l) the recent advising history of the relevant provider for the 5
years ending immediately before the time the notice is
lodged;
(m) information about both of the following:
(i) the educational qualifications of, and any training
courses completed by, the relevant provider, to the
extent that the qualifications and training courses are
relevant to the provision of financial services;
(ii) the relevant provider’s membership (if any) of a
professional association if an approval is in force under
section 921K in relation to a compliance scheme
monitored and enforced by the association;
(n) the name of the compliance scheme that is to cover the
relevant provider.
Note: For the meaning of recent advising history, see section 922G.
Educational qualifications and memberships
(2) For the purposes of subparagraph (1)(m)(i), if a relevant provider
has more than 5 educational qualifications or has completed more
than 5 training courses, the notice must include the 5 qualifications
or training courses that the person lodging the notice believes, on
reasonable grounds, are most relevant to the provision of financial
services.
Information already registered
(3) The notice does not need to include the information referred to in
paragraph (1)(h), (l) or (m) if:
(a) the person required under subsection 922L(4) to cause the
notice to be lodged believes on reasonable grounds that the
information has previously been lodged; or
(b) the information is already entered on the Register of Relevant
Providers.
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Section 922G
Corporations Act 2001 331
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Provisional relevant providers
(4) The notice does not need to include the information referred to in
paragraph (1)(k) in relation to a provisional relevant provider if
that information is not known at the time the notice relating to the
provisional relevant provider is lodged by the licensee.
Note: A notice must be lodged under section 922H once this information is
known.
922G Meaning of recent advising history
The recent advising history of a relevant provider is the following
information:
(a) for a relevant provider who is or was a financial services
licensee authorised to provide personal advice to retail clients
in relation to relevant financial products—each period during
which the relevant provider was such a licensee;
(b) for a relevant provider who is or was authorised to provide
personal advice to retail clients, on behalf of one or more
financial services licensees, in relation to relevant financial
products—the following information:
(i) the name of each licensee;
(ii) if the relevant provider is or was a relevant provider as a
result of section 916B—the name of each authorised
representative who authorised the relevant provider
under that section;
(iii) each period during which the relevant provider was
authorised by each licensee or each authorised
representative to provide such advice.
Note: If a relevant provider is covered by paragraphs (a) and (b) of this
section, the relevant provider’s recent advising history includes all the
information required under those paragraphs.
922H Ongoing obligation to notify ASIC when there is a change in a
matter for a relevant provider
(1) A notice must be lodged under this section, in accordance with
section 922L, if:
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(a) there is a change in a matter, particulars of which are entered
for a relevant provider in the Register of Relevant Providers
(other than a change that is a direct consequence of an act by
ASIC); or
(b) both of the following apply:
(i) a notice is lodged under section 922D in relation to a
relevant provider by a financial services licensee
without including the information referred to in
paragraph 922F(1)(k);
(ii) the information becomes known to the licensee after the
notice is lodged.
Note: For paragraph (1)(a) of this section, an example of a change in a
matter would be a person ceasing to be a relevant provider. Another
example would be a change in the compliance scheme that covers a
relevant provider.
(2) The notice must include the following information:
(a) the new particulars or information to be entered in the
Register;
(b) the relevant provider’s name;
(c) if applicable, the number given to the relevant provider under
section 922R.
922HA Obligation to notify ASIC of financial services licensee’s
CPD year
(1) A notice must be lodged under this subsection, in accordance with
section 922L, if ASIC grants an applicant an Australian financial
services licence that covers the provision of personal advice to
retail clients in relation to relevant financial products.
(2) A notice lodged under subsection (1) must include the day on
which the licensee’s CPD year is to begin.
(3) A notice must be lodged under this subsection, in accordance with
section 922L, if a financial services licensee:
(a) has previously lodged a notice under subsection (1) or this
subsection specifying a particular day of the year; and
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(b) decides that the licensee’s CPD year is to begin on another
day of the year; and
(c) has not lodged a notice under subsection (1) or this
subsection in the 12-month period preceding that decision.
(4) A notice lodged under subsection (3) must include the day on
which the licensee’s CPD year is to begin.
922HB Obligation to notify ASIC of non-compliance with
continuing professional development standard
(1) A notice must be lodged under this section, in accordance with
section 922L, in relation to a person if, at the end of a financial
services licensee’s CPD year:
(a) the person:
(i) is the licensee; or
(ii) is authorised to provide personal advice to retail clients,
on behalf of the licensee, in relation to relevant financial
products; and
(b) the person is a relevant provider; and
(c) the relevant provider has not complied with section 921D
during the licensee’s CPD year.
Note 1: A financial services licensee may obtain information from a relevant
provider under section 922N for the purposes of determining whether
to lodge a notice under this section.
Note 2: Subsection 921D(1) requires certain relevant providers to meet the
continuing professional development standard in subsection 921B(5).
(2) The notice must state that the relevant provider has not complied
with section 921D during the licensee’s CPD year.
922HC Requirement to retain information
(1) A financial services licensee must retain evidence of the continuing
professional development undertaken during the licensee’s CPD
year by:
(a) if the licensee is a relevant provider—the licensee; and
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(b) if a relevant provider is authorised to provide personal advice
to retail clients, on behalf of the licensee, in relation to
relevant financial products—the relevant provider.
(2) The evidence must be retained for 12 months after the end of the
CPD year.
Offence
(3) A person commits an offence if:
(a) the person is required to retain evidence under this section;
and
(b) the person fails to retain the evidence in accordance with this
section.
Penalty: 50 penalty units.
922HD Obligation to notify ASIC in relation to failures to comply
with the Code of Ethics
(1) A notice must be lodged under this subsection, in accordance with
section 922L, if:
(a) a monitoring body for a compliance scheme determines
under subsection 921L(1) that a relevant provider covered by
the scheme has failed to comply with the Code of Ethics; or
(b) a sanction is imposed on a relevant provider covered by a
compliance scheme in relation to a failure to comply with the
Code of Ethics by the relevant provider.
(2) The notice must include the following information:
(a) if the relevant provider is a financial services licensee—the
name of the licensee;
(b) if the relevant provider is not a financial services licensee:
(i) the name of the relevant provider; and
(ii) the name of the financial services licensee on whose
behalf the relevant provider is authorised to provide
personal advice to retail clients in relation to relevant
financial products;
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(c) if paragraph (1)(a) applies—details of the failure to comply;
(d) if paragraph (1)(b) applies—details of the sanction imposed.
(3) If, in relation to the same failure to comply, the events mentioned
in paragraphs (1)(a) and (b) occur within 30 business days of one
another:
(a) a single notice may be lodged under subsection (1) within 30
business days of the later of those events; and
(b) only one notice is taken to be required to be caused to be
lodged for the purposes of subsection 922M(1).
922J Obligation to notify ASIC about a person who starts to have
control of a body corporate licensee
(1) A notice must be lodged under this section, in accordance with
section 922L, if a person starts to have control of a body corporate
licensee.
Note: Subsection 922P(3) provides that a notice is not required to be lodged
when a person starts and then ceases to have control of a body
corporate licensee within 30 business days.
(2) The notice must include the following information:
(a) the name of the licensee;
(b) the licence number given to the licensee under
subsection 913C(1);
(c) the name of the person who starts to have control of the
licensee;
(d) the day the person starts to have control of the licensee.
922K Obligation to notify ASIC about a person who ceases to have
control of a body corporate licensee
(1) A notice must be lodged under this section, in accordance with
section 922L, if a person ceases to have control of a body corporate
licensee.
Note: Subsection 922P(3) provides that a notice is not required to be lodged
when a person starts and then ceases to have control of a body
corporate licensee within 30 business days.
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(2) The notice must include the following information:
(a) the name of the licensee;
(b) the licence number given to the licensee under
subsection 913C(1);
(c) the name of the person who ceases to have control of the
licensee;
(d) the day the person ceases to have control of the licensee.
922L Requirement for notice to be lodged
Notice in prescribed form
(1) A notice under a notice provision must be in the prescribed form.
Note 1: Under section 350, a document that this Act requires to be lodged with
ASIC in a prescribed form must:
(a) if a form for the document is prescribed in the regulations—be in that prescribed form; and
(b) if a form for the document is not prescribed in the regulations but ASIC has approved a form for the document—be in that approved form.
Note 2: The prescribed form may deal with information that is required under
more than one section of this Act.
When notice must be lodged
(2) A notice under a notice provision must be lodged within 30
business days of the following day:
(a) if the notice is lodged under subsection 922HA(1)—the day
ASIC grants the Australian financial services licence
mentioned in that subsection;
(b) if the notice is lodged under subsection 922HA(3)—the day
the financial services licensee mentioned in that subsection
decides that the licensee’s CPD year is to begin on another
day of the year;
(c) if the notice is lodged under subsection 922HB(1)—the last
day of the CPD year of the financial services licensee
mentioned in that subsection;
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(d) if the notice is lodged under subsection 922HD(1)—(subject
to subsection 922HD(3)) the day the monitoring body
mentioned in subsection 922HD(1) determines under
subsection 921L(1) that a relevant provider has failed to
comply with the Code of Ethics or a sanction is imposed;
(e) if the notice is lodged under any other notice provision—the
day of the event mentioned in subsection (1) of the notice
provision.
(3) The information contained in the notice must be accurate as at the
day mentioned in paragraph (2)(a), (b), (c), (d) or (e).
Who must cause notice to be lodged
(4) The following person must cause a notice under section 922D,
922H or 922HB to be lodged in relation to a relevant provider:
(a) if the relevant provider is a financial services licensee—the
licensee;
(b) otherwise—the financial services licensee on whose behalf
the relevant provider is authorised to provide personal advice
to retail clients in relation to relevant financial products.
(5) A notice under subsection 922HA(1) or (3) must be lodged by the
financial services licensee mentioned in that section.
(6) A notice under section 922HD must be lodged by the monitoring
body mentioned in subsection 922HD(1).
(7) A notice under section 922J or 922K relating to a person who starts
or ceases to have control of a body corporate licensee must be
lodged by the licensee.
922M Offence for failing to comply with obligation to notify ASIC
(1) A person commits an offence if:
(a) the person is required to cause a notice to be lodged under a
notice provision; and
(b) the person fails to cause the notice to be lodged in accordance
with that provision.
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Part 7.6 Licensing of providers of financial services
Division 9 Registers relating to financial services
Section 922N
338 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A notice must be lodged in accordance with section 922L in order to
be lodged in accordance with a notice provision (see subsection (1) of
the notice provision).
Penalty: 50 penalty units.
(2) However, subsection (1) does not apply if:
(a) the person fails to cause the notice to be lodged in accordance
with section 922D; and
(b) the only reason the person fails to cause the notice to be
lodged in accordance with that section is because the
information referred to in paragraph 922F(1)(h), (l) or (m) is
not included in the notice; and
(c) subsection 922F(3) provides that the notice does not need to
include that information.
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) Subsection 4K(2) of the Crimes Act 1914 does not apply to
subsection (1) of this section.
Note: A person may commit an offence if the person knowingly gives false
or misleading information (see section 1308 of this Act and
section 137.1 of the Criminal Code).
922N Obligation for relevant providers to provide information to
financial services licensees
Information about relevant provider
(1) A person must provide information to a financial services licensee
in accordance with this section if:
(a) the person is a relevant provider; and
(b) the person has been authorised to provide personal advice to
retail clients, on behalf of the licensee, in relation to relevant
financial products; and
(c) the licensee has asked the person to provide the information
so that the licensee can:
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Corporations Act 2001 339
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(i) comply with its obligation to lodge a notice relating to
the person in accordance with section 922D; or
(ii) comply with its obligation to lodge, under section 922H,
a notice relating to the person for the purposes of
section 921H; or
(iii) determine whether the licensee has an obligation to
lodge a notice under section 922HB.
Note: A person may commit an offence if the person knowingly gives false
or misleading information (see section 1308 of this Act and
section 137.1 of the Criminal Code).
When information must be given
(2) The information must be given to the licensee within a period that
allows the licensee to comply with the obligation referred to in
paragraph (1)(c).
922P Change in matter within 30 business days
(1) Notices must be given under sections 922D, 922H and 922HD in
relation to a person who was a relevant provider even if the person
ceases to be a relevant provider before a notice has been lodged
under section 922D.
(2) A notice is not required to be given under section 922HB in
relation to a person if:
(a) the person was a relevant provider at the end of a financial
services licensee’s CPD year; and
(b) the person was authorised at that time to provide personal
advice to retail clients, on behalf of the licensee, in relation to
relevant financial products; and
(c) the person ceases to be a relevant provider within 30 business
days of becoming a relevant provider.
(3) A notice is not required to be given under sections 922J and 922K
in relation to a person who starts or ceases to have control of a
body corporate licensee if the person ceases to have control of the
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Division 9 Registers relating to financial services
Section 922Q
340 Corporations Act 2001
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licensee within 30 business days of starting to have control of the
licensee.
Subdivision C—Register of Relevant Providers
922Q Register of Relevant Providers
Register to include details of relevant providers
(1) ASIC must enter details on a Register of Relevant Providers in
respect of each person who is or was a relevant provider.
Contents of Register
(2) The details that must be entered on the Register include the
following:
(a) the relevant provider’s name;
(b) the relevant provider’s principal place of business;
(c) the name of each financial services licensee on whose behalf
the relevant provider is or was authorised to provide personal
advice to retail clients in relation to relevant financial
products;
(d) if applicable, each person who has control of the licensee;
(e) the relevant provider’s date and place of birth;
(f) the licence number given under subsection 913C(1) to the
relevant provider and each licensee referred to in
paragraph (c);
(g) if applicable, the number given under section 922R;
(h) if the relevant provider is a relevant provider as a result of
section 916B:
(i) the name of the authorised representative who
authorised the relevant provider under that section; and
(ii) the number allocated to the authorised representative by
ASIC;
(i) the recent advising history of the relevant provider;
(j) if the relevant provider is a provisional relevant provider:
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(i) the fact that the relevant provider is a provisional
relevant provider; and
(ii) the day the relevant provider began undertaking work
and training in accordance with subsection 921B(4); and
(iii) a statement that the relevant provider is required to be
supervised in accordance with Subdivision C of
Division 8A;
(k) except in relation to provisional relevant providers—the year
in which the relevant provider first provided personal advice
to retail clients in relation to relevant financial products in
accordance with the law (including the law of a State or
Territory);
(l) whether the person is currently, or has ceased to be, a
relevant provider;
(m) if a financial services licensee has lodged a notice under
section 922HB in relation to the relevant provider—that the
relevant provider did not comply with section 921D during
the licensee’s CPD year;
(n) if the relevant provider has been disqualified from managing
corporations—information contained on the register
established under section 1274AA;
(o) if the relevant provider has been banned or disqualified under
section 80 or 86 of the National Consumer Credit Protection
Act 2009—information about that banning or
disqualification;
(p) if the relevant provider has been banned, disqualified or
suspended under Division 8 of Part 7.6, or under
section 130F of the Superannuation Industry (Supervision)
Act 1993—information about that banning, disqualification
or suspension;
(q) if the relevant provider has given an undertaking under either
or both section 93AA of the ASIC Act and section 322 of the
National Consumer Credit Protection Act 2009—information
about that undertaking;
(r) if a monitoring body for a compliance scheme determines
under subsection 921L(1) that the relevant provider who is
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Section 922Q
342 Corporations Act 2001
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covered by the scheme has failed to comply with the Code of
Ethics:
(i) details of the failure to comply; and
(ii) details of any sanction imposed on the relevant provider
in relation to the failure to comply;
(s) if applicable, information about both of the following:
(i) the relevant financial products in relation to which the
relevant provider is authorised to provide personal
advice to retail clients;
(ii) whether the relevant provider is authorised to provide
class of product advice in relation to some or all of
those products;
(t) if applicable, the ABN of any of the following:
(i) the relevant provider;
(ii) each licensee referred to in paragraph (c);
(iii) if applicable, the authorised representative referred to in
paragraph (h);
(u) information about both of the following:
(i) the educational qualifications of, and any training
courses completed by, the relevant provider (but not
courses completed for the purposes of
subsection 921B(5)), to the extent that the qualifications
and training courses are relevant to the provision of
financial services;
(ii) the relevant provider’s membership (if any) of a
professional association if an approval is in force under
section 921K in relation to a compliance scheme
monitored and enforced by the association;
(v) the name of the compliance scheme that is to cover the
relevant provider;
(w) any other information that ASIC believes should be included
in the Register that relates to the provision of financial
services by the relevant provider.
Note 1: Not all of the Register’s contents are publicly available. However,
section 1274A provides that ASIC may permit a person to search
certain registers kept by ASIC for prescribed information.
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Section 922R
Corporations Act 2001 343
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Note 2: Information in paragraph (2)(s) may not be known in relation to a
provisional relevant provider (see subsection 922F(4)).
922R Relevant provider number
ASIC may give a unique number (or any unique combination of
numbers, characters, symbols and letters) to a person who is a
relevant provider.
922S Correcting the Register
ASIC may correct any error in, or omission from, the Register of
Relevant Providers.
Note: Australian Privacy Principle 13 applies to ASIC and requires it to take
reasonable steps to correct personal information that is wrong or
misleading so that the information is accurate, up to date, complete,
relevant and not misleading (see Schedule 1 to the Privacy Act 1988).
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Chapter 7 Financial services and markets
Part 7.6 Licensing of providers of financial services
Division 10 Restrictions on use of terminology
Section 923A
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 10—Restrictions on use of terminology
923A Restriction on use of certain words or expressions
(1) A person contravenes this subsection if:
(a) either:
(i) the person carries on a financial services business or
provides a financial service (whether or not on behalf of
another person); or
(ii) another person (the provider) provides a financial
service on behalf of the first person; and
(b) the first person assumes or uses, in this jurisdiction, a
restricted word or expression in relation to that business or
service.
Note 1: For the meanings of restricted word or expression and assume or use,
see subsection (5).
Note 2: A contravention of this subsection is an offence (see
subsection 1311(1)).
(2) However, it is not a contravention of subsection (1) for a person to
assume or use a restricted word or expression if:
(a) the person does not receive any of the following:
(i) commissions (apart from commissions that are rebated
in full to the person’s clients);
(ii) forms of remuneration calculated on the basis of the
volume of business placed by the person with an issuer
of a financial product;
(iii) other gifts or benefits from an issuer of a financial
product which may reasonably be expected to influence
the person; and
(b) none of the following persons receives any of the things
covered by paragraph (a):
(i) the person’s employer (if any);
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(ii) if the person provides the financial service on behalf of
another person (as mentioned in
subparagraph (1)(a)(i))—that other person;
(iii) any other person identified (whether by reference to a
class of person or otherwise) in regulations made for the
purposes of this subparagraph; and
(c) if subparagraph (1)(a)(ii) applies in relation to a financial
service—the provider mentioned in that subparagraph does
not receive any of the things mentioned in paragraph (a) of
this subsection in respect of the provision of that service; and
(d) in carrying on a financial services business, or providing
financial services, the person operates free from direct or
indirect restrictions relating to the financial products in
respect of which they provide financial services; and
(e) in carrying on that business, or providing those services, the
person operates without any conflicts of interest that might:
(i) arise from their associations or relationships with
issuers of financial products; and
(ii) reasonably be expected to influence the person in
carrying on the business or providing the services.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
(3) The reference in paragraph (2)(d) to direct or indirect restrictions
does not include a reference to restrictions imposed on a person by:
(a) the conditions on an Australian financial services licence; or
(b) this Chapter or regulations made for the purposes of this
Chapter.
(4) If a person assumes or uses a word or expression in circumstances
that give rise to the person committing an offence based on
subsection (1) of this section, the person is guilty of such an
offence in respect of:
(a) the first day on which the offence is committed; and
(b) each subsequent day (if any) on which the circumstances that
gave rise to the person committing the offence continue
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Division 10 Restrictions on use of terminology
Section 923B
346 Corporations Act 2001
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(including the day of conviction for any such offence or any
later day).
(5) In this section:
(a) a reference to a restricted word or expression is a reference
to:
(i) the word independent, impartial or unbiased; or
(ii) any other word or expression specified in the
regulations as a restricted word or expression for the
purposes of this section; or
(iii) any other word or expression (whether or not in
English) that is of like import to a word or expression
covered by any of the previous subparagraphs; and
(b) a reference to a word or expression being assumed or used
includes a reference to the word or expression being assumed
or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other
symbols.
923B Restriction on use of certain words or expressions unless
authorised in licence conditions
(1) A person contravenes this subsection if:
(a) the person carries on a financial services business or provides
a financial service (whether or not on behalf of another
person); and
(b) the person assumes or uses, in this jurisdiction, a restricted
word or expression in relation to that business or service; and
(c) the person is not authorised, by the conditions on an
Australian financial services licence held by the person, or by
a person in relation to whom they are a representative, to
assume or use that word or expression (see subsection (3)).
Note 1: For the meanings of restricted word or expression and assume or use,
see subsection (4).
Note 2: A contravention of this subsection is an offence (see
subsection 1311(1)).
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(2) If a person assumes or uses a word or expression in circumstances
that give rise to the person committing an offence based on
subsection (1), the person is guilty of such an offence in respect of:
(a) the first day on which the offence is committed; and
(b) each subsequent day (if any) on which the circumstances that
gave rise to the person committing the offence continue
(including the day of conviction for any such offence or any
later day).
(3) ASIC can only impose a condition on an Australian financial
services licence authorising a person to assume or use a restricted
word or expression in these circumstances:
(a) in the case of a word or expression covered by
subparagraph (4)(a)(i)—if the person:
(i) can, under the licence, provide a financial service
relating to securities (whether or not the person can
provide other financial services under the licence as
weln( � and
(ii) is a participant in a licensed market whose licence
covers dealings in securities;
(b) in the case of a word or expression covered by
subparagraph (4)(a)(ii)—if the person:
(i) can, under the licence, provide a financial service
relating to derivatives (whether or not the person can
provide other financial services under the licence as
weln( � and
(ii) is a participant in a licensed market whose licence
covers dealings in derivatives;
(c) in the case of a word or expression covered by
subparagraph (4)(a)(iii)—if the person:
(i) can, under the licence, provide a financial service
relating to contracts of insurance (whether or not the
person can provide other financial services under the
licence as weln( � and
(ii) in providing that service, acts on behalf of intending
insureds;
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Division 10 Restrictions on use of terminology
Section 923B
348 Corporations Act 2001
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(d) in the case of a word or expression covered by
subparagraph (4)(a)(iv)—if the person:
(i) can, under the licence, provide a financial service
relating to contracts of general insurance (whether or
not the person can provide other financial services under
the licence as weln( � and
(ii) in providing that service, acts on behalf of intending
insureds;
(e) in the case of a word or expression covered by
subparagraph (4)(a)(v)—if the person:
(i) can, under the licence, provide a financial service
relating to contracts of life insurance (whether or not the
person can provide other financial services under the
licence as weln( � and
(ii) in providing that service, acts on behalf of intending
insureds;
(f) in the case of a word or expression covered by
subparagraph (4)(a)(vi)—in the circumstances (if any) that
are prescribed by regulations made for the purposes of this
paragraph, or after ASIC has considered the matters (if any)
that are so prescribed.
(4) In this section:
(a) a reference to a restricted word or expression is a reference
to:
(i) the expression stockbroker or sharebroker, or any other
word or expression (whether or not in English) that is of
like import to that expression; or
(ii) the expression futures broker, or any other word or
expression (whether or not in English) that is of like
import to that expression; or
(iii) the expression insurance broker or insurance broking,
or any other word or expression (whether or not in
English) that is of like import to that expression; or
(iv) the expression general insurance broker, or any other
word or expression (whether or not in English) that is of
like import to that expression; or
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(v) the expression life insurance broker, or any other word
or expression (whether or not in English) that is of like
import to that expression; or
(vi) any other expression or word specified in the
regulations as a restricted word or expression for the
purposes of this section, or any other word or expression
(whether or not in English) that is of like import to such
a word or expression; and
(b) a reference to a word or expression being assumed or used
includes a reference to the word or expression being assumed
or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other
symbols; and
(c) contract of insurance and insured have the same meanings
as in Division 4 of Part 7.8.
923C Restriction on use of terms “financial adviser” and “financial
planner”
(1) A person contravenes this subsection if:
(a) the person carries on a financial services business or provides
a financial service (whether or not on behalf of another
person); and
(b) the person assumes or uses, in this jurisdiction, a restricted
word or expression in relation to the service; and
(c) any of the following apply:
(i) the person is not a relevant provider;
(ii) the person is a provisional relevant provider;
(iii) the person is a limited-service time-sharing adviser.
Note 1: For the meanings of restricted word or expression and assume or use,
see subsections (8) and (9) of this section.
Note 2: A contravention of this subsection is an offence (see
subsection 1311(1)).
(2) A person (the first person) contravenes this subsection if:
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Division 10 Restrictions on use of terminology
Section 923C
350 Corporations Act 2001
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(a) the first person carries on a financial services business or
provides a financial service; and
(b) another person provides a financial service on behalf of the
person; and
(c) the first person assumes or uses, in this jurisdiction, a
restricted word or expression in relation to the service; and
(d) any of the following apply:
(i) the first person is not a relevant provider;
(ii) the first person is a provisional relevant provider;
(iii) the first person is a limited-service time-sharing adviser.
Note 1: For the meanings of restricted word or expression and assume or use,
see subsections (8) and (9) of this section.
Note 2: A contravention of this subsection is an offence (see
subsection 1311(1)).
Advice to wholesale clients
(3) It is not a contravention of subsection (1) for a person to assume or
use a restricted word or expression if:
(a) the person provides advice to wholesale clients; and
(b) the person assumes or uses the restricted word or expression
only in relation to that advice.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (3). See subsection 13.3(3) of the Criminal Code.
(4) It is not a contravention of subsection (2) for a person to assume or
use a restricted word or expression if:
(a) another person (the adviser) provides a financial service on
behalf of the person; and
(b) the adviser provides advice to wholesale clients; and
(c) the person assumes or uses the restricted word or expression
only in relation to that advice.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
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Advice as employee or director
(5) It is not a contravention of subsection (1) for a person to assume or
use a restricted word or expression if:
(a) the person is an employee or director of a body; and
(b) the person provides advice to the body; and
(c) the person assumes or uses the restricted word or expression
only in relation to that advice.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) It is not a contravention of subsection (2) for a person to assume or
use a restricted word or expression if:
(a) another person (the adviser) is an employee or director of a
body; and
(b) the adviser provides advice to the body; and
(c) the person assumes or uses the restricted word or expression
only in relation to that advice.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
Continuing contravention
(7) If a person assumes or uses a word or expression in circumstances
that give rise to the person committing an offence under
subsection (1) or (2), the person commits the offence in respect of:
(a) the first day on which the offence is committed; and
(b) each subsequent day (if any) on which the circumstances that
gave rise to the person committing the offence continue
(including the day of conviction for any such offence or any
later day).
References to restricted word or expression
(8) In this section:
(a) a reference to a restricted word or expression is a reference
to:
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Division 10 Restrictions on use of terminology
Section 923C
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(i) the expression financial adviser or financial planner;
or
(ii) any other word or expression specified in the
regulations as a restricted word or expression for the
purposes of this section; or
(iii) any other word or expression (whether or not in
English) that is of like import to a word or expression
covered by any of the previous subparagraphs; and
(b) a reference to a restricted word or expression being assumed
or used includes a reference to the restricted word or
expression being assumed or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other
symbols.
(9) However, a reference in this section to a restricted word or
expression does not include a reference to a word or expression
mentioned in paragraph (8)(a) if:
(a) the word or expression mentioned in that paragraph is
assumed or used in relation to a provisional relevant
provider; and
(b) the word or expression is assumed or used as part of a word
or expression specified by the standards body for the
purposes of subparagraph 921U(2)(a)(v).
Contravention does not affect compensation arrangements
(10) To avoid doubt, this section does not affect the obligation of a
financial services licensee to have arrangements in place under
section 912B.
Note: Section 912B requires financial services licensees to have in place
compensation arrangements if the licensee provides financial services
to retail clients.
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Agreements with unlicensed persons relating to the provision of financial services
Division 11
Section 924A
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 11—Agreements with unlicensed persons relating
to the provision of financial services
Subdivision A—Agreements affected
924A Agreements with certain unlicensed persons
(1) Subdivision B applies to an agreement entered into by a person (in
this section and Subdivision B called the non-licensee) and another
person (in this section and Subdivision B called the client) (not
being a financial services licensee) that constitutes, or relates to,
the provision of a financial service by the non-licensee if:
(a) the agreement is entered into in the course of a financial
services business carried on by the non-licensee; and
(b) the non-licensee does not hold an Australian financial
services licence covering the provision of the financial
service, and is not exempt from the requirement to hold such
a licence.
Note: It does not matter whether the financial service is provided to the
client as a wholesale client or as a retail client.
(2) Subdivision B applies to the agreement whether or not anyone else
is a party to the agreement.
Subdivision B—Effect on agreements
925A Client may give notice of rescission
(1) Subject to this section, the client may, whether before or after
completion of the agreement, give to the non-licensee a written
notice stating that the client wishes to rescind the agreement.
(2) The client may only give a notice under this section within a
reasonable period after becoming aware of the facts entitling the
client to give the notice.
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Part 7.6 Licensing of providers of financial services
Division 11 Agreements with unlicensed persons relating to the provision of financial
services
Section 925B
354 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The client is not entitled to give a notice under this section if the
client engages in conduct by engaging in which the client would, if
the entitlement so to give a notice were a right to rescind the
agreement for misrepresentation by the non-licensee, be taken to
have affirmed the agreement.
(4) The client is not entitled to give a notice under this section if,
within a reasonable period before the agreement was entered into,
the non-licensee informed the client (whether or not in writing) that
the non-licensee did not hold an Australian financial services
licence.
(5) If, at a time when an Australian financial services licence held by
the non-licensee was suspended, the non-licensee informed the
client that the licence was suspended, the non-licensee is to be
taken for the purposes of subsection (4) to have informed the client
at that time that the non-licensee did not hold the licence.
(6) None of subsections (2), (3) and (4) limits the generality of either
of the others.
(7) Subject to this section, the client may give a notice under this
section whether or not:
(a) the notice will result under section 925B in rescission of the
agreement; or
(b) the Court will, if the notice so results, be empowered to make
a particular order, or any order at all, under section 925D.
925B Effect of notice under section 925A
A notice given under section 925A rescinds the agreement unless
rescission of the agreement would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in
good faith, for valuable consideration and without notice of the
facts entitling the client to give the notice.
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Division 11
Section 925C
Corporations Act 2001 355
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
925C Client may apply to Court for partial rescission
(1) If the client gives a notice under section 925A but the notice does
not rescind the agreement because rescission of it would prejudice
a right or estate of the kind referred to in section 925B, the client
may, within a reasonable period after giving the notice, apply to
the Court for an order under subsection (4) of this section.
(2) The Court may extend the period for making an application under
subsection (1).
(3) If an application is made under subsection (1), the Court may make
such orders expressed to have effect until the determination of the
application as it would have power to make if the notice had
rescinded the agreement under section 925B and the application
were for orders under section 925D.
(4) On an application under subsection (1), the Court may make an
order:
(a) varying the agreement in such a way as to put the client in
the same position, as nearly as can be done without
prejudicing such a right or estate acquired before the order is
made, as if the agreement had not been entered into; and
(b) declaring the agreement to have had effect as so varied at and
after the time when it was originally made.
(5) If the Court makes an order under subsection (4), the agreement is
to be taken for the purposes of section 925D to have been
rescinded under section 925B.
(6) An order under subsection (4) does not affect the application of
section 925F or 925H in relation to the agreement as originally
made or as varied by the order.
925D Court may make consequential orders
(1) Subject to subsection (2), on rescission of the agreement under
section 925B, the Court, on the application of the client or the
non-licensee, may make such order or orders as it would have
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Part 7.6 Licensing of providers of financial services
Division 11 Agreements with unlicensed persons relating to the provision of financial
services
Section 925E
356 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
power to make if the client had duly rescinded the agreement
because of misrepresentation by the non-licensee.
(2) The Court is not empowered to make a particular order under
subsection (1) if the order would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in
good faith, for valuable consideration and without notice of the
facts entitling the client to give the notice.
925E Agreement unenforceable against client
(1) This section:
(a) applies while both of the following are the case:
(i) the client is entitled to give a notice under section 925A;
(ii) a notice so given will result under section 925B in
rescission of the agreement; and
(b) applies after the agreement is rescinded under section 925B;
but does not otherwise apply.
(2) The non-licensee is not entitled, as against the client:
(a) to enforce the agreement, whether directly or indirectly; or
(b) to rely on the agreement, whether directly or indirectly and
whether by way of defence or otherwise.
925F Non-licensee not entitled to recover commission
(1) Without limiting the generality of section 925E, this section:
(a) applies while the client is entitled to give a notice under
section 925A; and
(b) applies after the client so gives a notice, even if the notice
does not result under section 925B in rescission of the
agreement;
but does not otherwise apply.
(2) The non-licensee is not entitled to recover by any means
(including, for example, set-off or a claim on a quantum meruit)
any brokerage, commission or other fee for which the client would,
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Division 11
Section 925G
Corporations Act 2001 357
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
but for this section, have been liable to the non-licensee under or in
connection with the agreement.
925G Onus of establishing non-application of section 925E or 925F
For the purposes of determining, in a proceeding in a court,
whether or not the non-licensee is, or was at a particular time,
entitled as mentioned in subsection 925E(2) or 925F(2), it is to be
presumed, unless the contrary is proved, that section 925E or 925F,
as the case may be, applies, or applied at that time, as the case may
be.
925H Client may recover commission paid to non-licensee
(1) Without limiting the generality of section 925D, if the client gives
a notice under section 925A, the client may, even if the notice does
not result under section 925B in rescission of the agreement,
recover from the non-licensee as a debt the amount of any
brokerage, commission or other fee that the client has paid to the
non-licensee under or in connection with the agreement.
(2) ASIC may, if it considers that it is in the public interest to do so,
bring an action under subsection (1) in the name of, and for the
benefit of, the client.
925I Remedies under this Division additional to other remedies
The client’s rights and remedies under this Division are additional
to, and do not prejudice, any other right or remedy of the client.
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Division 12 Miscellaneous
Section 926A
358 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 12—Miscellaneous
926A Exemptions and modifications by ASIC
(1) The provisions to which this section applies are all provisions of
this Part other than Divisions 4 and 8.
(2) ASIC may:
(a) exempt a person or class of persons from all or specified
provisions to which this section applies; or
(b) exempt a financial product or class of financial products from
all or specified provisions to which this section applies; or
(c) declare that provisions to which this section applies apply in
relation to a person or financial product, or a class of persons
or financial products, as if specified provisions were omitted,
modified or varied as specified in the declaration.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) An exemption or declaration is a legislative instrument if the
exemption or declaration is expressed to apply in relation to a class
of persons or a class of financial products (whether or not it is also
expressed to apply in relation to one or more persons or products
identified otherwise than by reference to membership of a class).
(4A) If subsection (4) does not apply to an exemption or declaration, the
exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (2)(c) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the requirements of the Legislative
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Section 926B
Corporations Act 2001 359
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Instruments Act 2003 (if the declaration is of a kind referred to in
subsection (4)), or with the gazettal requirement of
subsection (4A), as the case may be):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(6) For the purpose of this section, the provisions to which this section
applies include:
(a) definitions in this Act, or in the regulations, as they apply to
references in those provisions; and
(b) any provisions of Part 10.2 or 10.23A (transitional
provisions) that relate to those provisions.
Note: Because of section 761H, a reference to the provisions to which this
section applies, or to provisions of Part 10.2, also includes a reference
to regulations or other instruments made for the purposes of those
provisions.
926B Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Chapter 7 Financial services and markets
Part 7.7 Financial services disclosure
Division 1 Preliminary
Section 940A
360 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.7—Financial services disclosure
Division 1—Preliminary
940A How Part applies if a financial services licensee is acting as
authorised representative
If a financial services licensee is, in providing a financial service,
acting as the authorised representative of another financial services
licensee (see section 916E), this Part applies to the first-mentioned
licensee, in relation to the service, in the capacity of authorised
representative (rather than the capacity of licensee).
940B What if there is no reasonable opportunity to give a document,
information or statement required by this Part?
(1) If:
(a) apart from this section, a person (the providing entity) would
be required by a provision of this Part to give another person
(the client) a particular document (for example, a Financial
Services Guide or a Statement of Advice), or particular
information or a particular statement; and
(b) the providing entity has not had a reasonable opportunity to
give (in accordance with section 940C) the client the
document, information or statement by the time they are
required by this Part to give it to the client;
the fact that the providing entity has not given the document,
information or statement to the client as required by the provision
is not a contravention of the provision.
Note: In a prosecution for an offence, a defendant bears an evidential burden
in relation to the matters in this section (see subsection 13.3(3) of the
Criminal Code).
(2) For the purposes of subsection (1), the providing entity is not taken
not to have had a reasonable opportunity to provide the document,
information or statement if:
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Preliminary Division 1
Section 940C
Corporations Act 2001 361
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) section 940C (or regulations made for the purposes of that
section) permit the document, information or statement to be
sent to an address (including an electronic address) or fax
number nominated by the client; and
(b) the client has not given the providing entity an address
(including an electronic address) or fax number to which the
document, information or statement can be sent; but
(c) the providing entity has had a reasonable opportunity to
make, but has not made, reasonable enquiries of the client to
obtain such an address or fax number.
940C How documents, information and statements are to be given
(1) For the purposes of this Part (unless a contrary intention appears), a
Financial Services Guide, a Supplementary Financial Services
Guide or a Statement of Advice is given by a person (the providing
entity) to another person (the client) if (and only if):
(a) it is:
(i) given to the client, or to the client’s agent, personally; or
(ii) sent to the client, or the client’s agent, at an address
(including an electronic address) or fax number
nominated by the client or the client’s agent; or
(iii) otherwise made available to the client, or the client’s
agent, as agreed between the client, or the client’s agent,
and the providing entity; and
(b) it is in printed or electronic form.
(2) For the purposes of this Part (unless a contrary intention appears),
information that subsection 941C(7) or 946B(6) requires to be
given by a person (the providing entity) to another person (the
client) is given by the providing entity to the client if (and only if):
(a) it is given to the client, or the client’s agent, orally; or
(b) it is in printed or electronic form and is:
(i) given to the client, or the client’s agent, personally; or
(ii) sent to the client, or the client’s agent, at an address
(including an electronic address) or fax number
nominated by the client or the client’s agent; or
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Division 1 Preliminary
Section 940C
362 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) otherwise made available to the client, or the client’s
agent, as agreed between the client or the client’s agent
and the providing entity; or
(c) it is given by some other method permitted by regulations
made for the purposes of this paragraph.
(3) For the purposes of this Part (unless a contrary intention appears),
information that subsection 941C(5), paragraph 946AA(5)(b) or
subsection 946B(3) or (8) requires to be given by a person (the
providing entity) to another person (the client) is given by the
providing entity to the client if (and only if) it is given to the client,
or the client’s agent, in accordance with the applicable
requirements of regulations made for the purposes of this
subsection.
(4) For the purposes of this Part (unless a contrary intention appears), a
statement that subsection 941D(2) or 946C(2) requires to be given
by a person (the providing entity) to another person (the client) is
given by the providing entity to the client if (and only if) it is given
orally to the client or the client’s agent.
(5) For the purposes of this section, a document, information or
statement to which this section applies is sent to a person at an
address if, and only if:
(a) the document, information or statement is sent to the address;
and
(b) either:
(i) the envelope or other container in which it is sent; or
(ii) the message that accompanies it;
is addressed to the person.
(6) A document, information or statement to which this section applies
may be given or sent to a person’s agent only if the agent is not
acting as the person’s agent in one of the following capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services licensee;
(d) a person who is not required to hold an Australian financial
services licence because the person is covered by:
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Section 940D
Corporations Act 2001 363
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( �
(e) a person who is required to hold an Australian financial
services licence but who does not hold such a licence;
(f) an employee, director or other representative of a person
referred to in paragraph (a), (b), (c), (d) or (e).
(7) The regulations may specify requirements as to:
(a) the manner in which a document, information or statement
may be given to a person; and
(b) the presentation, structure and format for a document,
information or statement that is to be given in electronic
form.
The giving of the document, information or statement is not
effective unless those requirements are satisfied.
940D General approach to offence provisions
Subdivision A of Division 7 contains provisions creating offences
by reference to various rules contained in Divisions of this Part.
However, it does not create all the offences relating to those rules,
as some offences are created by subsection 1311(1). Where
offences are created by subsection 1311(1) in relation to a rule, this
is indicated by a note at the end of the provision containing the
rule.
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Part 7.7 Financial services disclosure
Division 2 Person provided with financial service as retail client to be given a Financial
Services Guide
Section 941A
364 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Person provided with financial service as retail
client to be given a Financial Services Guide
Subdivision A—Requirement for a Financial Services Guide to
be given
941A Obligation on financial services licensee to give a Financial
Services Guide if financial service provided to person as a
retail client
(1) A financial services licensee (the providing entity) must give a
person a Financial Services Guide in accordance with this Division
if the providing entity provides a financial service to the person
(the client) as a retail client.
(2) This section has effect subject to section 941C.
941B Obligation on authorised representative to give a Financial
Services Guide if financial service provided to person as a
retail client
(1) An authorised representative (the providing entity) of a financial
services licensee (the authorising licensee), or of 2 or more
financial services licensees (the authorising licensees), must give a
person a Financial Services Guide in accordance with this Division
if the providing entity, as a representative of the authorising
licensee, or one or more of the authorising licensees, provides a
financial service to the person (the client) as a retail client.
Note: If the providing entity is the authorised representative of 2 or more
financial services licensees, each of those licensees is, for the purposes
of this Division, an authorising licensee in relation to the financial
service provided to the client, even though the providing entity may
not have been acting as representative of each of those licensees in
providing the service to the client.
(2) A Financial Services Guide must not be given to the person by the
providing entity unless the authorising licensee, or each of the
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Person provided with financial service as retail client to be given a Financial Services
Guide Division 2
Section 941C
Corporations Act 2001 365
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
authorising licensees, has authorised its distribution by the
providing entity.
(3) This section has effect subject to section 941C.
941C Situations in which a Financial Services Guide is not required
Client has already received the information
(1) The providing entity does not have to give the client a Financial
Services Guide (the new FSG) if the client has already received a
Financial Services Guide that contains all of the information that
the new FSG is required to contain.
Providing entity is product issuer dealing in own products
(2) The providing entity does not have to give the client a Financial
Services Guide if:
(a) the providing entity is an issuer of financial products; and
(b) the financial service is a dealing (see section 766C) in
financial products, other than derivatives able to be traded on
a licensed market, issued by the providing entity, and does
not also relate to financial products issued by someone else.
Note: The issuer will however have to comply with the Product Disclosure
Statement requirements (see Division 2 of Part 7.9).
Providing entity is merely operating a registered scheme
(3) The providing entity does not have to give the client a Financial
Services Guide if:
(a) the providing entity is the responsible entity of a registered
scheme; and
(b) the financial service consists only of the operation of that
scheme by the providing entity.
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Part 7.7 Financial services disclosure
Division 2 Person provided with financial service as retail client to be given a Financial
Services Guide
Section 941C
366 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Financial product advice given to the public
(4) The providing entity does not have to give the client a Financial
Services Guide if the financial service is general advice provided to
the public, or a section of the public, in the manner prescribed by
regulations made for the purposes of this subsection.
(5) However, if subsection (4) applies and the client is not given a
Financial Services Guide before the advice is provided, the client
must instead, before the advice is provided, be given the
information that would be required to be in the Financial Services
Guide by paragraphs 942B(2)(a), (e) and (f), or paragraphs
942C(2)(a), (c), (f) and (g), as the case requires.
Certain basic deposit and other products
(6) The providing entity does not have to give the client a Financial
Services Guide if the financial service is a dealing (see
section 766C) in, is the provision of financial product advice (see
section 766B) about, or in any other way relates to, any of the
following:
(a) a basic deposit product;
(b) a facility for making non-cash payments (see section 763D)
that is related to a basic deposit product;
(c) a financial product of a kind prescribed by regulations made
for the purposes of this paragraph.
(7) However, if subsection (6) applies and the client is not given a
Financial Services Guide before the service is provided, the client
must instead, before the service is provided, be given the
information that would be required to be in the Financial Services
Guide by paragraphs 942B(2)(a) and (h), or paragraphs 942C(2)(a)
and (i), as the case requires.
Regulations may specify other exemptions
(8) A Financial Services Guide does not have to be given to the client
in circumstances specified in regulations made for the purposes of
this subsection.
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Person provided with financial service as retail client to be given a Financial Services
Guide Division 2
Section 941D
Corporations Act 2001 367
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
941D Timing of giving Financial Services Guide
General rule
(1) Subject to this section, the Financial Services Guide must be given
to the client as soon as practicable after it becomes apparent to the
providing entity that the financial service will be, or is likely to be,
provided to the client, and must in any event be given to the client
before the financial service is provided.
Time critical cases
(2) If:
(a) the client expressly instructs that they require the financial
service to be provided immediately, or by a specified time;
and
(b) it is not reasonably practicable to give the Financial Services
Guide to the client before the service is provided as so
instructed;
the providing entity must instead give the client a statement that
complies with subsection (3) before the service is provided.
(3) The statement must contain:
(a) the information that would be required to be in the Financial
Services Guide by paragraphs 942B(2)(e), (f) and (i), or
paragraphs 942C(2)(f), (g) and (j), as the case requires; and
(b) such other information as would be required to be in the
Financial Services Guide as is particularly relevant to the
financial service to be provided.
(4) The client must then be given the Financial Services Guide within
5 days after being given the statement, or sooner if practicable.
941E Information must be up to date
The information in the Financial Services Guide must be up to date
as at the time when it is given to the client.
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Part 7.7 Financial services disclosure
Division 2 Person provided with financial service as retail client to be given a Financial
Services Guide
Section 941F
368 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A Supplementary Financial Services Guide containing updated
information may be given with a Financial Services Guide that has
become out of date. The updated information is taken to be included
in the Financial Services Guide (see section 943D.)
941F Obligation to give updated Financial Services Guide
If:
(a) the Financial Services Guide is given to the client before the
financial service is provided; and
(b) the following conditions are satisfied:
(i) there is a change in circumstances before the service is
provided, and the Financial Services Guide does not
contain the information it would be required to contain
if it were given to a person immediately after that
change;
(ii) the fact that the Financial Services Guide does not
contain the up to date information is materially adverse
from the point of view of a reasonable person deciding,
as a retail client, whether to proceed to be provided with
the financial service;
the providing entity must, before the service is provided, give the
client:
(c) another Financial Services Guide that contains the up to date
information before the service is provided; or
(d) a Supplementary Financial Services Guide (see Subdivision
C) that updates the information in the Financial Services
Guide.
Subdivision B—Content and authorisation of Financial
Services Guide
942A Title of Financial Services Guide
(1) The title “Financial Services Guide” must be used on the cover of,
or at or near the front of, a Financial Services Guide.
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Person provided with financial service as retail client to be given a Financial Services
Guide Division 2
Section 942B
Corporations Act 2001 369
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) In any other part of a Financial Services Guide, “Financial Services
Guide” may be abbreviated to “FSG”.
942B Financial Services Guide given by financial services licensee—
main requirements
(1) This section applies if the providing entity is a financial services
licensee.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Financial Services Guide must include the
following statements and information:
(a) a statement setting out the name and contact details of the
providing entity; and
(b) a statement setting out any special instructions about how the
client may provide instructions to the providing entity; and
(c) information about the kinds of financial services (the
authorised services) that the providing entity is authorised by
its licence to provide, and the kinds of financial products to
which those services relate; and
(d) information about who the providing entity acts for when
providing the authorised services; and
(e) information about the remuneration (including commission)
or other benefits that any of the following is to receive in
respect of, or that is attributable to, the provision of any of
the authorised services:
(i) the providing entity;
(ii) a related body corporate of the providing entity;
(iii) a director or employee of the providing entity or a
related body corporate;
(iv) an associate of any of the above;
(v) any other person in relation to whom the regulations
require the information to be provided;
(f) information about any associations or relationships between
the providing entity, or any related body corporate, and the
issuers of any financial products, being associations or
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Section 942B
370 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
relationships that might reasonably be expected to be capable
of influencing the providing entity in providing any of the
authorised services; and
(g) if the providing entity provides further market-related advice
(see subsection 946B(1)) or advice to which
subsection 946B(7) applies—a statement in relation to which
the following requirements are satisfied:
(i) the statement must indicate that the client may request a
record of that advice, if they have not already been
provided with a record of that advice;
(ii) the statement must set out particulars of how the client
may request such a record;
(iii) any limitations in those particulars on the time within
which the client may request such a record must be
consistent with any applicable requirements in
regulations made for the purposes of this subparagraph
or, if there are no such applicable requirements, must be
such as to allow the client a reasonable opportunity to
request a record of the advice; and
(h) information about the dispute resolution system that covers
complaints by persons to whom the providing entity provides
financial services, and about how that system may be
accessed; and
(i) if the providing entity acts under a binder in providing any of
the authorised services—a statement that:
(i) identifies the services provided under the binder; and
(ii) states that they are provided under a binder; and
(iii) explains the significance of the services being provided
under a binder; and
(j) if the providing entity is a participant in a licensed market or
a licensed CS facility—a statement that the providing entity
is a participant in that market or facility; and
(k) any other statements or information required by the
regulations.
Note: A Supplementary Financial Services Guide containing additional
information may be given with a Financial Services Guide that does
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Section 942B
Corporations Act 2001 371
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
not contain all the required information. The additional information is
taken to be included in the Financial Services Guide (see
section 943D.)
(3) Subject to subsection (4), the level of information about a matter
that is required is such as a person would reasonably require for the
purpose of making a decision whether to acquire financial services
from the providing entity as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a
particular situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required
by a provision of subsection (2), either in a particular
situation or generally;
(d) that certain supplementary information must be given or
made available to the client in some other way.
(5) The Financial Services Guide must be dated. The date must be the
date on which the Financial Services Guide was prepared or its
preparation was completed.
(6) The Financial Services Guide may also contain other information.
(6A) The information included in the Financial Services Guide must be
worded and presented in a clear, concise and effective manner.
(7) The regulations may require the providing entity, in circumstances
specified in the regulations, to provide the client, on request, with
more detailed information about remuneration (including
commission) or other benefits of a kind referred to in
paragraph (2)(e).
(8) If:
(a) the Financial Services Guide includes a statement to the
effect that a client may request a record of further
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Section 942C
372 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
market-related advice or advice to which subsection 946B(7)
applies; and
(b) the client is provided with advice to which that statement
applies; and
(c) the client has not already been provided with a record of that
advice;
the providing entity must comply with a request made in
accordance with that statement for a record of that advice.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
942C Financial Services Guide given by authorised representative—
main requirements
(1) This section applies if the providing entity is an authorised
representative.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Financial Services Guide must include the
following statements and information:
(a) a statement setting out the name and contact details of the
providing entity; and
(b) a statement setting out any special instructions about how the
client may provide instructions to the providing entity; and
(c) a statement:
(i) setting out the name and contact details of the
authorising licensee, or of each of the authorising
licensees; and
(ii) stating that the providing entity is the authorised
representative of that licensee or those licensees; and
(d) information, in relation to the authorising licensee or each of
the authorising licensees, about the kinds of financial
services (the authorised services) that the providing entity
provides as representative of the authorising licensee, and the
kinds of financial products to which those services relate; and
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Section 942C
Corporations Act 2001 373
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) information about who the authorising licensee, or each of
the authorising licensees, acts for when financial services are
provided on their behalf by the providing entity; and
(f) information about the remuneration (including commission)
or other benefits that any of the following is to receive in
respect of, or that is attributable to, the provision of any of
the authorised services:
(i) the providing entity;
(ii) an employer of the providing entity;
(iii) the authorising licensee, or any of the authorising
licensees;
(iv) an employee or director of the authorising licensee, or
of any of the authorising licensees;
(v) an associate of any of the above;
(vi) any other person in relation to whom the regulations
require the information to be provided; and
(g) information about any associations or relationships between:
(i) the providing entity, or any employer of the providing
entity, and the issuers of any financial products; or
(ii) the authorising licensee, or any of the authorising
licensees, or any related body corporate of the
authorising licensee or any of the authorising licensees,
and the issuers of any financial products;
being associations or relationships that might reasonably be
expected to be capable of influencing the providing entity in
providing any of the authorised services; and
(h) if the providing entity, when acting as representative of the
authorising licensee or any of the authorising licensees,
provides further market-related advice (see
subsection 946B(1)) or advice to which subsection 946B(7)
applies—a statement in relation to which the following
requirements are satisfied:
(i) the statement must indicate that the client may request a
record of that advice, if they have not already been
provided with a record of that advice;
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Section 942C
374 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) the statement must set out particulars of how the client
may request such a record;
(iii) any limitations in those particulars on the time within
which the client may request such a record must be
consistent with any applicable requirements in
regulations made for the purposes of this subparagraph
or, if there are no such applicable requirements, must be
such as to allow the client a reasonable opportunity to
request a record of the advice; and
(i) information about the dispute resolution system that covers
complaints by persons to whom the providing entity provides
financial services when acting as representative of the
authorising licensee or any of the authorising licensees, and
about how that system may be accessed; and
(j) if the providing entity acts under a binder in providing any of
the authorised services—a statement that:
(i) identifies the services provided under the binder; and
(ii) states that they are provided under a binder; and
(iii) explains the significance of the services being provided
under a binder; and
(k) if the providing entity, or the authorising licensee or any of
the authorising licensees, is a participant in a licensed market
or a licensed CS facility—a statement that the providing
entity or authorising licensee is a participant in that market or
facility; and
(l) a statement to the effect that the distribution of the Financial
Services Guide by the providing entity has been authorised
by the authorising licensee, or by each of the authorising
licensees; and
(m) any other statements or information required by the
regulations.
Note: A Supplementary Financial Services Guide containing additional
information may be given with a Financial Services Guide that does
not contain all the required information. The additional information is
taken to be included in the Financial Services Guide (see
section 943D.)
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Section 942C
Corporations Act 2001 375
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Subject to subsection (4), the level of detail of information about a
matter that is required is such as a person would reasonably require
for the purpose of making a decision whether to acquire financial
services from the providing entity as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a
particular situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required
by a provision of subsection (2), either in a particular
situation or generally;
(d) that certain supplementary information must be given or
made available to the client in some other way.
(5) The Financial Services Guide must be dated. The date must be the
date on which the Financial Services Guide was prepared or its
preparation was completed.
(6) The Financial Services Guide may also contain other information.
(6A) The information included in the Financial Services Guide must be
worded and presented in a clear, concise and effective manner.
(7) The regulations may require the providing entity, in circumstances
specified in the regulations, to provide the client, on request, with
more detailed information about remuneration (including
commission) or other benefits of a kind referred to in
paragraph (2)(f).
(8) If:
(a) the Financial Services Guide includes a statement to the
effect that a client may request a record of further
market-related advice or advice to which subsection 946B(7)
applies; and
(b) the client is provided with advice to which that statement
applies; and
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Section 942D
376 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the client has not already been provided with a record of that
advice;
the providing entity must comply with a request made in
accordance with that statement for a record of that advice.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
942D Financial Services Guide may consist of 2 or more separate
documents given at same time
(1) Subject to this section, a Financial Services Guide may be made up
of 2 or more separate documents that are given at the same time.
(2) Each of the documents must have on the cover of the document, or
at or near the front of the document, a statement:
(a) to the effect that the document is part of a Financial Services
Guide; and
(b) that (subject to subsection (3)) identifies the other documents
that make up the Financial Services Guide.
(3) If there are or may be different versions of a document referred to
in paragraph (2)(b), the statement required by subsection (2) does
not have to identify any particular one of those versions and may
instead identify the document generically.
Note: For example, if a Financial Services Guide is made up of a core
document that is not updated very frequently, and a separate document
providing information about remuneration that is updated more
frequently:
(a) the statement in the core document need only refer to the fact that it, and a separate document about remuneration, make up the Financial Services Guide; and
(b) the statement in the document about remuneration need only refer to the fact that it, and a separate document about all other required matters, make up the Financial Services Guide.
(4) The requirement of section 942A (title of Financial Services
Guide) is taken to be satisfied if the title “Financial Services
Guide” is used on the cover of, or at or near the front of, at least
one of the documents that make up the Financial Services Guide.
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Section 942DA
Corporations Act 2001 377
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) The requirement of subsection 942B(5) or 942C(5) (dating of
Financial Services Guide) must be separately complied with in
relation to each of the documents. If, for any purpose, a single date
needs to be determined as the date of the Financial Services Guide
as a whole, that date is the most recent of the dates of those
documents.
(6) Section 942E applies to an alteration to one of the documents as
though the reference in that section to the date specified in the
Financial Services Guide were a reference to the date specified in
the document.
(7) The regulations may impose additional requirements to be
complied with if a Financial Services Guide is made up of 2 or
more documents.
942DA Combining a Financial Services Guide and a Product
Disclosure Statement in a single document
(1) A Financial Services Guide and a Product Disclosure Statement
may be combined in a single document (a combined FSG and
PDS) in circumstances specified in regulations made for the
purposes of this section.
(2) Those regulations may also provide that this Chapter applies in
relation to a combined FSG and PDS as if specified provisions
were omitted, modified or varied as specified in the regulations.
(3) A Financial Services Guide and a Product Disclosure Statement
must not be combined in a single document except as permitted
under subsection (1).
942E Altering a Financial Services Guide after its preparation and
before giving it to a person
A financial services licensee, or an authorised representative of a
financial services licensee, must not, in purported compliance with
a provision of this Part, give a person a Financial Services Guide
(the FSG) that has been altered (otherwise than pursuant to
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Section 943A
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
paragraph (b)) after the date specified in the FSG as required by
subsection 942B(5) or 942C(5) unless:
(a) the alteration was made by, or with the authority of:
(i) if section 942B applies to the FSG—the financial
services licensee to which the FSG relates; or
(ii) if section 942C applies to the FSG—the financial
services licensee, or each of the financial services
licensees, who authorised the distribution of the FSG;
and
(b) if the alteration is a material alteration—the date of the FSG
has been changed to the date on which the alteration was
made.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
Subdivision C—Supplementary Financial Services Guides
943A What a Supplementary Financial Services Guide is
(1) A Supplementary Financial Services Guide is a document by
which a person who has prepared a Financial Services Guide (the
FSG) can:
(a) correct a misleading or deceptive statement in the FSG; or
(b) correct an omission from the FSG of information it is
required to contain; or
(c) update the information contained in the FSG.
(2) A Supplementary Financial Services Guide must not be given to a
person by an authorised representative of a financial services
licensee unless the licensee has authorised its distribution by the
authorised representative.
943B Title of Supplementary Financial Services Guide
(1) The title “Supplementary Financial Services Guide” must be used
on the cover of, or at or near the front of, a Supplementary
Financial Services Guide.
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Section 943C
Corporations Act 2001 379
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) In any other part of a Supplementary Financial Services Guide,
“Supplementary Financial Services Guide” may be abbreviated to
“SFSG”.
943C Form of Supplementary Financial Services Guide
(1) At the beginning of a Supplementary Financial Services Guide
there must be:
(a) a statement that it is a Supplementary Financial Services
Guide; and
(b) an identification of the Financial Services Guide that it
supplements; and
(c) a statement that it is to be read together with that Financial
Services Guide and any other specified Supplementary
Financial Services Guides.
(2) The Supplementary Financial Services Guide must be dated. The
date must be the date on which the Supplementary Financial
Services Guide was prepared or its preparation was completed.
(3) If the Supplementary Financial Services Guide will or may be
distributed by an authorised representative of a financial services
licensee, it must contain a statement to the effect that its
distribution by the authorised representative has been authorised by
the licensee.
943D Effect of giving a person a Supplementary Financial Services
Guide
If:
(a) a person is given a Financial Services Guide (the FSG); and
(b) at the same time, or later, they are given a Supplementary
Financial Services Guide (the SFSG) that supplements the
FSG;
the FSG is taken, from when the SFSG is given to the person, to
include the information and statements contained in the SFSG.
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Section 943E
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
943E Situation in which only a Supplementary Financial Services
Guide need be given
If:
(a) apart from this section, a person (the providing entity) would
be required to give another person (the client) a Financial
Services Guide (the new FSG); and
(b) the client has, because of some previous conduct, already
been given a Financial Services Guide (the earlier FSG)
containing some, but not all, of the information that the new
FSG is required to contain;
the provider may, instead of giving the client the new FSG, give
the client a Supplementary Financial Services Guide that contains
the additional information.
943F Altering a Supplementary Financial Services Guide after its
preparation and before giving it to a person
A financial services licensee, or an authorised representative of a
financial services licensee, must not, in purported compliance with
a provision of this Part, give a person a Supplementary Financial
Services Guide (the SFSG) that has been altered (otherwise than
pursuant to paragraph (b)) after the date specified in the SFSG as
required by subsection 943C(2) unless:
(a) the alteration was made by, or with the authority of:
(i) if section 942B applies to the Financial Services Guide
that the SFSG supplements—the financial services
licensee to which the Guide relates; or
(ii) if section 942C applies to the Financial Services Guide
that the SFSG supplements—the financial services
licensee, or each of the financial services licensees, who
authorised the distribution of the SFSG; and
(b) if the alteration is a material alteration—the date of the SFSG
has been changed to the date on which the alteration was
made.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
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Additional requirements for personal advice provided to a retail client Division 3
Section 944A
Corporations Act 2001 381
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Additional requirements for personal advice
provided to a retail client
Subdivision A—When this Division applies
944A Situation in which Division applies
This Division applies in relation to the provision of personal advice
(the advice) in the following circumstances:
(a) the advice is provided:
(i) by a financial services licensee (the providing entity); or
(ii) by a person (the providing entity) in their capacity as
authorised representative of a financial services licensee
(the authorising licensee), or of 2 or more financial
services licensees (the authorising licensees); and
(b) the advice is provided to a person (the client) as a retail
client.
Subdivision C—Requirement for a Statement of Advice to be
given
946A Obligation to give client a Statement of Advice
(1) The providing entity must give the client a Statement of Advice in
accordance with this Subdivision and Subdivision D.
(2) The Statement of Advice may be:
(a) the means by which the advice is provided; or
(b) a separate record of the advice.
(3) This section has effect subject to sections 946AA and 946B.
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Section 946AA
382 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
946AA Small investments—Statement of Advice not required
Small investments generally
(1) The providing entity does not have to give the client a Statement of
Advice for particular advice (the small investment advice) if:
(a) both of the following apply:
(i) an amount (the threshold amount) has been prescribed
by regulations made for the purposes of this paragraph;
(ii) the total value of all financial investments in relation to
which the advice is provided, as worked out under
subsection (2), does not exceed the threshold amount;
and
(b) the advice does not relate to any of the following:
(i) a derivative;
(ii) a general insurance product;
(iii) a life risk insurance product (except to the extent that
advice about a superannuation product relates to a life
risk insurance product); and
(c) the advice does not relate to any superannuation product or
RSA product, unless the client already has an interest in the
product.
Total value of investments
(2) For the purposes of paragraph (1)(a), the total value of investments
in relation to which the small investment advice is provided is:
(a) if the advice solely relates to the acquisition of all (or part) of
one or more financial products, or of an increased interest in
one or more financial products—the sum of the values (the
total acquisition value) of each acquisition; or
(b) if the advice solely relates to the disposal of all (or part) of
one or more financial products, or of a part of an interest in
one or more financial products—the sum of the values (the
total disposal value) of each disposal; or
(c) if the advice relates to both an acquisition, and a disposal,
mentioned in paragraphs (a) and (b):
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Corporations Act 2001 383
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(i) the total acquisition value; or
(ii) if the total disposal value exceeds the total acquisition
value—the total disposal value.
Method for working out threshold amount
(3) Regulations made for the purposes of paragraph (1)(a) may
prescribe how the threshold amount is to be worked out in relation
to particular kinds of financial products.
Record of advice
(4) The providing entity must keep a record of the small investment
advice and, in doing so, must comply with any applicable
requirements of regulations made for the purposes of this
subsection.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) The providing entity must, at the applicable time, give the client:
(a) a copy of the record of the small investment advice; and
(b) the information that would, if a Statement of Advice were to
be given, be required to be in the Statement by paragraphs
947B(2)(d) and (e), or 947C(2)(e) and (f), as the case
requires.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) For the purposes of subsection (5), the applicable time for
something to be given relating to the small investment advice is the
time:
(a) when, or as soon as practicable after, the advice is provided;
and
(b) in any event—before the providing entity provides the client
with any further financial service arising out of, or connected
with, the advice.
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Division 3 Additional requirements for personal advice provided to a retail client
Section 946B
384 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
946B Other situations in which a Statement of Advice is not
required
Further market-related advice
(1) The providing entity does not have to give the client a Statement of
Advice for particular advice (the further market-related advice) if:
(a) the providing entity is a participant in a licensed market, or is
an authorised representative of a participant in a licensed
market; and
(b) the providing entity has previously given the client a
Statement of Advice that set out the client’s relevant personal
circumstances in relation to the advice (the previous advice)
set out in that Statement; and
(c) the further market-related advice recommends that the client:
(i) acquire or dispose of, or not acquire or dispose of; or
(ii) accept or refuse an offer or invitation which, if
accepted, would result in the client acquiring or
disposing of, or offering to acquire or dispose of;
securities, managed investment products or derivatives that
are able to be traded on a licensed market; and
(d) the following conditions are satisfied:
(ia) the providing entity has, either immediately before the
further market-related advice is given, or within the
preceding 12 months, checked with the client whether
the client’s objectives, financial situation and needs
have changed since the last time the providing entity
checked with the client about those matters; and
(i) the client’s relevant personal circumstances in relation
to the further market-related advice (determined having
regard to the client’s objectives, financial situation and
needs as currently known to the providing entity) are
not significantly different from the client’s relevant
personal circumstances in relation to the previous
advice; and
(ii) so far as the basis on which advice is given relates to
other matters—the basis on which the further
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Corporations Act 2001 385
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market-related advice is given is not significantly
different from the basis on which the previous advice
was given; and
(e) the providing entity has a reasonable belief that:
(i) the client requires the further market-related advice to
be provided promptly; or
(ii) it is in the client’s interests that the further
market-related advice be provided promptly; and
(f) either:
(i) the further market-related advice does not contain any
other kind of financial product advice; or
(ii) the only other kind of financial product advice
contained in the further market-related advice is cash
management facility advice; and
(g) the further market-related advice is given:
(i) by telephone; or
(ii) by fax; or
(iii) by e-mail; or
(iv) by another kind of electronic communication specified
in regulations made for the purposes of this
subparagraph.
Note: Paragraphs 947B(2)(b) and 947C(2)(b) require a Statement of Advice
to include information about the basis on which the advice is or was
given, which may include the client’s relevant personal circumstances,
in which case paragraph (b) of this subsection would be satisfied.
(2) For the purposes of subsection (1):
able to be traded on a licensed market means:
(a) in relation to securities or managed investment products—
either:
(i) the securities or products are admitted to quotation on a
licensed market and their admission to quotation is not
suspended; or
(ii) the securities or products are not admitted to quotation
on a licensed market, but are further securities or
products of a kind that are already admitted to quotation
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Section 946B
386 Corporations Act 2001
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on the market and whose admission to quotation is not
suspended; and
(b) in relation to derivatives:
(i) the standard terms of the arrangement that constitutes
the derivative are set out in the operating rules of a
licensed market; and
(ii) under the operating rules of that market, the derivatives
are able to be dealt with on the market.
cash management facility means:
(a) an interest in a registered scheme of a kind commonly known
as a cash common fund or a cash management trust; or
(b) a basic deposit product; or
(c) a bank accepted bill.
cash management facility advice means advice about the use (but
not the establishment) of a cash management facility in connection
with an acquisition or disposal of securities, managed investment
products or derivatives to which the further market-related advice
relates.
(3) However, in the same communication as is used to provide the
further market-related advice to the client, the client must be given
the information that would, if a Statement of Advice were to be
given, be required to be in the Statement by paragraphs 947B(2)(d)
and (e), or 947C(2)(e) and (f), as the case requires.
(3A) The providing entity must keep a record of the further
market-related advice and, in doing so, must comply with any
applicable requirements of regulations made for the purposes of
this subsection.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: For the client’s right to a record of the advice, see
subsections 942B(8) and 942C(8).
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Section 946B
Corporations Act 2001 387
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Certain basic deposit and other products
(5) The providing entity does not have to give the client a Statement of
Advice if the advice relates to any or all of the following:
(a) a basic deposit product;
(b) a facility for making non-cash payments (see section 763D)
that is related to a basic deposit product;
(c) a financial product of a kind prescribed by regulations made
for the purposes of this paragraph.
(6) However, if subsection (5) applies and the client is not given a
Statement of Advice, the client must instead, when, or as soon as
practicable after, the advice is provided, be given the information
that would be required to be in the Statement of Advice by
paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case
requires.
Where advice does not recommend the purchase or sale of
products
(7) The providing entity does not have to give the client a Statement of
Advice for particular advice if:
(a) the advice does not recommend or state an opinion in respect
of:
(i) the acquisition or disposal of any specific financial
product, or the products of a specific issuer; nor
(ii) a modification to an investment strategy or a
contribution level in relation to a financial product held
by the client; and
(b) the following persons do not directly receive any
remuneration (other than remuneration that is currently being
received for an earlier acquisition of a product) or other
benefit for, or in relation to, the advice:
(i) the providing entity;
(ii) an employer of the providing entity;
(iii) the authorising licensee, or any of the authorising
licensees;
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Section 946C
388 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iv) an employee or director of the authorising licensee, or
of any of the authorising licensees;
(v) an associate of any of the above;
(vi) any other person prescribed by regulations made for the
purposes of this paragraph.
(8) However, in the same communication as is used to provide to the
client the advice referred to in subsection (7), the client must be
given the information that would, if a Statement of Advice were to
be given, be required to be in the Statement by paragraphs
947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires.
(9) The providing entity must keep a record of the advice and, in doing
so, must comply with any applicable requirements of regulations
made for the purposes of this subsection.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: For the client’s right to a record of the advice, see
subsections 942B(8) and 942C(8).
946C Timing of giving Statement of Advice
General rule
(1) Subject to this section, if the Statement of Advice is not the means
by which the advice is provided, the Statement of Advice must be
given to the client when, or as soon as practicable after, the advice
is provided and, in any event, before the providing entity provides
the client with any further financial service that arises out of or is
connected with that advice.
Statement of certain information if Statement of Advice not given
when advice provided
(2) If the Statement of Advice is not given to the client when the
advice is provided, the providing entity must, when the advice is
provided, give the client a statement that contains the information
that would be required to be in a Statement of Advice by
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Corporations Act 2001 389
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paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case
requires, and by section 947D, if applicable.
Time critical cases
(3) If:
(a) the client expressly instructs that they require a further
financial service that arises out of, or is connected with, the
advice to be provided immediately, or by a specified time;
and
(b) it is not reasonably practicable to give the Statement of
Advice to the client before that further service is provided as
so instructed;
the providing entity must give the client the Statement of Advice:
(c) unless paragraph (d) applies—within 5 days after providing
that further service, or sooner if practicable; or
(d) if that further service is the provision to the person of a
financial product and section 1019B (cooling-off period) will
apply to the acquisition of the product by the person—before
the start of the period applicable under subsection 1019B(3),
or sooner if practicable.
Subdivision D—Content of Statement of Advice
947A Title of Statement of Advice
(1) The title “Statement of Advice” must be used on the cover of, or at
or near the front of, a Statement of Advice.
(2) In any other part of a Statement of Advice, “Statement of Advice”
may be abbreviated to “SoA”.
947B Statement of Advice given by financial services licensee—main
requirements
(1) This section applies if the providing entity is a financial services
licensee.
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Section 947B
390 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Statement of Advice must include the
following statements and information:
(a) a statement setting out the advice; and
(b) information about the basis on which the advice is or was
given; and
(c) a statement setting out the name and contact details of the
providing entity; and
(d) information about any remuneration (including commission)
or other benefits that any of the following is to receive that
might reasonably be expected to be or have been capable of
influencing the providing entity in providing the advice:
(i) the providing entity;
(ii) a related body corporate of the providing entity;
(iii) a director or employee of the providing entity or a
related body corporate;
(iv) an associate of any of the above;
(v) any other person in relation to whom the regulations
require the information to be provided; and
(e) information about:
(i) any other interests, whether pecuniary or not and
whether direct or indirect, of the providing entity or of
any associate of the providing entity; and
(ii) any associations or relationships between the providing
entity or any associate of the providing entity and the
issuers of any financial products;
that might reasonably be expected to be or have been capable
of influencing the providing entity in providing the advice;
and
(f) if section 961H requires a warning to be given to the client in
relation to the advice—a statement setting out, or recording,
the warning required by that section; and
(g) any other statements or information required by the
regulations; and
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Section 947C
Corporations Act 2001 391
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(h) unless in accordance with the regulations, for information to
be disclosed in accordance with paragraph (d) and
subparagraph (e)(i), any amounts are to be stated in dollars.
(3) Subject to subsection (4), the level of detail about a matter that is
required is such as a person would reasonably require for the
purpose of deciding whether to act on the advice as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a
particular situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required
by a provision of subsection (2), either in a particular
situation or generally.
(5) The Statement of Advice:
(a) must also include any information required by section 947D,
if applicable; and
(b) may also include other information.
(6) The statements and information included in the Statement of
Advice must be worded and presented in a clear, concise and
effective manner.
947C Statement of Advice given by authorised representative—main
requirements
(1) This section applies if the providing entity is an authorised
representative.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Statement of Advice must include the
following statements and information:
(a) a statement setting out the advice; and
(b) information about the basis on which the advice is or was
given; and
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Section 947C
392 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) a statement setting out the name and contact details of the
providing entity; and
(d) a statement
(i) setting out the name and contact details of the
authorising licensee, or of each of the authorising
licensees; and
(ii) stating that the providing entity is the authorised
representative of that licensee or those licensees; and
(e) information about the remuneration (including commission)
or other benefits that any of the following is to receive that
might reasonably be expected to be or have been capable of
influencing the providing entity in providing the advice:
(i) the providing entity;
(ii) an employer of the providing entity;
(iii) the authorising licensee, or any of the authorising
licensees;
(iv) an employee or director of the authorising licensee, or
of any of the authorising licensees;
(v) an associate of any of the above;
(vi) any other person in relation to whom the regulations
require the information to be provided; and
(f) information about:
(i) any other interests, whether pecuniary or not and
whether direct or indirect, of the providing entity, any
employer of the providing entity, the authorising
licensee or any of the authorising licensees, or of any
associate of any of those persons; and
(ii) any associations or relationships between the providing
entity, any employer of the providing entity, the
authorising licensee or any of the authorising licensees,
or any associate of any of those persons, and the issuers
of any financial products;
that might reasonably be expected to be or have been capable
of influencing the providing entity in providing the advice;
and
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Section 947D
Corporations Act 2001 393
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(g) if section 961H requires a warning to be given to the client in
relation to the advice—a statement setting out, or recording,
the warning required by that section; and
(h) any other statements or information required by the
regulations; and
(i) unless in accordance with the regulations, for information to
be disclosed in accordance with paragraph (e) and
subparagraph (f)(i), any amounts are to be stated in dollars.
(3) Subject to subsection (4), the level of detail about a matter that is
required is such as a person would reasonably require for the
purpose of deciding whether to act on the advice as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a
particular situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required
by a provision of subsection (2), either in a particular
situation or generally.
(5) The Statement of Advice:
(a) must also include any information required by section 947D,
if applicable; and
(b) may also include other information.
(6) The statements and information included in the Statement of
Advice must be worded and presented in a clear, concise and
effective manner.
947D Additional requirements when advice recommends
replacement of one product with another
(1) This section applies (subject to subsection (4)) if the advice is or
includes a recommendation that:
(a) the client dispose of, or reduce the client’s interest in, all or
part of a particular financial product and instead acquire all
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Section 947D
394 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
or part of, or increase the client’s interest in, another financial
product; or
(b) the client dispose of, or reduce the client’s interest in, a
MySuper product offered by a regulated superannuation fund
and instead acquire an interest, or increase the client’s
interest, in another MySuper product or a choice product
offered by the fund.
(2) The following additional information must be included in the
Statement of Advice:
(a) information about the following, to the extent that the
information is known to, or could reasonably be found out
by, the providing entity:
(i) any charges the client will or may incur in respect of the
disposal or reduction;
(ii) any charges the client will or may incur in respect of the
acquisition or increase;
(iii) any pecuniary or other benefits that the client will or
may lose (temporarily or otherwise) as a result of taking
the recommended action;
(b) information about any other significant consequences for the
client of taking the recommended action that the providing
entity knows, or ought reasonably to know, are likely;
(c) any other information required by regulations made for the
purposes of this paragraph;
(d) unless in accordance with the regulations, for information to
be disclosed in accordance with paragraph (a), any amounts
are to be stated in dollars.
(3) If:
(a) the providing entity knows that, or is reckless as to whether:
(i) the client will or may incur charges as mentioned in
subparagraph (2)(a)(i) or (ii); or
(ii) the client will or may lose benefits as mentioned in
subparagraph (2)(a)(iii); or
(iii) there will or may be consequences for the client as
mentioned in paragraph (2)(b); but
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Section 947E
Corporations Act 2001 395
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(b) the providing entity does not know, and cannot reasonably
find out, what those charges, losses or consequences are or
will be;
the Statement of Advice must include a statement to the effect that
there will or may be such charges, losses or consequences but the
providing entity does not know what they are.
(4) The regulations may provide either or both of the following:
(a) that this section does not apply in relation to a financial
product or a class of financial products;
(b) that this section does not require the provision of information
of a particular kind, whether generally or in relation to a
particular situation, financial product or class of financial
products.
(5) In this section:
MySuper product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
947E Statement of Advice not to be combined with Financial
Services Guide or Product Disclosure Statement
A Statement of Advice must not be combined in a single document
with a Financial Services Guide or a Product Disclosure Statement.
Subdivision E—Other matters
948A Qualified privilege if providing entity complies with this
Division
The providing entity has qualified privilege in respect of a
statement made to the client, whether orally or in writing, in the
course of, or in connection with, providing the advice if the
providing entity has complied with all material requirements of this
Division in relation to the advice.
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Division 4 Other disclosure requirements
Section 949A
396 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Other disclosure requirements
949A General advice provided to retail client—obligation to warn
client that advice does not take account of client’s
objectives, financial situation or needs
(1) This section applies in relation to the provision of general advice
if:
(a) the advice is provided:
(i) by a financial services licensee (the providing entity); or
(ii) by an authorised representative (the providing entity) of
a financial services licensee, or of 2 or more financial
services licensees; and
(b) the advice is provided to a person (the client) as a retail
client; and
(c) the advice is not provided in circumstances specified in
regulations made for the purposes of this paragraph.
(2) The providing entity must, in accordance with subsection (3), warn
the client that:
(a) the advice has been prepared without taking account of the
client’s objectives, financial situation or needs; and
(b) because of that, the client should, before acting on the advice,
consider the appropriateness of the advice, having regard to
the client’s objectives, financial situation and needs; and
(c) if the advice relates to the acquisition, or possible acquisition,
of a particular financial product—the client should:
(i) if the product is not a CGS depository interest—obtain a
Product Disclosure Statement (see Division 2 of
Part 7.9) relating to the product and consider the
Statement before making any decision about whether to
acquire the product; or
(ii) if the product is a CGS depository interest—obtain each
information statement (see Division 5C of Part 7.9) for
the class of CGS depository interests that includes the
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Corporations Act 2001 397
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product and consider the statement before making any
decision about whether to acquire the product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The warning must be given to the client at the same time as the
advice is provided and by the same means as the advice is
provided.
(4) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (1), it
is a defence if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be
complied with in relation to the giving of personal advice;
and
(b) the representative’s failure to comply with subsection (1)
occurred because the representative was acting in reliance on
that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
(5) A financial services licensee must take reasonable steps to ensure
that an authorised representative of the licensee complies with
subsection (2).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
949B Regulations may impose disclosure requirements in certain
situations
(1) The regulations may impose disclosure requirements, or additional
disclosure requirements, to be complied with in any of the
following situations:
(a) a financial service related to a risk insurance product or an
investment life insurance product is provided to a person as a
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Section 949B
398 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
retail client by a financial services licensee, or an authorised
representative of a financial services licensee, acting under a
binder;
(b) a financial services licensee, or an authorised representative
of a financial services licensee, arranges for a person’s
instructions to be carried out through a financial market or a
clearing and settlement facility (whether inside or outside
Australia) that is not a licensed market or a licensed CS
facility;
(d) a financial service is provided by a person who does not need
an Australian financial services licence because the person is
covered by an exemption under paragraph 911A(2)(k) or (n( �
(e) a financial service is provided to a person as a wholesale
client.
(2) A person to whom regulations made for the purposes of
subsection (1) apply must comply with any applicable
requirements in those regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (2), it
is a defence if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be
complied with in relation to the matter dealt with in the
requirement in the regulations; and
(b) the representative’s failure to comply with the requirement in
the regulations occurred because the representative was
acting in reliance on that information or those instructions;
and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (3). See subsection 13.3(3) of the Criminal Code.
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Section 949B
Corporations Act 2001 399
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(4) A financial services licensee must take reasonable steps to ensure
that an authorised representative of the licensee complies with
subsection (2).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 6 Miscellaneous
Section 951A
400 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Miscellaneous
951A Part cannot be contracted out of
A condition of a contract for the acquisition of a financial product,
or for the provision of a financial service, is void if it provides that
a party to the contract is:
(a) required or bound to waive compliance with any requirement
of this Part; or
(b) taken to have notice of any contract, document or matter not
specifically referred to in a Financial Services Guide,
Statement of Advice or other document given to the party.
951B Exemptions and modifications by ASIC
(1) ASIC may:
(a) exempt a person or a class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or class of financial products from
all or specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a
financial product, or a class of persons or financial products,
as if specified provisions of this Part were omitted, modified
or varied as specified in the declaration.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(c) had not been made, that conduct does not
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Section 951C
Corporations Act 2001 401
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constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (4)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(6) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
951C Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Part 7.7 Financial services disclosure
Division 7 Enforcement
Section 952A
402 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Enforcement
Subdivision A—Offences
952A Overview
This Subdivision contains provisions creating offences by
references to various rules contained in preceding Divisions of this
Part. However, it does not create all the offences relating to those
rules, as some offences are created by subsection 1311(1). Where
offences are created by subsection 1311(1) in relation to a rule, this
is indicated by a note at the end of the provision containing the
rule.
952B Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) if the disclosure document or statement is a Financial
Services Guide, a Supplementary Financial Services Guide,
or is information or a statement required by
subsection 941C(5), 941C(7) or 941D(2):
(i) there is a misleading or deceptive statement in the
disclosure document or statement; or
(ii) if it is a Financial Services Guide—there is an omission
from the Financial Services Guide of material required
by section 942B or 942C; or
(iii) if it is a Supplementary Financial Services Guide that is
given for the purposes of paragraph 941F(d)—there is
an omission from the Supplementary Financial Services
Guide of material required by that paragraph; or
(iv) if it is information or a statement required by
subsection 941C(5), 941C(7) or 941D(2)—there is an
omission from the document or statement of material
required by that subsection;
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being a statement, or an omission, that is or would be
materially adverse from the point of view of a reasonable
person considering whether to proceed to be provided with
the financial service concerned; or
(b) if the disclosure document or statement is a Statement of
Advice, or is information, a statement or a copy of a record
required by subsection 946AA(5), 946B(3), (6) or (8) or
946C(2):
(i) there is a misleading or deceptive statement in the
disclosure document or statement; or
(ii) if it is a Statement of Advice—there is an omission from
the Statement of advice of material required by
section 947B, 947C or 947D; or
(iii) if it is information, a statement or a copy of a record
required by subsection 946AA(5), 946B(3), (6) or (8) or
946C(2)—there is an omission from the information,
statement or copy of material required by that
subsection or section;
being a statement, or an omission, that is or would be
materially adverse from the point of view of a reasonable
person considering whether to act in reliance on the advice
concerned.
Note: In determining whether a Financial Services Guide is defective, the
effect of section 943D must be taken into account (section 943D takes
information and statements in a Supplementary Financial Services
Guide to be included in the Financial Services Guide it supplements).
disclosure document or statement means:
(a) a Financial Services Guide; or
(b) a Supplementary Financial Services Guide; or
(c) a Statement of Advice; or
(d) information, a statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6)
or (8) or 946C(2).
(1A) For the avoidance of doubt, if section 941E (information must be
up to date) is not complied with in relation to a Financial Services
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Guide, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Financial Services
Guide is not as up to date as section 941E requires it to be—
the information so included constitutes a misleading
statement in the Financial Services Guide; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Financial Services
Guide—the failure to include the information constitutes an
omission from the Statement of material required by
section 942B or 942C.
Note 1: The effect of section 943D (information in a Supplementary Financial
Services Guide is taken to be contained in the Financial Services
Guide it supplements) must be taken into account in determining
whether section 941E is complied with in relation to a Financial
Services Guide.
Note 2: Whether the inclusion of out of date information, or the failure to
include information, results in the Financial Services Guide being
defective as defined in subsection (1) depends on whether the
materiality test set out in that definition is satisfied.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
952C Offence of failing to give a disclosure document or statement
Strict liability offence
(1) A person (the providing entity) commits an offence if:
(a) the providing entity is required by a provision of this Part to
give another person a disclosure document or statement (the
required disclosure document or statement); and
(b) the providing entity does not give (within the meaning of
section 940C) the other person anything purporting to be the
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required disclosure document or statement by the time they
are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A person (the providing entity) commits an offence if:
(a) the providing entity is required by a provision of this Part to
give another person a disclosure document or statement (the
required disclosure document or statement); and
(b) the providing entity does not give (within the meaning of
section 940C) the other person anything purporting to be the
required disclosure document or statement by the time they
are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
Defence for authorised representative
(4) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (1) or
(3), it is a defence if:
(a) the licensee had provided the representative with information
or instructions about the giving of disclosure documents or
statements; and
(b) the representative’s failure to give the required disclosure
document or statement occurred because the representative
was acting in reliance on that information or those
instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
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Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
952D Offence of giving a disclosure document or statement knowing
it to be defective
(1) A person (the providing entity), being a financial services licensee,
commits an offence if:
(a) the providing entity:
(i) gives (see subsection (3)) another person a disclosure
document or statement in circumstances in which the
document or statement is required by a provision of this
Part to be given to the other person; or
(ii) is a financial services licensee and gives (see
subsection (3)), or makes available to, another person a
disclosure document or statement, being a Financial
Services Guide or a Supplementary Financial Services
Guide, reckless as to whether the other person will or
may rely on the information in it; and
(b) the providing entity knows that the disclosure document or
statement is defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) An authorised representative of a financial services licensee
commits an offence if:
(a) the representative:
(i) gives (see subsection (3)) a person a disclosure
document or statement in circumstances in which the
document or statement is required by a provision of this
Part to be given to the person; or
(ii) gives (see subsection (3)), or makes available to, a
person a disclosure document or statement, being a
Financial Services Guide or a Supplementary Financial
Services Guide, reckless as to whether the person will or
may rely on the information in it; and
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(b) the representative knows that the disclosure document or
statement is defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(3) In this section, give means give by any means (including orally),
and is not limited to the meaning it has because of section 940C.
952E Offence of giving a defective disclosure document or statement
(whether or not known to be defective)
(1) A person (the providing entity), being a financial services licensee,
commits an offence if:
(a) the providing entity:
(i) gives (see subsection (7)) another person a disclosure
document or statement in circumstances in which the
document or statement is required by a provision of this
Part to be given to the other person; or
(ii) is a financial services licensee and gives (see
subsection (7)), or makes available to, another person a
disclosure document or statement, being a Financial
Services Guide or a Supplementary Financial Services
Guide, reckless as to whether the other person will or
may rely on the information in it; and
(b) the disclosure document or statement is defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to the physical element of the offence specified in
paragraph (1)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An authorised representative of a financial services licensee
commits an offence if:
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(a) the representative gives (see subsection (7)) a person a
disclosure document or statement, being a Statement of
Advice, or information, a statement or a copy of a record
required by subsection 941C(5) or (7), 941D(2), 946AA(5),
946B(3), (6) or (8) or 946C(2), in circumstances in which the
document or statement is required by a provision of this Part
to be given to the person; and
(b) the disclosure document or statement is defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
paragraph (3)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) In any proceedings against a person for an offence based on
subsection (1) or (3), it is a defence if the person took reasonable
steps to ensure that the disclosure document or statement would not
be defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) In any proceedings against a person for an offence based on
subsection (3), it is a defence if the disclosure document or
statement:
(a) was provided to the person by a financial services licensee
for whom they were, at that time, an authorised
representative; or
(b) was defective because of information, or an omission from
information, provided to them by a financial services licensee
for whom they were, at that time, an authorised
representative.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
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(7) In this section, give means give by any means (including orally),
and is not limited to the meaning it has because of section 940C.
952F Offences of financial services licensee knowingly providing
defective disclosure material to an authorised
representative
(1) For the purposes of this section, a financial services licensee
provides disclosure material to an authorised representative of the
licensee if:
(a) the licensee authorises the distribution by the representative
of a disclosure document or statement, being a Financial
Services Guide or a Supplementary Financial Services
Guide; or
(b) the licensee provides the representative with a disclosure
document or statement, being a Statement of Advice, or
information, a statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6)
or (8) or 946C(2); or
(c) the licensee provides the representative with information:
(i) for the purpose of it being included by the
representative in a disclosure document or statement,
being a Statement of Advice, or information, a
statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5),
946B(3), (6) or (8) or 946C(2); or
(ii) knowing that it is likely that it will be so included in
such a document.
(2) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being a disclosure
document or statement) to an authorised representative of the
licensee as mentioned in paragraph (1)(a) or (b); and
(b) the licensee knows that the disclosure document or statement
is defective.
(3) A financial services licensee commits an offence if:
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(a) the licensee provides disclosure material (being information)
to an authorised representative of the licensee as mentioned
in paragraph (1)(c); and
(b) the licensee knows that, if the information is included by the
representative as mentioned in that paragraph, the disclosure
document or statement concerned will be defective.
(4) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information)
to an authorised representative of the licensee as mentioned
in paragraph (1)(c); and
(b) the information relates to a matter or matters, but the licensee
knows that it is only some of the information relating to the
matter or matters that the disclosure document or statement
concerned is required to contain; and
(c) the licensee is reckless as to whether the representative will
or may prepare the disclosure document or statement on the
basis that the information is all the information relating to the
matter or matters that the disclosure document or statement is
required to contain.
952G Offences of financial services licensee providing disclosure
material to an authorised representative (whether or not
known to be defective)
(1) For the purposes of this section, a financial services licensee
provides disclosure material to an authorised representative of the
licensee if:
(a) the licensee authorises the distribution by the representative
of a disclosure document or statement, being a Financial
Services Guide or a Supplementary Financial Services
Guide; or
(b) the licensee provides the representative with a disclosure
document or statement, being a Statement of Advice, or
information, a statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6)
or (8) or 946C(2); or
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(c) the licensee provides the representative with information:
(i) for the purpose of it being included by the
representative in a disclosure document or statement,
being a Statement of Advice, or information, a
statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5),
946B(3), (6) or (8) or 946C(2); or
(ii) knowing that it is likely that it will be so included in
such a document.
(2) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being a disclosure
document or statement) to an authorised representative of the
licensee as mentioned in paragraph (1)(a) or (b); and
(b) the disclosure document or statement is defective in a respect
that does not relate to material required to be in the document
or statement only because the representative is also the
authorised representative of another financial services
licensee.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical element of the offence specified in
paragraph (2)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information)
to an authorised representative of the licensee as mentioned
in paragraph (1)(c); and
(b) the authorised representative includes the information in the
disclosure document or statement concerned; and
(c) the disclosure document or statement is defective because it
includes that information (whether or not it is also defective
for other reasons).
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical element of the offence specified in
paragraph (4)(c).
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Note: For strict liability, see section 6.1 of the Criminal Code.
(6) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information)
to an authorised representative of the licensee as mentioned
in paragraph (1)(c); and
(b) the information relates to a matter or matters, but it is only
some of the information relating to the matter or matters that
the disclosure document or statement concerned is required
to contain; and
(c) the representative prepares the disclosure document or
statement on the basis that the information is all the
information relating to the matter or matters that the
disclosure document or statement is required to contain; and
(d) the disclosure document or statement is defective because it
includes only that information about the matter or matters
(whether or not it is also defective for other reasons).
(7) For the purposes of an offence based on subsection (6), strict
liability applies to the physical elements of the offence specified in
paragraphs (6)(b) and (d).
Note: For strict liability, see section 6.1 of the Criminal Code.
(8) In any proceedings against a person for an offence based on
subsection (2), it is a defence if the person took reasonable steps to
ensure that the disclosure document or statement would not be
defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (8). See subsection 13.3(3) of the Criminal Code.
(9) In any proceedings against a person for an offence based on
subsection (4), it is a defence if the person took reasonable steps to
ensure that the information they provided would not be such as to
make the disclosure document or statement defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (9). See subsection 13.3(3) of the Criminal Code.
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(10) In any proceedings against a person for an offence based on
subsection (6), it is a defence if the person took reasonable steps to
ensure that the information they provided about the matter or
matters would be all the information about the matter or matters
that the disclosure document or statement would be required to
contain.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (10). See subsection 13.3(3) of the Criminal Code.
952H Offence of financial services licensee failing to ensure
authorised representative gives disclosure documents or
statements as required
A financial services licensee commits an offence if the licensee
does not take reasonable steps to ensure that an authorised
representative of the licensee:
(a) complies with their obligations under this Part to give
disclosure documents or statements as and when required;
and
(b) without limiting paragraph (a), does not, in purported
compliance with obligations under this Part, give disclosure
documents or statements that are defective.
952I Offences if a Financial Services Guide (or Supplementary FSG)
does not comply with certain requirements
(1) A financial services licensee commits an offence if:
(a) the licensee:
(i) gives (see subsection (6)) a person a Financial Services
Guide in circumstances in which it is required by a
provision of this Part to be given to the person; or
(ii) gives (see subsection (6)), or makes available to, a
person a Financial Services Guide, reckless as to
whether the person will or may rely on the information
in it; and
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(b) the Financial Services Guide does not comply with
section 942A, subsection 942B(5) or 942DA(3) or
paragraph 942E(b).
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) A financial services licensee commits an offence if:
(a) the financial services licensee authorises the distribution of a
Financial Services Guide by an authorised representative of
the licensee; and
(b) the Financial Services Guide does not comply with
section 942A, subsection 942B(5) or 942DA(3) or
paragraph 942E(b).
(3) A financial services licensee commits an offence if:
(a) the licensee:
(i) gives (see subsection (6)) a person a Supplementary
Financial Services Guide in circumstances in which it is
required by a provision of this Part to be given to the
person; or
(ii) gives (see subsection (6)), or makes available to, a
person a Supplementary Financial Services Guide,
reckless as to whether the person will or may rely on the
information in it; and
(b) the Supplementary Financial Services Guide does not comply
with section 943B or 943C.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(4) A financial services licensee commits an offence if:
(a) the financial services licensee authorises the distribution of a
Supplementary Financial Services Guide by an authorised
representative of the licensee; and
(b) the Supplementary Financial Services Guide does not comply
with section 943B or 943C.
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(5) For the purposes of an offence based on subsection (1), (2), (3) or
(4), strict liability applies to paragraph (b) of that subsection.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) In this section, give means give by any means (including orally),
and is not limited to the meaning it has because of section 940C.
952J Offence if a Statement of Advice does not comply with certain
requirements
(1) A financial services licensee, or an authorised representative of a
financial services licensee, commits an offence if:
(a) the licensee or representative gives (see subsection (3)) a
person a Statement of Advice in circumstances in which it is
required by a provision of this Part to be given to the person;
and
(b) the Statement of Advice does not comply with section 947A
or 947E.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (b) of that subsection.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) In this section, give means give by any means (including orally),
and is not limited to the meaning it has because of section 940C.
952K Offence if authorised representative gives out unauthorised
Financial Services Guide (or Supplementary FSG)
An authorised representative of a financial services licensee
commits an offence if:
(a) the representative:
(i) gives a person a Financial Services Guide, or a
Supplementary Financial Services Guide, in
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circumstances in which it is required by a provision of
this Part to be given to the person; or
(ii) gives, or makes available to, a person a Financial
Services Guide, or a Supplementary Financial Services
Guide, reckless as to whether the person will or may
rely on the information in it; and
(b) the licensee has not authorised the distribution by the
representative of the Financial Services Guide or the
Supplementary Financial Services Guide.
Note: A defendant bears an evidential burden in relation to the matters in
subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
952L Offences if financial services licensee or authorised
representative becomes aware that a Financial Services
Guide (or Supplementary FSG) is defective
(1) A financial services licensee commits an offence if:
(a) the licensee has authorised an authorised representative of the
licensee to distribute a Financial Services Guide or a
Supplementary Financial Services Guide; and
(b) the licensee becomes aware that the Financial Services
Guide, or the Supplementary Financial Services Guide, is
defective; and
(c) the licensee does not, as soon as practicable, give the
representative a direction that satisfies one or more of the
following subparagraphs:
(i) a direction not to distribute the Financial Services Guide
or the Supplementary Financial Services Guide;
(ii) a direction not to distribute the Financial Services Guide
unless it is accompanied by a Supplementary Financial
Services Guide that corrects the deficiency;
(iii) a direction not to distribute the Financial Services Guide
or the Supplementary Financial Services Guide without
first altering it in a way that is specified in the direction,
being a way that corrects the deficiency and that
complies with section 942E or 943F.
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(2) An authorised representative commits an offence if:
(a) the representative is given a direction under subsection (1);
and
(b) the representative does not comply with the direction.
(3) An authorised representative of a financial services licensee
commits an offence if:
(a) the licensee has authorised the representative to distribute a
Financial Services Guide or a Supplementary Financial
Services Guide; and
(b) the representative becomes aware that the Financial Services
Guide, or the Supplementary Financial Services Guide, is
defective; and
(c) the representative does not, as soon as practicable, notify the
licensee of the particulars of the deficiency.
(4) In this section, a reference to distributing a Financial Services
Guide or a Supplementary Financial Services Guide includes (but
is not limited to) giving or reading the document or statement to
another person in purported compliance with a requirement of this
Part.
952M Offence of unauthorised alteration of Financial Services
Guide or Supplementary Financial Services Guide
A person commits an offence if:
(a) the person engages in conduct that results in an alteration of a
Financial Services Guide or a Supplementary Financial
Services Guide that:
(i) has been prepared by or on behalf of a particular
financial services licensee; or
(ii) the distribution of which by the person has been
authorised by a particular financial services licensee;
and
(b) the alteration results in the Financial Services Guide or
Supplementary Financial Services Guide becoming defective,
or more defective than it previously was; and
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(c) the alteration is not made with the authority of the licensee;
and
(d) the person, in purported compliance with a provision of this
Part, gives the altered Financial Services Guide or
Supplementary Financial Services Guide to another person.
Subdivision B—Civil liability
953A Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) if the disclosure document or statement is a Financial
Services Guide, a Supplementary Financial Services Guide,
or is information or a statement required by
subsection 941C(5), 941C(7) or 941D(2):
(i) there is a misleading or deceptive statement in the
disclosure document or statement; or
(ii) if it is a Financial Services Guide—there is an omission
from the Financial Services Guide of material required
by section 942B or 942C; or
(iii) if it is a Supplementary Financial Services Guide that is
given for the purposes of paragraph 941F(d)—there is
an omission from the Supplementary Financial Services
Guide of material required by that paragraph; or
(iv) if it is information or a statement required by
subsection 941C(5), 941C(7) or 941D(2)—there is an
omission from the document or statement of material
required by that subsection; or
(b) if the disclosure document or statement is a Statement of
Advice, or is information, a statement or a copy of a record
required by subsection 946AA(5), 946B(3), (6) or (8) or
946C(2):
(i) there is a misleading or deceptive statement in the
disclosure document or statement; or
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(ii) if it is a Statement of Advice—there is an omission from
the Statement of Advice of material required by
section 947B, 947C or 947D; or
(iii) if it is information, a statement or a copy of a record
required by subsection 946AA(5), 946B(3), (6) or (8) or
946C(2)—there is an omission from the information,
statement or copy of material required by that
subsection or section.
Note: In determining whether a Financial Services Guide is defective, the
effect of section 943D must be taken into account (section 943D takes
information and statements in a Supplementary Financial Services
Guide to be included in the Financial Services Guide it supplements).
disclosure document or statement means:
(a) a Financial Services Guide; or
(b) a Supplementary Financial Services Guide; or
(c) a Statement of Advice; or
(d) information, a statement or a copy of a record required by
subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6)
or (8) or 946C(2).
(1A) For the avoidance of doubt, if section 941E (information must be
up to date) is not complied with in relation to a Financial Services
Guide, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Financial Services
Guide is not as up to date as section 941E requires it to be—
the information so included constitutes a misleading
statement in the Financial Services Guide; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Financial Services
Guide—the failure to include the information constitutes an
omission from the Statement of material required by
section 942B or 942C.
Note: The effect of section 943D (information in a Supplementary Financial
Services Guide is taken to be contained in the Financial Services
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Guide it supplements) must be taken into account in determining
whether section 941E is complied with in relation to a Financial
Services Guide.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
953B Civil action for loss or damage
(1) This section applies in the following situations:
(a) a person:
(i) is required by a provision of this Part to give another
person (the client) a disclosure document or statement
(the required disclosure document or statement); and
(ii) does not give (within the meaning of section 940C) the
client anything purporting to be the required disclosure
document or statement by the time they are required to
do so; or
(b) a person:
(i) gives another person (the client) a disclosure document
or statement that is defective in circumstances in which
a disclosure document or statement is required by a
provision of this Part to be given to the client; or
(ii) is a financial services licensee and gives, or makes
available to, another person (the client) a disclosure
document or statement, being a Financial Services
Guide or a Supplementary Financial Services Guide,
that is defective, reckless as to whether the client will or
may rely on the information in it; or
(c) a person contravenes section 949A or 949B.
In paragraph (b), give means give by any means (including orally),
and is not limited to the meaning it has because of section 940C.
(2) In a situation to which this section applies, if a person suffers loss
or damage:
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(a) if paragraph (1)(a) applies—because the client was not given
the disclosure document or statement that they should have
been given; or
(b) if paragraph (1)(b) applies—because the disclosure document
or statement the client was given was defective; or
(c) if paragraph (1)(c) applies—because of the contravention
referred to in that paragraph;
the person may, subject to subsection (6), recover the amount of
the loss or damage by action against the, or a, liable person (see
subsections (3) and (4)), whether or not that person (or anyone
else) has been convicted of an offence in respect of the matter
referred to in paragraph (a), (b) or (c).
(3) For the purposes of subsection (2), the, or a, liable person is:
(a) if the person first-referred to in paragraph (1)(a), (b) or (c) is
a financial services licensee—subject to subsection (4), that
person; or
(b) if the person first-referred to in paragraph (1)(a), (b) or (c) is
an authorised representative of only one financial services
licensee—that financial services licensee; or
(c) if the person first-referred to in paragraph (1)(a), (b) or (c) is
an authorised representative of more than one financial
services licensee:
(i) if, under the rules in section 917C, one of those
licensees is responsible for the person’s conduct—that
licensee; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the
person’s conduct—each of those licensees.
(3A) For the purposes of paragraph (3)(c):
(a) section 917C is taken to apply, despite section 917F; and
(b) section 917D is taken not to apply.
(4) If:
(a) paragraph (1)(b) applies; and
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(b) an alteration was made to the disclosure document or
statement before it was given to the client; and
(c) the alteration made the disclosure document or statement
defective, or more defective than it would otherwise have
been; and
(d) the alteration was not made by, or with the authority of, the
person who would, but for this subsection, be the liable
person because of paragraph (3)(a);
then, so far as a person has suffered loss or damage because the
disclosure document or statement was defective because of the
alteration, the liable person is the person who made the alteration,
rather than the person referred to in paragraph (d).
(5) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(6) A person is not liable under subsection (2) in a situation described
in paragraph (1)(b) if the person took reasonable steps to ensure
that the disclosure document or statement would not be defective.
(7) This section does not affect any liability that a person has under
any other law.
953C Additional powers of court to make orders
(1) The court dealing with an action under subsection 953B(2) may, in
addition to awarding loss or damage under that subsection and if it
thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client referred to in that subsection for or relating to a
financial product or a financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(2) Without limiting paragraph (1)(b), an order under that paragraph
may include an order for the return of money paid by a person,
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and/or an order for payment of an amount of interest specified in,
or calculated in accordance with, the order.
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Division 1 Preliminary
Section 960
424 Corporations Act 2001
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Part 7.7A—Best interests obligations and
remuneration
Division 1—Preliminary
960 Definitions
In this Part:
asset-based fee has the meaning given by section 964F.
basic banking product has the meaning given by section 961F.
conflicted remuneration has the meaning given by section 963A,
as affected by sections 963B, 963C and 963D.
consumer credit insurance has the same meaning as in the
Insurance Contracts Act 1984.
custodian, in relation to a registrable superannuation entity, has the
same meaning as in the Superannuation Industry (Supervision) Act
1993.
disclosure day has the meaning given by section 962J.
fee disclosure statement has the meaning given by
subsection 962H(1).
fee recipient has the meaning given by section 962C.
group life policy for members of a superannuation entity has the
meaning given by subsection 963B(2).
life policy for a member of a default superannuation fund has the
meaning given by subsection 963B(3).
ongoing fee has the meaning given by section 962B.
ongoing fee arrangement has the meaning given by section 962A.
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Corporations Act 2001 425
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reasonable investigation has a meaning affected by section 961D.
reasonably apparent:
(a) in Division 2—has the meaning given by section 961C; and
(b) in Subdivision B of Division 5—has the meaning given by
section 964H.
registrable superannuation entity has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
regulated superannuation fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
renewal notice has the meaning given by subsection 962K(2).
renewal notice day has the meaning given by subsection 962L(1).
renewal period has the meaning given by subsection 962L(2).
representative of a financial services licensee has the same
meaning as in Part 7.6 (see section 910A).
responsible licensee, in relation to a contravention of a provision
of this Part, has the meaning given by section 961P.
RSE licensee has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
volume-based shelf-space fee has a meaning affected by
section 964A.
960A No contracting out
A condition of a contract or other arrangement is void if it provides
that a party to the contract is required or bound to waive any right
under this Part, or waive the compliance with any requirement of
this Part.
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Division 1 Preliminary
Section 960B
426 Corporations Act 2001
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960B Obligations under this Part in addition to other obligations
The obligations imposed on a person under this Part are in addition
to any other obligations to which the person is subject under this
Act or any other law.
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Section 961
Corporations Act 2001 427
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Division 2—Best interests obligations
Subdivision A—Preliminary
961 Application of this Division
(1) This Division applies in relation to the provision of personal advice
(the advice) to a person (the client) as a retail client.
(2) The individual who is to provide the advice is referred to in this
Division as the provider.
(3) If 2 or more individuals are to provide the advice, each of those
individuals is referred to in this Division as the provider.
(4) An individual is a provider for the purposes of this Division even if
the individual is a representative of a financial services licensee
and is to provide the advice on behalf of that licensee.
(5) If it is not reasonably possible to identify the individual who is to,
or individuals who are to, provide the advice, the person who is to
provide the advice is the provider for the purposes of this Division.
(6) A person who offers personal advice through a computer program
is taken to be the person who is to provide the advice, and is the
provider for the purposes of this Division.
961A Application to a financial services licensee acting as an
authorised representative
If a financial services licensee is acting as an authorised
representative of another financial services licensee in relation to
the advice, this Division applies to the first licensee in relation to
the advice in that licensee’s capacity as an authorised
representative (rather than in the capacity of licensee).
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Section 961B
428 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Provider must act in the best interests of the
client
961B Provider must act in the best interests of the client
(1) The provider must act in the best interests of the client in relation
to the advice.
(2) The provider satisfies the duty in subsection (1), if the provider
proves that the provider has done each of the following:
(a) identified the objectives, financial situation and needs of the
client that were disclosed to the provider by the client
through instructions;
(b) identified:
(i) the subject matter of the advice that has been sought by
the client (whether explicitly or implicitly); and
(ii) the objectives, financial situation and needs of the client
that would reasonably be considered as relevant to
advice sought on that subject matter (the client’s
relevant circumstances);
(c) where it was reasonably apparent that information relating to
the client’s relevant circumstances was incomplete or
inaccurate, made reasonable inquiries to obtain complete and
accurate information;
(d) assessed whether the provider has the expertise required to
provide the client advice on the subject matter sought and, if
not, declined to provide the advice;
(e) if, in considering the subject matter of the advice sought, it
would be reasonable to consider recommending a financial
product:
(i) conducted a reasonable investigation into the financial
products that might achieve those of the objectives and
meet those of the needs of the client that would
reasonably be considered as relevant to advice on that
subject matter; and
(ii) assessed the information gathered in the investigation;
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(f) based all judgements in advising the client on the client’s
relevant circumstances;
(g) taken any other step that, at the time the advice is provided,
would reasonably be regarded as being in the best interests of
the client, given the client’s relevant circumstances.
Note: The matters that must be proved under subsection (2) relate to the
subject matter of the advice sought by the client and the circumstances
of the client relevant to that subject matter (the client’s relevant
circumstances). That subject matter and the client’s relevant
circumstances may be broad or narrow, and so the subsection
anticipates that a client may seek scaled advice and that the inquiries
made by the provider will be tailored to the advice sought.
Advice given by Australian ADIs—best interests duty satisfied if
certain steps are taken
(3) If:
(a) the provider is:
(i) an agent or employee of an Australian ADI; or
(ii) otherwise acting by arrangement with an Australian
ADI under the name of the Australian ADI; and
(b) the subject matter of the advice sought by the client relates
only to the following:
(i) a basic banking product;
(ii) a general insurance product;
(iii) consumer credit insurance;
(iv) a combination of any of those products;
the provider satisfies the duty in subsection (1) in relation to the
advice given in relation to the basic banking product and the
general insurance product if the provider takes the steps mentioned
in paragraphs (2)(a), (b) and (c).
General insurance products—best interests duty satisfied if certain
steps are taken
(4) To the extent that the subject matter of the advice sought by the
client is a general insurance product, the provider satisfies the duty
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Section 961C
430 Corporations Act 2001
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in subsection (1) if the provider takes the steps mentioned in
paragraphs (2)(a), (b) and (c).
Regulations
(5) The regulations may prescribe:
(a) a step, in addition to or substitution for the steps mentioned
in subsection (2), that the provider must, in prescribed
circumstances, prove that the provider has taken, to satisfy
the duty in subsection (1); or
(b) that the provider is not required, in prescribed circumstances,
to prove that the provider has taken a step mentioned in
subsection (2), to satisfy the duty in subsection (1); or
(c) circumstances in which the duty in subsection (1) does not
apply.
961C When is something reasonably apparent?
Something is reasonably apparent if it would be apparent to a
person with a reasonable level of expertise in the subject matter of
the advice that has been sought by the client, were that person
exercising care and objectively assessing the information given to
the provider by the client.
961D What is a reasonable investigation?
(1) A reasonable investigation into the financial products that might
achieve those of the objectives and meet those of the needs of the
client that would reasonably be considered relevant to advice on
the subject matter sought by the client does not require an
investigation into every financial product available.
(2) However, if the client requests the provider to consider a specified
financial product, a reasonable investigation into the financial
products that might achieve those of the objectives and meet those
of the needs of the client that would reasonably be considered
relevant to advice on the subject matter sought by the client
includes an investigation into that financial product.
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Section 961E
Corporations Act 2001 431
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961E What would reasonably be regarded as in the best interests of
the client?
It would reasonably be regarded as in the best interests of the client
to take a step, if a person with a reasonable level of expertise in the
subject matter of the advice that has been sought by the client,
exercising care and objectively assessing the client’s relevant
circumstances, would regard it as in the best interests of the client,
given the client’s relevant circumstances, to take that step.
961F What is a basic banking product?
Each of the following is a basic banking product:
(a) a basic deposit product;
(b) a facility for making non-cash payments (see section 763D);
(d) a facility for providing traveller’s cheques;
(e) any other product prescribed by regulations for the purposes
of this paragraph.
Subdivision C—Resulting advice must be appropriate to the
client
961G Resulting advice must be appropriate to the client
The provider must only provide the advice to the client if it would
be reasonable to conclude that the advice is appropriate to the
client, had the provider satisfied the duty under section 961B to act
in the best interests of the client.
Note: A responsible licensee or an authorised representative may contravene
a civil penalty provision if a provider fails to comply with this section
(see sections 961K and 961Q). The provider may be subject to a
banning order (see section 920A).
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Section 961H
432 Corporations Act 2001
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Subdivision D—Where resulting advice still based on
incomplete or inaccurate information
961H Resulting advice still based on incomplete or inaccurate
information
(1) If it is reasonably apparent that information relating to the
objectives, financial situation and needs of the client on which the
advice is based is incomplete or inaccurate, the provider must, in
accordance with subsections (2) and (3), warn the client that:
(a) the advice is, or may be, based on incomplete or inaccurate
information relating to the client’s relevant personal
circumstances; and
(b) because of that, the client should, before acting on the advice,
consider the appropriateness of the advice, having regard to
the client’s objectives, financial situation and needs.
(2) The warning must be given to the client at the same time as the
advice is provided and, subject to subsection (3), by the same
means as the advice is provided.
(3) If a Statement of Advice is the means by which the advice is
provided, or is given to the client at the same time as the advice is
provided, the warning may be given by including it in the
Statement of Advice.
Note: The Statement of Advice must at least contain a record of the warning
(see paragraphs 947B(2)(f) and 947C(2)(g)).
(4) If 2 or more individuals provide the advice and one of those
individuals provides a warning in accordance with this section, the
other individuals are taken to have complied with this section.
(5) Nothing in this section affects the duty of the provider under
section 961B to make reasonable inquiries to obtain complete and
accurate information.
Note: A responsible licensee or an authorised representative may contravene
a civil penalty provision if a provider fails to comply with this section
(see sections 961K and 961Q). The provider may be subject to a
banning order (see section 920A).
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Section 961J
Corporations Act 2001 433
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision E—Provider to give priority to the client’s interests
961J Conflict between client’s interests and those of provider,
licensee, authorised representative or associates
(1) If the provider knows, or reasonably ought to know, that there is a
conflict between the interests of the client and the interests of:
(a) the provider; or
(b) an associate of the provider; or
(c) a financial services licensee of whom the provider is a
representative; or
(d) an associate of a financial services licensee of whom the
provider is a representative; or
(e) an authorised representative who has authorised the provider,
under subsection 916B(3), to provide a specified financial
service or financial services on behalf of a financial services
licensee; or
(f) an associate of an authorised representative who has
authorised the provider, under subsection 916B(3), to provide
a specified financial service or financial services on behalf of
a financial services licensee;
the provider must give priority to the client’s interests when giving
the advice.
Note: A responsible licensee or an authorised representative may contravene
a civil penalty provision if a provider fails to comply with this section
(see sections 961K and 961Q). The provider may be subject to a
banning order (see section 920A).
(2) If:
(a) the provider is:
(i) an agent or employee of an Australian ADI; or
(ii) otherwise acting by arrangement with an Australian
ADI under the name of the Australian ADI; and
(b) the subject matter of the advice sought by the client relates
only to the following:
(i) a basic banking product;
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Section 961K
434 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) a general insurance product;
(iii) consumer credit insurance;
(iv) a combination of any of those products;
subsection (1) does not apply to the extent that the advice relates to
a basic banking product or a general insurance product or a
combination of those 2 products.
(3) Subsection (1) does not apply to the extent that the subject matter
of the advice sought by the client is a general insurance product.
Subdivision F—Responsibilities of licensees under this Division
961K Civil penalty provision—sections 961B, 961G, 961H and 961J
(1) A financial services licensee contravenes this section if the licensee
contravenes section 961B, 961G, 961H or 961J.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A financial services licensee contravenes this section if:
(a) a representative, other than an authorised representative, of
the licensee contravenes section 961B, 961G, 961H or 961J;
and
(b) the licensee is the, or a, responsible licensee in relation to
that contravention.
Note: This subsection is a civil penalty provision (see section 1317E).
961L Licensees must ensure compliance
A financial services licensee must take reasonable steps to ensure
that representatives of the licensee comply with sections 961B,
961G, 961H and 961J.
Note: This section is a civil penalty provision (see section 1317E).
961M Civil action for loss or damage
(1) This section applies if the client suffers loss or damage because of
a contravention of a provision of this Division.
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Section 961M
Corporations Act 2001 435
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(2) A Court may order that one or more of the following persons
compensate the client for the amount of the loss or damage:
(a) if the person who contravenes the provision is a financial
services licensee—that licensee;
(b) if the person who contravenes the provision is a
representative of a financial services licensee, or 2 or more
financial services licensees—the, or a, responsible licensee in
relation to the contravention.
(3) The Court may make the order under this section:
(a) on its own initiative, during proceedings before the Court; or
(b) on the application of ASIC; or
(c) on the application of the client.
(4) In determining the damage suffered by the client, the Court may
include profits resulting from the contravention that are made by:
(a) if the person who contravenes the provision is a financial
services licensee—the licensee; or
(b) if the person who contravenes the provision is a
representative of a financial services licensee, or 2 or more
financial services licensees:
(i) the representative; and
(ii) where the Court’s order under subsection (2) relates to a
financial services licensee that is the, or a, responsible
licensee in relation to the contravention—the licensee.
(5) An order under this section may be made whether or not the
licensee against whom the order is made (or anyone else) has been
convicted of an offence, or been the subject of a civil penalty order,
in respect of the matter.
(6) An action to recover the amount of the loss or damage may be
begun at any time within 6 years after the contravention.
(7) An order under this section may be enforced as if it were a
judgement of the Court.
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Section 961N
436 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) This section does not affect any liability that a person has under
any other law.
961N Additional powers of Court to make orders
(1) The Court dealing with an action under subsection 961M(2) may,
in addition to awarding loss or damage under that subsection and if
it thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client for or relating to a financial product or a financial
service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(2) Without limiting paragraph (1)(b), an order under that paragraph
may include either or both of the following:
(a) an order for the return of money paid by a person;
(b) an order for the payment of an amount of interest specified
in, or calculated in accordance with, the order.
961P Responsible licensee
For the purposes of this Part, the, or a, responsible licensee, in
relation to a contravention of a provision of this Part, is:
(a) if the person who contravenes the provision is a
representative of only one financial services licensee—that
financial services licensee; or
(b) if the person who contravenes the provision is a
representative of more than one financial services licensee:
(i) if, under the rules in section 917C, one of those
licensees is responsible for the person’s conduct—that
licensee; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the
person’s conduct—each of those licensees.
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Section 961Q
Corporations Act 2001 437
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision G—Responsibilities of authorised representatives
under this Division
961Q Civil penalty provision—sections 961B, 961G, 961H and 961J
(1) An authorised representative of a financial services licensee
contravenes this section if the authorised representative
contravenes section 961B, 961G, 961H or 961J.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) Subsection (1) does not apply if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be
complied with in relation to the giving of personal advice;
and
(b) the authorised representative’s failure to comply with
section 961B, 961G, 961H or 961J occurred because the
representative was acting in reliance on that information or
those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
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Part 7.7A Best interests obligations and remuneration
Division 3 Charging ongoing fees to clients
Section 962
438 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Charging ongoing fees to clients
Subdivision A—Preliminary
962 Application of this Division
(1) This Division applies in a case where:
(a) a financial services licensee, or a representative of a financial
services licensee, enters into an ongoing fee arrangement
with another person (the client); and
(b) the arrangement has not terminated for any reason.
(2) This Division also applies in a case where:
(a) the rights of a financial services licensee, or a representative
of a financial services licensee, under an ongoing fee
arrangement are assigned to another person; and
(b) the arrangement has not terminated for any reason.
962A Ongoing fee arrangements
Ongoing fee arrangements
(1) If:
(a) a financial services licensee gives personal advice to a person
as a retail client; and
(b) that person enters into an arrangement with the financial
services licensee, or a representative of the financial services
licensee; and
(c) under the terms of the arrangement, a fee (however described
or structured) is to be paid during a period of more than 12
months;
the arrangement is an ongoing fee arrangement.
(2) If:
(a) a representative of a financial services licensee gives
personal advice to a person as a retail client; and
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Section 962A
Corporations Act 2001 439
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) that person enters into an arrangement with the representative
or the financial services licensee; and
(c) under the terms of the arrangement, a fee (however described
or structured) is to be paid during a period of more than 12
months;
the arrangement is an ongoing fee arrangement.
Paying for advice by instalments
(3) Despite subsections (1) and (2), an arrangement is not an ongoing
fee arrangement if each of the following is satisfied:
(a) the total of the fees payable under the terms of the
arrangement is fixed at the time the arrangement is entered
into;
(b) the total of the fees payable under the terms of the
arrangement is specified in the arrangement;
(c) the fees payable under the terms of the arrangement are to be
paid by instalments over a fixed period specified in the
arrangement;
(d) the fees payable under the terms of the arrangement can
reasonably be characterised as relating to personal advice
given to the person before the arrangement is entered into;
(e) under the terms of the arrangement, there is no fee payment
of which, or the amount of which, is dependent on the
amount invested by the person, or the amount in relation to
which personal advice is given;
(f) the person cannot opt out of payment of any of the fees
payable under the terms of the arrangement.
Insurance premiums
(4) Despite subsections (1) and (2), an arrangement is not an ongoing
fee arrangement if the only fee payable under the arrangement is
an insurance premium.
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Division 3 Charging ongoing fees to clients
Section 962B
440 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Other prescribed arrangements
(5) Despite subsections (1) and (2), an arrangement is not an ongoing
fee arrangement if it is an arrangement of a prescribed kind that
relates to a fee that is prescribed as a product fee.
962B Ongoing fees
A fee that is payable under an ongoing fee arrangement is referred
to in this Division as an ongoing fee.
962C Fee recipients
(1) Where:
(a) a financial services licensee enters into an ongoing fee
arrangement; and
(b) the rights of the licensee under the arrangement have not
been assigned to another person;
the licensee is the fee recipient in relation to the arrangement.
(2) Where:
(a) a representative of a financial services licensee enters into an
ongoing fee arrangement; and
(b) the rights of the representative under the arrangement have
not been assigned to another person;
the representative is the fee recipient in relation to the
arrangement.
(3) Where the rights of a financial services licensee, or a representative
of a financial services licensee, under an ongoing fee arrangement
have been assigned to another person, the person who currently
holds those rights is the fee recipient in relation to the
arrangement.
962CA Exemption from application of opt-in requirement
(1) ASIC may exempt a person, or a class of persons, from
section 962K (the opt-in requirement), if ASIC is satisfied that the
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Section 962D
Corporations Act 2001 441
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
person is, or persons of that class are, bound by a code of conduct
approved by ASIC for the purposes of this section.
(2) A code of conduct is approved by ASIC for the purposes of this
section if:
(a) the code of conduct is approved by ASIC under
section 1101A; and
(b) ASIC is satisfied that the code of conduct obviates the need
for persons bound by the code to be bound by the opt-in
requirement; and
(c) ASIC is satisfied of any other matters prescribed by the
regulations.
(3) The exemption must be in writing and ASIC must publish notice of
it in the Gazette.
Subdivision B—Termination, disclosure and renewal
962D Application of this Subdivision
(1) This Subdivision only applies where:
(a) the client has not been provided with personal advice as a
retail client before the application day by:
(i) in a case where the client has entered into an ongoing
fee arrangement with a financial services licensee—the
financial services licensee or a person acting as a
representative of the financial services licensee; or
(ii) in a case where the client has entered into an ongoing
fee arrangement with a person acting as a representative
of a financial services licensee—the representative or
the financial services licensee; and
(b) the client enters into the ongoing fee arrangement on or after
the application day.
(2) In this section:
application day means:
(a) where:
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Section 962E
442 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) the client enters into the ongoing fee arrangement with a
financial services licensee, or a person acting as a
representative of a financial services licensee; and
(ii) the financial services licensee has lodged notice with
ASIC in accordance with subsection 967(1) that the
obligations and prohibitions under this Part are to apply
to the licensee and persons acting as representatives of
the licensee, on and from a day specified in the notice;
the day specified in the notice; or
(b) in any other case—1 July 2013.
962E Client may terminate arrangement at any time
(1) It is a condition of the ongoing fee arrangement that the client may
terminate the arrangement at any time.
(2) Any condition of the ongoing fee arrangement, or any other
arrangement, that requires the client to pay an amount on
terminating the ongoing fee arrangement is void to the extent that
the amount exceeds the sum of:
(a) any liability that the client has accrued but not satisfied under
the ongoing fee arrangement before the termination; and
(b) the costs of the current fee recipient incurred solely and
directly because of the termination.
962F Arrangement terminates if this Subdivision not complied with
(1) It is a condition of the ongoing fee arrangement that the
arrangement terminates if section 962G (the disclosure obligation)
or section 962K (the renewal notice obligation) has not been
complied with in relation the arrangement, whether by the current
or a previous fee recipient.
(2) The client is not taken to have waived the client’s rights under the
condition (subject to subsection (3)), or to have entered into a new
ongoing fee arrangement, if the client makes a payment of an
ongoing fee after a failure to comply with section 962G or
section 962K in relation to the ongoing fee arrangement.
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Section 962G
Corporations Act 2001 443
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) However, if the client makes a payment of an ongoing fee after a
failure to comply with section 962G or section 962K in relation to
the ongoing fee arrangement, the fee recipient is not obliged to
refund the payment.
Note: A Court may order that the fee recipient refund the amount (see
section 1317GA).
962G Fee recipient must give fee disclosure statement
(1) The current fee recipient in relation to an ongoing fee arrangement
must, before the end of a period of 60 days beginning on the
disclosure day for the arrangement, give the client a fee disclosure
statement in relation to the arrangement.
(2) The regulations may provide that subsection (1) does not apply in a
particular situation.
962H Fee disclosure statements
(1) A fee disclosure statement, in relation to an ongoing fee
arrangement, is a statement in writing that:
(a) includes the information required under this section; and
(b) relates to:
(i) a period of 12 months (the previous year) that ends on a
day that is no more than 60 days before that on which
the statement is given; and
(ii) any other period prescribed by the regulations.
(2) The following information is required for a fee disclosure
statement in relation to an ongoing fee arrangement, subject to
subsection (3):
(a) the amount of each ongoing fee paid under the arrangement
by the client in the previous year, expressed in Australian
dollars unless an alternative is provided in the regulations;
(c) information about the services that the client was entitled to
receive from the current and any previous fee recipient under
the arrangement during the previous year;
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Section 962J
444 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) information about the services that the client received from
the current and any previous fee recipient under the
arrangement during the previous year;
(f) information about any other prescribed matters, including
information that relates to a period that begins after the
previous year.
(3) The regulations may provide either or both of the following:
(a) that particular information is not required for a fee disclosure
statement, either in a particular situation or generally;
(b) a more detailed statement of the information that is required
for a fee disclosure statement, either in a particular situation
or generally.
962J Disclosure day
The disclosure day for an ongoing fee arrangement is:
(a) if no fee disclosure statement has been given to the client in
relation to the arrangement since the arrangement was
entered into—the anniversary of the day on which the
arrangement was entered into; and
(b) if a fee disclosure statement in relation to the arrangement
has been given to the client since the arrangement was
entered into—the anniversary of the day immediately after
the end of the earliest period of 12 months to which the last
fee disclosure statement given to the client related.
962K Fee recipient must give renewal notice
(1) The current fee recipient in relation to an ongoing fee arrangement
must, before the end of a period of 60 days beginning on the
renewal notice day for the arrangement, give the client a renewal
notice and a fee disclosure statement in relation to the arrangement.
(2) A renewal notice, in relation to an ongoing fee arrangement, is a
notice in writing that includes:
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Section 962L
Corporations Act 2001 445
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a statement that the client may renew the arrangement by
giving the current fee recipient notice in writing of the
election; and
(b) a statement that the arrangement will terminate, and no
further advice will be provided or fee charged under it, if the
client does not elect to renew the arrangement; and
(c) a statement that the client will be taken to have elected not to
renew the arrangement if the client does not give the current
fee recipient notice in writing of an election to renew before
the end of the renewal period; and
(d) a statement that the renewal period is a period of 30 days
beginning on the day on which the renewal notice and fee
disclosure statement is given to the client.
(3) The regulations may provide that subsection (1) does not apply in a
particular situation.
962L Renewal notice day and renewal period
(1) The renewal notice day for an ongoing fee arrangement means:
(a) if the arrangement has not previously been renewed—the
second anniversary of the day on which the arrangement was
entered into; and
(b) if the arrangement has previously been renewed—the second
anniversary of the last day on which the arrangement was
renewed.
(2) The renewal period for an ongoing fee arrangement is a period of
30 days beginning on the day on which the current fee recipient in
relation to the arrangement gives the client a renewal notice and a
fee disclosure statement in relation to the arrangement.
962M If client notifies fee recipient that client does not wish to
renew
If the client notifies the current fee recipient in relation to the
ongoing fee arrangement in writing within the renewal period for
the arrangement that the client does not wish to renew the
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Section 962N
446 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
arrangement, the arrangement terminates on the day on which the
notification is given.
962N If client does not notify fee recipient that client wishes to
renew
If the client does not notify the current fee recipient in relation to
the ongoing fee arrangement in writing within the renewal period
for the arrangement that the client wishes to renew the
arrangement, the arrangement terminates at the end of a further
period of 30 days after the end of the renewal period for the
arrangement.
962P Civil penalty provision—charging ongoing fees after
arrangement terminated
If an ongoing fee arrangement terminates for any reason, the
current fee recipient in relation to the arrangement must not
continue to charge an ongoing fee.
Note: This section is a civil penalty provision (see section 1317E).
962Q Effect of termination
To avoid doubt, if, under an ongoing fee arrangement, the
continued provision of a service to the client by the fee recipient in
relation to the arrangement is dependent on the continued payment
of an ongoing fee, on termination of the arrangement, the
obligation to continue to provide the service also terminates.
Subdivision C—Disclosure for arrangements to which
Subdivision B does not apply
962R Application of this Subdivision
(1) This Subdivision applies, on and from the application day, to an
ongoing fee arrangement to which Subdivision B does not apply.
(2) In this section:
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Section 962S
Corporations Act 2001 447
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
application day means:
(a) where:
(i) the client has entered into the ongoing fee arrangement
with a financial services licensee, or a person acting as a
representative of a financial services licensee; and
(ii) that licensee or representative is the fee recipient in
relation to the arrangement on 1 July 2012; and
(iii) the financial services licensee has lodged notice with
ASIC in accordance with subsection 967(1) that the
obligations and prohibitions under this Part are to apply
to the licensee and persons acting as representatives of
the licensee, on and from a day specified in the notice;
the day specified in the notice; or
(b) where:
(i) the client has entered into the ongoing fee arrangement
with a financial services licensee, or a person acting as a
representative of a financial services licensee; and
(ii) because the rights of the licensee or representative under
the arrangement have been assigned, another person is
the fee recipient in relation to the arrangement on 1 July
2012; and
(iii) a notice has been lodged with ASIC in accordance with
subsection 967(1) or (3) that the obligations and
prohibitions under this Part are to apply to the other
person, on and from a day specified in the notice;
the day specified in the notice; or
(c) in any other case—1 July 2013.
962S Fee recipient must give fee disclosure statement
(1) The current fee recipient in relation to the ongoing fee arrangement
must, before the end of a period of 60 days beginning on the
disclosure day for the arrangement, give the client a fee disclosure
statement in relation to the arrangement.
Note: This subsection is a civil penalty provision (see section 1317E).
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Division 3 Charging ongoing fees to clients
Section 962S
448 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The regulations may provide that subsection (1) does not apply in a
particular situation.
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Conflicted remuneration Division 4
Section 963
Corporations Act 2001 449
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Conflicted remuneration
Subdivision A—Preliminary
963 Application to a financial services licensee acting as an
authorised representative
If a financial services licensee is acting as an authorised
representative of another financial services licensee in relation to
financial product advice, this Division applies to the first licensee
in relation to the advice in that licensee’s capacity as an authorised
representative (rather than in the capacity of licensee).
Subdivision B—What is conflicted remuneration?
963A Conflicted remuneration
Conflicted remuneration means any benefit, whether monetary or
non-monetary, given to a financial services licensee, or a
representative of a financial services licensee, who provides
financial product advice to persons as retail clients that, because of
the nature of the benefit or the circumstances in which it is given:
(a) could reasonably be expected to influence the choice of
financial product recommended by the licensee or
representative to retail clients; or
(b) could reasonably be expected to influence the financial
product advice given to retail clients by the licensee or
representative.
Note: A reference in this Subdivision (including sections 963A, 963B, 963C
and 963D) to giving a benefit includes a reference to causing or
authorising it to be given (see section 52).
963B Monetary benefit given in certain circumstances not conflicted
remuneration
(1) Despite section 963A, a monetary benefit given to a financial
services licensee, or a representative of a financial services
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Section 963B
450 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
licensee, who provides financial product advice to persons as retail
clients is not conflicted remuneration in the circumstances set out
in any of the following paragraphs:
(a) the benefit is given to the licensee or representative solely in
relation to a general insurance product;
(b) the benefit is given to the licensee or representative solely in
relation to a life risk insurance product, other than:
(i) a group life policy for members of a superannuation
entity (see subsection (2)); or
(ii) a life policy for a member of a default superannuation
fund (see subsection (3));
(c) each of the following is satisfied:
(i) the benefit is given to the licensee or representative in
relation to the issue or sale of a financial product to a
person;
(ii) financial product advice in relation to the product, or
products of that class, has not been given to the person
as a retail client by the licensee or representative in the
12 months immediately before the benefit is given;
(d) the benefit is given to the licensee or representative by a
retail client in relation to:
(i) the issue or sale of a financial product by the licensee or
representative to the client; or
(ii) financial product advice given by the licensee or
representative to the client;
(e) the benefit is a prescribed benefit or is given in prescribed
circumstances.
Note: Under the governing rules of some regulated superannuation funds, a
member may seek advice on the basis that the trustee of the fund will
pay the licensee or representative for the advice and then recover the
amount paid from the assets of the fund attributed to that member. In
that case, the member has caused or authorised the amount to be paid
to the licensee or representative and so, because of section 52 of this
Act, paragraph (1)(d) would apply to that amount. This does not affect
the trustee’s obligations under section 62 of the Superannuation
Industry (Supervision) Act 1993 (which deals with the purposes for
which a trustee may act in maintaining a regulated superannuation
fund).
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Section 963B
Corporations Act 2001 451
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A life risk insurance product is a group life policy for members of
a superannuation entity if the product is issued to an RSE licensee
of a registrable superannuation entity, or a custodian in relation to a
registrable superannuation entity, for the benefit of a class of
members of the entity.
(3) A life risk insurance product is a life policy for a member of a
default superannuation fund if:
(a) the product is issued to an RSE licensee of a registrable
superannuation entity, or a custodian in relation to a
registrable superannuation entity, for the benefit of a person
who is a member of the entity; and
(b) the person has not given written notice to an employer of the
person that the fund is the person’s chosen fund, but the
employer of the person makes contributions to the fund for
the benefit of the person.
Note: Superannuation guarantee surcharge may be imposed on an employer
if the employer does not make contributions to a superannuation fund
for the benefit of its employees. If an employee does not notify the
employer of the employee’s chosen fund, the employer is still able to
satisfy its obligations by making contributions to certain funds (see the
Superannuation Guarantee (Administration) Act 1992).
(4) The regulations may prescribe circumstances in which, despite a
provision of this section, all or part of a benefit is to be treated as
conflicted remuneration.
Note: The expression intrafund advice is often used to describe financial
product advice given by a trustee (or an employee of, or another
person acting under arrangement with, the trustee) of a regulated
superannuation fund to its members, where that advice is not of a kind
to which the prohibition in section 99F of the Superannuation Industry
(Supervision) Act 1993 applies. (Section 99F of that Act prohibits
trustees of regulated superannuation funds from passing on the cost of
providing certain kinds of financial product advice in relation to one
member of the fund to another.)
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Section 963C
452 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
963C Non-monetary benefit given in certain circumstances not
conflicted remuneration
(1) Despite section 963A, a non-monetary benefit given to a financial
services licensee, or a representative of a financial services
licensee, who provides financial product advice to persons as retail
clients is not conflicted remuneration in the circumstances set out
in any of the following paragraphs:
(a) the benefit is given to the licensee or representative solely in
relation to a general insurance product;
(b) each of the following is satisfied:
(i) the benefit is of less than an amount prescribed;
(ii) identical or similar benefits are not given on a frequent
or regular basis;
(c) the benefit satisfies each of the following:
(i) the benefit has a genuine education or training purpose;
(ii) the benefit is relevant to the carrying on of a financial
services business;
(iii) the benefit complies with regulations made for the
purposes of this subparagraph;
(d) the benefit satisfies each of the following:
(i) the benefit is the provision of information technology
software or support;
(ii) the benefit is related to the provision of financial
product advice to persons as retail clients in relation to
the financial products issued or sold by the benefit
provider;
(iii) the benefit complies with regulations made for the
purposes of this subparagraph;
(e) the benefit is given to the licensee or representative by a
retail client in relation to:
(i) the issue or sale of a financial product by the licensee or
representative to the client; or
(ii) financial product advice given by the licensee or
representative to the client;
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Section 963D
Corporations Act 2001 453
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(f) the benefit is a prescribed benefit or is given in prescribed
circumstances.
(2) The regulations may prescribe circumstances in which, despite
subsection (1), all or part of a benefit is to be treated as conflicted
remuneration.
963D Benefits for employees etc. of ADIs
(1) This section applies if:
(a) a monetary or non-monetary benefit is given to a financial
services licensee, or a representative of a financial services
licensee; and
(b) the benefit is in whole or in part remuneration for work
carried out, or to be carried out, by the licensee or
representative:
(i) as an agent or employee of an Australian ADI; or
(ii) in otherwise acting by arrangement with an Australian
ADI under the name of the Australian ADI.
(2) If:
(a) access to the benefit, or the amount of the benefit, is in whole
or in part dependent on the licensee or representative
recommending:
(i) a basic banking product; or
(ii) a general insurance product; or
(iii) consumer credit insurance; and
(b) the licensee or representative does not, in the course of
recommending any, or any combination, of those products
give other financial product advice that does not relate to any
of those products;
to the extent that the benefit relates to the recommendation of any,
or any combination of, the products mentioned in paragraph (a),
the benefit is not conflicted remuneration.
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Section 963E
454 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The regulations may prescribe circumstances in which, despite
subsection (2), all or part of a benefit is to be treated as conflicted
remuneration.
Subdivision C—Ban on conflicted remuneration
963E Licensee must not accept conflicted remuneration
(1) A financial services licensee must not accept conflicted
remuneration.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A financial services licensee contravenes this section if:
(a) a representative, other than an authorised representative, of
the licensee accepts conflicted remuneration; and
(b) the licensee is the, or a, responsible licensee in relation to the
contravention.
Note: This subsection is a civil penalty provision (see section 1317E).
963F Licensee must ensure compliance
A financial services licensee must take reasonable steps to ensure
that representatives of the licensee do not accept conflicted
remuneration.
Note: This section is a civil penalty provision (see section 1317E).
963G Authorised representative must not accept conflicted
remuneration
(1) An authorised representative of a financial services licensee must
not accept conflicted remuneration.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) Subsection (1) does not apply if:
(a) the licensee had provided the authorised representative with
information about the nature of the benefit to be accepted by
the authorised representative; and
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Section 963H
Corporations Act 2001 455
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) at the time the authorised representative accepted the benefit,
the representative was not aware that the benefit was
conflicted remuneration because the representative was
acting in reliance on that information; and
(c) the representative’s reliance on that information was
reasonable.
963H Other representatives must not accept conflicted
remuneration
A representative, other than an authorised representative, of a
financial services licensee must not accept conflicted remuneration
unless it is in circumstances for which an employer of the licensee
or representative is liable under section 963J.
Note: A representative who contravenes this section may be subject to a
banning order (see section 920A).
963J Employer must not give employees conflicted remuneration
An employer of a financial services licensee, or a representative of
a financial services licensee, must not give the licensee or
representative conflicted remuneration for work carried out, or to
be carried out, by the licensee or representative as an employee of
the employer.
Note: This section is a civil penalty provision (see section 1317E).
963K Product issuer or seller must not give conflicted remuneration
An issuer or seller of a financial product must not give a financial
services licensee, or a representative of a financial services
licensee, conflicted remuneration.
Note: This section is a civil penalty provision (see section 1317E).
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Chapter 7 Financial services and markets
Part 7.7A Best interests obligations and remuneration
Division 4 Conflicted remuneration
Section 963L
456 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
963L Volume-based benefits presumed to be conflicted
remuneration
It is presumed for the purposes of this Division that a benefit of
one of the following kinds is conflicted remuneration, unless the
contrary is proved:
(a) a benefit access to which, or the value of which, is wholly or
partly dependent on the total value of financial products of a
particular class, or particular classes:
(i) recommended by a financial services licensee, or a
representative of a financial services licensee, to retail
clients, or a class of retail clients; or
(ii) acquired by retail clients, or a class of retail clients, to
whom a financial services licensee, or a representative
of a financial services licensee, provides financial
product advice;
(b) a benefit access to which, or the value of which, is wholly or
partly dependent on the number of financial products of a
particular class, or particular classes:
(i) recommended by a financial services licensee, or a
representative of a financial services licensee, to retail
clients, or a class of retail clients; or
(ii) acquired by retail clients, or a class of retail clients, to
whom a financial services licensee, or a representative
of a financial services licensee, provides financial
product advice.
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Other banned remuneration Division 5
Section 964
Corporations Act 2001 457
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Other banned remuneration
Subdivision A—Volume-based shelf-space fees
964 Application
(1) This Subdivision applies if:
(a) a financial services licensee or an RSE licensee (the platform
operator) is, or offers to be, the provider of a custodial
arrangement; and
(b) a monetary or non-monetary benefit is given, or to be given,
by a financial services licensee or an RSE licensee (the funds
manager) to the platform operator; and
(c) a financial product to which the custodial arrangement relates
is a financial product in which the funds manager deals (the
funds manager’s financial product).
(2) In this Subdivision:
custodial arrangement has the same meaning as it has in
subsection 1012IA(1), subject to subsection (3).
provider has the same meaning as in subsection 1012IA(1).
(3) The definition of custodial arrangement in subsection 1012IA(1)
is to be read as if the reference in that definition to an instruction
included a reference to:
(a) a direction of the kind mentioned in paragraph 58(2)(d) or
(da) of the Superannuation Industry (Supervision) Act 1993
that will involve the acquisition of a particular financial
product, or a financial product of a particular kind; and
(b) a direction of the kind mentioned in subsection 52B(4) of the
Superannuation Industry (Supervision) Act 1993 that will
involve the acquisition of a particular financial product, or a
financial product of a particular kind.
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Part 7.7A Best interests obligations and remuneration
Division 5 Other banned remuneration
Section 964A
458 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) A reference to a kind of financial product in subsection (3) has the
same meaning in that subsection as it has in the definition of
custodial arrangement in subsection 1012IA(1).
964A Platform operator must not accept volume-based shelf-space
fees
(1) The platform operator must not accept the benefit if it is a
volume-based shelf-space fee.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) Subject to subsection (3), the benefit is presumed to be a
volume-based shelf-space fee if the benefit, or the value of benefit,
is wholly or partly dependent on the total number or value of the
funds manager’s financial products of a particular class, or
particular classes, to which the custodial arrangement relates.
(3) If it is proved that all or part of the benefit is of a kind specified in
one of the following paragraphs then, to the extent that the benefit
is of that kind, it is not presumed to be a volume-based shelf space
fee:
(a) a reasonable fee for a service provided to the funds manager
by the platform operator or another person;
(b) a discount on an amount payable, or a rebate of an amount
paid, to the funds manager by the platform operator, the
value of which does not exceed an amount that may
reasonably be attributed to efficiencies gained by the funds
manager because of the number or value of financial products
in relation to which the funds manager provides services to
the platform operator, or through the platform operator to
another person.
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Other banned remuneration Division 5
Section 964B
Corporations Act 2001 459
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision B—Asset-based fees on borrowed amounts
964B Application
This Subdivision applies where a financial services licensee, or a
representative of a financial services licensee, provides financial
product advice (the advice) to a person (the client) as a retail client.
964C Application to a financial services licensee acting as an
authorised representative
If a financial services licensee is acting as an authorised
representative of another financial services licensee in relation to
the advice, this Subdivision applies to the first licensee in relation
to the advice in that licensee’s capacity as an authorised
representative (rather than in the capacity of licensee).
964D Financial services licensees must not charge asset-based fees
on borrowed amounts
(1) The financial services licensee must not charge an asset-based fee
on a borrowed amount used or to be used to acquire financial
products by or on behalf of the client.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A financial services licensee contravenes this section if:
(a) a representative, other than an authorised representative, of
the licensee charges an asset-based fee on a borrowed amount
used or to be used to acquire financial products by or on
behalf of the client; and
(b) the licensee is the, or a, responsible licensee in relation to the
contravention.
Note: This subsection is a civil penalty provision (see section 1317E).
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Part 7.7A Best interests obligations and remuneration
Division 5 Other banned remuneration
Section 964E
460 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Exceptions
(3) Subsections (1) and (2) do not apply in relation to a borrowed
amount if it is not reasonably apparent that the amount has been
borrowed.
(4) The regulations may provide that subsections (1) and (2) do not
apply in prescribed circumstances.
Duty to make reasonable inquiries
(5) Nothing in this section affects the duty of the financial services
licensee, or the representative of the financial services licensee,
under section 961B to make reasonable inquiries to obtain
complete and accurate information.
964E Authorised representatives must not charge asset-based fees
on borrowed amounts
(1) The authorised representative of the financial services licensee
must not charge an asset-based fee on a borrowed amount used or
to be used to acquire financial products by or on behalf of the
client.
Note: This subsection is a civil penalty provision (see section 1317E).
Exceptions
(2) Subsection (1) does not apply in relation to a borrowed amount if it
is not reasonably apparent that the amount has been borrowed.
(3) The regulations may provide that subsection (1) does not apply in
prescribed circumstances.
Duty to make reasonable inquiries
(4) Nothing in this section affects the duty of the authorised
representative under section 961B to make reasonable inquiries to
obtain complete and accurate information.
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Other banned remuneration Division 5
Section 964F
Corporations Act 2001 461
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
964F What is an asset-based fee?
A fee for providing financial product advice to a person as a retail
client is an asset-based fee to the extent that it is dependent upon
the amount of funds used or to be used to acquire financial
products by or on behalf of the person.
964G Meaning of borrowed
(1) In this Subdivision:
borrowed means borrowed in any form, whether secured or
unsecured, including through:
(a) a credit facility within the meaning of the regulations; and
(b) a margin lending facility.
(2) To avoid doubt, an amount is no longer borrowed to the extent that
it has been repaid.
964H When is something reasonably apparent?
Something is reasonably apparent if it would be apparent to a
person with a reasonable level of expertise in the subject matter of
the advice that has been sought by the client, were that person
exercising care and objectively assessing the information given to
the financial services licensee, or the representative of the financial
services licensee, by the client.
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Chapter 7 Financial services and markets
Part 7.7A Best interests obligations and remuneration
Division 6 Anti-avoidance
Section 965
462 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Anti-avoidance
965 Anti-avoidance
(1) Subject to subsection (2), a person must not, either alone or
together with one or more other persons, enter into, begin to carry
out or carry out a scheme if:
(a) it would be concluded that the person, or any of the persons,
who entered into, began to carry out or carried out the
scheme or any part of the scheme did so for the sole purpose
or for a purpose (that is not incidental) of avoiding the
application of any provision of this Part in relation to any
person or persons (whether or not a person or persons who
entered into, began to carry out or carried out the scheme or
any part of the scheme); and
(b) the scheme or the part of the scheme has achieved, or apart
from this section, would achieve, that purpose.
Note: This section is a civil penalty provision (see section 1317E).
(2) Subsection (1) does not apply to a scheme to the extent that the
operation of the subsection would result in an acquisition of
property (within the meaning of paragraph 51(xxxi) of the
Constitution) from a person otherwise than on just terms (within
the meaning of that paragraph of the Constitution).
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Transition Division 7
Section 966
Corporations Act 2001 463
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Transition
966 Transition period
In this Division:
transition period means the period beginning on 1 July 2012 and
ending on 30 June 2013.
967 Best interests obligations and remuneration provisions to apply
during transition period
(1) A financial services licensee may, during the transition period,
lodge notice in the prescribed form with ASIC that the obligations
and prohibitions imposed under this Part are to apply to the
licensee, and any person acting as a representative of the licensee,
on and from a day that:
(a) falls on or after the day on which the notice is lodged with
ASIC; and
(b) is specified in the notice.
(2) If a notice is lodged with ASIC in accordance with subsection (1),
ASIC must, on its website:
(a) publish the name of the financial services licensee who
lodged the notice; and
(b) include a statement that the obligations and prohibitions
imposed under this Part are to apply to the licensee, and any
person acting as a representative of the licensee; and
(c) state the day on and from which those obligations and
prohibitions are to apply.
(3) A person:
(a) who would be subject to an obligation or prohibition under
this Part, if it applied; and
(b) who would not be subject to the obligation or prohibition as a
financial services licensee, or a person acting as a
representative of a financial services licensee;
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Part 7.7A Best interests obligations and remuneration
Division 7 Transition
Section 968
464 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
may, during the transition period, lodge notice in the prescribed
form with ASIC that the obligations and prohibitions imposed
under this Part are to apply to the person on and from a day that:
(c) falls on or after the day on which the notice is lodged with
ASIC; and
(d) is specified in the notice.
(4) If a notice is lodged with ASIC in accordance with subsection (3),
ASIC must, on its website:
(a) publish the name of the person who lodged the notice; and
(b) include a statement that the obligations and prohibitions
imposed under this Part are to apply to the person; and
(c) state the day on and from which those obligations and
prohibitions are to apply.
968 Notice to clients in transition period
(1) A financial services licensee who lodges a notice with ASIC in
accordance with subsection 967(1) must ensure that any person in
relation to whom the licensee, or a person acting as a representative
of the licensee, has an obligation or is subject to a prohibition
under this Part during the transition period (the client) is given a
notice that complies with this section.
(2) The notice:
(a) must be in writing; and
(b) must be given to the client on or before the notice day for the
client; and
(c) must state that the obligations and prohibitions imposed
under this Part begin to apply to the licensee, and any person
acting as a representative of the licensee, on a day specified
in the notice given to the client.
(3) The day specified in the notice given to the client must be the same
as the day specified in the notice lodged with ASIC in accordance
with subsection 967(1).
(4) The notice day is:
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Section 968
Corporations Act 2001 465
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) for a person (the client) in relation to whom the licensee, or a
person acting as a representative of the licensee, has an
obligation or is subject to a prohibition under Division 2 of
this Part in relation to personal advice provided on or after a
day that falls in the transition period—the first day on which
personal advice is provided to the client during the transition
period; and
(b) for a person to whom the licensee, or a person acting as a
representative of the licensee, is obliged to give a fee
disclosure statement during the transition period:
(i) unless subparagraph (ii) applies—the disclosure day for
the arrangement in relation to which the fee disclosure
statement is to be given that falls within the transition
period; and
(ii) if a fee disclosure statement is given before the end of a
period of 30 days beginning on that disclosure day—the
day on which it is given; and
(c) for a person (the client) in relation to whom the licensee, or a
person acting as a representative of the licensee, has an
obligation or is subject to a prohibition under Subdivision B
of Division 5 of this Part in relation to the charging of an
asset-based fee during the transition period—the first day on
which the client is charged an asset-based fee during the
transition period; and
(d) for a person in relation to whom more than one of
paragraphs (a), (b) and (c) is satisfied—the earliest of the
days specified as the notice day under the paragraphs that are
satisfied for that person.
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Chapter 7 Financial services and markets
Part 7.8 Other provisions relating to conduct etc. connected with financial products
and financial services, other than financial product disclosure
Division 1 Preliminary
Section 980A
466 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.8—Other provisions relating to conduct etc.
connected with financial products and
financial services, other than financial
product disclosure
Division 1—Preliminary
980A Matters covered by this Part
This Part contains:
(a) provisions (see Divisions 2 to 7) relating to conduct etc. of
financial services licensees; and
(b) miscellaneous provisions (see Division 8) relating to other
conduct connected with financial products and financial
services.
It does not deal with financial product disclosure (which is dealt
with in Part 7.9).
980B General approach to offence provisions
Division 9 contains provisions creating offences by reference to
various rules contained in Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences
are created by subsection 1311(1). Where offences are created by
subsection 1311(1) in relation to a rule, this is indicated by a note
at the end of the provision containing the rule.
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services, other than financial product disclosure Part 7.8
Dealing with clients’ money Division 2
Section 981A
Corporations Act 2001 467
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Dealing with clients’ money
Subdivision A—Money other than loans
981A Money to which Subdivision applies
(1) This Subdivision applies (subject to subsections (2), (3) and (4)) to
money paid to a financial services licensee (the licensee) in the
following circumstances:
(a) the money is paid in connection with:
(i) a financial service that has been provided, or that will or
may be provided, to a person (the client); or
(ii) a financial product held by a person (the client); and
(b) the money is paid:
(i) by the client; or
(ii) by a person acting on behalf of the client; or
(iii) to the licensee in the licensee’s capacity as a person
acting on behalf of the client.
(2) This Subdivision does not apply to money paid as mentioned in
subsection (1) to the extent that:
(a) the money is paid by way of remuneration payable to the
licensee, or the licensee is entitled to deduct such
remuneration from the money; or
(b) the money is paid:
(i) to reimburse the licensee for payments made to acquire,
or acquire an increased interest in, a financial product;
or
(ii) to discharge a liability incurred by the licensee in
respect of the acquisition of a financial product or an
increased interest in a financial product, or to indemnify
the licensee in respect of such a liability; or
(c) the money is paid to acquire, or acquire an increased interest
in, a financial product from the licensee, whether by way of
issue or sale by the licensee; or
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Part 7.8 Other provisions relating to conduct etc. connected with financial products
and financial services, other than financial product disclosure
Division 2 Dealing with clients’ money
Section 981B
468 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ca) the licensee is a licensed trustee company, and the money is
paid to the licensee in connection with traditional trustee
company services provided by the licensee; or
(d) Subdivision B (loan money) applies to the money.
Note: Money excluded by paragraph (c) is covered by section 1017E.
(3) If a person pays money to a financial services licensee in order for
it to be deposited to the credit of a deposit product held by the
person or another person with the licensee, that payment does not
constitute money to which this Subdivision applies.
(4) The regulations may:
(a) exempt money paid in specified circumstances from some or
all of the provisions of this Subdivision; or
(b) declare that this Subdivision applies in relation to money
paid in specified circumstances as if specified provisions of
this Subdivision were omitted, modified or varied as set out
in the regulations.
(5) An exemption in regulations made for the purposes of
paragraph (4)(a) may be made subject to conditions specified in, or
imposed in accordance with, the regulations. The regulations may
provide for consequences of a contravention of a condition.
981B Obligation to pay money into an account
(1) The licensee must ensure that money to which this Subdivision
applies is paid into an account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the
purposes of this paragraph;
and is designated as an account for the purposes of this
section of this Act; and
(b) the only money paid into the account is:
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Dealing with clients’ money Division 2
Section 981C
Corporations Act 2001 469
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) money to which this Subdivision applies (which may be
money paid by, on behalf of, or for the benefit of,
several different clients); or
(ii) interest on the amount from time to time standing to the
credit of the account; or
(iii) interest, or other similar payments, on an investment
made in accordance with regulations referred to in
section 981C, or the proceeds of the realisation of such
an investment; or
(iv) other money permitted to be paid into the account by the
regulations; and
(c) if regulations made for the purposes of this paragraph impose
additional requirements—the requirements so imposed by the
regulations; and
(d) if the licence conditions of the licensee’s licence impose
additional requirements—the requirements so imposed by the
licence conditions.
The money must be paid into such an account on the day it is
received by the licensee, or on the next business day.
(2) The licensee may, for the purposes of this section, maintain a
single account or 2 or more accounts.
981C Regulations may deal with various matters relating to
accounts maintained for the purposes of section 981B
The regulations may deal with all or any of the following in
relation to accounts, or a class of accounts, maintained for the
purposes of section 981B:
(a) the circumstances in which payments may be made out of an
account (including the circumstances in which money may be
withdrawn and invested, and the kinds of investment that
may be made);
(b) the minimum balance to be maintained in an account;
(c) how interest on an account is to be dealt with;
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Part 7.8 Other provisions relating to conduct etc. connected with financial products
and financial services, other than financial product disclosure
Division 2 Dealing with clients’ money
Section 981D
470 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) how interest or other earnings on an investment of money
withdrawn from an account, or the proceeds of the realisation
of such an investment, are to be dealt with.
981D Money related to derivatives may be used for general
margining etc. purposes
Despite anything in regulations made for the purposes of
section 981C, if:
(a) the financial service referred to in
subparagraph 981A(1)(a)(i) is or relates to a dealing in a
derivative; or
(b) the financial product referred to in
subparagraph 981A(1)(a)(ii) is a derivative;
the money concerned may also be used for the purpose of meeting
obligations incurred by the licensee in connection with margining,
guaranteeing, securing, transferring, adjusting or settling dealings
in derivatives by the licensee (including dealings on behalf of
people other than the client).
981E Protection of money from attachment etc.
(1) This section applies to:
(a) money to which this Subdivision applies that has been paid to
the licensee, both while it is in an account maintained for the
purposes of section 981B and before and after it is paid into
such an account; and
(b) other money in such an account as permitted by
paragraph 981B(1)(b); and
(c) investments made in accordance with regulations made for
the purposes of section 981C.
(2) Money and investments to which this section applies are not
capable:
(a) of being attached or otherwise taken in execution; or
(b) of being made subject to a set-off, security interest or
charging order, or to any process of a similar nature;
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Dealing with clients’ money Division 2
Section 981F
Corporations Act 2001 471
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
except at the suit of a person who is otherwise entitled to the
money or investment.
981F Regulations may deal with how money to be dealt with if
licensee ceases to be licensed etc.
The regulations may include provisions dealing with how money in
an account maintained for the purposes of section 981B, or an
investment of such money, is to be dealt with if:
(a) the licensee ceases to be a financial services licensee; or
(b) the licensee becomes insolvent, within the meaning of the
regulations; or
(c) the licensee merges with another financial services licensee;
or
(d) the licensee ceases to carry on some or all of the activities
authorised by their licence.
981G Account provider not liable merely because of licensee’s
contravention
Nothing in this Subdivision, or in regulations made for the
purposes of this Subdivision, makes the body (not being the
licensee) that the account is with under paragraph 981B(1)(a)
subject to any liability merely because of a failure by the licensee
to comply with any of the provisions of this Subdivision or those
regulations.
981H Money to which Subdivision applies taken to be held in trust
(1) Subject to subsection (3), money to which this Subdivision applies
that is paid to the licensee:
(a) by the client; or
(b) by a person acting on behalf of the client; or
(c) in the licensee’s capacity as a person acting on behalf of the
client;
is taken to be held in trust by the licensee for the benefit of the
client.
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Chapter 7 Financial services and markets
Part 7.8 Other provisions relating to conduct etc. connected with financial products
and financial services, other than financial product disclosure
Division 2 Dealing with clients’ money
Section 982A
472 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The regulations may:
(a) provide that subsection (1) does not apply in relation to
money in specified circumstances; and
(b) provide for matters relating to the taking of money to be held
in trust (including, for example, terms on which the money is
taken to be held in trust and circumstances in which it is no
longer taken to be held in trust).
Subdivision B—Loan money
982A Money to which this Subdivision applies
(1) Subject to subsection (2), this Subdivision applies to money paid to
a financial services licensee (the licensee) by way of a loan from a
person (the client) in connection with activities authorised by the
licensee’s licence.
(2) If a person pays money to a financial services licensee:
(a) in order for it to be deposited to the credit of a deposit
product held by the person or another person with the
licensee; or
(b) on condition that it is to be repaid to the person by the
licensee, as a debt, pursuant to the terms of a debenture or
other financial product issued by the licensee;
that payment does not constitute money to which this Subdivision
applies.
982B Obligation to pay money into an account
(1) The licensee must ensure that money to which this Subdivision
applies is paid into an account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the
purposes of this paragraph;
and is designated as an account for the purposes of this
section of this Act; and
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Corporations Act 2001 473
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the only money paid into the account is:
(i) money to which this Subdivision applies (which may be
money lent by several different persons); or
(ii) interest on the amount from time to time standing to the
credit of the account.
The money must be paid into such an account on the day it is
received by the licensee, or on the next business day.
(2) The licensee may, for the purposes of this section, maintain a
single account or 2 or more accounts.
982C Licensee to give client statement setting out terms of loan etc.
Obligation to give client a statement
(1) The licensee must, in accordance with the regulations, give the
client a statement setting out:
(a) the terms and conditions on which the loan is made and
accepted; and
(b) the purpose for which, and the manner in which, the licensee
is to use the money.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Obligation to keep money in account until receive acknowledgment
of receipt of statement
(2) The licensee must not take money out of the account before the
client has given the licensee a written acknowledgment that the
client has received the statement required by subsection (1).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
982D Permitted use of loan
The licensee must only use the money:
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Section 983A
474 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) for the purpose, and in the manner, set out in the statement
given under section 982C; or
(b) for another purpose, or in another manner, agreed on in
writing by the licensee and the client after the licensee gave
the client the statement.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
Subdivision C—Powers of Court
983A Court may freeze certain accounts
(1) The Court may, by order, restrain dealings in respect of specified
accounts with financial institutions that a person holds or maintains
(whether in Australia or elsewhere), subject to such terms and
conditions as the Court imposes, if subsection (2) or (3) applies in
relation to the person.
(2) This subsection applies to a person if, on application by ASIC, the
Court is satisfied that the person holds, or has at any time held, an
Australian financial services licence and that:
(a) there are reasonable grounds for believing that there is a
deficiency in an account maintained by the person for the
purposes of section 981B or 982B, whether the account is
maintained in this jurisdiction or elsewhere; or
(b) there has been undue delay, or unreasonable refusal, on the
person’s part in paying, applying or accounting for money as
provided for by this Division, by a condition of the licence,
or by the operating rules of a licensed market or a licensed
CS facility in which the person is or has been a participant; or
(c) without limiting the generality of paragraph (a) or (b), the
person has contravened section 981B or 982B.
(3) This subsection applies to a person if, on application by ASIC, the
Court is satisfied that the person holds, or has at any time held, an
Australian financial services licence and that:
(a) the licence has been revoked or suspended; or
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Corporations Act 2001 475
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the person is incapable, through mental or physical
incapacity, of managing his or her affairs; or
(c) the person no longer carries on a financial services business;
or
(d) the person has died.
983B Interim order freezing accounts
(1) Before considering an application under section 983A, the Court
may, if it considers it desirable to do so, grant an interim order that
is an order of the kind applied for and is expressed to apply until
the application is determined.
(2) The Court must not require ASIC or any other person, as a
condition of granting an order under subsection (1), to give an
undertaking as to damages.
983C Duty of person to whom order directed to make full disclosure
If an order made under section 983A is directed to a financial
institution, the institution must:
(a) disclose to ASIC every account kept at the institution in the
name of the person to whom the order relates, and any
account that the institution reasonably suspects is held or
kept at the institution for the benefit of that person; and
(b) permit ASIC to make a copy of, or to take an extract from,
any account of the person to whom the order relates or any of
the institution’s books relating to that person.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
983D Further orders and directions
(1) If an order is made under section 983A or 983B, the Court may, on
application by ASIC or a person whom the order affects, make a
further order that does one or more of the following:
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Section 983E
476 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) deals with such ancillary matters as the Court thinks
necessary or desirable;
(b) directs that specified amounts in an account affected by the
first-mentioned order be paid to ASIC or a person nominated
by ASIC;
(c) varies or discharges the first-mentioned order or an order
under this section.
(2) An order under this section may be made subject to such terms and
conditions as the Court imposes.
983E Power of Court to make order relating to payment of money
(1) An order made under section 983D may include directions to a
person to whom money is ordered to be paid directing that the
person:
(a) must pay the money into a separate account; or
(b) is authorised to prepare a scheme for distributing the money
to persons who claim, within 6 months after the person
receives the money, to be entitled to the money and satisfy
the person that they are so entitled; or
(c) if the money received is insufficient to pay all proved claims,
may, despite any rule of law or equity to the contrary,
apportion the money among the claimants in proportion to
their proved claims and show in the scheme how the money
is so apportioned.
(2) If a person prepares a scheme for a distribution of money under
subsection (1), the person must apply to the Court for approval of
the scheme and for directions in respect of it.
(3) The Court may, in relation to money held in a separate account
under subsection (1), give such directions as the Court thinks fit as
to:
(a) the persons to whom that money is to be paid, and in what
amounts the whole or any portion of that money is to be paid;
and
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Section 983E
Corporations Act 2001 477
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the payment of the balance of the money (if any) remaining
in the account.
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Division 3 Dealing with other property of clients
Section 984A
478 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Dealing with other property of clients
984A Property to which Division applies
(1) Subject to subsection (2), this Division applies to property other
than money (for example, share certificates) given to a financial
services licensee (the licensee) in the following circumstances:
(a) the property is given in connection with:
(i) a financial service that has been provided, or that will or
may be provided, to a person (the client); or
(ii) a financial product held by a person (the client); and
(b) the property is given:
(i) by the client; or
(ii) by a person acting on behalf of the client; or
(iii) for the benefit of the client; and
(c) the licensee is accountable for the property.
(2) The regulations may:
(a) exempt property given in specified circumstances from some
or all of the provisions of this Division; or
(b) declare that this Division applies in relation to property given
in specified circumstances as if specified provisions of this
Division were omitted, modified or varied as set out in the
regulations.
The circumstances that may be specified include (but are not
limited to) that the property was given in connection with a
specified class of financial product or financial service.
(3) An exemption in regulations made for the purposes of
paragraph (2)(a) may be made subject to conditions specified in, or
imposed in accordance with, the regulations. The regulations may
provide for consequences of a contravention of a condition.
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Section 984B
Corporations Act 2001 479
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
984B How property to which this Division applies is to be dealt with
(1) Subject to subsection (2), the licensee must ensure that property to
which this Division applies is only dealt with in accordance with:
(a) the requirements (if any) specified in regulations made for
the purposes of this paragraph; and
(b) subject to those requirements:
(i) the terms and conditions on which the property was
given to the licensee; and
(ii) any subsequent instructions given by the client.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) If:
(a) the financial service referred to in
subparagraph 984A(1)(a)(i) is or relates to a dealing in a
derivative; or
(b) the financial product referred to in
subparagraph 984A(1)(a)(ii) is a derivative;
the property concerned may also be used for the purpose of
meeting obligations incurred by the licensee in connection with
margining, guaranteeing, securing, transferring, adjusting or
settling dealings in derivatives by the licensee (including dealings
on behalf of people other than the client).
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Division 4 Special provisions relating to insurance
Section 985A
480 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Special provisions relating to insurance
985A Definitions etc.
(1) In this Division:
contract of insurance includes a contract of life insurance.
Note: Contract of life insurance has a meaning affected by subsection (2).
insured, in relation to a contract of life insurance, means a person
(other than the insurer) who is entitled to a benefit under the
contract, whether that person is the life insured or some other
person.
Note: Intending insured has a corresponding meaning.
(2) For the purposes of this Division, if:
(a) a life policy (within the meaning of the Life Insurance Act
1995) would not ordinarily be regarded as a contract of life
insurance; and
(b) liability under the policy is borne by a company registered
under section 21 of that Act; and
(c) the policy was entered into after the commencement of
section 9D of the Insurance (Agents and Brokers) Act 1984
as in force before the commencement of this Chapter;
the policy is taken to be a contract of life insurance.
985B Status of amounts paid to financial services licensees in respect
of contracts of insurance
(1) If:
(a) a contract of insurance is arranged or effected by a financial
services licensee; and
(b) the licensee is not the insurer;
payment to the licensee of money payable (whether in respect of a
premium or otherwise) by the insured under or in relation to the
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Section 985C
Corporations Act 2001 481
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
contract is a discharge, as between the insured and the insurer, of
the liability of the insured to the insurer in respect of that money.
(2) Payment to a financial services licensee by or on behalf of an
intending insured of money (whether in respect of a premium or
otherwise) in respect of a contract of insurance to be arranged or
effected by the licensee with an insurer (not being the licensee) is a
discharge, as between the insured and the insurer, of any liability
of the insured under or in respect of the contract, to the extent of
the amount of the payment.
(3) Payment by an insurer to a financial services licensee of money
payable to an insured, whether in respect of a claim, return of
premiums or otherwise, under or in relation to a contract of
insurance, does not discharge any liability of the insurer to the
insured in respect of that money.
(4) An agreement, so far as it purports to alter or restrict the operation
of subsection (1), (2) or (3), is void.
(5) Subsection (4) does not make void an agreement between a
financial services licensee and an insured in so far as the agreement
allows the licensee to set off against money payable to the insured
money payable by the insured to the licensee in respect of
premiums.
985C Regulations may impose other requirements etc. if financial
services licensee is not the insurer
(1) The regulations may impose requirements to be complied with by a
financial services licensee in relation to, or make other provision
dealing with, a situation specified in subsection (2) that arises in
relation to a contract or proposed contract of insurance under
which the licensee is not the insurer.
(2) The situations are as follows:
(a) the licensee receives an amount as a premium or instalment
of premium;
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Section 985D
482 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the licensee does not receive an amount as a premium or
instalment of premium by a particular time;
(c) the licensee is not aware of the amount of a premium or
instalment of premium that is to be paid;
(d) the licensee receives money from the insured or intending
insured but the risk or part of the risk has not been accepted
by a particular time;
(e) the licensee receives money from the insurer for payment to
or on behalf of the insured.
985D Financial services licensees etc. not to deal in general
insurance products from unauthorised insurers etc.
(1) A financial services licensee, or an authorised representative of a
financial services licensee, must not deal in a general insurance
product if the insurer for the product, or (if there is more than one
insurer for the product) each insurer for the product, is not at least
one of the following:
(a) a general insurer within the meaning of the Insurance Act
1973;
(b) a Lloyd’s underwriter within the meaning of that Act;
(c) a person in respect of whom a determination is in force,
under subsection 7(1) of that Act, that subsection 9(1) or
10(1) or (2) of that Act does not apply (the effect of which is
the effect referred to in paragraph 9(1)(c), 10(1)(c) or
10(2)(c) of that Act (as the case requires)).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subsection (1) does not apply in relation to a general insurance
product if, because of section 3A of the Insurance Act 1973,
undertaking liability under the contract of insurance concerned is
not, or would not be, insurance business for the purposes of that
Act.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2) (see subsection 13.3(3) of the Criminal Code).
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Section 985D
Corporations Act 2001 483
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Paragraph (1)(b) ceases to apply after section 93 of the Insurance
Act 1973 has ceased to have effect.
(4) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Division 4A Special provisions relating to margin lending facilities
Section 985EA
484 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4A—Special provisions relating to margin lending
facilities
Subdivision A—Responsible lending conduct for margin
lending facilities
985EA Application of this Subdivision
This Subdivision applies to a financial services licensee (the
provider) in relation to:
(a) the issuing of a margin lending facility to a retail client; or
(b) the increasing of the limit of a margin lending facility that
was issued to a retail client.
985E Requirements before issuing etc. margin lending facility
Requirement to make assessment of unsuitability
(1) The provider must not:
(a) issue the margin lending facility to the retail client; or
(b) increase the limit of the margin lending facility that was
issued to the retail client;
on a day (the critical day) unless the provider has, within 90 days
(or other period prescribed by the regulations) before the critical
day:
(c) made an assessment that:
(i) is in accordance with section 985F; and
(ii) covers a period in which the critical day occurs; and
(d) made the inquiries and verification in accordance with
section 985G.
Note: This subsection is a civil penalty provision (see section 1317E).
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Section 985F
Corporations Act 2001 485
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Increase in limit of standard margin lending facility
(2) For the purposes of paragraph (1)(b), the limit of a standard margin
lending facility is taken not to be increased if:
(a) apart from this subsection, there would be an increase in the
limit; and
(b) the increase in the limit would result from an increase in the
value, determined under the terms of the facility, of the
secured property under the facility (as referred to in
paragraph 761EA(2)(c)); and
(c) the increase in the value of the secured property does not
result from the client contributing additional property to the
secured property.
Regulations
(3) For the purposes of paragraph (1)(b), the regulations may prescribe
particular situations in which the limit of a margin lending facility
is taken:
(a) to be increased, despite subsection (2); or
(b) not to be increased.
985F Assessment of unsuitability of margin lending facility
For the purposes of paragraph 985E(1)(c), the provider must make
an assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the margin lending facility will be
unsuitable for the retail client if the facility is issued or the
limit is increased in that period.
Note: The provider is not required to make the assessment if the margin
lending facility is not issued or the limit is not increased.
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Division 4A Special provisions relating to margin lending facilities
Section 985G
486 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
985G Reasonable inquiries etc. about the retail client
Requirement to make inquiries and take steps to verify
(1) For the purposes of paragraph 985E(1)(d), the provider must,
before making the assessment:
(a) make reasonable inquiries about the retail client’s financial
situation; and
(b) take reasonable steps to verify the retail client’s financial
situation; and
(c) make any inquiries prescribed by the regulations about any
matter prescribed by the regulations; and
(d) take any steps prescribed by the regulations to verify any
matter prescribed by the regulations.
(2) The regulations may prescribe particular inquiries or steps that
must be made or taken, or do not need to be made or taken, for the
purposes of paragraph (1)(a) or (b).
When not required to take steps to verify
(3) Despite subsection (1), if:
(a) a financial services licensee that is authorised to provide
financial product advice in relation to margin lending
facilities has prepared a statement of advice for the retail
client; and
(b) the statement of advice was prepared no more than 90 days
before the critical day; and
(c) the statement of advice recommends that:
(i) the retail client acquire the particular margin lending
facility; or
(ii) the limit of the particular margin lending facility be
increased; and
(d) the limit of the facility, or the increase in the limit of the
facility, is not greater than the limit, or the increase in the
limit, recommended in the statement of advice; and
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Section 985H
Corporations Act 2001 487
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) the statement of advice includes the information that was
used for the purposes of preparing the statement of advice;
then the provider is not required, for the purposes of
paragraph (1)(b) or (d), to verify that information.
985H When margin lending facility must be assessed as unsuitable
Requirement to assess the margin lending facility as unsuitable
(1) The provider must assess that the margin lending facility will be
unsuitable for the retail client if the margin lending facility will be
unsuitable for the retail client under subsection (2).
Note 1: This subsection is a civil penalty provision (see section 1317E).
Note 2: Even if the margin lending facility will not be unsuitable for the retail
client under subsection (2), the provider may still assess that the
margin lending facility will be unsuitable for the retail client for other
reasons.
(2) The margin lending facility will be unsuitable for the retail client
if, at the time of the assessment, it is likely that:
(a) if the facility is issued or the limit increased in the period
covered by the assessment, and the facility were to go into
margin call, the retail client:
(i) would be unable to comply with the retail client’s
financial obligations under the terms of the facility; or
(ii) could only comply with substantial hardship; or
(b) if the regulations prescribe circumstances in which a margin
lending facility is unsuitable—those circumstances will apply
to the margin lending facility if the facility is issued or the
limit increased in the period covered by the assessment.
Information to be used to make the assessment
(3) For the purposes of determining under subsection (2) whether the
margin lending facility will be unsuitable, only information that
satisfies both of the following paragraphs is to be taken into
account:
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Division 4A Special provisions relating to margin lending facilities
Section 985J
488 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the information is about the retail client’s financial situation,
or any other matter prescribed by regulations under
paragraph 985G(1)(c) or (d);
(b) at the time of the assessment:
(i) the provider had reason to believe that the information
was true; or
(ii) the provider would have had reason to believe that the
information was true if it had made the inquiries or
verification under section 985G.
985J Giving the retail client the assessment
Requirement to give assessment if requested
(1) If, before the margin lending facility is issued or the limit is
increased, the retail client requests a copy of the assessment from
the provider, the provider must give the retail client a written copy
of the assessment before issuing the facility or increasing the limit.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: This subsection is a civil penalty provision (see section 1317E).
Note 3: The provider is not required to give the retail client a copy of the
assessment if the margin lending facility is not issued or the limit is
not increased.
(2) If, during the period that:
(a) starts on the critical day referred to in subsection 985E(1);
and
(b) ends 7 years after that day;
the retail client requests a copy of the assessment from the
provider, the provider must give the retail client a written copy of
the assessment:
(c) if the request is made within 2 years of the critical day—
before the end of 7 business days after the day the provider
receives the request; and
(d) otherwise—before the end of 21 business days after the day
the provider receives the request.
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Special provisions relating to margin lending facilities Division 4A
Section 985K
Corporations Act 2001 489
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: This subsection is a civil penalty provision (see section 1317E).
Manner of giving assessment
(3) The provider must give the retail client the copy of the assessment
in the manner (if any) prescribed by the regulations.
No payment for assessment
(4) The provider must not request or demand payment of an amount
for giving the retail client a copy of the assessment.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: This subsection is a civil penalty provision (see section 1317E).
Strict liability
(5) An offence based on subsection (1), (2) or (4) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
985K Unsuitable margin lending facilities
Requirement not to issue unsuitable margin lending facilities etc.
(1) The provider must not:
(a) issue the margin lending facility to the retail client; or
(b) increase the limit of the margin lending facility that was
issued to the retail client;
if the facility is unsuitable for the retail client under subsection (2).
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: This subsection is a civil penalty provision (see section 1317E).
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Part 7.8 Other provisions relating to conduct etc. connected with financial products
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Division 4A Special provisions relating to margin lending facilities
Section 985K
490 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
When a margin lending facility will be unsuitable
(2) The margin lending facility is unsuitable for the retail client if, at
the time it is issued or the limit is increased:
(a) it is likely that, if the facility were to go into margin call, the
retail client:
(i) would be unable to comply with the retail client’s
financial obligations under the terms of the facility; or
(ii) could only comply with substantial hardship; or
(b) if the regulations prescribe circumstances in which a margin
lending facility is unsuitable—those circumstances apply to
the margin lending facility.
Information to be used for the purposes of subsection (2)
(3) For the purposes of determining under subsection (2) whether the
margin lending facility will be unsuitable, only information that
satisfies both of the following paragraphs is to be taken into
account:
(a) the information is about the retail client’s financial situation,
or any other matter prescribed by regulations under
paragraph 985G(1)(c) or (d);
(b) at the time the margin lending facility is issued or the limit is
increased:
(i) the provider had reason to believe that the information
was true; or
(ii) the provider would have had reason to believe that the
information was true if it had made the inquiries or
verification under section 985G.
Regulations in relation to unsuitability of margin lending facility
(4) The regulations may prescribe particular situations in which a
margin lending facility is taken not to be unsuitable for a retail
client, despite subsection (2).
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Special provisions relating to margin lending facilities Division 4A
Section 985L
Corporations Act 2001 491
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Increase in limit of standard margin lending facility
(5) For the purposes of paragraph (1)(b), the limit of a standard margin
lending facility is taken not to be increased if:
(a) apart from this subsection, there would be an increase in the
limit; and
(b) the increase in the limit would result from an increase in the
value, determined under the terms of the facility, of the
secured property under the facility (as referred to in
paragraph 761EA(2)(c)); and
(c) the increase in the value of the secured property does not
result from the client contributing additional property to the
secured property.
Regulations in relation to increase in limit
(6) For the purposes of paragraph (1)(b), the regulations may prescribe
particular situations in which the limit of a margin lending facility
is taken:
(a) to be increased, despite subsection (5); or
(b) not to be increased.
Subdivision B—Notice of margin calls under margin lending
facilities
985L Issue of margin lending facility must not be conditional on
agreement to receive communications through agent
A financial services licensee must not require, as a condition of
issuing a margin lending facility to a retail client, that the retail
client enter into an agreement of the kind referred to in
subsection 985M(2) (which deals with agreements about
communications in relation to margin lending facilities).
Note: This section is a civil penalty provision (see section 1317E).
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Part 7.8 Other provisions relating to conduct etc. connected with financial products
and financial services, other than financial product disclosure
Division 4A Special provisions relating to margin lending facilities
Section 985M
492 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
985M Notification of margin calls
Provider must notify retail client of margin call
(1) A financial services licensee (the provider) that has issued a
margin lending facility to a retail client must, when the facility
goes into margin call, take reasonable steps to notify the retail
client under the facility of the margin call in accordance with this
section.
Note: This subsection is a civil penalty provision (see section 1317E).
When provider must notify retail client’s agent, and agent must
notify retail client, of margin call
(2) However, if there is an agreement between the provider, the retail
client, and another financial services licensee (the agent) that the
agent will receive communications from the provider in relation to
the margin lending facility on behalf of the retail client, then:
(a) the provider must take reasonable steps to notify the agent
(instead of the retail client) of the margin call in accordance
with this section; and
(b) the agent must take reasonable steps to notify the retail client
of the margin call in accordance with this section.
Note: This subsection is a civil penalty provision (see section 1317E).
When and how notice must be given
(3) A notice under this section must be given:
(a) at a time determined by ASIC; or
(b) if no time is determined by ASIC—as soon as practicable.
(4) A notice under this section must be given:
(a) if a manner in which the notice is to be given has been agreed
between the person who is required to give the notice and the
person to whom the notice is required to be given—in that
manner; or
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Special provisions relating to margin lending facilities Division 4A
Section 985M
Corporations Act 2001 493
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if there is no agreement and ASIC has determined the manner
in which the notice is to be given—in that manner; or
(c) otherwise—in a reasonable manner.
ASIC may determine when and how notice must be given
(5) ASIC may determine:
(a) the time by which, and manner in which, a provider must
notify a client or agent of a margin call under this section;
and
(b) the time by which, and manner in which, an agent must
notify a client of a margin call under this section.
(6) A determination made under subsection (5):
(a) must be in writing; and
(b) is a legislative instrument for the purposes of the Legislative
Instruments Act 2003.
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Division 5 Obligations to report
Section 986A
494 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Obligations to report
986A Reporting in relation to money to which Subdivision A or B of
Division 2 applies or property to which Division 3 applies
The regulations may impose reporting requirements to be complied
with by a financial services licensee in relation to money to which
Subdivision A or B of Division 2 applies or property to which
Division 3 applies.
986B Reporting in relation to dealings in derivatives
The regulations may impose reporting requirements to be complied
with by a financial services licensee in relation to dealings in
derivatives on behalf of other people.
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Financial records, statements and audit Division 6
Section 987A
Corporations Act 2001 495
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Financial records, statements and audit
Subdivision A—Preliminary
987A Application of Division
(1) This Division applies in relation to a financial services licensee and
a financial services business carried on by the licensee, whether
that business is carried on in this jurisdiction or elsewhere.
(2) This Division does not affect, and is to be taken never to have
affected, the operation of Chapter 2M in relation to a company that
is a financial services licensee or in relation to a financial services
business that is carried on by such a company.
Subdivision B—Financial records of financial services licensees
988A Obligation to keep financial records
(1) A financial services licensee must (subject to subsection (2)):
(a) keep financial records that correctly record and explain the
transactions and financial position of the financial services
business carried on by the licensee; and
(b) keep those records in accordance with the requirements of
this Subdivision; and
(c) comply with the requirements of this Subdivision in relation
to conversion of records into the English language (see
subsection 988C(2)).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The licensee does not contravene a requirement of this Subdivision
merely because some or all of the records are kept as a part of, or
in conjunction with, the records relating to any other business that
is carried on by the licensee.
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Division 6 Financial records, statements and audit
Section 988B
496 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
988B Records to be kept so that profit and loss statements and
balance sheet can be prepared and audited
The records must be kept in a way that:
(a) enables true and fair profit and loss statements, and balance
sheets, of the financial services business of the licensee to be
prepared from time to time; and
(b) allows those statements and balance sheets to be
conveniently and properly audited.
988C Language of records
(1) The records must be kept in writing in the English language, or in a
manner that enables them to be readily accessible and readily
converted into writing in the English language.
(2) If any of the records are not kept in writing in the English
language, the licensee must, if required to convert the records
concerned into writing in the English language by a person who is
entitled to examine the records concerned, comply with the
requirement within a reasonable time.
988D Location of records
If any of the records are kept outside this jurisdiction, the licensee
must:
(a) cause to be sent to and kept at a place in this jurisdiction such
particulars with respect to the business dealt with in those
records as will enable true and fair profit and loss statements
and balance sheets to be prepared; and
(b) if required by ASIC to produce those records at a place in
this jurisdiction, comply with the requirement not later than
28 days after the requirement is made.
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Section 988E
Corporations Act 2001 497
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
988E Particular categories of information to be shown in records
The records must be kept in sufficient detail to show particulars of:
(a) all money received or paid by the licensee, including money
paid to, or disbursed from, an account maintained for the
purposes of section 981B or 982B; and
(b) all acquisitions and disposals of financial products made by
the licensee, the charges and credits arising from them, and
the names of the person acquiring or disposing of each of
those products; and
(c) all income received by the licensee from commissions,
interest, and other sources, and all expenses, commissions,
and interest paid by the licensee; and
(d) all the assets and liabilities (including contingent liabilities)
of the licensee; and
(e) all securities or managed investment products that are the
property of the licensee, showing by whom the securities or
products, or the documents of title to the securities or
products, are held and, if they are held by some other person,
whether or not they are held as security against loans or
advances; and
(f) all securities or managed investment products that are not the
property of the licensee and for which the licensee or a
nominee controlled by the licensee is accountable, showing:
(i) by whom, and for whom, the securities or products, or
the documents of title to the securities or products, are
held; and
(ii) the extent to which they are either held for safe custody
or deposited with a third party as security for loans or
advances made to the licensee; and
(g) such other matters (if any) as are specified in regulations
made for the purposes of this paragraph.
988F Regulations may impose additional requirements
The regulations may impose additional requirements to be
complied with in relation to the records including, for example,
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Division 6 Financial records, statements and audit
Section 988G
498 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
requirements for things to be contained in the records, and
requirements relating to the level of detail to be shown in the
records.
988G Records taken to be made with licensee’s authority
An entry in the records is, unless the contrary is proved, to be taken
to have been made by, or with the authority of, the licensee.
Subdivision C—Financial statements of financial services
licensees
989A Meaning of financial year
In this Subdivision:
financial year, in relation to a financial services licensee, means:
(a) if the licensee is not a body corporate—a year ending on
30 June; and
(b) if the licensee is a body corporate—a financial year of the
body corporate.
989B Financial services licensee to prepare and lodge annual profit
and loss statement and balance sheet
(1) A financial services licensee must, in respect of each financial
year, prepare a true and fair profit and loss statement and balance
sheet in accordance with this Subdivision.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1).
(2) The licensee must lodge the statement and balance sheet with
ASIC in accordance with this Subdivision.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1).
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Section 989C
Corporations Act 2001 499
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The licensee must, with the statement and balance sheet, lodge an
auditor’s report with ASIC containing the information and matters
required by the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1).
989C Requirements as to contents and applicable accounting
principles
The profit and loss statement and the balance sheet must:
(a) contain the information that is required by the regulations;
and
(b) be prepared in accordance with any requirements in the
regulations as to the accounting principles to be used.
989CA Audit to be conducted in accordance with auditing standards
(1) If an individual auditor, or an audit company, conducts an audit of
a profit and loss statement and balance sheet for the purposes of
this Subdivision, the individual auditor or audit company must:
(a) conduct the audit in accordance with the auditing standards;
and
(b) include in the audit report on the profit and loss statement,
and balance sheet, any statements or disclosures required by
the auditing standards.
(2) If an audit firm, or an audit company, conducts an audit of a profit
and loss statement and balance sheet for the purposes of this
Subdivision, the lead auditor for the audit or review must ensure
that:
(a) the audit is conducted in accordance with the auditing
standards; and
(b) the audit report on the profit and loss statement, and balance
sheet, includes any statements or disclosures required by the
auditing standards.
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Division 6 Financial records, statements and audit
Section 989D
500 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) An offence based on subsection (1) or (2) is an offence of strict
liability.
Note: For strict liability see section 6.1 of the Criminal Code.
989D Time of lodgment
(1) Unless an extension is granted under subsection (3), the profit and
loss statement and the balance sheet must be lodged before:
(a) if the licensee is not a body corporate—the day that is 2
months after the end of that financial year; or
(b) if the licensee is a body corporate—the day that is 3 months
after the end of that financial year.
(2) If an extension is granted under subsection (3), the profit and loss
statement and the balance sheet must be lodged before the end of
the extended period.
(3) ASIC may, on application made:
(a) by a financial services licensee and the licensee’s auditor;
and
(b) before the end of the period that would otherwise apply;
approve an extension of the period for lodging the profit and loss
statement and balance sheet. The extension may be of the period
originally applicable or the period applicable under a previous
extension.
(4) An approval under subsection (3) may be given subject to such
conditions (if any) as ASIC imposes.
(5) If an approval under subsection (3) is given subject to conditions,
the licensee must comply with those conditions.
Subdivision D—Appointment etc. of auditors
990A Sections 990B to 990H not to apply to public companies
Sections 990B to 990H do not apply to a financial services licensee
that is a public company.
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Section 990B
Corporations Act 2001 501
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
990B Appointment of auditor by licensee
(1) A financial services licensee must, within 1 month after beginning
to hold the licence, appoint as auditor or auditors to audit the
licensee’s financial statements:
(a) a person or persons; or
(b) a firm or firms; or
(c) a person or persons and a firm or firms.
Subsections (4) and (5) must be complied with in relation to the
appointment.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Within 14 days after a vacancy occurs in the office of an auditor of
the licensee, if there is no surviving or continuing auditor of the
licensee, the licensee must appoint:
(a) a person or persons; or
(b) a firm or firms; or
(c) a person or persons and a firm or firms;
to fill the vacancy. Subsections (4) and (5) must be complied with
in relation to the appointment.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) While a vacancy in the office of an auditor of the licensee
continues, the surviving or continuing auditor or auditors (if any)
may act.
(4) The licensee must not appoint as auditor a person who, or firm that,
is ineligible by virtue of regulations made for the purposes of
section 990C to act as auditor of the licensee.
(5) The licensee must not appoint a person or firm as auditor of the
licensee unless that person or firm has, before the appointment,
consented by written notice given to the licensee to act as auditor
and has not withdrawn the consent by written notice given to the
licensee.
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Division 6 Financial records, statements and audit
Section 990C
502 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) The licensee must, within 14 days after an appointment of a person
or firm as auditor, lodge a written notice with ASIC stating that the
licensee has made the appointment and specifying the name of the
person or firm.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) The regulations may include provisions (including provisions
imposing obligations) dealing with matters related to the
appointment of a firm as auditor, including, for example:
(a) taking certain members of the firm to have been appointed as
auditors; and
(b) the effect of a dissolution and reconstitution of the firm; and
(c) requiring a member of the firm who retires or withdraws to
continue to act as auditor in certain circumstances; and
(d) how a report, notice or other document is to be made or
given.
(8) Regulations made for the purposes of subsection (7) may also
include provisions modifying the effect of provisions of this
Subdivision in relation to matters dealt with in those regulations.
(9) In this section:
person means:
(a) an individual auditor; or
(b) an authorised audit company.
990C When a person or firm is ineligible to act as auditor
A person or firm is ineligible to act as auditor of the licensee if
regulations made for the purposes of this section provide that the
person or firm is ineligible so to act.
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Section 990D
Corporations Act 2001 503
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
990D Ineligible person or firm must not consent to act or disqualify
themselves etc.
(1) A person or firm, while ineligible to act as auditor of the licensee,
must not:
(a) consent to be appointed as auditor of the licensee; or
(b) act as auditor of the licensee; or
(c) prepare a report that an auditor of the licensee is to prepare
under this Part.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A person must not:
(a) if the person has been appointed auditor of the licensee—
disqualify himself or herself, while the appointment
continues, from acting as auditor of the licensee; or
(b) if the person is a member of a firm that has been appointed
auditor of the licensee—disqualify the firm, while the
appointment continues, from acting as auditor of the licensee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
990E Duration of appointment of auditors
An auditor of the licensee holds office until:
(a) death; or
(b) removal in accordance with section 990F; or
(c) resignation in accordance with sections 990G and 990H; or
(d) becoming prohibited by subsection 990D(1) from acting as
auditor of the licensee;
whichever occurs first.
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Division 6 Financial records, statements and audit
Section 990F
504 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
990F Removal of auditors
The licensee:
(a) must remove an auditor of the licensee from office if the
auditor becomes ineligible to act as auditor of the licensee;
and
(b) may, with ASIC’s consent, remove an auditor of the licensee
from office.
Note: Failure to comply with paragraph (a) is an offence (see
subsection 1311(1)).
990G Resignation of auditors—requirements for resignation
(1) An auditor of the licensee may, by written notice given to the
licensee, resign as auditor of the licensee if:
(a) the auditor has, by written notice given to ASIC, applied for
consent to the resignation and, at or about the same time as
the auditor gave notice to ASIC, gave written notice of the
application to the licensee; and
(b) ASIC has consented and the auditor has received notice of
ASIC’s consent.
(2) ASIC must, as soon as practicable after receiving an application
from an auditor under subsection (1), notify the auditor and the
licensee whether it consents to the resignation.
(3) A statement by an auditor in an application under subsection (1), or
in answer to an inquiry by ASIC relating to the reasons for the
application:
(a) is not admissible in evidence in any civil or criminal
proceedings in a court against the auditor other than
proceedings for a contravention of section 1308; and
(b) may not be made the ground of a prosecution (other than a
prosecution for a contravention of section 1308), action or
suit against the auditor.
(4) A certificate by ASIC that a statement was made in an application
under subsection (1), or in answer to an inquiry by ASIC relating
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Section 990H
Corporations Act 2001 505
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
to the reasons for such an application, is conclusive evidence that
the statement was so made.
990H Resignation of auditors—when resignation takes effect
The resignation of an auditor of the licensee takes effect on:
(a) if the notice of resignation specifies a date as the date the
resignation is to take effect—the date so specified; or
(b) the date on which ASIC gives its consent to the resignation;
or
(c) if ASIC has fixed a date as the date the resignation is to take
effect—the date so fixed;
whichever last occurs.
990I Auditor’s right of access to records, information etc.
(1) An auditor of the licensee has a right of access at all reasonable
times to the financial records or other records (including any
register) of the licensee.
(2) An auditor of the licensee is entitled to require:
(a) from the licensee; or
(b) if the licensee is a body corporate—from any director,
secretary or senior manager of the licensee;
such assistance and explanations as the auditor desires for the
purposes of audit.
(3) The licensee, or a director, secretary or senior manager of the
licensee if it is a body corporate, must not:
(a) refuse or fail to allow an auditor of the licensee access, in
accordance with subsection (1), to financial records or other
records of the licensee; or
(b) refuse or fail to give assistance, or an explanation, to an
auditor of the licensee as and when required under
subsection (2); or
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Section 990J
506 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) otherwise hinder, obstruct or delay an auditor of the licensee
in the performance or exercise of the auditor’s duties or
powers.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
990J Auditor’s fees and expenses
(1) The reasonable fees and expenses of an auditor of the licensee are
payable by the licensee.
(2) The auditor may recover those fees by action against the licensee.
990K Auditor to report on certain matters
(1) If an auditor, in the performance of duties as auditor of the
licensee, becomes aware of a matter referred to in subsection (2),
the auditor must, within 7 days after becoming aware of the matter,
lodge a written report on the matter with ASIC and send a copy of
the report to the licensee, and to each licensed market (if any) and
each licensed CS facility (if any) in which the licensee is a
participant.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(2) A report must be given in relation to any matter that, in the opinion
of the auditor:
(a) has adversely affected, is adversely affecting or may
adversely affect the ability of the licensee to meet the
licensee’s obligations as a licensee; or
(b) constitutes or may constitute a contravention of:
(i) a provision of Subdivision A or B of Division 2 (or a
provision of regulations made for the purposes of such a
provision); or
(ii) a provision of Division 3 (or a provision of regulations
made for the purposes of such a provision); or
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Section 990L
Corporations Act 2001 507
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) a provision of Subdivision B or C of this Division (or a
provision of regulations made for the purposes of such a
provision); or
(iv) a condition of the licensee’s licence; or
(c) constitutes an attempt to unduly influence, coerce,
manipulate or mislead the auditor in the conduct of the audit.
990L Qualified privilege for auditor etc.
Qualified privilege for auditor
(1) An auditor of the licensee has qualified privilege in respect of:
(a) a statement that the auditor makes, orally or in writing, in the
course of the auditor’s duties as auditor; or
(b) the lodging of a report under subsection 990K(1); or
(c) the sending of a report to:
(i) the licensee; or
(ii) a licensed market or a licensed CS facility;
under subsection 990K(1); or
(d) a disclosure made by the auditor in response to a notice given
to the auditor under subsection 225A(5) of the ASIC Act.
Note: If the auditor is an audit company, the company has qualified privilege
under this subsection in respect of statements made, and reports
lodged or sent, by individuals on behalf of the company if those
statements and notices can be properly attributed to the company.
Qualified privilege for registered company auditor acting on
behalf of audit company
(2) If the auditor of the licensee is an audit company, a registered
company auditor acting on behalf of the company has qualified
privilege in respect of:
(a) a statement that the registered company auditor makes (orally
or in writing) in the course of the performance, on behalf of
the company, of the company’s duties as auditor; or
(b) the lodging by the registered company auditor, on behalf of
the company, of a report under subsection 990K(1); or
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Division 6 Financial records, statements and audit
Section 990L
508 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the sending by the registered company auditor, on behalf of
the company, of a report to:
(i) the licensee; or
(ii) a licensed market or a licensed CS facility;
under subsection 990K(1); or
(d) a disclosure made by the registered company auditor in
response to a notice given to the audit company under
subsection 225A(5) of the ASIC Act.
Qualified privilege for subsequent publication
(3) A person has qualified privilege in respect of the publishing of a
document:
(a) prepared by an auditor of the licensee in the course of the
auditor’s duties as auditor; or
(b) required by or under this Chapter to be lodged with ASIC
(whether or not the document has been so lodged).
(4) A person has qualified privilege in respect of the publishing of a
statement:
(a) made by an auditor of the licensee as mentioned in
subsection (1); or
(b) a statement made by a registered company auditor as
mentioned in subsection (2).
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Section 991A
Corporations Act 2001 509
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Division 7—Other rules about conduct
991A Financial services licensee not to engage in unconscionable
conduct
(1) A financial services licensee must not, in or in relation to the
provision of a financial service, engage in conduct that is, in all the
circumstances, unconscionable.
(2) If a person suffers loss or damage because a financial services
licensee contravenes subsection (1), the person may recover the
amount of the loss or damage by action against the licensee.
(3) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(4) This section does not affect any liability that a person has under
any other law.
991B Financial services licensee to give priority to clients’ orders
(1) This section applies if:
(a) a person (the client) has instructed a financial services
licensee to buy or sell financial products of a particular class
that are able to be traded on a licensed market; and
(b) the licensee has not complied with the instruction; and
(c) the client is not an associate of the licensee; and
(d) regulations made for the purposes of this paragraph do not
exclude those financial products from this section.
(2) The financial services licensee must not, except as permitted by
subsection (3):
(a) enter into a transaction of purchase or sale of financial
products of that class either on their own behalf or on behalf
of an associate of the licensee; or
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Section 991C
510 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) instruct another person to enter into a transaction of purchase
or sale of financial products of that class on behalf of the
licensee or an associate of the licensee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) Subsection (2) does not apply in relation to the entering into of a
transaction, or the giving of an instruction, by the licensee if:
(a) the client’s instructions required the purchase or sale to be
effected only on specified conditions relating to price and the
licensee has been unable to comply with the instructions
because of those conditions; or
(b) the transaction, or the giving of the instruction, is permitted
by regulations made for the purposes of this paragraph.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
991C Regulations may deal with various matters relating to
instructions to deal through licensed markets
The regulations may do all or any of the following in relation to
instructions received by financial services licensees to deal in
financial products through licensed markets:
(a) impose requirements relating to the order in which
instructions are to be transmitted to a licensed market or to
another financial services licensee who is a participant in a
licensed market;
(b) impose requirements relating to the order in which dealings
that have been effected on a licensed market are to be
allocated to instructions;
(c) prohibit the disclosure of instructions in specified
circumstances.
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Section 991D
Corporations Act 2001 511
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991D Regulations may require records to be kept in relation to
instructions to deal on licensed markets and foreign
markets
The regulations may impose requirements for the keeping of
records relating to all or any of the following:
(a) instructions received by financial services licensees to deal in
financial products through licensed markets or through other
financial markets (whether inside or outside Australia);
(b) the execution of such instructions;
(c) the transmission of such instructions.
991E Obligations of financial services licensee in relation to dealings
with non-licensees
Obligation to disclose if acting on own behalf
(1) Subject to the regulations, a financial services licensee must not,
either personally or through an authorised representative, enter into
a financial product transaction on their own behalf:
(a) that relates to a financial product that is able to be traded on a
licensed market; and
(b) that is with a person (the non-licensee) who is not a financial
services licensee or an authorised representative;
if:
(c) the licensee has not (in accordance with any applicable
regulations made for the purposes of paragraph (2)(a))
disclosed to the non-licensee the fact that the licensee will be
acting on their own behalf in the proposed dealing; or
(d) the non-licensee has not (in accordance with any applicable
regulations made for the purposes of paragraph (2)(b))
consented to the licensee so acting in the proposed dealing.
If the licensee is acting through an authorised representative, the
disclosure referred to in paragraph (c) may instead be given by the
representative.
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Division 7 Other rules about conduct
Section 991E
512 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The regulations may deal with either or both of the following:
(a) how a disclosure referred to in paragraph (1)(c) is to be
made;
(b) how a consent referred to in paragraph (1)(d) is to be given.
Obligation not to charge fee
(3) If a financial services licensee, either personally or through an
authorised representative, enters into a transaction of sale or
purchase of financial products on their own behalf:
(a) that relates to a financial product that is able to be traded on a
licensed market; and
(b) that is with a person (the non-licensee) who is not a financial
services licensee or an authorised representative;
the licensee must only charge the non-licensee a brokerage,
commission or other fee in respect of the transaction if the charge
is permitted by the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Person may rescind contract if section contravened
(4) If subsection (1) or (3) is contravened in relation to a transaction
(whether or not anyone is convicted of an offence in respect of the
contravention), the non-licensee may, subject to subsection (5),
rescind the contract effecting the transaction, unless the contract
was for the purchase of financial products by the non-licensee and
the non-licensee has disposed of those products.
(5) The right under subsection (4) to rescind the contract:
(a) can only be exercised during the period of 14 days starting
on:
(i) unless subparagraph (ii) applies—the day on which the
contract was entered into; or
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Section 991F
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(ii) if regulations made for the purposes of this
subparagraph specify a later day—that later day; and
(b) is to be exercised by notice in writing to the licensee.
(6) Nothing in subsections (4) and (5) affects any other right that a
person has.
Regulations may require records to be kept in relation to
transactions entered into by licensee on own behalf
(7) The regulations may impose requirements for the keeping of
records relating to financial products transactions entered into by a
financial services licensee on their own behalf.
991F Dealings involving employees of financial services licensees
(1) Subject to the regulations, a financial services licensee and an
employee of the licensee must not, on their own behalves, jointly
acquire a financial product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subject to the regulations, a financial services licensee must not
give credit to an employee of the licensee, or to a person who they
know is an associate of an employee of the licensee, if:
(a) the credit is given for the purpose of enabling the person to
whom the credit is given to acquire a financial product; or
(b) the licensee knows or has reason to believe that the credit
will be used for the purpose of acquiring a financial product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) Subject to the regulations, a person:
(a) who is an employee of a financial services licensee that is a
participant in a licensed market; and
(b) who is so employed in connection with a business of dealing
in financial products;
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Section 991F
514 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
must only, on their own behalf, acquire or agree to acquire a
financial product of a kind that is able to be traded on that market if
the licensee acts as the agent of the person in respect of the
acquisition.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) In this section, a reference to an employee of a financial services
licensee includes, for a licensee that is a body corporate, a
reference to an officer of the body.
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Miscellaneous Division 8
Section 992A
Corporations Act 2001 515
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Division 8—Miscellaneous
992A Prohibition on hawking of certain financial products
(1) A person must not offer financial products for issue or sale in the
course of, or because of, an unsolicited meeting with another
person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subsection (1) does not apply to offering of securities, hawking of
which is prohibited by section 736, or to offering of managed
investment products, hawking of which is prohibited by
section 992AA.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
(3) A person must not make an offer to issue or sell a financial product
in the course of, or because of:
(aa) an unsolicited telephone call to another person; or
(ab) an unsolicited contact with another person in another way
that is prescribed by the regulations for the purposes of this
paragraph;
unless the other person has been:
(a) contacted only during the hours prescribed by the regulations
and only if the person is not listed on the “No Contact/No
Call” register in relation to the person making the contact;
and
(b) given an opportunity to:
(i) register on a “No Contact/No Call” register maintained
by the person making the contact at no cost to that
person; and
(ii) select the time and frequency of any future contacts; and
(c) given a Product Disclosure Statement before becoming
bound to acquire a financial product; and
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Section 992A
516 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) clearly informed of the importance of using the information
in the Product Disclosure Statement when making a decision
to acquire a financial product; and
(e) given the option of having the information in the Product
Disclosure Statement read out to that person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3A) Neither subsection (1) nor (3) applies to an offer of financial
products if the offer is not to a retail client.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
(3B) Neither subsection (1) nor (3) applies to an offer of financial
products that is made under an eligible employee share scheme.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
(4) In addition to other penalties for breaches of this section, a failure
to comply with this section gives the other person a right of return
and refund exercisable within 1 month after the expiry date of the
relevant cooling-off period for the financial product, or one month
and fourteen days in the event that no cooling-off period applies to
the financial product, subject to the following provisions:
(a) on the exercise of the right to return the product:
(i) if the product is constituted by a legal relationship
between the client and the issuer of the product—that
relationship is, by force of this subsection, terminated
with effect from that time without penalty to the client;
and
(ii) any contract for the acquisition of the product by the
client is, by force of this subsection, terminated with
effect from that time without penalty to the client;
(b) the regulations may provide for consequences and
obligations (in addition to those provided for in
paragraph (a)) to apply if the right to return a financial
product is exercised;
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Section 992AA
Corporations Act 2001 517
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(c) the regulations may do any or all of the following:
(i) provide that a specified subclass of financial products
that would otherwise be covered by this subsection is
excluded from this subsection;
(ii) provide additional requirements to be satisfied before
this subsection applies in relation to a class or subclass
of financial products;
(iii) provide that this subsection does not apply in relation to
the provision of a financial product in specified
circumstances.
(5) For the purposes of this section:
(a) a reference to offering a financial product for issue (or
offering to issue a financial product) includes a reference to
inviting an application for the issue of the financial product;
and
(b) a reference to offering a financial product for sale (or
offering to sell a financial product) includes a reference to
inviting an offer to purchase the financial product.
992AA Prohibition of hawking of managed investment products
(1) A person must not offer interests in managed investment schemes
for issue or sale in the course of, or because of:
(a) an unsolicited meeting with another person; or
(b) an unsolicited telephone call to another person;
unless the offer is exempted under subsection (2).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subsection (1) does not apply to an offer of interests in managed
investment schemes if:
(a) the offer is not to a retail client;
(b) the offer is an offer of interests in a listed managed
investment scheme made by telephone by a financial services
licensee; or
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Section 992B
518 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the offer is made to a client by a financial services licensee
through whom the client has acquired or disposed of an
interest in a managed investment scheme in the previous 12
months; or
(d) the offer is made under an eligible employee share scheme.
(3) For the purposes of this section:
(a) a reference to offering interests in a managed investment
scheme for issue includes a reference to inviting an
application for the issue of interests in the scheme; and
(b) a reference to offering interests in a managed investment
scheme for sale includes a reference to inviting an offer to
purchase interests in the scheme.
992B Exemptions and modifications by ASIC
(1) ASIC may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or class of financial products from
all or specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a
financial product, or a class of persons or financial products,
as if specified provisions of this Part were omitted, modified
or varied as specified in the declaration.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(4) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(c) had not been made, that conduct does not
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Section 992C
Corporations Act 2001 519
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (4)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(6) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
992C Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Division 9 Enforcement
Section 993A
520 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 9—Enforcement
993A Overview
This Division contains provisions creating offences by reference to
various rules contained in preceding Divisions of this Part.
However, it does not create all the offences relating to those rules,
as some offences are created by subsection 1311(1). Where
offences are created by subsection 1311(1) in relation to a rule, this
is indicated by a note at the end of the provision containing the
rule.
993B Offence of failing to pay client money into an account as
required
Strict liability offence
(1) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 981B(1) to pay
particular money into an account in accordance with that
subsection; and
(b) the licensee does not pay the money into an account in
accordance with that subsection.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 981B(1) to pay
particular money into an account in accordance with that
subsection; and
(b) the licensee does not pay the money into an account in
accordance with that subsection.
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Enforcement Division 9
Section 993C
Corporations Act 2001 521
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993C Offence of failing to comply with requirements relating to
client money account
Strict liability offence
(1) A financial services licensee commits an offence if the licensee
contravenes a requirement in regulations made for the purposes of
section 981C.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
(a) a requirement in regulations made for the purposes of
section 981C applies to the licensee; and
(b) the licensee contravenes the requirement.
993D Offence of failing to pay loan money into an account as
required
Strict liability offence
(1) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 982B(1) to pay
particular money into an account in accordance with that
subsection; and
(b) the licensee does not pay the money into an account in
accordance with that subsection.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
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Section 993D
522 Corporations Act 2001
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(a) the licensee is required by subsection 982B(1) to pay
particular money into an account in accordance with that
subsection; and
(b) the licensee does not pay the money into an account in
accordance with that subsection.
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Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
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About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Corporations Act 2001 i
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Contents
Chapter 7—Financial services and markets 1
Part 7.9—Financial product disclosure and other provisions
relating to issue, sale and purchase of financial
products 1
Division 1—Preliminary 1
1010A Part generally does not apply to securities.........................1
1010B Part does not apply to financial products not issued
in the course of a business .................................................1
1010BA Part does not apply to contribution plans ..........................2
1010C Special provisions about meaning of sale and offer ..........2
1010D General approach to offence provisions ............................2
Division 2—Product Disclosure Statements 3
Subdivision A—Preliminary 3
1011A Jurisidictional scope of Division .......................................3
1011B Definitions.........................................................................3
1011C Treatment of offers of options over financial
products .............................................................................4
Subdivision B—Requirement for a Product Disclosure Statement
to be given 4
1012A Obligation to give Product Disclosure Statement—
personal advice recommending particular financial
product ..............................................................................4
1012B Obligation to give Product Disclosure Statement—
situations related to issue of financial products .................6
1012C Obligation to give Product Disclosure Statement—
offers related to sale of financial products.........................7
1012D Situations in which Product Disclosure Statement
is not required..................................................................12
1012DAA Rights issues for which Product Disclosure
Statement is not required .................................................17
1012DA Product Disclosure Statement not required for sale
amounting to indirect issue..............................................20
1012E Small scale offerings of managed investment and
other prescribed financial products (20 issues or
sales in 12 months) ..........................................................26
1012F Product Disclosure Statement for certain
superannuation products may be provided later ..............29
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1012G Product Disclosure Statement may sometimes be
provided later ..................................................................29
1012H Obligation to take reasonable steps to ensure that
Product Disclosure Statement is given to person
electing to be covered by group financial product ...........31
1012I Obligation to give employer a Product Disclosure
Statement in relation to certain superannuation
products and RSA products .............................................32
1012IA Treatment of arrangements under which a person
can instruct another person to acquire a financial
product ............................................................................34
1012J Information must be up to date........................................38
1012K Anti-avoidance determinations........................................38
Subdivision C—Preparation and content of Product Disclosure
Statements 39
1013A Who must prepare Product Disclosure Statement ...........39
1013B Title of Product Disclosure Statement .............................40
1013C Product Disclosure Statement content
requirements ....................................................................40
1013D Product Disclosure Statement content—main
requirements ....................................................................42
1013DA Information about ethical considerations etc. ..................45
1013E General obligation to include other information
that might influence a decision to acquire .......................45
1013F General limitations on extent to which information
is required to be included ................................................45
1013FA Information not required to be included in PDS for
continuously quoted securities.........................................46
1013G Product Disclosure Statement must be dated...................47
1013H Requirements if Product Disclosure Statement
states or implies that financial product will be able
to be traded......................................................................47
1013I Extra requirements if Product Disclosure
Statement relates to managed investment products
that are ED securities.......................................................48
1013J Requirements if Statement has been lodged with
ASIC................................................................................49
1013K Requirements relating to consents to certain
statements ........................................................................49
1013L Product Disclosure Statement may consist of 2 or
more separate documents given at same time..................50
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1013M Combining a Product Disclosure Statement and a
Financial Services Guide in a single document ...............51
Subdivision D—Supplementary Product Disclosure Statements 51
1014A What a Supplementary Product Disclosure
Statement is .....................................................................51
1014B Title of Supplementary Product Disclosure
Statement.........................................................................52
1014C Form of Supplementary Product Disclosure
Statement.........................................................................52
1014D Effect of giving person a Supplementary Product
Disclosure Statement .......................................................52
1014E Situation in which only a Supplementary Product
Disclosure Statement need be given ................................53
1014F Application of other provisions in relation to
Supplementary Product Disclosure Statements ...............53
Subdivision DA—Replacement Product Disclosure Statements 53
1014G Application of this Subdivision—stapled securities ........53
1014H What a Replacement Product Disclosure Statement
is......................................................................................54
1014J Consequences of lodging a Replacement Product
Disclosure Statement .......................................................54
1014K Form, content and preparation of Replacement
Product Disclosure Statements ........................................54
1014L Giving, lodgment and notice of Replacement
Product Disclosure Statements ........................................55
Subdivision E—Other requirements relating to Product
Disclosure Statements and Supplementary
Product Disclosure Statements 56
1015A Subdivision applies to Product Disclosure
Statements and Supplementary Product Disclosure
Statements .......................................................................56
1015B Some Statements must be lodged with ASIC ..................56
1015C How a Statement is to be given .......................................57
1015D Notice, retention and access requirements for
Statement that does not need to be lodged.......................58
1015E Altering a Statement after its preparation and
before giving it to a person..............................................59
Subdivision F—Other rights and obligations related to Product
Disclosure Statements 60
1016A Provisions relating to use of application forms................60
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1016B If Statement lodged with ASIC, financial product
is not to be issued or sold before specified period ...........64
1016C Minimum subscription condition must be fulfilled
before issue or sale ..........................................................65
1016D Condition about ability to trade on a market must
be fulfilled before issue or sale........................................65
1016E Choices open to person making the offer if
disclosure condition not met or Product Disclosure
Statement defective .........................................................67
1016F Remedies for person acquiring financial product
under defective Product Disclosure Document................73
Division 3—Other disclosure obligations of the issuer of a
financial product 75
1017A Obligation to give additional information on
request .............................................................................75
1017B Ongoing disclosure of material changes and
significant events.............................................................77
1017BA Trustees of regulated superannuation funds—
obligation to make product dashboard publicly
available ..........................................................................80
1017BB Trustees of registrable superannuation entities—
obligation to make information relating to
investment of assets publicly available............................83
1017BC Obligations relating to investment of assets of
registrable superannuation entities—general rule
about giving notice and providing information ...............84
1017BD Obligations relating to investment of assets of
registrable superannuation entities—giving notice
to providers under custodial arrangements ......................85
1017BE Obligations relating to investment of assets of
registrable superannuation entities—giving notice
to acquirers under custodial arrangements.......................87
1017C Information for existing holders of superannuation
products and RSA products .............................................88
1017D Periodic statements for retail clients for financial
products that have an investment component ..................93
1017DA Trustees of superannuation entities—regulations
may specify additional obligations to provide
information......................................................................95
1017E Dealing with money received for financial product
before the product is issued .............................................97
1017F Confirming transactions ..................................................99
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1017G Certain product issuers and regulated persons must
meet appropriate dispute resolution requirements .........105
Division 4—Advertising for financial products 107
1018A Advertising or other promotional material for
financial product must refer to Product Disclosure
Statement.......................................................................107
1018B Prohibition on advertising personal offers covered
by section 1012E ...........................................................110
Division 5—Cooling-off periods 112
1019A Situations in which this Division applies.......................112
1019B Cooling-off period for return of financial product.........113
Division 5A—Unsolicited offers to purchase financial products
off-market 115
1019C Definitions.....................................................................115
1019D Offers to which this Division applies ............................115
1019E How offers are to be made.............................................116
1019F Prohibition on inviting offers to sell ..............................117
1019G Duration and withdrawal of offers.................................117
1019H Terms of offer cannot be varied ....................................117
1019I Contents of offer document ...........................................118
1019J Obligation to update market value.................................119
1019K Rights if requirements of Division not complied
with................................................................................120
Division 5B—Disclosure etc. in relation to short sales covered by
securities lending arrangement of listed
section 1020B products 124
1020AA Definitions.....................................................................124
1020AB Seller disclosure ............................................................125
1020AC Licensee disclosure........................................................126
1020AD Public disclosure of information....................................127
1020AE Licensee’s obligation to ask seller about short sale .......129
1020AF Regulations....................................................................129
Division 5C—Information about CGS depository interests 131
1020AG Jurisdictional scope of Division ....................................131
1020AH Definitions.....................................................................131
1020AI Requirement to give information statements for
CGS depository interest if recommending
acquisition of interest ....................................................132
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1020AJ Information statement given must be up to date ............134
1020AK How an information statement is to be given ................134
1020AL Civil action for loss or damage......................................136
Division 6—Miscellaneous 138
1020A Offers etc. relating to certain managed investment
schemes not to be made in certain circumstances..........138
1020B Prohibition of certain short sales of securities,
managed investment products and certain other
financial products ..........................................................138
1020D Part cannot be contracted out of ....................................140
1020E Stop orders by ASIC......................................................140
1020F Exemptions and modifications by ASIC .......................144
1020G Exemptions and modifications by regulations...............145
Division 7—Enforcement 147
Subdivision A—Offences 147
1021A Overview.......................................................................147
1021B Definitions.....................................................................147
1021C Offence of failing to give etc. a disclosure
document or statement...................................................149
1021D Offence of preparer of defective disclosure
document or statement giving the document or
statement knowing it to be defective .............................151
1021E Offence of preparer of defective disclosure
document or statement giving the document or
statement (whether or not known to be defective) .........152
1021F Offence of regulated person (other than preparer)
giving disclosure document or statement knowing
it to be defective ............................................................153
1021FA Paragraph 1012G(3)(a) obligation—offences
relating to communication of information .....................154
1021FB Paragraph 1012G(3)(a) obligation—offences
relating to information provided by product issuer
for communication by another person ...........................155
1021G Offence of financial services licensee failing to
ensure authorised representative gives etc.
disclosure documents or statements as required ............158
1021H Offences if a Product Disclosure Statement (or
Supplementary PDS) does not comply with certain
requirements ..................................................................158
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1021I Offence of giving disclosure document or
statement that has not been prepared by the
appropriate person .........................................................159
1021J Offences if preparer etc. of disclosure document or
statement becomes aware that it is defective .................160
1021K Offence of unauthorised alteration of Product
Disclosure Statement (or Supplementary PDS).............161
1021L Offences of giving, or failing to withdraw, consent
to inclusion of defective statement ................................162
1021M Offences relating to keeping and providing copies
of Product Disclosure Statements (or
Supplementary PDSs)....................................................164
1021N Offence of failing to provide additional
information requested under section 1017A..................165
1021NA Offences relating to obligation to make product
dashboard publicly available .........................................165
1021NB Offences relating to obligation to make
superannuation investment information publicly
available ........................................................................168
1021NC Offences relating to obligations under
sections 1017BC, 1017BD and 1017BE........................170
1021O Offences of issuer or seller of financial product
failing to pay money into an account as required ..........172
1021P Offences relating to offers to which Division 5A
applies ...........................................................................173
Subdivision B—Civil liability 175
1022A Definitions.....................................................................175
1022B Civil action for loss or damage......................................177
1022C Additional powers of court to make orders ...................184
Part 7.10—Market misconduct and other prohibited conduct
relating to financial products and financial services 185
Division 1—Preliminary 185
1040A Content of Part ..............................................................185
Division 2—The prohibited conduct (other than insider trading
prohibitions) 186
1041A Market manipulation .....................................................186
1041B False trading and market rigging—creating a false
or misleading appearance of active trading etc..............186
1041C False trading and market rigging—artificially
maintaining etc. trading price ........................................188
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1041D Dissemination of information about illegal
transactions....................................................................189
1041E False or misleading statements ......................................190
1041F Inducing persons to deal................................................191
1041G Dishonest conduct .........................................................192
1041H Misleading or deceptive conduct (civil liability
only) ..............................................................................192
1041I Civil action for loss or damage for contravention
of sections 1041E to 1041H ..........................................194
1041J Sections of this Division have effect independently
of each other ..................................................................196
1041K Division applies to certain conduct to the
exclusion of State Fair Trading Acts provisions............196
Division 2A—Proportionate liability for misleading and
deceptive conduct 197
1041L Application of Division .................................................197
1041M Certain concurrent wrongdoers not to have benefit
of apportionment ...........................................................197
1041N Proportionate liability for apportionable claims ............198
1041O Defendant to notify plaintiff of concurrent
wrongdoer of whom defendant aware ...........................199
1041P Contribution not recoverable from defendant................199
1041Q Subsequent actions ........................................................200
1041R Joining non-party concurrent wrongdoer in the
action.............................................................................200
1041S Application of Division .................................................200
Division 3—The insider trading prohibitions 202
Subdivision A—Preliminary 202
1042A Definitions.....................................................................202
1042B Application of Division .................................................203
1042C When information is generally available ......................203
1042D When a reasonable person would take information
to have a material effect on price or value of
Division 3 financial products.........................................204
1042E Division 3 financial products taken to be able to be
traded despite suspensions or section 794D
directions.......................................................................204
1042F Inciting, inducing or encouraging an act or
omission constitutes procuring the omission.................205
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1042G Information in possession of officer of body
corporate........................................................................205
1042H Information in possession of partner or employee
of partnership ................................................................206
Subdivision B—The prohibited conduct 206
1043A Prohibited conduct by person in possession of
inside information .........................................................206
1043B Exception for withdrawal from registered scheme ........208
1043C Exception for underwriters ............................................208
1043D Exception for acquisition pursuant to legal
requirement ...................................................................209
1043E Exception for information communicated pursuant
to a legal requirement ....................................................209
1043F Chinese wall arrangements by bodies corporate............209
1043G Chinese wall arrangements by partnerships etc. ............210
1043H Exception for knowledge of person’s own
intentions or activities ...................................................211
1043I Exception for bodies corporate......................................211
1043J Exception for officers or agents of body corporate .......212
1043K Transactions by holder of financial services
licence or a representative of the holder of such a
licence ...........................................................................212
1043L A specific situation in which a compensation order
under section 1317HA may be made.............................213
1043M Defences to prosecution for an offence .........................218
1043N Relief from civil liability ...............................................219
1043O Powers of Court.............................................................219
Division 4—Defences, relief and limits on liability 221
1044A General defence or relief for publishers ........................221
1044B Limit on liability for misleading or deceptive
conduct ..........................................................................221
Division 5—Miscellaneous 224
1045A Exemptions and modifications by regulations...............224
Part 7.11—Title and transfer 225
Division 1—Title to certain securities 225
1070A Nature of shares and certain other interests in a
company or registered scheme ......................................225
1070B Numbering of shares .....................................................226
1070C Matters to be specified in share certificate ....................227
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1070D Loss or destruction of title documents for certain
securities........................................................................227
Division 2—Transfer of certain securities 230
Subdivision A—General provisions 230
1071A Application of the Subdivision to certain securities ......230
1071B Instrument of transfer ....................................................230
1071C Occupation need not appear in transfer document,
register etc. ....................................................................232
1071D Registration of transfer at request of transferor .............233
1071E Notice of refusal to register transfer ..............................234
1071F Remedy for refusal to register transfer or
transmission...................................................................234
1071G Certification of transfers................................................235
1071H Duties of company with respect to issue of
certificates .....................................................................237
Subdivision B—Special provisions for shares 239
1072A Transmission of shares on death (replaceable
rule—see section 135) ...................................................239
1072B Transmission of shares on bankruptcy
(replaceable rule—see section 135) ..............................240
1072C Rights of trustee of estate of bankrupt shareholder........240
1072D Transmission of shares on mental incapacity
(replaceable rule—see section 135) ..............................242
1072E Trustee etc. may be registered as owner of shares .........243
1072F Registration of transfers (replaceable rule—see
section 135) ...................................................................245
1072G Additional general discretion for directors of
proprietary companies to refuse to register
transfers (replaceable rule—see section 135)................246
1072H Notices relating to non-beneficial and beneficial
ownership of shares .......................................................246
Division 3—Transfer of certain securities effected otherwise
than through a prescribed CS facility 250
1073A Application of the Division to certain securities............250
1073B Definitions.....................................................................250
1073C Application of Division to certain bodies as if they
were companies .............................................................251
1073D Regulations may govern transfer of certain
securities........................................................................251
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1073E ASIC may extend regulations to securities not
otherwise covered..........................................................254
1073F Operation of this Division and regulations made
for its purposes ..............................................................255
Division 4—Transfer of financial products effected through
prescribed CS facility 257
1074A Financial products to which this Division applies .........257
1074B Definitions.....................................................................257
1074C Operating rules of prescribed CS facility may deal
with transfer of title .......................................................257
1074D Valid and effective transfer if operating rules
complied with................................................................258
1074E Regulations may govern transfer of financial
products in accordance with operating rules of
prescribed CS facility ....................................................258
1074F Issuer protected from civil liability for person’s
contravention of prescribed CS facility’s
certificate cancellation rules ..........................................261
1074G Operation of this Division and regulations made
for its purposes ..............................................................261
Division 5—Exemptions and modifications 264
1075A ASIC’s power to exempt and modify ............................264
Part 7.12—Miscellaneous 266
Division 1—Qualified privilege 266
1100A Qualified privilege for information given to ASIC........266
1100B Qualified privilege for the conduct of market
licensees and CS facility licensees ................................267
1100C Qualified privilege for information given to
market licensees and CS facility licensees etc. ..............268
1100D Extension of protections given by this Division ............268
Division 2—Other matters 269
1101A Approved codes of conduct ...........................................269
1101B Power of Court to make certain orders ..........................270
1101C Preservation and disposal of records etc........................275
1101D Destruction of records by ASIC ....................................276
1101E Concealing etc. of books ...............................................276
1101F Falsification of records ..................................................277
1101G Precautions against falsification of records ...................278
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1101GA How Part 9.3 applies to books required to be kept
by this Chapter etc.........................................................278
1101H Contravention of Chapter does not generally affect
validity of transactions etc.............................................279
1101I Gaming and wagering laws do not affect validity
of contracts relating to financial products......................279
1101J Delegation .....................................................................280
Chapter 8—Mutual recognition of securities offers 281
Part 8.1—Preliminary 281 1200A Definitions.....................................................................281
Part 8.2—Foreign offers that are recognised in this jurisdiction 283
Division 1—Recognised offers 283
1200B When an offer is a recognised offer...............................283
1200C Conditions that must be met to be a recognised
offer ...............................................................................283
1200D Required documents and information............................285
1200E Warning statement.........................................................286
Division 2—Effect of a recognised offer 287
1200F Effect of a recognised offer ...........................................287
Division 3—Ongoing conditions for recognised offers 289
1200G Offering conditions........................................................289
1200H Address for service condition ........................................293
1200J Dispute resolution condition..........................................294
Division 4—Modification of provisions of this Act 296
1200K Additional operation of section 675 (continuous
disclosure) .....................................................................296
1200L Pre-offer advertising......................................................296
1200M Modification by the regulations.....................................297
Division 5—ASIC’s powers in relation to recognised offers 298
1200N Stop orders ....................................................................298
1200P Ban on making subsequent recognised offers................302
1200Q Offence of breaching an ongoing condition ..................304
Division 6—Miscellaneous 305
1200R Service of documents ....................................................305
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Part 8.3—Offers made under foreign recognition schemes 306 1200S Notice to ASIC..............................................................306
1200T Extension of this Act to recognised jurisdictions ..........306
1200U ASIC stop order for advertising in a recognised
jurisdiction.....................................................................307
Chapter 9—Miscellaneous 309
Part 9.1—Registers and registration of documents 309 1274 Registers........................................................................309
1274AA Register of disqualified company directors and
other officers .................................................................317
1274A Obtaining information from certain registers ................318
1274B Use, in court proceedings, of information from
ASIC’s national database ..............................................319
1274C ASIC certificate.............................................................319
1275 Relodging of lost registered documents ........................320
Part 9.2—Registration of auditors 321
Division 1—Interpretation 321
1276 Definitions.....................................................................321
Division 2—Registration 322
1279 Application for registration as auditor ...........................322
1280 Registration of auditors .................................................322
1280A Approval of auditing competency standard ...................324
1281 Auditor-General taken to be registered as auditor .........325
1285 Register of Auditors ......................................................325
1287 Notification of certain matters .......................................326
1287A Annual statements by registered company auditors.......326
1289 Auditors and other persons to enjoy qualified
privilege in certain circumstances .................................327
Division 2A—Conditions on registration of auditors 330
1289A ASIC may impose conditions on registration ................330
Division 3—Cancellation or suspension of registration 331
1290 Cancellation at request of registered person ..................331
1291 Immediate suspension or cancellation ...........................331
1291A Notice of suspension or cancellation .............................331
1291B ASIC may vary or revoke suspension ...........................332
1292 Powers of Board in relation to auditors .........................332
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1294 Board to give opportunity for hearing etc......................334
1294A Pre-hearing conference..................................................335
1295 Board may remove suspension ......................................336
1296 Notice of Board’s decision ............................................336
1297 Time when Board’s decision comes into effect .............337
1298 Effect of suspension ......................................................338
Division 4—Validation of approval of auditing competency
standard 339
1298P Validation of approval of auditing competency
standard .........................................................................339
1298Q Compensation for acquisition of property .....................339
Part 9.2A—Authorised audit companies 341
Division 1—Registration 341
1299A Application for registration as authorised audit
company ........................................................................341
1299B Eligibility for registration as an authorised audit
company ........................................................................341
1299C Registration as authorised audit company .....................342
1299D Registration may be subject to conditions .....................342
1299E Register of authorised audit companies .........................343
1299F Notification of certain matters .......................................344
1299G Annual statements by authorised audit company...........345
Division 2—Cancellation or suspension of registration 346
1299H Cancellation at request of registered person ..................346
1299I Cancellation or suspension in other cases......................346
1299J Notice of cancellation or suspension .............................346
1299K Time when ASIC’s decision comes into effect..............347
1299L Effect of suspension ......................................................347
1299M Effect of cancellation.....................................................348
Part 9.3—Books 349 1300 Inspection of books .......................................................349
1301 Location of books on computers ...................................350
1303 Court may compel compliance ......................................351
1304 Translations of instruments ...........................................351
1305 Admissibility of books in evidence ...............................351
1306 Form and evidentiary value of books ............................352
1307 Falsification of books ....................................................353
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Part 9.4—Offences 355
Division 1A—Application of the Criminal Code 355
1308A Application of Criminal Code .......................................355
Division 1—Specific offences 356
1308 False or misleading statements ......................................356
1309 False information etc. ....................................................359
1310 Obstructing or hindering ASIC etc. ...............................363
Division 2—Offences generally 364
1311 General penalty provisions ............................................364
1312 Penalties for bodies corporate .......................................365
1313 Penalty notices...............................................................366
1313A Offences committed partly in and partly out of the
jurisdiction.....................................................................370
1314 Continuing offences ......................................................370
1315 Proceedings: how taken.................................................374
1316 Time for instituting criminal proceedings .....................374
1316A Privilege against self-incrimination not available
to bodies corporate in Corporations Act criminal
proceedings ...................................................................375
1317 Certain persons to assist in prosecutions .......................375
Part 9.4AAA—Protection for whistleblowers 377 1317AA Disclosures qualifying for protection under this
Part ................................................................................377
1317AB Disclosure that qualifies for protection not
actionable etc.................................................................378
1317AC Victimisation prohibited................................................379
1317AD Right to compensation...................................................380
1317AE Confidentiality requirements for company,
company officers and employees and auditors ..............380
Part 9.4A—Review by Administrative Appeals Tribunal of
certain decisions 383 1317A Definitions.....................................................................383
1317B Applications for review .................................................383
1317C Excluded decisions........................................................383
1317D Notice of reviewable decision and review rights ...........385
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Part 9.4AA—Infringement notices for alleged contraventions of
continuous disclosure provisions 387 1317DAA Definitions.....................................................................387
1317DAB Purpose and effect of this Part.......................................388
1317DAC Issue of infringement notice ..........................................389
1317DAD Statement of reasons must be given ..............................390
1317DAE Matters to be included in infringement notice ...............391
1317DAF Effect of issue and compliance with infringement
notice.............................................................................394
1317DAG Effect of failure to comply with infringement
notice.............................................................................396
1317DAH Compliance period for infringement notice...................399
1317DAI Withdrawal of infringement notice................................399
1317DAJ Publication in relation to infringement notices ..............401
Part 9.4B—Civil consequences of contravening civil penalty
provisions 403 1317DA Definitions.....................................................................403
1317E Declarations of contravention........................................403
1317F Declaration of contravention is conclusive
evidence ........................................................................407
1317G Pecuniary penalty orders ...............................................407
1317GA Refund orders—contravention of section 962P.............411
1317H Compensation orders—corporation/scheme civil
penalty provisions .........................................................412
1317HA Compensation orders—financial services civil
penalty provisions .........................................................413
1317HB Compensation orders—market integrity rules ...............414
1317J Who may apply for a declaration or order .....................415
1317K Time limit for application for a declaration or
order ..............................................................................416
1317L Civil evidence and procedure rules for declarations
of contravention and civil penalty orders ......................416
1317M Civil proceedings after criminal proceedings ................416
1317N Criminal proceedings during civil proceedings .............417
1317P Criminal proceedings after civil proceedings ................417
1317Q Evidence given in proceedings for penalty not
admissible in criminal proceedings ...............................418
1317R ASIC requiring person to assist .....................................418
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1317S Relief from liability for contravention of civil
penalty provision ...........................................................419
Part 9.5—Powers of Courts 422 1318 Power to grant relief ......................................................422
1319 Power of Court to give directions with respect to
meetings ordered by the Court.......................................423
1322 Irregularities ..................................................................423
1323 Power of Court to prohibit payment or transfer of
money, financial products or other property..................426
1324 Injunctions.....................................................................429
1324A Provisions relating to prosecutions................................432
1324B Order to disclose information or publish
advertisements ...............................................................433
1325 Other orders...................................................................433
1325A Orders if contravention of Chapter 6, 6A, 6B or 6C......436
1325B Court may order bidder to make offers..........................437
1325C Unfair or unconscionable agreements, payments or
benefits ..........................................................................437
1325D Contravention due to inadvertence etc. .........................439
1325E Orders to secure compliance .........................................439
1326 Effect of sections 1323, 1324 and 1325.........................440
1327 Power of Court to punish for contempt of Court ...........440
Part 9.6—Proceedings 441 1330 ASIC’s power to intervene in proceedings ....................441
1331 Civil proceedings not to be stayed.................................441
1332 Standard of proof...........................................................441
1333 Evidence of contravention.............................................442
1335 Costs..............................................................................442
1336 Vesting of property........................................................443
Part 9.6A—Jurisdiction and procedure of Courts 445
Division 1—Civil jurisdiction 445
Subdivision A—Preliminary 445
1337A Operation of Division....................................................445
Subdivision B—Conferral of jurisdiction 446
1337B Jurisdiction of Federal Court and State and
Territory Supreme Courts..............................................446
1337C Jurisdiction of Family Court and State Family
Courts ............................................................................447
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1337D Jurisdiction of courts (decisions to prosecute and
related criminal justice process decisions made by
Commonwealth officers) ...............................................447
1337E Jurisdiction of lower courts ...........................................449
1337F Appeals..........................................................................450
1337G Courts to act in aid of each other ...................................451
Subdivision C—Transfer of proceedings 451
1337H Transfer of proceedings by the Federal Court and
State and Territory Supreme Courts ..............................451
1337J Transfer of proceedings by Family Court and State
Family Courts................................................................453
1337K Transfer of proceedings in lower courts ........................455
1337L Further matters for a court to consider when
deciding whether to transfer a proceeding.....................456
1337M Transfer may be made at any stage................................456
1337N Transfer of documents...................................................457
1337P Conduct of proceedings.................................................457
1337Q Rights of appearance .....................................................458
1337R Limitation on appeals ....................................................458
Subdivision D—Rules of court 459
1337S Rules of the Federal Court.............................................459
1337T Rules of the Supreme Court ..........................................459
1337U Rules of the Family Court .............................................460
Division 2—Criminal jurisdiction 461
1338A Operation of Division....................................................461
1338B Jurisdiction of courts .....................................................461
1338C Laws to be applied.........................................................464
Part 9.7—Unclaimed property 465 1339 ASIC to deal with unclaimed property ..........................465
1340 No liability to pay calls on shares etc. ...........................465
1341 Entitlement to unclaimed property ................................465
1342 Commonwealth or ASIC not liable for loss or
damage ..........................................................................467
1343 Disposal of securities if whereabouts of holder
unknown........................................................................467
1343A Disposal of interests in registered scheme if
whereabouts of member unknown.................................467
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Part 9.9—Miscellaneous 469 1344 Use of ABN...................................................................469
1345A Minister may delegate prescribed functions and
powers under this Act....................................................469
1346 Non-application of rule against perpetuities to
certain schemes .............................................................469
1348 Operation of Life Insurance Act ....................................470
1349 Privilege against exposure to penalty—
disqualification etc. .......................................................470
1350 Compensation for compulsory acquisition ....................474
Part 9.10—Fees imposed by the Corporations (Fees) Act 2001
and the Corporations (Review Fees) Act 2003 475 1351 Fees are payable to the Commonwealth ........................475
1354 Lodgment of document without payment of fee............476
1355 Doing act without payment of fee .................................476
1356 Effect of sections 1354 and 1355 ..................................476
1359 Waiver and refund of fees .............................................477
1360 Debts due to the Commonwealth...................................477
1362 Payment of fee does not give right to inspect or
search ............................................................................477
Part 9.12—Regulations 478 1363 Definitions.....................................................................478
1364 Power to make regulations ............................................478
1365 Scope of particular regulations ......................................480
1366 Verifying or certifying documents ................................480
1367 Documents lodged by an agent......................................481
1367A Publication in the prescribed manner ............................481
1368 Exemptions from Chapter 6D or 7 ................................481
1369 Penalty notices...............................................................482
1369A State termination of reference........................................483
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financial products Part 7.9
Preliminary Division 1
Section 1010A
Corporations Act 2001 1
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 7—Financial services and markets
Part 7.9—Financial product disclosure and other
provisions relating to issue, sale and
purchase of financial products
Division 1—Preliminary
1010A Part generally does not apply to securities
(1) Apart from section 1017F and Divisions 5A, 5B, 5C and 6 (and
provisions of Division 7 that apply in relation to that section or
provisions of those Divisions), nothing in this Part applies in
relation to securities.
Note: Chapters 6CA and 6D provide for disclosure in relation to securities.
(2) Apart from section 1017F and Divisions 5A, 5B and 6, nothing in
this Part applies in relation to debentures, stocks or bonds issued or
proposed to be issued by a government.
Note: These financial products are not securities within the meaning of
section 761A.
1010B Part does not apply to financial products not issued in the
course of a business
(1) Apart from Division 5A, nothing in this Part applies in relation to a
financial product that is not or was not issued, or that will not be
issued, in the course of a business of issuing financial products.
(2) For this purpose, the issue of:
(a) any managed investment product; or
(b) any superannuation product;
is taken to occur in the course of a business of issuing financial
products.
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Division 1 Preliminary
Section 1010BA
2 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1010BA Part does not apply to contribution plans
Apart from section 1017F and Divisions 5A and 6 (and provisions
of Division 7 that apply in relation to that section or provisions of
those Divisions), nothing in this Part applies in relation to
contribution plans.
1010C Special provisions about meaning of sale and offer
(1) For the purposes of this Part, a reference to a sale or purchase of a
financial product is a reference to a sale of the product by, or a
purchase of the product from, a person who has (whether by issue
or otherwise) acquired the product. The issue of a financial product
is not a sale of the financial product.
(2) For the purposes of this Part:
(a) a reference to offering to issue a financial product includes a
reference to inviting an application for the issue of the
financial product; and
(b) a reference to offering to sell a financial product includes a
reference to inviting an offer to purchase the financial
product.
1010D General approach to offence provisions
Division 7 contains provisions creating offences by reference to
various rules contained in Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences
are created by subsection 1311(1). Where offences are created by
subsection 1311(1) in relation to a rule, this is indicated by a note
at the end of the provision containing the rule.
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Product Disclosure Statements Division 2
Section 1011A
Corporations Act 2001 3
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Product Disclosure Statements
Subdivision A—Preliminary
1011A Jurisidictional scope of Division
(1) Subject to subsection (2), sections 1012A, 1012B and 1012C only
apply in relation to offers and recommendations referred to in those
sections that are received in this jurisdiction.
(2) Section 1012B also applies in relation to issues referred to in
subparagraph 1012B(3)(a)(iii) that are made in this jurisdiction.
(3) The regulations may make provision dealing with the jurisdictional
scope of some or all of the other provisions of this Division. The
other provisions of this Division have effect subject to any such
regulations.
1011B Definitions
In this Division:
issue Statement has the meaning given by subsection 1013A(1).
offer has a meaning affected by sections 1010C and 1011C.
regulated person, in relation to a financial product, means:
(a) an issuer of the financial product; or
(b) a seller of the financial product if the sale takes place in
circumstances described in subsection 1012C(5), (6) or (8)
(secondary sales that require a Product Disclosure
Statement); or
(c) any financial services licensee; or
(d) any authorised representative of a financial services licensee;
or
(f) any person who is not required to hold an Australian
financial services licence because the person is covered by:
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Division 2 Product Disclosure Statements
Section 1011C
4 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( � or
(g) any person who is required to hold an Australian financial
services licence but who does not hold such a licence.
responsible person for a Product Disclosure Statement has the
meaning given by subsection 1013A(3).
sale has a meaning affected by section 1010C.
sale Statement has the meaning given by subsection 1013A(2).
1011C Treatment of offers of options over financial products
For the purposes of this Division:
(a) an offer of an option over a financial product is not to be
taken to be an offer of the underlying financial product; and
(b) the grant of an option without an offer of the option is taken
to be an offer of the option; and
(c) an offer to grant an option is taken to be an offer to issue the
financial product constituted by the option.
Subdivision B—Requirement for a Product Disclosure
Statement to be given
1012A Obligation to give Product Disclosure Statement—personal
advice recommending particular financial product
Section sets out recommendation situation in which Product
Disclosure Statement required
(1) This section sets out the situations in which giving financial
product advice that consists of, or includes, a recommendation to
acquire a financial product gives rise to an obligation on a
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Product Disclosure Statements Division 2
Section 1012A
Corporations Act 2001 5
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regulated person to give another person a Product Disclosure
Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is a recommendation situation; and
(b) the relevant conduct for that situation is the making of the
recommendation; and
(c) the client for that situation is the person to whom the advice
is provided.
Personal advice recommending a particular financial product
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person provides financial product advice to the
person that consists of, or includes, a recommendation that
the person acquire the financial product; and
(b) the person would acquire the financial product by way of:
(i) the issue of the product to the person (rather than the
transfer of the product to the person); or
(ii) the transfer of the product to the person in
circumstances described in subsection 1012C(5), (6) or
(8) (secondary sales that require a Product Disclosure
Statement); and
(c) the financial product advice is provided to the client as a
retail client; and
(d) the financial product advice is personal advice to the client.
The Product Disclosure Statement must be given at or before the
time when the regulated person provides the advice and must be
given in accordance with this Division.
This section has effect subject to other provisions
(4) This section has effect subject to sections 1012D, 1012DA, 1012E,
1012F, 1012G and 1014E.
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Division 2 Product Disclosure Statements
Section 1012B
6 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012B Obligation to give Product Disclosure Statement—situations
related to issue of financial products
Section sets out issue situations in which Product Disclosure
Statement required
(1) This section sets out situations in which:
(a) an offer relating to the issue of a financial product; or
(b) the issue of a financial product;
gives rise to an obligation on a regulated person to give another
person a Product Disclosure Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is an issue situation; and
(b) the relevant conduct for that situation is the conduct by the
regulated person that gives rise to the obligation to give the
Product Disclosure Statement; and
(c) the client for that situation is the person to whom the
financial product is to be or is issued.
The main issue situations
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person:
(i) offers to issue the financial product to the person; or
(ii) offers to arrange for the issue of the financial product to
the person; or
(iii) issues the financial product to the person in
circumstances in which there are reasonable grounds to
believe that the person has not been given a Product
Disclosure Statement for the product; and
(b) the financial product is, or is to be, issued to the person as a
retail client.
The Product Disclosure Statement must be given at or before the
time when the regulated person makes the offer, or issues the
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Product Disclosure Statements Division 2
Section 1012C
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financial product, to the person and must be given in accordance
with this Division.
Note: If a Product Disclosure Statement is given when the offer is made, it
will not need to be given again when the product is issued to the
person (see subsection 1012D(1)) unless the Product Disclosure
Statement that was given is no longer up to date.
Receiving offer to acquire financial product
(4) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the person makes an offer to the regulated person to acquire
the financial product; and
(b) the person would acquire the financial product by way of the
issue of the product to the person (rather than the transfer of
the product to the person); and
(c) the financial product is to be issued to the person as a retail
client.
The Product Disclosure Statement must be given to the person
before the person becomes bound by a legal obligation to acquire
the financial product pursuant to the offer and must be given in
accordance with this Division.
This section has effect subject to other provisions
(5) This section has effect subject to sections 1012D, 1012DAA,
1012E, 1012F, 1012G and 1014E.
1012C Obligation to give Product Disclosure Statement—offers
related to sale of financial products
Section sets out sale situations in which Product Disclosure
Statement required
(1) This section sets out situations in which an offer relating to the sale
of a financial product gives rise to an obligation on a regulated
person to give another person a Product Disclosure Statement for
the product.
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Division 2 Product Disclosure Statements
Section 1012C
8 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purposes of this Division:
(a) each of the situations is a sale situation; and
(b) the relevant conduct for that situation is the offer; and
(c) the client for that situation is the person to whom the product
is to be sold.
Sale offers that require a Product Disclosure Statement
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person offers to sell the financial product to the
person; and
(b) a sale of the product to the person pursuant to the offer would
take place in circumstances covered by subsection (5), (6) or
(8); and
(c) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given at or before the
time when the regulated person makes the offer and must be given
in accordance with this Division.
(4) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the person makes an offer to the regulated person to acquire
the financial product; and
(b) the person would acquire the financial product by way of the
transfer of the product to the person; and
(c) a sale of the product to the person pursuant to the offer would
take place in the circumstances described in subsection (5),
(6) or (8); and
(d) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given to the person
before the person becomes bound by a legal obligation to acquire
the financial product pursuant to the offer and must be given in
accordance with this Division.
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Product Disclosure Statements Division 2
Section 1012C
Corporations Act 2001 9
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Off-market sale by controller
(5) This subsection covers the circumstances in which:
(a) the seller controls the issuer of the financial product; and
(b) either:
(i) the product is not able to be traded on any licensed
market; or
(ii) although the product is able to be traded on a licensed
market, the offer is not made in the ordinary course of
trading on a licensed market.
Note: See section 50AA for when a person controls a body.
Sale amounting to indirect issue
(6) This subsection covers the circumstances in which:
(a) the offer is made within 12 months after the issue of the
financial product; and
(b) the product was issued without a Product Disclosure
Statement for the product being prepared; and
(c) either:
(i) the issuer issued the product with the purpose of the
person to whom it was issued selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product; or
(ii) the person to whom the product was issued acquired it
with the purpose of selling or transferring the product,
or granting, issuing or transferring interests in, or
options or warrants over, the product.
The purpose test in subsection (6)
(7) For the purposes of subsection (6):
(a) a financial product is taken to be:
(i) issued with the purpose referred to in
subparagraph (6)(c)(i); or
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Division 2 Product Disclosure Statements
Section 1012C
10 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) acquired with the purpose referred to in
subparagraph (6)(c)(ii);
if there are reasonable grounds for concluding that the
product was issued or acquired with that purpose (whether or
not there were or may have been other purposes for the issue
or acquisition); and
(b) without limiting paragraph (a), a financial product is taken to
be:
(i) issued with the purpose referred to in
subparagraph (6)(c)(i); or
(ii) acquired with the purpose referred to in
subparagraph (6)(c)(ii);
if the financial product, or any financial product of the same
kind that was issued at the same time, is subsequently sold,
or offered for sale, within 12 months after issue, unless it is
proved that the circumstances of the issue and the subsequent
sale or offer are not such as to give rise to reasonable grounds
for concluding that the product was issued or acquired with
that purpose.
Sale amounting to indirect off-market sale by controller
(8) This subsection covers the circumstances in which:
(a) the offer is made within 12 months after the sale of the
financial product by a person (the controller) who controlled
the issuer of the product at the time of the sale; and
(b) either:
(i) at the time of the sale by the controller, the product was
not able to be traded on any licensed market; or
(ii) although the product was able to be traded on a licensed
market at that time, the sale by the controller did not
occur in the ordinary course of trading on a licensed
market; and
(c) a Product Disclosure Statement was not prepared by, or on
behalf of, the controller before the sale of the product by the
controller; and
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Section 1012C
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(d) either:
(i) the controller sold the product with the purpose of the
person to whom it was sold selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product; or
(ii) the person to whom the controller sold the product
acquired it with the purpose of selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product.
Note: See section 50AA for when a person controls a body.
The purpose test in subsection (8)
(9) For the purposes of subsection (8):
(a) a financial product is taken to be:
(i) sold with the purpose referred to in
subparagraph (8)(d)(i); or
(ii) acquired with the purpose referred to in
subparagraph (8)(d)(ii);
if there are reasonable grounds for concluding that the
product was sold or acquired with that purpose (whether or
not there were or may have been other purposes for the sale
or acquisition); and
(b) without limiting paragraph (a), a financial product is taken to
be:
(i) sold with the purpose referred to in
subparagraph (8)(d)(i); or
(ii) acquired with the purpose referred to in
subparagraph (8)(d)(ii);
if the financial product, or any financial product of the same
kind that was sold by the controller at the same time, is
subsequently sold, or offered for sale, within 12 months after
issue, unless it is proved that the circumstances of the initial
sale and the subsequent sale or offer are not such as to give
rise to reasonable grounds for concluding that the product
was sold or acquired (in the initial sale) with that purpose.
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Division 2 Product Disclosure Statements
Section 1012D
12 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This section has effect subject to other provisions
(10) This section has effect subject to sections 1012D, 1012DA, 1012E
and 1014E.
1012D Situations in which Product Disclosure Statement is not
required
Recommendation, issue or sale situation—client has already
received an up to date Product Disclosure Statement
(1) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the client has already received a Product Disclosure
Statement that contains all of the information that the
first-mentioned Product Disclosure Statement would be
required to contain; or
(b) the regulated person believes on reasonable grounds that
paragraph (a) applies.
Recommendation, issue or sale situation—client has or has access
to up to date information
(2) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement for the financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) the regulated person believes on reasonable grounds that the
client has received, or has, and knows that they have, access
to, all of the information that the first-mentioned Product
Disclosure Statement would be required to contain through:
(i) a Product Disclosure Statement; and
(ii) information provided to the client under section 1017B,
1017C or 1017D or through continuous disclosure under
Chapter 6CA.
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Section 1012D
Corporations Act 2001 13
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Note: Paragraph (a)—see subsection (10).
Recommendation or issue situation—interests in self-managed
superannuation funds
(2A) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement for the financial product if:
(a) the financial product is an interest in a self-managed
superannuation fund; and
(b) the regulated person believes on reasonable grounds that the
client has received, or has, and knows that they have, access
to, all of the information that the Product Disclosure
Statement would be required to contain.
Recommendation, issue or sale situation—no information required
to be in Product Disclosure Statement
(2B) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement for the financial product if, because of
section 1013F, no information would be required to be included in
the Statement.
Recommendation or issue situation—certain offers to present
holders
(3) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement for the financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) either:
(i) in a recommendation situation—the advice that
constitutes the relevant conduct relates to an offer made
under a distribution reinvestment plan or switching
facility; or
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Section 1012D
14 Corporations Act 2001
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(ii) in an issue situation—the offer or issue that constitutes
the relevant conduct is made under a distribution
reinvestment plan or switching facility.
Note: Paragraph (a)—see subsection (10).
Recommendation, issue or sale situation—no consideration to be
provided
(5) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) no consideration is to be provided for the issue or sale of the
financial product; and
(b) the financial product is not an option and is:
(i) a managed investment product; or
(ii) a financial product of a kind prescribed by regulations
made for the purposes of this subparagraph.
(6) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is an option; and
(b) no consideration is to be provided for the issue or sale of the
financial product; and
(c) no consideration is to be provided for the underlying
financial product on the exercise of the option.
Issue or sale situation—takeovers
(7) In an issue situation or a sale situation, the regulated person does
not have to give the client a Product Disclosure Statement if:
(a) the financial product is:
(i) a managed investment product; or
(ii) an option to acquire, by way of transfer, a share in a
body, a debenture of a body or a legal or equitable right
or interest in a share in a body or a debenture of a body;
and
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Section 1012D
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(b) the offer that constitutes the relevant conduct is made as
consideration for an offer made under a takeover bid under
Chapter 6; and
(c) the offer is accompanied by a bidder’s statement.
Note: Although a Product Disclosure Statement is not needed, disclosures
must be made in the bidder’s document under section 636.
Recommendation, issue or sale situation—responsible entity an
exempt body
(8) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is a financial product described in
paragraph 764A(1)(ba) (which relates to certain managed
investment schemes that are not registered schemes); and
(b) the holder of the office (by whatever name it is known), in
relation to the managed investment scheme, that corresponds
most closely to the office of responsible entity of a registered
scheme is an exempt body; and
(c) in the case of a recommendation situation or an issue
situation—either:
(i) the recommendation that constitutes the relevant
conduct relates to an offer made by the office holder
referred to in paragraph (b); or
(ii) the offer that constitutes the relevant conduct is made by
or to the office holder referred to in paragraph (b).
Note 1: Section 66A defines exempt body.
Note 2: In the case of a sale situation, there is no additional requirement
equivalent to paragraph (c).
Recommendation or issue situation—interim contracts of insurance
(9) In a recommendation situation or an issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement if the financial product is an interim contract of
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Section 1012D
16 Corporations Act 2001
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insurance (as defined in subsection 11(2) of the Insurance
Contracts Act 1984).
Note: This does not detract from the obligation to give a Product Disclosure
Statement relating to any contract of insurance that replaces or
supersedes the interim contract.
Recommendation, issue or sale situation—client is associated with
registered scheme
(9A) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is a managed investment product; and
(b) the client is associated (within the meaning of
subsection (9B)) with the scheme’s responsible entity.
(9B) For the purposes of subsection (9A), the client is associated with
the scheme’s responsible entity if the client is:
(a) a senior manager of the responsible entity or of a related
body corporate; or
(b) a spouse, parent, child, brother or sister of a person who is a
senior manager of the responsible entity or a related body
corporate; or
(c) a body corporate controlled by a person referred to in
paragraph (a) or (b).
Interpretation
(10) For the purposes of this section:
(a) a financial product (other than a managed investment product
or a superannuation product) is of the same kind as another
financial product only if they are both issued:
(i) by the same issuer; and
(ii) on the same terms and conditions (other than price); and
(b) a managed investment product, or a superannuation product,
is of the same kind as another product only if the other
product is an interest in the same scheme or fund; and
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(c) a reference to information that a Product Disclosure
Statement would be required to contain includes a reference
to information that would be required to be in any statement
that the Product Disclosure Statement would be required to
contain.
1012DAA Rights issues for which Product Disclosure Statement is
not required
(1) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (2), the regulated person would be required
by section 1012B to give a Product Disclosure Statement for
the transfer or issue of a financial product (the relevant
product); and
(b) a determination under subsection (3) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
Conditions required for rights issue
(2) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is being offered under a rights issue; and
(b) the class of the relevant product are quoted securities at the
time at which the offer is made; and
(c) trading in that class of the relevant product on a prescribed
financial market on which they are quoted was not suspended
for more than a total of 5 days during the shorter of the
following periods:
(i) the period during which the class of the relevant product
is quoted;
(ii) the period of 12 months before the day on which the
offer is made; and
(d) no exemption under section 111AS or 111AT covered the
issuer of the relevant product, or any person as director or
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auditor of the issuer, at any time during the relevant period
referred to in paragraph (c); and
(e) no order under section 340 or 341 covered the issuer of the
relevant product, or any person as director or auditor of the
issuer, at any time during the relevant period referred to in
paragraph (c); and
(f) the issuer of the relevant product gives the relevant market
operator for the issuer a written notice that complies with
subsection (7) within the 24 hour period before the relevant
conduct occurs.
Determination by ASIC
(3) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the issuer of the relevant
product contravened any of the following provisions:
(a) the provisions of Chapter 2M as they apply to the registered
scheme in which the relevant product is an interest;
(b) section 674 or 675 as it applies to the registered scheme in
which the relevant product is an interest;
(c) section 1016E, 1021D, 1021E or 1021J;
(d) subsection (10) of this section;
(e) section 1308 as it applies to a notice under subsection (2) of
this section.
(4) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(5) The determination made under subsection (3) is not a legislative
instrument.
(6) A failure to publish a copy of the determination does not affect the
validity of the determination.
Requirements for notice
(7) A notice complies with this subsection if the notice:
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(a) states that the relevant product was issued without a Product
Disclosure Statement for the relevant product being prepared;
and
(b) states that the notice is being given under paragraph (2)(f);
and
(c) states that, as a disclosing entity, the issuer of the relevant
product is subject to regular reporting and disclosure
obligations; and
(d) states that, as at the date of the notice, the issuer of the
relevant product has complied with:
(i) the provisions of Chapter 2M as they apply to the
registered scheme in which the relevant product is an
interest; and
(ii) section 674 as it applies to that registered scheme; and
(e) sets out any information that is excluded information as at the
date of the notice (see subsections (8) and (9)); and
(f) states:
(i) the potential effect the issue of the relevant product will
have on the control of the body; and
(ii) the consequences of that effect.
Note 1: A person is taken not to contravene section 1021C if a notice purports
to comply with this subsection but does not actually comply with this
subsection: see subsection 1021C(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
see sections 1308 and 1309. The issuer has an obligation to correct a
defective notice: see subsection (10) of this section.
(8) For the purposes of subsection (7), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that a person would reasonably require for the purpose of
making a decision, as a retail client, whether to acquire the
relevant product.
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Section 1012DA
20 Corporations Act 2001
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(9) The notice given under subsection (2) must contain any excluded
information only to the extent to which it is reasonable for a person
considering, as a retail client, whether to acquire the relevant
product to expect to find the information in a Product Disclosure
Statement.
Obligation to correct defective notice
(10) The issuer of the relevant product contravenes this subsection if:
(a) the notice given under subsection (2) is defective; and
(b) the issuer becomes aware of the defect in the notice within 12
months after the relevant product is issued; and
(c) the issuer does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
notice that sets out the information necessary to correct the
defect.
(11) For the purposes of subsection (10), the notice under subsection (2)
is defective if the notice:
(a) does not comply with paragraph (2)(f); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing, the omission of which
renders the notice misleading in a material respect.
1012DA Product Disclosure Statement not required for sale
amounting to indirect issue
Product Disclosure Statement not required
(1) In a recommendation situation or sale situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (5), (11) or (12), the regulated person
would be required by section 1012A or 1012C to give a
Product Disclosure Statement for the relevant product; and
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(b) the transfer or sale of the financial product (the relevant
product) to the client would take place in circumstances
covered by subsection 1012C(6); and
(c) the relevant product was not issued by the issuer with the
purpose referred to in subparagraph 1012C(6)(c)(i); and
(d) a determination under subsection (2) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
(1A) In a recommendation situation or sale situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (5), the regulated person would be required
by section 1012C to give a Product Disclosure Statement for
the transfer or sale of the financial product (the relevant
product); and
(b) the transfer or sale of the relevant product to the client would
take place in circumstances covered by subsection 1012C(8);
and
(c) the relevant product was not sold by the controller with the
purpose referred to in subparagraph 1012C(8)(d)(i); and
(d) a determination under subsection (2) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
Determination by ASIC
(2) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the issuer of the relevant
product contravened any of the following provisions:
(a) the provisions of Chapter 2M as they apply to the issuer (or,
if the relevant financial product is an interest in a registered
scheme, as those provisions apply to the scheme);
(b) section 674 or 675 as it applies to the issuer (or, if the
relevant financial product is an interest in a registered
scheme, as that section applies to the scheme);
(c) section 1016E, 1021D, 1021E or 1021J;
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(d) subsection (9) of this section;
(e) section 1308 as it applies to a notice under subsection (5) of
this section.
(3) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(4) A failure to publish a copy of the determination does not affect the
validity of the determination.
Transfer or sale of quoted securities—case 1
(5) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is in a class of financial products that
were quoted securities at all times in the 3 months before the
day on which the relevant product was issued; and
(b) trading in that class of financial products on a prescribed
financial market on which they were quoted was not
suspended for more than a total of 5 days during the shorter
of the period during which the class of financial product was
quoted, and the period of 12 months before the day on which
the relevant product was issued; and
(c) no exemption under section 111AS or 111AT covered the
issue of the relevant product, or any person as director or
auditor of the issuer, at any time during the relevant period
referred to in paragraph (b); and
(d) no order under section 340 or 341 covered the issuer of the
relevant product, or any person as director or auditor of the
issuer, at any time during the relevant period referred to in
paragraph (b); and
(e) either:
(i) if the regulated person is not required under
subsection (1) to give a Product Disclosure Statement—
the issuer of the relevant product gives the relevant
market operator for the issuer a written notice that
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complies with subsection (6) before the relevant
conduct occurs; or
(ii) if the regulated person is not required under
subsection (1A) to give a Product Disclosure
Statement—both the issuer of the relevant product, and
the controller, give the relevant market operator for the
issuer a written notice that complies with subsection (6)
before the relevant conduct occurs.
(6) A notice complies with this subsection if the notice:
(a) is given within 5 business days after the day on which the
relevant product was issued; and
(b) states that the relevant product was issued without a Product
Disclosure Statement for the relevant product being prepared;
and
(c) states that the notice is being given under paragraph (5)(e);
and
(d) states that, as a disclosing entity, the issuer of the relevant
product is subject to regular reporting and disclosure
obligations; and
(e) states that, as at the date of the notice, the issuer of the
relevant product has complied with:
(i) the provisions of Chapter 2M as they apply to the issuer
(or, if the relevant financial product is an interest in a
registered scheme, as those provisions apply to the
scheme); and
(ii) section 674 as it applies to the issuer (or, if the relevant
financial product is an interest in a registered scheme, as
that section applies to the scheme); and
(f) sets out any information that is excluded information as at the
date of the notice (see subsections (7) and (8)).
Note 1: A person is taken not to contravene section 1021C if a notice purports
to comply with this subsection but does not actually comply with this
subsection: see subsection 1021C(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
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Section 1012DA
24 Corporations Act 2001
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see sections 1308 and 1309. The issuer has an obligation to correct a
defective notice: see subsection (9) of this section.
(7) For the purposes of subsection (6), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that a person would reasonably require for the purpose of
making a decision, as a retail client, whether to acquire the
relevant product.
(8) The notice given under subsection (5) must contain any excluded
information only to the extent to which it is reasonable for a person
considering, as a retail client, whether to acquire the relevant
product to expect to find the information in a Product Disclosure
Statement.
Obligation to correct defective notice
(9) The issuer of the relevant product contravenes this subsection if:
(a) the notice given under subsection (5) is defective; and
(b) the issuer becomes aware of the defect in the notice within 12
months after the relevant product is issued; and
(c) the issuer does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
notice that sets out the information necessary to correct the
defect.
(10) For the purposes of subsection (9), the notice under subsection (5)
is defective if the notice:
(a) does not comply with paragraph (6)(f); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing the omission of which
renders the notice misleading in a material respect.
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Transfer or sale of quoted securities—case 2
(11) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is in a class of financial products that are
quoted securities of the issuer; and
(b) either:
(i) a Product Disclosure Statement required to be given by
section 1012B is lodged with ASIC on or after the day
on which the relevant product is issued but before the
day on which the relevant conduct occurs; or
(ii) a Product Disclosure Statement required to be given by
section 1012B is lodged with ASIC before the day on
which the relevant product is issued and, on the day on
which the relevant product is issued, the Product
Disclosure Statement is still being used by the issuer of
the relevant product for offers of financial products in
the same class of financial products as the relevant
product; and
(c) the Product Disclosure Statement is for a financial product of
the issuer of the relevant product that is in the same class of
financial products as the relevant product.
Transfer or sale of quoted securities—case 3
(12) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) a Product Disclosure Statement for a financial product was
given under section 1012B; and
(b) the relevant product was issued to:
(i) a person (the underwriter) named in that Product
Disclosure Statement as an underwriter of the issue of
the financial product; or
(ii) a person nominated by the underwriter; and
(c) the relevant product was issued to the underwriter, or the
person nominated by the underwriter, at or about the time
that persons who applied for the financial product under that
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Section 1012E
26 Corporations Act 2001
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Product Disclosure Statement were issued with that product;
and
(d) the relevant product is in a class of financial products that
were quoted securities of the issuer.
1012E Small scale offerings of managed investment and other
prescribed financial products (20 issues or sales in 12
months)
(1) This section applies only to financial products that are:
(a) managed investment products; or
(b) financial products of a kind prescribed by regulations made
for the purposes of this paragraph.
(2) Personal offers of financial products do not need a Product
Disclosure Statement under this Part if:
(a) all of the financial products are issued by the same person
(the issuer); and
(b) none of the offers results in a breach of the 20 purchasers
ceiling (see subsections (6) and (7)); and
(c) none of the offers results in a breach of the $2 million ceiling
(see subsections (6) and (7)).
(3) Subsection (2) does not apply to an offer to which
subsection 1012C(6) (sale amounting to indirect issue) or (8) (sale
amounting to indirect sale by controller) applies.
Note: Under section 1012K, ASIC may make a determination aggregating
the transactions of bodies that ASIC considers to be closely related.
(4) If subsection (2) applies to an offer of a financial product, a
recommendation to a person to acquire a financial product in
response to a personal offer of that kind does not need a Product
Disclosure Statement under this Part.
(5) For the purposes of subsections (2) and (4), a personal offer is one
that:
(a) may only be accepted by the person to whom it is made; and
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(b) is made to a person who is likely to be interested in the offer,
having regard to:
(i) previous contact between the person making the offer
and that person; or
(ii) some professional or other connection between the
person making the offer and that person; or
(iii) statements or actions by that person that indicate that
they are interested in offers of that kind.
(6) An offer to issue, or arrange for the issue of, a financial product:
(a) results in a breach of the 20 purchasers ceiling if it results in
the number of people to whom the issuer has issued financial
products exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the issuer from issuing financial products
exceeding $2 million in any 12 month period.
(7) An offer by a person to sell a financial product:
(a) results in a breach of the 20 purchasers ceiling if it results in
the number of people to whom the person sells financial
products issued by the issuer of that financial product
exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the person from selling financial products
issued by the issuer of that financial product exceeding $2
million in any 12 month period.
(8) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the
purposes of subsection (2), disregard issues and sales that result
from offers that:
(a) do not need a Product Disclosure Statement (otherwise than
because of this section); or
(b) are made under a Product Disclosure Statement.
Note: Also see provisions on restrictions on advertising (section 1018A) and
the anti-hawking provisions in section 992A.
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Division 2 Product Disclosure Statements
Section 1012E
28 Corporations Act 2001
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(9) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the
purposes of subsection (2), disregard any issues and sales made by
a body if:
(a) the body was a managed investment scheme (but not a
registered scheme) at the time that the offer of interests in the
scheme that resulted in the issues or sales was made; and
(b) the body became a registered scheme within 12 months after
that offer was made; and
(c) the offer would not have required a Product Disclosure
Statement (otherwise than because of this section) if the
managed investment scheme had been a registered scheme at
the time that the offer was made.
(10) In working out the amount of money raised by the issuer from
issuing financial products, include the following:
(a) the amount payable for the financial products at the time
when they are issued;
(b) if the financial product is an option—any amount payable on
the exercise of the option;
(c) if the financial products carry a right to convert the financial
product into other financial products—any amount payable
on the exercise of that right.
(11) If a person relies on subsection (2) to make offers of financial
products without a Product Disclosure Statement under this Part,
the person must not issue, arrange for the issue of, or transfer,
financial products without a Product Disclosure Statement under
this Part if the issue or transfer would result in a breach of the 20
purchasers ceiling or the $2 million ceiling (see subsections (6),
(7), (8), (9) and (10)).
(12) For the purposes of this section, an offer of a financial product is
an offer to:
(a) issue the financial product; or
(b) arrange for the issue of the financial product; or
(c) sell the financial product.
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Section 1012F
Corporations Act 2001 29
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1012F Product Disclosure Statement for certain superannuation
products may be provided later
In a recommendation situation or an issue situation in which the
financial product is a superannuation product of a kind specified in
regulations made for the purposes of this section, the regulated
person:
(a) need not give the client the Product Disclosure Statement at
or before the time when it would otherwise be required to be
given; and
(b) must give the client the Product Disclosure Statement as soon
as is reasonably practicable and in any event within 3 months
after the product is issued to the client; and
(c) need not give the client the Product Disclosure Statement at
all if the client ceases to be a member of the superannuation
fund concerned before the regulated person is required to
give the Product Disclosure Statement under paragraph (b).
1012G Product Disclosure Statement may sometimes be provided
later
(1) The regulated person may deal with a financial product under this
section only if:
(a) the financial product is one for which an application form is
not required under section 1016A and section 1019B (cooling
off period) will apply if the client enters into a legal
obligation to acquire the product pursuant to the
recommendation or offer that constitutes the relevant
conduct; or
(b) the financial product is:
(i) a basic deposit product; or
(ii) a facility for making non-cash payments (see
section 763D) that is related to a basic deposit product;
or
(iii) a financial product of a kind prescribed by regulations
made for the purposes of this subparagraph.
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Division 2 Product Disclosure Statements
Section 1012G
30 Corporations Act 2001
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(2) In a recommendation situation or an issue situation, the regulated
person need not give the client a Product Disclosure Statement for
the financial product at or before the time when it would otherwise
be required to be given if:
(a) the client expressly instructs the regulated person that they
require:
(i) in a recommendation situation—the advice constituting
the recommendation; or
(ii) in an issue situation—the financial product;
to be provided or issued immediately, or by a specified time;
and
(b) it is not reasonably practicable, while complying with the
client’s instructions, to give the client the Product Disclosure
Statement at or before the time when it would otherwise be
required to be given.
The regulated person must comply with subsection (3) instead.
(3) The regulated person must:
(a) at or before the time referred to in paragraph (2)(b), orally
communicate the following information to the client:
(i) the name and contact details of the issuer of the
financial product; and
(ii) information about the essential features of the financial
product; and
(iii) the information that would be required to be in a
Product Disclosure Statement for the financial product
by paragraphs 1013D(1)(c), (d), (g) and (i); and
(b) give the client the Product Disclosure Statement as soon as
practicable after that time, and in any event not later than:
(i) the time when the confirmation requirement (if
applicable) is complied with; or
(ii) the end of the fifth day after the day on which the
financial product was issued or sold to the client.
(3A) The information referred to in paragraph (3)(a) must be
communicated in a clear, concise and effective manner.
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Section 1012H
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(4) For the purposes of paragraph (3)(b), the confirmation requirement
is complied with when:
(a) the client receives confirmation, as mentioned in
paragraph 1017F(5)(a), of the transaction by which they
acquired the financial product; or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
1012H Obligation to take reasonable steps to ensure that Product
Disclosure Statement is given to person electing to be
covered by group financial product
(1) This section covers the situation in which a financial product:
(a) is issued to a person; and
(b) covers, or is designed to cover, a group of people; and
(c) may cover a particular person (the new group member) if the
person elects to be covered by the financial product.
(2) The issuer must take reasonable steps to ensure that the new group
member is given a Product Disclosure Statement for the financial
product in accordance with this Division before the new group
member makes an election to be covered by the financial product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) For the purposes of this section, a person is covered by a financial
product if benefits are, or may be, provided under the financial
product directly to:
(a) the person; or
(b) a relative of the person; or
(c) a person nominated by the person.
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Division 2 Product Disclosure Statements
Section 1012I
32 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012I Obligation to give employer a Product Disclosure Statement
in relation to certain superannuation products and RSA
products
(1) At or before the time when a person (the applicant) becomes a
standard employer-sponsor of a superannuation entity, the person
(the issuer) who is to provide the superannuation products to the
applicant’s employees must give the applicant a Product Disclosure
Statement in accordance with this Division for each of those
superannuation products.
(2) If:
(a) a person (the applicant) applies for the issue of an RSA
product to the employee; and
(b) the applicant has not previously applied to the RSA provider
for the issue to any employee of an RSA product of the same
kind;
the person (the issuer) who is to issue the RSA product to the
employee must, at or before the time when the RSA product is
issued to the employee, give the applicant a Product Disclosure
Statement in accordance with this Division for the RSA product.
(2A) If:
(a) a trustee (the applicant), under Part 24 of the Superannuation
Industry (Supervision) Act 1993, applies on behalf of a
person for the issue of an interest in a relevant
superannuation entity; and
(b) the applicant has not previously applied under that Part for
the issue of an interest in that entity on behalf of any person;
the person (the issuer) who is to issue the interest to the person
must, at or before the time when the interest is issued to the person,
give the applicant a Product Disclosure Statement in accordance
with this Division for the interest.
(2B) If:
(a) a trustee (the applicant), under Part 9 of the Retirement
Savings Accounts Act 1997, applies on behalf of a person for
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the issue of an interest in a relevant superannuation entity;
and
(b) the applicant has not previously applied under that Part for
the issue of an interest in that entity on behalf of any person;
the person (the issuer) who is to issue the interest to the person
must, at or before the time when the interest is issued to the person,
give the applicant a Product Disclosure Statement in accordance
with this Division for the interest.
(3) The issuer does not have to give the applicant a Product Disclosure
Statement under subsection (1), (2), (2A) or (2B) for a financial
product if:
(a) the applicant has already received a Product Disclosure
Statement for that financial product that contains all of the
information that the first-mentioned Product Disclosure
Statement would be required to contain; or
(b) the issuer believes on reasonable grounds that paragraph (a)
applies.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
(4) The issuer need not give the applicant a Product Disclosure
Statement under subsection (1), (2), (2A) or (2B) in the
circumstances specified in the regulations.
(5) In this section:
(a) terms used in subsection (1) that are defined for the purposes
of the Superannuation Industry (Supervision) Act 1993 have
the same meanings as in that Act; and
(b) terms used in subsection (2) that are defined for the purposes
of the Retirement Savings Accounts Act 1997 have the same
meanings as in that Act; and
(c) relevant superannuation entity has the same meaning as in
section 1016A of this Act.
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Division 2 Product Disclosure Statements
Section 1012IA
34 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012IA Treatment of arrangements under which a person can
instruct another person to acquire a financial product
Definitions
(1) In this section:
acquirer, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
client, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
custodial arrangement means an arrangement between a person
(the provider) and another person (the client) (whether or not there
are also other parties to the arrangement) under which:
(a) the client is, or is entitled, to give an instruction that a
particular financial product, or a financial product of a
particular kind, is to be acquired; and
(b) if the client gives such an instruction, a person (the acquirer),
being the provider or a person with whom the provider has or
will have an arrangement, must (subject to any discretion
they have to refuse) acquire the financial product, or a
financial product of that kind; and
(c) if the acquirer acquires the financial product, or a financial
product of that kind, pursuant to an instruction given by the
client, either:
(i) the product is to be held on trust for the client or another
person nominated by the client; or
(ii) the client, or another person nominated by the client, is
to have rights or benefits in relation to the product or a
beneficial interest in the product, or in relation to, or
calculated by reference to, dividends or other benefits
derived from the product.
instruction includes a direction or request.
provider, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
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Section 1012IA
Corporations Act 2001 35
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
regulated acquisition means an acquisition of a financial product
pursuant to an instruction by the client under a custodial
arrangement, being an acquisition:
(a) by way of issue by the issuer (the regulated person); or
(b) pursuant to a sale by a person (the regulated person) in
circumstances described in subsection 1012C(5), (6) or (8).
regulated person, in relation to a regulated acquisition of a
financial product, has the meaning given by paragraph (a) or (b) (as
the case requires) of the definition of regulated acquisition.
Obligation on provider to give client a PDS
(2) Before a regulated acquisition of a financial product occurs
pursuant to an instruction given by the client under a custodial
arrangement, the provider must give the client a Product Disclosure
Statement for the product if a Product Disclosure Statement for the
product would, if there were an equivalent direct acquisition by the
client, be required by subsection 1012B(3) or 1012C(3) (see
subsection (3) of this section) to be given to the client by the
regulated person before that acquisition occurred. For this purpose,
an equivalent direct acquisition is an acquisition that would occur
if:
(a) the product were instead being offered for issue or sale direct
to the client by the regulated person for the same price (or for
the appropriate proportion of that price, if the transaction for
the regulated acquisition also covers other products); and
(b) the circumstances of that issue or sale to the client were
otherwise the same as those in which the regulated
acquisition will occur.
Determining whether a PDS would have to be given for an
equivalent direct acquisition
(3) The following provisions apply for the purpose of determining
whether the regulated person would be required by
subsection 1012B(3) or 1012C(3) to give the client a Product
Disclosure Statement for the financial product:
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Division 2 Product Disclosure Statements
Section 1012IA
36 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the effect of the provisions referred to in
subsection 1012B(5) or 1012C(10), as the case requires, as
they have effect subject to the following paragraphs, must be
taken into account;
(b) subsections 1012D(1), (2) and (2A) apply as if references in
those subsections to the regulated person’s belief in relation
to a matter were instead references to the provider’s belief in
relation to that matter;
(c) subsections 1012D(2) and (3) apply as if references to the
client already holding a financial product of the same kind
also included a reference to a person already holding a
financial product of the same kind as a result of an
instruction given by the client under a custodial arrangement;
(d) sections 1012E and 1012F are to be disregarded;
(e) section 1012G has effect in accordance with subsection (4).
Modification of section 1012G
(4) The following provisions apply in relation to section 1012G:
(a) in determining for the purposes of subsection (2) whether the
regulated person would be required by subsection 1012B(3)
or 1012C(3) to give the client a Product Disclosure Statement
for the financial product, subsection 1012G(2) applies as if
the reference to the client instructing the regulated person (in
an issue situation) that they require the financial product to
be provided or issued immediately, or by a specified time,
were instead a reference to the client instructing the provider
that they require the financial product to be acquired
immediately, or by a specified time;
(b) if, because of subsection 1012G(2) as it applies because of
paragraph (a) of this subsection, the provider does not have
to give the client a Product Disclosure Statement for a
financial product before a regulated acquisition of the
financial product occurs pursuant to an instruction given by
the client under a custodial arrangement:
(i) subsection 1012G(2) applies in relation to the provider,
the client and the regulated acquisition as if the
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
obligation it imposes to comply with
subsection 1012G(3) were imposed on the provider; and
(ii) subsection 1012G(3) applies in relation to the provider,
the client and the regulated acquisition as if the
reference to the regulated person were instead a
reference to the provider, as if
subparagraph 1012G(3)(b)(i) were omitted and as if the
reference in subparagraph 1012G(3)(b)(ii) to the day on
which the financial product was issued or sold to the
client were instead a reference to the day on which the
regulated acquisition occurs.
Modification of section 1013A
(5) Section 1013A applies in relation to a regulated acquisition as if:
(a) paragraph 1013A(1)(b) also covered a Product Disclosure
Statement that is required to be given by subsection (2) of
this section in relation to an acquisition covered by
paragraph (a) of the definition of regulated acquisition in
subsection (1) of this section; and
(b) paragraph 1013A(2)(b) also covered a Product Disclosure
Statement that is required to be given by subsection (2) of
this section in relation to an acquisition covered by
paragraph (b) of the definition of regulated acquisition in
subsection (1) of this section.
Provider is not an agent for the purposes of section 1015C
(6) For the purposes of the application of section 1015C in relation to a
regulated acquisition, the provider in relation to the relevant
custodial arrangement is taken not to be an agent of the client.
Provider is covered by sections 1015E, 1021F and 1021I
(7) Sections 1015E, 1021F and 1021I apply in relation to a regulated
acquisition as if the references to a regulated person were instead
references to the provider in relation to the relevant custodial
arrangement.
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Division 2 Product Disclosure Statements
Section 1012J
38 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Regulations may provide for other modifications
(8) The regulations may provide for other modifications of provisions
of this Part that are to have effect in relation to regulated
acquisitions.
1012J Information must be up to date
The information in a Product Disclosure Statement must be up to
date as at the time when it is given.
Note: A Supplementary Product Disclosure Statement containing updated
information may be given with a Product Disclosure Statement that
has become out of date. The updated information is taken to be
included in the Product Disclosure Statement (see section 1014D).
1012K Anti-avoidance determinations
(1) ASIC may determine in writing that a number of different bodies
are closely related and that their transactions should be aggregated
for the purposes of this Subdivision. If ASIC does so:
(a) an issue, sale or transfer of financial products of any other
bodies is taken to also be an issue, sale or transfer of the
financial products of each of the other bodies by those
bodies; and
(b) any money received from an issue, sale or transfer of
financial products of any of the bodies is taken to also be
received by each of the other bodies from an issue, sale or
transfer of its own financial products.
ASIC must give written notice of the determination to each of the
bodies.
(2) ASIC may determine in writing that the transactions of a body and
of a person who controls the body should be aggregated for the
purposes of this Subdivision. If ASIC does so:
(a) an issue of financial products of the body is taken to also be
the transfer of the financial products by the controller; and
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(b) any money received from an issue of financial products of
the body is taken to also be received by the controller from a
transfer of the financial products; and
(c) a sale or transfer of financial products of the body by the
controller is taken to also be the issue of the financial
products by the body; and
(d) any money received from a sale or transfer of financial
products of the body by the controller is taken to also be
received by the body from an issue of the financial products.
ASIC must give written notice of the determination to the body and
the controller.
Subdivision C—Preparation and content of Product Disclosure
Statements
1013A Who must prepare Product Disclosure Statement
(1) A Product Disclosure Statement that:
(a) is required to be given by section 1012A (otherwise than in a
situation in which the recommendation concerned relates to
an offer described in subsection 1012C(3) or (4)); or
(b) is required to be given by section 1012B; or
(c) section 1012H requires an issuer to take reasonable steps to
ensure is given to a new group member; or
(d) is required to be given by section 1012I;
must be a document that has been prepared by the issuer of the
financial product. A Product Disclosure Statement of this kind is in
this Division referred to as an issue Statement.
(2) A Product Disclosure Statement that:
(a) is required to be given by section 1012A in a situation in
which the recommendation concerned relates to an offer
described in subsection 1012C(3) or (4)); or
(b) is required to be given by section 1012C;
must be a document that has been prepared by the person making
the offer to sell the financial product. A Product Disclosure
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Division 2 Product Disclosure Statements
Section 1013B
40 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Statement of this kind is in this Division referred to as a sale
Statement.
(3) The person who, or on whose behalf, a Product Disclosure
Statement for a financial product is required to be prepared is, in
this Division, referred to as the responsible person for the financial
product.
(4) For the purposes of this Part, a Product Disclosure Statement
prepared on behalf of a person is taken to be prepared by the
person.
1013B Title of Product Disclosure Statement
(1) The title “Product Disclosure Statement” must be used on the cover
of, or at or near the front of, a Product Disclosure Statement.
(2) In any other part of a Product Disclosure Statement, “Product
Disclosure Statement” may be abbreviated to “PDS”.
1013C Product Disclosure Statement content requirements
(1) A Product Disclosure Statement:
(a) must include the following statements and information
required by this Subdivision:
(i) the statements and information required by
section 1013D; and
(ii) the information required by section 1013E; and
(iii) the information required by the other provisions of this
Subdivision; and
(b) may also:
(i) include other information; or
(ii) refer to other information that is set out in another
document.
Note: A Supplementary Product Disclosure Statement containing additional
information may be given with a Product Disclosure Statement that
does not contain all the required information. The additional
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Section 1013C
Corporations Act 2001 41
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
information is taken to be included in the Product Disclosure
Statement (see section 1014D).
(2) The information required by sections 1013D and 1013E need only
be included in the Product Disclosure Statement to the extent to
which it is actually known to:
(a) the responsible person; and
(b) in the case of a sale Statement—the issuer of the financial
product; and
(c) any person named in the Statement as an underwriter of the
issue or sale of the financial product; and
(d) any person:
(i) named in the Statement as a financial services licensee
providing services in relation to the issue or sale of the
financial product; and
(ii) who participated in any way in the preparation of the
Statement; and
(e) any person who has given a consent referred to in
section 1013K in relation to a statement included in the
Statement; and
(f) any person named in the Statement with their consent as
having performed a particular professional or advisory
function; and
(g) if any of the above persons is a body corporate—any director
of that body corporate.
(3) The information included in the Product Disclosure Statement must
be worded and presented in a clear, concise and effective manner.
(4) The responsible person may include in the Product Disclosure
Statement a statement about the association between the financial
product and another person.
(5) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product
is issued or sold by that other person; and
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Division 2 Product Disclosure Statements
Section 1013D
42 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the person has not issued or sold the product.
(6) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product
is guaranteed or underwritten by that other person; and
(b) the person has not guaranteed or underwritten the product.
(7) If the Product Disclosure Statement states that a person provides,
or is to provide, services in relation to the financial product, the
Product Disclosure Statement must clearly distinguish between the
respective roles of that person and the issuer or seller of the
financial product.
1013D Product Disclosure Statement content—main requirements
(1) Subject to this section, subsection 1013C(2) and sections 1013F
and 1013FA, a Product Disclosure Statement must include the
following statements, and such of the following information as a
person would reasonably require for the purpose of making a
decision, as a retail client, whether to acquire the financial product:
(a) a statement setting out the name and contact details of:
(i) the issuer of the financial product; and
(ii) if the Statement is a sale Statement—the seller; and
(b) information about any significant benefits to which a holder
of the product will or may become entitled, the circumstances
in which and times at which those benefits will or may be
provided, and the way in which those benefits will or may be
provided; and
(c) information about any significant risks associated with
holding the product; and
(d) information about:
(i) the cost of the product; and
(ii) any amounts that will or may be payable by a holder of
the product in respect of the product after its acquisition,
and the times at which those amounts will or may be
payable; and
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Section 1013D
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) if the amounts paid in respect of the financial product
and the amounts paid in respect of other financial
products are paid into a common fund—any amounts
that will or may be deducted from the fund by way of
fees, expenses or charges; and
(e) if the product will or may generate a return to a holder of the
product—information about any commission, or other similar
payments, that will or may impact on the amount of such a
return; and
(f) information about any other significant characteristics or
features of the product or of the rights, terms, conditions and
obligations attaching to the product; and
(g) information about the dispute resolution system that covers
complaints by holders of the product and about how that
system may be accessed; and
(h) general information about any significant taxation
implications of financial products of that kind; and
(i) information about any cooling-off regime that applies in
respect of acquisitions of the product (whether the regime is
provided for by a law or otherwise); and
(j) if the product issuer (in the case of an issue Statement) or the
seller (in the case of a sale Statement) makes other
information relating to the product available to holders or
prospective holders of the product, or to people more
generally—a statement of how that information may be
accessed; and
(k) any other statements or information required by the
regulations; and
(l) if the product has an investment component—the extent to
which labour standards or environmental, social or ethical
considerations are taken into account in the selection,
retention or realisation of the investment; and
(m) unless in accordance with the regulations, for information to
be disclosed in accordance with paragraphs (b), (d) and (e),
any amounts are to be stated in dollars.
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Division 2 Product Disclosure Statements
Section 1013D
44 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purposes of paragraph (1)(d), an amount will or may be
payable in respect of a financial product by the holder of the
financial product if:
(a) the holder will or may have to pay an amount in respect of
the product; or
(b) an amount will or may be deducted from:
(i) a payment to be made by the holder; or
(ii) a payment to be made to the holder; or
(iii) an amount held on the holder’s behalf under the
financial product; or
(c) an account representing the holder’s interest in the financial
product will or may be debited with an amount.
It includes an amount that the holder will or may have to pay, or
that will or may be deducted or debited, as a fee, expense or charge
in relation to a particular transaction in relation to the financial
product.
(2A) For the purposes of paragraph (1)(l), products which have an
investment component include superannuation products, managed
investment products and investment life insurance products.
(3) Subsection (1) requires information to be included in the Product
Disclosure Statement only to the extent to which the requirement is
applicable to the financial product. The Product Disclosure
Statement does not need to indicate that a particular requirement is
not applicable to the financial product.
(4) The regulations may:
(a) provide that a provision of subsection (1) does not apply in a
particular situation; or
(b) provide that particular information is not required by a
provision of subsection (1), either in a particular situation or
generally; or
(c) provide a more detailed statement of the information that is
required by a provision of subsection (1), either in a
particular situation or generally.
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Section 1013DA
Corporations Act 2001 45
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1013DA Information about ethical considerations etc.
ASIC may develop guidelines that must be complied with where a
Product Disclosure Statement makes any claim that labour
standards or environmental, social or ethical considerations are
taken into account in the selection, retention or realisation of the
investment.
1013E General obligation to include other information that might
influence a decision to acquire
Subject to subsection 1013C(2) and sections 1013F and 1013FA, a
Product Disclosure Statement must also contain any other
information that might reasonably be expected to have a material
influence on the decision of a reasonable person, as a retail client,
whether to acquire the product.
1013F General limitations on extent to which information is
required to be included
(1) Despite anything in section 1013D or 1013E, information, or a
statement containing information, is not required to be included in
a Product Disclosure Statement if it would not be reasonable for a
person considering, as a retail client, whether to acquire the
product to expect to find the information in the Statement.
(2) In considering whether it would not be reasonable for a person
considering, as a retail client, whether to acquire the product to
expect to find particular information in the Statement, the matters
that may be taken into account include, but are not limited to:
(a) the nature of the product (including its risk profile); and
(b) the extent to which the product is well understood by the
kinds of person who commonly acquire products of that kind
as retail clients; and
(c) the kinds of things such persons may reasonably be expected
to know; and
(d) if the product is an ED security that is not a continuously
quoted security—the effect of the following provisions:
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Division 2 Product Disclosure Statements
Section 1013FA
46 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) Chapter 2M as it applies to disclosing entities;
(ii) sections 674 and 675; and
(e) the way in which the product is promoted, sold or distributed;
and
(f) any other matters specified in the regulations.
1013FA Information not required to be included in PDS for
continuously quoted securities
(1) This section applies to a Product Disclosure Statement that relates
to a continuously quoted security.
(2) Despite anything in section 1013D, 1013E or 1013F, information is
not required to be included in the Product Disclosure Statement if:
(a) the information is included in any of the following
documents:
(i) the annual financial report most recently lodged with
ASIC by the issuer of the product;
(ii) any half-year financial report lodged with ASIC by the
issuer of the product after the lodgment of that annual
financial report and before the date of the Product
Disclosure Statement;
(iii) any continuous disclosure notices given by the issuer of
the product after the lodgment of that annual financial
report and before the date of the Product Disclosure
Statement; and
(b) the Product Disclosure Statement:
(i) states that as a disclosing entity, the issuer of the
product is subject to regular reporting and disclosure
obligations; and
(ii) informs people of their right to obtain a copy of any of
the documents referred to in paragraph (a).
If the Product Disclosure Statement informs people of their right to
obtain a copy of the document, the issuer of the product must give
a copy of the document free of charge to anyone who asks for it.
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Section 1013G
Corporations Act 2001 47
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(3) ASIC may determine that this section does not apply to Product
Disclosure Statements for continuously quoted securities if ASIC is
satisfied that in the previous 12 months:
(a) the issuer of the continuously quoted securities contravened:
(i) the provisions of Chapter 2M; or
(ii) subsection 674(2) or 675(2); or
(iii) subsection 1012DAA(10) or 1012DA(9); or
(iv) section 1308 as it applies to a notice under
subsection 1012DAA(2) or 1012DA(5); or
(b) the responsible person for the Product Disclosure Statement
contravened section 1016E, 1021D, 1021E or 1021J.
(4) The determination must be made in writing and ASIC must publish
a copy of the determination in the Gazette.
1013G Product Disclosure Statement must be dated
A Product Disclosure Statement must be dated. The date must be:
(a) if a copy of the Product Disclosure Statement has been
lodged with ASIC (see section 1015B)—the date on which it
was so lodged; or
(b) in any other case—the date on which the Product Disclosure
Statement was prepared or its preparation was completed.
1013H Requirements if Product Disclosure Statement states or
implies that financial product will be able to be traded
If a Product Disclosure Statement states or implies that the
financial product will be able to be traded on a financial market
(whether in Australia or elsewhere), the Statement must state that:
(a) the product is able to be traded on that market; or
(b) an application has been made to the operator of that market
for the taking of such action as is necessary to enable the
product to be traded on that market; or
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Section 1013I
48 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) an application of a kind referred to in paragraph (b) will be
made to the operator of that market within 7 days after the
date of the Statement.
1013I Extra requirements if Product Disclosure Statement relates to
managed investment products that are ED securities
(1) This section applies to a Product Disclosure Statement that relates
to managed investment products that are ED securities.
(2) The Product Disclosure Statement must include a statement that:
(a) as a disclosing entity, the scheme is subject to regular
reporting and disclosure obligations; and
(b) copies of documents lodged with ASIC in relation to the
scheme may be obtained from, or inspected at, an ASIC
office.
(3) The Product Disclosure Statement must either:
(a) inform people of their right to obtain a copy of the following
documents:
(i) the annual financial report most recently lodged with
ASIC by the scheme;
(ii) any half-year financial report lodged with ASIC by the
scheme after the lodgment of that annual financial
report and before the date of the Product Disclosure
Statement;
(iii) any continuous disclosure notices given by the scheme
after the lodgment of that annual report and before the
date of the Product Disclosure Statement; or
(b) include, or be accompanied by, a copy of the relevant
document or documents.
(4) If:
(a) the Product Disclosure Statement informs people of their
right to obtain a copy of a document referred to in
subsection (3); and
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(b) a person asks the issuer (in the case of an issue Statement) or
the seller (in the case of a sale Statement) for a copy of the
document;
the issuer or seller must give (see subsection (5)) the person a copy
of the document free of charge as soon as practicable, and in any
event within 5 days, after receiving the person’s request.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) In subsection (4), give means give in a way that would satisfy the
requirements of section 1015C if the copy of the document were a
Statement to which that section applied.
1013J Requirements if Statement has been lodged with ASIC
A Product Disclosure Statement, a copy of which has been lodged
with ASIC (see section 1015B), must include a statement that:
(a) a copy of the document has been lodged with ASIC; and
(b) ASIC takes no responsibility for the content of the document.
1013K Requirements relating to consents to certain statements
(1) A Product Disclosure Statement must only include a statement
made by a person, or a statement said in the Product Disclosure
Statement to be based on a statement made by a person, if:
(a) the person has consented to the statement being included in
the Product Disclosure Statement in the form and context in
which it is included; and
(b) the Product Disclosure Statement states that the person has
given this consent; and
(c) the person has not withdrawn this consent before the date of
the Product Disclosure Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 2 Product Disclosure Statements
Section 1013L
50 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The person who prepared the Product Disclosure Statement must
not, without reasonable excuse, fail to keep the consent, or a copy
of it, for the period, and in the manner, required by the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1013L Product Disclosure Statement may consist of 2 or more
separate documents given at same time
(1) Subject to this section, a Product Disclosure Statement may be
made up of 2 or more separate documents that are given at the
same time.
(2) Each of the documents must have on the cover of the document, or
at or near the front of the document, a statement:
(a) to the effect that the document is part of a Product Disclosure
Statement; and
(b) that (subject to subsection (3)) identifies the other documents
that make up the Product Disclosure Statement.
(3) If there are or may be different versions of a document referred to
in paragraph (2)(b), the statement required by subsection (2) does
not have to identify any particular one of those versions and may
instead identify the document generically.
Note: For example, if a Product Disclosure Statement is made up of a core
document that is not updated very frequently, and a separate document
providing information about remuneration that is updated more
frequently:
(a) the statement in the core document need only refer to the fact that it, and a separate document about remuneration, make up the Product Disclosure Statement; and
(b) the statement in the document about remuneration need only refer to the fact that it, and a separate document about all other required matters, make up the Product Disclosure Statement.
(4) The requirement of section 1013B (title of Product Disclosure
Statement) is taken to be satisfied if the title “Product Disclosure
Statement” is used on the cover of, or at or near the front of, at
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least one of the documents that make up the Product Disclosure
Statement.
(5) The requirement of section 1013G (dating of Product Disclosure
Statement) must be separately complied with in relation to each of
the documents. If, for any purpose, a single date needs to be
determined as the date of the Product Disclosure Statement as a
whole, that date is the most recent of the dates of those documents.
(6) Section 1015E applies to an alteration to one of the documents as
though the reference in that section to the date specified in the
Product Disclosure Statement were a reference to the date specified
in the document.
(7) The regulations may impose additional requirements to be
complied with if a Product Disclosure Statement is made up of 2 or
more documents.
1013M Combining a Product Disclosure Statement and a Financial
Services Guide in a single document
For provisions about combining a Product Disclosure Statement
and a Financial Services Guide in a single document, see
section 942DA and regulations made for the purposes of that
section.
Subdivision D—Supplementary Product Disclosure Statements
1014A What a Supplementary Product Disclosure Statement is
A Supplementary Product Disclosure Statement is a document by
which a person who has prepared a Product Disclosure Statement
(the PDS) can:
(a) correct a misleading or deceptive statement in the PDS; or
(b) correct an omission from the PDS of information it is
required to contain; or
(c) update, or add to, the information contained in the PDS; or
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Section 1014B
52 Corporations Act 2001
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(d) change a statement of a kind referred to in
paragraph 1016E(1)(a) or (b).
Note: In certain circumstances a Replacement Product Disclosure Statement
may be prepared instead of a Supplementary Product Disclosure
Statement (see Subdivision DA).
1014B Title of Supplementary Product Disclosure Statement
(1) The title “Supplementary Product Disclosure Statement” must be
used on the cover of, or at or near the front of, a Supplementary
Product Disclosure Statement.
(2) In any other part of a Supplementary Product Disclosure
Statement, “Supplementary Product Disclosure Statement” may be
abbreviated to “SPDS”.
1014C Form of Supplementary Product Disclosure Statement
At the beginning of a Supplementary Product Disclosure Statement
there must be:
(a) a statement that it is a Supplementary Product Disclosure
Statement; and
(b) an identification of the Product Disclosure Statement that it
supplements; and
(c) a statement that it is to be read together with that Product
Disclosure Statement and any other specified Supplementary
Disclosure Statements.
1014D Effect of giving person a Supplementary Product Disclosure
Statement
If:
(a) a person is given a Product Disclosure Statement (the PDS);
and
(b) at the same time, or later, they are given a Supplementary
Product Disclosure Statement (the SPDS) that supplements
the PDS;
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the PDS is taken, from when the SPDS is given to the person, to
include the information and statements contained in the SPDS.
1014E Situation in which only a Supplementary Product Disclosure
Statement need be given
If:
(a) apart from this section, a person would be required to give
another person (the client) a Product Disclosure Statement
(the new PDS) relating to a financial product; and
(b) the client has, because of some previous conduct, already
received a Product Disclosure Statement (the earlier PDS)
relating to the financial product; and
(c) the earlier PDS contains some, but not all, of the information
that the new PDS is required to contain;
the person may, instead of giving the client the new PDS, give the
client a Supplementary Product Disclosure Statement that contains
the additional information.
1014F Application of other provisions in relation to Supplementary
Product Disclosure Statements
Sections 1013A, 1013G, 1013H, 1013J and 1013K, and
subsections 1013C(3) to (7), apply in relation to a Supplementary
Product Disclosure Statement in the same way as they apply to a
Product Disclosure Statement.
Subdivision DA—Replacement Product Disclosure Statements
1014G Application of this Subdivision—stapled securities
This Subdivision applies if:
(a) a Product Disclosure Statement has been lodged in relation to
an offer for the issue or sale of an interest in a managed
investment scheme; and
(b) the interest can only be transferred together with one or more
securities; and
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Division 2 Product Disclosure Statements
Section 1014H
54 Corporations Act 2001
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(c) a disclosure document has been lodged in relation to an offer
for the issue or sale of the security (or securities).
1014H What a Replacement Product Disclosure Statement is
A Replacement Product Disclosure Statement is a document that
replaces the Product Disclosure Statement (the earlier PDS)
mentioned in paragraph 1014G(a) in order to:
(a) correct a misleading or deceptive statement in the earlier
PDS; or
(b) correct an omission from the earlier PDS of information it is
required to contain; or
(c) update, or add to, the information contained in the earlier
PDS; or
(d) change a statement of a kind referred to in
paragraph 1016E(1)(a) or (b).
1014J Consequences of lodging a Replacement Product Disclosure
Statement
If a Replacement Product Disclosure Statement is prepared in
accordance with section 1014K and lodged with ASIC as provided
by Subdivision E (in its application under section 1014L), a
reference to a Product Disclosure Statement is taken to be a
reference to the Replacement Product Disclosure Statement for the
purposes of the application of this Act to events that occur after the
lodgment.
Note: This section means, for example, that offers made after lodgment of
the Replacement Product Disclosure Statement must be accompanied
by copies of the Replacement Product Disclosure Statement and not
the earlier PDS.
1014K Form, content and preparation of Replacement Product
Disclosure Statements
(1) At the beginning of a Replacement Product Disclosure Statement,
there must be:
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(a) a statement that it is a Replacement Product Disclosure
Statement; and
(b) an identification of the Product Disclosure Statement it
replaces.
(2) The title “Replacement Product Disclosure Statement” must be
used on the cover of, or at or near the front of, a Replacement
Product Disclosure Statement.
(3) In any other part of a Replacement Product Disclosure Statement,
“Replacement Product Disclosure Statement” may be abbreviated
to “RPDS”.
(4) Otherwise, section 1012J and Subdivision C (apart from
section 1013B) apply in relation to a Replacement Product
Disclosure Statement in the same way as they apply to a Product
Disclosure Statement.
Note: Section 1012J provides that the information in a Product Disclosure
Statement must be up to date at the time it is given. Subdivision C
deals with the preparation and content of Product Disclosure
Statements.
1014L Giving, lodgment and notice of Replacement Product
Disclosure Statements
Subdivision E applies in relation to a Replacement Product
Disclosure Statement in the same way as it applies to a Product
Disclosure Statement that is required to be lodged with ASIC under
section 1015B.
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Division 2 Product Disclosure Statements
Section 1015A
56 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision E—Other requirements relating to Product
Disclosure Statements and Supplementary Product
Disclosure Statements
1015A Subdivision applies to Product Disclosure Statements and
Supplementary Product Disclosure Statements
This Subdivision applies to Product Disclosure Statements and to
Supplementary Product Disclosure Statements. Both kinds of
document are referred to in this Subdivision as a Statement.
1015B Some Statements must be lodged with ASIC
(1) A copy of a Statement must have been lodged with ASIC (in
accordance with the requirements of subsection (2) for consents)
before the Statement is given to a person for the purposes of a
provision of this Part if:
(a) the following subparagraphs apply:
(i) the financial product is a managed investment product;
and
(ii) the Statement states or implies that the product will be
able to be traded on a financial market; and
(iii) the Statement meets the requirements set out in
section 1013H; or
(b) the financial product is a managed investment product that
can be traded on a financial market; or
(c) the financial product is a financial product of a kind specified
in regulations made for the purposes of this paragraph.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The lodgment of a Statement with ASIC requires the consent of:
(a) whether it is an issue Statement or a sale Statement:
(i) if the responsible person is a body corporate—every
director of the responsible person; or
(ii) otherwise—the responsible person; and
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(b) if it is a sale Statement:
(i) if the issuer of the financial product concerned is a body
corporate—every director of the issuer; or
(ii) otherwise—the issuer of the financial product
concerned.
1015C How a Statement is to be given
(1) A Statement:
(a) must be:
(i) given to a person, or the person’s agent, personally; or
(ii) sent to the person, or the person’s agent, at an address
(including an electronic address) or fax number
nominated by the person or the agent; and
(b) may be printed or be in electronic form.
(2) For the purposes of this section, the Statement is sent to a person at
an address if, and only if:
(a) the Statement is sent to the address; and
(b) either:
(i) the envelope or other container in which the Statement
is sent; or
(ii) the message that accompanies the Statement;
is addressed to the person.
(3) The Statement may be given or sent to the person’s agent only if
the agent is not acting as the person’s agent in one of the following
capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services licensee;
(d) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
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Section 1015D
58 Corporations Act 2001
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(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( �
(e) a person who is required to hold an Australian financial
services licence but who does not hold such a licence;
(f) an employee, director or other representative of a person
referred to in paragraph (a), (b), (d) or (e).
(4) The regulations may provide for alternative ways of giving a
Statement to a person.
(5) The regulations may specify requirements as to:
(a) the manner in which a Statement may be given to a person;
and
(b) the presentation, structure and format for a Statement that is
to be given in electronic form.
The giving of the Statement is not effective unless those
requirements are satisfied.
1015D Notice, retention and access requirements for Statement that
does not need to be lodged
(1) This section applies to a Statement if section 1015B does not
require a copy of the Statement to be lodged with ASIC.
(2) The responsible person for the Statement (other than the trustee of
a self-managed superannuation fund) must lodge a notice with
ASIC, in electronic form, advising of the occurrence of any of the
following events as soon as practicable, and in any event within 5
business days, after the occurrence of the event:
(a) except in the case of a Supplementary Product Disclosure
Statement—a copy of the Statement is first given to someone
in a recommendation, issue or sale situation;
(b) a change is made to fees and charges set out in the Statement;
(c) the financial product to which the Statement relates ceases to
be available to be recommended or offered to new clients in a
recommendation, issue or sale situation.
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Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: The fees and charges set out in a Product Disclosure Statement may be
changed by a Supplementary Product Disclosure Statement (see
section 1014A).
(3) The responsible person for the Statement must keep a copy of the
Statement for the period of 7 years after the date of the Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) During that period the responsible person:
(a) must make a copy of the Statement available to ASIC if
asked to do so by ASIC; and
(b) must comply with any reasonable request from any other
person for a copy of the Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1015E Altering a Statement after its preparation and before giving it
to a person
(1) A regulated person must not, in purported compliance with a
provision of this Part, give a person a Statement that has been
altered (otherwise than pursuant to paragraph (b)) after the date of
the Statement if either or both of the following paragraphs applies:
(a) the alteration was not made by, or with the authority of, the
issuer or seller, as the case requires, of the financial products;
(b) the alteration is a material alteration and the date of the
Statement has not been changed to:
(i) if a copy of the altered Statement has been lodged with
ASIC (see subsection (2))—the date on which it was so
lodged; or
(ii) in any other case—the date on which the alteration was
made.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 2 Product Disclosure Statements
Section 1016A
60 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) If the alteration is a material alteration to a Statement that has been
lodged with ASIC under section 1015B, that section applies to the
altered Statement as if it were a new Statement.
Subdivision F—Other rights and obligations related to Product
Disclosure Statements
1016A Provisions relating to use of application forms
(1) In this section:
defective, in relation to a Product Disclosure Statement as at a
particular time, means that the Product Disclosure Statement, if it
had been given to a person at that time, would have been defective
as defined in Subdivision A of Division 7.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
eligible application, in relation to a restricted issue or restricted
sale of a relevant financial product, means an application that
satisfies the following requirements:
(a) the application is made using an application form; and
(b) the application form used to apply for the product:
(i) was included in, or accompanied, a Product Disclosure
Statement (relating to the product) that was given to the
applicant and that was not defective as at the time when
the application was made; or
(ii) was copied, or directly derived, by the applicant from a
form referred to in subparagraph (i); and
(c) all other applicable requirements (if any) in regulations made
for the purposes of this paragraph are satisfied in relation to
the application.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
relevant financial product means:
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(a) a managed investment product; or
(b) a superannuation product; or
(c) an investment life insurance product; or
(d) an RSA product; or
(db) a margin lending facility; or
(e) a financial product of a kind specified in regulations made for
the purposes of this paragraph.
relevant superannuation entity means a superannuation entity of a
kind specified in regulations made for the purposes of this
definition.
restricted issue means an issue of a relevant financial product to a
person as a retail client, other than an issue covered by either of the
following paragraphs:
(a) an issue in a situation, or pursuant to an offer made in a
situation, to which a subsection, other than subsection (1), of
section 1012D applies; or
(b) an issue in a situation, or pursuant to an offer made in a
situation, to which section 1012E or 1012F applies.
restricted sale means a sale of a relevant financial product pursuant
to an offer that:
(a) is of a kind described in subsection 1012C(3) or (4); and
(b) is not made in a situation to which a subsection, other than
subsection (1), of section 1012D applies.
RSA provider has the same meaning as in the Retirement Savings
Accounts Act 1997.
standard employer-sponsor has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
standard employer-sponsored fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
standard employer-sponsored member has the same meaning as in
the Superannuation Industry (Supervision) Act 1993.
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Section 1016A
62 Corporations Act 2001
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(2) A person (the issuer or seller) must only make a restricted issue or
a restricted sale of a relevant financial product to a person (the
recipient) if:
(a) the issue or sale is made pursuant to an eligible application
made to the issuer or seller by the recipient; or
(b) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by a standard employer-sponsor of the entity
on the recipient’s behalf;
(iii) if the application is the first application for the issue of a
superannuation interest made to the issuer by the
standard employer-sponsor on behalf of any person—
the application is an eligible application; or
(c) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by another trustee under Part 24 of the
Superannuation Industry (Supervision) Act 1993 on the
recipient’s behalf;
(iii) if the application is the first application under Part 24 of
that Act made to the issuer by the other trustee on behalf
of any person—the application is an eligible
application; or
(d) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by an RSA provider under Part 9 of the
Retirement Savings Accounts Act 1997 on the
recipient’s behalf;
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(iii) if the application is the first application under Part 9 of
that Act made to the issuer by the RSA provider on
behalf of any person—the application is an eligible
application; or
(e) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an RSA product;
(ii) the interest is issued pursuant to an application made to
the issuer by an employer (within the meaning of the
Retirement Savings Accounts Act 1997) of the recipient;
(iii) if the application is the first application for the issue of
an RSA product of that kind made to the issuer by the
employer on behalf of any person—the application is an
eligible application;
(iv) all other applicable requirements (if any) in regulations
made for the purposes of this subparagraph are satisfied
in relation to the application; or
(f) the issue or sale occurs in a situation covered by regulations
made for the purposes of this paragraph.
Note 1: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The trustee of a relevant superannuation entity must only permit a
person to become a standard employer-sponsor of the entity if:
(a) the person applied to become a standard employer-sponsor of
the entity using an application form; and
(b) the application form used to apply to become a standard
employer-sponsor:
(i) was included in, or accompanied, a Product Disclosure
Statement (relating to an interest in the entity) that was
given to the person and that was not defective as at the
time when the application was made; or
(ii) was copied, or directly derived, by the person from a
form referred to in subparagraph (i).
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 2 Product Disclosure Statements
Section 1016B
64 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The regulations may:
(a) provide for defences to offences based on subsection (2) or
(3); and
(b) provide for additional offences relating to the receipt or
non-receipt of applications or application forms.
Note 1: A defendant bears an evidential burden in relation to a defence. See
subsection 13.3(3) of the Criminal Code.
Note 2: For the limit on penalties for offences against the regulations, see
paragraph 1364(2)(w).
1016B If Statement lodged with ASIC, financial product is not to be
issued or sold before specified period
(1) If:
(a) a copy of a Product Disclosure Statement has been lodged
with ASIC; and
(b) the financial product to which the Statement relates is not
able to be traded on any financial market (whether in
Australia or elsewhere);
the responsible person must not issue or sell a financial product,
pursuant to an application made in response to the Statement, until
the period of 7 days (or that period as extended under
subsection (2)) after lodgment of the Statement has ended.
Note 1: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) ASIC may extend the period by notice in writing to the responsible
person. The period as extended must end no more than 14 days
after lodgment.
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Section 1016C
Corporations Act 2001 65
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1016C Minimum subscription condition must be fulfilled before
issue or sale
If a Product Disclosure Statement for a financial product states that
a financial product to which the Statement relates will not be
issued or sold unless:
(a) applications for a minimum number of financial products of
that kind are received; or
(b) a minimum amount is raised;
the responsible person must not issue or sell a financial product of
that kind, pursuant to an application made in response to the
Statement, if that condition has not been satisfied. For the purpose
of working out whether the condition has been satisfied, a person
who has agreed to take a financial product as underwriter is taken
to have applied for that product.
Note 1: Statements in a Supplementary Product Disclosure Statement are
taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 1A: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this section is an offence (see
subsection 1311(1)).
1016D Condition about ability to trade on a market must be fulfilled
before issue or sale
(1) If a Product Disclosure Statement for a financial product states or
implies that a financial product to which the Statement relates will
be able to be traded on a financial market (whether in Australia or
elsewhere), the responsible person must only issue or sell a
financial product of that kind, pursuant to an application made in
response to the Statement, if:
(a) the product is able to be traded on that market; or
(b) an application has, within 7 days after the relevant date (see
subsection (3)), been made to the operator of that market for
the taking of such action as is necessary to enable financial
products of that kind to be traded on that market.
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Section 1016D
66 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Paragraph (b) ceases to apply to the financial product at the end of
the period of 3 months starting on the relevant date.
Note 1: Statements in a Supplementary Product Disclosure Statement are
taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 1A: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Issue or transfer void if quotation condition not fulfilled
(2) If a Product Disclosure Statement for a financial product states or
implies that the financial product is to be quoted on a financial
market (whether in Australia or elsewhere) and:
(a) an application has not, within 7 days after the relevant date
(see subsection (3)), been made to the operator of that market
for the taking of such action as is necessary to enable
financial products of that kind to be traded on that market; or
(b) the product is not able to be traded on that market at the end
of 3 months after the relevant date;
then:
(c) an issue or transfer to a person of a financial product of that
kind is void if:
(i) the issue or transfer is pursuant to an application made
in response to the Statement; or
(ii) the person should have been given the Statement; and
(d) if:
(i) an issue or transfer of a financial product to a person is
void because of paragraph (c); and
(ii) the responsible person received money from that person
on account of the issue or transfer—the responsible
person must, as soon as practicable, return the money to
that person.
Note 1: Paragraphs (c) and (d) do not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
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Section 1016E
Corporations Act 2001 67
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 2: Failure to comply with paragraph (d) is an offence (see
subsection 1311(1)).
The relevant date
(3) For the purposes of this section, the relevant date in relation to an
express or implied statement is:
(a) if the statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the
date of the Product Disclosure Statement; or
(b) if the statement is express or implied in a Supplementary
Product Disclosure Statement—the date of the
Supplementary Product Disclosure Statement; or
(c) if the statement is express or implied in a Replacement
Product Disclosure Statement (whether or not it is express or
implied in the earlier Product Disclosure Statement it
replaces)—the date of the Replacement Product Disclosure
Statement.
1016E Choices open to person making the offer if disclosure
condition not met or Product Disclosure Statement
defective
(1) This section applies if:
(a) a Product Disclosure Statement for a financial product states
that a financial product to which the Statement relates will
not be issued or sold unless:
(i) applications for a minimum number of financial
products of that kind are received; or
(ii) a minimum amount is raised;
and that condition is not satisfied within 4 months after the
relevant date (see subsections (3) and (4)); or
(b) a Product Disclosure Statement for a financial product states
or implies that a financial product to which the Statement
relates will be able to be traded on a financial market
(whether in Australia or elsewhere) and:
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Section 1016E
68 Corporations Act 2001
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(i) an application has not, within 7 days after the relevant
date (see subsection (4)), been made to the operator of
that market for the taking of such action as is necessary
to enable financial products of that kind to be traded on
that market; or
(ii) at the end of the period of 3 months starting on the
relevant date, financial products of that kind are not able
to be traded on that market; or
(c) in relation to a Product Disclosure Statement for a financial
product, the responsible person becomes aware that the
Product Disclosure Statement was defective as at the time
when it was prepared, or that it became or has become
defective as at some later time.
Note: Information and statements in a Supplementary Product Disclosure
Statement are taken to be contained in the Product Disclosure
Statement it supplements (see section 1014D).
(2) If this section applies, the responsible person must, in relation to
any application for financial products of the relevant kind that is
made in response to the Product Disclosure Statement (the first
Product Disclosure Statement) and that has not resulted in an issue
or sale of financial products of that kind, comply with one of the
following paragraphs:
(a) the responsible person must repay the money they received
from the applicant; or
(aa) the responsible person must give the applicant:
(i) a new Product Disclosure Statement for the financial
products, and an additional statement that identifies the
respects in which the new Product Disclosure Statement
is materially different from the first Product Disclosure
Statement; and
(ii) 1 month to withdraw their application and be repaid; or
(b) the responsible person must give the applicant:
(i) a Supplementary Product Disclosure Statement that
changes the statement referred to in paragraph (1)(a) or
(b), or that corrects the deficiency referred to in
paragraph (1)(c); and
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(ii) 1 month to withdraw their applications and be repaid; or
(ba) the responsible person must issue or sell the financial
products to the applicant and give them:
(i) a new Product Disclosure Statement for the financial
products, and an additional statement that identifies the
respects in which the new Product Disclosure Statement
is materially different from the first Product Disclosure
Statement; and
(ii) 1 month to return the financial products and be repaid;
or
(c) the responsible person must issue or sell the financial
products to the applicant and give them:
(i) a Supplementary Product Disclosure Statement that
changes the statement referred to in paragraph (1)(a) or
(b), or that corrects the deficiency referred to in
paragraph (1)(c); and
(ii) 1 month to return the financial products and be repaid.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: If the responsible person chooses the option given by paragraph (aa)
or (b), that option does not require the responsible person to wait until
the end of the month referred to in subparagraph (aa)(ii) or (b)(ii)
before going ahead and issuing or selling the financial products to the
applicant if the applicant indicates before then that they still wish to
proceed with the application.
Note 3: However, if the responsible person chooses the option given by
paragraph (aa) or (b), whether the responsible person may go ahead
and issue or sell the financial products to the applicant at the end of
the month referred to in subparagraph (aa)(ii) or (b)(ii) (or earlier, as
mentioned in note 2) is affected by this subsection and sections 1016A
to 1016E (including as those provisions are affected by
subsections (2A) and (2B) of this section).
Note 4: If the responsible person chooses the option given by paragraph (c),
sections 1016A to 1016D do not prohibit the issue or sale of the
financial products under that paragraph (see subsection (2C) of this
section).
(2A) If, in accordance with paragraph (2)(aa), the responsible person
gives the applicant a new Product Disclosure Statement for the
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Division 2 Product Disclosure Statements
Section 1016E
70 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
financial products and the additional statement referred to in
subparagraph (2)(aa)(i):
(a) subsection (2), and sections 1016B, 1016C, 1016D and
1016E, apply in relation to the application, from the time
when the applicant is given the new Product Disclosure
Statement (the correction time), as if the application had
been made in response to the new Product Disclosure
Statement; and
(b) if:
(i) the reason for giving the new Product Disclosure
Statement was that the responsible person became
aware that the first Product Disclosure Statement was
defective as at the time when it was prepared, or had
become defective by the time the application was made;
and
(ii) the financial products are relevant financial products as
defined in section 1016A;
section 1016A applies in relation to the application, from the
correction time, as if the first Product Disclosure Statement
had instead contained the content of the new Product
Disclosure Statement.
Note 1: Because of paragraph (a):
(a) if this section applies to the new Product Disclosure Statement, the responsible person’s ability to proceed to issue or sell the financial products pursuant to the application will be affected by subsection (2), and by sections 1016B, 1016C and 1016D, as those provisions apply in relation to the new Product Disclosure Statement (even though the application was actually made in response to the first Product Disclosure Statement); and
(b) sections 1016B, 1016C and 1016D, as they relate to the first Product Disclosure Statement, cease to apply in relation to the application.
Note 2: Because of paragraph (b), the application may be an eligible
application as defined in section 1016A, even though the first Product
Disclosure Statement was actually defective as at the time when the
application was made.
(2B) If:
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) in accordance with paragraph (2)(b), the responsible person
gives the applicant a Supplementary Product Disclosure
Statement that relates to the financial products; and
(b) the reason for giving the Supplementary Product Disclosure
Statement was that the responsible person became aware that
the first Product Disclosure Statement was defective as at the
time when it was prepared, or had become defective by the
time the application was made; and
(c) the financial products are relevant financial products as
defined in section 1016A;
section 1016A applies in relation to the application, from the time
when the applicant is given the Supplementary Product Disclosure
Statement, as if the Supplementary Product Disclosure Statement
had been given to the applicant before the application was made.
Note 1: Because of this subsection and section 1014D (information in a
Supplementary Product Disclosure Statement is taken to be contained
in the Product Disclosure Statement it supplements), the application
may be an eligible application as defined in section 1016A, even
though the Supplementary Product Disclosure Statement was not
actually given until after the time when the application was made.
Note 2: The responsible person’s ability to proceed to issue or sell the
financial products pursuant to the application will be affected by
subsection (2), and by sections 1016B, 1016C and 1016D, as those
provisions apply in relation to the first Product Disclosure Statement
as affected by the Supplementary Product Disclosure Statement and
any other Supplementary Product Disclosure Statements.
(2BA) If Subdivision DA applies:
(a) for the purposes of subsection (2), instead of giving the
applicant a Supplementary Product Disclosure Statement, the
responsible person may give the applicant a Replacement
Product Disclosure Statement; and
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Section 1016E
72 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if the responsible person gives the applicant a Replacement
Product Disclosure Statement, subsection (2B) applies as if
references in that subsection to a Supplementary Product
Disclosure Statement were references to the Replacement
Product Disclosure Statement.
(2C) If the responsible person chooses to comply with paragraph (2)(c),
nothing in sections 1016A to 1016D applies to the issue or sale of
the financial products under that paragraph.
Note: This subsection affects the elements of the offences under
sections 1016A to 1016D, and so it is not an exception in relation to
which a defendant bears an evidential burden under subsection 13.3(3)
of the Criminal Code.
(3) For the purpose of working out whether the condition referred to in
paragraph (1)(a) has been satisfied, a person who has agreed to
take a financial product as an underwriter is taken to have applied
for that financial product.
(4) For the purposes of paragraphs (1)(a) and (b), the relevant date in
relation to an express or implied statement is:
(a) if the statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the
date of the Product Disclosure Statement; or
(b) if the statement is express or implied in a Supplementary
Product Disclosure Statement—the date of the
Supplementary Product Disclosure Statement; or
(c) if the statement is express or implied in a Replacement
Product Disclosure Statement (whether or not it is express or
implied in the earlier Product Disclosure Statement it
replaces)—the date of the Replacement Product Disclosure
Statement.
(5) For the purposes of this section, defective, when used in relation to
a Product Disclosure Statement at a particular time, means that the
Product Disclosure Statement, if it had been given to a person at
that time, would have been defective as defined in Subdivision A
of Division 7.
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Product Disclosure Statements Division 2
Section 1016F
Corporations Act 2001 73
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
1016F Remedies for person acquiring financial product under
defective Product Disclosure Document
(1) Subject to this section, if a financial product is issued or sold to a
person (the client) in contravention of section 1016E, the client has
the right to return the product and to have the money they paid to
acquire the product repaid. This is so even if the responsible person
is being wound up.
(2) If the responsible person:
(a) is a body corporate; and
(b) does not repay the money as required by subsection (1);
the directors of the responsible person are personally liable to
repay the money.
(3) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product,
those other requirements must be complied with.
(4) The right to return the product can only be exercised during the
period of 1 month starting on the date of the issue or sale of the
product to the client.
(5) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between
the client and the issuer of the product—that relationship is,
by force of this section, terminated with effect from that time
without penalty to the client; and
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Section 1016F
74 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) any contract for the acquisition of the product by the client is,
by force of this section, terminated with effect from that time
without penalty to the client.
(6) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (5)) to apply if the
right to return a financial product is exercised.
(7) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that
would otherwise be covered by this section is excluded from
this section;
(b) provide additional requirements to be satisfied before this
section applies in relation to a class or subclass of financial
products;
(c) provide that this section does not apply in relation to the
provision of a financial product in specified circumstances.
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Other disclosure obligations of the issuer of a financial product Division 3
Section 1017A
Corporations Act 2001 75
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Other disclosure obligations of the issuer of a
financial product
1017A Obligation to give additional information on request
Obligation to give information
(1) The following people may request the person who is the
responsible person for a Product Disclosure Statement for a
financial product under Division 2 to provide further information
about the product:
(a) a person who:
(i) has been or should have been given, or who has
obtained, the Product Disclosure Statement for the
financial product; and
(ii) is not a holder of the financial product;
(b) a financial services licensee;
(c) an authorised representative of a financial services licensee;
(e) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(l).
(2) The responsible person must give the person the information if:
(a) the financial product is offered in this jurisdiction or the
Product Disclosure Statement is given or obtained in this
jurisdiction; and
(b) the responsible person has previously made the information
generally available to the public; and
(c) the information might reasonably influence a person’s
decision, as a retail client, whether to acquire a financial
product to which the Statement relates; and
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Section 1017A
76 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) it is reasonably practicable for the responsible person to give
the person the information; and
(e) the person pays any charge payable under subsection (5).
The responsible person does not need to give information that is
contained in the Product Disclosure Statement.
Note 1: Paragraph (b)—This requirement means that the responsible person
does not have to disclose material that is confidential because it is:
(a) an internal working document; or
(b) personal information about another person; or
(c) a trade secret or other information that has a commercial value that would be reduced or destroyed by the disclosure; or
(d) material that the responsible person owes another a person a duty not to disclose.
Note 2: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
(3) The responsible person must take reasonable steps to ensure that,
as soon as practicable after receiving the request, and in any event
within one month, subsection (2) is complied with.
Manner of giving information
(4) The responsible person may give the person making the request the
information:
(a) by making a document containing the information available
for inspection by the person:
(i) at a suitable place (having adequate facilities for the
person to inspect and photocopy the document); and
(ii) during normal business hours; or
(b) in some other way that is agreed between the responsible
person and the person making the request.
Issuer or seller may charge for giving information
(5) The responsible person may require the person making the request
to pay a charge for obtaining the information.
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Section 1017B
Corporations Act 2001 77
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) The amount of the charge must not exceed the reasonable costs that
the responsible person incurs that are reasonably related to giving
the information (including any costs incurred in photocopying the
document containing the information).
Note: This would include the costs of searching for, obtaining and collating
the information.
1017B Ongoing disclosure of material changes and significant events
Issuer to notify holders of changes and events
(1) If:
(a) a person (the holder) acquired a financial product as a retail
client (whether or not it was acquired from the issuer); and
(b) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this
jurisdiction; and
(c) the product is not specified in regulations made for the
purposes of this paragraph; and
(d) the circumstances in which the product was acquired are not
specified in regulations made for the purposes of this
paragraph;
the issuer must, in accordance with subsections (3) to (8), notify
the holder of changes and events referred to in subsection (1A).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
The changes and events that must be notified
(1A) The changes and events that must be notified are:
(a) any material change to a matter, or significant event that
affects a matter, being a matter that would have been required
to be specified in a Product Disclosure Statement for the
financial product prepared on the day before the change or
event occurs; and
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Section 1017B
78 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) any other change, event or other matter of a kind specified in
regulations made for the purposes of this paragraph; and
(c) without limiting paragraph (a) or (b)—any replacement of a
kind specified in regulations made for the purposes of this
paragraph of a beneficial interest of a class that is a MySuper
product with a beneficial interest of another class in a
superannuation entity.
Note: Paragraph (a) applies whether or not a Product Disclosure Statement
for the financial product was in fact prepared (or required to be
prepared) on the day before the change or event occurs.
(2) The issuer does not need to give the notice if the financial product
is a managed investment product that is an ED security.
Note 1: The continuous disclosure provisions in Chapter 6CA
(sections 674-677) apply to managed investment products that are ED
securities.
Note 2: A defendant bears an evidential burden in relation to the matters in
this subsection.
(3) The issuer must notify the holder in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(4) The notice must give the holder the information that is reasonably
necessary for the holder to understand the nature and effect of the
change or event.
Time for notifying holders
(5) The time within which the issuer must give the notice is set out in
the following table:
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Section 1017B
Corporations Act 2001 79
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Time for giving notice of change or event
Nature of change or event Time for giving notice
1 Change or event is not an
increase in fees or charges
Subject to subsection (6),
before the change or event
occurs or as soon as
practicable after, but not more
than 3 months after, the
change or event occurs
2 Change is an increase in fees
or charges
30 days before the change
takes effect
(6) If the change or event is not an increase in fees or charges, the
notice may be given more than 3 months after the change or event
occurs if:
(a) the issuer reasonably believes that the event is not adverse to
the holder’s interests and accordingly the holder would not
be expected to be concerned about the delay in receiving the
information; and
(b) the notice is given no later than 12 months after the change or
event occurs.
(7) If the change or event might result in an increase in fees or charges,
this section applies to the change or event as if it would result in an
increase in fees or charges.
(8) In any proceedings against the issuer for an offence based on
subsection (1), it is a defence if the issuer took reasonable steps to
ensure that the other person would be notified of the matters
required by subsection (1) in accordance with subsections (3) to
(8).
Note: A defendant bears an evidential burden in relation to the matters in
subsection (8). See subsection 13.3(3) of the Criminal Code.
(9) In this section:
fees or charges does not include fees or charges payable under a
law of the Commonwealth or of a State or Territory.
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Division 3 Other disclosure obligations of the issuer of a financial product
Section 1017BA
80 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
MySuper product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
1017BA Trustees of regulated superannuation funds—obligation to
make product dashboard publicly available
(1) The trustee, or the trustees, of a regulated superannuation fund that
has 5 or more members must ensure:
(a) that a product dashboard for each of the fund’s MySuper
products and choice products is publicly available at all times
on the fund’s website; and
(b) that each product dashboard sets out the information required
by subsection (2) or (3); and
(c) that the information set out in each product dashboard about
fees and other costs is updated within 14 days after the end of
a period prescribed by the regulations; and
(d) that the other information set out in each product dashboard
is updated within 14 days after any change to the
information; and
(e) if the regulations prescribe the way in which information is to
be set out in a product dashboard—that each product
dashboard sets out the information in accordance with the
regulations.
(2) The product dashboard for a MySuper product must set out:
(a) the following, worked out in accordance with the regulations
in relation to the period or periods prescribed by the
regulations:
(i) a return target or return targets for the product;
(ii) a return or returns for the product;
(iii) a comparison or comparisons between return targets and
returns for the product;
(iv) the level of investment risk that applies to the product;
(v) a statement of fees and other costs in relation to the
product; and
(b) any other information prescribed by the regulations.
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Corporations Act 2001 81
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) Subject to subsection (4), the product dashboard for a choice
product must set out:
(a) the following for each investment option offered within the
choice product, worked out in accordance with the
regulations in relation to the period or periods prescribed by
the regulations:
(i) a return target or return targets for the investment
option;
(ii) a return or returns for the investment option;
(iii) a comparison or comparisons between return targets and
returns for the investment option;
(iv) the level of investment risk that applies to the
investment option;
(v) a statement of fees and other costs in relation to the
investment option; and
(b) any other information prescribed by the regulations.
(4) Subsection (3) does not apply to an investment option within a
choice product if:
(a) the assets of the fund that are invested under the option are
invested only in one or more of the following:
(i) a life policy under which contributions and accumulated
earnings may not be reduced by negative investment
returns or any reduction in the value of assets in which
the policy is invested;
(ii) a life policy under which the benefit to a member (or a
relative or dependant of a member) is based only on the
realisation of a risk, not the performance of an
investment;
(iii) an investment account contract the only beneficiaries of
which are a member, and relatives and dependants of a
member; or
(b) the sole purpose of the investment option is the payment of a
pension to members who have satisfied a condition of release
of benefits specified in a standard made under
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Section 1017BA
82 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
paragraph 31(2)(h) of the Superannuation Industry
(Supervision) Act 1993; or
(c) the assets of the fund that are invested under the option are
invested only in another single asset.
(4A) The regulations may prescribe circumstances in which assets of a
regulated superannuation fund are, or are not, to be treated as
invested in a single asset for the purposes of paragraph (4)(c).
(5) In this section:
choice product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
fee, in relation to a MySuper product or a choice product offered
by a regulated superannuation fund, means a fee (other than an
activity fee, an advice fee or an insurance fee within the meaning
of the Superannuation Industry (Supervision) Act 1993) that may
be charged by the trustee, or the trustees, of the regulated
superannuation fund in relation to the product under that Act.
investment account contract has the same meaning as in the Life
Insurance Act 1995.
life policy has the same meaning as in the Life Insurance Act 1995.
member, in relation to a regulated superannuation fund, has the
same meaning as in the Superannuation Industry (Supervision) Act
1993.
MySuper product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
pension has the same meaning as in the Superannuation Industry
(Supervision) Act 1993.
regulated superannuation fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
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Section 1017BB
Corporations Act 2001 83
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1017BB Trustees of registrable superannuation entities—obligation
to make information relating to investment of assets
publicly available
(1) The trustee, or the trustees, of a registrable superannuation entity
(other than a pooled superannuation trust) must make the following
information publicly available on the entity’s website no later than
90 days after each reporting day:
(a) information that is sufficient to identify each of the financial
products or other property in which assets, or assets derived
from assets, of the entity are invested, at the end of the
reporting day;
(b) the value of the assets, or assets derived from assets, of the
entity, at the end of the reporting day, that are invested in
each of the financial products or other property.
(2) Information made publicly available under subsection (1) in
respect of a reporting day must continue to be made publicly
available on the registrable superannuation entity’s website until
information relating to the next reporting day is made publicly
available under subsection (1).
(3) If the regulations prescribe the way in which information made
publicly available under subsection (1) must be organised, the
information must be organised in accordance with the regulations.
(4) The regulations may provide that investment in a financial product
or other property is not a material investment in circumstances
prescribed by the regulations.
(5) If regulations are made for the purposes of subsection (4),
information relating to the investment of a financial product or
other property in the prescribed circumstances is not required to be
made publicly available under subsection (1).
(6) In this section:
reporting day means 30 June and 31 December each year.
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Section 1017BC
84 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1017BC Obligations relating to investment of assets of registrable
superannuation entities—general rule about giving notice
and providing information
(1) This section applies if:
(a) a person (the first party) enters into an arrangement with
another person (the second party); and
(b) under the terms of the arrangement, the first party acquires a
financial product from the second party; and
(c) the first party acquires the financial product in this
jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the arrangement is, or is derived
from, an asset of a registrable superannuation entity; and
(e) the arrangement is not of a kind prescribed by the regulations
as an arrangement to which this section does not apply.
Obligation of first party
(2) The first party must, at the time the arrangement is entered into,
notify the second party of the following:
(a) that an asset that is the subject of the arrangement is, or is
derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Obligations of second party
(3) If the second party is notified by the first party in accordance with
subsection (2), the second party must provide the trustee, or the
trustees, of the registrable superannuation entity with information
about:
(a) the financial product acquired by the first party; and
(b) if the second party knows, or reasonably ought to know, that:
(i) an asset about which the second party was notified by
the first party will be used, by the second party or
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Corporations Act 2001 85
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
another person, to acquire another financial product—
that financial product; or
(ii) an asset about which the second party was notified by
the first party will be used, by the second party or
another person, to acquire property other than a
financial product—that other property;
sufficient to allow the trustee, or the trustees, of the registrable
superannuation entity to satisfy the obligation under
section 1017BB.
Obligation of agent of first party
(4) If the financial product is acquired in this jurisdiction on behalf of
the first person by a person (the agent) other than a person who is
the provider or acquirer under a custodial arrangement:
(a) the agent must notify the second party in accordance with
subsection (2) on behalf of the first party; and
(b) if the agent so notifies the second party, the first party is
taken to have satisfied the obligation under that subsection.
Definitions
(5) In this section:
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017BD Obligations relating to investment of assets of registrable
superannuation entities—giving notice to providers under
custodial arrangements
(1) This section applies if:
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(a) a person (the first party) enters into an arrangement (the core
arrangement) with another person (the second party); and
(b) under the terms of the core arrangement, the second party is
the provider under a custodial arrangement under which the
first party is a client; and
(c) the first party knows, or reasonably ought to know that, under
the custodial arrangement, a financial product may be
acquired in this jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the core arrangement is, or is
derived from, an asset of a registrable superannuation entity;
and
(e) the core arrangement is not of a kind prescribed by the
regulations as an arrangement to which this section does not
apply.
(2) The first party must, at the time the core arrangement is entered
into, notify the second party of the following:
(a) that an asset that is the subject of the core arrangement is, or
is derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Note: Section 1017BC may apply in relation to an arrangement under which
the second party, or an acquirer under the custodial arrangement,
actually acquires the financial product.
(3) In this section:
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
client, in relation to a custodial arrangement, has the same meaning
as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
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Corporations Act 2001 87
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017BE Obligations relating to investment of assets of registrable
superannuation entities—giving notice to acquirers under
custodial arrangements
(1) This section applies if:
(a) a person (the first party) enters into an arrangement (the core
arrangement) with another person (the second party); and
(b) under the terms of the core arrangement, the second party is
the acquirer in relation to a custodial arrangement under
which the first party is the provider; and
(c) the first party knows, or reasonably ought to know that, under
the core arrangement, the second party may acquire a
financial product in this jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the core arrangement is, or is
derived from, an asset of a registrable superannuation entity;
and
(e) the core arrangement is not of a kind prescribed by the
regulations as an arrangement to which this section does not
apply.
(2) The first party must, at the time the core arrangement is entered
into, notify the second party of the following:
(a) that an asset that is the subject of the core arrangement is, or
is derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Note: Section 1017BC may apply in relation to an arrangement under which
the second party actually acquires the financial product.
(3) In this section:
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Section 1017C
88 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017C Information for existing holders of superannuation products
and RSA products
Application
(1) This section applies to the issuer of a financial product if the
product is:
(a) a superannuation product; or
(b) an RSA product.
Information for concerned person related to a superannuation
product
(2) If the financial product is a superannuation product, then, subject to
subsection (4), the issuer must, on request by a concerned person,
give the concerned person information that the concerned person
reasonably requires for the purposes of:
(a) understanding any benefit entitlements that the concerned
person may have, has or used to have under the
superannuation product; or
(b) understanding the main features of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(c) making an informed judgment about the management and
financial condition of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any); or
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(d) making an informed judgment about the investment
performance of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(e) understanding the particular investments of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any).
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines concerned person and relevant sub-plan.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for concerned person related to an RSA product
(2A) If the financial product is an RSA product, then, subject to
subsection (4), the issuer must, on request by a concerned person,
give the concerned person information that the concerned person
reasonably requires for the purposes of:
(a) understanding any benefit entitlements that the concerned
person may have, has or used to have under the RSA product;
or
(b) understanding the main features of the RSA product.
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines concerned person.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for employer-sponsor related to a superannuation
product
(3) If the financial product is a superannuation product, then, subject to
subsection (4), the issuer must, on request by an employer-sponsor,
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
give the employer-sponsor information that the employer-sponsor
reasonably requires for the purposes of:
(a) understanding the kinds of benefits to which the
employer-sponsor’s employees are entitled or will or may
become entitled; or
(b) understanding the main features of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(c) making an informed judgment about the management and
financial condition of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any); or
(d) making an informed judgment about the investment
performance of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(e) a matter related to the Superannuation Guarantee
(Administration) Act 1992.
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines relevant sub-plan.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for employer related to an RSA product
(3A) If the financial product is an RSA product, then, subject to
subsection (4), the issuer must, on request by an employer who
made an application to acquire the RSA product on behalf of an
employee, give the employer information that the employer
reasonably requires for the purposes of:
(a) understanding the kinds of benefits to which the employer’s
employees are entitled or will or may become entitled; or
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(b) understanding the main features of the RSA product; or
(c) a matter related to the Superannuation Guarantee
(Administration) Act 1992.
The information must be given in accordance with the other
requirements of this section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Exceptions
(4) This section does not require (and does not, by implication,
authorise) the disclosure of:
(a) internal working documents of the issuer; or
(b) information or documents that would disclose, or tend to
disclose:
(i) personal information of another person if, in the
circumstances, the disclosure would be unreasonable; or
(ii) trade secrets or other information having a commercial
value that would be reduced or destroyed by the
disclosure; or
(c) information or documents in relation to which the issuer
owes to another person a duty of non-disclosure.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
Specific requirements
(5) The issuer must, on request in writing by a person who is a
concerned person, an employer-sponsor (if the financial product is
a superannuation product) or an employer referred to in
subsection (3A) (if the financial product is an RSA product), give
the person:
(a) a copy of a prescribed document (to the extent the issuer has
access to the document) specified in the request; or
(b) prescribed information (to the extent to which the issuer has
or has access to the information) specified in the request.
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The document or information must be given in accordance with the
other requirements of this section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) Subsection (5) does not apply if the issuer is the trustee of a
self-managed superannuation fund.
Documents may be made available for inspection
(7) It is sufficient compliance with a requirement imposed by this
section on the issuer to give information, or to give a copy of a
document, to a person (the client) if:
(a) a document containing the information; or
(b) a copy of the document;
is made available for inspection by the issuer:
(c) at a suitable place (having adequate facilities for the person
to inspect and photocopy the document); and
(d) during normal business hours;
or as otherwise agreed between the issuer for the financial product
and the client.
Time for compliance
(8) The issuer must comply with a request to give information, or a
copy of a document, as soon as practicable. The issuer must, in any
event, make reasonable efforts to comply with the request within 1
month of receiving the request.
Definitions
(9) In this section:
concerned person:
(a) in relation to a superannuation product—means a person
who:
(i) is, or was within the preceding 12 months, a member of
the superannuation entity; or
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(ii) is a beneficiary of the superannuation entity; or
(b) in relation to an RSA product—means a person who:
(i) is, or was within the preceding 12 months, a holder of
the RSA product; or
(ii) has a right or a claim under the RSA product.
relevant sub-plan, in relation to a superannuation product, has the
meaning given by the regulations.
1017D Periodic statements for retail clients for financial products
that have an investment component
(1) If:
(a) a person (the holder) of a financial product acquired the
financial product as a retail client (whether or not it was
acquired from the issuer); and
(b) the product is:
(i) a managed investment product; or
(ii) a superannuation product; or
(iii) an RSA product; or
(iv) an investment life insurance product; or
(v) a deposit product; or
(va) a margin lending facility; or
(vi) specified in regulations made for the purposes of this
paragraph; and
(c) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this
jurisdiction;
the issuer of the product must, in accordance with subsections (2)
to (6), give the holder a periodic statement for each reporting
period during which the holder holds the product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The following provisions apply in relation to reporting periods:
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(a) each reporting period lasts for a period, not exceeding 1 year,
determined by the issuer;
(b) the first reporting period starts when the holder acquired the
product;
(c) each subsequent reporting period starts at the end of the
preceding reporting period;
(d) if the holder ceases to hold the product, the period starting at
the end of the preceding reporting period and ending when
the holder ceases to hold the product is a reporting period.
(3) The periodic statement must be given as soon as practicable after,
and in any event within 6 months after, the end of the reporting
period to which it relates.
(4) The periodic statement must give the holder the information that
the issuer reasonably believes the holder needs to understand his or
her investment in the financial product.
(5) The periodic statement must include the following if they are
relevant to the financial product:
(a) opening and closing balances for the reporting period;
(b) the termination value of the investment at the end of the
reporting period (to the extent to which it is reasonably
practicable to calculate that value for the investment or a
component of the investment);
(c) details of transactions in relation to the product during the
reporting period as required by regulations made for the
purposes of this paragraph;
(d) any increases in contributions in relation to the financial
product by the holder or another person during the reporting
period;
(e) return on investment during the reporting period (on an
individual basis if reasonably practicable to do so and
otherwise on a fund basis);
(f) details of any change in circumstances affecting the
investment that has not been notified since the previous
periodic statement;
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(g) details prescribed by regulations made for the purposes of
this paragraph.
(5A) Unless in accordance with the regulations:
(a) for information to be disclosed in accordance with
paragraphs (5)(a), (b), (c), (d) and (e), any amounts are to be
stated in dollars; and
(b) for any other information in relation to amounts paid by the
holder of the financial product during the period, any
amounts are to be stated in dollars.
(6) The periodic statement must be given in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(7) The periodic statement need not be given if the issuer has already
given the holder all the information that would be included in the
periodic statement if it were to be given.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection.
1017DA Trustees of superannuation entities—regulations may
specify additional obligations to provide information
(1) The regulations may:
(a) require the trustee of a superannuation entity to do all or any
of the following:
(i) provide information to the holder of a superannuation
product (being an interest in that entity) with
information relating to the management, financial
condition and investment performance of the entity
and/or of any relevant sub-plan (within the meaning of
section 1017C);
(ii) provide information to the holder or former holder of a
superannuation product (being an interest in that entity),
or to any other person to whom benefits under the
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product are payable, with information relating to his or
her benefit entitlements;
(iii) provide information to the holder of a superannuation
product (being an interest in the entity) with information
about arrangements for dealing with inquiries and/or
complaints relating to the product; or
(b) require an RSA provider to do either or both of the
following:
(i) provide information to the holder or former holder of an
RSA product provided by the RSA provider, or to any
other person to whom benefits under the product are
payable, with information relating to his or her benefit
entitlements;
(ii) provide information to the holder of an RSA product
provided by the RSA provider with information about
arrangements for dealing with inquiries and/or
complaints relating to the product.
(2) Without limiting subsection (1), regulations made for the purposes
of that subsection may deal with all or any of the following:
(a) what information is to be provided;
(b) when information is to be provided;
(c) how information is to be provided.
(3) The trustee of a superannuation entity, or an RSA provider, must
provide information in accordance with any applicable
requirements of regulations made for the purposes of
subsection (1).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) In this section:
RSA provider has the same meaning as in the Retirement Savings
Accounts Act 1997.
superannuation entity has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
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1017E Dealing with money received for financial product before the
product is issued
(1) This section applies to money paid to:
(a) an issuer (the product provider) of financial products; or
(b) a seller (the product provider) of financial products in
relation to which the seller has prepared a Product Disclosure
Statement;
if:
(c) the money is paid to acquire, or acquire an increased interest
in, one or more of those financial products from the product
provider (whether or not the acquisition would be by a person
as a retail client); and
(d) the product provider does not, for whatever reason, issue or
transfer the product or products, or the increased interest,
immediately after receiving the money; and
(e) either:
(i) the financial product or increased interest was offered in
this jurisdiction; or
(ii) the application for the financial product or increased
interest was made in this jurisdiction; or
(iii) the money was received in this jurisdiction.
(2) The product provider must ensure that the money is paid into an
account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the
purposes of this paragraph;
and is designated as an account for the purposes of this
section of this Act; and
(b) the only money paid into the account is:
(i) money to which this section applies; or
(ii) interest on the amount from time to time standing to the
credit of the account; and
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Section 1017E
98 Corporations Act 2001
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(c) if regulations made for the purposes of this paragraph impose
additional requirements—the requirements so imposed by the
regulations.
The money must be paid into the account on the day it is received
by the product provider, or on the next business day.
Note: See section 1021O for related offences.
(2A) Subject to subsection (2C), the money is taken to be held in trust
by the product provider for the benefit of the person who paid the
money.
(2C) The regulations may:
(a) provide that subsection (2A) does not apply in relation to
money in specified circumstances; and
(b) provide for matters relating to the taking of money to be held
in trust (including, for example, terms on which the money is
taken to be held in trust and circumstances in which it is no
longer taken to be held in trust).
(3) The money must only be taken out of the account if:
(a) it is taken out for the purpose of return to the person by
whom it was paid; or
(b) the product is issued or transferred to, or in accordance with
the instructions of, that person; or
(c) it is taken out for a purpose specified by regulations made for
the purposes of this paragraph; or
(d) it is taken out in a situation specified by regulations made for
the purposes of this paragraph.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The product provider must:
(a) return the money; or
(b) issue or transfer the product to, or in accordance with the
instructions of, the person who paid the money; or
(c) if the money is taken out:
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Corporations Act 2001 99
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(i) for a purpose specified by regulations made for the
purposes of paragraph (3)(c); or
(ii) in a situation specified by regulations made for the
purposes of paragraph (3)(d);
do any action required, by regulations made for the purposes
of this paragraph, after taking out that money;
either:
(d) before the end of one month starting on the day on which the
money was received; or
(e) if it is not reasonably practicable to do so before the end of
that month—by the end of such longer period as is
reasonable in the circumstances.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) The product provider may, for the purposes of this section,
maintain a single account or 2 or more accounts.
(6) Nothing in this section, or in regulations made for the purposes of
this section, makes the body (not being the product provider) that
the account is with under paragraph (2)(a) subject to any liability
merely because of a failure by the product provider to comply with
any of the provisions of this section or those regulations.
1017F Confirming transactions
Transactions to which this section applies
(1) This section applies in relation to a transaction involving a
financial product if:
(a) a person (the holder) acquired the product as a retail client;
and
(b) the transaction is:
(i) the transaction by which the holder acquired the
product; or
(ii) a transaction that occurs while the holder holds the
product, including a transaction by which the holder
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Section 1017F
100 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
disposes of all or part of the product (and see also
subsection (3)); and
(c) the transaction is not one that does not require confirmation
because of subsection (4); and
(d) the holder has not, in accordance with regulations made for
the purposes of paragraph (9)(d), waived their right to be
provided with confirmation of the transaction; and
(e) either:
(i) the financial product was offered to, or acquired by, the
holder in this jurisdiction; or
(ii) the transaction takes place in this jurisdiction.
Note: This section extends to financial products that are securities (see
section 1010A).
Obligation to confirm transactions
(2) The person (the responsible person) specified in column 3 of an
item in the following table must provide the holder with
confirmation of the transaction specified in column 2 of the same
item. The confirmation must be provided in accordance with
subsections (5) to (8).
Who bears the obligation to confirm a transaction
Item Transaction Whose obligation?
1 transaction by which the holder acquired
the financial product, unless that
transaction was a sale pursuant to an offer
to which section 1012C applies
the issuer of the product
2 transaction by which the holder acquired
the financial product, where that
transaction was a sale pursuant to an offer
to which section 1012C applies
the seller of the product
3 any other transaction in relation to the
financial product that occurs while the
holder holds the product, other than a
disposal of all or part of the product
the issuer of the product
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Corporations Act 2001 101
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Who bears the obligation to confirm a transaction
Item Transaction Whose obligation?
4 transaction by which the holder disposes of
all or part of the financial product
the person specified in the
regulations made for the
purposes of this item
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Examples of transactions that are covered by
subparagraph (1)(b)(ii)
(3) Without limiting the generality of subparagraph (1)(b)(ii), the
transactions that are covered by that subparagraph include:
(a) varying the terms of the financial product while the holder
holds the product (unless subsection (4) provides that the
variation does not require confirmation); and
(b) the redemption or surrender of the financial product from or
by the holder.
Transactions that do not require confirmation
(4) The following transactions do not require confirmation:
(a) a transaction consisting solely of an additional contribution
towards the financial product in either of the following
circumstances:
(i) the timing and amount, or method of calculating the
amount, of the additional contribution was agreed on
when the product was acquired by the holder;
(ii) the additional contribution is an amount that is payable
under the terms of the product because of an increase in
an external factor, such as a person’s salary, an inflation
index or a rate of a tax or levy;
(b) if the financial product is a security—a transaction consisting
solely of a variation of the rights attaching to the security;
(c) if the financial product is a deposit product—any of the
following transactions:
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(i) a withdrawal from the deposit product pursuant to a
cheque drawn on the account;
(ii) a deposit to, or withdrawal from, the deposit product
under a direct credit arrangement or a direct debit
arrangement;
(iii) crediting interest to the deposit product;
(iv) debiting the deposit product for fees or charges in
respect of the product or transactions involving the
product;
(v) debiting the deposit product for charges or duties on
deposits into, or withdrawals from, the product that are
payable under a law of the Commonwealth or of a State
or Territory;
(vi) a transaction of a kind specified in regulations made for
the purposes of this subparagraph;
(d) a variation of the terms of all financial products in the class
to which the financial product belongs;
(e) a transaction of a kind specified in regulations made for the
purposes of this paragraph.
Note 1: Because of subparagraph (a)(i), confirmation is not required, e.g., for
regular monthly contributions to a superannuation fund.
Note 2: A defendant bears an evidential burden in relation to the matters in
this subsection.
Confirmation may be provided on a transaction-by-transaction
basis or by means of a standing facility
(5) Confirmation of a transaction must be provided:
(a) by confirming the transaction in accordance with
subsections (6) to (8), to the holder as soon as is reasonably
practicable after the transaction occurs; or
(b) subject to subsection (5A), by providing the holder with
access to a facility through which they can, for themselves,
get a confirmation of the transaction in accordance with
subsections (6) to (8) as soon as is reasonably practicable
after the transaction occurs.
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Corporations Act 2001 103
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An arrangement under which the holder may request or require
another person to provide a confirmation does not count as a
facility that satisfies paragraph (b).
When confirmation may be provided by means of a standing
facility
(5A) Confirmation may only be provided by means of a facility as
mentioned in paragraph (5)(b) if:
(a) the holder concerned has agreed that confirmation of
transactions involving the product may be provided by means
of the facility; or
(b) the holder concerned:
(i) has, in accordance with the applicable requirements (if
any) in regulations made for the purposes of this
subparagraph, been informed, by or on behalf of the
responsible person, about the facility and its availability
to the holder as a means of obtaining confirmation of
transactions involving the product; and
(ii) has not advised the responsible person that the holder
does not agree to use the facility as a means of obtaining
such confirmations.
Means of confirmation
(6) The confirmation of the transaction:
(a) must be:
(i) in writing; or
(ii) electronic; or
(iii) in some other form applicable under regulations made
for the purposes of this paragraph; and
(b) may be provided:
(i) in a case to which paragraph (5)(a) applies—directly by
the responsible person or through another person (such
as a financial services licensee); or
(ii) in a case to which paragraph (5)(b) applies—through a
facility provided directly by the responsible person, or
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provided on behalf of the responsible person by
someone else.
Content of confirmation
(7) The confirmation of the transaction must give the holder the
information that the responsible person reasonably believes the
holder needs (having regard to the information the holder has
received before the transaction) to understand the nature of the
transaction.
(8) Without limiting subsection (7), the confirmation of the transaction
must:
(a) identify the issuer and the holder; and
(b) if required to be given by a person other than the issuer—
identify that person; and
(c) give details of the transaction, including:
(i) the date of the transaction; and
(ii) a description of the transaction; and
(iii) subject to regulations made for the purposes of this
subparagraph—any amount paid or payable by the
holder in relation to the transaction; and
(iv) subject to any regulations made for the purposes of this
subparagraph—any taxes and stamp duties payable in
relation to the transaction; and
(d) give any other details prescribed by regulations made for the
purposes of this paragraph.
Regulations may provide for modification or waiver of
confirmation obligation
(9) The regulations may do all or any of the following:
(a) modify subsection (2) to change the person required to
provide confirmation of a transaction;
(b) modify subsections (5) and (6) to expand on or change the
way in which confirmation of a transaction must be provided
in particular circumstances;
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Section 1017G
Corporations Act 2001 105
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(c) modify subsections (7) and (8) to expand on or change the
information that must be included in the confirmation of a
transaction in particular circumstances;
(d) specify the circumstances in which a person may waive the
right to be provided with confirmation of a transaction, and
specify how such a waiver may be made.
1017G Certain product issuers and regulated persons must meet
appropriate dispute resolution requirements
(1) If:
(a) particular financial products are, or have been, available for
acquisition (whether by issue or sale) by a person or persons
as retail clients; and
(b) the issue or sale of those products is not covered by an
Australian financial services licence;
both the issuer, and any regulated person obliged under
subsection 1012C(5), (6) or (8) to give a retail client a Product
Disclosure Statement for one or more of those financial products,
must each have a dispute resolution system complying with
subsection (2).
Note 1: If the issue of particular financial products is covered by an Australian
financial services licence, the requirement to have a dispute resolution
system relating to the issue of the products is imposed by
paragraph 912A(1)(g).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) To comply with this subsection, a dispute resolution system must
consist of:
(a) an internal dispute resolution procedure that:
(i) complies with standards, and requirements, made or
approved by ASIC in accordance with regulations made
for the purposes of this subparagraph; and
(ii) covers complaints, against the person required to have
the system, made by retail clients in relation to financial
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Section 1017G
106 Corporations Act 2001
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services provided in relation to any of those products;
and
(b) membership of one or more external dispute resolution
schemes that:
(i) is, or are, approved by ASIC in accordance with
regulations made for the purposes of this subparagraph;
and
(ii) covers, or together cover, complaints (other than
complaints that may be dealt with by the
Superannuation Complaints Tribunal established by
section 6 of the Superannuation (Resolution of
Complaints) Act 1993), against the person required to
have the system, made by retail clients in relation to
financial services provided in relation to any of those
products.
(3) Regulations made for the purposes of subparagraph (2)(a)(i) or
(2)(b)(i) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
(b) approvals given by ASIC.
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Section 1018A
Corporations Act 2001 107
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Division 4—Advertising for financial products
1018A Advertising or other promotional material for financial
product must refer to Product Disclosure Statement
Advertisements and promotional material must identify issuer (or
issuer and seller) and refer to Product Disclosure Statement
(1) Subject to this section, if a particular financial product is available
for acquisition by persons as retail clients (whether or not it is also
available for acquisition by persons as wholesale clients) by way of
issue, or pursuant to sale offers to which section 1012C applies or
will apply, a person must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people
to acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is available by way of issue—the issuer of
the product; or
(ii) if the product is available pursuant to sale offers to
which section 1012C applies or will apply—the issuer
of the product and the seller of the product; and
(d) indicates that a Product Disclosure Statement for the product
is available and where it can be obtained; and
(e) indicates that a person should consider the Product
Disclosure Statement in deciding whether to acquire, or to
continue to hold, the product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subject to this section, if a particular financial product, or proposed
financial product, is not available for acquisition by persons as
retail clients but it is reasonably likely that the product will become
so available (whether or not it is, or will also become, available for
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Section 1018A
108 Corporations Act 2001
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acquisition by persons as wholesale clients) by way of issue, or
pursuant to sale offers to which section 1012C will apply, a person
must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people
to acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is likely to be so available by way of
issue—the issuer of the product; or
(ii) if the product is likely to be so available pursuant to sale
offers to which section 1012C will apply—the issuer of
the product and the seller of the product; and
(d) indicates that a Product Disclosure Statement for the product
will be made available when the product is released or
otherwise becomes available; and
(e) indicates when and where the Product Disclosure Statement
is expected to be made available; and
(f) indicates that a person should consider the Product
Disclosure Statement in deciding whether to acquire, or
continue to hold, the product.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Subsection (2) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(4)).
Distribution of disclosure document
(3) A person may distribute a Product Disclosure Statement without
contravening subsection (1) or (2). This does not apply if an order
under section 1020E is in force in relation to the product.
Note 1: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Note 2: Subsection (3) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(5)).
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Section 1018A
Corporations Act 2001 109
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General exceptions
(4) An advertisement or publication does not contravene subsection (1)
or (2) if it:
(a) relates to a financial product that is able to be traded on a
financial market and consists of a notice or report by the
issuer of the product, or one of its officers, about its affairs to
the market operator; or
(b) consists solely of a notice or report of a general meeting of
the issuer; or
(c) consists solely of a report about the issuer that is published
by the issuer and:
(i) does not contain information that materially affects
affairs of the issuer, other than information previously
made available in a Product Disclosure Statement that
has been distributed or disclosure document that has
been lodged with ASIC, an annual report or a notice or
report referred to in paragraph (a) or (b); and
(ii) does not refer (whether directly or indirectly) to the
offer of the financial product; or
(d) is a news report, or is genuine comment, in the media relating
to:
(i) a Product Disclosure Statement that has been distributed
or disclosure document that has been lodged with ASIC;
or
(ii) information contained in such a Statement or document;
or
(iii) a notice or report covered by paragraph (a), (b) or (c); or
(e) is a report about the financial products of the issuer published
by someone who is not:
(i) the issuer; or
(ii) acting at the instigation of, or by arrangement with, the
issuer; or
(iii) a director of the issuer; or
(iv) a person who has an interest in the success of the issue
or sale of the financial product.
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Section 1018B
110 Corporations Act 2001
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Paragraphs (d) and (e) do not apply if anyone gives consideration
or another benefit for publishing the report.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Liability of publishers
(5) A person does not contravene subsection (1) or (2) by publishing
an advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that its
publication would amount to a contravention of a provision
of this section.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Meaning of media
(6) For the purposes of this section, the media consists of:
(a) newspapers and magazines; and
(b) radio and television broadcasting services; and
(c) electronic services (including services provided through the
internet) that:
(i) are operated on a commercial basis; and
(ii) are similar to newspapers, magazines or radio or
television broadcasts.
1018B Prohibition on advertising personal offers covered by
section 1012E
(1) A person must not advertise an offer, or intended offer, of financial
products that would not need a Product Disclosure Statement
because of section 1012E.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1018B
Corporations Act 2001 111
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(2) A person does not contravene subsection (1) by publishing an
advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that a Product
Disclosure Statement was needed.
For this purpose, media has the same meaning as it has in
section 1018A.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
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Section 1019A
112 Corporations Act 2001
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Division 5—Cooling-off periods
1019A Situations in which this Division applies
(1) Subject to subsection (2), this Division applies if:
(a) a financial product of one of the following classes is provided
in this jurisdiction to a person as a retail client after the
commencement of this Chapter:
(i) risk insurance products;
(ii) investment life insurance products;
(iii) managed investment products;
(iv) superannuation products;
(v) RSA products; and
(b) the product is provided to the person:
(i) by way of issue; or
(ii) by way of sale pursuant to an offer to which
section 1012C applies.
(2) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that
would otherwise be covered by a subparagraph of
paragraph (1)(a) are excluded from that subparagraph;
(b) provide additional requirements to be satisfied before this
Division applies in relation to a class or subclass of financial
products;
(c) provide that this Division does not apply in relation to the
provision of a financial product in specified circumstances.
(3) In this Division:
(a) the person referred to in paragraph (1)(a) is the client; and
(b) the person who issues or sells the product to the client is the
responsible person.
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Section 1019B
Corporations Act 2001 113
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1019B Cooling-off period for return of financial product
(1) Subject to this section, the client has the right to return the
financial product to the responsible person and to have the money
they paid to acquire the product repaid. This is so even if the
responsible person is being wound up.
(2) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product,
those other requirements must be complied with.
(3) The right to return the product can only be exercised during the
period of 14 days starting on the earlier of:
(a) the time when the confirmation requirement (if applicable) is
complied with; or
(b) the end of the 5th day after the day on which the product was
issued or sold to the client.
(4) For the purposes of subsection (3), the confirmation requirement is
complied with when:
(a) the client receives confirmation, as mentioned in
paragraph 1017F(5)(a), of the transaction by which they
acquired the product; or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
(5) The right to return the product (and have money paid to acquire it
repaid) cannot be exercised at any time after:
(a) the client has (whether before or after the start of the period
referred to in subsection (3)) exercised a right or power that
they have under the terms applicable to the product; or
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Division 5 Cooling-off periods
Section 1019B
114 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the time (whether before or after the start of the period
referred to in subsection (3)) at which, under the terms
applicable to the product, the client’s rights or powers in
respect of the product end.
Note: So, e.g.:
(a) if the product is a contract of insurance, the right to return cannot be exercised after the client has made a claim under the contract of insurance; and
(b) if the product is a contract of insurance covering a period of only one week, the right to return cannot be exercised after the end of that week.
(5A) The regulations may specify other circumstances in which the right
to return the product (and have money paid to acquire it repaid)
cannot be exercised.
(6) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between
the client and the issuer of the product—that relationship is,
by force of this section, terminated with effect from that time
without penalty to the client; and
(b) any contract for the acquisition of the product by the client is,
by force of this section, terminated with effect from that time
without penalty to the client.
(7) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (6)) to apply if the
right to return a financial product is exercised.
(8) The regulations may provide that, in specified circumstances, the
amount to be repaid on exercise of the right to return a financial
product is to be increased or reduced in accordance with the
regulations.
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019C
Corporations Act 2001 115
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5A—Unsolicited offers to purchase financial
products off-market
1019C Definitions
In this Division:
date of offer has the meaning given by subsection 1019I(1).
offeree, in relation to an offer to which this Division applies, has
the meaning given by subsection 1019D(1).
offeror, in relation to an offer to which this Division applies, has
the meaning given by subsection 1019D(1).
offer to which this Division applies means an offer to which this
Division applies because of section 1019D.
1019D Offers to which this Division applies
(1) This Division applies to an offer in relation to which the following
paragraphs are satisfied:
(a) the offer is an unsolicited offer to purchase a financial
product made by a person (the offeror) to another person (the
offeree);
(b) the offer is made otherwise than on a licensed market;
(c) one or more of the following apply:
(i) the offer is made in the course of a business of
purchasing financial products;
(ii) the offeror was not in a personal or business relationship
with the offeree before the making of the offer;
(iii) the offer is made in circumstances specified in
regulations made for the purposes of this subparagraph;
(d) the offer is not:
(i) made to the issuer of the financial products; or
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Section 1019E
116 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) to buy back shares under a buy-back authorised by
section 257A; or
(iii) made under a compromise or arrangement approved at a
meeting held as a result of an order under
subsection 411(1) or (1A); or
(iv) to acquire securities under an off-market bid; or
(v) to compulsorily acquire or buy out securities under
Chapter 6A; or
(vi) to acquire shares from a dissenting shareholder under
section 414; or
(vii) made in relation to particular financial products that are
specified in regulations made for the purposes of this
subparagraph; or
(viii) made in circumstances that are specified in regulations
made for the purposes of this subparagraph;
(e) the offer is made or received in this jurisdiction.
(2) The regulations may clarify:
(a) when an offer is, or is not, made in the course of a business
of purchasing financial products; or
(b) when an offeror was, or was not, in a previous personal or
business relationship with an offeree.
Regulations made for the purposes of this subsection have effect
despite anything else in this section.
1019E How offers are to be made
(1) An offer to which this Division applies must not be made
otherwise than by sending an offer document in printed or
electronic form to the offeree in accordance with the following
requirements:
(a) the document must be sent to an address of the offeree
(which may be an electronic address);
(b) either the envelope or the container in which it is sent, or the
message that accompanies it, must be addressed to the
offeree.
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Section 1019F
Corporations Act 2001 117
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The offer document must be sent to the offeree as soon as
practicable after the date of offer.
1019F Prohibition on inviting offers to sell
A person must not invite another person to make an offer to sell a
financial product in circumstances in which, if the invitation were
instead an offer to purchase the financial product, that offer would
be an offer to which this Division applies.
1019G Duration and withdrawal of offers
(1) An offer to which this Division applies:
(a) must remain open for at least 1 month after the date of offer;
and
(b) cannot remain open for more than 12 months after the date of
offer.
(2) The offer may be withdrawn by the offeror at any time, but not
within 1 month of the date of offer.
(3) The offer may only be withdrawn by the offeror by sending a
withdrawal document in printed or electronic form to the offeree in
accordance with paragraphs 1019E(1)(a) and (b). The withdrawal
document must identify the offeror and be dated.
(4) A purported withdrawal of the offer contrary to subsection (2) or
(3) is ineffective.
1019H Terms of offer cannot be varied
(1) The terms of an offer to which this Division applies, as set out in
the offer document, cannot be varied.
(2) A purported variation of the terms of the offer is ineffective.
(3) This section does not:
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019I
118 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) affect the offeror’s obligation under section 1019J to update
the market value of the financial product to which the offer
relates; or
(b) prevent the offeror from withdrawing the offer in accordance
with section 1019G or paragraph 1019J(2)(a) and making
another offer on different terms; or
(c) prevent the offeree from making a counter-offer on different
terms.
1019I Contents of offer document
(1) The offer document by which an offer to which this Division
applies is made must identify the offeror and be dated (this date is
the date of offer).
(2) The offer document must also contain the following:
(a) the price at which the offeror wishes to purchase the financial
products;
(b) if the financial product is able to be traded on a licensed
market and there is a market value for the product as traded
on that market—the market value of the product as at the date
of offer;
(c) if paragraph (b) does not apply—a fair estimate of the value
of the product as at the date of offer, and an explanation of
the basis on which that estimate was made;
(d) the period during which the offer remains open (which must
be consistent with subsection 1019G(1));
(e) a statement to the effect that the offer may be withdrawn by
sending a withdrawal document to the offeree, but generally
not within 1 month of the date of offer;
(f) any other information specified in regulations made for the
purposes of this paragraph.
(3) The regulations may clarify:
(a) the manner in which a fair estimate of the value of a financial
product (see paragraph (2)(c)) is to be worked out; and
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Section 1019J
Corporations Act 2001 119
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the level of detail required in the explanation of the basis on
which the estimate was made.
Regulations made for the purposes of this subsection have effect
despite anything else in this section.
(4) The offer document must be worded and presented in a clear,
concise and effective manner.
1019J Obligation to update market value
(1) This section applies if:
(a) the offer document by which an offer to which this Division
applies is made states the market value of the financial
product to which the offer relates as at the date of the offer;
and
(b) while the offer remains open, there is an increase or decrease
in the market value of the product when compared to:
(i) unless subparagraph (ii) applies—the market value (the
currently stated value) stated as mentioned in
paragraph (a); or
(ii) if this section has previously applied in relation to the
offer and one or more supplementary offer documents
have been sent to the offeree—the market value (the
currently stated value) stated as mentioned in
paragraph (3)(c) in the supplementary offer document
most recently sent to the offeree; and
(c) the increase or decrease, expressed as a percentage of the
currently stated value, exceeds the percentage specified in the
regulations for the purposes of this paragraph.
(2) The offeror must, within 10 business days of this section applying
because of a particular increase or decrease in value:
(a) withdraw the offer by sending a withdrawal document, in
printed or electronic form, to the offeree in accordance with
paragraphs 1019E(1)(a) and (b):
(i) that identifies the offeror and that is dated; and
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019K
120 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) that contains a statement to the effect that the offer is
withdrawn because of a change in the market value of
the product, and that withdrawal for this reason is
permitted even within 1 month of the date of offer; or
(b) send a supplementary offer document (see subsection (3)) in
printed or electronic form to the offeree in accordance with
paragraphs 1019E(1)(a) and (b).
Nothing in section 1019G affects the effectiveness of a withdrawal
of the offer under paragraph (a) of this subsection.
(3) A supplementary offer document must:
(a) identify the offer to which it relates; and
(b) be dated; and
(c) state the market value of the financial product to which the
offer relates as at that date; and
(d) state the price that was stated in the offer document as
required by paragraph 1019I(2)(a), and contain a statement to
the effect that this is still the price at which the offeror wishes
to purchase the product and that the terms of the offer remain
unchanged; and
(e) contain a statement to the effect that the document has been
prepared because the market value of the product has
changed.
(4) A supplementary offer document must be worded and presented in
a clear, concise and effective manner.
(5) In this section, a reference to stating a market value of a financial
product includes a reference to purporting to state the market value
of the product.
1019K Rights if requirements of Division not complied with
First situation covered by this section—offers to which this
Division applies
(1) This section applies if, in relation to an offer to which this Division
applies, the offeree (the seller) accepts the offer and enters into a
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Section 1019K
Corporations Act 2001 121
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
contract for the sale of the financial product to the offeror (the
buyer), and one or more of the following paragraphs applies:
(a) section 1019E was not complied with in relation to the offer;
(b) the offer was accepted after the period referred to in
paragraph 1019G(1)(b);
(c) the offeror gave the offeree an offer document and either:
(i) the offer document did not comply with section 1019I;
or
(ii) there was a misleading or deceptive statement in the
offer document;
(d) in a situation to which section 1019J applies, either:
(i) subsection 1019J(2) was not complied with; or
(ii) subsection 1019J(2) was complied with, but the offeree
did not receive the withdrawal document, or the
supplementary offer document, as the case requires,
until after the offeree had accepted the offer;
(e) in a situation to which section 1019J applies, the offeror gave
the offeree a supplementary offer document and either:
(i) the supplementary offer document did not comply with
subsection 1019J(3); or
(ii) there was a misleading or deceptive statement in the
supplementary offer document.
Second situation covered by this section—invitations prohibited by
section 1019F
(2) This section applies if, in response to an invitation prohibited by
section 1019F, a person (the seller) makes an offer to sell a
financial product to the person who made the invitation (the
buyer), and that person accepts the offer and enters into a contract
for the purchase of that financial product from the seller.
Seller’s right to refuse to transfer, or to seek the return of, the
financial product
(3) The seller has:
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Section 1019K
122 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the right to refuse to transfer the financial product to the
buyer; or
(b) if the seller has already transferred the financial product to
the buyer—the right to have the financial product returned to
the seller, if the buyer still holds the product.
The seller’s right under paragraph (a) or (b) is conditional on the
seller repaying any money that has been paid to the seller for the
purchase of the financial product.
How the seller’s right is to be exercised
(4) The seller’s right under subsection (3) must be exercised by
notifying the buyer in one of the following ways:
(a) in writing;
(b) electronically;
(c) in any other way specified in regulations made for the
purposes of this paragraph.
Also, if the regulations require the seller to comply with other
requirements in order to exercise that right, those other
requirements must be complied with.
(5) The seller’s right under subsection (3) can only be exercised during
the period of 30 days starting on the day the contract was entered
into.
Effect of exercise of seller’s right
(6) On the exercise of the seller’s right under subsection (3), the
contract referred to in subsection (1) or (2) is, by force of this
section, terminated from that time without penalty to the seller.
Regulations may provide for certain matters
(7) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (6)) to apply if the
seller’s right under subsection (3) is exercised.
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Section 1019K
Corporations Act 2001 123
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) The regulations may provide that, in specified circumstances, the
amount to be repaid as mentioned in subsection (3) is to be
increased or reduced in accordance with the regulations.
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Division 5B Disclosure etc. in relation to short sales covered by securities lending
arrangement of listed section 1020B products
Section 1020AA
124 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5B—Disclosure etc. in relation to short sales
covered by securities lending arrangement of
listed section 1020B products
Note: Section 1020B prohibits certain short sales of section 1020B products.
1020AA Definitions
(1) In this Division:
crossing: a crossing of section 1020B products is a sale of
section 1020B products made by a financial services licensee:
(a) on behalf of both the buyer and the seller of the products; or
(b) on behalf of the buyer of the products and on its own behalf
as seller of the products; or
(c) on behalf of the seller of the products and on its own behalf
as buyer of the products.
section 1020B products has the meaning given by
subsection 1020B(1).
securities lending arrangement means an arrangement under
which:
(a) one entity (the lender) agrees that it will:
(i) deliver particular securities, managed investment
products or other financial products to another entity
(the borrower) or to an entity nominated by the
borrower; and
(ii) vest title in those products in the entity to which they
are delivered; and
(b) the borrower agrees that it will, after the lender does the
things mentioned in paragraph (a):
(i) deliver the products (or equivalent products) to the
lender or to an entity nominated by the lender; and
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Section 1020AB
Corporations Act 2001 125
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) vest title in those products (or those equivalent
products) in the entity to which they are delivered.
(2) To avoid doubt, for the purposes of this Division, treat the entering
into of an agreement to sell section 1020B products as the sale of
the products.
(3) To avoid doubt, for the purposes of this Division, treat a financial
services licensee as making a sale on behalf of a person if the sale
is, in economic substance, made by the licensee for the person.
Example: A request that the sale be made is passed from the person to the
financial services licensee through a chain of intermediaries.
(4) For the purposes of this Division, treat a crossing of section 1020B
products as being made on a licensed market.
1020AB Seller disclosure
(1) Subsection (3) applies if:
(a) either:
(i) a financial services licensee, on behalf of a person (the
seller), makes a sale in this jurisdiction of
section 1020B products on a licensed market to a buyer;
or
(ii) a financial services licensee (the seller), on its own
behalf, makes a sale in this jurisdiction of section 1020B
products on a licensed market to a buyer; and
(b) before the time of the sale, the seller had entered into or
gained the benefit of a securities lending arrangement; and
(c) at the time of the sale, the seller intends that the securities
lending arrangement will ensure that some or all the
section 1020B products can be vested in the buyer; and
(d) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
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arrangement of listed section 1020B products
Section 1020AC
126 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
(2) Subsection (3) applies regardless of whether the seller is inside or
outside Australia.
Offence
(3) The seller must:
(a) give the entity mentioned in subsection (4) particulars
specified in the regulations in relation to the circumstances
mentioned in paragraphs (1)(a), (b) and (c); and
(b) do so:
(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The entity is:
(a) if subparagraph (1)(a)(i) applies:
(i) the financial services licensee mentioned in that
subparagraph; or
(ii) if the regulations specify another entity—that entity; or
(b) if subparagraph (1)(a)(ii) applies:
(i) the operator of the licensed market mentioned in that
subparagraph; or
(ii) if the regulations specify another entity—that entity.
1020AC Licensee disclosure
(1) Subsection (2) applies if:
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Section 1020AD
Corporations Act 2001 127
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the seller mentioned in subparagraph 1020AB(1)(a)(i) gives a
financial services licensee information in accordance with
section 1020AB in relation to a sale of section 1020B
products on a licensed market; and
(b) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
Offence
(2) The financial services licensee must:
(a) give the entity mentioned in subsection (3) particulars
specified in the regulations in relation to the circumstances
mentioned in paragraph (1)(a); and
(b) do so:
(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The entity is:
(a) the operator of the licensed market mentioned in
paragraph (1)(a); or
(b) if the regulations specify another entity—that entity.
1020AD Public disclosure of information
(1) Subsection (2) applies if:
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Section 1020AD
128 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) any of the following apply, in relation to a sale of
section 1020B products on a licensed market:
(i) the seller mentioned in subparagraph 1020AB(1)(a)(ii)
gives information to the operator of a licensed market
(or to another entity) in accordance with
section 1020AB;
(ii) the financial services licensee mentioned in
paragraph 1020AC(1)(a) gives information to the
operator of a licensed market (or to another entity) in
accordance with section 1020AC;
(iii) if regulations for the purposes of
subparagraph 1020AB(4)(a)(ii) provide that the entity to
which information is to be given in accordance with
section 1020AB is the operator of a licensed market (or
another entity)—the seller mentioned in
subparagraph 1020AB(1)(a)(i) gives information to the
operator (or other entity) in accordance with that
section; and
(b) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
Offence
(2) The operator (or the other entity) must:
(a) make a public disclosure of particulars specified in the
regulations in relation to the information mentioned in
paragraph (1)(a); and
(b) do so:
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Section 1020AE
Corporations Act 2001 129
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1020AE Licensee’s obligation to ask seller about short sale
The financial services licensee must not make a sale in this
jurisdiction of section 1020B products on a licensed market if:
(a) the sale is on behalf of a person (the seller); and
(b) the seller will be obliged under section 1020AB to give the
financial services licensee information in relation to the sale;
and
(c) either or both of the following apply:
(i) before making the sale, the financial services licensee
failed to ask the seller, orally or in writing, whether the
seller will be obliged under section 1020AB to give the
financial services licensee information in relation to the
sale;
(ii) before making the sale, the financial services licensee
failed to record, in writing, the seller’s answer.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)).
Note 2: For the definition of writing, see section 25 of the Acts Interpretation
Act 1901. For the application of the Acts Interpretation Act 1901 to
this Act, see section 5C of this Act.
1020AF Regulations
(1) Regulations made for the purposes of this Division may specify a
matter or thing differently for different kinds of persons, things or
circumstances. For example, the regulations may:
(a) specify a matter or thing differently for different kinds of
sellers mentioned in subsection 1020AB(1) or 1020AC(1);
and
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arrangement of listed section 1020B products
Section 1020AF
130 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) specify a time differently for different kinds of
circumstances.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
(2) Subsection (1) does not limit the regulations that may be made for
the purposes of this Division.
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Information about CGS depository interests Division 5C
Section 1020AG
Corporations Act 2001 131
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5C—Information about CGS depository interests
1020AG Jurisdictional scope of Division
(1) Section 1020AI applies only in relation to recommendations
received in this jurisdiction.
(2) The regulations may make provision dealing with the jurisdictional
scope of some or all of the other provisions of this Division. The
other provisions of this Division have effect subject to any such
regulations.
1020AH Definitions
In this Division:
CGS depository interest information website means a website that
is prescribed by the regulations for the purposes of this definition.
information statement for a class of CGS depository interests
means a document that:
(a) contains a statement that the document is an information
statement for that class for the purposes of this Division; and
(b) contains information about all CGS depository interests of
that class (whether or not it also contains information about
CGS depository interests of another class); and
(c) is prepared by the Commonwealth; and
(d) is published on the CGS depository interest information
website.
regulated person, in relation to a CGS depository interest, means:
(a) an issuer of the CGS depository interest; or
(b) any financial services licensee; or
(c) any authorised representative of a financial services licensee;
or
(d) any person who is not required to hold an Australian
financial services licence because the person is covered by:
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Section 1020AI
132 Corporations Act 2001
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(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( � or
(e) any person who is required to hold an Australian financial
services licence but who does not hold such a licence.
1020AI Requirement to give information statements for CGS
depository interest if recommending acquisition of
interest
(1) A regulated person must give a person (the client) each
information statement for a class of CGS depository interests if:
(a) the regulated person provides financial product advice to the
client that consists of, or includes, a recommendation that the
client acquire a CGS depository interest of that class; and
(b) the financial product advice is provided to the client as a
retail client; and
(c) the financial product advice is personal advice to the client.
Each information statement must be given at or before the time
when the regulated person provides the advice and must be given
in accordance with this Division.
Note: If the recommendation is to acquire CGS depository interests of a
class for which there is an information statement and that is a subset
of a wider class of CGS depository interests for which there is another
information statement, the regulated person must give the client both
information statements.
(2) However, the regulated person does not have to give the client an
information statement for a class of CGS depository interests if:
(a) the client has already received that statement; or
(b) the regulated person reasonably believes that the client has
received that statement.
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Section 1020AI
Corporations Act 2001 133
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Strict liability offence of failing to give statement
(3) A regulated person commits an offence if:
(a) the regulated person is required by this section to give
another person an information statement for a class of CGS
depository interests; and
(b) the regulated person does not give the other person, in
accordance with section 1020AK, that statement by the time
the regulated person is required to do so.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2). See subsection 13.3(3) of the Criminal Code.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence of failing to give statement
(5) A regulated person commits an offence if:
(a) the regulated person is required by this section to give
another person an information statement for a class of CGS
depository interests; and
(b) the regulated person does not give the other person, in
accordance with section 1020AK, that statement by the time
the regulated person is required to do so.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2).
Defence for authorised representative
(6) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (3) or
(5), it is a defence if:
(a) the licensee had provided the representative with information
or instructions about the giving of information statements for
a class of CGS depository interests; and
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(b) the representative’s failure to give an information statement
for that class occurred because the representative was acting
in reliance on that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
Offence of failing to ensure authorised representative gives
statement
(7) A financial services licensee commits an offence if the licensee
does not take reasonable steps to ensure that an authorised
representative of the licensee complies with the representative’s
obligations under this section to give each information statement
for a class of CGS depository interests as and when required by
this section.
1020AJ Information statement given must be up to date
A regulated person must not, in purported compliance with this
Division, give a person at a time a document that:
(a) purports to be an information statement for a class of CGS
depository interests; and
(b) is not an information statement for that class published at that
time on the CGS depository interest information website.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
1020AK How an information statement is to be given
(1) An information statement for a class of CGS depository interests:
(a) must be:
(i) given to a person, or the person’s agent, personally; or
(ii) sent to the person, or the person’s agent, at an address
(including an electronic address) or fax number
nominated by the person or the agent; and
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Corporations Act 2001 135
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(b) may be printed or be in electronic form.
(2) For the purposes of this section, the information statement is sent
to a person at an address if, and only if:
(a) the information statement is sent to the address; and
(b) either:
(i) the envelope or other container in which the information
statement is sent; or
(ii) the message that accompanies the information
statement;
is addressed to the person.
(3) The information statement may be given or sent to the person’s
agent only if the agent is not acting as the person’s agent in one of
the following capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services licensee;
(c) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( �
(d) a person who is required to hold an Australian financial
services licence but who does not hold such a licence;
(e) an employee, director or other representative of a person
referred to in paragraph (a), (b), (c) or (d).
(4) The regulations may provide for other ways of giving an
information statement for a class of CGS depository interests.
(5) The regulations may specify requirements as to the manner in
which an information statement for a class of CGS depository
interests may be given to a person. The giving of the information
statement is not effective unless those requirements are satisfied.
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Division 5C Information about CGS depository interests
Section 1020AL
136 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1020AL Civil action for loss or damage
(1) A person (the client) who suffers loss or damage for a reason
described in column 1 of an item of the table may recover the
amount of the loss or damage by action begun against a person
indicated in column 2 of that item within 6 years after the loss or
damage was suffered.
Recovery of amount of loss or damage
Column 1
Reason for loss or damage
Column 2
Person amount may be recovered
from
1 The client was not given an information
statement for a class of CGS depository
interests as and when required by this
Division
The person required to give the
statement or, if that person was an
authorised representative of a
financial services licensee, each such
licensee responsible for the person’s
conduct (see subsection (2))
2 The client was given at a time, in
purported compliance with this
Division, a document that:
(a) purported to be an information
statement for a class of CGS
depository interests; and
(b) was not an information statement for
that class that was published at that
time on the CGS depository interest
information website
Each person who:
(a) directly or indirectly caused or
contributed to the giving of the
document; and
(b) did not take reasonable steps to
ensure that the document given
would be an information
statement published at that time
on the CGS depository interest
information website
(2) A financial services licensee is responsible for the conduct of an
authorised representative of the licensee for the purposes of item 1
of the table in subsection (1), and the authorised representative is
not liable under that item, if:
(a) the authorised representative is not an authorised
representative of any other financial services licensee; or
(b) the licensee is responsible (alone or jointly and severally with
other financial services licensees) for the authorised
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representative’s conduct under section 917C, disregarding
sections 917D and 917F.
(3) This section does not affect any liability that a person has under
any other law.
Other orders
(4) The court dealing with an action under subsection (1) may, in
addition to awarding loss or damage under that subsection and if it
thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client referred to in that subsection for or relating to a
financial product or a financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(5) Without limiting paragraph (4)(b), the orders that may be made
under that paragraph include (but are not limited to) an order for
the return of money paid by a person, and/or an order for payment
of an amount of interest specified in, or calculated in accordance
with, the order.
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Division 6 Miscellaneous
Section 1020A
138 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Miscellaneous
1020A Offers etc. relating to certain managed investment schemes
not to be made in certain circumstances
(1) A person must not engage in conduct of a kind referred to in
subsection (2) in relation to a financial product described in
paragraph 764A(1)(ba) (which relates to certain managed
investment schemes that are not registered schemes) if the
managed investment scheme concerned needs to be, or will need to
be, registered and has not been registered. This is so even if it is
proposed to register the scheme.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subject to subsection (3), the kinds of conduct that must not be
engaged in in relation to such a managed investment product are as
follows:
(a) making a recommendation, as described in
subsection 1012A(3), that is received in this jurisdiction;
(b) making an offer, as described in subsection 1012B(3) or
1012C(3), that is received in this jurisdiction;
(c) accepting an offer, made as described in subsection 1012B(3)
or (4), that was received in this jurisdiction.
(3) Subsection (2) does not apply to a recommendation or offer made
in a situation to which a subsection of section 1012D, other than
subsection 1012D(1), applies.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1020B Prohibition of certain short sales of securities, managed
investment products and certain other financial products
(1) In this section and in Division 5B:
section 1020B products means:
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(a) securities; or
(b) managed investment products; or
(c) financial products referred to in paragraph 764A(1)(j); or
(d) financial products of any other kind prescribed by regulations
made for the purposes of this definition.
(2) Subject to this section and the regulations, a person must only, in
this jurisdiction, sell section 1020B products to a buyer if, at the
time of the sale:
(a) the person has or, if the person is selling on behalf of another
person, that other person has; or
(b) the person believes on reasonable grounds that the person
has, or if the person is selling on behalf of another person,
that other person has;
a presently exercisable and unconditional right to vest the products
in the buyer.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) For the purposes of subsection (2):
(a) a person who, at a particular time, has a presently exercisable
and unconditional right to have section 1020B products
vested in the person, or in accordance with the directions of
the person, has at that time a presently exercisable and
unconditional right to vest the products in another person;
and
(b) a right of a person to vest section 1020B products in another
person is not conditional merely because the products are
subject to a security interest in favour of another person to
secure the repayment of money.
(4) Subsection (2) does not apply in relation to a sale of section 1020B
products by a person who, before the time of sale, has entered into
a contract to buy those products and who has a right to have those
products vested in the person that is conditional only upon all or
any of the following:
(a) payment of the consideration in respect of the purchase;
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Section 1020D
140 Corporations Act 2001
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(b) the receipt by the person of a proper instrument of transfer in
respect of the products;
(c) the receipt by the person of the documents that are, or are
documents of title to, the products.
(7) For the purposes of this section, a person who:
(a) purports to sell section 1020B products; or
(b) offers to sell section 1020B products; or
(c) holds himself, herself or itself out as entitled to sell
section 1020B products; or
(d) instructs a financial services licensee to sell section 1020B
products;
is taken to sell the products.
1020D Part cannot be contracted out of
A condition of a contract for the acquisition of a financial product
is void if it provides that a party to the contract is:
(a) required or bound to waive compliance with any requirement
of this Part (or of regulations made for the purposes of this
Part); or
(b) if the acquisition occurs in circumstances in which the party
is required by a provision of this Part to have been given a
Product Disclosure Statement for the product—taken to have
notice of any contract, document or matter not specifically
referred to in a Product Disclosure Statement or
Supplementary Product Disclosure Statement given to the
party.
1020E Stop orders by ASIC
(1) This section applies if:
(a) either:
(i) a disclosure document or statement is defective (see
subsection (11)); or
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(ia) a disclosure document or statement does not comply
with a requirement of this Part that it be worded and
presented in a clear, concise and effective manner; or
(ii) an advertisement or statement of a kind referred to in
subsection 1018A(1) or (2) that relates to financial
products is defective (see subsection (11)); or
(b) an issuer of financial products is in breach of section 1017G;
or
(c) information made publicly available under section 1017BA
or 1017BB, or provided under subsection 1017BC(3), is
defective (see subsection (11)).
(2) ASIC may order that:
(a) if paragraph (1)(a) applies—specified conduct in respect of
the financial products to which the document, advertisement
or statement relates; or
(b) if paragraph (1)(b) applies—specified conduct in respect of
financial products issued by that issuer; or
(c) if paragraph (1)(c) applies—specified conduct in respect of
the financial products or other property to which the
information relates;
must not be engaged in while the order is in force.
(3) The order may include a statement that specified conduct engaged
in contrary to the order will be regarded as not complying with the
requirements of a specified provision of this Part.
(4) Before making an order under subsection (2), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(5) If ASIC considers that any delay in making an order under
subsection (2) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order
under that subsection. The interim order may be made without
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Section 1020E
142 Corporations Act 2001
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holding a hearing and lasts for 21 days after the day on which it is
made unless revoked before then.
(6) At any time during the hearing, ASIC may make an interim order
under subsection (2). The interim order lasts until:
(a) ASIC makes an order under subsection (2) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
(7) The order under subsection (2) must be in writing and must be
served on:
(a) unless paragraph (b), (c) or (d) applies—the issuer of the
financial products concerned; or
(b) if paragraph (1)(a) applies and the document, advertisement
or statement relates to a sale or proposed sale of the financial
products—the seller of the financial products; or
(c) if subparagraph (1)(a)(i) applies and the disclosure document
or statement is an offer document of a kind referred to in
section 1019E or a supplementary offer document of a kind
referred to in section 1019J—the offeror referred to in
subsection 1019D(1); or
(d) if paragraph (1)(c) applies—the person who made the
information publicly available or who provided the
information.
(8) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(9) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1020E
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(10) If the person on whom the order is served, or a person who is
aware of the order, engages in conduct contrary to the order, any
relevant statement included in the order under subsection (3) has
effect accordingly. This applies in addition to any other
consequence that is provided for by this Act.
(11) In this section:
defective:
(a) in relation to a disclosure document or statement—has the
same meaning as in Subdivision B of Division 7; and
(b) in relation to an advertisement or statement of a kind referred
to in subsection 1018A(1) or (2) that relates to financial
products—means:
(i) there is a misleading or deceptive statement in the
advertisement or statement; or
(ii) there is an omission from the advertisement or statement
of material required by paragraph 1018A(1)(c), (d) or
(e), or paragraph 1018A(2)(c), (d), (e) or (f), to be
included in the advertisement or statement; and
(c) in relation to information made publicly available under
section 1017BA—means:
(i) the information has not been updated as required by that
section; or
(ii) the information is otherwise misleading or deceptive; or
(iii) there is an omission from the information; and
(d) in relation to information made publicly available under
section 1017BB or information provided under
section 1017BC—means:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
disclosure document or statement has the same meaning as it has
in Subdivision B of Division 7.
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Division 6 Miscellaneous
Section 1020F
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1020F Exemptions and modifications by ASIC
(1) ASIC may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a
financial product, or a class of persons or financial products,
as if specified provisions were omitted, modified or varied as
specified in the declaration.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(c) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(7) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
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Section 1020G
Corporations Act 2001 145
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(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
(8) To avoid doubt, a declaration under paragraph (1)(c) may specify
omissions, modifications or variations that have any or all of the
following effects:
(a) suspending, prohibiting or limiting:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(b) varying requirements under this Part that apply to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(c) removing some or all requirements under this Part that apply
to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(d) imposing requirements that apply to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products.
1020G Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
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Division 6 Miscellaneous
Section 1020G
146 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relates to provisions of this Part.
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Enforcement Division 7
Section 1021A
Corporations Act 2001 147
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 7—Enforcement
Subdivision A—Offences
1021A Overview
This Subdivision contains provisions creating offences by
reference to various rules contained in preceding Divisions of this
Part. However, it does not create all the offences relating to those
rules, as some offences are created by subsection 1311(1). Where
offences are created by subsection 1311(1) in relation to a rule, this
is indicated by a note at the end of the provision containing the
rule.
1021B Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required
by section 1013C, other than material required by
section 1013B or 1013G; or
(c) if it is a Supplementary Product Disclosure Statement that is
given for the purposes of section 1014E—there is an
omission from the Supplementary Product Disclosure
Statement of material required by that section; or
(d) if it is information required by paragraph 1012G(3)(a)—there
is an omission from the information of material required by
that paragraph;
being a statement, or an omission, that is or would be materially
adverse from the point of view of a reasonable person considering
whether to proceed to acquire the financial product concerned.
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Division 7 Enforcement
Section 1021B
148 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: In determining whether a Product Disclosure Statement is defective,
the effect of section 1014D must be taken into account (section 1014D
takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure
Statement it supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) information required by paragraph 1012G(3)(a).
regulated person has the same meaning as it has in Division 2.
(1A) For the avoidance of doubt, if section 1012J (information must be
up to date) is not complied with in relation to a Product Disclosure
Statement, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Product Disclosure
Statement is not as up to date as section 1012J requires it to
be—the information so included constitutes a misleading
statement in the Product Disclosure Statement; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Product Disclosure
Statement—the failure to include the information constitutes
an omission from the Statement of material required by
section 1013C.
Note 1: The effect of section 1014D (information in a Supplementary Product
Disclosure Statement is taken to be contained in the Product
Disclosure Statement it supplements) must be taken into account in
determining whether section 1012J is complied with in relation to a
Product Disclosure Statement.
Note 2: Whether the inclusion of out of date information, or the failure to
include information, results in the Product Disclosure Statement being
defective as defined in subsection (1) depends on whether the
materiality test set out in that definition is satisfied.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement, or to information, of a
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kind referred to in a paragraph of the definition of disclosure
document or statement in subsection (1) includes a reference to
something purporting to be a document or statement, or to be
information, of that kind.
1021C Offence of failing to give etc. a disclosure document or
statement
Strict liability offence
(1) A person (the providing entity) commits an offence if:
(a) the providing entity:
(i) is required by a provision of this Part to give another
person a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person; and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to
be the required disclosure document or statement by the
time they are required to do so; or
(ii) if subparagraph (a)(ii) applies—orally communicate to
the other person anything purporting to be the
information required by paragraph 1012G(3)(a) by the
time they are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A person (the providing entity) commits an offence if:
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(a) the providing entity:
(i) is required by a provision of this Part to give another
person a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person; and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to
be the required disclosure document or statement by the
time they are required to do so; or
(ii) if subparagraph (a)(ii) applies—orally communicate to
the other person anything purporting to be the
information required by paragraph 1012G(3)(a) by the
time they are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
Defence for authorised representative
(4) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (1) or
(3), it is a defence if:
(a) the licensee had provided the representative with information
or instructions about the giving or communication of
disclosure documents or statements; and
(b) the representative’s failure to give or communicate the
required disclosure document or statement occurred because
the representative was acting in reliance on that information
or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
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Section 1021D
Corporations Act 2001 151
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Circumstances in which a person is taken not to contravene this
section
(5) If:
(a) a person does not give another person a Product Disclosure
Statement for a financial product because of
section 1012DAA or 1012DA; and
(b) a notice was given under subsection 1012DAA(2) or
1012DA(5); and
(c) the notice purported to comply with subsection 1012DAA(7)
or 1012DA(6) but did not actually comply with that
subsection;
the person is taken not to contravene this section.
1021D Offence of preparer of defective disclosure document or
statement giving the document or statement knowing it to
be defective
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person knows that the disclosure document or statement
is defective; and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (3)), or makes available to,
another person the disclosure document or statement
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) A person commits an offence if:
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Section 1021E
152 Corporations Act 2001
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(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person knows that the disclosure document or statement
is defective; and
(c) the person gives (see subsection (3)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person, or someone else, will
or may give it, or make it available, to another person as
mentioned in subparagraph (1)(c)(i) or (ii).
(3) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021E Offence of preparer of defective disclosure document or
statement giving the document or statement (whether or
not known to be defective)
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the disclosure document or statement is defective; and
(c) the person:
(i) gives (see subsection (5)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (5)), or makes available to,
another person a disclosure document or statement,
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) A person commits an offence if:
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Section 1021F
Corporations Act 2001 153
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(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the disclosure document or statement is defective; and
(c) the person gives (see subsection (5)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person, or someone else, will
or may give it, or make it available, to another person as
mentioned in subparagraph (1)(c)(i) or (ii).
(3) For the purposes of an offence based on subsection (1) or (2), strict
liability applies to the physical element of the offence specified in
paragraph (1)(b) or (2)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) In any proceedings against a person for an offence based on
subsection (1) or (2), it is a defence if the person took reasonable
steps to ensure that the disclosure document or statement would not
be defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
(5) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021F Offence of regulated person (other than preparer) giving
disclosure document or statement knowing it to be
defective
(1) A regulated person commits an offence if:
(a) another person prepares (or has someone else prepare for
them) a disclosure document or statement (not being
information required by paragraph 1012G(3)(a)); and
(b) the regulated person knows that the disclosure document or
statement is defective; and
(c) the regulated person:
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Section 1021FA
154 Corporations Act 2001
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(i) gives (see subsection (2)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (2)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021FA Paragraph 1012G(3)(a) obligation—offences relating to
communication of information
Offence where information known to be defective
(1) A person (the providing entity) commits an offence if:
(a) the providing entity communicates information required by
paragraph 1012G(3)(a) to another person in circumstances in
which the providing entity is required to do so; and
(b) the providing entity knows that the information is defective.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D and 1012E.
Offence whether or not information known to be defective
(2) A person (the providing entity) commits an offence if:
(a) the providing entity communicates information required by
paragraph 1012G(3)(a) to another person in circumstances in
which the providing entity is required to do so; and
(b) the information is defective.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D and 1012E.
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Section 1021FB
Corporations Act 2001 155
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(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical element of the offence specified in
paragraph (2)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(4) In any proceedings against a person for an offence based on
subsection (1) or (2), it is a defence if the person took reasonable
steps to ensure that the information communicated would not be
defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
(5) In any proceedings against a person for an offence based on
subsection (2), it is a defence if the information communicated was
defective because of information, or an omission from information,
provided to the person (whether in a document or otherwise) by the
issuer of the financial product concerned.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
1021FB Paragraph 1012G(3)(a) obligation—offences relating to
information provided by product issuer for
communication by another person
Product issuer knows information is defective
(1) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of the information being communicated
under paragraph 1012G(3)(a); or
(ii) knowing that it is likely that the information will be so
communicated; and
(b) the issuer knows that, if the person communicates the
provided information for the purpose of
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Section 1021FB
156 Corporations Act 2001
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paragraph 1012G(3)(a), the information communicated will
be defective.
Product issuer knows information is not all the required
information
(2) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the provided information relates to a matter or matters, but
the issuer knows that it is not all of the information relating
to the matter or matters that is required to be so
communicated; and
(c) the issuer is reckless as to whether the person will or may
communicate information for the purposes of
paragraph 1012G(3)(a) on the basis that the provided
information is all the information relating to the matter or
matters that is required to be so communicated.
Product issuer provides information that results in information
required by paragraph 1012G(3)(a) being defective
(3) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the person communicates the information for the purpose of
paragraph 1012G(3)(a); and
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Section 1021FB
Corporations Act 2001 157
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(c) the information communicated is defective because it
includes the provided information (whether or not it is
defective for other reasons).
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
paragraph (3)(c).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defence to subsection (3) offence
(5) In any proceedings against the issuer of a financial product for an
offence based on subsection (3), it is a defence if the issuer took
reasonable steps to ensure that the information they provided
would not be such as to make the information communicated for
the purpose of paragraph 1012G(3)(a) defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
Product issuer does not provide all the required information
(6) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the provided information relates to a matter or matters, but it
is not all of the information relating to the matter or matters
that is required to be so communicated; and
(c) the person communicates information for the purpose of
paragraph 1012G(3)(a) on the basis that the provided
information is all the information relating to the matter or
matters that is required to be so communicated; and
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Section 1021G
158 Corporations Act 2001
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(d) the information communicated is defective because it
includes only that information about the matter or matters
(whether or not it is also defective for other reasons).
(7) For the purposes of an offence based on subsection (6), strict
liability applies to the physical elements of the offence specified in
paragraphs (6)(b) and (d).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defence to subsection (6) offence
(8) In any proceedings against the issuer of a financial product for an
offence based on subsection (6), it is a defence if the issuer took
reasonable steps to ensure that the information they provided about
the matter or matters would be all the information about the matter
or matters that would be required by paragraph 1012G(3)(a) to be
communicated.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (8). See subsection 13.3(3) of the Criminal Code.
1021G Offence of financial services licensee failing to ensure
authorised representative gives etc. disclosure documents
or statements as required
A financial services licensee commits an offence if the licensee
does not take reasonable steps to ensure that an authorised
representative of the licensee complies with their obligations under
this Part to give or communicate disclosure documents or
statements as and when required by this Part.
1021H Offences if a Product Disclosure Statement (or
Supplementary PDS) does not comply with certain
requirements
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
Product Disclosure Statement, a Supplementary Product
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Section 1021I
Corporations Act 2001 159
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Disclosure Statement or a Replacement Product Disclosure
Statement (the disclosure document); and
(b) the disclosure document does not comply with:
(i) if it is a Product Disclosure Statement—section 1013B
or 1013G or subsection 942DA(3); or
(ii) if it is a Supplementary Product Disclosure Statement—
section 1013G, 1014B or 1014C; or
(iii) if it is a Replacement Product Disclosure Statement—
subsection 942DA(3), section 1013G or
subsection 1014K(1), (2) or (3); and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure
document in circumstances in which it is required by a
provision of this Part to be given to the other person; or
(ii) gives (see subsection (3)), or makes available to,
another person the disclosure document, reckless as to
whether the other person will or may rely on the
information in it; or
(iii) gives (see subsection (3)), or makes available to,
another person the disclosure document, reckless as to
whether the other person, or someone else, will or may
give it, or make it available, to another person as
mentioned in subparagraph (i) or (ii).
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (b) of that subsection.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021I Offence of giving disclosure document or statement that has
not been prepared by the appropriate person
(1) A regulated person commits an offence if:
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Section 1021J
160 Corporations Act 2001
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(a) the regulated person:
(i) gives (see subsection (2)) another person a disclosure
document or statement (not being information required
by paragraph 1012G(3)(a)) in circumstances in which it
is required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (2)), or makes available to,
another person a disclosure document or statement (not
being information required by paragraph 1012G(3)(a)),
reckless as to whether the other person will or may rely
on the information in it; and
(b) the disclosure document or statement has not been prepared
by, or on behalf of, the person required by section 1013A to
prepare it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021J Offences if preparer etc. of disclosure document or statement
becomes aware that it is defective
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person becomes aware that the disclosure document or
statement is defective; and
(c) the person does not, as soon as practicable, take reasonable
steps to ensure that any regulated person to whom the
disclosure document or statement has been provided for
further distribution is given a direction that satisfies one of
more of the following subparagraphs:
(i) a direction not to distribute the disclosure document or
statement;
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Section 1021K
Corporations Act 2001 161
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(ii) if it is a Product Disclosure Statement—a direction not
to distribute the Product Disclosure Statement unless it
is accompanied by a Supplementary Product Disclosure
Statement that corrects the deficiency;
(iii) if it is a Product Disclosure Statement or a
Supplementary Product Disclosure Statement—a
direction not to distribute the Product Disclosure
Statement or Supplementary Product Disclosure
Statement without first altering it in a way that is
specified in the direction, being a way that corrects the
deficiency and that complies with section 1015E.
(2) A regulated person commits an offence if:
(a) the person is given a direction referred to in paragraph (1)(c);
and
(b) the person does not comply with the direction.
(3) A regulated person commits an offence if:
(a) a disclosure document or statement (not being information
required by paragraph 1012G(3)(a)) has been provided to the
person for distribution; and
(b) the person becomes aware that the disclosure document or
statement is defective; and
(c) the person does not take reasonable steps to notify the person
by whom, or on whose behalf, the disclosure document or
statement was prepared of the particulars of the deficiency.
(4) In this section, a reference to distributing a disclosure document or
statement includes (but is not limited to) giving the document or
statement to another person in purported compliance with a
requirement of this Part.
1021K Offence of unauthorised alteration of Product Disclosure
Statement (or Supplementary PDS)
(1) A person commits an offence if:
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Section 1021L
162 Corporations Act 2001
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(a) the person engages in conduct that results in an alteration of a
Product Disclosure Statement or a Supplementary Product
Disclosure Statement that has been prepared by or on behalf
of another person (the responsible person); and
(b) the alteration results in the Product Disclosure Statement or
Supplementary Product Disclosure Statement becoming
defective, or more defective than it previously was; and
(c) the alteration is not made with the authority of the
responsible person; and
(d) either:
(i) the person, in purported compliance with a provision of
this Part, gives (see subsection (2)) the altered Product
Disclosure Statement or Supplementary Product
Disclosure Statement to another person; or
(ii) the person gives (see subsection (2)), or makes available
to, another person the altered Product Disclosure
Statement or Supplementary Product Disclosure
Statement, reckless as to whether the other person will
or may rely on the information in it; or
(iii) the person gives (see subsection (2)), or makes available
to, another person the altered Product Disclosure
Statement or Supplementary Product Disclosure
Statement, reckless as to whether the other person, or
someone else, will or may give it, or make it available,
to another person as mentioned in subparagraph (i) or
(ii).
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021L Offences of giving, or failing to withdraw, consent to
inclusion of defective statement
(1) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a
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Section 1021L
Corporations Act 2001 163
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Supplementary Product Disclosure Statement as mentioned
in paragraph 1013K(1)(a); and
(b) either:
(i) there is a misleading or deceptive statement in the
consented material; or
(ii) there is an omission of information from the consented
material; and
(c) the statement or omission is or would be materially adverse
from the point of view of a reasonable person considering
whether to proceed to acquire the financial product
concerned.
(2) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a
Supplementary Product Disclosure Statement as mentioned
in paragraph 1013K(1)(a); and
(b) they become aware that either:
(i) there is a misleading or deceptive statement in the
consented material; or
(ii) there is an omission of information from the consented
material;
being a statement, or an omission, that:
(iii) is or would be materially adverse from the point of view
of a reasonable person considering whether to proceed
to acquire the financial product concerned; or
(iv) results in the Product Disclosure Statement or the
Supplementary Product Disclosure Statement being
defective, or more defective than it would otherwise be;
and
(c) they do not withdraw their consent after becoming aware of
the matter mentioned in paragraph (b).
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Section 1021M
164 Corporations Act 2001
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1021M Offences relating to keeping and providing copies of Product
Disclosure Statements (or Supplementary PDSs)
Strict liability offence
(1) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a
Supplementary Product Disclosure Statement is in use;
or
(ii) to keep a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement for a
particular period; or
(iii) to make a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement available
to ASIC; or
(iv) to comply with a request from a person for a copy of a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement; and
(b) the person does not comply with that requirement.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a
Supplementary Product Disclosure Statement is in use;
or
(ii) to keep a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement for a
particular period; or
(iii) to make a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement available
to ASIC; or
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(iv) to comply with a request from a person for a copy of a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement; and
(b) the person does not comply with that requirement.
1021N Offence of failing to provide additional information
requested under section 1017A
A person (the responsible person) commits an offence if:
(a) a request is made to them by another person, in accordance
with subsection 1017A(1), to provide further information
about a financial product; and
(b) the responsible person is required by subsection 1017A(2) to
give the other person the information; and
(c) the other person has paid any charge in respect of the request,
being a charge that is in accordance with
subsections 1017A(5) and (6); and
(d) the responsible person does not take reasonable steps to
ensure that, as soon as practicable after receiving the request,
and in any event within one month, the information is
provided to the other person in accordance with
subsection 1017A(4).
1021NA Offences relating to obligation to make product dashboard
publicly available
Failure to comply with obligation to make product dashboard
publicly available
(1) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) as trustee, the person is required, under section 1017BA, to
ensure that a product dashboard for each of the fund’s
MySuper products and choice products is made publicly
available on the fund’s website; and
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(c) a product dashboard for each of the fund’s MySuper products
and choice products is not made publicly available as
required by that section.
Offence where information known to be defective
(2) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) a product dashboard is made publicly available on the fund’s
website in purported compliance with section 1017BA; and
(c) the person knows that:
(i) the information set out in the product dashboard has not
been updated as required by that section; or
(ii) the information set out in the product dashboard is
otherwise misleading or deceptive; or
(iii) there is an omission from the information set out in the
product dashboard.
Offence whether or not information known to be defective
(3) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) a product dashboard is made publicly available on the fund’s
website in purported compliance with section 1017BA; and
(c) either:
(i) the information set out in the product dashboard has not
been updated as required by that section; or
(ii) the information set out in the product dashboard is
otherwise misleading or deceptive; or
(iii) there is an omission from the information set out in the
product dashboard.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
any of subparagraphs (3)(c)(i) to (iii).
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Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(5) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (2)(c)(iii) or (3)(c)(iii),
it is a defence if:
(a) the trustee or another trustee of the fund took reasonable
steps to ensure that there would not be an omission from the
information set out in the product dashboard; or
(b) both of the following apply:
(i) the information was omitted because it was not up to
date;
(ii) the trustee or another trustee of the fund took reasonable
steps to obtain up-to-date information; or
(c) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
(ii) the trustee or another trustee of the fund took reasonable
steps to obtain information that would not have been
misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (3)(c)(i), it is a defence
if the trustee or another trustee of the fund took reasonable steps to
ensure that the information set out in the product dashboard was
updated as required by section 1017BA.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (3)(c)(ii), it is a defence
if the trustee or another trustee of the fund took reasonable steps to
ensure that the information set out in the product dashboard would
not be misleading or deceptive.
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Section 1021NB
168 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021NB Offences relating to obligation to make superannuation
investment information publicly available
Failure to comply with obligation to make information publicly
available
(1) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
(b) as trustee, the person is required, under section 1017BB, to
make information publicly available on the entity’s website;
and
(c) the information is not made publicly available as required by
that section.
Offence where information known to be defective
(2) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
(b) as trustee, the person is required, under section 1017BB, to
make information publicly available; and
(c) information is made publicly available in purported
compliance with that requirement; and
(d) the trustee knows that:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
Offence whether or not information known to be defective
(3) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
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(b) as trustee, the person is required, under section 1017BB, to
make information publicly available; and
(c) information is made publicly available in purported
compliance with that requirement; and
(d) either:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
subparagraph (3)(d)(i) or (ii).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(5) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subsection (1), it is a defence if the
information would have been made publicly available but for the
fact that the trustee or another trustee of the entity was unable to
obtain the information after taking reasonable steps to do so.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subparagraph (2)(d)(ii) or (3)(d)(ii),
it is a defence if:
(a) there was an omission from the information made publicly
available because the trustee or another trustee of the entity
was unable to obtain the information after taking reasonable
steps to do so; or
(b) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
(ii) the trustee or another trustee of the entity took
reasonable steps to obtain information that would not
have been misleading or deceptive.
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Section 1021NC
170 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subparagraph (3)(d)(i), it is a
defence if the trustee or another trustee of the entity took
reasonable steps to ensure that the information made publicly
available would not be misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021NC Offences relating to obligations under sections 1017BC,
1017BD and 1017BE
Failure to notify
(1) A person commits an offence if:
(a) the person is required to notify another person under
subsection 1017BC(2) or (4) or section 1017BD or 1017BE;
and
(b) the person does not notify, and is not taken to have notified,
the other person as required by that provision.
Failure to provide information
(2) A person commits an offence if:
(a) the person is required to provide another person with
information under subsection 1017BC(3); and
(b) the person does not provide the other person with the
information as required by that subsection.
Information provided known to be defective
(3) A person commits an offence if:
(a) the person:
(i) notifies another person of information as required by
subsection 1017BC(2) or (4) or section 1017BD or
1017BE; or
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(ii) provides information (whether in a document or
otherwise) to another person as required by
subsection 1017BC(3); and
(b) the person knows that:
(i) the information provided is misleading or deceptive; or
(ii) there is an omission from the information provided.
Information provided defective
(4) A person commits an offence if:
(a) the person:
(i) notifies another person of information as required by
subsection 1017BC(2) or (4) or section 1017BD or
1017BE; or
(ii) provides information (whether in a document or
otherwise) to another person as required by
subsection 1017BC(3); and
(b) either:
(i) the information provided is misleading or deceptive; or
(ii) there is an omission from the information provided.
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical element of the offence specified in
subparagraph (4)(b)(i) or (ii).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(6) In any proceedings against a person for an offence based on
subparagraph (3)(b)(ii) or (4)(b)(ii), it is a defence if:
(a) the person took reasonable steps to ensure that there would
not be an omission from the information provided; or
(b) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
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(ii) the person took reasonable steps to obtain information
that would not have been misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a person for an offence based on
subparagraph (4)(b)(i), it is a defence if the person took reasonable
steps to ensure that the information provided would not be
misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021O Offences of issuer or seller of financial product failing to pay
money into an account as required
Strict liability offence
(1) An issuer or seller of financial products commits an offence if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that
subsection; and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) An issuer or seller of financial products commits an offence if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that
subsection; and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
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Section 1021P
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1021P Offences relating to offers to which Division 5A applies
Failure to comply with requirements of section 1019E relating to
how offers are made
(1) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) in making the offer, the person fails to comply with a
requirement of section 1019E.
Contravening section 1019F by inviting offers to sell
(2) A person commits an offence if:
(a) the person invites another person to make an offer to sell a
financial product; and
(b) in making the invitation, the person contravenes
section 1019F.
Failure to comply with requirements of section 1019G relating to
duration and withdrawal of offers
(3) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) any of the following apply:
(i) the offer does not remain open for the period required
by paragraph 1019G(1)(a);
(ii) the offer remains open for longer than is permitted by
paragraph 1019G(1)(b);
(iii) in purporting to withdraw the offer, the person fails to
comply with a requirement of subsection 1019G(2) or
(3).
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Failure to comply with requirements of section 1019I relating to
price or value
(4) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) the person gives the offeree an offer document; and
(d) either:
(i) the offer document does not comply with
paragraph 1019I(2)(a), (b) or (c); or
(ii) material of a kind referred to in paragraph 1019I(2)(a),
(b) or (c) that is included in the offer document is
misleading or deceptive.
Failure to comply with other requirements of section 1019I
(5) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) the person gives the offeree an offer document; and
(d) either:
(i) the offer document does not comply with
subsection 1019I(1), or paragraph 1019I(2)(d), (e) or
(f); or
(ii) material of a kind referred to in subsection 1019I(1), or
paragraph 1019I(2)(d), (e) or (f), that is included in the
offer document is misleading or deceptive.
Failure to comply with requirements of section 1019J
(6) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
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(c) section 1019J applies because of an increase or decrease in
the market value of the financial product to which the offer
relates; and
(d) one of the following subparagraphs applies:
(i) the person fails to comply with subsection 1019J(2) in
relation to that increase or decrease; or
(ii) the person gives the offeree a supplementary offer
document in relation to that increase or decrease, but
that document does not comply with
subsection 1019J(3); or
(iii) the person gives the offeree a supplementary offer
document in relation to that increase or decrease, but
material of a kind referred to in subsection 1019J(3) that
is included in that document is misleading or deceptive.
Subdivision B—Civil liability
1022A Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required
by section 1013C, other than material required by
section 1013B or 1013G; or
(c) if it is a Supplementary Product Disclosure Statement that is
given for the purposes of section 1014E—there is an
omission from the Supplementary Product Disclosure
Statement of material required by that section; or
(d) if it is information required by paragraph 1012G(3)(a)—there
is an omission from the information of material required by
that paragraph; or
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(e) if it is an offer document of a kind referred to in
section 1019E—there is an omission from the document of
material required by section 1019I; or
(f) if it is a supplementary offer document of a kind referred to
in section 1019J—there is an omission from the document of
material required by subsection 1019J(3).
Note: In determining whether a Product Disclosure Statement is defective,
the effect of section 1014D must be taken into account (section 1014D
takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure
Statement it supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) information required by paragraph 1012G(3)(a); or
(d) an offer document of a kind referred to in section 1019E; or
(e) a supplementary offer document of a kind referred to in
section 1019J.
regulated person has the same meaning as it has in Division 2.
(1A) For the avoidance of doubt, if section 1012J (information must be
up to date) is not complied with in relation to a Product Disclosure
Statement, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Product Disclosure
Statement is not as up to date as section 1012J requires it to
be—the information so included constitutes a misleading
statement in the Product Disclosure Statement; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Product Disclosure
Statement—the failure to include the information constitutes
an omission from the Statement of material required by
section 1013C.
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Note: The effect of section 1014D (information in a Supplementary Product
Disclosure Statement is taken to be contained in the Product
Disclosure Statement it supplements) must be taken into account in
determining whether section 1012J is complied with in relation to a
Product Disclosure Statement.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement, or to information, of a
kind referred to in a paragraph of the definition of disclosure
document or statement in subsection (1) includes a reference to
something purporting to be a document or statement, or to be
information, of that kind.
1022B Civil action for loss or damage
(1) This section applies in the following situations:
(a) a person:
(i) is required by a provision of this Part to give another
person (the client) a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); and
(ii) does not give (in accordance with section 1015C) the
client anything purporting to be the required disclosure
document or statement by the time they are required to
do so; or
(aa) a person makes an offer to which Division 5A applies (see
section 1019D) to another person (the client) otherwise than
by sending the client an offer document in accordance with
section 1019E; or
(ab) a person makes an invitation prohibited by section 1019F to
another person (the client); or
(ac) a person:
(i) is required by subsection 1019J(2), in relation to an
offer made to another person (the client), to send the
client a withdrawal document or a supplementary offer
document; and
(ii) does not send (in accordance with paragraphs
1019E(1)(a) and (b)) the client anything purporting to
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be either of those things by the time they are required to
do so; or
(b) a person:
(i) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person (the client);
and
(ii) does not orally communicate to the other person
anything purporting to be the information required by
that paragraph by the time they are required to do so; or
(c) a person:
(i) gives another person (the client) a disclosure document
or statement (other than an offer document of a kind
referred to in section 1019E or a supplementary offer
document of a kind referred to in section 1019J) that is
defective in circumstances in which a disclosure
document or statement is required by a provision of this
Part to be given to the client; or
(ia) makes an offer to which Division 5A applies (see
section 1019D) by sending another person (the client)
an offer document in accordance with section 1019E,
but that offer document is defective; or
(ib) in a situation to which section 1019J applies, sends a
person (the client) a supplementary offer document in
accordance with that section but that supplementary
offer document is defective; or
(ii) is a regulated person and gives, or makes available to,
another person (the client) a disclosure document or
statement, being a Product Disclosure Statement or a
Supplementary Product Disclosure Statement, that is
defective, reckless as to whether the client will or may
rely on the information in it; or
(d) a person:
(i) gives consent to the inclusion of a statement in a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement as mentioned in
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subsection 1021L(1), disregarding
paragraph 1021L(1)(c); or
(ii) does not take reasonable steps to withdraw such a
statement as mentioned in subsection 1021L(2),
disregarding subparagraphs 1021L(2)(b)(iii) and (iv); or
(e) a person contravenes section 1017B or 1017D; or
(f) a person is required by section 1017BA to make information
publicly available on a regulated superannuation fund’s
website and any of the following circumstances apply:
(i) the information is not made publicly available as
required by that section;
(ii) the information made publicly available is not updated
as required by that section;
(iii) the information made publicly available is misleading or
deceptive;
(iv) there is an omission from the information made publicly
available; or
(g) a person is required by section 1017BB to make information
publicly available on a registrable superannuation entity’s
website and any of the following circumstances apply:
(i) the information is not made publicly available as
required by that section;
(ii) the information made publicly available is misleading or
deceptive;
(iii) there is an omission from the information made publicly
available; or
(h) a person is required by subsection 1017BC(3) to provide
information to another person and any of the following
circumstances apply:
(i) the person does not provide the information as required
by that subsection;
(ii) the information provided is misleading or deceptive;
(iii) there is an omission from the information provided.
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Section 1022B
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In paragraph (c), give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(2) In a situation to which this section applies, if a person suffers loss
or damage:
(a) if paragraph (1)(a) applies—because the client was not given
the disclosure document or statement that they should have
been given; or
(aa) if paragraph (1)(aa) applies—because the client was not sent
an offer document in accordance with section 1019E; or
(ab) if paragraph (1)(ab) applies—because the client received an
invitation prohibited by section 1019F rather than being sent
an offer document in accordance with section 1019E; or
(ac) if paragraph (1)(ac) applies—because the client was not sent
a withdrawal document or a supplementary offer document
as required by subsection 1019J(2); or
(b) if paragraph (1)(b) applies—because the information required
by paragraph 1012G(3)(a) was not communicated to the
client; or
(c) if paragraph (1)(c) applies—because the disclosure document
or statement the client was given or sent was defective; or
(d) if paragraph (1)(d) applies—because the consent referred to
in that paragraph was given, or was not withdrawn, as the
case requires; or
(e) if paragraph (1)(e) applies—because of the contravention
referred to in that paragraph; or
(f) if paragraph (1)(f), (g) or (h) apply—because of any of the
circumstances mentioned in those paragraphs;
the person may recover the amount of the loss or damage by action
against the, or a, liable person (see subsections (3) to (5)), whether
or not that person (or anyone else) has been convicted of an
offence in respect of the matter referred to in paragraph (a), (aa),
(ab), (ac), (b), (c), (d), (e) or (f).
(3) For the purposes of subsection (2), the, or a, liable person is:
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(a) if paragraph (1)(a), (aa), (ab), (ac) or (b) applies—subject to
subsection (4), the person first-referred to in that paragraph;
or
(aa) if paragraph (1)(c) applies and the disclosure document or
statement is information required by
paragraph 1012G(3)(a)—subject to subsection (5A), the
person first-referred to in paragraph (1)(c) of this section; or
(b) if paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib))
applies and the disclosure document or statement is not
information required by paragraph 1012G(3)(a)—subject to
subsection (5):
(i) the person by whom, or on whose behalf, the disclosure
document or statement was prepared; and
(ii) each other person involved in the preparation of the
disclosure document or statement who, directly or
indirectly, caused the disclosure document or statement
to be defective or contributed to it being defective; or
(ba) if subparagraph (1)(c)(ia) or (ib) applies—the person who
made the offer; or
(c) if paragraph (1)(d) applies—the person who gave the
consent; or
(d) if paragraph (1)(e) applies—the person who contravened the
provision concerned; or
(e) if paragraph (1)(f) applies—the trustee, or the trustees, of the
regulated superannuation fund on whose website the
information was required to be made publicly available; or
(f) if paragraph (1)(g) applies—the trustee, or the trustees, of the
registrable superannuation entity on whose website the
information was required to be made publicly available; or
(g) if paragraph (1)(h) applies—the person who was required to
provide the information.
(4) If paragraph (1)(a) or (b) applies, or paragraph (1)(c) applies so far
as it relates to information required by paragraph 1012G(3)(a), and
the person who would, but for this subsection, be the liable person
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Division 7 Enforcement
Section 1022B
182 Corporations Act 2001
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is an authorised representative, the authorised representative is not
the liable person and the following paragraphs apply:
(a) if the authorised representative is an authorised representative
of only one financial services licensee—that financial
services licensee is the liable person;
(b) if the authorised representative is an authorised representative
of more than one financial services licensee:
(i) if, under the rules in section 917C, one of those
licensees is responsible for the person’s conduct—that
licensee is the (or a) liable person; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the
person’s conduct—each of those licensees is a liable
person.
(4A) For the purposes of paragraph (4)(b):
(a) section 917C is taken to apply, despite section 917F; and
(b) section 917D is taken not to apply.
(5) If:
(a) paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib))
applies; and
(b) an alteration was made to the disclosure document or
statement (not being information required by
paragraph 1012G(3)(a)) before it was given to the client; and
(c) the alteration made the disclosure document or statement
defective, or more defective than it would otherwise have
been; and
(d) the alteration was not made by, or with the authority of, the
person who would, but for this subsection, be a liable person
because of subparagraph (3)(b)(i);
then, so far as a person has suffered loss or damage because the
disclosure document or statement was defective because of the
alteration, the person who made the alteration is a liable person,
rather than the person referred to in paragraph (d).
(5A) If:
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(a) paragraph (3)(aa) applies; and
(b) the person referred to in that paragraph is not the issuer, or an
authorised representative of the issuer, of the financial
product to which the required disclosure document or
statement relates; and
(c) the required disclosure document or statement was defective
because of information, or an omission from information,
provided to that person (whether in a document or otherwise)
by the issuer of the product;
the issuer of the product is the liable person, rather than the person
who would otherwise be the liable person because of
paragraph (3)(aa) or subsection (4).
(6) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(7) A person is not liable under subsection (2) in a situation described
in paragraph (1)(c) if the person took reasonable steps to ensure
that the disclosure document or statement would not be defective.
(7A) If subsection (5A) applies, the issuer of the financial product is not
liable under subsection (2) if the issuer took reasonable steps to
ensure that the information provided as mentioned in
paragraph (5A)(c) would not be such as to make the required
disclosure document or statement defective.
(7B) A person is not liable under subsection (2) in a situation described
in subparagraph (1)(f)(iii), (g)(ii) or (h)(ii) if the person took
reasonable steps to ensure that the information would not be
misleading or deceptive.
(7C) A person is not liable under subsection (2) in a situation described
in subparagraph (1)(f)(iv), (g)(iii) or (h)(iii) if the person took
reasonable steps to ensure that there would not be an omission
from the information.
(8) This section does not affect any liability that a person has under
any other law.
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Division 7 Enforcement
Section 1022C
184 Corporations Act 2001
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1022C Additional powers of court to make orders
(1) The court dealing with an action under subsection 1022B(2) may,
in addition to awarding loss or damage under that subsection and if
it thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client referred to in that subsection for or relating to a
financial product or a financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(2) Without limiting paragraph (1)(b), the orders that may be made
under that paragraph include (but are not limited to) an order for
the return of money paid by a person, and/or an order for payment
of an amount of interest specified in, or calculated in accordance
with, the order.
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Preliminary Division 1
Section 1040A
Corporations Act 2001 185
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Part 7.10—Market misconduct and other
prohibited conduct relating to financial
products and financial services
Division 1—Preliminary
1040A Content of Part
This Part deals in Division 2 with various kinds of prohibited
conduct, other than insider trading. The insider trading prohibitions
are contained in Division 3.
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041A
186 Corporations Act 2001
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Division 2—The prohibited conduct (other than insider
trading prohibitions)
1041A Market manipulation
A person must not take part in, or carry out (whether directly or
indirectly and whether in this jurisdiction or elsewhere):
(a) a transaction that has or is likely to have; or
(b) 2 or more transactions that have or are likely to have;
the effect of:
(c) creating an artificial price for trading in financial products on
a financial market operated in this jurisdiction; or
(d) maintaining at a level that is artificial (whether or not it was
previously artificial) a price for trading in financial products
on a financial market operated in this jurisdiction.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)).
Note 2: This section is also a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this section, see
section 1317S.
1041B False trading and market rigging—creating a false or
misleading appearance of active trading etc.
(1) A person must not do, or omit to do, an act (whether in this
jurisdiction or elsewhere) if that act or omission has or is likely to
have the effect of creating, or causing the creation of, a false or
misleading appearance:
(a) of active trading in financial products on a financial market
operated in this jurisdiction; or
(b) with respect to the market for, or the price for trading in,
financial products on a financial market operated in this
jurisdiction.
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Corporations Act 2001 187
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Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see Division 4 and section 1317S.
(1A) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1):
(a) intention is the fault element for the physical element
consisting of doing or omitting to do an act as mentioned in
that subsection; and
(b) recklessness is the fault element for the physical element
consisting of having, or being likely to have, the effect of
creating, or causing the creation of, a false or misleading
appearance as mentioned in that subsection.
Note 1: For intention, see section 5.2 of the Criminal Code.
Note 2: For recklessness, see section 5.4 of the Criminal Code.
(2) For the purposes of subsection (1), a person is taken to have
created a false or misleading appearance of active trading in
particular financial products on a financial market if the person:
(a) enters into, or carries out, either directly or indirectly, any
transaction of acquisition or disposal of any of those financial
products that does not involve any change in the beneficial
ownership of the products; or
(b) makes an offer (the regulated offer) to acquire or to dispose
of any of those financial products in the following
circumstances:
(i) the offer is to acquire or to dispose of at a specified
price; and
(ii) the person has made or proposes to make, or knows that
an associate of the person has made or proposes to
make:
(A) if the regulated offer is an offer to acquire—an
offer to dispose of; or
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041C
188 Corporations Act 2001
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(B) if the regulated offer is an offer to dispose of—
an offer to acquire;
the same number, or substantially the same number, of
those financial products at a price that is substantially
the same as the price referred to in subparagraph (i).
Note: The circumstances in which a person creates a false or misleading
appearance of active trading in particular financial products on a
financial market are not limited to the circumstances set out in this
subsection.
(3) For the purposes of paragraph (2)(a), an acquisition or disposal of
financial products does not involve a change in the beneficial
ownership if:
(a) a person who had an interest in the financial products before
the acquisition or disposal; or
(b) an associate of such a person;
has an interest in the financial products after the acquisition or
disposal.
(4) The reference in paragraph (2)(a) to a transaction of acquisition or
disposal of financial products includes:
(a) a reference to the making of an offer to acquire or dispose of
financial products; and
(b) a reference to the making of an invitation, however
expressed, that expressly or impliedly invites a person to
offer to acquire or dispose of financial products.
1041C False trading and market rigging—artificially maintaining
etc. trading price
(1) A person must not (whether in this jurisdiction or elsewhere) enter
into, or engage in, a fictitious or artificial transaction or device if
that transaction or device results in:
(a) the price for trading in financial products on a financial
market operated in this jurisdiction being maintained, inflated
or depressed; or
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Corporations Act 2001 189
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(b) fluctuations in the price for trading in financial products on a
financial market operated in this jurisdiction.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see Division 4 and section 1317S.
(2) In determining whether a transaction is fictitious or artificial for the
purposes of subsection (1), the fact that the transaction is, or was at
any time, intended by the parties who entered into it to have effect
according to its terms is not conclusive.
1041D Dissemination of information about illegal transactions
A person must not (whether in this jurisdiction or elsewhere)
circulate or disseminate, or be involved in the circulation or
dissemination of, any statement or information to the effect that the
price for trading in financial products on a financial market
operated in this jurisdiction will, or is likely to, rise or fall, or be
maintained, because of a transaction, or other act or thing done, in
relation to those financial products, if:
(a) the transaction, or thing done, constitutes or would constitute
a contravention of section 1041A, 1041B, 1041C, 1041E or
1041F; and
(b) the person, or an associate of the person:
(i) has entered into such a transaction or done such an act
or thing; or
(ii) has received, or may receive, directly or indirectly, a
consideration or benefit for circulating or disseminating,
or authorising the circulation or dissemination of, the
statement or information.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
section, see Division 4.
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041E
190 Corporations Act 2001
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Note 2: This section is also a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this section, see
Division 4 and section 1317S.
1041E False or misleading statements
(1) A person must not (whether in this jurisdiction or elsewhere) make
a statement, or disseminate information, if:
(a) the statement or information is false in a material particular
or is materially misleading; and
(b) the statement or information is likely:
(i) to induce persons in this jurisdiction to apply for
financial products; or
(ii) to induce persons in this jurisdiction to dispose of or
acquire financial products; or
(iii) to have the effect of increasing, reducing, maintaining
or stabilising the price for trading in financial products
on a financial market operated in this jurisdiction; and
(c) when the person makes the statement, or disseminates the
information:
(i) the person does not care whether the statement or
information is true or false; or
(ii) the person knows, or ought reasonably to have known,
that the statement or information is false in a material
particular or is materially misleading.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I. For relief from liability under that section, see
Division 4.
(2) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1), paragraph (1)(a) is a
physical element, the fault element for which is as specified in
paragraph (1)(c).
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Section 1041F
Corporations Act 2001 191
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(3) For the purposes of an offence based on subsection (1), strict
liability applies to subparagraphs (1)(b)(i), (ii) and (iii).
Note: For strict liability, see section 6.1 of the Criminal Code.
1041F Inducing persons to deal
(1) A person must not, in this jurisdiction, induce another person to
deal in financial products:
(a) by making or publishing a statement, promise or forecast if
the person knows, or is reckless as to whether, the statement
is misleading, false or deceptive; or
(b) by a dishonest concealment of material facts; or
(c) by recording or storing information that the person knows to
be false or misleading in a material particular or materially
misleading if:
(i) the information is recorded or stored in, or by means of,
a mechanical, electronic or other device; and
(ii) when the information was so recorded or stored, the
person had reasonable grounds for expecting that it
would be available to the other person, or a class of
persons that includes the other person.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I. For relief from liability under that section, see
Division 4.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the
standards of ordinary people.
(3) This section applies in relation to the following conduct as if that
conduct were dealing in financial products:
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Section 1041G
192 Corporations Act 2001
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(a) applying to become a standard employer-sponsor (within the
meaning of the Superannuation Industry (Supervision) Act
1993) of a superannuation entity (within the meaning of that
Act);
(b) permitting a person to become a standard employer-sponsor
(within the meaning of the Superannuation Industry
(Supervision) Act 1993) of a superannuation entity (within
the meaning of that Act);
(c) applying, on behalf of an employee (within the meaning of
the Retirement Savings Accounts Act 1997), for the employee
to become the holder of an RSA product.
1041G Dishonest conduct
(1) A person must not, in the course of carrying on a financial services
business in this jurisdiction, engage in dishonest conduct in relation
to a financial product or financial service.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the
standards of ordinary people.
1041H Misleading or deceptive conduct (civil liability only)
(1) A person must not, in this jurisdiction, engage in conduct, in
relation to a financial product or a financial service, that is
misleading or deceptive or is likely to mislead or deceive.
Note 1: Failure to comply with this subsection is not an offence.
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Note 2: Failure to comply with this subsection may lead to civil liability under
section 1041I. For limits on, and relief from, liability under that
section, see Division 4.
(2) The reference in subsection (1) to engaging in conduct in relation
to a financial product includes (but is not limited to) any of the
following:
(a) dealing in a financial product;
(b) without limiting paragraph (a):
(i) issuing a financial product;
(ii) publishing a notice in relation to a financial product;
(iii) making, or making an evaluation of, an offer under a
takeover bid or a recommendation relating to such an
offer;
(iv) applying to become a standard employer-sponsor
(within the meaning of the Superannuation Industry
(Supervision) Act 1993) of a superannuation entity
(within the meaning of that Act);
(v) permitting a person to become a standard
employer-sponsor (within the meaning of the
Superannuation Industry (Supervision) Act 1993) of a
superannuation entity (within the meaning of that Act);
(vi) a trustee of a superannuation entity (within the meaning
of the Superannuation Industry (Supervision) Act 1993)
dealing with a beneficiary of that entity as such a
beneficiary;
(vii) a trustee of a superannuation entity (within the meaning
of the Superannuation Industry (Supervision) Act 1993)
dealing with an employer-sponsor (within the meaning
of that Act), or an associate (within the meaning of that
Act) of an employer-sponsor, of that entity as such an
employer-sponsor or associate;
(viii) applying, on behalf of an employee (within the meaning
of the Retirement Savings Accounts Act 1997), for the
employee to become the holder of an RSA product;
(ix) an RSA provider (within the meaning of the Retirement
Savings Accounts Act 1997) dealing with an employer
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Section 1041I
194 Corporations Act 2001
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(within the meaning of that Act), or an associate (within
the meaning of that Act) of an employer, who makes an
application, on behalf of an employee (within the
meaning of that Act) of the employer, for the employee
to become the holder of an RSA product, as such an
employer;
(x) carrying on negotiations, or making arrangements, or
doing any other act, preparatory to, or in any way
related to, an activity covered by any of
subparagraphs (i) to (ix).
(3) Conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover
document); or
(ii) section 728 (misleading or deceptive fundraising
document); or
(iii) section 1021NA, 1021NB or 1021NC; or
(b) in relation to a disclosure document or statement within the
meaning of section 953A; or
(c) in relation to a disclosure document or statement within the
meaning of section 1022A;
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.
1041I Civil action for loss or damage for contravention of
sections 1041E to 1041H
(1) A person who suffers loss or damage by conduct of another person
that was engaged in in contravention of section 1041E, 1041F,
1041G or 1041H may recover the amount of the loss or damage by
action against that other person or against any person involved in
the contravention, whether or not that other person or any person
involved in the contravention has been convicted of an offence in
respect of the contravention.
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(1A) Subsection (1) has effect subject to section 1044B.
Note: Section 1044B may limit the amount that the person may recover for a
contravention of section 1041H (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 1041H; 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: Division 2A also applies proportionate liability to a claim for damages
under this section for a contravention of section 1041H.
(2) An action under subsection (1) may be begun at any time within 6
years after the day on which the cause of action arose.
(3) This section does not affect any liability that a person has under
any other law.
(4) Section 1317S (which provides for relief from liability) applies in
relation to liability under subsection (1) as if:
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Section 1041J
196 Corporations Act 2001
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(a) the sections referred to in subsection (1) were civil penalty
provisions; and
(b) proceedings under subsection (1) were eligible proceedings.
Note: Relief from liability under this section may also be available
(depending on the circumstances) under Division 4.
1041J Sections of this Division have effect independently of each
other
Subject to any express provision to the contrary, the various
sections in this Division have effect independently of each other,
and nothing in any of the sections limits the scope or application of
any of the other sections.
1041K Division applies to certain conduct to the exclusion of State
Fair Trading Acts provisions
(1) This section applies to conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover
document); or
(ii) section 728 (misleading or deceptive fundraising
document); or
(iii) section 1021NA, 1021NB or 1021NC; or
(b) that relates to a disclosure document or statement within the
meaning of section 953A; or
(c) that relates to a disclosure document or statement within the
meaning of section 1022A.
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) This Division operates in relation to conduct to which this section
applies to the exclusion of the provisions of the State Fair Trading
Act of any State or Territory.
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financial services Part 7.10
Proportionate liability for misleading and deceptive conduct Division 2A
Section 1041L
Corporations Act 2001 197
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2A—Proportionate liability for misleading and
deceptive conduct
1041L Application of Division
(1) This Division applies to a claim (an apportionable claim) if the
claim is a claim for damages made under section 1041I for:
(a) economic loss; or
(b) damage to property;
caused by conduct that was done in a contravention of
section 1041H.
(2) For the purposes of this Division, there is a single apportionable
claim in proceedings in respect of the same loss or damage even if
the claim for the loss or damage is based on more than one cause of
action (whether or not of the same or a different kind).
(3) In this Division, a concurrent wrongdoer, in relation to a claim, is
a person who is one of 2 or more persons whose acts or omissions
(or act or omission) caused, independently of each other or jointly,
the damage or loss that is the subject of the claim.
(4) For the purposes of this Division, apportionable claims are limited
to those claims specified in subsection (1).
(5) For the purposes of this Division, it does not matter that a
concurrent wrongdoer is insolvent, is being wound up or has
ceased to exist or died.
1041M Certain concurrent wrongdoers not to have benefit of
apportionment
(1) Nothing in this Division operates to exclude the liability of a
concurrent wrongdoer (an excluded concurrent wrongdoer) in
proceedings involving an apportionable claim if:
(a) the concurrent wrongdoer intended to cause the economic
loss or damage to property that is the subject of the claim; or
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Section 1041N
198 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the concurrent wrongdoer fraudulently caused the economic
loss or damage to property that is the subject of the claim.
(2) The liability of an excluded concurrent wrongdoer is to be
determined in accordance with the legal rules (if any) that (apart
from this Division) are relevant.
(3) The liability of any other concurrent wrongdoer who is not an
excluded concurrent wrongdoer is to be determined in accordance
with the provisions of this Division.
1041N Proportionate liability for apportionable claims
(1) In any proceedings involving an apportionable claim:
(a) the liability of a defendant who is a concurrent wrongdoer in
relation to that claim is limited to an amount reflecting that
proportion of the damage or loss claimed that the court
considers just having regard to the extent of the defendant’s
responsibility for the damage or loss; and
(b) the court may give judgment against the defendant for not
more than that amount.
(2) If the proceedings involve both an apportionable claim and a claim
that is not an apportionable claim:
(a) liability for the apportionable claim is to be determined in
accordance with the provisions of this Division; and
(b) liability for the other claim is to be determined in accordance
with the legal rules, if any, that (apart from this Division) are
relevant.
(3) In apportioning responsibility between defendants in the
proceedings:
(a) the court is to exclude that proportion of the damage or loss
in relation to which the plaintiff is contributorily negligent
under any relevant law; and
(b) the court may have regard to the comparative responsibility
of any concurrent wrongdoer who is not a party to the
proceedings.
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Section 1041O
Corporations Act 2001 199
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) This section applies in proceedings involving an apportionable
claim whether or not all concurrent wrongdoers are parties to the
proceedings.
(5) A reference in this Division to a defendant in proceedings includes
any person joined as a defendant or other party in the proceedings
(except as a plaintiff) whether joined under this Division, under
rules of court or otherwise.
1041O Defendant to notify plaintiff of concurrent wrongdoer of
whom defendant aware
(1) If:
(a) a defendant in proceedings involving an apportionable claim
has reasonable grounds to believe that a particular person (the
other person) may be a concurrent wrongdoer in relation to
the claim; and
(b) the defendant fails to give the plaintiff, as soon as
practicable, written notice of the information that the
defendant has about:
(i) the identity of the other person; and
(ii) the circumstances that may make the other person a
concurrent wrongdoer in relation to the claim; and
(c) the plaintiff unnecessarily incurs costs in the proceedings
because the plaintiff was not aware that the other person may
be a concurrent wrongdoer in relation to the claim;
the court hearing the proceedings may order that the defendant pay
all or any of those costs of the plaintiff.
(2) The court may order that the costs to be paid by the defendant be
assessed on an indemnity basis or otherwise.
1041P Contribution not recoverable from defendant
A defendant against whom judgment is given under this Division
as a concurrent wrongdoer in relation to an apportionable claim:
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Section 1041Q
200 Corporations Act 2001
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(a) cannot be required to contribute to any damages or
contribution recovered from another concurrent wrongdoer in
respect of the apportionable claim (whether or not the
damages or contribution are recovered in the same
proceedings in which judgment is given against the
defendant); and
(b) cannot be required to indemnify any such wrongdoer.
1041Q Subsequent actions
(1) In relation to an apportionable claim, nothing in this Division or
any other law prevents a plaintiff who has previously recovered
judgment against a concurrent wrongdoer for an apportionable part
of any damage or loss from bringing another action against any
other concurrent wrongdoer for that damage or loss.
(2) However, in any proceedings in respect of any such action, the
plaintiff cannot recover an amount of damages that, having regard
to any damages previously recovered by the plaintiff in respect of
the damage or loss, would result in the plaintiff receiving
compensation for damage or loss that is greater than the damage or
loss actually sustained by the plaintiff.
1041R Joining non-party concurrent wrongdoer in the action
(1) The court may give leave for any one or more persons to be joined
as defendants in proceedings involving an apportionable claim.
(2) The court is not to give leave for the joinder of any person who
was a party to any previously concluded proceedings in respect of
the apportionable claim.
1041S Application of Division
Nothing in this Division:
(a) prevents a person being held vicariously liable for a
proportion of an apportionable claim for which another
person is liable; or
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Section 1041S
Corporations Act 2001 201
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(b) prevents a partner from being held severally liable with
another partner for that proportion of an apportionable claim
for which the other partner is liable; or
(c) affects the operation of any other Act to the extent that it
imposes several liability on any person in respect of what
would otherwise be an apportionable claim.
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1042A
202 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—The insider trading prohibitions
Subdivision A—Preliminary
1042A Definitions
In this Division:
able to be traded has a meaning affected by section 1042E.
Division 3 financial products means:
(a) securities; or
(b) derivatives; or
(c) interests in a managed investment scheme; or
(ca) debentures, stocks or bonds issued or proposed to be issued
by a government; or
(d) superannuation products, other than those prescribed by
regulations made for the purposes of this paragraph; or
(e) any other financial products that are able to be traded on a
financial market.
generally available, in relation to information, has the meaning
given by section 1042C.
information includes:
(a) matters of supposition and other matters that are
insufficiently definite to warrant being made known to the
public; and
(b) matters relating to the intentions, or likely intentions, of a
person.
inside information means information in relation to which the
following paragraphs are satisfied:
(a) the information is not generally available;
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Section 1042B
Corporations Act 2001 203
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(b) if the information were generally available, a reasonable
person would expect it to have a material effect on the price
or value of particular Division 3 financial products.
material effect, in relation to a reasonable person’s expectations of
the effect of information on the price or value of Division 3
financial products, has the meaning given by section 1042D.
procure has a meaning affected by section 1042F.
relevant Division 3 financial products, in relation to particular
inside information, means the Division 3 financial products
referred to in paragraph (b) of the definition of inside information.
1042B Application of Division
This Division applies to:
(a) acts and omissions within this jurisdiction in relation to
Division 3 financial products (regardless of where the issuer
of the products is formed, resides or located and of where the
issuer carries on business); and
(b) acts and omissions outside this jurisdiction (and whether in
Australia or not) in relation to Division 3 financial products
issued by:
(i) a person who carries on business in this jurisdiction; or
(ii) a body corporate that is formed in this jurisdiction.
1042C When information is generally available
(1) For the purposes of this Division, information is generally
available if:
(a) it consists of readily observable matter; or
(b) both of the following subparagraphs apply:
(i) it has been made known in a manner that would, or
would be likely to, bring it to the attention of persons
who commonly invest in Division 3 financial products
of a kind whose price might be affected by the
information; and
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Section 1042D
204 Corporations Act 2001
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(ii) since it was made known, a reasonable period for it to
be disseminated among such persons has elapsed; or
(c) it consists of deductions, conclusions or inferences made or
drawn from either or both of the following:
(i) information referred to in paragraph (a);
(ii) information made known as mentioned in
subparagraph (b)(i).
(2) None of the paragraphs of subsection (1) limits the generality of
any of the other paragraphs of that subsection.
1042D When a reasonable person would take information to have a
material effect on price or value of Division 3 financial
products
For the purposes of this Division, a reasonable person would be
taken to expect information to have a material effect on the price
or value of particular Division 3 financial products if (and only if)
the information would, or would be likely to, influence persons
who commonly acquire Division 3 financial products in deciding
whether or not to acquire or dispose of the first-mentioned
financial products.
1042E Division 3 financial products taken to be able to be traded
despite suspensions or section 794D directions
Particular Division 3 financial products that are ordinarily able to
be traded on a licensed market are taken, for the purposes of this
Division, to be able to be traded on that market even though
trading in those products on that market is suspended by action
taken by the market licensee, or is contrary to a direction given to
the market licensee by ASIC under subsection 794D(2) or 798J(2).
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The insider trading prohibitions Division 3
Section 1042F
Corporations Act 2001 205
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1042F Inciting, inducing or encouraging an act or omission
constitutes procuring the omission
(1) For the purposes of this Division, but without limiting the meaning
that the expression procure has apart from this section, if a person
incites, induces, or encourages an act or omission by another
person, the first-mentioned person is taken to procure the act or
omission by the other person.
(2) Subsection (1) does not limit the application in relation to
provisions in this Division of:
(a) section 6 of the Crimes Act 1914; or
(b) section 11.1, 11.2, 11.2A, 11.4 or 11.5 of the Criminal Code.
1042G Information in possession of officer of body corporate
(1) For the purposes of this Division:
(a) a body corporate is taken to possess any information which
an officer of the body corporate possesses and which came
into his or her possession in the course of the performance of
duties as such an officer; and
(b) if an officer of a body corporate knows any matter or thing
because he or she is an officer of the body corporate, it is to
be presumed that the body corporate knows that matter or
thing; and
(c) if an officer of a body corporate, in that capacity, is reckless
as to a circumstance or result, it is to be presumed that the
body corporate is reckless as to that circumstance or result;
and
(d) for the purposes of paragraph 1043M(2)(b), if an officer of a
body corporate ought reasonably to know any matter or thing
because he or she is an officer of the body corporate, it is to
be presumed that the body corporate ought reasonably to
know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
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Division 3 The insider trading prohibitions
Section 1042H
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1042H Information in possession of partner or employee of
partnership
(1) For the purposes of this Division:
(a) a member of a partnership is taken to possess any
information:
(i) which another member of the partnership possesses and
which came into the other member’s possession in the
other member’s capacity as a member of the
partnership; or
(ii) which an employee of the partnership possesses and
which came into his or her possession in the course of
the performance of duties as such an employee; and
(b) if a member or employee of a partnership knows any matter
or thing because the member or employee is such a member
or employee, it is to be presumed that every member of the
partnership knows that matter or thing; and
(c) if a member or employee of a partnership, in that capacity, is
reckless as to a circumstance or result, it is to be presumed
that every member of the partnership is reckless as to that
circumstance or result; and
(d) for the purposes of paragraph 1043M(2)(b), if a member or
employee of a partnership ought reasonably to know any
matter or thing because he or she is such a member or
employee, it is to be presumed that every member of the
partnership ought reasonably to know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
Subdivision B—The prohibited conduct
1043A Prohibited conduct by person in possession of inside
information
(1) Subject to this Subdivision, if:
(a) a person (the insider) possesses inside information; and
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(b) the insider knows, or ought reasonably to know, that the
matters specified in paragraphs (a) and (b) of the definition of
inside information in section 1042A are satisfied in relation
to the information;
the insider must not (whether as principal or agent):
(c) apply for, acquire, or dispose of, relevant Division 3 financial
products, or enter into an agreement to apply for, acquire, or
dispose of, relevant Division 3 financial products; or
(d) procure another person to apply for, acquire, or dispose of,
relevant Division 3 financial products, or enter into an
agreement to apply for, acquire, or dispose of, relevant
Division 3 financial products.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see sections 1043N and 1317S.
(2) Subject to this Subdivision, if:
(a) a person (the insider) possesses inside information; and
(b) the insider knows, or ought reasonably to know, that the
matters specified in paragraphs (a) and (b) of the definition of
inside information in section 1042A are satisfied in relation
to the information; and
(c) relevant Division 3 financial products are able to be traded on
a financial market operated in this jurisdiction;
the insider must not, directly or indirectly, communicate the
information, or cause the information to be communicated, to
another person if the insider knows, or ought reasonably to know,
that the other person would or would be likely to:
(d) apply for, acquire, or dispose of, relevant Division 3 financial
products, or enter into an agreement to apply for, acquire, or
dispose of, relevant Division 3 financial products; or
(e) procure another person to apply for, acquire, or dispose of,
relevant Division 3 financial products, or enter into an
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Section 1043B
208 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
agreement to apply for, acquire, or dispose of, relevant
Division 3 financial products.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see sections 1043N and 1317S.
(3) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1) or (2):
(a) paragraph (1)(a) is a physical element, the fault element for
which is as specified in paragraph (1)(b); and
(b) paragraph (2)(a) is a physical element, the fault element for
which is as specified in paragraph (2)(b).
1043B Exception for withdrawal from registered scheme
Subsection 1043A(1) does not apply in respect of a member’s
withdrawal from a registered scheme if the amount paid to the
member on withdrawal is calculated (so far as is reasonably
practicable) by reference to the underlying value of the assets of
the financial or business undertaking or scheme, common
enterprise, investment contract or time-sharing scheme to which
the member’s interest relates, less any reasonable charge for
acquiring the member’s interest.
1043C Exception for underwriters
(1) Subsection 1043A(1) does not apply in respect of:
(a) applying for or acquiring securities or managed investment
products under an underwriting agreement or a
sub-underwriting agreement; or
(b) entering into an agreement referred to in paragraph (a); or
(c) disposing of securities or managed investment products
acquired under an agreement referred to in paragraph (a).
(2) Subsection 1043A(2) does not apply in respect of:
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Section 1043D
Corporations Act 2001 209
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the communication of information in relation to securities or
managed investment products to a person solely for the
purpose of procuring the person to enter into an underwriting
agreement in relation to any such securities or managed
investment products; or
(b) the communication of information in relation to securities or
managed investment products by a person who may be
required under an underwriting agreement to apply for or
acquire any such securities or managed investment products
if the communication is made to another person solely for the
purpose of procuring the other person to do either or both of
the following:
(i) enter into a sub-underwriting agreement in relation to
any such securities or managed investment products;
(ii) apply for any such securities or managed investment
products.
1043D Exception for acquisition pursuant to legal requirement
Subsection 1043A(1) does not apply in respect of the acquisition of
financial products pursuant to a requirement imposed by this Act.
1043E Exception for information communicated pursuant to a legal
requirement
Subsection 1043A(2) does not apply in respect of the
communication of information pursuant to a requirement imposed
by the Commonwealth, a State, a Territory or any regulatory
authority.
1043F Chinese wall arrangements by bodies corporate
A body corporate does not contravene subsection 1043A(1) by
entering into a transaction or agreement at any time merely because
of information in the possession of an officer or employee of the
body corporate if:
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Section 1043G
210 Corporations Act 2001
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(a) the decision to enter into the transaction or agreement was
taken on its behalf by a person or persons other than that
officer or employee; and
(b) it had in operation at that time arrangements that could
reasonably be expected to ensure that the information was
not communicated to the person or persons who made the
decision and that no advice with respect to the transaction or
agreement was given to that person or any of those persons
by a person in possession of the information; and
(c) the information was not so communicated and no such advice
was so given.
1043G Chinese wall arrangements by partnerships etc.
(1) The members of a partnership do not contravene
subsection 1043A(1) by entering into a transaction or agreement at
any time merely because one or more (but not all) of the members,
or an employee or employees of the partnership, are in actual
possession of information if:
(a) the decision to enter into the transaction or agreement was
taken on behalf of the partnership by any one or more of the
following persons:
(i) a member or members who are taken to have possessed
the information merely because another member or
other members, or an employee or employees of the
partnership, were in possession of the information;
(ii) an employee or employees of the partnership who was
not or were not in possession of the information; and
(b) the partnership had in operation at that time arrangements
that could reasonably be expected to ensure that the
information was not communicated to the person or persons
who made the decision and that no advice with respect to the
transaction or agreement was given to that person or any of
those persons by a person in possession of the information;
and
(c) the information was not so communicated and no such advice
was so given.
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Section 1043H
Corporations Act 2001 211
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(2) A member of a partnership does not contravene
subsection 1043A(1) by entering into a transaction or agreement
otherwise than on behalf of the partnership merely because the
member is taken to possess information that is in the possession of
another member or an employee of the partnership.
1043H Exception for knowledge of person’s own intentions or
activities
A natural person does not contravene subsection 1043A(1) by
entering into a transaction or agreement in relation to financial
products issued by another person merely because the person is
aware that he or she proposes to enter into, or has previously
entered into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
1043I Exception for bodies corporate
(1) A body corporate does not contravene subsection 1043A(1) by
entering into a transaction or agreement in relation to financial
products issued by another person merely because the body
corporate is aware that it proposes to enter into, or has previously
entered into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
(2) Subject to subsection (3), a body corporate does not contravene
subsection 1043A(1) by entering into a transaction or agreement in
relation to financial products issued by another person merely
because an officer or employee of the body corporate is aware that
the body corporate proposes to enter into, or has previously entered
into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
(3) Subsection (2) does not apply unless the officer or employee of the
body corporate became aware of the matters referred to in that
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Section 1043J
212 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
subsection in the course of the performance of duties as such an
officer or employee.
1043J Exception for officers or agents of body corporate
(1) Subject to subsection (2), a person (the first person) does not
contravene subsection 1043A(1) by entering into a transaction or
agreement on behalf of a person (the second person) in relation to
financial products issued by another person (the third person)
merely because the first person is aware that the second person
proposes to enter into, or has previously entered into or proposed to
enter into, one or more transactions or agreements in relation to
financial products issued by the third person or by a fourth person.
(2) Subsection (1) does not apply unless the first person became aware
of the matters referred to in that subsection in the course of the
performance of duties as an officer or employee of the second
person or in the course of acting as an agent of the second person.
1043K Transactions by holder of financial services licence or a
representative of the holder of such a licence
A person (the agent) does not contravene subsection 1043A(1) by
applying for, acquiring, or disposing of, or entering into an
agreement to apply for, acquire, or dispose of, financial products
that are able to be traded on a licensed market if:
(a) the agent is a financial services licensee or a representative of
a financial services licensee; and
(b) the agent entered into the transaction or agreement concerned
on behalf of another person (the principal) under a specific
instruction by the principal to enter into that transaction or
agreement; and
(c) the licensee had in operation, at the time when that
transaction or agreement was entered into, arrangements that
could reasonably be expected to ensure that any information
in the possession of the licensee, or of any representative of
the licensee, as a result of which the person in possession of
the information would be prohibited by subsection 1043A(1)
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Section 1043L
Corporations Act 2001 213
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from entering into that transaction or agreement was not
communicated to the agent and that no advice with respect to
the transaction or agreement was given to the principal or to
the agent by a person in possession of the information; and
(d) the information was not so communicated and no such advice
was so given; and
(e) the principal is not an associate of the licensee or of any
representative of the licensee;
but nothing in this section affects the application of
subsection 1043A(1) in relation to the principal.
1043L A specific situation in which a compensation order under
section 1317HA may be made
Situation to which this section applies
(1) If:
(a) a person (the insider) possesses information that is not
generally available but, if the information were generally
available, a reasonable person would expect it to have a
material effect on the price or value of Division 3 financial
products (other than derivatives); and
(b) the insider knows that, or is reckless as to whether:
(i) the information is not generally available; and
(ii) if the information were generally available, it might
have a material effect on the price or value of those
Division 3 financial products; and
(c) the insider (whether as principal or agent) in contravention of
subsection 1043A(1):
(i) applies for, acquires, or disposes of, or enters into an
agreement to apply for, acquire, or dispose of, any such
Division 3 financial products; or
(ii) procures another person to apply for, acquire, or dispose
of, or to enter into an agreement to apply for, acquire, or
dispose of, any such Division 3 financial products;
the following subsections apply.
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043L
214 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Compensation for damage suffered by person applying for the
Division 3 financial products
(2) If the insider applied for or agreed to apply for, or procured another
person to apply for or to agree to apply for, the Division 3 financial
products, the issuer of the products may, by action under
section 1317HA, recover as compensation for damage suffered by
the issuer, the amount (if any) by which the price described in the
first of the following paragraphs was less than the price described
in the second of those paragraphs:
(a) the price at which the products were applied for, or agreed to
be applied for, by the insider or the other person;
(b) the price at which they would have been likely to have been
disposed of in a disposal made at the time of the application
or the time of the agreement, as the case may be, if the
information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
Compensation for damage suffered by person disposing of the
Division 3 financial products
(3) If the insider acquired or agreed to acquire, or procured another
person to acquire or to agree to acquire, the Division 3 financial
products from a person (in this subsection and subsection (5) called
the disposer) who did not possess the information, the disposer
may, by action under section 1317HA, recover, as compensation
for damage suffered by the disposer, the amount (if any) by which
the price described in the first of the following paragraphs was less
than the price described in the second of those paragraphs:
(a) the price at which the financial products were acquired, or
agreed to be acquired, by the insider or the other person from
the disposer;
(b) the price at which they would have been likely to have been
acquired in an acquisition made at the time of the
first-mentioned acquisition or the time of the agreement, as
the case may be, if the information had been generally
available.
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Financial services and markets Chapter 7
Market misconduct and other prohibited conduct relating to financial products and
financial services Part 7.10
The insider trading prohibitions Division 3
Section 1043L
Corporations Act 2001 215
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
The action may be taken against the insider, the other person or
any other person involved in the contravention.
Compensation for damage suffered by person acquiring the
Division 3 financial products
(4) If the insider disposed of or agreed to dispose of, or procured
another person to dispose of or to agree to dispose of, the
Division 3 financial products to a person (in this subsection and
subsection (5) called the acquirer) who did not possess the
information, the acquirer may, by action under section 1317HA,
recover, as compensation for damage suffered by the acquirer, the
amount (if any) by which the price described in the first of the
following paragraphs was greater than the price described in the
second of those paragraphs:
(a) the price at which the financial products were disposed of, or
agreed to be disposed of, by the insider or the other person to
the acquirer;
(b) the price at which they would have been likely to have been
disposed of in a disposal made at the time of the
first-mentioned disposal or the time of the agreement, as the
case may be, if the information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
Additional situations in which issuer may recover
(5) In addition to any action that may be brought as provided by
subsection (3) or (4), the issuer of the financial products may, in
the case of an acquisition or disposal of, or an agreement to acquire
or dispose of, the financial products by the insider or another
person in the circumstances mentioned in that subsection, by action
under section 1317HA, recover, as compensation for damage
suffered by the issuer:
(a) in the case of an acquisition or agreement to acquire the
financial products—the amount (if any) by which the price
described in the first of the following subparagraphs was less
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043L
216 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
than the price described in the second of those
subparagraphs:
(i) the price at which the financial products were acquired,
or agreed to be acquired, by the insider or other person
from the disposer;
(ii) the price at which they were likely to have been
acquired in an acquisition made at the time of the
first-mentioned acquisition or the time of the agreement,
as the case may be, if the information had been
generally available; or
(b) in the case of a disposal or an agreement to dispose of
financial products—the amount (if any) by which the price
described in the first of the following subparagraphs was
greater than the price described in the second of those
subparagraphs:
(i) the price at which the financial products were disposed
of, or agreed to be disposed of, by the insider or other
person to the acquirer;
(ii) the price at which they would have been likely to have
been disposed of at the time of the first-mentioned
disposal or the time of the agreement, as the case may
be, if the information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
ASIC may take action for benefit of issuer
(6) ASIC may, if it considers that it is in the public interest to do so,
bring an action in accordance with subsection (2) or (5) in the
name of, and for the benefit of, an issuer of Division 3 financial
products for the recovery of an amount that the issuer is entitled to
recover by virtue of that subsection.
Relief from liability
(7) In an action brought against a person in accordance with this
section because the person entered into, or procured another person
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financial services Part 7.10
The insider trading prohibitions Division 3
Section 1043L
Corporations Act 2001 217
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
to enter into, a transaction or agreement at a time when certain
information was in the first-mentioned person’s possession, the
court may relieve the person wholly or partly from liability if it
appears to the court that the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i).
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (2) loss
(8) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible
entity for a registered scheme;
brings an action in accordance with subsection (2) in respect of a
subscription for, or any agreement to subscribe for, any interests in
the scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the
persons who, at the time of the subscription or agreement,
had rights or interests in the relevant financial or business
undertaking or scheme, common enterprise, investment
contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that,
at that time, their individual rights or interests bore to the
total of all those rights or interests.
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (5) loss
(9) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible
entity for a registered scheme;
brings an action in accordance with subsection (5) in respect of an
acquisition or disposal of, or an agreement to acquire or dispose of,
interests in the scheme, any amount recovered in the action:
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043M
218 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) is to be held by the responsible entity on behalf of the
persons who, at the time of the disposal, acquisition or
agreement, had rights or interests in the relevant financial or
business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that,
at that time, their individual rights or interests bore to the
total of all those rights or interests.
(10) Any right of action that a person has by virtue of this section is in
addition to any right that any other person has under
section 1317HA.
1043M Defences to prosecution for an offence
(1) In a prosecution of a person for an offence based on
subsection 1043A(1) or (2), it is not necessary for the prosecution
to prove the non-existence of facts or circumstances which, if they
existed, would, by virtue of section 1043B, 1043C, 1043D, 1043E,
1043F, 1043G, 1043H, 1043I, 1043J or 1043K, preclude the act or
omission from constituting a contravention of subsection 1043A(1)
or (2), as the case may be, but it is a defence if the facts or
circumstances existed.
Note: A defendant bears an evidential burden in relation to the facts or
circumstances. See subsection 13.3(3) of the Criminal Code.
(2) In a prosecution brought against a person for an offence based on
subsection 1043A(1) because the person entered into, or procured
another person to enter into, a transaction or agreement at a time
when certain information was in the first-mentioned person’s
possession:
(a) it is a defence if the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other party to the transaction or
agreement knew, or ought reasonably to have known, of the
information before entering into the transaction or agreement.
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Financial services and markets Chapter 7
Market misconduct and other prohibited conduct relating to financial products and
financial services Part 7.10
The insider trading prohibitions Division 3
Section 1043N
Corporations Act 2001 219
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters
referred to in paragraphs (a) and (b). See subsection 13.3(3) of the
Criminal Code.
(3) In a prosecution against a person for an offence based on
subsection 1043A(2) because the person communicated
information, or caused information to be communicated, to another
person:
(a) it is a defence if the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other person knew, or ought reasonably
to have known, of the information before the information was
communicated.
Note: A defendant bears an evidential burden in relation to the matters
referred to in paragraphs (a) and (b). See subsection 13.3(3) of the
Criminal Code.
1043N Relief from civil liability
In proceedings against a person under Part 9.4B (including under
section 1317HA) relating to a contravention of
subsection 1043A(1) or (2), the court may relieve the person
wholly or partly from liability if it appears to the court that:
(a) in any case—the circumstances in any of the sections referred
to in subsection 1043M(1) applied; or
(b) in the case of subsection 1043A(1)—the circumstance
referred to in paragraph 1043M(2)(a) or (b) applied; or
(c) in the case of subsection 1043A(2)—the circumstance
referred to in paragraph 1043M(3)(a) or (b) applied.
1043O Powers of Court
If, in a proceeding instituted under this Act, the Court finds that a
contravention of section 1043A has occurred, the Court may, in
addition to any other orders that it may make under any other
provision of this Act, make such order or orders as it thinks just,
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043O
220 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
including, but without limiting the generality of the above, any one
or more of the following orders:
(a) an order restraining the exercise of rights attached to
Division 3 financial products;
(b) an order restraining the issue of Division 3 financial
products;
(c) an order restraining the acquisition or disposal of Division 3
financial products;
(d) an order directing the disposal of Division 3 financial
products;
(e) an order vesting Division 3 financial products in ASIC;
(f) an order cancelling an agreement for the acquisition or
disposal of Division 3 financial products;
(g) an order cancelling an Australian financial services licence;
(h) for the purpose of securing compliance with any other order
made under this section, an order directing a person to do or
refrain from doing a specified act.
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Market misconduct and other prohibited conduct relating to financial products and
financial services Part 7.10
Defences, relief and limits on liability Division 4
Section 1044A
Corporations Act 2001 221
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Division 4—Defences, relief and limits on liability
1044A General defence or relief for publishers
(1) It is a defence to a prosecution for an offence based on a provision
of this Part committed by the publication of an advertisement if:
(a) the defendant was, at that time, a person whose business it
was to publish or arrange for the publication of
advertisements; and
(b) they received the advertisement for publication in the
ordinary course of that business and did not know, and had
no reason to believe, that its publication would amount to an
offence against that provision.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (1). See subsection 13.3(3) of the Criminal Code.
(2) In proceedings against a person under:
(a) Part 9.4B (including under section 1317H or 1317HA)
relating to a contravention of a civil penalty provision that is
in this Part; or
(b) section 1041I relating to a contravention of a provision to
which that section applies;
the court may relieve the person wholly or partly from liability if it
appears to the court that the circumstances mentioned in
paragraphs (1)(a) and (b) applied.
1044B Limit on liability for misleading or deceptive conduct
State or Territory professional standards law limits liability
(1) A professional standards law of a State, the Australian Capital
Territory or the Northern Territory applies to limit occupational
liability relating to an action for contravention of section 1041H in
the same way as it limits occupational liability arising under a law
of the State or Territory.
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 4 Defences, relief and limits on liability
Section 1044B
222 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Section 1041H prohibits misleading or deceptive conduct by a person
in relation to a financial product or financial service.
(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 1041H, 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:
modifications includes additions, omissions and substitutions.
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.
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Market misconduct and other prohibited conduct relating to financial products and
financial services Part 7.10
Defences, relief and limits on liability Division 4
Section 1044B
Corporations Act 2001 223
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
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.
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Chapter 7 Financial services and markets
Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 5 Miscellaneous
Section 1045A
224 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Miscellaneous
1045A Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Financial services and markets Chapter 7
Title and transfer Part 7.11
Title to certain securities Division 1
Section 1070A
Corporations Act 2001 225
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Part 7.11—Title and transfer
Division 1—Title to certain securities
1070A Nature of shares and certain other interests in a company or
registered scheme
(1) A share, other interest of a member in a company or interest of a
person in a registered scheme:
(a) is personal property; and
(b) is transferable or transmissible as provided by:
(i) the company’s, or scheme’s, constitution; or
(ii) the operating rules of a prescribed CS facility if they are
applicable; and
(c) is capable of devolution by will or by operation of law.
(2) Paragraph (1)(c) has effect subject to:
(a) in the case of a company:
(i) the company’s constitution (if any); and
(ii) any replaceable rules that apply to the company; and
(iii) the operating rules of a prescribed CS facility if they
apply to the share or interest; and
(b) in the case of a scheme:
(i) the scheme’s constitution; and
(ii) the operating rules of a prescribed CS facility if they
apply to the interest.
(3) Subject to subsection (1):
(a) the laws applicable to ownership of, and dealing with,
personal property apply to a share, other interest of a member
in a company or interest of a person in a registered scheme as
they apply to other property; and
(b) equitable interests in respect of a share, interest of a member
in a company or other interest of a person in a registered
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Chapter 7 Financial services and markets
Part 7.11 Title and transfer
Division 1 Title to certain securities
Section 1070B
226 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
scheme may be created, dealt with and enforced as in the
case of other personal property.
(4) For the purposes of any law, a share, other interest of a member in
a company or interest of a person in a registered scheme is taken to
be situated:
(a) if the share, interest in a company, or interest in a registered
scheme is entered on the register kept under section 169—in
the State or Territory where that register is kept; or
(b) if the share or interest in the company is entered on an
overseas branch register kept under section 178—in the
foreign country where that register is kept.
1070B Numbering of shares
(1) Except as provided in subsection (2), a company must ensure that
each share in the company is distinguished by an appropriate
number.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Despite subsection (1):
(a) if at any time all the issued shares in a company, or all the
issued shares in a company of a particular class:
(i) are fully paid up; and
(ii) rank equally for all purposes;
none of those shares is required to have a distinguishing
number so long as each of those shares remains fully paid up,
and ranks equally for all purposes with all shares of the same
class for the time being issued and fully paid up; and
(b) if:
(i) all the issued shares in a company are evidenced by
certificates in accordance with section 1070C; and
(ii) each certificate is distinguished by an appropriate
number; and
(iii) that number is recorded in the register of members;
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Title and transfer Part 7.11
Title to certain securities Division 1
Section 1070C
Corporations Act 2001 227
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
none of those shares is required to have a distinguishing
number; and
(c) a share need not have a distinguishing number if the
operating rules of a prescribed CS facility through which it is
able to be transferred provide that the share need not have a
distinguishing number.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1070C Matters to be specified in share certificate
(1) A company must ensure that a certificate it issues specifying the
shares held by a member of the company states:
(a) the name of the company and the fact that it is registered
under this Act; and
(b) the class of the shares; and
(c) the amount (if any) unpaid on the shares.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A certificate issued in accordance with subsection (1) specifying
shares held by a member of a company is prima facie evidence of
the title of the member to the shares.
(3) A failure to comply with subsection (1) does not affect the rights of
a holder of shares.
1070D Loss or destruction of title documents for certain securities
(1) This section applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme.
(2) This section applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
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Chapter 7 Financial services and markets
Part 7.11 Title and transfer
Division 1 Title to certain securities
Section 1070D
228 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) references to the directors of a company were instead
references to the directors of the responsible entity of the
registered scheme.
(3) A company must, in accordance with subsection (4), issue a
duplicate certificate or other title document for securities if:
(a) the certificate or document is lost or destroyed; and
(b) the owner of the securities applies to the company for the
duplicate in accordance with subsection (5); and
(c) the owner complies with any requirements made in
accordance with subsection (6).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The company must issue the duplicate:
(a) if the company requires the payment of an amount not
exceeding the amount prescribed by regulations made for the
purposes of this paragraph—within 21 days after the payment
is received by the company or within such longer period as
ASIC approves; or
(b) in a case to which paragraph (a) does not apply—within 21
days after the application is made or within such longer
period as ASIC approves.
(5) The application must be accompanied by:
(a) a statement in writing that the certificate or other document:
(i) has been lost or destroyed; and
(ii) has not been pledged, sold or otherwise disposed of; and
(b) if the certificate or other document has been lost—a
statement in writing that proper searches have been made;
and
(c) an undertaking in writing that if the certificate or other
document is found or received by the owner it will be
returned to the company.
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Title and transfer Part 7.11
Title to certain securities Division 1
Section 1070D
Corporations Act 2001 229
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) The directors of the company may, before accepting an application
for the issue of a duplicate certificate, require the applicant to do
either or both of the following:
(a) place an advertisement in a daily newspaper circulating in a
place specified by the directors stating that:
(i) the certificate or other document has been lost or
destroyed; and
(ii) the owner intends, after the end of 14 days after the
publication of the advertisement, to apply to the
company for a duplicate certificate;
(b) give a bond for an amount equal to at least the current market
value of the securities indemnifying the company against loss
following the production of the original certificate or other
document.
(7) If:
(a) a certificate or other title document for securities is cancelled
in reliance on the operating rules of a prescribed CS facility;
and
(b) having regard to those provisions, the certificate or other
document should not have been cancelled;
this section applies to the certificate or other document as though it
were destroyed on its cancellation.
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Chapter 7 Financial services and markets
Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071A
230 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Transfer of certain securities
Subdivision A—General provisions
1071A Application of the Subdivision to certain securities
(1) This Subdivision applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme.
(2) This Subdivision applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
(b) references to the constitution of a company were instead
references to the constitution of the registered scheme; and
(c) references to members of a company were instead references
to members of the registered scheme.
1071B Instrument of transfer
(1) This section does not apply to a transfer of a security through a
prescribed CS facility.
(2) Subject to subsection (5), a company must only register a transfer
of securities if a proper instrument of transfer (see subsections (3)
and (4)) has been delivered to the company. This is so despite:
(a) anything in its constitution; or
(b) anything in a deed relating to debentures.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) An instrument of transfer is not a proper instrument of transfer for
the purposes of subsection (2) if it does not show the details,
specified in the regulations, in relation to the company concerned.
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Title and transfer Part 7.11
Transfer of certain securities Division 2
Section 1071B
Corporations Act 2001 231
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If the transfer of the securities is covered by Division 3 of this Part,
then (in addition to subsection (3)), the instrument is not a proper
instrument of transfer for the purposes of subsection (2) unless it is
a sufficient transfer of the securities under regulations made for the
purposes of that Division.
(5) Subsection (2) does not prejudice the power of the company to
register, as the holder of securities, a person to whom the right to
the securities has devolved by will or by operation of law.
(6) Subsections (7) to (13) deal with a transfer of a security of a dead
holder by the dead holder’s personal representative. They deal with
the transfer differently depending on whether the personal
representative is a local representative or not.
(7) The personal representative is a local representative if the
representative is duly constituted as a personal representative under
the law of the State or Territory in which the security is situated.
Note: Subsection 1070A(4) provides that the security is situated where the
relevant register is kept.
(8) If the personal representative is a local representative, a transfer of
the security by the representative is as valid as if the representative
had been registered as the holder of the security at the time when
the instrument of transfer was executed.
(9) If:
(a) the personal representative is not a local representative; and
(b) the representative:
(i) executes an instrument of transfer of the security to the
representative or to another person; and
(ii) delivers the instrument to the company; and
(iii) delivers to the company with the instrument a statement
in writing made by the representative to the effect that,
to the best of the representative’s knowledge,
information and belief, no grant of representation of the
estate of the deceased holder has been applied for or
made in the State or Territory in which the security is
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071C
232 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
located and no application for such a grant will be
made; and
(c) the statement is made within 3 months immediately before
the date on which the statement is delivered to the company;
the company must (subject to subsection (10)) register the transfer
and pay to the representative any dividends or other money accrued
in respect of the security up to the time when the instrument was
executed.
(10) Subsection (9) does not operate so as to require the company to do
anything that it would not have been required to do if the personal
representative were a local representative.
(11) A transfer or payment made under subsection (9) and a receipt or
acknowledgment of such a payment is, for all purposes, as valid
and effectual as if the personal representative were a local
representative.
(12) For the purposes of this section, an application by a personal
representative of a dead person for registration as the holder of a
security in place of the dead person is taken to be an instrument of
transfer effecting a transfer of the security to the personal
representative.
(13) The production to a company of a document that is, under the law
of a State or Territory, sufficient evidence of probate of the will, or
letters of administration of the estate, of a dead person having been
granted to a person, is sufficient evidence of the grant (for the
company’s purposes). This is so despite:
(a) anything in its constitution; or
(b) in a deed relating to debentures.
1071C Occupation need not appear in transfer document, register
etc.
(1) A document transferring securities need not state the occupation of
the transferor or transferee and, if it is signed by a person, the
signature need not be witnessed.
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Transfer of certain securities Division 2
Section 1071D
Corporations Act 2001 233
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Subsection (1) applies despite anything in:
(a) the constitution of:
(i) a company; or
(ii) a body referred to in paragraph 1073C(a) or (b); or
(b) the terms and conditions on which securities are created or
issued.
(3) The omission from a register, certificate, document transferring
securities or other document relating to a security, of a statement of
the occupation of a person who is, or is entitled to be, registered as
the holder of the security does not breach any law, constitution,
trust deed or other document relating to the securities.
1071D Registration of transfer at request of transferor
(1) A written application by the transferor of a security of a company
for the transferee’s name to be entered in the appropriate register is
as effective (for the company’s purposes) as if it were an
application by the transferee. The application is subject to the same
conditions as it would be if it had been made by the transferee.
(2) If the transferor of a security of a company requests the company
in writing to do so, the company must, by written notice, require a
person who has possession, custody or control of either or both of
the following:
(a) any title documents for the security;
(b) the instrument of transfer of the security;
to bring it or them into the office of the company within a specified
period, to have the document cancelled or rectified and the transfer
registered or otherwise dealt with.
(3) The period specified under subsection (2) must be not less than 7
and not more than 28 days after the date of the notice.
(4) If a person refuses or fails to comply with a notice given under
subsection (2), the transferor may apply to the Court for the issue
of a summons for that person to appear before the Court and show
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071E
234 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
cause why the documents mentioned in the notice should not be
delivered up or produced as required by the notice.
(5) The Court may:
(a) if the person appears:
(i) examine the person upon oath or affirmation; and
(ii) receive other evidence; and
(b) if the person does not appear after being duly served with the
summons—receive evidence in the person’s absence; and
(c) in either case order the person to deliver up such documents
to the company upon such terms or conditions as the Court
considers just and reasonable.
The costs of the summons and of proceedings on the summons are
in the discretion of the Court.
(6) Lists of documents required to be brought in under subsection (2)
but not brought in in accordance with a requirement made under
subsection (2) or delivered up in accordance with an order under
subsection (5), must be:
(a) exhibited in the office of the company; and
(b) advertised in the Gazette and in such newspapers and at such
times as the company thinks fit.
1071E Notice of refusal to register transfer
If a company refuses to register a transfer of a security of the
company, it must, within 2 months after the date on which the
transfer was lodged with it, give the transferee notice of the refusal.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
1071F Remedy for refusal to register transfer or transmission
(1) If a relevant authority in relation to a company:
(a) refuses or fails to register; or
(b) refuses or fails to give its consent or approval to the
registration of;
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Section 1071G
Corporations Act 2001 235
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
a transfer or transmission of securities of the company, the
transferee or transmittee may apply to the Court for an order under
this section.
(2) If the Court is satisfied on the application that the refusal or failure
was without just cause, the Court may:
(a) order that the transfer or transmission be registered; or
(b) make such other order as it thinks just and reasonable,
including:
(i) in the case of a transfer or transmission of shares—an
order providing for the purchase of the shares by a
specified member of the company or by the company;
and
(ii) in the case of a purchase by the company—an order
providing for the reduction accordingly of the capital of
the company.
(3) In this section:
relevant authority, in relation to a company, means:
(a) a person who has, 2 or more persons who together have, or a
body that has, authority to register a transfer or transmission
of securities of the company; or
(b) a person, 2 or more persons, or a body, whose consent or
approval is required before a transfer or transmission of
securities of the company is registered.
1071G Certification of transfers
(1) The certification by a company of an instrument of transfer of
securities of the company:
(a) is taken as a representation by the company to any person
acting on the faith of the certification that there have been
produced to the company such documents as on the face of
them show prima facie title to the securities in the transferor
named in the instrument of transfer; and
(b) is not taken as a representation that the transferor has any
title to the securities.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071G
236 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) If a person acts on the faith of a false certification by a company
made negligently, the company is under the same liability to the
person as if the certification had been made fraudulently.
(3) A certification may be expressed to be limited to 42 days or any
longer period from the date of certification. If it is, the company
and its officers and employees are not, in the absence of fraud,
liable in respect of the registration of any transfer of securities
comprised in the certification after the end of:
(a) the period so limited; or
(b) any extension of that period given by the company;
if the instrument of transfer has not, within that period, been
lodged with the company for registration.
(4) For the purposes of this section:
(a) an instrument of transfer is taken to be certified if it bears the
words “certificate lodged” or words to the like effect; and
(b) the certification of an instrument of transfer is taken to be
made by a company if:
(i) the person issuing the instrument is a person authorised
to issue certified instruments of transfer on the
company’s behalf; and
(ii) the certification is signed by a person authorised to
certify transfers on the company’s behalf or by an
officer of the company or of a body corporate so
authorised; and
(c) a certification that purports to be authenticated by a person’s
signature or initials (whether handwritten or not) is taken to
be signed by the person unless it is shown that the signature
or initials:
(i) was not or were not placed there by the person; and
(ii) was not or were not placed there by any other person
authorised to use the signature or initials;
for the purpose of certifying transfers on the company’s
behalf.
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Section 1071H
Corporations Act 2001 237
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1071H Duties of company with respect to issue of certificates
(1) Subject to subsection (2), within 2 months after a company issues a
security, the company must:
(a) complete and have ready for delivery to the holder of the
security all the appropriate certificates or other title
documents in connection with the issue of the security; and
(b) unless otherwise instructed by the holder, send or deliver the
completed certificates or other title documents to:
(i) the holder; or
(ii) if the holder has instructed the company in writing to
send them to a nominated person—that person.
Paragraph (a) has effect in relation to shares subject to the
conditions on which the shares are issued.
(2) If the operating rules of a prescribed CS facility include a provision
to the effect that:
(a) no document is required by subsection (1) to be completed
and delivered by a company in relation to the issue of a
security in specified circumstances; or
(b) the only document required by subsection (1) to be
completed and delivered by a company in relation to the
issue of a security in specified circumstances is the document
required by the provision;
the provision has effect accordingly.
(3) Within one month after the date on which a transfer of a security is
lodged with a company, the company must:
(a) complete and have ready for delivery to the transferee all the
appropriate transfer and title documents in connection with
the transfer; and
(b) unless otherwise instructed by the transferee, send or deliver
the completed documents to:
(i) the transferee; or
(ii) if the transferee has instructed the company in writing to
send them to a nominated person—that person.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071H
238 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This subsection does not apply to a transfer that the company is for
any reason entitled to refuse to register and does not register.
(4) The only document required by subsection (3) to be completed and
delivered by a company in relation to a transfer covered by the
operating rules of a prescribed CS facility is the document (if any)
that those rules require to be completed and delivered.
(5) A company need not comply:
(a) with subsection (1) in relation to the issue of a security; or
(b) with subsection (3) in relation to a transfer of a security;
if the person to whom the security is issued, or the transferee, has:
(c) applied to ASIC for the making of a declaration under this
subsection; and
(d) been declared by ASIC, by writing published in the Gazette,
to be a person in relation to whom this section does not
apply.
(6) If:
(a) either:
(i) if subsection (1) applies—the holder referred to in that
subsection serves a notice on the company requiring the
company to remedy a contravention of that subsection;
or
(ii) if subsection (3) applies—the transferee referred to in
that subsection serves a notice on the company requiring
the company to remedy a contravention of that
subsection; and
(b) the company fails to remedy the contravention within 10
days after the service of the notice; and
(c) the person entitled to have the documents delivered to him or
her applies to the Court for an order under this subsection;
the Court may make an order directing the company and any
officer or employee of the company to remedy the contravention
within such period as is specified in the order.
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Transfer of certain securities Division 2
Section 1072A
Corporations Act 2001 239
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(7) An order under subsection (6) may provide that all costs of, and
incidental to, the application are to be borne by:
(a) the company; or
(b) any officer or employee of the company who was involved in
the contravention;
in such proportions as the Court thinks just and reasonable.
Subdivision B—Special provisions for shares
1072A Transmission of shares on death (replaceable rule—see
section 135)
If shares not held jointly
(1) If a shareholder who does not own shares jointly dies, the company
will recognise only the personal representative of the deceased
shareholder as being entitled to the deceased shareholder’s interest
in the shares.
(2) If the personal representative gives the directors the information
they reasonably require to establish the representative’s entitlement
to be registered as holder of the shares:
(a) the personal representative may:
(i) by giving a written and signed notice to the company,
elect to be registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company,
transfer the shares to another person; and
(b) the personal representative is entitled, whether or not
registered as the holder of the shares, to the same rights as
the deceased shareholder.
(3) On receiving an election under subparagraph (2)(a)(i), the
company must register the personal representative as the holder of
the shares.
(4) A transfer under subparagraph (2)(a)(ii) is subject to the same rules
(for example, about entitlement to transfer and registration of
transfers) as apply to transfers generally.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1072B
240 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
If shares held jointly
(5) If a shareholder who owns shares jointly dies, the company will
recognise only the survivor as being entitled to the deceased
shareholder’s interest in the shares. The estate of the deceased
shareholder is not released from any liability in respect of the
shares.
1072B Transmission of shares on bankruptcy (replaceable rule—see
section 135)
(1) If a person entitled to shares because of the bankruptcy of a
shareholder gives the directors the information they reasonably
require to establish the person’s entitlement to be registered as
holder of the shares, the person may:
(a) by giving a written and signed notice to the company, elect to
be registered as the holder of the shares; or
(b) by giving a completed transfer form to the company, transfer
the shares to another person.
(2) On receiving an election under paragraph (1)(a), the company must
register the person as the holder of the shares.
(3) A transfer under paragraph (1)(b) is subject to the same rules (for
example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
(4) This section has effect subject to the Bankruptcy Act 1966.
1072C Rights of trustee of estate of bankrupt shareholder
(1) If:
(a) because of the Bankruptcy Act 1966, a share in a company,
being part of the property of a bankrupt, vests in the trustee
of the bankrupt’s estate; and
(b) the bankrupt is the registered holder of that share;
this section applies whether or not the trustee has been registered
as the holder of the share.
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Section 1072C
Corporations Act 2001 241
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On producing such information as the company’s directors
properly require, the trustee is entitled to:
(a) the same dividends and other benefits; and
(b) the same rights, for example, but without limitation, rights in
relation to:
(i) meetings of the company; or
(ii) documents, including notices of such meetings; or
(iii) voting; or
(iv) inspection of the company’s records;
as the bankrupt would be entitled to if he or she were not a
bankrupt.
(3) The trustee has the same rights:
(a) to transfer the share; and
(b) to require a person to do an act or give a consent in
connection with completing or registering a transfer of the
share;
as the bankrupt would have if he or she were not a bankrupt.
(4) If the trustee transfers the share, the transfer is as valid as if the
trustee had been registered as the holder of the share when the
trustee executed the instrument of transfer.
(5) A person or body whose consent or approval is required for the
transfer of shares in the company must not unreasonably withhold
consent or approval for the transfer of the share by the trustee.
(6) If:
(a) the company’s constitution requires:
(i) the share to be offered for purchase to a member of the
company; or
(ii) an invitation to buy the share to be issued to such a
member; and
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Section 1072D
242 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) as at the end of a reasonable period after the trustee so offers
the share, or so issues such an invitation, no such member
has agreed to buy the share from the trustee at a reasonable
price;
the trustee may sell and transfer the share to a person other than
such a member.
(7) A provision of the company’s constitution is void as against the
trustee in so far as, apart from this section, it would affect rights
attached to the share:
(a) because the bankrupt is a bankrupt; or
(b) because of some event that led to the bankrupt becoming, or
that indicated that the bankrupt was about to become, or
might be about to become, a bankrupt; or
(c) for reasons including a reason referred to in paragraph (a) or
(b).
(8) Nothing in this section limits the generality of anything else in it.
(9) This section has effect despite anything in the company’s
constitution.
1072D Transmission of shares on mental incapacity (replaceable
rule—see section 135)
(1) If a person entitled to shares because of the mental incapacity of a
shareholder gives the directors the information they reasonably
require to establish the person’s entitlement to be registered as the
holder of the shares:
(a) the person may:
(i) by giving a written and signed notice to the company,
elect to be registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company,
transfer the shares to another person; and
(b) the person is entitled, whether or not registered as the holder
of the shares, to the same rights as the shareholder.
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Section 1072E
Corporations Act 2001 243
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On receiving an election under subparagraph (1)(a)(i), the
company must register the person as the holder of the shares.
(3) A transfer under subparagraph (1)(a)(ii) is subject to the same rules
(for example, about entitlement to transfer and registration of
transfers) as apply to transfers generally.
1072E Trustee etc. may be registered as owner of shares
(1) In this section:
share, in relation to a body corporate, means a share in the body
that is registered in a register kept in this jurisdiction.
(2) A trustee, executor or administrator of the estate of a dead person
who was the registered holder of a share in a corporation may be
registered as the holder of that share as trustee, executor or
administrator of that estate.
(3) A trustee, executor or administrator of the estate of a dead person
who was entitled in equity to a share in a corporation may, with the
consent of:
(a) the corporation; and
(b) the registered holder of that share;
be registered as the holder of that share as trustee, executor or
administrator of that estate.
(4) If:
(a) a person (the administrator) is appointed, under a law of a
State or Territory relating to the administration of the estates
of persons who, through mental or physical infirmity, are
incapable of managing their affairs, to administer the estate
of a person who is so incapable; and
(b) the incapable person is the registered holder of a share in a
corporation;
the administrator may be registered as the holder of that share as
administrator of that estate.
(5) If:
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Section 1072E
244 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a person (the administrator) is appointed, under a law of a
State or Territory relating to the administration of the estates
of a person who, through mental or physical infirmity, are
incapable of managing their affairs, to administer the estate
of a person who is so incapable; and
(b) the incapable person is entitled in equity to a share in a
corporation;
the administrator may, with the consent of the corporation and of
the registered holder of that share, be registered as the holder of the
share as administrator of that estate.
(6) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the
Official Trustee in Bankruptcy; and
(b) the bankrupt is the registered holder of that share;
the Official Trustee may be registered as the holder of that share as
the Official Trustee in Bankruptcy.
(7) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the
Official Trustee in Bankruptcy; and
(b) the bankrupt is entitled in equity to that share;
the Official Trustee may, with the consent of the body and of the
registered holder of that share, be registered as the holder of that
share as the Official Trustee in Bankruptcy.
(8) A person registered under subsection (2), (3), (4), (5), (6) or (7), is,
while registered as mentioned in that subsection:
(a) subject to the same liabilities in respect of the share as those
to which he, she or it would have been subject if the share
had remained, or had been, as the case requires, registered in
the name of the dead person, the incapable person or the
bankrupt, as the case may be; and
(b) subject to no other liabilities in respect of the share.
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Section 1072F
Corporations Act 2001 245
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(9) Shares in a corporation registered in a register and held by a trustee
in respect of a particular trust may, with the consent of the
corporation, be marked in the register in such a way as to identify
them as being held in respect of the trust.
(10) Except as provided in this section and section 169:
(a) no notice of a trust, whether express, implied or constructive,
must be entered on a register kept in this jurisdiction or be
receivable by ASIC; and
(b) no liabilities are affected by anything done under a preceding
subsection of this section or under section 169; and
(c) nothing so done affects the body corporate concerned with
notice of a trust.
(11) A person must, within one month after beginning to hold shares in
a proprietary company as trustee for, or otherwise on behalf of or
on account of, a body corporate, serve on the company notice in
writing that the person so holds the shares.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1072F Registration of transfers (replaceable rule—see section 135)
(1) A person transferring shares remains the holder of the shares until
the transfer is registered and the name of the person to whom they
are being transferred is entered in the register of members in
respect of the shares.
(2) The directors are not required to register a transfer of shares in the
company unless:
(a) the transfer and any share certificate have been lodged at the
company’s registered office; and
(b) any fee payable on registration of the transfer has been paid;
and
(c) the directors have been given any further information they
reasonably require to establish the right of the person
transferring the shares to make the transfer.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1072G
246 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The directors may refuse to register a transfer of shares in the
company if:
(a) the shares are not fully-paid; or
(b) the company has a lien on the shares.
(4) The directors may suspend registration of transfers of shares in the
company at the times and for the periods they determine. The
periods of suspension must not exceed 30 days in any one calendar
year.
1072G Additional general discretion for directors of proprietary
companies to refuse to register transfers (replaceable
rule—see section 135)
The directors of a proprietary company may refuse to register a
transfer of shares in the company for any reason.
1072H Notices relating to non-beneficial and beneficial ownership of
shares
(1) If, upon registration of a transfer of shares in a company, the
transferee would hold non-beneficially particular shares (the
relevant shares), being all or any of the shares to which the
transfer relates, the transferee must only lodge the instrument of
transfer with the company for registration of the transfer if the
instrument of transfer includes a notice that:
(a) contains a statement to the effect that, upon registration of
the transfer, the transferee will hold the relevant shares
non-beneficially; and
(b) sets out particulars of the relevant shares; and
(c) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The fact that a person has failed to comply with subsection (1) does
not affect the validity of the registration of a transfer of shares in a
company.
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Section 1072H
Corporations Act 2001 247
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) If:
(a) an instrument of transfer of shares in a company includes a
notice of the kind referred to in paragraph (1)(c) and is
lodged with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
beneficially particular shares (in this subsection called the
relevant shares), being all or any of the shares particulars of
which are set out in the notice;
then, before the end of 14 days beginning on registration of the
transfer, the transferee must, whether or not the transferee begins
before the end of that period to hold all or any of the relevant
shares non-beneficially, give to the company a notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of
the transfer, the transferee holds the relevant shares
beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) If:
(a) an instrument of transfer of shares in a company is lodged
with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
non-beneficially particular shares (in this subsection called
the relevant shares), being all or any of the shares to which
the instrument of transfer relates (other than, in a case in
which the instrument of transfer includes a notice of the kind
referred to in paragraph (1)(c), the shares particulars of which
are set out in the notice);
then, before the end of 14 days beginning on registration of the
transfer, the transferee must, whether or not the transferee begins
before the end of that period to hold any of the relevant shares
beneficially, give to the company a notice that:
(c) sets out the name and address of the transferee; and
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Section 1072H
248 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) contains a statement to the effect that, as from registration of
the transfer, the transferee holds the relevant shares
non-beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) If:
(a) at a particular time, a person holds beneficially shares in a
company; and
(b) immediately after that time, the person holds non-beneficially
particular shares (in this subsection called the relevant
shares), being all or any of the shares referred to in
paragraph (a);
then, before the end of 14 days beginning at that time, the person
must, whether or not the person recommences before the end of
that period to hold any of the relevant shares beneficially, give to
the company a notice that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the
person holds the relevant shares non-beneficially; and
(e) specifies that time and sets out particulars of the relevant
shares; and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) If:
(a) at a particular time, a person holds non-beneficially shares in
a company; and
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(b) immediately after that time, the person holds beneficially
particular shares (in this subsection called the relevant
shares), being all or any of the shares referred to in
paragraph (a);
then, before the end of 14 days beginning at that time, the person
must, whether or not the person recommences before the end of
that period to hold any of the relevant shares non-beneficially, give
to the company a notice that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the
person holds the relevant shares beneficially; and
(e) specifies that time and sets out particulars of the relevant
shares; and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) In proceedings under, or for an offence based on a provision of,
this section, a person is, unless the contrary is established,
presumed to have been aware at a particular time of a circumstance
of which an employee or agent of the person, being an employee or
agent having duties or acting in relation to the transfer to, or
ownership by, the person of a share or shares in the company
concerned, was aware at that time.
(8) For the purposes of this section and of section 169:
(a) if, at a particular time, a person:
(i) holds shares in a capacity other than that of sole
beneficial owner; or
(ii) without limiting the generality of subparagraph (i),
holds shares as trustee for, as nominee for, or otherwise
on behalf of or on account of, another person;
the first-mentioned person is taken to hold the shares
non-beneficially at that time; and
(b) a person who holds shares at a particular time is taken to hold
the shares beneficially at that time unless the person holds the
shares non-beneficially at that time.
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Section 1073A
250 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Transfer of certain securities effected
otherwise than through a prescribed CS facility
1073A Application of the Division to certain securities
(1) This Division applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme, being interests that are
covered by regulations made for the purposes of this
paragraph;
(d) rights (whether existing or future, and whether contingent or
not) to acquire, by way of issue, a security referred to in
paragraph (a), (b) or (c) (whether or not on payment of any
money or for any other consideration);
(da) a CGS depository interest;
(db) a simple corporate bonds depository interest;
(e) securities declared by ASIC under section 1073E to be
securities to which the regulations apply.
(2) This Division applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
(b) references to the constitution of a company were instead
references to the constitution of the registered scheme; and
(c) references to members of a company were instead references
to members of the registered scheme.
1073B Definitions
In this Division, unless the contrary intention appears:
transfer of a financial product means:
(a) a change in the ownership of the financial product; or
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Corporations Act 2001 251
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(b) if the financial product is a right—the renunciation and
transfer of the right.
transfer document for the transfer of a financial product means a
document, or electronic message or other electronic
communication, by which the financial product is transferred.
1073C Application of Division to certain bodies as if they were
companies
This Division applies to the following as if they were companies:
(a) a body corporate (other than a company) that:
(i) is incorporated in a State or Territory in this
jurisdiction; and
(ii) is prescribed by regulations made for the purposes of
this subparagraph;
(b) an unincorporated society, association or body, that:
(i) is formed or established in a State or Territory in this
jurisdiction; and
(ii) is included in the official list of a licensed market; and
(iii) is prescribed by regulations made for the purposes of
this paragraph.
1073D Regulations may govern transfer of certain securities
(1) The regulations may make provision in relation to transfers of
securities that are not effected through a prescribed CS facility.
Regulations may make provision in relation to the transfer of
securities
(2) The regulations may specify:
(a) the way in which a security may be transferred, including:
(i) the forms (if any) to be used; and
(ii) what amounts to a proper or sufficient transfer of a
security; and
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252 Corporations Act 2001
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(b) the legal effect of a proper or sufficient transfer of a security;
and
(c) the rights, liabilities and obligations of a person in relation to
the transfer of a security, including the rights, liabilities and
obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(d) the circumstances in which a person will be taken to be
involved in the transfer of a security for the purposes of the
regulations; and
(e) the circumstances in which a person is required not to
register, or give effect to, a transfer.
Sufficient transfer
(3) Without limiting paragraph (2)(a), the regulations may:
(a) specify the requirements for a document to be a sufficient
transfer of a security; and
(b) provide that a document meeting specified requirements may
be used:
(i) as a proper instrument of transfer for the purposes of
section 1071B; and
(ii) as an instrument of transfer for the purposes of any
other law or instrument governing or relating to the
security.
Rights and liabilities in relation to transfer
(4) Without limiting paragraph (2)(c), the regulations may provide that
a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular
thing; or
(ii) done a particular thing; or
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
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Corporations Act 2001 253
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(b) is taken to be authorised to do particular things on behalf of
another person; or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss
or damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(5) Without limiting paragraph (2)(d), the regulations may provide for
any of the following to be taken to be involved in a transfer of
securities:
(a) a person who carries on a financial services business and who
arranges for the transfer; and
(b) a person who operates a financial market on which the
securities are sold; and
(c) a person who operates a licensed CS facility through which
the securities are transferred; and
(d) a company with which the transfer is lodged for registration;
and
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person
will be taken to be an associate of another person for the purposes
of the regulations.
Offences
(6) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the use, or purported use, of a stamp of a person who:
(i) carries on a financial services business; or
(ii) operates a financial market; or
(iii) operates a clearing and settlement facility; or
(b) the execution of a document, or the transmission of an
electronic message or other electronic communication, that
may be used as a sufficient transfer under this Division; or
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Section 1073E
254 Corporations Act 2001
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(c) the lodgment of a transfer document or title document for a
security with the issuer of the security; or
(d) the use of identifying codes in relation to transfers of
securities.
Jurisdiction
(7) The regulations may apply to conduct engaged in in this
jurisdiction or elsewhere.
1073E ASIC may extend regulations to securities not otherwise
covered
(1) ASIC may, by writing, declare that:
(a) particular securities; or
(b) a particular class of securities;
are securities to which this Division, and regulations made for the
purposes of section 1073D, apply.
Note: The securities in respect of which a declaration under this subsection
may be made are not limited to those covered by paragraphs
1073A(1)(a) to (db).
(2) ASIC may specify in the declaration modifications of the
regulations that are to have effect in relation to the application of
this Division and the regulations to the securities, or the class of
securities, to which the declaration relates.
(3) A declaration under subsection (1) has effect accordingly.
(4) ASIC must cause a copy of a declaration under subsection (1) to be
published in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
subsection (1) had not been made, that conduct does not constitute
an offence unless, before the conduct occurred (in addition to
complying with the gazettal requirement of subsection (4)):
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Corporations Act 2001 255
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(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
1073F Operation of this Division and regulations made for its
purposes
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
(2) The provisions apply in relation to a transfer of securities despite
anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the
securities.
(3) Except as provided in the provisions, the provisions do not affect
the terms and conditions on which securities are sold.
(4) Nothing in the provisions affects any right of the issuer of a
security to refuse:
(a) to acknowledge or register a person as the holder of a
security; or
(b) to issue a security to a person;
on a ground other than an objection to the form of document, or
electronic message or other electronic communication, that is
lodged with or sent to the issuer and purports to transfer the
security to the person.
(5) The registration of a transfer, or the issue, of a security by means
of a transfer effected in accordance with regulations made for the
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Section 1073F
256 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
purposes of this Division does not breach any law, constitution,
trust deed or other instrument relating to financial products.
(6) Nothing in the provisions prevents or affects the use of:
(a) any other form of transfer of securities; or
(b) any other mode of executing a document transferring
securities;
that is otherwise permitted by law.
(7) A transfer of a security by or to a trustee or legal representative
may be effected by means of a transfer in accordance with
regulations made for the purposes of this Division. The transfer
may be so effected despite the means required by any law or the
provisions of the instrument (if any) creating, or having effect in
relation to, the trust or will under which the trustee or legal
representative is appointed.
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
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Section 1074A
Corporations Act 2001 257
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Transfer of financial products effected through
prescribed CS facility
1074A Financial products to which this Division applies
This Division only applies in relation to particular financial
products and a prescribed CS facility if regulations made for the
purposes of this section provide that all financial products, or a
class of financial products that includes the financial products, are
financial products to which this Division applies in relation to the
prescribed CS facility (whether or not they are also products to
which this Division applies in relation to other prescribed CS
facilities).
1074B Definitions
In this Division, unless the contrary intention appears:
transfer of a financial product has the meaning given by
section 1073B.
transfer document for the transfer of a financial product has the
meaning given by section 1073B.
1074C Operating rules of prescribed CS facility may deal with
transfer of title
(1) The operating rules of a prescribed CS facility may deal with the
transfer of financial products through the facility.
(2) Without limiting subsection (1), the operating rules of a prescribed
CS facility may deal with the way in which a financial product may
be transferred, including specifying:
(a) the financial products that may be transferred through the
facility; and
(b) how financial products are transferred through the facility;
and
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Section 1074D
258 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the person or body (if any) authorised to determine whether a
transfer substantially complies with the operating rules of the
facility.
(3) Nothing in subsection (1) or (2) confers a discretion to deal with a
matter in the operating rules of a prescribed CS facility if there is
an obligation under section 822A for that matter to be dealt with in
those rules.
1074D Valid and effective transfer if operating rules complied with
(1) If a transfer of a financial product is effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility;
the transfer is valid and effective for the purposes of any law or
instrument governing or relating to the way in which the financial
product may be transferred.
(2) For the purposes of this section, the transfer of a financial product
is taken to be, and always to have been, effected in accordance
with the operating rules of a prescribed CS facility if the person or
body authorised to do so under those rules determines that the
transfer substantially complies with those rules.
1074E Regulations may govern transfer of financial products in
accordance with operating rules of prescribed CS facility
Transfers that regulations may deal with
(1) The regulations may make provision in relation to transfers of
financial products effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility.
Regulations may make provision in relation to the transfer of
financial products
(2) The regulations may specify:
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Corporations Act 2001 259
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(a) the legal effect of a transfer of a financial product through the
facility in accordance with its operating rules; and
(b) the rights, liabilities and obligations of a person in relation to
the transfer of a financial product through the facility,
including the rights, liabilities and obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(c) the circumstances in which a person will be taken to be
involved in the transfer of a financial product for the
purposes of the regulations; and
(d) the circumstances in which a person is required not to
register, or give effect to, a transfer through the facility; and
(e) the circumstances in which a person is required not to refuse
or fail to register, or give effect to, a transfer through the
facility; and
(f) the circumstances in which a transfer through the facility will
be taken to have been made in accordance with the rules of a
prescribed CS facility; and
(g) the circumstances in which a person will be taken to be the
holder of a financial product for the purposes of:
(i) a meeting; or
(ii) paying or transferring money or property to a person
because the person holds or held a financial product; or
(iii) issuing a financial product to a person because the
person holds or held a financial product; or
(iv) conferring a right on a person because the person holds
or held a financial product.
Rights and liabilities in relation to transfer
(3) Without limiting paragraph (2)(b), the regulations may provide that
a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular
thing; or
(ii) done a particular thing; or
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Section 1074E
260 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
(b) is taken to be authorised to do particular things on behalf of
another person (even if the person has died); or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss
or damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(4) Without limiting paragraph (2)(c), the regulations may provide for
any of the following to be taken to be involved in a transfer of a
financial product:
(a) a person who carries on a financial services business and who
arranges for the transfer;
(b) a person who operates a financial market on which the
financial product is sold;
(c) a person who operates a licensed CS facility through which
the product is transferred;
(d) the issuer of the product;
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person
will be taken to be an associate of another person for the purposes
of the regulations.
Offences
(5) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the lodgment of a transfer document or title document for a
financial product with the issuer of the product; or
(b) the use of identifying codes in relation to transfers of
financial products; or
(c) contraventions of the operating rules of a prescribed CS
facility.
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Section 1074F
Corporations Act 2001 261
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Civil liability
(6) The regulations may also:
(a) provide for the liability of a person who contravenes the
operating rules of a prescribed CS facility to compensate a
person for loss or damage the person suffers because of the
conduct engaged in in contravention of those rules; and
(b) specify the period within which an action for compensation
must be begun.
(7) The regulations do not affect a liability that a person has under any
other law.
Jurisdiction
(8) The regulations may apply to conduct engaged in in this
jurisdiction or elsewhere.
1074F Issuer protected from civil liability for person’s contravention
of prescribed CS facility’s certificate cancellation rules
If:
(a) a person contravenes the certificate cancellation provisions of
a prescribed CS facility in relation to the transfer of a
particular financial product through the facility; and
(b) the issuer of the financial product is not involved in the
contravention;
the issuer is not liable to an action or other proceeding for damages
in relation to the person’s contravention.
1074G Operation of this Division and regulations made for its
purposes
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
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Section 1074G
262 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The provisions apply in relation to a transfer of financial products
despite anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the
financial products.
(3) Except as provided in the provisions, the provisions do not affect
the terms and conditions on which financial products are sold.
(4) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(e)) affects any right of the issuer of
a financial product to refuse:
(a) to acknowledge or register a person as the holder of a
financial product; or
(b) to issue a financial product to a person;
on a ground other than an objection to the form of document, or
electronic message or other electronic communication, that is
lodged with or sent to the issuer and purports to transfer the
financial product to the person.
(5) The registration of a transfer, or the issue, of a financial product by
means of a transfer effected in accordance with the operating rules
of a prescribed CS facility does not breach any law, constitution,
trust deed or other instrument relating to financial products.
(6) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(d)) prevents or affects the use of:
(a) any other form of transfer of financial products; or
(b) any other mode of executing a document transferring
financial products;
that is otherwise permitted by law.
(7) A transfer of a financial product by or to a trustee or legal
representative may be effected by means of a transfer in
accordance with the operating rules of a prescribed CS facility
despite any law or the provisions of the instrument (if any)
creating, or having effect in relation to, the trust or will under
which the trustee or legal representative is appointed.
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Section 1074G
Corporations Act 2001 263
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(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
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Division 5 Exemptions and modifications
Section 1075A
264 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Exemptions and modifications
1075A ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt specified financial products, or a specified class of
financial products, from a provision of this Part; or
(b) declare that this Part applies to specified financial products,
or a specified class of financial products, as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) ASIC’s power to grant an exemption or make a declaration under
this section may be exercised in relation to financial products, or a
class of financial products, only if ASIC is satisfied that:
(a) if the exemption were granted or the declaration were made,
the interests of the holders of those financial products, or of
financial products in that class, would continue to have
adequate protection; and
(b) the granting of the exemption or the making of the
declaration would make the transfer of those financial
products, or of financial products in that class, more efficient.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Part; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all financial products, specified financial products or
a specified class of financial products; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
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Section 1075A
Corporations Act 2001 265
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(5) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(b) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(7) For the purposes of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
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Chapter 7 Financial services and markets
Part 7.12 Miscellaneous
Division 1 Qualified privilege
Section 1100A
266 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.12—Miscellaneous
Division 1—Qualified privilege
1100A Qualified privilege for information given to ASIC
(1) A person has qualified privilege in respect of the giving of any
information to ASIC that the person:
(a) is required to give under this Chapter or regulations made for
the purposes of this Chapter; or
(b) gives in relation to a contravention or suspected
contravention of subsection 798H(1) (complying with market
integrity rules).
(2) A person or body that is:
(a) a market licensee; or
(b) a CS facility licensee; or
(c) a person acting under an arrangement to operate a licensed
market or supervise a licensed CS facility; or
(d) a foreign person or body responsible for the supervision of
the operation in a foreign country of a financial market or
clearing and settlement facility;
also has qualified privilege in respect of the giving of any
information to ASIC in connection with the performance or
exercise of ASIC’s functions or powers under, or in relation to, this
Chapter or regulations made for the purposes of this Chapter.
(3) A person or body that has qualified privilege under subsection (1)
or (2) in respect of conduct is also not liable for any action based
on breach of confidence in relation to that conduct.
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1100B Qualified privilege for the conduct of market licensees and
CS facility licensees
(1) A market licensee, or CS facility licensee, has qualified privilege in
respect of actions (including the giving of information) done in
connection with:
(a) the performance, or purported performance, of the licensee’s
obligations under this Act; or
(b) the exercise or performance, or purported exercise or
performance, of the licensee’s powers, functions or
obligations under the operating rules of the market or facility
concerned, if the licensee believes, on reasonable grounds,
that the action is necessary:
(i) in the case of a market licensee—to ensure the market
operates in a fair, orderly and transparent way; or
(ii) in the case of a CS facility licensee—to ensure the
facility’s services are provided in a fair and effective
manner or to reduce systemic risk in the provision of
those services.
(2) A market licensee, or CS facility licensee, has qualified privilege in
respect of the giving of information:
(a) to the operator of a financial market (regardless of where the
market is operated) for the purpose of assisting the operator
to ensure that market operates in a fair, orderly and
transparent way; or
(b) to the operator of a clearing and settlement facility
(regardless of where the facility is operated) for the purpose
of assisting the operator to ensure that facility’s services are
provided in a fair and effective manner or to reduce systemic
risk.
(3) Despite subsections (1) and (2), a market licensee does not have
qualified privilege in respect of the giving of information if:
(a) an entity included on the market’s official list gave the
information to the licensee under a provision of this Act or of
the market’s operating rules; and
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Section 1100C
268 Corporations Act 2001
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(b) this Act, or those rules, expressly or impliedly authorised the
entity to limit the purposes for which it gave the information
to the licensee; and
(c) when giving the information to the licensee, the entity limited
those purposes as so authorised; and
(d) the giving of the information by the licensee is not solely for
one or more of the limited purposes.
(4) The protections given by this section apply to the giving of
information whether or not the recipient of the information has an
interest in the information.
1100C Qualified privilege for information given to market licensees
and CS facility licensees etc.
A person has qualified privilege in respect of the giving of
information if:
(a) the person gives the information to any of the following
persons or bodies:
(i) a market licensee;
(ii) a CS facility licensee;
(iii) a person acting under an arrangement to operate a
licensed market or supervise a licensed CS facility;
(iv) a foreign person or body responsible for the supervision
of the operation in a foreign country of a financial
market or clearing and settlement facility; and
(b) the information is in relation to a contravention or suspected
contravention of this Act or the operating rules of the market
or facility concerned.
1100D Extension of protections given by this Division
The protections given by this Division to a person or body in
respect of conduct extend to officers, employees and
representatives of the person or body.
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Section 1101A
Corporations Act 2001 269
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Division 2—Other matters
1101A Approved codes of conduct
(1) ASIC may, on application, approve codes of conduct that relate to
any aspect of the activities of:
(a) financial services licensees; or
(b) authorised representatives of financial services licensees; or
(c) issuers of financial products;
being activities in relation to which ASIC has a regulatory
responsibility. The approval must be in writing.
(2) ASIC may, on application, approve a variation of an approved code
of conduct. The approval must be in writing.
(3) ASIC must not approve a code of conduct, or a variation of a code
of conduct, unless it is satisfied that:
(a) the code, or the code as proposed to be varied, is not
inconsistent with this Act or any other law of the
Commonwealth under which ASIC has regulatory
responsibilities; and
(b) it is appropriate to approve the code, having regard to the
following matters, and to any other matters that ASIC
considers are relevant:
(i) the ability of the applicant to ensure that persons who
hold out that they comply with the code will comply
with the code as in force from time to time; and
(ii) the desirability of codes of conduct being harmonised to
the greatest extent possible.
(4) ASIC may revoke an approval of a code of conduct:
(a) on application by the person who applied for the approval; or
(b) if ASIC is no longer satisfied as mentioned in subsection (3).
The revocation must be in writing.
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Section 1101B
270 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1101B Power of Court to make certain orders
Court’s power to make orders in relation to certain contraventions
(1) The Court may make such order, or orders, as it thinks fit if:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened a provision of this Chapter, or any
other law relating to dealing in financial products or
providing financial services; or
(ii) has contravened a condition of an Australian market
licence, Australian CS facility licence, Australian
derivative trade repository licence or Australian
financial services licence; or
(iii) has contravened a provision of the operating rules, or
the compensation rules (if any), of a licensed market or
of the operating rules of a licensed CS facility; or
(v) has contravened a condition on an exemption from the
requirement to hold an Australian market licence or an
Australian CS facility licence; or
(vi) is about to do an act with respect to dealing in financial
products or providing a financial service that, if done,
would be such a contravention; or
(b) on the application of a market licensee, it appears to the
Court that a person has contravened the operating rules, or
the compensation rules (if any), of a licensed market operated
by the licensee; or
(c) on the application of a CS facility licensee, it appears to the
Court that a person has contravened a provision of the
operating rules of a licensed CS facility operated by the
licensee; or
(d) on the application of a person aggrieved by an alleged
contravention by another person of subsection 798H(1)
(complying with market integrity rules) or a provision of the
operating rules, or the compensation rules (if any), of a
licensed market, it appears to the Court that:
(i) the other person did contravene the provision; and
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(ii) the applicant is aggrieved by the contravention.
However, the Court can only make such an order if the Court is
satisfied that the order would not unfairly prejudice any person.
Note: For examples of orders the Court could make, see subsection (4).
(2) For the purposes of paragraph (1)(d), if a body corporate
contravenes a provision of the operating rules of a licensed market,
a person who holds financial products of the body corporate that
are able to be traded on the licensed market is taken to be a person
aggrieved by the contravention.
(3) Subsection (2) does not limit the circumstances in which a person
may be aggrieved by a contravention for the purposes of
paragraph (1)(d).
Examples of orders the Court may make
(4) Without limiting subsection (1), some examples of orders the Court
may make under subsection (1) include:
(a) an order restraining a person from carrying on a business, or
doing an act or classes of acts, in relation to financial
products or financial services, if the person has persistently
contravened, or is continuing to contravene:
(i) a provision or provisions of this Chapter; or
(ii) a provision or provisions of any other law relating to
dealing in financial products or providing financial
services; or
(iii) a condition on an Australian market licence, Australian
CS facility licence, Australian derivative trade
repository licence or Australian financial services
licence; or
(v) a condition of an exemption from a requirement to hold
an Australian market licence or Australian CS facility
licence; or
(vi) a provision of the operating rules, or the compensation
rules (if any), of a licensed market or of the operating
rules of a licensed CS facility; or
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(b) an order giving directions about complying with a provision
of the market integrity rules, or of the derivative transaction
rules or the derivative trade repository rules, or a provision of
the operating rules, or the compensation rules (if any), of a
licensed market or of the operating rules of a licensed CS
facility to a person (or the directors of the body corporate, if
the person is a body corporate) who contravened the
provision; and
(c) an order requiring a person to disclose to the public or to
specified persons, in accordance with the order, specified
information that the person to whom the order is directed
possesses or to which that person has access, if the person:
(i) contravened a provision of the market integrity rules, or
of the derivative transaction rules or the derivative trade
repository rules, or a provision of the operating rules of
a licensed market or a condition relating to the
disclosure or provision of information; or
(ii) was involved in such a contravention; and
(d) an order requiring a person to publish advertisements in
accordance with the order at that person’s expense, if the
person:
(i) contravened a provision of the market integrity rules, or
of the derivative transaction rules or the derivative trade
repository rules, or a provision of the operating rules of
a licensed market, or a condition relating to the
disclosure or provision of information; or
(ii) was involved in such a contravention; and
(e) an order restraining a person from acquiring, disposing of or
otherwise dealing with any financial products that are
specified in the order; and
(f) an order restraining a person from providing any financial
services that are specified in the order; and
(g) an order appointing a receiver of property (see
subsection (9)) of a financial services licensee; and
(h) an order declaring a contract relating to financial products or
financial services to be void or voidable; and
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(i) an order directing a person to do or refrain from doing a
specified act, if that order is for the purpose of securing
compliance with any other order under this section; and
(j) any ancillary order considered to be just and reasonable in
consequence of the making of an order under any of the
preceding provisions of this subsection.
Interim orders
(5) Before considering an application to the Court under
subsection (1), the Court may make an interim order of the kind
applied for to apply pending the determination of the application, if
in the opinion of the Court it is desirable to do so.
(6) However, if ASIC, a market licensee or a CS facility licensee
applies for an order under subsection (1), the Court must not
require the applicant, or any other person, to give any undertakings
as to damages as a condition of making an interim order under
subsection (5).
Power to give notice of applications
(7) Before making an order under subsection (1), the Court may do
either or both of the following:
(a) direct that notice of the application be given to such persons
as it thinks fit;
(b) direct that notice of the application be published in such
manner as it thinks fit.
Powers of receivers appointed under Court orders
(8) A person appointed by order of the Court under subsection (1) as a
receiver of the property (see subsection (12)) of a financial services
licensee:
(a) may require the financial services licensee to:
(i) deliver to the person any property of which the person
has been appointed receiver; or
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(ii) give to the person all information concerning that
property that may reasonably be required; and
(b) may acquire and take possession of any property of which the
person has been appointed receiver; and
(c) may deal with any property that the person has acquired, or
of which the person has taken possession, in any way in
which the financial services licensee might lawfully have
dealt with the property; and
(d) has such other powers in respect of the property as the Court
specifies in the order.
Duty to comply with order
(10) A person must not, without reasonable excuse, contravene:
(a) an order under this section; or
(b) a requirement imposed under paragraph (8)(a) or (8)(d) by a
receiver appointed by order of the Court under
subsection (1).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Power to rescind or vary order
(11) The Court may rescind or vary an order made by it under this
section or suspend the operation of such an order.
(12) In this section:
compensation rules has the same meaning as in Part 7.5.
property, in relation to a financial services licensee, includes:
(a) money; or
(b) financial products; or
(c) documents of title to financial products; or
(d) other property;
entrusted to, or received on behalf of, any other person by the
financial services licensee or another person in the course of, or in
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Corporations Act 2001 275
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connection with, a financial services business carried on by the
financial services licensee.
1101C Preservation and disposal of records etc.
Registers
(1) A person who is required by a provision of this Chapter to keep a
register in relation to a business carried on by the person must
preserve it for 5 years after the day on which the last entry was
made in the register.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Financial records
(2) A person who is required by a provision of this Chapter to keep
any financial record in relation to a business carried on by the
person must preserve it for 7 years after the transactions covered
by the record are completed.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Other records
(3) A person who is required by a provision of this Chapter or the
regulations to keep any other record must preserve it for 5 years
after the day on which the last entry was made in the record.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Exceptions
(4) Registers and records must be preserved in accordance with this
section (even if the person stops carrying on the business to which
they relate during the period for which they must be preserved),
unless:
(a) the regulations provide that those documents, or a class to
which they belong, need not be preserved; and
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Section 1101D
276 Corporations Act 2001
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(b) any conditions specified in or under those regulations have
been complied with.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1101D Destruction of records by ASIC
ASIC may destroy or otherwise dispose of any document that is
lodged under, or for the purposes of, a provision of this Chapter if:
(a) ASIC is of the opinion that it is no longer necessary or
desirable to retain it; and
(b) it has been in the possession of ASIC for such period as is
specified in the regulations, either generally or in relation to a
particular document or class of documents.
1101E Concealing etc. of books
(1) A person must not:
(a) conceal, destroy, mutilate or alter a book:
(i) relating to the business carried on by a financial services
licensee or an authorised representative of such a
licensee; or
(ii) required under a provision of this Chapter to be kept by
a market licensee, a CS facility licensee, a financial
services licensee or an authorised representative of a
financial services licensee; or
(b) send such a book out of this jurisdiction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) In any proceedings against a person for an offence based on
subsection (1), it is a defence if the person did not act with intent
to:
(a) defraud; or
(b) defeat the objects of this Chapter; or
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(c) prevent, delay or obstruct the carrying out of an examination,
investigation or audit, or the exercise of a power, under this
Chapter.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
1101F Falsification of records
(1A) A person must not engage in conduct that results in the falsification
of:
(a) a book required to be kept by a provision of this Chapter; or
(b) a register or any accounting or other record referred to in
section 1101C.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(1) If matter that is used, or intended to be used, in connection with:
(a) the keeping of a book required to be kept by a provision of
this Chapter; or
(b) a register or any accounting or other record referred to in
section 1101C;
is recorded or stored in an illegible form by means of a mechanical
device, an electronic device or any other device, a person must not:
(c) record or store by means of that device matter that the person
knows to be false in a material particular or materially
misleading; or
(d) destroy, remove or falsify matter that is recorded or stored by
means of that device, or has been prepared for the purpose of
being recorded or stored, or for use in compiling other matter
to be recorded or stored, by means of that device; or
(e) fail to record or store matter by means of that device, with
intent to falsify any entry made or intended to be compiled,
wholly or in part, from that matter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1101G
278 Corporations Act 2001
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(2) In any proceedings against a person for an offence based on
subsection (1A) or (1), it is a defence if it is proved that the person
acted honestly and that in all the circumstances the act or omission
constituting the offence should be excused.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
1101G Precautions against falsification of records
A person required by a provision of this Chapter to keep a book or
record must take reasonable precautions for guarding against
falsification of the book or record and for facilitating discovery of
any falsification.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1101GA How Part 9.3 applies to books required to be kept by this
Chapter etc.
(1) In this section:
Chapter 7 book means:
(a) a book (by whatever name it is known) that a provision of
this Chapter requires to be kept; or
(b) a document lodged under, or for the purposes of, a provision
of this Chapter; or
(c) a book relating to the business carried on by a financial
services licensee or an authorised representative of a
financial services licensee; or
(d) a register or accounting record referred to in section 1101C.
(2) Part 9.3 does not apply in relation to a Chapter 7 book except as
provided in the following paragraphs:
(a) section 1303 applies to a Chapter 7 book;
(b) section 1305, and subsections 1306(5) and (6), apply to a
Chapter 7 book as if references in section 1305 to a body
corporate were instead references to a person;
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Section 1101H
Corporations Act 2001 279
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(c) regulations made for the purposes of this paragraph may
provide that other provisions of Part 9.3 apply in relation to a
Chapter 7 book, or a class of Chapter 7 books, with such
modifications (if any) as are specified in the regulations.
1101H Contravention of Chapter does not generally affect validity
of transactions etc.
(1) Subject to subsection (2), a failure to comply with any requirement
of this Chapter (including requirements in regulations made for the
purposes of this Chapter) does not affect the validity or
enforceability of any transaction, contract or other arrangement.
(2) Subsection (1) has effect subject to any express provision to the
contrary in:
(a) this Chapter; or
(b) regulations made for the purposes of another provision of this
Chapter; or
(c) regulations referred to in subsection (3).
(3) Regulations made for the purposes of this subsection may provide
that a failure to comply with a specified requirement referred to in
subsection (1) has a specified effect on the validity or
enforceability of a transaction, contract or arrangement.
1101I Gaming and wagering laws do not affect validity of contracts
relating to financial products
Despite any law of a State or Territory in this jurisdiction about
gaming and wagering:
(a) a person may enter into a contract that is a financial product;
and
(b) the contract is valid and enforceable.
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Section 1101J
280 Corporations Act 2001
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1101J Delegation
The Minister may delegate any of the Minister’s powers under this
Chapter to:
(a) ASIC; or
(b) a member of ASIC (within the meaning of section 9 of the
Australian Securities and Investments Commission Act
2001); or
(c) a staff member (within the meaning given by subsection 5(1)
of that Act) who is an SES employee (within the meaning of
section 34 of the Public Service Act 1999) or who holds an
office or position that is at a level equivalent to that of an
SES employee.
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Section 1200A
Corporations Act 2001 281
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Chapter 8—Mutual recognition of securities
offers
Part 8.1—Preliminary
1200A Definitions
(1) In this Chapter:
foreign recognition scheme means the provisions of a law of a
recognised jurisdiction that are prescribed by the regulations as
comprising a foreign recognition scheme for the purposes of this
Chapter.
law of a recognised jurisdiction includes law of part of a
recognised jurisdiction.
offer securities includes:
(a) invite applications for the issue of securities; and
(b) invite offers to purchase securities.
offeror, of securities, means:
(a) in relation to an offer of a kind prescribed by the
regulations—a person of a kind prescribed by the regulations;
and
(b) otherwise—the person who has the capacity, or who agrees,
to issue or transfer the securities if the offer is accepted.
recognised jurisdiction means a foreign country prescribed by the
regulations as a recognised jurisdiction.
recognised offer has the meaning given by section 1200B.
securities means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) an interest in a managed investment scheme; or
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(d) a legal or equitable right or interest in a security or interest
covered by paragraph (a), (b) or (c); or
(e) an option to acquire, by way of issue, an interest or right
covered by paragraph (a), (b), (c) or (d).
(2) For the purposes of this Chapter, paragraph (b) of the definition of
debenture in section 9 is taken to include a reference to an
undertaking by an institution, authorised by or under the law of a
recognised jurisdiction as a deposit-taking institution (however
described), to repay money deposited with it, or lent to it, in the
ordinary course of its banking business.
(3) For the purposes of this Chapter:
(a) paragraph (c) of the definition of managed investment
scheme in section 9 is taken to include a reference to a
partnership that, if this Act applied to it, would not need to be
incorporated or formed under an Australian law because of
regulations made for the purposes of subsection 115(2); and
(b) paragraph (i) of the definition of managed investment
scheme in section 9 is taken to include a reference to a
scheme operated by an institution, authorised by or under the
law of a recognised jurisdiction as a deposit-taking institution
(however described), in the ordinary course of its banking
business.
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Recognised offers Division 1
Section 1200B
Corporations Act 2001 283
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Part 8.2—Foreign offers that are recognised in this
jurisdiction
Division 1—Recognised offers
1200B When an offer is a recognised offer
(1) An offer of securities becomes a recognised offer, in relation to a
recognised jurisdiction, on the day the offer is first made in this
jurisdiction, if the conditions in section 1200C are met in relation
to the offer on that day.
(2) The offer continues to be a recognised offer after that day, even if a
condition in section 1200C ceases to be met after that day.
(3) If, at the time an offer is first made in this jurisdiction, the offer
would be a recognised offer but for a failure to meet the condition
in subsection 1200C(5) or (6) that ASIC is satisfied is minor or
technical, ASIC may declare in writing that the offer is a
recognised offer within the meaning of subsection (1).
(4) If ASIC makes a declaration under subsection (3) in relation to an
offer, the condition is taken to have been met at the time the offer
was first made in this jurisdiction.
(5) A declaration under subsection (3) is not a legislative instrument.
1200C Conditions that must be met to be a recognised offer
(1) For the purposes of subsection 1200B(1), the conditions that must
be met are those set out in this section.
(2) The person offering the securities must be:
(a) a person incorporated by or under the law of the recognised
jurisdiction; or
(b) a natural person resident in the recognised jurisdiction; or
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Section 1200C
284 Corporations Act 2001
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(c) a legal person established by or under the law of the
recognised jurisdiction; or
(d) a person of a kind prescribed by regulations made in relation
to the recognised jurisdiction for the purposes of this
paragraph.
(3) The person offering the securities must not be banned under
section 1200P.
(4) The offer must be an offer of a kind prescribed by the regulations
in relation to the recognised jurisdiction.
(5) At least 14 days before the day on which the offer is first made in
this jurisdiction, the person making the offer must have lodged
with ASIC:
(a) a notice in the prescribed form (if any) of the person’s
intention to make a recognised offer; and
(b) the documents and information required to be lodged under
section 1200D.
(6) If:
(a) before the offer is first made in this jurisdiction; and
(b) after a document or information was lodged with ASIC under
section 1200D;
either:
(c) an event of a kind mentioned in the table in
subsection 1200G(9) happened; or
(d) the address for service in this jurisdiction of the person
proposing to offer the securities changed;
the person making the offer must have lodged with ASIC:
(e) if paragraph (c) applies—the document or information that
would have been required to have been lodged under
subsection 1200G(9) for the event if that subsection had
applied; and
(f) if paragraph (d) applies—the changed address for service.
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Foreign offers that are recognised in this jurisdiction Part 8.2
Recognised offers Division 1
Section 1200D
Corporations Act 2001 285
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200D Required documents and information
(1) For the purposes of paragraph 1200C(5)(b), the documents and
information required to be lodged under this section are:
(a) any offer document required by the law of the recognised
jurisdiction; and
(b) the warning statement that is to be included with an offer
document in this jurisdiction (which, if regulations are in
force for the purposes of section 1200E, must comply with
those regulations); and
(c) unless paragraph (d) applies—the constitution of the body
whose securities are to be the subject of the offer; and
(d) if the securities that are to be the subject of the offer are
interests in a managed investment scheme, rights or interests
in such interests, or options to acquire such interests by way
of issue—the constituent document of the scheme; and
(e) details, in the prescribed form (if any), of any exemption
from the securities law of the recognised jurisdiction that
applies, but not exclusively, to the offer or to the offeror in
relation to the offer; and
(f) if the offeror is relying on subsection (2)—notice of the
document or information that is not being lodged because of
the offeror’s reliance on that subsection; and
(g) an address for service in this jurisdiction, in the prescribed
form (if any); and
(h) a copy of any exemption from the securities law of the
recognised jurisdiction that applies exclusively to the offer or
to the offeror; and
(i) any other documents or information prescribed by the
regulations.
(2) For the purposes of this Chapter, a person is taken to have lodged a
document or information under this section if:
(a) the document or information has been lodged under
Division 2 or 3 of Part 5B.2; or
(b) the document or information is not required to be lodged
because of section 601CDA or 601CTA.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 1 Recognised offers
Section 1200E
286 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) For the purposes of this Chapter, a person is taken to have lodged a
document or information under this section if the person lodged the
document or information in compliance with subsection 1200C(6).
1200E Warning statement
The regulations may, in relation to offer documents used in this
jurisdiction for recognised offers, prescribe either or both of the
following:
(a) statements to be included with those documents that relate to
the status of an offer as a recognised offer and the laws that
regulate the offer;
(b) details to be given in statements to be included with those
documents that relate to the status of an offer as a recognised
offer and the laws that regulate the offer.
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Effect of a recognised offer Division 2
Section 1200F
Corporations Act 2001 287
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Effect of a recognised offer
1200F Effect of a recognised offer
(1) The provisions listed in the table do not apply, in relation to a
recognised offer, to the things specified in the table for those
provisions.
Note: Recognised offers must comply with Division 3 instead.
Provisions that do not apply in relation to a recognised offer
Item These provisions: do not apply, in relation to the offer, to:
1 Chapter 2L if the recognised offer is an offer of debentures—
the offeror.
2 Chapter 5C if the recognised offer is an offer of interests in a
managed investment scheme—the operator of the
managed investment scheme.
3 Chapter 6D, other than
sections 736 and 738
(a) the recognised offer; or
(b) the offeror of the recognised offer; or
(c) any offer document for the offer.
4 Parts 7.6, 7.7 and 7.8,
other than
section 992AA
(a) the issue or disposal of a security under the
recognised offer; or
(b) general advice (within the meaning of
Chapter 7) contained in any offer document
for the offer; or
(c) general advice contained in an advertisement
for the recognised offer issued by, or on
behalf of, the offeror; or
(d) the provision of a custodial or depository
service (within the meaning of Chapter 7) in
relation to interests in a managed investment
scheme that are the subject of the recognised
offer.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 2 Effect of a recognised offer
Section 1200F
288 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provisions that do not apply in relation to a recognised offer
Item These provisions: do not apply, in relation to the offer, to:
5 Part 7.9, other than
sections 1020AB,
1020AC, 1020AD and
1020B
the offeror of the recognised offer.
(2) Despite subsection (1), the regulations may:
(a) apply a provision listed in the table in subsection (1) to a
person or class of persons; or
(b) apply a provision listed in the table in subsection (1) to a
security or class of securities; or
(c) provide that a provision listed in the table in subsection (1)
applies with the modifications specified in the regulations.
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Foreign offers that are recognised in this jurisdiction Part 8.2
Ongoing conditions for recognised offers Division 3
Section 1200G
Corporations Act 2001 289
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Ongoing conditions for recognised offers
1200G Offering conditions
When the offering conditions apply
(1) The offering conditions in this section apply in relation to a
recognised offer until the recognised offer closes in this
jurisdiction.
Note: Failure to comply with an offering condition is an offence (see
sections 1200Q and 1311).
Offering conditions
(2) The offer must be made in the recognised jurisdiction as well as in
this jurisdiction.
(3) The offeror must meet the conditions in subsections 1200C(2) and
(3).
(4) The offer must meet the condition in subsection 1200C(4).
(5) The offer must comply with the law of the recognised jurisdiction.
(6) There must be no person concerned in the management of the
offeror:
(a) who is disqualified from managing corporations for the
purposes of Part 2D.6; or
(b) who is disqualified from being concerned in the management
of the offeror under the law of the recognised jurisdiction; or
(c) who is subject to a banning order under section 920A; or
(d) who is subject to a court order under paragraph 921A(2)(a).
(7) An offer document provided to a person in this jurisdiction must
have included with it:
(a) the warning statement lodged under subsection 1200D(1) for
that offer document; or
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200G
290 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if a changed warning statement is lodged with ASIC under
subsection 1200G(9)—the changed warning statement.
(8) The offeror must, on request by a person in this jurisdiction,
provide a copy of the constitution or constituent document lodged
under paragraph 1200D(1)(c) or (d).
(9) If an event mentioned in an item of this table occurs in relation to
the offer or offeror, the offeror must lodge with ASIC the
document, statement or notice specified in the table for that event,
by the time specified for that event.
Offering condition under subsection (9)
Item If: the offeror must lodge
with ASIC:
by this time:
1 a change is made to an
offer document, or any
other document,
required by the law of
the recognised
jurisdiction in relation
to the offer
a copy of the document
as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
2 a change is made to the
warning statement that
is included with the
offer document in this
jurisdiction
a copy of the warning
statement as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
3 a supplementary or
replacement offer
document is required
by the law of the
recognised jurisdiction
a copy of the
supplementary or
replacement offer
document
no later than 7 days
after the day on which
the supplementary or
replacement offer
document is (or should
have been) lodged with
the home regulator.
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Ongoing conditions for recognised offers Division 3
Section 1200G
Corporations Act 2001 291
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offering condition under subsection (9)
Item If: the offeror must lodge
with ASIC:
by this time:
4 a change is made to the
constitution or
constituent document
lodged under
paragraph 1200D(1)(c)
or (d)
a copy of the
constitution or
constituent document
as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
5 the home regulator
makes, changes or
revokes an exemption
that applies, but not
exclusively, to the offer
or the offeror under the
law of the recognised
jurisdiction
written notice in the
prescribed form (if
any) of the details of
the exemption, change
or revocation
no later than 14 days
after the making,
change or revocation
occurs.
6 the home regulator
makes, changes or
revokes an exemption
that applies exclusively
to the offer or the
offeror under the law
of the recognised
jurisdiction
a copy of the
exemption, the
exemption as changed,
or notice in the
prescribed form (if
any) of the details of
the revocation
no later than 7 days
after the making,
change or revocation
occurs.
7 the home regulator
begins enforcement
action, or exercises a
power it has under law,
in relation to the
offeror or offer
written notice in the
prescribed form (if
any) of the details of
the action taken or
power exercised
no later than 7 days
after the action is taken
or the power is
exercised.
(10) For the purposes of this Chapter, a person is taken to have lodged a
document under subsection (9) if:
(a) the document has been lodged under Division 2 or 3 of
Part 5B.2; or
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200G
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the document is not required to be lodged because of
section 601CDA or 601CTA.
(11) If:
(a) an event mentioned in the table in subsection (9) occurs
while the offering conditions in this section apply; and
(b) the time by which an offeror is required to lodge a document,
statement or notice with ASIC because of that event is after
the offering conditions cease to apply;
then, for the purposes of this section and paragraph 1200Q(1)(b),
the offering conditions are taken to continue to apply until that
time in relation to the offer to the extent necessary to require the
offeror to lodge the document, statement or information by that
time.
(12) The offer must meet any other conditions prescribed by the
regulations.
Home regulator
(13) For the purposes of subsection (9), the home regulator for a
recognised jurisdiction is an authority in the recognised jurisdiction
whose functions under the law of the recognised jurisdiction
include functions equivalent to any of those of ASIC under this Act
and that is prescribed by the regulations as the home regulator for
that jurisdiction.
(14) If there is more than one authority in a recognised jurisdiction
whose functions include functions under the law of the recognised
jurisdiction equivalent to any of those of ASIC under this Act and
that is prescribed under subsection (13), the regulations may
prescribe the matters in relation to which that authority is to be
regarded as the home regulator.
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Ongoing conditions for recognised offers Division 3
Section 1200H
Corporations Act 2001 293
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200H Address for service condition
When the address for service condition applies
(1) The address for service condition in this section applies in relation
to a recognised offer:
(a) until the end of the last day on which a person who resides in
this jurisdiction could acquire securities under the offer; and
(b) if a person who resides in this jurisdiction acquires securities
under the offer—at all times when the offeror’s records
indicate that someone who resides in this jurisdiction holds
securities in the class of securities that was the subject of the
recognised offer.
Note: Failure to comply with the address for service condition is an offence
(see sections 1200Q and 1311).
Address for service condition
(2) The offeror must lodge with ASIC written notice, in the prescribed
form (if any), of any change in its address for service in this
jurisdiction, no later than the end of the seventh day after the day
on which the address changed.
(3) If:
(a) the offeror’s address for service in this jurisdiction changes
while the address for service condition in this section applies;
and
(b) the time by which the offeror is required to lodge notice with
ASIC because of the change is after the address for service
condition ceases to apply;
then, for the purposes of this section and
subparagraph 1200Q(2)(b)(i), the address for service condition is
taken to continue to apply until that time to the extent necessary to
require the offeror to lodge notice by that time.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200J
294 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200J Dispute resolution condition
When the dispute resolution condition applies
(1) The dispute resolution condition in this section applies, to a person
who is or who has been the offeror of a recognised offer, at all
times when the person’s records indicate that someone who resides
in this jurisdiction holds securities in the class of securities that
was the subject of the recognised offer.
Note: Failure to comply with the dispute resolution condition is an offence
(see sections 1200Q and 1311).
Dispute resolution condition
(2) The person must have a dispute resolution process that complies
with subsection 1017G(2), if the recognised offer was an offer of:
(a) interests in a managed investment scheme; or
(b) rights or interests in such interests, or options to acquire such
interests by way of issue.
Exemption from the dispute resolution condition
(3) ASIC may, on application by a person in the prescribed form (if
any), grant the person an exemption from the dispute resolution
condition in this section, subject to any conditions specified in the
exemption.
(4) If ASIC grants a person an exemption under subsection (3), then,
for the purposes of this Chapter, the person is taken to comply with
the dispute resolution condition in this section for so long as the
exemption is in force.
(5) ASIC may, in relation to an exemption under subsection (3):
(a) vary, or impose, a condition in relation to the exemption; or
(b) revoke the exemption.
(6) A variation, imposition or revocation under subsection (5) takes
effect:
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Section 1200J
Corporations Act 2001 295
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) if the person has an address for service in this jurisdiction—
when it is served on the person at that address; or
(b) if the person does not have an address for service in this
jurisdiction—on publication in the Gazette.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 4 Modification of provisions of this Act
Section 1200K
296 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Modification of provisions of this Act
1200K Additional operation of section 675 (continuous disclosure)
In relation to a disclosing entity that has been the offeror of a
recognised offer, section 675 also has the operation it would have
if paragraph 675(2)(c) were replaced by the following paragraph:
(c) the information is not required, by the law of the recognised
jurisdiction to which the offer relates, to be included in a
supplementary or replacement offer document; and
1200L Pre-offer advertising
Offers that need a disclosure document
(1) Subsection 734(4) also has the operation it would have if:
(a) the reference in that subsection to a disclosure document that
has been lodged with ASIC were a reference to an offer
document lodged with ASIC for the purposes of this Chapter;
and
(b) the reference in that subsection to section 739 were a
reference to section 1200N.
(2) Subsection 734(5) also has the operation it would have if:
(a) references in that subsection to a disclosure document were
references to an offer document that complies with the law of
a recognised jurisdiction; and
(b) references in that subsection to completing an application
form were references to completing an application process
under the law of that recognised jurisdiction.
(3) Subsection 734(6) also has the operation it would have if:
(a) references in that subsection to a disclosure document were
references to an offer document lodged with ASIC for the
purposes of this Chapter; and
(b) references in that subsection to completing an application
form were references to completing an application process
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Modification of provisions of this Act Division 4
Section 1200M
Corporations Act 2001 297
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
under the law of the recognised jurisdiction to which the
offer relates.
Offers that need a Product Disclosure Statement
(4) Subsection 1018A(2) also has the operation it would have if:
(a) a reference in that subsection to a Product Disclosure
Statement were a reference to an offer document that
complies with the law of a recognised jurisdiction; and
(b) a reference in that subsection to sale offers to which
section 1012C will apply were a reference to sale offers to
which section 1012C would apply if the financial product,
when made available, were not made available under a
recognised offer.
(5) Subsection 1018A(3) also has, in relation to subsection 1018A(2),
the operation it would have if:
(a) the reference in that subsection to a Product Disclosure
Statement were a reference to an offer document that
complies with the law of a recognised jurisdiction; and
(b) the reference to section 1020E were a reference to
section 1200N.
1200M Modification by the regulations
The regulations may modify a provision of this Act in relation to
its application in respect of a recognised offer or a proposed offer
of securities that may become a recognised offer.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200N
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—ASIC’s powers in relation to recognised offers
1200N Stop orders
(1) If, in relation to a thing mentioned in an item of this table, ASIC is
satisfied of the matters specified in the table item for that thing,
ASIC may make either or both of the orders specified in the table
item about that thing.
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
1 (a) an offer document
lodged under
paragraph 1200D(1
)(a); or
(b) a warning statement
lodged under
paragraph 1200D(1
)(b); or
(c) a document or
information lodged
under
paragraph 1200D(1
)(i)
there is a misleading or
deceptive statement in,
or a material omission
from, the document,
statement or
information
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document,
statement or
information relates
be made while the
order is in force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document,
statement or
information, must
not be engaged in
while the order is in
force.
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ASIC’s powers in relation to recognised offers Division 5
Section 1200N
Corporations Act 2001 299
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
2 a document, statement
or notice lodged under
subsection 1200G(9)
the change results in
there being a
misleading or
deceptive statement in,
or a material omission
from, the document,
statement or notice
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document,
statement or notice
relates be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document,
statement or notice,
must not be
engaged in while
the order is in force.
3 (a) an advertisement of
securities the
subject of a
recognised offer; or
(b) a published
statement that is
reasonably likely to
induce people to
acquire securities
the subject of a
recognised offer
there is a misleading or
deceptive statement in,
or a material omission
from, the advertisement
or statement
(a) that no offers,
issues, sales or
transfers of the
securities to which
the advertisement
or statement relates
be made while the
order is in force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
advertisement or
statement, must not
be engaged in while
the order is in force.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200N
300 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
4 an offer document
lodged under
paragraph 1200D(1)(a)
a new circumstance has
arisen since lodgment
and that circumstance
would have been
required by the law of
the recognised
jurisdiction to be
included in the offer
document, if the
circumstance had
arisen before the
document was lodged
with the home
regulator (as defined in
subsection 1200G(13))
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document
relates be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document, must not
be engaged in while
the order is in force.
5 a notice of intention to
make a recognised
offer lodged under
paragraph 1200C(5)(a)
one or more of the
requirements in
section 1200C is not
met in relation to the
proposed offer
(a) that no offers,
issues, sales or
transfers of the
securities that are
proposed to be
offered be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities
must not be
engaged in while
the order is in force.
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ASIC’s powers in relation to recognised offers Division 5
Section 1200N
Corporations Act 2001 301
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
6 a recognised offer an offering condition in
section 1200G, the
address for service
condition in
section 1200H or the
dispute resolution
condition in
section 1200J is not
being met
(a) that no offers,
issues, sales or
transfers of the
securities be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities
must not be
engaged in while
the order is in force.
(2) The order may include a statement that specified conduct engaged
in contrary to the order will be regarded as not meeting a specified
ongoing condition in Division 3.
(3) Before making an order under subsection (1), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(4) If ASIC considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order.
The interim order may be made without holding a hearing and lasts
for 21 days after the day on which it is made unless revoked before
then.
(5) At any time during the hearing, ASIC may make an interim order.
The interim order lasts until:
(a) ASIC makes an order under subsection (1) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200P
302 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) An order under subsection (1), (4) or (5) must be in writing and
must be served on the person who is ordered not to offer, issue, sell
or transfer securities or not to engage in specified conduct.
(7) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(8) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(9) A statement under subsection (2) has effect accordingly in relation
to a person on whom the order is served, or who is aware of it, who
engages in conduct contrary to the order. This applies in addition to
any other consequence that is provided for in this Act.
1200P Ban on making subsequent recognised offers
(1) ASIC may declare in writing that a person is, for the time specified
in the declaration (which must be no longer than 5 years from the
day the declaration takes effect), banned from making a recognised
offer if:
(a) the person, or an associate of the person, has been convicted
(whether or not in this jurisdiction) of an offence constituted
by conduct engaged in in relation to a recognised offer; or
(b) a court in this jurisdiction has made a civil penalty order
against the person, or an associate of the person, for a
contravention in relation to a recognised offer; or
(c) a court in a recognised jurisdiction has made an order against
the person, or an associate of the person, for a contravention
of the law of the recognised jurisdiction (other than an
offence) in relation to an offer that is a recognised offer in
this jurisdiction.
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ASIC’s powers in relation to recognised offers Division 5
Section 1200P
Corporations Act 2001 303
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Before making the declaration, ASIC must give the person an
opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; or
(b) to make submissions to ASIC on the matter.
This subsection does not apply if the person does not have an
address for service in this jurisdiction.
(3) ASIC may, in writing, vary or cancel the declaration, on ASIC’s
own initiative or on application lodged by the person in the
prescribed form (if any) together with any prescribed documents, if
ASIC is satisfied that a circumstance on which ASIC based the
declaration has changed.
(4) If ASIC proposes to reject an application by the person to vary or
cancel the declaration, ASIC must give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; or
(b) to make submissions to ASIC on the matter.
(5) The declaration, and any variation or cancellation of the
declaration, takes effect:
(a) if the person to whom the declaration applies has an address
for service in this jurisdiction—when it is served on the
person at that address; or
(b) if the person to whom the declaration applies does not have
an address for service in this jurisdiction—when it is
published in the Gazette under subsection (7).
(6) A declaration that is served on a person under paragraph (5)(a)
must be accompanied by a statement of ASIC’s reasons for the
declaration.
(7) ASIC must publish a notice in the Gazette as soon as practicable
after making, varying or cancelling the declaration. The notice:
(a) must state when the action takes or took effect; and
(b) in the case of the making of a declaration—set out a copy of
the declaration; and
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Section 1200Q
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(c) in the case of the varying of a declaration—set out a copy of
the declaration as varied.
(8) A declaration under this section is not a legislative instrument.
1200Q Offence of breaching an ongoing condition
(1) A person commits an offence if, at any particular time:
(a) the person is the offeror of a recognised offer; and
(b) an offering condition in section 1200G applies in relation to
the offer; and
(c) the condition is not met in relation to the offer.
(2) A person commits an offence if:
(a) the person is or has been the offeror of a recognised offer;
and
(b) at any particular time:
(i) the address for service condition in section 1200H; or
(ii) the dispute resolution condition in section 1200J;
applies in relation to the offer; and
(c) the condition is not met in relation to the offer.
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Division 6—Miscellaneous
1200R Service of documents
(1) For the purposes of any law, a document may be served on a
person who is, or who has been, the offeror of a recognised offer
by leaving it at, or posting it to, the person’s address for service in
this jurisdiction.
(2) The person’s address for service in this jurisdiction is:
(a) the address lodged under paragraph 1200D(1)(g); or
(b) if a change to that address has been lodged with ASIC under
section 1200H—the changed address, on and from the later
of:
(i) the day that is 7 days after the day on which the change
(or, if more than one change has been lodged, the latest
change) was lodged; or
(ii) the day specified in the notice of change as the day from
which the change is to take effect.
(3) This section does not affect:
(a) any other provision of this Act, or any provision of another
law, that permits a document to be served in a different way;
or
(b) the power of a court to authorise a document to be served in a
different way.
(4) This section does not apply in relation to a person who is, or who
has been, the offeror of a recognised offer if the address for service
condition in section 1200H does not apply to the person.
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Part 8.3 Offers made under foreign recognition schemes
Section 1200S
306 Corporations Act 2001
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Part 8.3—Offers made under foreign recognition
schemes
1200S Notice to ASIC
If:
(a) a body proposes to make an offer of securities in a
recognised jurisdiction under a foreign recognition scheme;
and
(b) under the foreign recognition scheme, the offer is to be
regulated by the law of this jurisdiction;
the body must lodge with ASIC written notice, in the prescribed
form (if any), of its intention to make the offer under the foreign
recognition scheme, no later than the time it notifies the recognised
jurisdiction of that intention.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1200T Extension of this Act to recognised jurisdictions
(1) If:
(a) a body proposes to make, or is making, an offer of securities
in a recognised jurisdiction under a foreign recognition
scheme; and
(b) under the foreign recognition scheme, the offer is to be
regulated by the law of this jurisdiction;
this Act applies in the recognised jurisdiction in relation to the
offer as if it were an offer being made in this jurisdiction.
(2) Despite subsection (1), the regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Act as it applies by force of subsection (1);
or
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(b) exempt a security or a class of securities from all or specified
provisions of this Act as it applies by force of subsection (1);
or
(c) provide that a provision of this Act as it applies by force of
subsection (1) applies with the modifications specified in the
regulations.
1200U ASIC stop order for advertising in a recognised jurisdiction
(1) If ASIC is satisfied that:
(a) an offer of securities is being made or has been made in a
recognised jurisdiction under a foreign recognition scheme;
and
(b) there is a contravention of section 734 or 1018A (as they
apply by force of section 1200T) constituted by conduct in
the recognised jurisdiction in relation to the offer;
ASIC may order that no offers, issues, sales or transfers of the
securities the subject of the offer be made in the recognised
jurisdiction while the order is in force.
(2) Before making an order under subsection (1), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(3) If ASIC considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order may be made
without holding a hearing and lasts for 21 days after the day on
which it is made unless revoked before then.
(4) At any time during the hearing, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order lasts until:
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(a) ASIC makes an order under subsection (1) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
(5) An order under subsection (1), (3) or (4) must be in writing and
must be served on the person who is ordered not to offer, issue, sell
or transfer securities.
(6) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Chapter 9—Miscellaneous
Part 9.1—Registers and registration of documents
1274 Registers
(1) ASIC must, subject to this Act, keep such registers as it considers
necessary in such form as it thinks fit.
(2) A person may:
(a) inspect any document lodged with ASIC, not being:
(iaa) a notice lodged under subsection 205D(3); or
(i) an application under section 1279 (application for
registration as an auditor), or section 20-5 of Schedule 2
(application for registration as a liquidator); or
(ia) a document lodged under a provision of Chapter 7
(other than subsection 792C(1), section 1015B or
section 1015D); or
(ii) a document lodged under section 1287 (notification of
matters by registered auditors), 1287A (annual
statements by registered auditors), 30-1 of Schedule 2
(annual liquidator returns) or 35-1 of Schedule 2 (notice
of significant events); or
(iii) a document lodged under paragraph 1296(2)(b); or
(iv) a report made or lodged under section 422, 438D or
533; or
(iva) a disclosure document lodged under section 718, or a
supplementary or replacement document lodged under
section 719, in relation to an offer of an ESS interest, in
a company (within the meaning of the Income Tax
Assessment Act 1997), if the conditions set out in
subsection (2AA) are satisfied; or
(v) a document that has been destroyed or otherwise
disposed of; or
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(b) require a certificate of the registration of a company or any
other certificate authorised by this Act to be given by ASIC;
or
(c) require a copy of or extract from any document that the
person is entitled to inspect pursuant to paragraph (a) or any
certificate referred to in paragraph (b) to be given, or given
and certified, by ASIC.
(2AA) For the purposes of subparagraph (2)(a)(iva), the conditions are the
following:
(a) the offer is under an employee share scheme (within the
meaning of the Income Tax Assessment Act 1997);
(b) the disclosure document or replacement document being
lodged, or the disclosure document as supplemented by the
supplementary document being lodged, states that the ESS
interest, in the company (within the meaning of that Act) (the
issuing company), will:
(i) be made available only to employees of the issuing
company or a subsidiary (within the meaning of that
Act) of the issuing company; and
(ii) relate only to ordinary shares;
(c) no equity interests in any of the following companies are
listed for quotation in the official list of any approved stock
exchange at the end of the issuing company’s most recent
income year (the pre-lodgement year) before the income year
in which the disclosure document or replacement document,
or the disclosure document being supplemented by the
supplementary document, is lodged:
(i) the issuing company;
(ii) any subsidiary (within the meaning of that Act) of the
issuing company at the end of the pre-lodgement year;
(iii) any holding company of the issuing company at the end
of the pre-lodgement year;
(iv) any subsidiary (within the meaning of that Act) of a
holding company of the issuing company at the end of
the pre-lodgement year;
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(d) the issuing company and each of the other companies
mentioned in paragraph (c) were incorporated by or under an
Australian law or foreign law less than 10 years before the
end of the pre-lodgement year;
(e) the issuing company had an aggregated turnover not
exceeding $50 million for the pre-lodgement year.
(2AB) Subsection 83A-33(7) of the Income Tax Assessment Act 1997 also
applies for the purposes of subsection (2AA) of this section.
(2A) For the purposes of subsections (2) and (5), a document given to
ASIC by a market operator (whether or not pursuant to a provision
of this Act) that contains information that the market operator has
made available to participants in the market is taken to be a
document lodged with ASIC.
Note: For example, a document given to ASIC for the purposes of
subsection 792C(1) will be covered by this subsection.
(2B) For the purposes of subsections (2) and (5), information or a copy
of a document that is not required to be lodged with ASIC because
of section 601CDA or 601CTA is taken to be a document lodged
with ASIC if an authority mentioned in the section has given the
information or document to ASIC.
(2C) For the purposes of subsections (2) and (5), information or a copy
of a document that is taken to be lodged with ASIC because of
paragraph 1200D(2)(b) or 1200G(10)(b) is taken to be a document
lodged with ASIC if an authority mentioned in section 601CDA or
601CTA has given the information or document to ASIC.
(2D) For the purposes of subsections (2) and (5), each of the following
is taken to be a document lodged with ASIC if a copy has been
given to ASIC by APRA:
(a) benefit fund rules that have been approved by APRA under
section 16L of the Life Insurance Act 1995;
(b) an amendment of benefit fund rules that has been approved
by APRA under section 16Q of the Life Insurance Act 1995;
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(c) consequential amendments of a company’s constitution that
have been approved by APRA under section 16U or 16V of
the Life Insurance Act 1995.
(3) If a reproduction or transparency of a document or certificate is
produced for inspection, a person is not entitled pursuant to
paragraph (2)(a) to require the production of the original of that
document or certificate.
(4) The reference in paragraph (2)(c) to a document or certificate
includes, where a reproduction or transparency of that document or
certificate has been incorporated with a register kept by ASIC, a
reference to that reproduction or transparency and, where such a
reproduction or transparency has been so incorporated, a person is
not entitled pursuant to that paragraph to a copy of or extract from
the original of that document or certificate.
(4A) A person is not entitled under paragraph (2)(a) to require the
production of the original of a document or certificate if ASIC
keeps by means of a mechanical, electronic or other device a
record of information set out in the document or certificate and:
(a) ASIC produces to the person for inspection a writing that sets
out what purports to be the contents of the document or
certificate; or
(b) ASIC causes to be displayed for the person what purports to
be the contents of the document or certificate and, as at the
time of the displaying, the person has not asked for the
production of a writing of the kind referred to in
paragraph (a).
(4B) Where:
(a) a person makes under paragraph (2)(c) a requirement that
relates to a document or certificate; and
(b) ASIC keeps by means of a mechanical, electronic or other
device a record of information set out in the document or
certificate; and
(c) pursuant to that requirement, ASIC gives a writing or
document that sets out what purports to be the contents of:
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(i) the whole of the document or certificate; or
(ii) a part of the document or certificate;
then, for the purposes of that paragraph, ASIC is taken to have
given, pursuant to that requirement:
(d) if subparagraph (c)(i) applies—a copy of the document or
certificate; or
(e) if subparagraph (c)(ii) applies—an extract from the document
or certificate setting out that part of it.
(4C) Where:
(a) the requirement referred to in paragraph (4B)(a) includes a
requirement that the copy or extract be certified; and
(b) pursuant to that requirement, ASIC gives a writing or
document as mentioned in paragraph (4B)(c);
then:
(c) ASIC may certify that the writing or document sets out the
contents of the whole or part of the document or certificate,
as the case requires; and
(d) the writing or document is, in a proceeding in a court,
admissible as prima facie evidence of the information
contained in it.
(4D) ASIC may edit from a statement of affairs any information that
ASIC is satisfied is commercial-in-confidence, before allowing a
person to inspect the statement, or giving a copy or extract of the
statement to a person, under subsection (2).
(4E) A statement of affairs is a statement or report required to be
prepared under one of the following provisions:
(a) subsection 421A(1);
(b) paragraph 429(2)(b);
(c) subsection 438B(2);
(d) subsection 475(1) or (2);
(e) subsection 494(2);
(f) subsection 497(4).
(4F) Information is commercial-in confidence if:
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(a) the disclosure of the information could unreasonably affect a
person, or a business or action related to a person, in an
adverse manner; and
(b) the information is not in the public domain; and
(c) the information is not required to be disclosed under another
law of the Commonwealth, a State or a Territory; and
(d) the information is not readily discoverable.
(4G) Despite subsection (2), a person is not entitled to inspect, or to
require a copy or an extract of, any information in a statement of
affairs that has been edited from the statement under
subsection (4D).
(5) A copy of or extract from any document lodged with ASIC, and
certified by ASIC, is, in any proceeding, admissible in evidence as
of equal validity with the original document.
Note: See also subsection (2A) for when certain documents are taken to
have been lodged with ASIC.
(6) The reference in subsection (5) to a document includes, where a
reproduction or transparency of that document has been
incorporated with a register kept by ASIC, a reference to that
reproduction or transparency.
(7) In any proceeding:
(a) a certificate by ASIC that, at a date or during a period
specified in the certificate, no company was registered under
this Act by a name specified in the certificate is to be
received as prima facie evidence that at that date or during
that period, as the case may be, no company was registered
by that name under this Act; and
(b) a certificate by ASIC that a requirement of this Act specified
in the certificate:
(i) had or had not been complied with at a date or within a
period specified in the certificate; or
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(ii) had been complied with at a date specified in the
certificate but not before that date;
is to be received as prima facie evidence of matters specified
in the certificate; and
(c) a certificate by ASIC that, during a period specified in the
certificate, a particular company was registered, or taken to
be registered, under this Act is to be received as prima facie
evidence that, during that period, that company was
registered under this Act.
(7A) A certificate issued by ASIC stating that a company has been
registered under this Act is conclusive evidence that:
(a) all requirements of this Act for its registration have been
complied with; and
(b) the company was duly registered as a company under this
Act on the date specified in the certificate.
(8) If ASIC is of opinion that a document submitted for lodgment:
(a) contains matter contrary to law; or
(b) contains matter that, in a material particular, is false or
misleading in the form or context in which it is included; or
(c) because of an omission or misdescription has not been duly
completed; or
(d) contravenes this Act; or
(e) contains an error, alteration or erasure;
ASIC may refuse to register or receive the document and may
request:
(f) that the document be appropriately amended or completed
and resubmitted; or
(g) that a fresh document be submitted in its place; or
(h) where the document has not been duly completed, that a
supplementary document in the prescribed form be lodged.
(9) ASIC may require a person who submits a document for lodgment
to produce to ASIC such other document, or to give to ASIC such
information, as ASIC thinks necessary in order to form an opinion
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whether it may refuse to receive or register the first-mentioned
document.
(10) ASIC may, if in the opinion of ASIC it is no longer necessary or
desirable to retain them, destroy or dispose of:
(a) in relation to a body corporate:
(i) any return of allotment of shares for cash that has been
lodged for not less than 2 years; or
(ii) any balance-sheet that has been lodged for not less than
7 years or any document creating or evidencing a
charge, or the complete or partial satisfaction of a
charge, where a memorandum of satisfaction of the
charge has been registered for not less than 7 years; or
(iii) any other document (other than the constitution or any
other document affecting it) that has been lodged or
registered for not less than 15 years; or
(c) any document a transparency of which has been incorporated
with a register kept by ASIC.
(11) If a body corporate or other person, having made default in
complying with:
(a) any provision of this Act or of any other law that requires the
lodging in any manner of any return, account or other
document or the giving of notice to ASIC of any matter; or
(b) any request of ASIC to amend or complete and resubmit any
document or to submit a fresh document;
fails to make good the default within 14 days after the service on
the body or person of a notice requiring it to be done, a court may,
on an application by any member or creditor of the body or by
ASIC, make an order directing the body or any officer of the body
or the person to make good the default within such time as is
specified in the order.
(12) Any such order may provide that all costs of and incidental to the
application are to be borne by the body or by any officers of the
body responsible for the default or by the person.
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(13) A person must not contravene an order made under
subsection (11).
(14) Nothing in this section prejudices the operation of any law
imposing penalties on a body corporate or its officers or on another
person in respect of a default mentioned in subsection (11).
(15) Where information about a person is included on a register kept by
ASIC, ASIC may at any time, in writing, require that person to
give ASIC specified information about the person, being
information of the kind included on that register.
(16) The person must provide the information within such reasonable
period, and in such form, as are specified by ASIC.
(17) An offence based on subsection (9), (13) or (16) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1274AA Register of disqualified company directors and other
officers
(1) ASIC must keep a register of persons who have been disqualified
from managing corporations under:
(a) section 206C, 206D, 206E, 206EAA, 206EA, 206EB or 206F
of this Act; or
(b) a provision of a law of a State or Territory that:
(i) was in force at any time before the commencement of
this Act; and
(ii) corresponds, in whole or in part, to one of the provisions
referred to in paragraph (a).
(2) The register must contain a copy of:
(a) every order made by the Court under section 206C, 206D or
206E; and
(aa) every court order referred to in section 206EA; and
(ab) every court order referred to in section 206EAA; and
(ac) every court order referred to in section 206EB; and
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(b) every notice that was served under subsection 206F(3); and
(c) each permission given under subsection 206F(5); and
(d) every order lodged under subsection 206G(4); and
(e) every order, notice or permission that was made, served,
given or lodged under a provision of a law of a State or
Territory that:
(i) was in force at any time before the commencement of
this Act; and
(ii) corresponds, in whole or in part, to one of the provisions
referred to in paragraph (a), (b), (c) or (d).
(3) Subsections 1274(2) and (5) apply to a copy of an order, notice or
permission referred to in subsection (2) as if that copy were a
document lodged with ASIC.
(4) A reference in this section to a provision of a law of a State or
Territory includes a provision as applied as a law of that State or
Territory.
1274A Obtaining information from certain registers
(1) In this section:
data processor means a mechanical, electronic or other device for
the processing of data.
register means a register kept by ASIC under this Act.
search includes inspect.
(2) ASIC may permit a person to search, otherwise than by using a
data processor, a prescribed register other than the Register of
Relevant Providers.
(3) ASIC may permit a person to search a prescribed register by using
a data processor in order to obtain prescribed information from the
register.
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(4) ASIC may make available to a person prescribed information (in
the form of a document or otherwise) that ASIC has obtained from
a prescribed register by using a data processor.
(5) Nothing in this section limits:
(a) a power or function that ASIC has apart from this section; or
(b) a right that a person has apart from this section.
1274B Use, in court proceedings, of information from ASIC’s
national database
(1) In this section:
data processor means a mechanical, electronic or other device for
processing data.
(2) In a proceeding in a court, a writing that purports to have been
prepared by ASIC is admissible as prima facie evidence of the
matters stated in so much of the writing as sets out what purports to
be information obtained by ASIC, by using a data processor, from
the national database. In other words, the writing is proof of such a
matter in the absence of evidence to the contrary.
(3) A writing need not bear a certificate or signature in order to be
taken to purport to have been prepared by ASIC.
(4) Nothing in this section limits, or is limited by, section 1274 or
1274A.
1274C ASIC certificate
ASIC may certify that a person was a director or secretary of a
company at a particular time or during a particular period. In the
absence of evidence to the contrary, a certificate is proof of the
matters stated in it.
Note: See section 1274B for the evidentiary status of documents prepared by
ASIC from the national database.
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1275 Relodging of lost registered documents
(1) Where a document forming part of the constitution of, or any other
document relating to, a body corporate has, since being lodged,
been lost or destroyed, a person may apply to ASIC for leave to
lodge a copy of the document as originally lodged.
(2) Where such an application is made, ASIC may direct that notice of
the application be given to such persons and in such manner as it
thinks fit.
(3) Whether or not an application has been made to ASIC under
subsection (1), ASIC, upon being satisfied:
(a) that an original document has been lost or destroyed; and
(b) of the date of the lodging of that document; and
(c) that a copy of that document produced to ASIC is a correct
copy;
may certify upon the copy that it is so satisfied and grant leave for
the copy to be lodged in the manner required by law in respect of
the original.
(4) Upon the lodgment the copy has, and is taken to have had from
such date as is mentioned in the certificate as the date of the
lodging of the original, the same force and effect for all purposes
as the original.
(5) A decision of the Tribunal varying or setting aside a decision of
ASIC to certify and grant leave under subsection (3) may be
lodged with ASIC and is to be registered by it, but no payments,
contracts, dealings, acts or things made, had or done in good faith
before the registration of the Tribunal’s decision and upon the faith
of and in reliance upon the certificate are to be invalidated or
affected by the Tribunal’s decision.
(6) Where a transparency of a document referred to in subsection (1)
has been incorporated with a register kept by ASIC and is lost or
destroyed as referred to in that subsection, this section applies as if
the document of which it is a transparency had been so lost or
destroyed.
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Corporations Act 2001 321
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Part 9.2—Registration of auditors
Division 1—Interpretation
1276 Definitions
In this Part, unless the contrary intention appears:
body corporate includes a Part 5.7 body.
decision, in relation to the Board, means, in Division 3, a decision
of the Board under that Division and includes a refusal to exercise
a power under section 1292.
registered means registered under Division 2.
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Section 1279
322 Corporations Act 2001
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Division 2—Registration
1279 Application for registration as auditor
(1) A natural person may make an application to ASIC for registration
as an auditor.
(2) An application under this section:
(a) must be lodged with ASIC; and
(b) must contain such information as is prescribed in the
regulations; and
(c) must be in the prescribed form.
1280 Registration of auditors
(2) Subject to this section, where an application for registration as an
auditor is made under section 1279, ASIC must grant the
application and register the applicant as an auditor if:
(a) the applicant satisfies subsection (2A) or (2B); and
(b) ASIC is satisfied that the applicant has either:
(i) satisfied all the components of an auditing competency
standard approved by ASIC under section 1280A; or
(ii) had such practical experience in auditing as is
prescribed; and
(c) ASIC is satisfied that the applicant is capable of performing
the duties of an auditor and is otherwise a fit and proper
person to be registered as an auditor;
but otherwise ASIC must refuse the application.
(2A) The applicant satisfies this subsection if the applicant:
(a) holds a degree, diploma or certificate from a prescribed
university or another prescribed institution in Australia; and
(b) has, in the course of obtaining that degree, diploma or
certificate, passed examinations in such subjects, under
whatever name, as the appropriate authority of the university
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or other institution certifies to ASIC to represent a course of
study:
(i) in accountancy (including auditing) of not less than 3
years duration; and
(ii) in commercial law (including company law) of not less
than 2 years duration; and
(c) has satisfactorily completed a course in auditing prescribed
by the regulations for the purposes of this paragraph.
(2B) The applicant satisfies this subsection if the applicant has other
qualifications and experience that, in ASIC’s opinion, are
equivalent to the requirements mentioned in subsection (2A).
(3) ASIC must not register as an auditor a person who is disqualified
from managing corporations under Part 2D.6.
(4) Subject to subsection (8), ASIC may refuse to register as an auditor
a person who is not resident in Australia.
(5) Where ASIC grants an application by a person for registration as
an auditor, ASIC must cause to be issued to the person a certificate
by ASIC stating that the person has been registered as an auditor
and specifying the day on which the application was granted.
(7) A registration under this section is taken to have taken effect at the
beginning of the day specified in the certificate as the day on which
the application for registration was granted and remains in force
until:
(a) the registration is cancelled by ASIC or the Board; or
(b) the person who is registered dies.
(8) ASIC must not refuse to register a person as an auditor unless
ASIC has given the person an opportunity to appear at a hearing
before ASIC and to make submissions and give evidence to ASIC
in relation to the matter.
(9) Where ASIC refuses an application by a person for registration as
an auditor, ASIC must, not later than 14 days after the decision,
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Section 1280A
324 Corporations Act 2001
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give to the person a notice in writing setting out the decision and
the reasons for it.
1280A Approval of auditing competency standard
(1) ASIC may, on application by any person, approve an auditing
competency standard for the purposes of paragraph 1280(2)(b).
The approval must be in writing.
(2) If, on application by a person, ASIC approves an auditing
competency standard under subsection (1), ASIC may, on
application by that person, approve a variation of the standard. The
approval must be in writing.
(3) ASIC must not approve an auditing competency standard, or a
variation of an auditing competency standard, unless it is satisfied
that:
(a) the standard, or the standard as proposed to be varied,
provides that a person’s performance against each component
of the standard is to be appropriately verified by a person
who:
(i) is a registered company auditor; and
(ii) has sufficient personal knowledge of the person’s work
to be able to give that verification; and
(b) the standard, or the standard as proposed to be varied, is not
inconsistent with this Act or any other law of the
Commonwealth under which ASIC has regulatory
responsibilities; and
(c) the standard adequately addresses the level of practical
experience needed for registration as a company auditor; and
(d) the standard is harmonised to the greatest extent possible
with other approved auditing competency standards.
(4) ASIC may revoke an approval of an auditing competency standard:
(a) on application by the person who applied for the approval; or
(b) if ASIC is no longer satisfied as mentioned in subsection (3).
The revocation must be in writing.
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Section 1281
Corporations Act 2001 325
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(5) An approval, an approval of a variation, and a revocation of an
approval, of an auditing competency standard are legislative
instruments.
1281 Auditor-General taken to be registered as auditor
(1) A person who holds office as, or is for the time being exercising
the powers and performing the duties of:
(a) the Auditor-General; or
(b) the Auditor-General of a State or Territory in this
jurisdiction;
is taken, despite any other provision of this Part, to be registered as
an auditor.
(2) A person to whom the Auditor-General of the Commonwealth, or
of a State or Territory, delegates:
(a) the function of conducting an audit; or
(b) the power to conduct an audit;
is taken to be registered as an auditor under this Part for the
purposes of applying Chapter 2M to the audit.
1285 Register of Auditors
(1) ASIC must cause a Register of Auditors to be kept for the purposes
of this Act and must cause to be entered in the Register in relation
to a person who is registered as an auditor:
(a) the name of the person; and
(b) the day on which the application by that person for
registration as an auditor was granted; and
(c) the address of the principal place where the person practises
as an auditor and the address of the other places (if any) at
which he or she so practises; and
(d) if the person practises as an auditor as a member of a firm or
under a name or style other than his or her own name—the
name of that firm or the name or style under which he or she
so practises; and
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Section 1287
326 Corporations Act 2001
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(e) particulars of any suspension of the person’s registration,
under Division 2, as an auditor and of any action taken in
respect of the person under paragraph 1292(9)(a), (b) or (c);
and may cause to be entered in the Register in relation to a person
who is registered as an auditor such other particulars as ASIC
considers appropriate.
(2) Where a person ceases to be registered as an auditor, ASIC must
cause to be removed from the Register of Auditors the name of the
person and any other particulars entered in the Register in relation
to that person.
(3) A person may inspect and make copies of, or take extracts from,
the Register of Auditors.
1287 Notification of certain matters
(1) Where:
(a) a person who is a registered company auditor ceases to
practise as an auditor; or
(b) a change occurs in any matter particulars of which are
required by paragraph 1285(1)(a), (c) or (d) to be entered in
the Register of Auditors in relation to a person who is a
registered company auditor;
the person must, not later than 21 days after the occurrence of the
event concerned, lodge, in the prescribed form, particulars in
writing of that event.
(4) If a person who is registered as an auditor is disqualified from
managing corporations under Part 2D.6, then, within a period of 3
days after they become disqualified, they must lodge written
particulars in the prescribed form of the circumstances because of
which they become disqualified.
1287A Annual statements by registered company auditors
(1) A person who is a registered company auditor must, within one
month after the end of:
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(a) the period of 12 months beginning on the day on which the
person’s registration begins; and
(b) each subsequent period of 12 months;
lodge with ASIC a statement in respect of that period.
(1A) A statement under subsection (1):
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
(2) ASIC may, on the application of the person made before the end of
the period for lodging a statement under subsection (1), extend, or
further extend, that period.
1289 Auditors and other persons to enjoy qualified privilege in
certain circumstances
Qualified privilege for auditor
(1) An auditor has qualified privilege in respect of:
(a) a statement that the auditor makes (orally or in writing) in the
course of the auditor’s duties as auditor; or
(b) a statement that the auditor makes (orally or in writing) on:
(i) a directors’ report under section 298 or 306; or
(ii) a statement, report or other document that is taken, for
any purpose, to be part of that report; or
(c) notifying ASIC of a matter under section 311; or
(d) a disclosure made by the auditor in response to a notice given
to the auditor under subsection 30A(1) or 225A(5) of the
ASIC Act.
Note: If the auditor is an audit company, the company has qualified privilege
under this subsection in respect of statements made, and notices given,
by individuals on behalf of the company if those statements and
notices can be properly attributed to the company.
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328 Corporations Act 2001
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Qualified privilege for registered company auditor acting on
behalf of audit company
(2) If the auditor is an audit company, a registered company auditor
acting on behalf of the company has qualified privilege in respect
of:
(a) a statement that the registered company auditor makes (orally
or in writing) in the course of the performance, on the behalf
of the company, of the company’s duties as auditor; or
(b) a statement that the registered company auditor makes (orally
or in writing), on behalf of the company, on:
(i) a directors’ report under section 298 or 306; or
(ii) any statement, report or other document that is taken,
for any purpose, to be part of that report; or
(c) a notification of a matter that the registered company auditor
gives ASIC, on behalf of the company, under section 311; or
(d) a disclosure made by the registered company auditor in
response to a notice given to the audit company under
subsection 225A(5) of the ASIC Act.
Extent of auditor’s duties—answering questions put to auditor by
members
(3) For the purposes of this section, an auditor’s duties as auditor
include:
(a) answering questions put to the auditor (or the auditor’s
representative) at an AGM; and
(b) providing answers to questions that are submitted to the
auditor under section 250PA.
Qualified privilege for person representing auditor at AGM
(4) A person who represents an auditor at an AGM has qualified
privilege in respect of any statement that the person makes in the
course of representing the auditor at that AGM.
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Qualified privilege for subsequent publication
(5) A person has qualified privilege in respect of the publishing of a
document that:
(a) is prepared by an auditor in the course of the auditor’s duties;
or
(b) required by or under this Act to be lodged (whether or not the
document has been lodged).
(6) A person has qualified privilege in respect of the publishing of any
statement:
(a) made by an auditor as mentioned in subsection (1); or
(b) made by a registered company auditor as mentioned in
subsection (2); or
(c) made by a person as mentioned in subsection (4).
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Division 2A Conditions on registration of auditors
Section 1289A
330 Corporations Act 2001
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Division 2A—Conditions on registration of auditors
1289A ASIC may impose conditions on registration
(1) Under this section, ASIC may impose only conditions of a kind
specified in the regulations.
(2) Subject to this section, ASIC may, at any time, by giving written
notice to a person registered as an auditor:
(a) impose conditions, or additional conditions, on their
registration; and
(b) vary or revoke conditions imposed on their registration.
(3) ASIC may do so:
(a) on its own initiative; or
(b) if the registered company auditor lodges with ASIC an
application for ASIC to do so, which is accompanied by the
documents, if any, required by regulations made for the
purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(4) Except where conditions are varied on the application of the
registered company auditor, ASIC may only impose conditions or
additional conditions, or vary the conditions, on registration after
giving the auditor an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC in relation to the matter.
This subsection does not apply to ASIC imposing conditions at the
time when the applicant is registered.
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Section 1290
Corporations Act 2001 331
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Division 3—Cancellation or suspension of registration
1290 Cancellation at request of registered person
(1) Where a person who is registered as an auditor requests ASIC to
cancel his or her registration, ASIC may cancel the registration of
that person as an auditor.
(2) A decision of ASIC under subsection (1) to cancel the registration
of a person as an auditor comes into effect as soon as practicable
upon the making of the decision.
1291 Immediate suspension or cancellation
ASIC may cancel or suspend a person’s registration as an auditor
if:
(a) the person is liable to pay levy imposed by the ASIC
Supervisory Cost Recovery Levy Act 2017; and
(b) the following have not been paid in full at least 12 months
after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
person;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note: See section 1298 for the effect of suspension.
1291A Notice of suspension or cancellation
Application of this section
(1) This section applies if ASIC decides under section 1291 to suspend
or cancel the registration of a person as an auditor.
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Section 1291B
332 Corporations Act 2001
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ASIC must give notice of decision
(2) ASIC must, within 10 business days after making the decision,
give a written notice setting out the decision, and the reasons for
the decision.
When decision comes into effect
(3) The decision comes into effect on the day after the notice is given
to the person.
Failure to give notice does not affect validity of decision
(4) A failure by ASIC to give the notice under subsection (2) within 10
business days does not affect the validity of the decision.
1291B ASIC may vary or revoke suspension
(1) This section applies if ASIC has suspended the registration of a
person as an auditor under section 1291.
(2) ASIC may at any time vary or revoke the suspension by giving
written notice to the person.
1292 Powers of Board in relation to auditors
(1) The Board may, if it is satisfied on an application by ASIC or
APRA for a person who is registered as an auditor to be dealt with
under this section that, before, at or after the commencement of
this section:
(a) the person has:
(ia) contravened section 324DB; or
(i) contravened section 1287A; or
(ia) failed to comply with a condition of the person’s
registration as an auditor; or
(ii) ceased to be resident in Australia; or
(b) the person either:
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(i) has not performed any audit work during a continuous
period of not less than 5 years; or
(ii) has not performed any significant audit work during a
continuous period of not less than 5 years;
and, as a result, has ceased to have the practical experience
necessary for carrying out audits for the purposes of this Act;
or
(d) the person has failed, whether in or outside this jurisdiction,
to carry out or perform adequately and properly:
(i) the duties of an auditor; or
(ii) any duties or functions required by an Australian law to
be carried out or performed by a registered company
auditor;
or is otherwise not a fit and proper person to remain
registered as an auditor;
by order, cancel, or suspend for a specified period, the registration
of the person as an auditor.
(1A) In determining for the purposes of subparagraph (1)(b)(ii) whether
audit work performed by a person is significant, have regard to:
(a) the nature of the audit; and
(b) the extent to which the person was involved in the audit; and
(c) the level of responsibility the person assumed in relation to
the audit.
(7) The Board must, if it is satisfied on an application by ASIC or
APRA for a person who is registered as an auditor to be dealt with
under this section:
(a) that the person is disqualified from managing corporations
under Part 2D.6; or
(b) that the person is incapable, because of mental infirmity, of
managing his or her affairs;
by order, cancel the registration of the person as an auditor.
(9) Where, on an application by ASIC or APRA for a person who is
registered as an auditor to be dealt with under this section, the
Board is satisfied that the person has failed to carry out or perform
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Section 1294
334 Corporations Act 2001
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adequately and properly any of the duties or functions mentioned
in paragraph (1)(d), or is otherwise not a fit and proper person to
remain registered as an auditor the Board may deal with the person
in one or more of the following ways:
(a) by admonishing or reprimanding the person;
(b) by requiring the person to give an undertaking to engage in,
or to refrain from engaging in, specified conduct;
(c) by requiring the person to give an undertaking to refrain from
engaging in specified conduct except on specified conditions;
and, if a person fails to give an undertaking when required to do so
under paragraph (b) or (c), or contravenes an undertaking given
pursuant to a requirement under that paragraph, the Board may, by
order, cancel, or suspend for a specified period, the registration of
the person as an auditor.
(10) The Board’s powers under subsection (9) may be exercised in
addition to, or in substitution for, the exercise of the Board’s
powers to cancel or suspend a registration under subsection (1).
(11) The Board may exercise any of its powers under this Division in
relation to a person as a result of conduct engaged in by the person
whether or not that conduct constituted or might have constituted
an offence, and whether or not any proceedings have been brought
or are to be brought in relation to that conduct.
(12) This section has effect subject to section 1294.
1294 Board to give opportunity for hearing etc.
(1) The Board must not:
(a) cancel or suspend the registration of a person as an auditor;
or
(b) deal with a person in any of the ways mentioned in
subsection 1292(9);
unless the Board has given the person an opportunity to appear at a
hearing held by the Board and to make submissions to, and adduce
evidence before, the Board in relation to the matter.
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Section 1294A
Corporations Act 2001 335
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(2) Where subsection (1) requires the Board to give a person an
opportunity to appear at a hearing and to make submissions to, and
bring evidence before, the Board in relation to a matter, the Board
must give ASIC and APRA an opportunity to appear at the hearing
and to make submissions to, and bring evidence before, the Board
in relation to the matter.
1294A Pre-hearing conference
(1) If subsection 1294(1) requires the Board to give a person an
opportunity to appear at a hearing and to make submissions to, and
bring evidence before, the Board in relation to a matter, the
Chairperson of the Board may, if he or she considers that it would
assist in the conduct of the hearing to do so, convene one or more
conferences with the person.
(2) The Chairperson of the Board may allow any of the following
persons to attend a conference:
(a) a representative of ASIC;
(b) a representative of APRA;
(c) any other person.
(3) The Chairperson of the Board must give written notice of a
conference to ASIC and APRA at least 14 days before the
conference.
(4) At a conference, the Chairperson of the Board may, on behalf of
the Board:
(a) fix a date or dates for the hearing; and
(b) give directions about the time within which submissions are
to be made to the Board in relation to the matter; and
(c) give directions about the time within which evidence is to be
brought before the Board in relation to the matter; and
(d) give directions as to the procedure to be followed at or in
connection with the hearing.
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Section 1295
336 Corporations Act 2001
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1295 Board may remove suspension
(1) Where a registration of a person as an auditor is suspended by the
Board, the Board may, on an application by the person or of its
own motion, by order, terminate the suspension.
(2) An order under subsection (1) has effect accordingly.
1296 Notice of Board’s decision
(1) Where the Board decides to exercise any of its powers under
section 1292 in relation to a person, or decides that it is required to
make an order under subsection 1292(7) in relation to a person, the
Board must, within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision
and the reasons for it; and
(b) lodge a copy of the notice referred to in paragraph (a); and
(c) cause to be published in the Gazette a notice in writing
setting out the decision.
(1A) If:
(a) the Board decides to exercise the power, or makes the order,
on the basis of particular conduct engaged in by the person;
and
(b) the person engaged in that conduct in the course of
participating in the conduct of an audit on behalf of an audit
firm or audit company;
the notice under paragraph (1)(c) may identify the audit firm or
audit company.
(1B) If the Board:
(a) decides to exercise any of its powers under section 1292 in
relation to a person; or
(b) decides that it is required to make an order under
subsection 1292(7) in relation to a person;
then, in addition to meeting the requirements of subsection (1), the
Board may take such steps as it considers reasonable and
appropriate to publicise:
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(c) the decision; and
(d) the reasons for the decision.
Without limiting this, the Board may make the decision and
reasons available on the internet.
(1C) If:
(a) the Board decides to exercise the power under section 1292,
or makes the order under subsection 1292(7), on the basis of
particular conduct engaged in by the person; and
(b) the person engaged in that conduct in the course of
participating in the conduct of an audit on behalf of an audit
firm or audit company;
a publication under subsection (1B) may identify the audit firm or
audit company.
(2) Where the Board decides to refuse to exercise its powers under
section 1292 in relation to a person, or decides that it is not
required to make an order under subsection 1292(7) in relation to a
person, the Board must, within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision
and the reasons for it; and
(b) lodge a copy of the notice referred to in paragraph (a).
(3) The validity of a decision of the Board is not affected by failure of
the Board to comply with subsection (1) or (2), as the case
requires, in relation to the decision.
1297 Time when Board’s decision comes into effect
(1) Subject to subsection (2) and to sections 41 and 44A of the
Administrative Appeals Tribunal Act 1975, an order made by the
Board cancelling or suspending the registration of a person as an
auditor comes into effect:
(a) at the end of the day on which there is given to the person a
paragraph 1296(1)(a) notice of the decision pursuant to
which the order is made; or
(b) at the end of such longer period (not exceeding 90 days) as
the Board determines.
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Section 1298
338 Corporations Act 2001
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(2) Where the Board makes an order of a kind referred to in
subsection (1), it may, in order to enable an application to be made
to the Tribunal for review of the decision to make the order,
determine that the order is not to come into effect until a specified
time or until the happening of a specified event.
(3) The Board may at any time vary or revoke a determination made
under subsection (2), including such a determination that has been
varied at least once before.
(4) A determination in force under subsection (2) has effect
accordingly.
1298 Effect of suspension
A person whose registration as an auditor is suspended is, except
for the purposes of subsection 1285(2), section 1287 (other than
paragraph 1287(1)(a)), section 1287A and this Division, taken not
to be registered as an auditor so long as the registration is
suspended.
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Section 1298P
Corporations Act 2001 339
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Validation of approval of auditing competency
standard
1298P Validation of approval of auditing competency standard
(1) This section applies, for the purposes of the laws of the
Commonwealth (including this Act), in relation to the approval
dated 24 November 2004 under section 1280A of an auditing
competency standard (whether or not the approval is in force when
this section commences).
(2) The Legislation Act 2003 has effect, and is taken always to have
had effect, as if:
(a) the approval had been lodged for registration immediately
after the approval was given; and
(b) the approval had been registered immediately after it was
lodged for registration; and
(c) any other requirement imposed by that Act in relation to the
approval had been met.
(3) However, this section does not affect rights or liabilities arising
between parties to proceedings heard and finally determined by a
court on or before the commencement of this section, to the extent
that those rights or liabilities arose from, or were affected by, the
approval.
Definitions
(4) In this section:
lodge has the same meaning as in the Legislation Act 2003.
register has the same meaning as in the Legislation Act 2003.
1298Q Compensation for acquisition of property
(1) If the operation of section 1298P would result in an acquisition of
property from a person otherwise than on just terms, the
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Part 9.2 Registration of auditors
Division 4 Validation of approval of auditing competency standard
Section 1298Q
340 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Commonwealth is liable to pay a reasonable amount of
compensation to the person.
(2) If the Commonwealth and the person do not agree on the amount
of the compensation, the person may institute proceedings in the
Federal Court for the recovery from the Commonwealth of such
reasonable amount of compensation as the court determines.
(3) To avoid doubt, this section applies in relation to the operation of
section 1298P instead of section 1350.
(4) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
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Authorised audit companies Part 9.2A
Registration Division 1
Section 1299A
Corporations Act 2001 341
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.2A—Authorised audit companies
Division 1—Registration
1299A Application for registration as authorised audit company
(1) A company may apply to ASIC for registration as an authorised
audit company.
(2) An application under this section:
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
1299B Eligibility for registration as an authorised audit company
A company is eligible to be registered as an authorised audit
company if and only if:
(a) each of the directors of the company:
(i) is a registered company auditor; and
(ii) is not disqualified from managing a corporation under
Part 2D.6; and
(b) each share in the company is held and beneficially owned by
a person who is:
(i) an individual; or
(ii) the legal personal representatives of an individual; and
(c) a majority of the votes that may be cast at a general meeting
of the company attach to shares in the company that are held
and beneficially owned by individuals who are registered
company auditors; and
(d) ASIC is satisfied that the company has adequate and
appropriate professional indemnity insurance for claims that
may be made against the company in relation to the audit of
companies and registered schemes for the purposes of this
Act; and
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Division 1 Registration
Section 1299C
342 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) the company is not a Chapter 5 body corporate.
1299C Registration as authorised audit company
(1) ASIC must grant the application and register the company as an
authorised audit company if the company is eligible to be
registered as an authorised audit company. Otherwise ASIC must
refuse the application.
(2) If ASIC grants the company’s application, ASIC must issue to the
company a certificate by ASIC stating that the company has been
registered as an authorised audit company and specifying the day
on which the application was granted.
(3) The company’s registration under this section takes effect at the
beginning of the day specified in the certificate as the day on which
the application for registration was granted and remains in force
until:
(a) the registration is cancelled by ASIC; or
(b) the company is wound up.
(4) ASIC must not refuse to register the company as an authorised
audit company unless ASIC has given the company an opportunity
to be represented at a hearing before ASIC and to make
submissions and give evidence to ASIC in relation to the matter.
(5) If ASIC refuses the company’s application, ASIC must, not later
than 14 days after the decision, give to the company a notice in
writing setting out the decision and the reasons for it.
1299D Registration may be subject to conditions
(1) The company’s registration as an authorised audit company is
subject to:
(a) the provisions of this Part; and
(b) the conditions or restrictions specified in the regulations; and
(c) any other conditions or restrictions determined by ASIC.
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Section 1299E
Corporations Act 2001 343
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) ASIC may determine conditions or restrictions for the purposes of
paragraph (1)(c) either at the time when the company is registered
as an authorised audit company or subsequently.
(3) ASIC determines a condition or restriction by written notice to the
company.
1299E Register of authorised audit companies
(1) ASIC must keep a Register of Authorised Audit Companies for the
purposes of this Act.
(2) In relation to each authorised audit company, ASIC must enter in
the Register:
(a) the name of the company; and
(b) the company’s ACN or ABN; and
(c) the day on which the company’s registration under
section 1299C took effect; and
(d) the address of the company’s registered office; and
(e) the address of the principal place where the company
practises as an auditor and the address of the other places (if
any) at which the company so practises; and
(f) the name and address of:
(i) each director of the company; and
(ii) each person who performs a chief executive officer
function (within the meaning of section 295A) in
relation to the company; and
(g) the details of any conditions or restrictions determined under
paragraph 1299D(1)(c) in relation to the registration; and
(h) details of any suspension of the registration.
(3) ASIC may enter in the Register in relation to the company any
other details that ASIC considers appropriate.
(4) If a company ceases to be registered as an authorised audit
company, ASIC must remove the entry in relation to the company
from the Register.
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Division 1 Registration
Section 1299F
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) A person may inspect and make copies of, or take extracts from,
the Register.
1299F Notification of certain matters
(1) An authorised audit company must notify ASIC if a condition or
restriction to which the company’s registration is subject is
contravened.
(2) The notice under subsection (1) must:
(a) set out details of the contravention; and
(b) be given within 14 days after the company becomes aware of
the contravention; and
(c) be lodged with ASIC in the prescribed form.
(3) An authorised audit company must notify ASIC if:
(a) details of a matter are required by subsection 1299E(2) to be
entered in the Register of Authorised Audit Companies in
relation to the company; and
(b) a change occurs in that matter while the company is
registered as an authorised audit company.
(4) The notice under subsection (3) must:
(a) set out details of the change; and
(b) be given within 28 days after the change occurs; and
(c) be lodged with ASIC in the prescribed form.
(5) A company that applies for registration as an authorised audit
company must notify ASIC if:
(a) details of a matter would be required by subsection 1299E(2)
to be entered in the Register of Authorised Audit Companies
in relation to the company if it were to be registered; and
(b) a change occurs in that matter before the application is
granted or rejected.
(6) The notice under subsection (5) must:
(a) set out details of the change; and
(b) be given within 28 days after the change occurs; and
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Section 1299G
Corporations Act 2001 345
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) be lodged with ASIC in the prescribed form.
1299G Annual statements by authorised audit company
(1) A company that is an authorised audit company must, within one
month after the end of:
(a) the period of 12 months beginning on the day on which the
company became registered as an authorised audit company;
and
(b) each subsequent period of 12 months;
lodge with ASIC a statement in respect of that period.
(1A) A statement under subsection (1):
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
(2) ASIC may, on the application of an authorised audit company
made before the end of the period for lodging a statement under
subsection (1), extend, or further extend, that period.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A director of a company must take all reasonable steps to comply
with, or to secure compliance with, subsection (1).
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Division 2 Cancellation or suspension of registration
Section 1299H
346 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Cancellation or suspension of registration
1299H Cancellation at request of registered person
(1) ASIC may cancel a company’s registration as an authorised audit
company if the company requests ASIC to cancel the registration.
(2) ASIC must take the steps necessary to cancel the registration as
soon as practicable after the request is made.
1299I Cancellation or suspension in other cases
ASIC may cancel or suspend a company’s registration as an
authorised audit company if:
(a) the company ceases to be eligible to be registered as an
authorised audit company; or
(b) the company fails to meet conditions or observe restrictions
imposed on the company’s registration as an authorised audit
company; or
(c) in the case of a company that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
company;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note: See section 1299K for when the cancellation takes effect.
1299J Notice of cancellation or suspension
(1) If ASIC decides to cancel or suspend a company’s registration as
an authorised audit company under section 1299I, ASIC must,
within 14 days after the decision:
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Section 1299K
Corporations Act 2001 347
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) give to the company written notice setting out the decision
and the reasons for it; and
(b) publish written notice of the decision in the Gazette.
(2) The validity of a decision by ASIC is not affected by a failure by
ASIC to comply with subsection (1) in relation to the decision.
1299K Time when ASIC’s decision comes into effect
(1) A decision by ASIC to cancel or suspend a company’s registration
as an authorised audit company comes into effect at the end of the
day on which the company is given notice of the decision under
paragraph 1299J(1)(a). This subsection has effect subject to
subsection (2) and to sections 41 and 44A of the Administrative
Appeals Tribunal Act 1975.
(2) ASIC may, in order to enable an application to be made to the
Tribunal for review of the decision to cancel or suspend the
registration, determine that the decision to cancel or suspend the
company’s registration as an authorised audit company is not to
come into effect until:
(a) a specified time; or
(b) the happening of a specified event.
(3) ASIC may at any time vary or revoke a determination made under
subsection (2), including such a determination that has been varied
at least once before.
(4) A determination in force under subsection (2) has effect
accordingly.
1299L Effect of suspension
A company whose registration as an authorised audit company is
suspended is, except for the purposes of subsection 1299E(4),
sections 1299F and 1299G and this Division, taken not to be
registered as an authorised audit company so long as the
registration is suspended.
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Division 2 Cancellation or suspension of registration
Section 1299M
348 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1299M Effect of cancellation
If a company’s registration as an authorised audit company is
cancelled (whether under section 1299H or 1299I), each
appointment of the company as auditor for a company or registered
scheme for the purposes of this Act that is in force on the day on
which the cancellation decision takes effect is terminated at the end
of that day.
Note: This means that the authorised audit company ceases to be auditor
without resigning and that the position of auditor for the company or
scheme will immediately become vacant unless there is another
auditor who has been appointed, and who can continue to act, as
auditor for the company or registered scheme.
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Books Part 9.3
Section 1300
Corporations Act 2001 349
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.3—Books
1300 Inspection of books
(1) A book that is by this Act required to be available for inspection
must, subject to and in accordance with this Act, be available for
inspection at the place where, in accordance with this Act, it is kept
and at all times when the registered office in this jurisdiction of the
body corporate concerned is required to be open to the public.
(2) If any register kept by a company or a foreign company for the
purposes of this Act is kept at a place other than the registered
office of the company or foreign company, that place must be open
to permit the register to be inspected during the same hours as
those during which the registered office of the company or foreign
company is required to be open to the public.
(2A) If a person asks a proprietary company in writing to inspect a
particular book of the company that the person has a right to
inspect, the company must make it available within 7 days, for
inspection by the person at the place where it is required to be kept.
(2B) An offence based on subsection (2A) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A person permitted by this Act (other than section 70-30 of
Schedule 2) to inspect a book may make copies of, or take extracts
from, the book and any person who refuses or fails to allow a
person so permitted to make a copy of, or take an extract from, the
book is guilty of an offence.
Note: Section 70-30 of Schedule 2 is about books relating to an external
administration.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 1301
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1301 Location of books on computers
(1) This section applies if:
(a) a corporation records, otherwise than in writing, matters (the
stored matters) this Act requires to be contained in a book;
and
(b) the record of the stored matters is kept at a place (the place of
storage) other than the place (the place of inspection) where
the book is, apart from this section, required to be kept; and
(c) at the place of inspection means are provided by which the
stored matters are made available for inspection in written
form; and
(d) the corporation has lodged a notice:
(i) stating that this section is to apply in respect of:
(A) except where sub-subparagraph (B) applies—
the book; or
(B) if the stored matters are only some of the
information that is required to be contained in
the book—the book and matters that are of the
same kind as the stored matters; and
(ii) specifying the situation of the place of storage and the
place of inspection.
(2) Subject to subsection (4), the corporation is taken to have complied
with the requirements of this Act as to the location of the book, but
only in so far as the book is required to contain the stored matters.
(3) Subject to subsection (4), for the purposes of the application of
subsection 1085(3) and section 1300 in relation to the corporation
and the book, the book is taken to be kept at the place of
inspection, even though the record of the stored matters is kept at
the place of storage.
(4) If:
(a) the situation of the place of storage or the place of inspection
changes; and
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Section 1303
Corporations Act 2001 351
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the corporation does not lodge notice of the change within 14
days after the change;
this section, as it applies to the corporation because of the lodging
of the notice referred to in paragraph (1)(d), ceases to so apply at
the end of that period of 14 days.
1303 Court may compel compliance
If any person in contravention of this Act refuses to permit the
inspection of any book or to supply a copy of any book, the Court
may by order compel an immediate inspection of the book or order
the copy to be supplied.
1304 Translations of instruments
(1) Where under this Act a person is required to lodge an instrument or
a certified copy of an instrument and the instrument is not written
in English, the person must lodge at the same time a certified
translation of the instrument into English.
(2) Where under this Act a body corporate is required to make an
instrument available for inspection and the instrument is not
written in English, the body corporate must keep at its registered
office or, if it does not have a registered office, at its principal
office in this jurisdiction, a certified translation of the instrument
into English.
(3) In this section, instrument includes any certificate, contract or
other document.
1305 Admissibility of books in evidence
(1) A book kept by a body corporate under a requirement of this Act is
admissible in evidence in any proceeding and is prima facie
evidence of any matter stated or recorded in the book.
(2) A document purporting to be a book kept by a body corporate is,
unless the contrary is proved, taken to be a book kept as mentioned
in subsection (1).
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Section 1306
352 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1306 Form and evidentiary value of books
(1) A book that is required by this Act to be kept or prepared may be
kept or prepared:
(a) by making entries in a bound or looseleaf book; or
(b) by recording or storing the matters concerned by means of a
mechanical, electronic or other device; or
(c) in any other manner approved by ASIC.
(2) Subsection (1) does not authorise a book to be kept or prepared by
a mechanical, electronic or other device unless:
(a) the matters recorded or stored will be capable, at any time, of
being reproduced in a written form; or
(b) a reproduction of those matters is kept in a written form
approved by ASIC.
(3) A corporation must take all reasonable precautions, including such
precautions (if any) as are prescribed, for guarding against damage
to, destruction of or falsification of or in, and for discovery of
falsification of or in, any book or part of a book required by this
Act to be kept or prepared by the corporation.
(4) Where a corporation records or stores any matters by means of a
mechanical, electronic or other device, any duty imposed by this
Act to make a book containing those matters available for
inspection or to provide copies of the whole or a part of a book
containing those matters is to be construed as a duty to make the
matters available for inspection in written form or to provide a
document containing a clear reproduction in writing of the whole
or part of them, as the case may be.
(4A) The regulations may provide for how up to date the information
contained in an instrument prepared for the purposes of
subsection (4) must be.
(5) If:
(a) because of this Act, a book that this Act requires to be kept or
prepared is prima facie evidence of a matter; and
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Section 1307
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the book, or a part of the book, is kept or prepared by
recording or storing matters (including that matter) by means
of a mechanical, electronic or other device;
a written reproduction of that matter as so recorded or stored is
prima facie evidence of that matter.
(6) A writing that purports to reproduce a matter recorded or stored by
means of a mechanical, electronic or other device is, unless the
contrary is established, taken to be a reproduction of that matter.
1307 Falsification of books
(1) An officer, former officer, employee, former employee, member or
former member of a company who engages in conduct that results
in the concealment, destruction, mutilation or falsification of any
securities of or belonging to the company or any books affecting or
relating to affairs of the company is guilty of an offence.
(2) Where matter that is used or intended to be used in connection with
the keeping of any books affecting or relating to affairs of a
company is recorded or stored in an illegible form by means of a
mechanical device, an electronic device or any other device, a
person who:
(a) records or stores by means of that device matter that the
person knows to be false or misleading in a material
particular; or
(b) engages in conduct that results in the destruction, removal or
falsification of matter that is recorded or stored by means of
that device, or has been prepared for the purpose of being
recorded or stored, or for use in compiling or recovering
other matter to be recorded or stored by means of that device;
or
(c) having a duty to record or store matter by means of that
device, fails to record or store the matter by means of that
device:
(i) with intent to falsify any entry made or intended to be
compiled, wholly or in part, from matter so recorded or
stored; or
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) knowing that the failure so to record or store the matter
will render false or misleading in a material particular
other matter so recorded or stored;
contravenes this subsection.
(3) It is a defence to a charge arising under subsection (1) or (2) if the
defendant proves that he, she or it acted honestly and that in all the
circumstances the act or omission constituting the offence should
be excused.
Note: A defendant bears a legal burden in relation to the matter mentioned in
subsection (3), see section 13.4 of the Criminal Code.
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Miscellaneous Chapter 9
Offences Part 9.4
Application of the Criminal Code Division 1A
Section 1308A
Corporations Act 2001 355
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.4—Offences
Division 1A—Application of the Criminal Code
1308A Application of Criminal Code
Subject to this Act, Chapter 2 of the Criminal Code applies to all
offences against this Act.
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Division 1 Specific offences
Section 1308
356 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 1—Specific offences
1308 False or misleading statements
(1) A corporation must not advertise or publish:
(a) a statement of the amount of its capital that is misleading; or
(b) a statement in which the total of all amounts paid and unpaid
on shares in the company is stated but the amount of paid up
capital or the amount of any charge on uncalled capital is not
stated.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) A person who, in a document required by or for the purposes of
this Act or lodged with or submitted to ASIC, makes or authorises
the making of a statement that to the person’s knowledge is false or
misleading in a material particular, or omits or authorises the
omission of any matter or thing without which the document is to
the person’s knowledge misleading in a material respect, is guilty
of an offence.
(3) A person who makes or authorises the making of a statement that is
based on information that to the person’s knowledge:
(a) is false or misleading in a material particular; or
(b) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
is, for the purposes of subsection (2), taken to have made or
authorised the making of a statement that to the person’s
knowledge was false or misleading in a material particular.
(3A) A person is not liable to be proceeded against for an offence in
consequence of a regulation made under section 1364 as well as for
an offence against subsection (2) of this section.
(4) A person who, in a document required by or for the purposes of
this Act or lodged:
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(a) makes or authorises the making of a statement that is false or
misleading in a material particular; or
(b) omits or authorises the omission of any matter or thing
without which the document is misleading in a material
respect;
without having taken reasonable steps to ensure that the statement
was not false or misleading in a material particular or to ensure that
the document did not omit any matter or thing without which the
document would be misleading in a material respect, as the case
may be, is guilty of an offence.
(5) A person who makes or authorises the making of a statement
without having taken reasonable steps to ensure that the
information on which the statement was based:
(a) was not false or misleading in a material particular; and
(b) did not have omitted from it a matter or thing the omission of
which would render the information misleading in a material
respect;
is, for the purposes of subsection (4), taken to have made or
authorised the making of a statement without having taken
reasonable steps to ensure that the statement was not false or
misleading.
(6) For the purposes of subsections (2) and (4), where:
(a) at a meeting, a person votes in favour of a resolution
approving, or otherwise approves, a document required by or
for the purposes of this Act or required to be lodged; and
(b) the document contains a statement that, to the person’s
knowledge, is false or misleading in a material particular, or
omits any matter or thing without which the document is, to
the person’s knowledge, misleading in a material respect;
the person is taken to have authorised the making of the statement
or the omission of the matter or thing.
(7) For the purposes of this section, a statement, report or other
document that:
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(a) relates to affairs of a company or of a subsidiary of a
company; and
(b) is not itself required by this Act to be laid before the
company in general meeting; and
(c) is attached to or included with a report of the directors
provided under section 314 to members of the company or
laid before the company at an annual general meeting of the
company;
is taken to be part of the report referred to in paragraph (c).
(8) A person must not, in connection with an application for an
Australian CS facility licence, Australian financial services licence
or Australian market licence:
(a) make a statement that is false or misleading in a material
particular knowing it to be false or misleading; or
(b) omit to state any matter or thing knowing that because of that
omission the application is misleading in a material respect.
(9) For the purposes of this section:
(a) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be a notice required for the
purposes of this Act; and
(b) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be misleading in a material respect
if it fails to comply with paragraph 708AA(7)(d), 708A(6)(e),
1012DAA(7)(e) or 1012DA(6)(f).
(10) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a statement was not false or
misleading in a material particular if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that the statement was not misleading in a material particular.
(11) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a document did not omit any matter
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or thing without which the document would be misleading in a
material respect if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that there was no such omission.
(12) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a statement was not false or
misleading in a material particular if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
(13) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a document did not omit any matter
or thing without which the document would be misleading in a
material respect if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
1309 False information etc.
(1) An officer or employee of a corporation who makes available or
gives information, or authorises or permits the making available or
giving of information, to:
(a) a director, auditor, member, debenture holder or trustee for
debenture holders of the corporation; or
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(b) if the corporation is taken for the purposes of Chapter 2M to
be controlled by another corporation—an auditor of the other
corporation; or
(c) an operator of a financial market (whether the market is
operated in Australia or elsewhere) or an officer of such a
market;
being information, whether in documentary or any other form, that
relates to the affairs of the corporation and that, to the knowledge
of the officer or employee:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
is guilty of an offence.
(2) An officer or employee of a corporation who makes available or
gives information, or authorises or permits the making available or
giving of information, to:
(a) a director, auditor, member, debenture holder or trustee for
debenture holders of the corporation; or
(b) if the corporation is taken for the purposes of Chapter 2M to
be controlled by another corporation—an auditor of the other
corporation; or
(c) an operator of a financial market (whether the market is
operated in Australia or elsewhere) or an officer of such a
market;
being information, whether in documentary or any other form,
relating to the affairs of the corporation that:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
without having taken reasonable steps to ensure that the
information:
(f) was not false or misleading in a material particular; and
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(g) did not have omitted from it a matter or thing the omission of
which rendered the information misleading in a material
respect;
is guilty of an offence.
(3) The references in subsections (1) and (2) to a person making
available or giving, or authorising or permitting the making
available or giving of, information relating to the affairs of a
corporation include references to a person making available or
giving, or authorising or permitting the making available or giving
of, information as to the state of knowledge of that person with
respect to the affairs of the corporation.
(4) Where information is made available or given to a person referred
to in paragraph (1)(a), (b) or (c) or (2)(a), (b) or (c) in response to a
question asked by that person, the question and the information are
to be considered together in determining whether the information
was false or misleading.
(5) For the purposes of this section:
(a) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be a notice required for the
purposes of this Act; and
(b) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be misleading in a material respect
if it omits information that is excluded information for the
purposes of section 708AA, 708A, 1012DAA or 1012DA.
(6) Paragraphs (1)(a) and (b) do not apply in relation to a corporation
that is an Aboriginal and Torres Strait Islander corporation.
Note: Similar offences are created in relation to Aboriginal and Torres Strait
Islander corporations under section 561-5 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
(7) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information was not false or
misleading in a material particular if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
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(b) after doing so, the person believed on reasonable grounds
that the information was not misleading or deceptive in a
material particular.
(8) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information did not have omitted
from it any matter or thing the omission of which rendered the
information misleading in a material respect if the person proves
that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that there was no such omission.
(9) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information was not false or
misleading in a material particular if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
(10) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information did not have omitted
from it any matter or thing the omission of which rendered the
information misleading in a material respect if the person proves
that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
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1310 Obstructing or hindering ASIC etc.
A person must not, without lawful excuse, obstruct or hinder
ASIC, or any other person, in the performance or exercise of a
function or power under this Act.
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1311 General penalty provisions
(1) A person who:
(a) does an act or thing that the person is forbidden to do by or
under a provision of this Act; or
(b) does not do an act or thing that the person is required or
directed to do by or under a provision of this Act; or
(c) otherwise contravenes a provision of this Act;
is guilty of an offence by virtue of this subsection, unless that or
another provision of this Act provides that the person:
(d) is guilty of an offence; or
(e) is not guilty of an offence.
Note: Chapter 2 of the Criminal Code sets out the general principles of
criminal responsibility.
(1A) Paragraphs (1)(a), (b) and (c) only apply to a provision in the
following list if a penalty, pecuniary or otherwise, is set out in
Schedule 3 for that provision, or for a provision or provisions in
which that provision is included:
(a) Chapters 2A, 2B and 2C;
(b) Parts 2F.2 and 2F.3;
(c) Chapters 2G, 2H, 2J, 2M (other than Part 2M.4), 2N, 2P and
5A;
(d) Parts 5B.1 and 5B.3;
(daa) Chapter 5D;
(da) Chapter 6CA;
(db) Chapter 7;
(dc) Chapter 8;
(e) Chapter 10.
(2) Subject to section 1312, a person who is guilty of an offence
against this Act, whether by virtue of subsection (1) or otherwise,
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is punishable, on conviction, by a penalty not exceeding the
penalty applicable to the offence.
(3) Where:
(a) subsection (1) operates in relation to a provision of this Act
so as to make a person guilty of an offence; or
(b) a provision of this Act (other than this section) provides that
a person is, in circumstances referred to in the provision,
guilty of an offence;
and a penalty, pecuniary or otherwise, is set out in Schedule 3 for
that provision, or for a provision or provisions in which that
provision is included, the penalty applicable to the offence is the
penalty so set out.
(4) Where a provision of this Act (other than this section) provides that
the penalty applicable to a contravention of a particular provision
of this Act is a specified penalty, pecuniary or otherwise, the
penalty applicable to an offence constituted by a contravention of
the particular provision is the specified penalty.
(5) Except as provided in subsection (3) or (4) or in a provision of this
Act (other than this section), the penalty applicable to the offence
is a fine of 5 penalty units.
(6) An offence based on subsection (1) for which the penalty is set out
in subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1312 Penalties for bodies corporate
(1) Where a body corporate is convicted of an offence against this Act,
the penalty that the court may impose is a fine not exceeding 5
times the maximum amount that, but for this section, the court
could impose as a pecuniary penalty for that offence.
(2) Subsection (1) does not apply in relation to the following
provisions of this Act:
(a) section 1041A;
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(b) subsection 1041B(1);
(c) subsection 1041C(1);
(d) section 1041D;
(e) subsection 1041E(1);
(f) subsection 1041F(1);
(g) subsection 1041G(1);
(h) subsection 1043A(1);
(i) subsection 1043A(2).
Note: The penalties applicable to these provisions in relation to bodies
corporate are set out in the relevant item of the table in Schedule 3.
1313 Penalty notices
(1) Where ASIC has reason to believe that a person has committed a
prescribed offence, ASIC may, subject to subsection (2), give the
person a notice in the prescribed form:
(a) alleging that the person has committed the prescribed offence
and giving the prescribed particulars in relation to the
prescribed offence; and
(b) setting out the prescribed penalty in respect of the prescribed
offence; and
(c) stating:
(i) in the case of a prescribed offence constituted by a
failure to do a particular act or thing:
(A) that the obligation to do the act or thing
continues despite the service of the notice or the
payment of the prescribed penalty; and
(B) that if, within the period specified in the notice
(being a period of at least 21 days), the person
pays the prescribed penalty to the authority
specified in the notice and does the act or thing,
no further action will be taken against the
person in relation to the prescribed offence; and
(C) that if, at the end of the period specified in the
notice, the person has not paid the prescribed
penalty to the authority specified in the notice
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or has not done the act or thing, proceedings
may be instituted against the person; or
(ii) in the case of a prescribed offence, not being an offence
constituted by a failure to do a particular act or thing:
(A) that if, within the period specified in the notice
(being a period of at least 21 days), the person
pays the prescribed penalty to the authority
specified in the notice, no further action will be
taken against the person in relation to the
prescribed offence; and
(B) that if, at the end of the period specified in the
notice, the person has not paid the prescribed
penalty to the authority specified in the notice,
proceedings may be instituted against the
person.
(2) Subsection (1) does not empower ASIC:
(a) to give a person more than one notice under that subsection
in relation to an alleged commission by that person of a
particular prescribed offence; or
(b) to give a person a notice under that subsection in relation to a
prescribed offence unless proceedings could be instituted
against that person for that offence in accordance with
section 1316.
(3) A notice under subsection (1) may be given to a natural person
either personally or by post.
(4) Where a notice under subsection (1) is given to a person in relation
to a prescribed offence constituted by a failure to do a particular act
or thing:
(a) if, within the period specified in the notice, the person pays
the prescribed penalty to the authority specified in the notice,
and does the act or thing—no proceedings may be instituted
against the person in respect of the prescribed offence; or
(b) if, at the end of the period specified in the notice, the person
has paid the prescribed penalty to the authority specified in
the notice but has not done the act or thing—no proceedings
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may be instituted against the person in respect of the
prescribed offence, but the obligation to do that act or thing
continues, and section 1314 applies in relation to the
continued failure to do that act or thing as if, on the day on
which the person so paid the prescribed penalty, the person
had been convicted of an offence constituted by a failure to
do that act or thing; or
(c) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice but had done the act or thing—proceedings may
be instituted against the person in respect of the prescribed
offence; or
(d) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice and has not done the act or thing—the
obligation to do that act or thing continues, and proceedings
may be instituted against the person in respect of the
prescribed offence.
(5) Where a notice under subsection (1) is given to a person in relation
to a prescribed offence, not being an offence constituted by a
failure to do a particular act or thing:
(a) if, within the period specified in the notice, the person pays
the prescribed penalty to the authority specified in the
notice—no proceedings may be instituted against the person
in respect of the prescribed offence; or
(b) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice—proceedings may be instituted against the
person in respect of the prescribed offence.
(6) The payment of an amount by a person pursuant to a notice served
on the person under this section in relation to a prescribed offence
is not taken for any purpose to be an admission by that person of
any liability in connection with the alleged commission of the
prescribed offence.
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(7) Except as provided by paragraphs (4)(a) and (b) and (5)(a), this
section does not affect the operation of any provision of this Act,
of the regulations, of the rules or of any other Act in relation to the
institution of proceedings in respect of offences that are prescribed
offences for the purposes of this section.
(8) In this section:
authority includes a person.
prescribed offence means:
(a) a subsection 1311(5) offence; or
(b) an offence against this Act that the regulations prescribe for
the purposes of this section.
prescribed penalty, in relation to a prescribed offence in relation to
which ASIC may give, or has given, to a person a notice under
subsection (1), means:
(a) if the offence is a subsection 1311(5) offence:
(i) if the regulations prescribe in relation to the offence for
the purposes of this paragraph an amount not exceeding
one half the amount of the penalty applicable to the
offence:
(A) if the person is a body corporate—a penalty of
five times the amount so prescribed; or
(B) otherwise—a penalty of the amount so
prescribed; or
(ii) otherwise:
(A) if the person is a body corporate—a penalty of
1.25 times the amount of the penalty applicable
to the offence; or
(B) otherwise—a penalty of 0.25 times the amount
of the penalty applicable to the offence; or
Note: Section 1311 provides for the penalty applicable to an offence.
(b) otherwise—a penalty of the amount that the regulations
prescribe in relation to the offence.
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subsection 1311(5) offence means an offence the penalty
applicable to which is provided for by subsection 1311(5).
1313A Offences committed partly in and partly out of the
jurisdiction
Where:
(a) a person does or omits to do an act outside this jurisdiction;
and
(b) if that person had done or omitted to do that act in this
jurisdiction, the person would, by reason of also having done
or omitted to do an act in this jurisdiction, have been guilty
of an offence against this Act;
the person is guilty of that offence.
1314 Continuing offences
(1) Where:
(a) by or under a provision, an act is or was required to be done
within a particular period or before a particular time; and
(b) failure to do the act within that period or before that time
constitutes an offence; and
(c) the act is not done within that period or before that time;
then:
(d) the obligation to do the act continues, after that period has
ended or that time has passed, and whether or not a person is
or has been convicted of a primary substantive offence in
relation to failure to do the act, until the act is done; and
(e) subsections (3) and (4) apply.
(2) Where:
(a) by or under a provision, an act is or was required to be done
but neither a period nor a time for the doing of the Act is or
was specified; and
(b) failure to do the act constitutes an offence; and
(c) a person is or has been convicted of a primary substantive
offence in relation to failure to do the act;
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then:
(d) the obligation to do the act continues, despite the conviction,
until the act is done; and
(e) subsections (3) and (4) apply.
(3) Where:
(a) at a particular time, a person is or was first convicted of a
substantive offence, or is or was convicted of a second or
subsequent substantive offence, in relation to failure to do the
act; and
(b) the failure to do the act continued after that time;
then:
(c) the person is, in relation to failure to do the act, guilty of a
further offence in respect of so much of the period
throughout which the failure to do the act continued or
elapsed after that time and before the relevant day in relation
to the further offence; and
(d) for the purposes of this Act and of the Crimes Act 1914, the
further offence is taken to be constituted by failure to do the
act during so much of that period as so elapsed.
(4) Where:
(a) the provision referred to in paragraph (1)(a) or (2)(a), as the
case may be, provides or provided that:
(i) an officer or employee of a body corporate; or
(ii) a person;
who is or was in default, or is or was involved in a
contravention constituted by the failure to do the act, is or
was guilty of an offence or contravenes or contravened a
provision of this Act; and
(b) throughout a particular period (in this subsection called the
relevant period):
(i) the failure to do the act continued; and
(ii) a person (in this subsection called the derivative
offender) is or was in any way, by act or omission,
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directly or indirectly, knowingly concerned in or party
to the failure to do the act; and
(iii) in a case where subparagraph (a)(i) applies—the
derivative offender is or was an officer or employee of
the body;
then:
(c) in a case where either or both of the following events occurs
or occur:
(i) a person is or was convicted, before or during the
relevant period, of a primary substantive offence in
relation to failure to do the act;
(ii) the derivative offender is or was convicted, before or
during the relevant period, of a primary derivative
offence in relation to failure to do the act;
the derivative offender is, in relation to failure to do the act,
guilty of an offence (in this paragraph called the relevant
offence) in respect of so much (if any) of the relevant period
as elapsed:
(iii) after the conviction referred to in subparagraph (i) or(ii),
or after the earlier of the convictions referred to in
subparagraphs (i) and (ii), as the case may be; and
(iv) before the relevant day in relation to the relevant
offence; and
(d) in a case where, at a particular time during the relevant
period, the derivative offender is or was first convicted of a
secondary derivative offence, or is or was convicted of a
second or subsequent secondary derivative offence, in
relation to failure to do the act—the derivative offender is, in
relation to failure to do the act, guilty of a further offence in
respect of so much of the relevant period as elapsed after that
time and before the relevant day in relation to the further
offence.
(5) Where a person is guilty, by virtue of subsection (3) or (4), of an
offence in respect of the whole or a part of a particular period, the
penalty applicable to the offence is a fine of the amount obtained
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by multiplying half a penalty unit by the number of days in that
period, or in that part of that period, as the case may be.
(6) In this section:
act includes thing.
primary derivative offence, in relation to failure to do an act,
means an offence (other than an offence of which a person is guilty
by virtue of this section) of which a person is or was guilty by
virtue of being an officer of a corporation, or a person, who is or
was in any way, by act or omission, directly or indirectly,
knowingly concerned in or party to failure to do the act.
primary substantive offence, in relation to a failure to do an act,
means an offence (other than an offence of which a person is or
was guilty by virtue of this section) constituted by failure to do the
act, or by failure to do the act within a particular period or before a
particular time.
provision means a section, or a subsection of a section, of this Act.
relevant day, in relation to an offence of which a person is guilty
by virtue of this section, means:
(a) in a case where the information relating to the offence
specifies a day in relation to the offence for the purposes of
this section, being a day not later than the day on which the
information is laid—the day the information so specifies; or
(b) in any other case—the day on which the information relating
to the offence is laid.
required includes directed.
secondary derivative offence, in relation to failure to do an act,
means an offence or further offence of which a person is, in
relation to failure to do the act, guilty by virtue of paragraph (4)(c)
or (d).
substantive offence, in relation to failure to do an act, means:
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(a) a primary substantive offence in relation to failure to do the
act; or
(b) a further offence of which a person is, in relation to failure to
do the act, guilty by virtue of subsection (3).
(7) For the purposes of subsection (4), a provision of this Act is,
whether or not it expressly provides as mentioned in
paragraph (4)(a), taken to provide that a person who is or was
involved in a contravention constituted by a failure to do an act
required by the provision contravenes or contravened that
provision.
1315 Proceedings: how taken
(1) Subject to this Act, in any proceedings for an offence against this
Act, any information, charge, complaint or application may be laid
or made by:
(a) ASIC; or
(b) a Commission delegate; or
(c) another person authorised in writing by the Minister to
institute the proceedings.
(2) A delegation for the purposes of paragraph (1)(b), or an
authorisation for the purposes of paragraph (1)(c), may relate to all
offences, or to specified offences, against this Act.
(3) Nothing in this section affects the operation of the Director of
Public Prosecutions Act 1983.
1316 Time for instituting criminal proceedings
Despite anything in any other law, proceedings for an offence
against this Act may be instituted within the period of 5 years after
the act or omission alleged to constitute the offence or, with the
Minister’s consent, at any later time.
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1316A Privilege against self-incrimination not available to bodies
corporate in Corporations Act criminal proceedings
(1) In a Corporations Act criminal proceeding, a body corporate is not
entitled to refuse or fail to comply with a requirement:
(a) to answer a question or give information; or
(b) to produce a book or any other thing; or
(c) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend:
(d) to incriminate the body (whether in respect of an offence to
which the proceeding relates or otherwise); or
(e) to make the body liable to a penalty (whether in respect of
anything to which the proceeding relates or otherwise).
(2) Subsection (1) applies whether or not the body concerned is a
defendant in the proceeding or in any other proceeding.
(3) In this section:
Corporations Act criminal proceeding means a proceeding in a
court when exercising jurisdiction in respect of a criminal matter
arising under this Act.
1317 Certain persons to assist in prosecutions
(1) Where a prosecution in respect of an offence against this Act has
been instituted, or ASIC is of the opinion that a prosecution in
respect of an offence against this Act ought to be instituted, against
a person (in this section referred to as the defendant), ASIC may:
(a) if the defendant is a natural person—require any person who
is or was a partner, employee or agent of the defendant; or
(b) if the defendant is a body corporate—require any person who
is or was an officer, employee or agent of the defendant;
to assist in the prosecution, and the person who is so required must
give all assistance in connection with the prosecution that that
person is reasonably able to give.
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Part 9.4 Offences
Division 2 Offences generally
Section 1317
376 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) ASIC must not make such a requirement as is mentioned in
subsection (1) of a person who, in the opinion of ASIC, is or is
likely to be a defendant in the proceedings or is or has been such a
person’s lawyer.
(3) If a person to whom paragraph (1)(a) or (b) relates fails to give
assistance as required by subsection (1), the person contravenes
this section and, without affecting any penalty to which the person
may be liable for the contravention, the Court may, on the
application of ASIC, order the person to comply with the
requirement within such time, and in such manner, as the Court
orders.
(4) In this section, agent, in relation to the defendant, includes a
banker of the defendant and a person engaged as an auditor by the
defendant, whether that person is an employee or an officer of the
defendant or not.
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Protection for whistleblowers Part 9.4AAA
Section 1317AA
Corporations Act 2001 377
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.4AAA—Protection for whistleblowers
1317AA Disclosures qualifying for protection under this Part
(1) A disclosure of information by a person (the discloser) qualifies for
protection under this Part if:
(a) the discloser is:
(i) an officer of a company; or
(ii) an employee of a company; or
(iii) a person who has a contract for the supply of services or
goods to a company; or
(iv) an employee of a person who has a contract for the
supply of services or goods to a company; and
(b) the disclosure is made to:
(i) ASIC; or
(ii) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(iii) a director, secretary or senior manager of the company;
or
(iv) a person authorised by the company to receive
disclosures of that kind; and
(c) the discloser informs the person to whom the disclosure is
made of the discloser’s name before making the disclosure;
and
(d) the discloser has reasonable grounds to suspect that the
information indicates that:
(i) the company has, or may have, contravened a provision
of the Corporations legislation; or
(ii) an officer or employee of the company has, or may
have, contravened a provision of the Corporations
legislation; and
(e) the discloser makes the disclosure in good faith.
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Section 1317AB
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Under section 1405, the reference to a provision of the Corporations
legislation includes a reference to a corresponding provision of the old
corporations legislation of the States and Territories.
(2) A reference in subsection (1) to a person contravening a provision
of the Corporations legislation includes a reference to a person
committing an offence against, or based on, a provision of this Act.
Note: This subsection causes section 11.6 of the Criminal Code to operate in
relation to such references.
1317AB Disclosure that qualifies for protection not actionable etc.
(1) If a person makes a disclosure that qualifies for protection under
this Part:
(a) the person is not subject to any civil or criminal liability for
making the disclosure; and
(b) no contractual or other remedy may be enforced, and no
contractual or other right may be exercised, against the
person on the basis of the disclosure.
Note: This subsection does not provide that the person is not subject to any
civil or criminal liability for conduct of the person that is revealed by
the disclosure.
(2) Without limiting subsection (1):
(a) the person has qualified privilege in respect of the disclosure;
and
(b) a contract to which the person is a party may not be
terminated on the basis that the disclosure constitutes a
breach of the contract.
(3) Without limiting paragraphs (1)(b) and (2)(b), if a court is satisfied
that:
(a) a person (the employee) is employed in a particular position
under a contract of employment with another person (the
employer); and
(b) the employee makes a disclosure that qualifies for protection
under this Part; and
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Corporations Act 2001 379
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(c) the employer purports to terminate the contract of
employment on the basis of the disclosure;
the court may order that the employee be reinstated in that position
or a position at a comparable level.
1317AC Victimisation prohibited
Actually causing detriment to another person
(1) A person (the first person) contravenes this subsection if:
(a) the first person engages in conduct; and
(b) the first person’s conduct causes any detriment to another
person (the second person); and
(c) the first person intends that his or her conduct cause
detriment to the second person; and
(d) the first person engages in his or her conduct because the
second person or a third person made a disclosure that
qualifies for protection under this Part.
Threatening to cause detriment to another person
(2) A person (the first person) contravenes this subsection if:
(a) the first person makes to another person (the second person)
a threat to cause any detriment to the second person or to a
third person; and
(b) the first person:
(i) intends the second person to fear that the threat will be
carried out; or
(ii) is reckless as to causing the second person to fear that
the threat will be carried out; and
(c) the first person makes the threat because a person:
(i) makes a disclosure that qualifies for protection under
this Part; or
(ii) may make a disclosure that would qualify for protection
under this Part.
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Section 1317AD
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Officers and employees involved in contravention
(3) If a company contravenes subsection (1) or (2), any officer or
employee of the company who is involved in that contravention
contravenes this subsection.
Threats
(4) For the purposes of subsection (2), a threat may be:
(a) express or implied; or
(b) conditional or unconditional.
(5) In a prosecution for an offence against subsection (2), it is not
necessary to prove that the person threatened actually feared that
the threat would be carried out.
1317AD Right to compensation
If:
(a) a person (the person in contravention) contravenes
subsection 1317AC(1), (2) or (3); and
(b) a person (the victim) suffers damage because of the
contravention;
the person in contravention is liable to compensate the victim for
the damage.
1317AE Confidentiality requirements for company, company
officers and employees and auditors
(1) A person (the offender) is guilty of an offence against this
subsection if:
(a) a person (the discloser) makes a disclosure of information
(the qualifying disclosure) that qualifies for protection under
this Part; and
(b) the qualifying disclosure relates to a contravention or
possible contravention of a provision of the Corporations
legislation by:
(i) a company; or
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(ii) an officer or employee of the company; and
(c) the qualifying disclosure is made to:
(i) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(ii) a director, secretary or senior manager of the company;
or
(iii) a person authorised by the company to receive
disclosures of that kind; and
(d) the offender is:
(i) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(ii) a director, secretary or senior manager of the company;
or
(iii) a person authorised by the company to receive
disclosures of that kind; or
(iv) the company; or
(v) any officer or employee of the company; and
(e) the offender discloses one of the following (the confidential
information):
(i) the information disclosed in the qualifying disclosure;
(ii) the identity of the discloser;
(iii) information that is likely to lead to the identification of
the discloser; and
(f) the confidential information is information that the offender
obtained directly or indirectly because of the qualifying
disclosure; and
(g) either:
(i) the offender is the person to whom the qualifying
disclosure is made; or
(ii) the offender is a person to whom the confidential
information is disclosed in contravention of this section
and the offender knows that the disclosure of the
confidential information to the offender was unlawful or
made in breach of confidence; and
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382 Corporations Act 2001
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(h) the disclosure referred to in paragraph (e) is not authorised
under subsection (2).
(2) The disclosure referred to in paragraph (1)(e) is authorised under
this subsection if it:
(a) is made to ASIC; or
(b) is made to APRA; or
(c) is made to a member of the Australian Federal Police (within
the meaning of the Australian Federal Police Act 1979); or
(d) is made to someone else with the consent of the discloser.
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Review by Administrative Appeals Tribunal of certain decisions Part 9.4A
Section 1317A
Corporations Act 2001 383
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.4A—Review by Administrative Appeals
Tribunal of certain decisions
1317A Definitions
In this Part:
decision has the same meaning as in the Administrative Appeals
Tribunal Act 1975.
1317B Applications for review
(1) Subject to this Part, applications may be made to the Tribunal for
review of a decision made under this Act by:
(a) the Minister; or
(b) ASIC; or
(c) the Companies Auditors Disciplinary Board; or
(d) a committee convened under Part 2 of Schedule 2.
(2) For the purposes of this Act and the Administrative Appeals
Tribunal Act 1975, ASIC and APRA are taken to be persons whose
interests are affected by a decision made under this Act by the
Companies Auditors Disciplinary Board.
1317C Excluded decisions
Section 1317B does not apply in relation to:
(a) a decision in respect of which any provision in the nature of
an appeal or review is expressly provided by this Act; or
(b) a decision that is declared by this Act to be conclusive or
final or is embodied in a document declared by this Act to be
conclusive evidence of an act, matter or thing; or
(ca) a decision of ASIC to order the winding up of a company
under section 489EA; or
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(d) a decision made by ASIC in the performance of a function, or
in the exercise of a power, under section 601CC or 601CL or
Chapter 5A; or
(e) a decision by ASIC to refuse to exercise a power under
section 601CC or 601CL or Chapter 5A; or
(f) a decision to apply under section 596A or 596B for the Court
to summon a person for examination about a corporation’s
examinable affairs; or
(g) a decision to apply under section 597A for the Court to
require a person to file an affidavit about a corporation’s
examinable affairs; or
(ga) a decision of ASIC under section 655A; or
(gb) a decision of ASIC under section 673 in relation to securities
of the target of a takeover bid during the bid period; or
(gc) a decision by ASIC whether to make an application under
section 657C, 657G, 659B, 1325A, 1325B or 1325C; or
(gca) a decision by ASIC to make market integrity rules under
section 798G; or
(gcb) a decision by the Minister to:
(i) consent to the making of a market integrity rule; or
(ii) direct ASIC to revoke or amend a market integrity rule;
or
(gcc) a decision by ASIC to do or not do anything under
regulations made for the purposes of section 798K
(alternatives to civil proceedings); or
(gd) a decision of the Minister under Division 1 of Part 7.4; or
(gda) a decision by the Minister:
(i) to make a determination under section 901B, or to
amend or revoke such a determination; or
(ii) to consent, under section 901K or 903H, to the making
of a derivative transaction rule or a derivative trade
repository rule, or to consent to the variation or
revocation of such a rule; or
(iii) to direct ASIC, under section 901L or 903J, to amend or
revoke a derivative transaction rule or a derivative trade
repository rule; or
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(gdb) a decision by ASIC to make derivative transaction rules or
derivative trade repository rules under section 901A or 903A,
or to vary or revoke such rules; or
(gdc) a decision by ASIC to do or not do anything under
regulations made for the purpose of section 901F or 903E; or
(ge) a decision of ASIC under section 1101A; or
(h) a decision to make a determination under
subsection 1317D(3); or
(i) a decision of ASIC to issue an infringement notice under
section 1317DAC; or
(j) a decision of ASIC to withdraw, or not to withdraw, an
infringement notice under section 1317DAI; or
(k) a decision of ASIC under section 40-5 of Schedule 2 (which
deals with directing liquidators to comply with requirements
to lodge documents etc.); or
(l) a decision of ASIC under section 40-10 of Schedule 2 (which
deals with directing liquidators to correct inaccuracies etc.);
or
(m) a decision of ASIC under section 40-100 of Schedule 2 to
take no action in relation to matters raised by an industry
notice lodged under that section (notice by industry bodies of
possible grounds for disciplinary action); or
(n) a decision of ASIC to give a direction under section 70-70 of
Schedule 2 (which deals with directing external
administrators to comply with requests for information etc.);
or
(o) a decision of ASIC under section 70-85 of Schedule 2 (a
decision to impose a condition on the use or disclosure of
relevant material).
1317D Notice of reviewable decision and review rights
(1) This section applies if the Minister, ASIC, the Companies Auditors
Disciplinary Board or a committee convened under Part 2 of
Schedule 2 (the decision maker) makes a decision to which
section 1317B applies.
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Section 1317D
386 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Subject to subsection (3), the decision maker must take such steps
as are reasonable in the circumstances to give to each person
whose interests are affected by the decision notice, in writing or
otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the
Tribunal.
(3) Subsection (2) does not require the decision maker to give notice to
a person affected by the decision or to the persons in a class of
persons affected by the decision, if the decision maker determines
that giving notice to the person or persons is not warranted, having
regard to:
(a) the cost of giving notice to the person or persons; and
(b) the way in which the interests of the person or persons are
affected by the decision.
(4) A failure to comply with this section does not affect the validity of
the decision.
(5) The fact that a person has not been given notice of the decision
because of a determination under subsection (3) constitutes special
circumstances for the purposes of subsection 29(6) of the
Administrative Appeals Tribunal Act 1975.
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Part 9.4AA
Section 1317DAA
Corporations Act 2001 387
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.4AA—Infringement notices for alleged
contraventions of continuous disclosure
provisions
1317DAA Definitions
(1) In this Part:
compensation proceedings means:
(a) proceedings under section 1317HA; and
(b) proceedings under section 12GF of the ASIC Act in relation
to a contravention of section 12DA of that Act; and
(c) any other proceedings by a person for compensation for loss
or damage suffered by the person.
compliance period for an infringement notice has the meaning
affected by section 1317DAH.
contravention proceedings means proceedings under
section 1101B by a person referred to in paragraph 1101B(1)(b) or
(d).
enforcement proceedings means proceedings under section 793C
by a person referred to in paragraph 793C(1)(b), (c) or (d).
infringement notice means an infringement notice issued under
section 1317DAC.
penalty and disclosure proceedings means the proceedings
referred to in column 3 of the table in subsection 1317DAG(2).
public interest proceedings means proceedings under section 50 of
the ASIC Act.
(2) For the purposes of applying this Part to a disclosing entity that is
an undertaking to which interests in a registered scheme relate:
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(a) references to the disclosing entity are taken to be references
to the responsible entity for the registered scheme; and
(b) references to a financial report for a financial year being
lodged by a disclosing entity are taken to be references to
such a report being lodged by the responsible entity in
relation to the scheme; and
(c) references to securities of a disclosing entity are taken to be
references to interests in the registered scheme; and
(d) references to a disclosing entity being convicted of an
offence based on subsection 674(2) or 675(2) are taken to be
references to the responsible entity being convicted of such
an offence in relation to the registered scheme; and
(e) references to a civil penalty order under Part 9.4B being
made against a disclosing entity in relation to a contravention
of subsection 674(2) or 675(2) are taken to be references to
such an order being made against the responsible entity in
relation to the registered scheme; and
(f) references to a disclosing entity having breached an
enforceable undertaking given to ASIC under section 93AA
of the ASIC Act in relation to the requirements of
subsection 674(2) or 675(2) are taken to be references to the
responsible entity having breached such an undertaking given
in relation to the registered scheme.
1317DAB Purpose and effect of this Part
(1) The purpose of this Part is to provide for the issue of an
infringement notice to a disclosing entity for an alleged
contravention of subsection 674(2) or 675(2) as an alternative to
proceedings for civil penalties under Part 9.4B.
(2) This Part does not:
(a) require an infringement notice to be issued to the disclosing
entity for the alleged contravention of subsection 674(2) or
675(2); or
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Section 1317DAC
Corporations Act 2001 389
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(b) affect the liability of the disclosing entity to civil or criminal
proceedings in relation to the alleged contravention of
subsection 674(2) or 675(2) if:
(i) an infringement notice is not issued to the disclosing
entity for the alleged contravention; or
(ii) an infringement notice issued to the disclosing entity for
the alleged contravention is withdrawn under
section 1317DAI; or
(c) prevent a Court from imposing a higher penalty than the
penalty specified in the infringement notice if the disclosing
entity does not comply with the infringement notice.
1317DAC Issue of infringement notice
Issue of infringement notice
(1) Subject to section 1317DAD, if ASIC has reasonable grounds to
believe that a disclosing entity has contravened subsection 674(2)
or 675(2), ASIC may issue an infringement notice to the disclosing
entity.
(2) ASIC issues the infringement notice to the disclosing entity by
serving it on the disclosing entity.
(3) ASIC must not issue more than one infringement notice to the
disclosing entity for the same alleged contravention of
subsection 674(2) or 675(2).
ASIC must have regard to certain matters
(4) In determining whether to issue an infringement notice to a listed
disclosing entity for an alleged contravention of subsection 674(2),
ASIC must have regard to:
(a) any guidelines issued by the relevant market operator for the
listed disclosing entity that relate to the provisions of the
listing rules referred to in subsection 674(1); and
(b) any other relevant matter.
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Infringement notice does not have effect
(5) The infringement notice does not have any effect if the
infringement notice:
(a) is issued more than 12 months after the day on which the
contravention of subsection 674(2) or 675(2) is alleged to
have occurred; or
(b) relates to more than one alleged contravention of
subsection 674(2) or 675(2) by the disclosing entity.
1317DAD Statement of reasons must be given
Statement of reasons
(1) Before issuing the infringement notice, ASIC must:
(a) give the disclosing entity a written statement that sets out
ASIC’s reasons for believing that the disclosing entity has
contravened subsection 674(2) or 675(2); and
(b) give a representative of the disclosing entity an opportunity
to:
(i) appear at a private hearing before ASIC; and
(ii) give evidence to ASIC; and
(iii) make submissions to ASIC;
in relation to the alleged contravention of subsection 674(2)
or 675(2).
(2) If the disclosing entity is a listed disclosing entity, ASIC must
consult with the relevant market operator for the disclosing entity
before giving the disclosing entity the statement under this
subsection.
(3) ASIC does not need to consult the relevant market operator under
subsection (2) if:
(a) the disclosing entity is the relevant market operator; or
(b) the disclosing entity conducts a business in competition with
a business conducted by the relevant market operator.
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Corporations Act 2001 391
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Limit on the use of evidence or information given to ASIC
(4) Evidence or information that a representative of the disclosing
entity gives ASIC under paragraph (1)(b) in relation to the alleged
contravention of subsection 674(2) or 675(2) is:
(a) not admissible in evidence against the disclosing entity in
any proceedings; and
(b) not admissible in evidence against a representative of the
disclosing entity in any proceedings (other than proceedings
for an offence based on the evidence or information given
being false or misleading).
1317DAE Matters to be included in infringement notice
(1) The infringement notice:
(a) must state the day on which it is issued; and
(b) must state the name and address of the disclosing entity to
whom it is issued; and
(c) must state that it is being issued by ASIC; and
(d) must state that ASIC may publish details of the disclosing
entity’s compliance with the infringement notice under
section 1317DAJ if the disclosing entity complies with the
notice; and
(e) must give details of the alleged contravention by the
disclosing entity, including:
(i) the date of the alleged contravention; and
(ii) the particular provision that was contravened; and
(f) must state the maximum pecuniary penalty that a Court could
impose under Part 9.4B in relation to the alleged
contravention; and
(g) must specify the penalty that is payable in relation to the
alleged contravention; and
(h) must state that the penalty is payable to ASIC on behalf of
the Commonwealth; and
(i) if it is alleged that the disclosing entity contravened
subsection 674(2)—may specify information that the
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disclosing entity must notify to the relevant market operator
in accordance with the provisions of the listing rules referred
to in subsection 674(1); and
(j) if it is alleged that the disclosing entity contravened
subsection 675(2)—may require the disclosing entity to
lodge a document with ASIC that contains specified
information; and
(k) must explain the effect of sections 1317DAF, 1317DAG and
1317DAH; and
(l) must state that the disclosing entity may make written
representations to ASIC seeking the withdrawal of the
infringement notice; and
(m) must contain any other matters that are prescribed in the
regulations.
(2) Subject to subsection (3), the penalty specified in the infringement
notice under paragraph (1)(g) for an alleged contravention of
subsection 674(2) is:
(a) $100,000 if the disclosing entity is a Tier 1 entity; or
(b) $66,000 if the disclosing entity is a Tier 2 entity; or
(c) $33,000 if the disclosing entity is a Tier 3 entity.
(3) The penalty specified in the infringement notice under
paragraph (1)(g) for an alleged contravention of subsection 674(2)
is:
(a) $100,000 if the disclosing entity is a Tier 2 entity; or
(b) $66,000 if the disclosing entity is a Tier 3 entity;
if:
(c) the disclosing entity has at any time been convicted of an
offence based on subsection 674(2) or 675(2); or
(d) a civil penalty order under Part 9.4B has at any time been
made against the disclosing entity in relation to a
contravention of subsection 674(2) or 675(2); or
(e) the disclosing entity has at any time breached an enforceable
undertaking given to ASIC under section 93AA of the ASIC
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Act in relation to the requirements of subsection 674(2) or
675(2).
(4) Subject to subsection (5), the penalty specified in the infringement
notice under paragraph (1)(g) for an alleged contravention of
subsection 675(2) is $33,000.
(5) The penalty specified in the infringement notice under
paragraph (1)(g) for an alleged contravention of subsection 675(2)
is $66,000 if:
(a) the disclosing entity has at any time been convicted of an
offence based on subsection 674(2) or 675(2); or
(b) a civil penalty order under Part 9.4B has at any time been
made against the disclosing entity in relation to a
contravention of subsection 674(2) or 675(2); or
(c) the disclosing entity has at any time breached an enforceable
undertaking given to ASIC under section 93AA of the ASIC
Act in relation to the requirements of subsection 674(2) or
675(2).
(6) For the purposes of this section:
(a) a disclosing entity is:
(i) a Tier 1 entity if its market capitalisation on the relevant
day exceeds $1,000 million; and
(ii) a Tier 2 entity if its market capitalisation on the relevant
day exceeds $100 million but does not exceed $1,000
million; and
(iii) a Tier 3 entity if its market capitalisation on the relevant
day does not exceed $100 million or it is not possible to
work out its market capitalisation on the relevant day
because it has not lodged a financial report with ASIC
before the relevant day; and
(b) the relevant day for an infringement notice is the last day of
the financial year in relation to which the latest financial
report by the disclosing entity has been lodged with ASIC
before the infringement notice is issued.
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(7) This is how to work out a disclosing entity’s market capitalisation
on the relevant day:
(a) for each class of security of the disclosing entity that is a
quoted security:
(i) work out the closing price, on the relevant day, for
securities in that class on the prescribed financial market
on which the securities are quoted; and
(ii) multiply that price by the number of securities in that
class on issue on the relevant day (as shown in the
financial report lodged with ASIC for the period that
ends on the relevant day); and
(b) add up the amounts obtained under paragraph (a): the result
is the disclosing entity’s market capitalisation on the relevant
day.
Disregard quoted securities of the disclosing entity that are options.
1317DAF Effect of issue and compliance with infringement notice
Circumstances in which this section applies
(1) This section applies if subsection (2) or (3) is satisfied.
(2) This subsection is satisfied if:
(a) the compliance period for the infringement notice has not
ended; and
(b) the infringement notice is not withdrawn under
section 1317DAI; and
(c) subsection (3) has not been satisfied.
(3) This subsection is satisfied if, within the compliance period for the
infringement notice, the disclosing entity:
(a) pays the penalty specified in the infringement notice; and
(b) either:
(i) if it is alleged in the infringement notice that the
disclosing entity contravened subsection 674(2)—
notifies the relevant market operator, in accordance with
the provisions of the listing rules referred to in
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subsection 674(1), of any information specified in the
infringement notice; or
(ii) if it is alleged in the infringement notice that the
disclosing entity contravened subsection 675(2)—
lodges any required document with ASIC that contains
the information specified in the infringement notice.
Note: If this subsection is satisfied, ASIC must not withdraw the
infringement notice, see section 1317DAI.
No contravention etc. by the disclosing entity
(4) The disclosing entity is not, by reason only of subsection (3) being
satisfied, regarded as:
(a) having contravened the provision specified in the
infringement notice; or
(b) having been convicted of an offence constituted by the same
conduct that constituted the alleged contravention of the
provision specified in the infringement notice.
No proceedings may be started etc.
(5) Subject to subsection (6), no proceedings (whether criminal or
civil) may be started or continued against the disclosing entity in
relation to:
(a) the alleged contravention of the provision specified in the
infringement notice; or
(b) an offence constituted by the same conduct that constituted
the alleged contravention.
(6) Subsection (5) does not apply to the following proceedings:
(a) compensation proceedings, contravention proceedings,
enforcement proceedings and public interest proceedings that
relate to the alleged contravention of the provision specified
in the infringement notice;
(b) proceedings to enforce the following orders of a Court:
(i) an order made in relation to proceedings referred to in
paragraph (a);
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(ii) an order made under subsection 1335(2) in relation to
proceedings referred to in paragraph (a) other than
public interest proceedings;
(c) any other proceedings in respect of a breach of an order
referred to in paragraph (b);
(d) an appeal to a Court against the following decisions or orders
of a Court:
(i) a decision or order made in relation to proceedings
referred to in paragraph (a);
(ii) a decision or order made under subsection 1335(2) in
relation to the proceedings referred to in paragraph (a)
other than public interest proceedings.
(7) To avoid doubt, subsection (5) does not prevent ASIC from:
(a) making an order under section 91 of the ASIC Act; or
(b) bringing proceedings to enforce the order.
1317DAG Effect of failure to comply with infringement notice
Circumstances in which this section applies
(1) This section applies if an infringement notice issued to a disclosing
entity is not withdrawn under section 1317DAI.
Effect of failure to comply with infringement notice
(2) If the disclosing entity fails to do a thing specified in column 2 of
the following table within the compliance period for the
infringement notice, the disclosing entity is liable to the
proceedings specified in column 3 of the following table:
Effect of failure to comply with infringement notice
Column 1 Column 2 Column 3
Item If the disclosing entity fails to: the disclosing entity is liable to:
1 pay the penalty specified in the
infringement notice
proceedings under Part 9.4B for:
(a) a declaration of contravention;
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Effect of failure to comply with infringement notice
Column 1 Column 2 Column 3
Item If the disclosing entity fails to: the disclosing entity is liable to:
and
(b) a pecuniary penalty order;
in relation to the alleged
contravention of the provision
specified in the infringement notice.
2 notify the relevant market
operator, in accordance with the
provisions of the listing rules
referred to in subsection 674(1),
of any information specified in
the infringement notice if it is
alleged in the infringement
notice that the disclosing entity
contravened subsection 674(2)
proceedings for an order under
section 1324B in relation to the
alleged contravention of the
provision specified in the
infringement notice.
3 lodge any required document
with ASIC that contains the
information specified in the
infringement notice if it is
alleged in the infringement
notice that the disclosing entity
contravened subsection 675(2)
proceedings for an order under
section 1324B in relation to the
alleged contravention of the
provision specified in the
infringement notice.
No other proceedings may be started etc.
(3) Subject to subsection (4), no other proceedings (whether criminal
or civil) may be started or continued against the disclosing entity in
relation to:
(a) the alleged contravention of the provision specified in the
infringement notice; or
(b) an offence constituted by the same conduct that constituted
the alleged contravention.
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(4) Subsection (3) does not apply to the following proceedings:
(a) compensation proceedings, contravention proceedings,
enforcement proceedings and public interest proceedings that
relate to the alleged contravention of the provision specified
in the infringement notice;
(b) proceedings to enforce the following orders of a Court:
(i) an order made in relation to penalty and disclosure
proceedings;
(ii) an order made in relation to proceedings referred to in
paragraph (a);
(iii) an order made under subsection 1335(2) in relation to
penalty and disclosure proceedings;
(iv) an order made under subsection 1335(2) in relation to
proceedings referred to in paragraph (a) other than
public interest proceedings;
(c) any other proceedings in respect of a breach of an order
referred to in paragraph (b);
(d) an appeal to a Court against the following decisions or orders
of a Court:
(i) a decision or order made in relation to penalty and
disclosure proceedings;
(ii) a decision or order made in relation to proceedings
referred to in paragraph (a);
(iii) a decision or order made under subsection 1335(2) in
relation to penalty and disclosure proceedings;
(iv) a decision or order made under subsection 1335(2) in
relation to proceedings referred to in paragraph (a) other
than public interest proceedings.
(5) To avoid doubt, subsection (3) does not prevent ASIC from:
(a) making a determination under subsection 708AA(3),
708A(2), 713(6), 713A(23), 1012DAA(3), 1012DA(2) or
1013FA(3) of this Act; or
(b) making an order under section 91 of the ASIC Act; or
(c) accepting an undertaking under section 93AA of the ASIC
Act; or
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(d) bringing proceedings to enforce the determination, order or
undertaking.
1317DAH Compliance period for infringement notice
(1) Subject to this section, the compliance period for an infringement
notice is a period of 28 days beginning on the day after the day on
which the infringement notice is issued.
(2) ASIC may extend, by notice in writing, the compliance period for
the infringement notice if ASIC is satisfied that it is appropriate to
do so.
(3) Only one extension may be given and the extension must not be for
longer than 28 days.
(4) Notice of the extension must be given to the disclosing entity that
was issued with the infringement notice.
(5) A failure to comply with subsection (4) does not affect the validity
of the extension.
(6) If ASIC extends the compliance period for an infringement notice,
a reference in this Act to the compliance period for an infringement
notice is taken to be a reference to the compliance period as so
extended.
1317DAI Withdrawal of infringement notice
Disclosing entity may seek withdrawal
(1) If an infringement notice is issued to a disclosing entity, the
disclosing entity may make written representations to ASIC
seeking the withdrawal of the infringement notice.
(2) Evidence or information that a representative of the disclosing
entity gives ASIC in the course of making representations under
subsection (1) is:
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(a) not admissible in evidence against the disclosing entity in
any proceedings; and
(b) not admissible in evidence against a representative of the
disclosing entity in any proceedings (other than proceedings
for an offence based on the evidence or information given
being false or misleading).
Withdrawal
(3) Subject to subsection (4), ASIC may withdraw the infringement
notice (whether or not the disclosing entity has made
representations seeking the withdrawal) if ASIC is satisfied that it
is appropriate to do so.
(4) ASIC must not withdraw the infringement notice if
subsection 1317DAF(3) is satisfied.
Withdrawal notice
(5) The withdrawal must be made by notice in writing and must be
given to the disclosing entity.
(6) The withdrawal notice must state:
(a) the name and address of the disclosing entity; and
(b) the day on which the infringement notice was issued to the
disclosing entity; and
(c) that the infringement notice is withdrawn; and
(d) that civil proceedings under Part 9.4B may be brought
against the disclosing entity for a contravention of the
provision specified in the infringement notice; and
(e) that a prosecution for an offence based on the provision
specified in the infringement notice may be brought against
the disclosing entity.
Refund of penalty
(7) If:
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(a) the disclosing entity pays the penalty specified in the
infringement notice; and
(b) the infringement notice is withdrawn after the disclosing
entity pays the penalty;
ASIC must refund to the disclosing entity an amount equal to the
amount paid.
1317DAJ Publication in relation to infringement notices
(1) If:
(a) ASIC issues an infringement notice to a disclosing entity;
and
(b) subsection 1317DAF(3) (compliance with the infringement
notice) is satisfied;
ASIC may publish details of the disclosing entity’s compliance
with the infringement notice under subsection (2) or (3) or under
both of those subsections.
(2) ASIC publishes details of the disclosing entity’s compliance with
the infringement notice under this subsection if it publishes a copy
of the infringement notice in the Gazette together with the
following statements:
(a) a statement that the disclosing entity has complied with the
infringement notice;
(b) a statement that compliance with the notice is not an
admission of guilt or liability;
(c) a statement that the disclosing entity is not regarded as
having contravened the provision specified in the notice.
(3) ASIC publishes details of the disclosing entity’s compliance with
the infringement notice under this subsection if:
(a) ASIC issues a statement (whether written or oral) about the
disclosing entity’s compliance with the infringement notice;
and
(b) the statement is limited to an accurate summary of the
infringement notice including:
(i) the name of the disclosing entity; and
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(ii) the amount of the penalty payable under the notice in
relation to the alleged contravention; and
(iii) the conduct specified in the notice as the conduct in
relation to which the infringement notice was issued;
together with the following statements:
(iv) a statement that the disclosing entity has complied with
the infringement notice;
(v) a statement that compliance with the notice is not an
admission of guilt or liability;
(vi) a statement that the relevant disclosing entity is not
regarded as having contravened the provision specified
in the notice.
(4) ASIC must not otherwise publish details of:
(a) an infringement notice; or
(b) a disclosing entity’s compliance with an infringement notice.
Failure to comply with this subsection is not an offence.
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Part 9.4B—Civil consequences of contravening civil
penalty provisions
1317DA Definitions
In this Act:
corporation/scheme civil penalty provision means a provision
specified in column 1 of any of the following items of the table in
subsection 1317E(1):
(a) items 1 to 13;
(b) item 46.
financial services civil penalty provision means a provision
specified in column 1 of any of the following items of the table in
subsection 1317E(1):
(a) item 14;
(b) items 23 to 45.
1317E Declarations of contravention
(1) If a Court is satisfied that a person has contravened a civil penalty
provision, it must make a declaration of contravention. The
provisions specified in column 1 of the following table are civil
penalty provisions.
Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
1 subsections 180(1), 181(1) and
(2), 182(1) and (2) and 183(1) and
(2)
officers’ duties
2 subsections 188(1) and (2) responsibilities of secretaries etc. for
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
corporate contraventions
3 subsection 209(2) related parties rules
4 subsections 254L(2), 256D(3),
259F(2) and 260D(2)
share capital transactions
5 subsection 344(1) requirements for financial reports
6 subsection 588G(2) insolvent trading
7 subsection 601FC(5) duties of responsible entity
8 subsection 601FD(3) duties of officers of responsible entity
9 subsection 601FE(3) duties of employees of responsible
entity
10 subsection 601FG(2) acquisition of interest in scheme by
responsible entity
11 subsection 601JD(3) duties of members
12 subsection 601UAA(2) duties of officers of licensed trustee
company
13 subsection 601UAB(2) duties of employees of licensed trustee
company
14 subsections 674(2), 674(2A),
675(2) and 675(2A)
continuous disclosure
15 subsection 798H(1) complying with market integrity rules
16 section 901E complying with derivative transaction
rules
17 section 903D complying with derivative trade
repository rules
18 subsections 961K(1) and (2) financial services licensee responsible
for breach of certain best interests
duties
19 section 961L financial services licensee to ensure
compliance with certain best interests
duties
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
20 subsection 961Q(1) authorised representative responsible
for breach of certain best interests
duties
21 section 962P charging ongoing fee after termination
of ongoing fee arrangement
22 subsection 962S(1) fee recipient must give fee disclosure
statement
23 subsections 963E(1) and (2) financial services licensee responsible
for breach of ban on conflicted
remuneration
24 section 963F financial services licensee must ensure
representatives do not accept conflicted
remuneration
25 subsection 963G(1) authorised representative must not
accept conflicted remuneration
26 section 963J employer must not pay employees
conflicted remuneration
27 section 963K financial product issuer or seller must
not give conflicted remuneration to
financial services licensee or
representative
28 subsection 964A(1) platform operator must not accept
volume-based shelf-space fees
29 subsections 964D(1) and (2) financial services licensee responsible
for breach of asset-based fees on
borrowed amounts
30 subsection 964E(1) authorised representative must not
charge asset-based fees on borrowed
amounts
31 section 965 anti-avoidance of Part 7.7A provisions
32 subsection 985E(1) issuing or increasing limit of margin
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
lending facility without having made
assessment etc.
33 subsection 985H(1) failure to assess a margin lending
facility as unsuitable
34 subsection 985J(1) failure to give assessment to retail
client if requested before issue of
facility or increase in limit
35 subsection 985J(2) failure to give assessment to retail
client if requested after issue of facility
or increase in limit
36 subsection 985J(4) demanding payment to give assessment
to retail client
37 subsection 985K(1) issuing or increasing limit of margin
lending facility if unsuitable
38 section 985L making issue of margin lending facility
conditional on retail client agreeing to
receive communications through agent
39 subsection 985M(1) failure to notify of margin call where
there is no agent
40 subsection 985M(2) failure to notify of margin call where
there is an agent
41 section 1041A market manipulation
42 subsection 1041B(1) false trading and market rigging—
creating a false or misleading
appearance of active trading etc.
43 subsection 1041C(1) false trading and market rigging—
artificially maintaining etc. market
price
44 section 1041D dissemination of information about
illegal transactions
45 subsections 1043A(1) and (2) insider trading
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
46 subclause 29(6) of Schedule 4 disclosure for proposed
demutualisation
Note 1: Once a declaration has been made ASIC can then seek a pecuniary
penalty order (section 1317G) or (in the case of a corporation/scheme
civil penalty provision) a disqualification order (section 206C).
Note 2: The descriptions of matters in column 2 are indicative only.
(2) A declaration of contravention 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;
(e) if the contravention is of a corporation/scheme civil penalty
provision—the corporation or registered scheme to which the
conduct related.
1317F Declaration of contravention is conclusive evidence
A declaration of contravention is conclusive evidence of the
matters referred to in subsection 1317E(2).
1317G Pecuniary penalty orders
Corporation/scheme civil penalty provisions
(1) A Court may order a person to pay the Commonwealth a pecuniary
penalty of up to $200,000 if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(aa) the contravention is of a corporation/scheme civil penalty
provision; and
(b) the contravention:
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(i) materially prejudices the interests of the corporation or
scheme, or its members; or
(ii) materially prejudices the corporation’s ability to pay its
creditors; or
(iii) is serious.
Financial services civil penalty provisions
(1A) A Court may order a person to pay the Commonwealth a pecuniary
penalty of the relevant maximum amount if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of a financial services civil penalty
provision not dealt with in subsections (1E) to (1G); and
(c) the contravention:
(i) materially prejudices the interests of acquirers or
disposers of the relevant financial products; or
(ii) materially prejudices the issuer of the relevant financial
products or, if the issuer is a corporation or scheme, the
members of that corporation or scheme; or
(iii) is serious.
(1B) The relevant maximum amount is:
(a) $200,000 for an individual; or
(b) $1 million for a body corporate.
Responsibilities of secretaries etc. for certain corporate
contraventions
(1BA) Without limiting subsection (1), if a declaration of contravention
by a person of subsection 188(1) or (2) has been made under
section 1317E, a Court may order the person to pay the
Commonwealth a pecuniary penalty of up to $3,000.
Market integrity rules
(1C) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
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(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of subsection 798H(1) (complying with
market integrity rules).
(1D) The maximum amount that the court may order the person to pay
for contravening a market integrity rule is the penalty amount set
out in the market integrity rules for the rule.
Derivative transaction rules and derivative trade repository rules
(1DA) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of:
(i) section 901E (complying with derivative transaction
rules); or
(ii) section 903D (complying with derivative trade
repository rules).
(1DB) The maximum amount that the court may order the person to pay
for contravening a derivative transaction rule, or a derivative trade
repository rule, is the penalty amount specified in those rules for
the rule that has been contravened.
Best interests obligations and remuneration
(1E) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of one of the following provisions:
(i) subsections 961K(1) and (2) (financial services licensee
responsible for breach of certain best interests duties);
(ii) section 961L (financial services licensee to ensure
compliance with certain best interests duties);
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(iii) subsection 961Q(1) (authorised representative
responsible for breach of certain best interests duties);
(iv) section 962P (charging ongoing fee after termination of
ongoing fee arrangement);
(v) subsection 962S(1) (fee recipient must give fee
disclosure statement);
(vi) subsections 963E(1) and (2) (financial services licensee
must not accept conflicted remuneration);
(vii) section 963F (financial services licensee must ensure
representatives do not accept conflicted remuneration);
(viii) subsection 963G(1) (authorised representative must not
accept conflicted remuneration);
(ix) section 963J (employer must not pay employees
conflicted remuneration);
(x) section 963K (financial product issuer or seller must not
give conflicted remuneration to financial services
licensee or representative);
(xi) subsection 964A(1) (platform operator) must not accept
volume-based shelf-space fees);
(xii) subsections 964D(1) and (2) (financial services licensee
must not charge asset-based fees on borrowed amounts);
(xiii) subsection 964E(1) (authorised representative must not
charge asset-based fees on borrowed amounts);
(xiv) section 965 (anti-avoidance of Part 7.7A provisions).
(1F) The maximum amount that the court may order the person to pay
for contravening a provision mentioned in paragraph (1E)(b)
(except a provision mentioned in subparagraph (1E)(b)(iv) or (v))
is:
(a) $200,000 for an individual; or
(b) $1 million for a body corporate.
(1G) The maximum amount that the court may order the person to pay
for contravening a provision mentioned in
subparagraph (1E)(b)(iv) or (v) is:
(a) $50,000 for an individual; or
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(b) $250,000 for a body corporate.
Penalty a civil debt etc.
(2) The penalty is a civil debt payable to ASIC on the
Commonwealth’s behalf. ASIC or the Commonwealth may enforce
the 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.
1317GA Refund orders—contravention of section 962P
(1) A Court may order that a person (the fee recipient) refund a fee
paid to the fee recipient by another person (the client) if the Court
is satisfied that:
(a) the fee recipient knowingly or recklessly contravened
section 962P in charging the client the fee (charging ongoing
fee after termination of ongoing fee arrangement); and
(b) it is reasonable in all the circumstances to make the order.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Applications for order
(2) The Court may make the order under this section:
(a) on its own initiative, during proceedings before the Court; or
(b) on application by ASIC; or
(c) on the application of the client.
When order may be made
(3) The Court must not make an order under this section in relation to
fees paid more than 6 years before the proceedings for the order are
commenced.
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Recovery of amount as a debt
(4) If the Court makes an order that the fee recipient refund an amount
specified in the order to the client, the client may recover the
amount as a debt due to the client.
1317H Compensation orders—corporation/scheme civil penalty
provisions
Compensation for damage suffered
(1) A Court may order a person to compensate a corporation or
registered scheme for damage suffered by the corporation or
scheme if:
(a) the person has contravened a corporation/scheme civil
penalty provision in relation to the corporation or scheme;
and
(b) the damage resulted from the contravention.
The order must specify the amount of the compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Damage includes profits
(2) In determining the damage suffered by the corporation or scheme
for the purposes of making a compensation order, include profits
made by any person resulting from the contravention or the
offence.
Damage includes diminution of value of scheme property
(3) In determining the damage suffered by the scheme for the purposes
of making a compensation order, include any diminution in the
value of the property of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the
amount of the compensation to scheme property. If anyone else is
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ordered to compensate the scheme, the responsible entity may
recover the compensation on behalf of the scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317HA Compensation orders—financial services civil penalty
provisions
Compensation for damage suffered
(1) A Court may order a person (the liable person) to compensate
another person (including a corporation), or a registered scheme,
for damage suffered by the person or scheme if:
(a) the liable person has contravened a financial services civil
penalty provision; and
(b) the damage resulted from the contravention.
The order must specify the amount of compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Damage includes profits
(2) In determining the damage suffered by a person or scheme for the
purposes of making a compensation order, include profits made by
any person resulting from the contravention.
Damage to scheme includes diminution of value of scheme
property
(3) In determining the damage suffered by a registered scheme for the
purposes of making a compensation order, include any diminution
in the value of the property of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the
amount of the compensation to the scheme property. If anyone else
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is ordered to compensate the scheme, the responsible entity may
recover the compensation on behalf of the scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317HB Compensation orders—market integrity rules
Compensation for damage suffered
(1) A Court may order a person (the liable person) to compensate
another person (including a corporation), or a registered scheme,
for damage suffered by the person or scheme if:
(a) the liable person has contravened subsection 798H(1)
(complying with market integrity rules); and
(b) the damage resulted from the contravention.
The order must specify the amount of compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
(2) Subsection (1) does not apply in relation to a contravention by the
operator of a licensed market acting in that capacity.
Damage includes profits
(3) In determining the damage suffered by a person or scheme for the
purposes of making a compensation order, include profits made by
any person resulting from the contravention.
Damage to scheme includes diminution of value of scheme
property
(4) In determining the damage suffered by a registered scheme for the
purposes of making a compensation order, include any diminution
in the value of the property of the scheme.
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Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317J Who may apply for a declaration or order
Application by ASIC
(1) ASIC may apply for a declaration of contravention, a pecuniary
penalty order or a compensation order.
Application by corporation
(2) The corporation, or the responsible entity for the registered
scheme, may apply for a compensation order.
Note: An application for a compensation order may be made whether or not
a declaration of contravention has been made under section 1317E.
(3) The corporation, or the responsible entity for the registered
scheme, may intervene in an application for a declaration of
contravention or a pecuniary penalty order in relation to the
corporation or scheme. The corporation or responsible entity is
entitled to be heard on all matters other than whether the
declaration or order should be made.
Compensation order relating to financial services civil penalty
provision—any other person who suffers damage may apply
(3A) Any other person who suffers damage in relation to a
contravention, or alleged contravention, of a financial services civil
penalty provision may apply for a compensation order under
section 1317HA.
Note: An application for a compensation order may be made whether or not
a declaration of contravention has been made under section 1317E.
(3B) Subsections (2) and (3) do not apply in relation to a contravention
of:
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(a) section 901E (complying with derivative transaction rules);
or
(b) section 903D (complying with derivative trade repository
rules).
No one else may apply
(4) No person may apply for a declaration of contravention, a
pecuniary penalty order or a compensation order unless permitted
by this section.
(5) Subsection (4) does not exclude the operation of the Director of
Public Prosecutions Act 1983.
1317K Time limit for application for a declaration or order
Proceedings for a declaration of contravention, a pecuniary penalty
order, or a compensation order, may be started no later than 6 years
after the contravention.
1317L Civil evidence and procedure rules for declarations of
contravention and civil penalty orders
The Court must apply the rules of evidence and procedure for civil
matters when hearing proceedings for:
(a) a declaration of contravention; or
(b) a pecuniary penalty order.
1317M Civil proceedings after criminal proceedings
A court must not make a declaration of contravention or a
pecuniary penalty order against a person for a contravention if the
person has been convicted of an offence constituted by conduct
that is substantially the same as the conduct constituting the
contravention.
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1317N Criminal proceedings during civil proceedings
(1) Proceedings for a declaration of contravention or pecuniary penalty
order against a person are stayed if:
(a) criminal proceedings are started or have already been started
against the person for an offence; and
(b) the offence is constituted by conduct that is substantially the
same as the conduct alleged to constitute the contravention.
(2) The proceedings for the declaration or order may be resumed if the
person is not convicted of the offence. Otherwise, the proceedings
for the declaration or order are dismissed.
1317P Criminal proceedings after civil proceedings
(1) Subject to subsection (2), criminal proceedings may be started
against a person for conduct that is substantially the same as
conduct constituting a contravention of a civil penalty provision
regardless of whether:
(a) a declaration of contravention has been made against the
person; or
(b) a pecuniary penalty order has been made against the person;
or
(ba) a refund order has been made against the person; or
(c) a compensation order has been made against the person; or
(d) the person has been disqualified from managing a
corporation under Part 2D.6; or
(e) an order has been made against the person by ASIC under
section 920A (banning orders) or by the Court under
section 921A (disqualification by Court).
(2) Subsection (1) does not apply if:
(a) an infringement notice is issued to the person for an alleged
contravention of subsection 674(2) or 675(2); and
(b) the infringement notice is not withdrawn under
section 1317DAI.
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1317Q Evidence given in proceedings for penalty not admissible in
criminal proceedings
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 evidence or produced the
documents in proceedings for a pecuniary penalty order
against the individual for a contravention of a civil penalty
provision (whether or not the order was made); and
(b) the conduct alleged to constitute the offence is substantially
the same as the conduct that was claimed to constitute the
contravention.
However, this does not apply to a criminal proceeding in respect of
the falsity of the evidence given by the individual in the
proceedings for the pecuniary penalty order.
1317R ASIC requiring person to assist
(1) ASIC may require a person to give all reasonable assistance in
connection with:
(a) an application for a declaration of contravention or a
pecuniary penalty order; or
(b) criminal proceedings for an offence against this Act.
(2) ASIC can require the person to assist in connection with an
application for a declaration or order if, and only if:
(a) it appears to ASIC that someone other than the person
required to assist may have contravened a civil penalty
provision; and
(b) ASIC suspects or believes that the person required to assist
can give information relevant to the application.
(3) ASIC can require the person to assist in connection with criminal
proceedings if, and only if:
(a) it appears to ASIC that the person required to assist is
unlikely to be a defendant in the proceedings; and
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(b) the person required to assist is, in relation to a person who is
or should be a defendant in the proceedings:
(i) an employee or agent (including a banker or auditor) of
the other person; or
(ii) if the other person is a corporation—an officer or
employee of the other person; or
(iii) if the other person is an individual—a partner of the
other person.
(4) ASIC can require the person to assist regardless of whether:
(a) an application for the declaration or penalty order has
actually been made; or
(b) criminal proceedings for the offence have actually begun.
(5) The person cannot be required to assist if they are or have been a
lawyer for:
(a) in an application for a declaration or penalty order—the
person suspected of the contravention; or
(b) in criminal proceedings—a defendant or likely defendant in
the proceedings.
(6) The requirement to assist must be given in writing.
(7) The Court may order the person to comply with the requirement in
a specified way. Only ASIC may apply to the Court for an order
under this subsection.
Note: The person must comply with the requirement and may commit an
offence if they do not, even if there is no order under this
subsection (see section 104 and subsection 1311(1)).
(8) This section does not limit and is not limited by section 49 of the
ASIC Act.
1317S Relief from liability for contravention of civil penalty
provision
(1) In this section:
eligible proceedings:
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(a) means proceedings for a contravention of a civil penalty
provision (including proceedings under section 588M, 588W,
961M, 1317GA, 1317H, 1317HA or 1317HB); and
(b) does not include proceedings for an offence (except so far as
the proceedings relate to the question whether the court
should make an order under section 588K, 1317H, 1317HA
or 1317HB).
(2) If:
(a) eligible proceedings are brought against a person; and
(b) in the proceedings it appears to the court that the person has,
or may have, contravened a civil penalty provision but that:
(i) the person has acted honestly; and
(ii) having regard to all the circumstances of the case
(including, where applicable, those connected with the
person’s appointment as an officer, or employment as
an employee, of a corporation or of a Part 5.7 body), the
person ought fairly to be excused for the contravention;
the court may relieve the person either wholly or partly from a
liability to which the person would otherwise be subject, or that
might otherwise be imposed on the person, because of the
contravention.
(3) In determining under subsection (2) whether a person ought fairly
to be excused for a contravention of section 588G, the matters to
which regard is to be had include, but are not limited to:
(a) any action the person took with a view to appointing an
administrator of the company or Part 5.7 body; and
(b) when that action was taken; and
(c) the results of that action.
(4) If a person thinks that eligible proceedings will or may be begun
against them, they may apply to the Court for relief.
(5) On an application under subsection (4), the Court may grant relief
under subsection (2) as if the eligible proceedings had been begun
in the Court.
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(6) For the purposes of subsection (2) as applying for the purposes of a
case tried by a judge with a jury:
(a) a reference in that subsection to the court is a reference to the
judge; and
(b) the relief that may be granted includes withdrawing the case
in whole or in part from the jury and directing judgment to be
entered for the defendant on such terms as to costs as the
judge thinks appropriate.
(7) Nothing in this section limits, or is limited by, section 1318.
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Part 9.5—Powers of Courts
1318 Power to grant relief
(1) If, in any civil proceeding against a person to whom this section
applies for negligence, default, breach of trust or breach of duty in
a capacity as such a person, it appears to the court before which the
proceedings are taken that the person is or may be liable in respect
of the negligence, default or breach but that the person has acted
honestly and that, having regard to all the circumstances of the
case, including those connected with the person’s appointment, the
person ought fairly to be excused for the negligence, default or
breach, the court may relieve the person either wholly or partly
from liability on such terms as the court thinks fit.
(2) Where a person to whom this section applies has reason to
apprehend that any claim will or might be made against the person
in respect of any negligence, default, breach of trust or breach of
duty in a capacity as such a person, the person may apply to the
Court for relief, and the Court has the same power to relieve the
person as it would have had under subsection (1) if it had been a
court before which proceedings against the person for negligence,
default, breach of trust or breach of duty had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge after hearing the evidence may, if he or
she is satisfied that the defendant ought pursuant to that subsection
to be relieved either wholly or partly from the liability sought to be
enforced against the person, withdraw the case in whole or in part
from the jury and forthwith direct judgment to be entered for the
defendant on such terms as to costs or otherwise as the judge thinks
proper.
(4) This section applies to a person who is:
(a) an officer or employee of a corporation; or
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(b) an auditor of a corporation, whether or not the person is an
officer or employee of the corporation; or
(c) an expert in relation to a matter:
(i) relating to a corporation; and
(ii) in relation to which the civil proceeding has been taken
or the claim will or might arise; or
(d) a receiver, receiver and manager, liquidator or other person
appointed or directed by the Court to carry out any duty
under this Act in relation to a corporation.
(5) This section does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Similar provision is made in relation to Aboriginal and Torres Strait
Islander corporations under section 576-1 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
1319 Power of Court to give directions with respect to meetings
ordered by the Court
Where, under this Act, the Court orders a meeting to be convened,
the Court may, subject to this Act, give such directions with
respect to the convening, holding or conduct of the meeting, and
such ancillary or consequential directions in relation to the
meeting, as it thinks fit.
1322 Irregularities
(1) In this section, unless the contrary intention appears:
(a) a reference to a proceeding under this Act is a reference to
any proceeding whether a legal proceeding or not; and
(b) a reference to a procedural irregularity includes a reference
to:
(i) the absence of a quorum at a meeting of a corporation,
at a meeting of directors or creditors of a corporation, at
a joint meeting of creditors and members of a
corporation or at a meeting of members of a registered
scheme; and
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(ii) a defect, irregularity or deficiency of notice or time.
(2) A proceeding under this Act is not invalidated because of any
procedural irregularity unless the Court is of the opinion that the
irregularity has caused or may cause substantial injustice that
cannot be remedied by any order of the Court and by order declares
the proceeding to be invalid.
(3) A meeting held for the purposes of this Act, or a meeting notice of
which is required to be given in accordance with the provisions of
this Act, or any proceeding at such a meeting, is not invalidated
only because of the accidental omission to give notice of the
meeting or the non-receipt by any person of notice of the meeting,
unless the Court, on the application of the person concerned, a
person entitled to attend the meeting or ASIC, declares proceedings
at the meeting to be void.
(3AA) A meeting held for the purposes of this Act, or a meeting notice of
which is required to be given in accordance with the provisions of
this Act, or any proceeding at such a meeting, is not invalidated
only because of the inability of a person to access the notice of
meeting, unless the Court, on the application of the person
concerned, a person entitled to attend the meeting or ASIC,
declares proceedings at the meeting to be void.
Note: Under paragraph 249J(3)(cb), a company may, in certain
circumstances, give a member notice of a meeting by notifying the
member that the notice of meeting is available and how the member
may access the notice of meeting.
(3A) If a member does not have a reasonable opportunity to participate
in a meeting of members, or part of a meeting of members, held at
2 or more venues, the meeting will only be invalid on that ground
if:
(a) the Court is of the opinion that:
(i) a substantial injustice has been caused or may be
caused; and
(ii) the injustice cannot be remedied by any order of the
Court; and
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(b) the Court declares the meeting or proceeding (or that part of
it) invalid.
(3B) If voting rights are exercised in contravention of
subsection 259D(3) (company controlling entity that holds shares
in it), the meeting or the resolution on which the voting rights were
exercised will only be invalid on that ground if:
(a) the court is of the opinion that:
(i) a substantial injustice has been caused or may be
caused; and
(ii) the injustice cannot be remedied by any order of the
court; and
(b) the court declares the meeting or resolution invalid.
(4) Subject to the following provisions of this section but without
limiting the generality of any other provision of this Act, the Court
may, on application by any interested person, make all or any of
the following orders, either unconditionally or subject to such
conditions as the Court imposes:
(a) an order declaring that any act, matter or thing purporting to
have been done, or any proceeding purporting to have been
instituted or taken, under this Act or in relation to a
corporation is not invalid by reason of any contravention of a
provision of this Act or a provision of the constitution of a
corporation;
(b) an order directing the rectification of any register kept by
ASIC under this Act;
(c) an order relieving a person in whole or in part from any civil
liability in respect of a contravention or failure of a kind
referred to in paragraph (a);
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(d) an order extending the period for doing any act, matter or
thing or instituting or taking any proceeding under this Act or
in relation to a corporation (including an order extending a
period where the period concerned ended before the
application for the order was made) or abridging the period
for doing such an act, matter or thing or instituting or taking
such a proceeding;
and may make such consequential or ancillary orders as the Court
thinks fit.
(5) An order may be made under paragraph (4)(a) or (c)
notwithstanding that the contravention or failure referred to in the
paragraph concerned resulted in the commission of an offence.
(6) The Court must not make an order under this section unless it is
satisfied:
(a) in the case of an order referred to in paragraph (4)(a):
(i) that the act, matter or thing, or the proceeding, referred
to in that paragraph is essentially of a procedural nature;
(ii) that the person or persons concerned in or party to the
contravention or failure acted honestly; or
(iii) that it is just and equitable that the order be made; and
(b) in the case of an order referred to in paragraph (4)(c)—that
the person subject to the civil liability concerned acted
honestly; and
(c) in every case—that no substantial injustice has been or is
likely to be caused to any person.
1323 Power of Court to prohibit payment or transfer of money,
financial products or other property
(1) Where:
(a) an investigation is being carried out under the ASIC Act or
this Act in relation to an act or omission by a person, being
an act or omission that constitutes or may constitute a
contravention of this Act; or
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(b) a prosecution has been begun against a person for a
contravention of this Act; or
(c) a civil proceeding has been begun against a person under this
Act;
and the Court considers it necessary or desirable to do so for the
purpose of protecting the interests of a person (in this section
called an aggrieved person) to whom the person referred to in
paragraph (a), (b) or (c), as the case may be, (in this section called
the relevant person), is liable, or may be or become liable, to pay
money, whether in respect of a debt, by way of damages or
compensation or otherwise, or to account for financial products or
other property, the Court may, on application by ASIC or by an
aggrieved person, make one or more of the following orders:
(d) an order prohibiting 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;
(e) an order prohibiting a person holding money, financial
products 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 financial products or other
property, to, or to another person at the direction or request
of, the person on whose behalf the money, financial products
or other property, is or are held;
(f) an order prohibiting the taking or sending out of this
jurisdiction, or out of Australia, by a person of money of the
relevant person or of an associate of the relevant person;
(g) an order prohibiting the taking, sending or transfer by a
person of financial products or other property of the relevant
person, or of an associate of the relevant person:
(i) from a place in this jurisdiction to a place outside this
jurisdiction (including the transfer of financial products
from a register in this jurisdiction to a register outside
this jurisdiction); or
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(ii) from a place in Australia to a place outside Australia
(including the transfer of financial products from a
register in Australia to a register outside Australia);
(h) an order appointing:
(i) if the relevant person is a natural person—a receiver or
trustee, having such powers as the Court orders, of the
property or of part of the property of that person; or
(ii) if the relevant person is a body corporate—a receiver or
receiver and manager, having such powers as the Court
orders, of the property or of part of the property of that
person;
(j) if the relevant person is a natural person—an order requiring
that person to deliver up to the Court his or her passport and
such other documents as the Court thinks fit;
(k) if the relevant person is a natural person—an order
prohibiting that person from leaving this jurisdiction, or
Australia, without the consent of the Court.
(2A) A reference in paragraph (1)(g) or (h) to property of a person
includes a reference to property that the person holds otherwise
than as sole beneficial owner, for example:
(a) as trustee for, as nominee for, or otherwise on behalf of or on
account of, another person; or
(b) in a fiduciary capacity.
(2B) Subsection (2A) is to avoid doubt, is not to limit the generality of
anything in subsection (1) and is not to affect by implication the
interpretation of any other provision of this Act.
(2) An order under subsection (1) prohibiting conduct may prohibit the
conduct either absolutely or subject to conditions.
(3) Where an application is made to the Court for an order under
subsection (1), the Court may, if in the opinion of the Court it is
desirable to do so, before considering the application, grant an
interim order, being an order of the kind applied for that is
expressed to have effect pending the determination of the
application.
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(4) On an application under subsection (1), the Court must not require
the applicant or any other person, as a condition of granting an
interim order under subsection (3), to give an undertaking as to
damages.
(5) Where the Court has made an order under this section on a
person’s application, the Court may, on application by that person
or by any person affected by the order, make a further order
discharging or varying the first-mentioned order.
(6) An order made under subsection (1) or (2) may be expressed to
operate for a specified period or until the order is discharged by a
further order under this section.
(7) Nothing in this section affects the powers that the Court has apart
from this section.
(8) This section has effect subject to the Bankruptcy Act 1966.
(9) A person must not contravene an order by the Court under this
section that is applicable to the person.
(10) An offence based on subsection (9) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1324 Injunctions
(1) Where a person has engaged, is engaging or is proposing to engage
in conduct that constituted, constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to
contravene this Act; or
(d) inducing or attempting to induce, whether by threats,
promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned
in, or party to, the contravention by a person of this Act; or
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(f) conspiring with others to contravene this Act;
the Court may, on the application of ASIC, or of a person whose
interests have been, are or would be affected by the conduct, grant
an injunction, on such terms as the Court thinks appropriate,
restraining the first-mentioned person from engaging in the
conduct and, if in the opinion of the Court it is desirable to do so,
requiring that person to do any act or thing.
(1A) For the purposes of subsection (1):
(a) a contravention of this Act affects the interests of a creditor
or member of a company if the insolvency of the company is
an element of the contravention; and
(b) a company’s contravention of:
(i) paragraph 257A(1)(a) (share buy-back not to prejudice
ability to pay creditors); or
(ia) paragraph 256B(1)(b) (share capital reduction not to
prejudice ability to pay creditors); or
(ii) paragraph 260A(1)(a) (financial assistance for share
acquisition not to prejudice company or shareholders or
ability to pay creditors);
affects the interests of a creditor or member of the company;
and
(c) a company’s contravention of paragraph 256B(1)(a) (fair and
reasonable test for share capital reduction) affects the
interests of a member of the company.
This subsection does not limit subsection (1) in any way.
(1B) If the ground relied on in an application for an injunction is
conduct or proposed conduct of a company or other person that it is
alleged constitutes, or would constitute:
(a) a contravention of paragraph 256B(1)(a) or (b), section 257A
or paragraph 260A(1)(a); or
(b) a contravention of a provision of this Act involving the
insolvency of the company because of:
(i) the company making a reduction of its share capital to
which Division 1 of Part 2J.1 applies; or
(ii) the company buying back its shares; or
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(iii) the company giving financial assistance to which
Part 2J.3 applies;
the Court must assume that the conduct constitutes, or would
constitute, a contravention of that paragraph, section or provision
unless the company or person proves otherwise.
(2) Where a person has refused or failed, is refusing or failing, or is
proposing to refuse or fail, to do an act or thing that the person is
required by this Act to do, the Court may, on the application of:
(a) ASIC; or
(b) any person whose interests have been, are or would be
affected by the refusal or failure to do that act or thing;
grant an injunction, on such terms as the Court thinks appropriate,
requiring the first-mentioned person to do that act or thing.
(3) Where an application for an injunction under subsection (1) or (2)
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 that
subsection applies.
(4) Where 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).
(5) The Court may discharge or vary an injunction granted under
subsection (1), (2) or (4).
(6) 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.
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(7) 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.
(8) Where ASIC applies 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 an undertaking as to damages.
(9) In proceedings under this section against a person the Court may
make an order under section 1323 in respect of the person.
(10) Where the Court has power under this section to grant an
injunction restraining a person from engaging in particular
conduct, or requiring a person to do a particular act or thing, the
Court may, either in addition to or in substitution for the grant of
the injunction, order that person to pay damages to any other
person.
1324A Provisions relating to prosecutions
In the prosecution of a person for an offence in respect of a
contravention of a provision of Chapter 5C, 6CA or 6D or
Part 7.10, the Court may do either or both of the following:
(a) grant an injunction under section 1324 against the person in
relation to:
(i) the conduct that constitutes, or is alleged to constitute,
the offence; or
(ii) other conduct of that kind
(b) make an order under section 1324B in respect of the person.
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1324B Order to disclose information or publish advertisements
Without limiting section 1324, if, on the application of ASIC, the
Court is satisfied that a person has engaged in conduct constituting
a contravention of a provision of Chapter 5C, 6CA or 6D,
subsection 798H(1), section 901E or 903D or Part 7.10, the Court
may make either or both of the following orders against that person
or a person involved in the contravention:
(a) an order requiring the person to whom it is directed to
disclose, in the manner specified in the order, to:
(i) the public; or
(ii) a particular person; or
(iii) a particular class of persons;
the information, or information of a kind, that is specified in
the order and is in the person’s possession or to which the
person has access;
(b) an order requiring the person to whom it is directed to
publish, at the person’s own expense, in the manner and at
times specified in the order, advertisements whose terms are
specified in, or are to be determined in accordance with, the
order.
1325 Other orders
(1) Where, in a proceeding instituted under, or for a contravention of,
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10, the Court finds that a person who is a party to the
proceeding has suffered, or is likely to suffer, loss or damage
because of conduct of another person that was engaged in in
contravention of subsection 201P(1), Chapter 5C, 6CA or 6D,
subsection 798H(1) or Part 7.10, the Court may, whether or not it
grants an injunction, or makes an order, under any other provision
of this Act, 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 (5)) if the Court considers that the
order or orders concerned will compensate the first-mentioned
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person in whole or in part for the loss or damage or will prevent or
reduce the loss or damage.
(2) The Court may, on the application of a person who has suffered, or
is likely to suffer, loss or damage because of conduct of another
person that was engaged in in contravention of subsection 201P(1),
Chapter 5C, 6CA or 6D, subsection 798H(1) or Part 7.10, or on the
application of ASIC in accordance with subsection (3) on behalf of
such a person or 2 or more such 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 (5)) if
the Court considers that the order or orders concerned will
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 will prevent or reduce
the loss or damage suffered, or likely to be suffered, by such a
person.
(3) Where, in a proceeding instituted for a contravention of
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10 or instituted by ASIC under section 1324, a person is
found to have engaged in conduct in contravention of
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10, ASIC may make an application under subsection (2)
on behalf of one or more persons identified in the application who
have suffered, or are likely to suffer, loss or damage by the
conduct, but ASIC must not make such an application except with
the consent in writing given before the application is made by the
person, or by each of the persons, on whose behalf the application
is made.
(4) An application under subsection (2) may be made within 6 years
after the day on which the cause of action arose.
(5) The orders referred to in subsections (1) and (2) are:
(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
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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 specified day
before the order is made; and
(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 specified day before the order is made;
and
(c) an order refusing to enforce any or all of the provisions of
such a contract; and
(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; and
(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; and
(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 the person’s own expense, to supply
specified services to the person who suffered, or is likely to
suffer, the loss or damage.
(5A) Subsections (1) and (2) have effect subject to section 1044B.
Note: Section 1044B 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 1041H (Misleading or deceptive conduct) or
involvement in such a contravention.
(6) Where an application is made for an order under this section
against a person, the Court may make an order under section 1323
in respect of the person.
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1325A Orders if contravention of Chapter 6, 6A, 6B or 6C
(1) The Court may make any order or orders (including a remedial
order) that it considers appropriate if a person:
(a) contravenes a provision of Chapter 6, 6A, 6B or 6C; or
(b) contravenes a condition on a consent given by ASIC under
section 652B; or
(c) states in a notice under section 672B about securities that
they do not know particular information about:
(i) the securities; or
(ii) someone who has a relevant interest in, or has given
instructions in relation to, the securities.
Note 1: Section 9 defines remedial order.
Note 2: Sections 659B and 659C deal with court proceedings during and after
a takeover bid.
(2) The Court may make any order or orders (including a remedial
order) that it considers appropriate if:
(a) the consideration offered under a takeover bid is or includes
securities; and
(b) the offers under the bid or the bidder’s statement states or
implies that the securities will be able to be traded on a
financial market (whether in Australia or elsewhere) and:
(i) an application for admission to quotation is not made
within 7 days after the start of the bid period; or
(ii) permission for admission to quotation is not granted
within 7 days after the end of the bid period.
Note: Section 9 defines remedial order.
(3) An order under this section may be made on application by the
following:
(a) ASIC;
(b) the company, or the responsible entity of the registered
scheme, whose securities are involved in the contravention;
(c) a member or former member of that company or scheme;
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(d) a person from whom the relevant interest in the securities
were acquired;
(e) a person whose interests are affected by the contravention.
1325B Court may order bidder to make offers
(1) If a bidder making a takeover bid for a class of securities
contravenes section 631 by failing to make offers under the bid
within time and ASIC applies for an order under this section, the
Court may:
(a) order the bidder to send, to each holder of securities in that
class, an offer to which the bidder’s statement relates within
a specified time; and
(b) make any ancillary orders it thinks appropriate including
orders that the bidder:
(i) send notices setting out specified information with the
offer; and
(ii) send copies of the notice within a specified period to the
target and, if the target is listed, to the relevant market
operator; and
(iii) lodge a copy of the notice with ASIC within a specified
period.
(2) Offers sent in accordance with an order under this section are taken
to be made under a takeover bid.
1325C Unfair or unconscionable agreements, payments or benefits
(1) The Court may make orders under subsection (2) if:
(a) a body corporate gives, or enters into an agreement to give, a
director or secretary of the body corporate or a related body
corporate a benefit (including a payment or an agreement to
employ them, or engage their services, for a fixed period);
and
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(b) the agreement is entered into or the benefit is given:
(i) within 12 months after the start of the bid period for a
takeover bid for the securities of the body corporate or a
related body corporate; or
(ii) at a time when the directors of the body corporate have
reason to believe that a takeover bid is to be made in
respect of securities of the body corporate or a related
body corporate; and
(c) the Court is satisfied that the agreement or benefit was unfair
or unconscionable having regard to the interests of the body
corporate.
(2) The Court may:
(a) declare the agreement, or any part of it, to be void or to have
always been void; or
(b) direct a person to whom a benefit is given, or another
specified person, to:
(i) make a payment or transfer property to the body
corporate; or
(ii) do any other act for the benefit of the body corporate; or
(c) make any other order it considers appropriate.
(3) This section does not apply to an agreement or benefit that has
been approved by an ordinary resolution of the body corporate
(whether before or after the agreement was entered into or the
benefit given) with no vote being cast by the person who is to
receive the benefit or their associates.
(4) An order under this section may be made on application by:
(a) the body corporate; or
(b) ASIC; or
(c) members who together hold shares carrying at least 10% of
the votes attached to voting shares in the body corporate or a
related body corporate;
within 12 months, or any longer period that the Court thinks
appropriate in the circumstances, after the agreement is entered
into or the benefit given.
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1325D Contravention due to inadvertence etc.
(1) The Court may declare that any act, document or matter:
(a) is not invalid merely because a person has contravened a
provision of Chapter 6, 6A, 6B or 6C; and
(b) has had effect at all times as if there had been no
contravention;
if the Court is satisfied that the contravention ought to be excused
in all the circumstances.
(2) An application for an order under subsection (1) may be made by
any interested person.
(3) If the Court is satisfied that in all the circumstances a contravention
of a provision of Chapter 6, 6A, 6B or 6C ought to be excused, the
Court must not make an order under section 1325A, 1325B or
1325C other than:
(a) an order restraining the exercise of voting or other rights
attached to securities; or
(b) an order that an exercise of voting or other rights attached to
securities be disregarded.
(4) In determining whether or not a contravention of a provision by a
person ought to be excused, have regard to the contravention being
caused by any of the following:
(a) the person’s inadvertence or mistake;
(b) the person not having been aware of a relevant fact or
occurrence;
(c) circumstances beyond the control of the person.
(5) This section applies notwithstanding anything contained in any
other provision of this Chapter.
1325E Orders to secure compliance
In order to secure compliance with an order under section 1325A,
1325B or 1325C, the Court may direct a person to:
(a) do a specified act; or
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(b) refrain from doing a specified act.
1326 Effect of sections 1323, 1324 and 1325
Nothing in any of sections 1323, 1324, 1324A, 1324B, and 1325
limits the generality of anything else in any of those sections.
1327 Power of Court to punish for contempt of Court
Nothing in a provision of this Act that provides:
(a) that a person must not contravene an order of the Court; or
(b) that a person who contravenes an order of the Court
contravenes a provision of this Act or is guilty of an offence;
affects the powers of the Court in relation to the punishment of
contempts of the Court.
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1330 ASIC’s power to intervene in proceedings
(1) ASIC may intervene in any proceeding relating to a matter arising
under this Act.
(2) Where ASIC intervenes in a proceeding referred to in
subsection (1), ASIC is taken to be a party to the proceeding and,
subject to this Act, has all the rights, duties and liabilities of such a
party.
(3) Without limiting the generality of subsection (2), ASIC may appear
and be represented in any proceeding in which it wishes to
intervene pursuant to subsection (1):
(a) by a staff member of ASIC; or
(b) by a natural person to whom, or by an officer or employee of
a person or body to whom or to which, ASIC has delegated
its functions and powers under this Act or such of those
functions and powers as relate to a matter to which the
proceeding relates; or
(c) by solicitor or counsel.
1331 Civil proceedings not to be stayed
No civil proceedings under this Act are to be stayed merely
because the proceeding discloses, or arises out of, the commission
of an offence.
1332 Standard of proof
Where, in proceedings other than proceedings for an offence, it is
necessary to establish, or for the Court to be satisfied, for any
purpose relating to a matter arising under this Act, that:
(a) a person has contravened a provision of this Act; or
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(b) default has been made in complying with a provision of this
Act; or
(c) an act or omission was unlawful by virtue of a provision of
this Act; or
(d) a person has been in any way, by act or omission, directly or
indirectly, knowingly concerned in or party to a
contravention, or a default in complying with, a provision of
this Act;
it is sufficient if the matter referred to in paragraph (a), (b), (c) or
(d) is established, or the Court is so satisfied, as the case may be,
on the balance of probabilities.
1333 Evidence of contravention
For the purposes of this Act, a certificate that:
(a) purports to be signed by the Registrar or other proper officer
of an Australian court; and
(b) states:
(i) that a person was convicted by that court on a specified
day of a specified offence; or
(ii) that a person charged before that court with a specified
offence was, on a specified day, found in that court to
have committed the offence but that the court did not
proceed to convict the person of the offence;
is, unless it is proved that the conviction was quashed or set aside,
or that the finding was set aside or reversed, as the case may be,
conclusive evidence:
(c) if subparagraph (b)(i) applies—that the person was convicted
of the offence on that day; and
(d) if the offence was constituted by a contravention of a
provision of a law—that the person contravened that
provision.
1335 Costs
(1) Where a corporation is plaintiff in any action or other legal
proceeding, the court having jurisdiction in the matter may, if it
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appears by credible testimony that there is reason to believe that
the corporation will be unable to pay the costs of the defendant if
successful in his, her or its defence, require sufficient security to be
given for those costs and stay all proceedings until the security is
given.
(1A) Subsection (1) does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Similar provision is made in relation to Aboriginal and Torres Strait
Islander corporations under section 581-20 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
(2) The costs of any proceeding before a court under this Act are to be
borne by such party to the proceeding as the court, in its discretion,
directs.
1336 Vesting of property
(1) Where an order is made by a court under this Act vesting property
in a person:
(a) subject to subsection (2), the property forthwith vests in the
person named in the order without any conveyance, transfer
or assignment; and
(b) the person who applied for the order must, within 7 days after
the passing and entering of the order, lodge an office copy of
the order with such person (if any) as is specified for the
purpose in the order.
(2) Where:
(a) the property to which an order referred to in subsection (1)
relates is property the transfer or transmission of which may
be registered under a law of the Commonwealth, of a State or
of a Territory; and
(b) that law enables the registration of such an order;
the property, notwithstanding that it vests in equity in the person
named in the order, does not vest in that person at law until the
requirements of the law referred to in paragraph (a) have been
complied with.
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(3) Where:
(a) property vests in a person by force of this Act; and
(b) the property is property the transfer or transmission of which
may be registered under a law of the Commonwealth, of a
State or of a Territory; and
(c) that law enables the person to be registered as the owner of
that property;
that property, notwithstanding that it vests in equity in that person
by force of this Act, does not vest in that person at law until the
requirements of the law referred to in paragraph (b) have been
complied with.
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Part 9.6A—Jurisdiction and procedure of Courts
Division 1—Civil jurisdiction
Subdivision A—Preliminary
1337A Operation of Division
(1) This Division deals with:
(a) the jurisdiction of courts in respect of civil matters arising
under the Corporations legislation; and
(b) the jurisdiction of courts in respect of matters arising under
the Administrative Decisions (Judicial Review) Act 1977
involving or related to decisions made under the
Corporations legislation by Commonwealth authorities and
officers of the Commonwealth; and
(c) the jurisdiction of courts in civil matters in respect of
decisions made by officers of the Commonwealth to
prosecute persons for offences against the Corporations
legislation and related criminal justice process decisions.
(2) This Division operates to the exclusion of:
(a) the Jurisdiction of Courts (Cross-vesting) Act 1987; and
(b) section 39B of the Judiciary Act 1903.
(3) This Division does not limit the operation of the provisions of the
Judiciary Act 1903 other than section 39B.
(4) Without limiting subsection (3), this Division does not limit the
operation of subsection 39(2) of the Judiciary Act 1903 in relation
to civil matters arising under the Corporations legislation.
(5) Nothing in this Division affects any other jurisdiction of any court.
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Subdivision B—Conferral of jurisdiction
1337B Jurisdiction of Federal Court and State and Territory
Supreme Courts
(1) Jurisdiction is conferred on the Federal Court of Australia with
respect to civil matters arising under the Corporations legislation.
(2) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on the Supreme Court
of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to civil matters arising under the Corporations
legislation.
(3) Despite section 9 of the Administrative Decisions (Judicial Review)
Act 1977, jurisdiction is conferred on the Supreme Court of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to matters arising under that Act involving or related
to decisions made, or proposed or required to be made, under the
Corporations legislation by a Commonwealth authority or an
officer of the Commonwealth.
Note 1: The Federal Court also has jurisdiction with respect to these matters
under that Act.
Note 2: A Supreme Court may be required to transfer a proceeding with
respect to such a matter to the Federal Court: see
subsection 1337H(3).
(4) Subsection (3) applies to a decision made, or proposed or required
to be made:
(a) whether or not in the exercise of a discretion; and
(b) whether before or after that subsection commences.
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(5) The jurisdiction conferred on a Supreme Court by subsection (2) or
(3) is not limited by any limits to which any other jurisdiction of
that Supreme Court may be subject.
(6) This section has effect subject to section 1337D.
1337C Jurisdiction of Family Court and State Family Courts
(1) Jurisdiction is conferred on the Family Court with respect to civil
matters arising under the Corporations legislation.
(2) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on each State Family
Court with respect to civil matters arising under the Corporations
legislation.
(3) The jurisdiction conferred on a State Family Court by
subsection (2) is not limited by any limits to which any other
jurisdiction of the State Family Court may be subject.
(4) This section has effect subject to section 1337D.
1337D Jurisdiction of courts (decisions to prosecute and related
criminal justice process decisions made by
Commonwealth officers)
(1) If a decision to prosecute a person for an offence against the
Corporations legislation has been made by an officer or officers of
the Commonwealth and the prosecution is proposed to be
commenced in a State or Territory court:
(a) neither the Federal Court nor the Family Court has
jurisdiction with respect to any matter in which a person
seeks a writ of mandamus or prohibition or an injunction
against the officer or officers in relation to that decision; and
(b) jurisdiction with respect to any such matter is conferred on
the Supreme Court of the State or Territory in which the
prosecution is proposed to be commenced.
(2) Subject to subsection (3), at any time when:
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(a) a prosecution for an offence against the Corporations
legislation is before a State or Territory court; or
(b) an appeal arising out of such a prosecution is before a State
or Territory court;
the following apply:
(c) neither the Federal Court nor the Family Court has
jurisdiction with respect to any matter in which the person
who is or was the defendant in the prosecution seeks a writ of
mandamus or prohibition or an injunction against an officer
or officers of the Commonwealth in relation to a related
criminal justice process decision;
(d) jurisdiction with respect to any such matter is conferred on
the Supreme Court of the State or Territory in which the
prosecution or appeal is before a court.
(3) Subsection (2) does not apply where a person has applied for a writ
of mandamus or prohibition, or an injunction, against an officer or
officers of the Commonwealth in relation to a related criminal
justice process decision before the commencement of a prosecution
for an offence against a law of the Commonwealth, or of a State or
a Territory.
(4) Where subsection (3) applies, the prosecutor may apply to the
court for a permanent stay of the proceedings referred to in that
subsection and the court may grant such a stay if the court
determines that:
(a) the matters that are the subject of the proceedings are more
appropriately dealt with in the criminal justice process; and
(b) a stay of proceedings will not substantially prejudice the
person.
(5) Subsections (1), (2), (3) and (4) have effect despite anything in this
Act or in any other law. In particular:
(a) neither this Act, nor any other law, has the effect of giving
the Federal Court or the Family Court jurisdiction contrary to
subsection (1) or (2); and
(b) neither section 9 of the Administrative Decisions (Judicial
Review) Act 1977, nor any other law, has the effect of
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removing from the Supreme Court of a State, the Capital
Territory or the Northern Territory the jurisdiction given to
that Court by subsection (1) or (2).
(6) In this section:
appeal includes an application for a new trial and a proceeding to
review or call in question the proceedings, decision or jurisdiction
of a court or judge.
related criminal justice process decision, in relation to an offence,
means a decision (other than a decision to prosecute) made in the
criminal justice process in relation to the offence, including:
(a) a decision in connection with the investigation, committal for
trial or prosecution of the defendant; and
(b) a decision in connection with the appointment of
investigators or inspectors for the purposes of such an
investigation; and
(c) a decision in connection with the issue of a warrant,
including a search warrant or a seizure warrant; and
(d) a decision requiring the production of documents, the giving
of information or the summoning of persons as witnesses;
and
(e) a decision in connection with an appeal arising out of the
prosecution.
1337E Jurisdiction of lower courts
(1) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on the lower courts of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to civil matters (other than superior court matters)
arising under the Corporations legislation.
(2) The jurisdiction conferred on a lower court by subsection (1):
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(a) is subject to the court’s general jurisdictional limits, so far as
they relate to:
(i) the amounts; or
(ii) the value of property;
with which the court may deal; but
(b) is not subject to the court’s other jurisdictional limits.
1337F Appeals
(1) An appeal may not be instituted from a decision of the Federal
Court to:
(a) a State or Territory court; or
(b) the Family Court.
(2) An appeal may not be instituted from a decision of a court of the
Capital Territory to:
(a) a court of a State or the Northern Territory; or
(b) the Family Court.
(3) An appeal may not be instituted from a decision of a court (not
being a State Family Court) of a State or the Northern Territory to:
(a) the Federal Court; or
(b) a court of another State or Territory; or
(c) the Family Court; or
(d) a State Family Court of that State.
(4) An appeal may not be instituted from a decision of the Family
Court to:
(a) the Federal Court; or
(b) a State or Territory court.
(5) An appeal may not be instituted from a decision of a State Family
Court of a State to:
(a) the Federal Court; or
(b) a court of another State or Territory; or
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(c) except in accordance with the law of the State under which
the State Family Court is constituted—the Supreme Court of
that State.
1337G Courts to act in aid of each other
All courts having jurisdiction in:
(a) civil matters arising under the Corporations legislation; or
(b) matters referred to in subsection 1337B(3);
and the officers of, or under the control of, those courts must
severally act in aid of, and be auxiliary to, each other in all those
matters.
Subdivision C—Transfer of proceedings
1337H Transfer of proceedings by the Federal Court and State and
Territory Supreme Courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is:
(i) a proceeding with respect to a civil matter arising under
the Corporations legislation; or
(ii) a subsection 1337B(3) proceeding; and
(b) the transferor court is:
(i) the Federal court; or
(ii) a State or Territory Supreme Court.
(2) Subject to subsections (3), (4) and (5), if it appears to the transferor
court that, having regard to the interests of justice, it is more
appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the
matters for determination in the relevant proceeding or application,
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the transferor court may transfer the relevant proceeding or
application to that other court.
(3) If:
(a) the relevant proceeding is a subsection 1337B(3) proceeding;
and
(b) the transferor court is a State or Territory Supreme Court;
the transferor court must transfer the relevant proceeding to the
Federal Court unless the matter for determination in it arises out of,
or relates to, another proceeding pending in any court of that State
or Territory that:
(c) arises, or a substantial part of which arises, under the
Corporations legislation; and
(d) is not a subsection 1337B(3) proceeding;
regardless of which proceeding was commenced first.
(4) Even if subsection (3) does not require a State or Territory
Supreme Court to transfer a subsection 1337B(3) proceeding to the
Federal Court, it may nevertheless do so if it considers that to be
appropriate, having regard to the interests of justice, including the
desirability of related proceedings being heard in the same State or
Territory.
(5) If:
(a) the relevant proceeding is a subsection 1337B(3) proceeding
in relation to a matter; and
(b) the transferor court is the Federal Court;
the transferor court may only transfer the relevant proceeding, or
an application in the relevant proceeding, to a State or Territory
Supreme Court if:
(c) the matter arises out of, or relates to, another proceeding
pending in any court of that State or Territory that:
(i) arises, or a substantial part of which arises, under the
Corporations legislation; and
(ii) is not a subsection 1337B(3) proceeding;
regardless of which proceeding was commenced first; and
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(d) the transferor court considers the transfer to be appropriate,
having regard to the interests of justice, including the
desirability of related proceedings being heard in the same
jurisdiction.
(6) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
(7) The fact that some references in this section to the interests of
justice include the desirability of related proceedings being heard
in the same jurisdiction does not of itself mean that other
references to the interests of justice, in this section or elsewhere in
this Act, do not include that matter.
1337J Transfer of proceedings by Family Court and State Family
Courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is with respect to a civil matter
arising under the Corporations legislation; and
(b) the transferor court is:
(i) the Family Court of Australia; or
(ii) a State Family Court.
(2) If it appears to the transferor court:
(a) that the relevant proceeding arises out of, or is related to,
another proceeding pending in:
(i) the Federal Court; or
(ii) another State or Territory court;
and that the court in which the other proceeding is pending is
the most appropriate court to determine the relevant
proceeding; or
(b) that having regard to:
(i) whether, in the transferor court’s opinion, apart from
this Division, the relevant proceeding, or a substantial
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part of it, would have been incapable of being instituted
in the transferor court; and
(ii) the extent to which, in the transferor court’s opinion, the
matters for determination in the relevant proceeding are
matters not within the transferor court’s jurisdiction
apart from this Division; and
(iii) the interests of justice;
the Federal Court, or another State or Territory court, is the
most appropriate court to determine the relevant proceeding;
or
(c) that it is otherwise in the interests of justice that the Federal
Court, or another State or Territory court, determine the
relevant proceeding;
the transferor court must transfer the relevant proceeding to the
Federal Court or to that other court.
(3) Subject to subsection (2), if it appears to the transferor court:
(a) that the relevant proceeding arises out of, or is related to,
another proceeding pending in another court that is:
(i) the Family Court of Australia; or
(ii) a State Family Court;
and that has jurisdiction under section 1337C in the matters
for determination in the relevant proceeding and that the
other court is the most appropriate court to determine the
relevant proceeding; or
(b) that it is otherwise in the interests of justice that the relevant
proceeding be determined by another court that is:
(i) the Family Court of Australia; or
(ii) a State Family Court;
and that has jurisdiction under section 1337C in the matters
for determination in the relevant proceeding;
the transferor court must transfer the relevant proceeding to the
other court.
(4) If:
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(a) the transferor court transfers the relevant proceeding to
another court; and
(b) it appears to the transferor court that:
(i) there is another proceeding pending in the transferor
court that arises out of, or is related to, the relevant
proceeding; and
(ii) it is in the interests of justice that the other court also
determine the other proceeding;
the transferor court must also transfer the other proceeding to the
other court.
(5) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
1337K Transfer of proceedings in lower courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is with respect to a civil matter
arising under the Corporations legislation; and
(b) the transferor court is a lower court of a State or Territory.
(2) If it appears to the transferor court that, having regard to the
interests of justice, it is more appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the
matters for determination in the relevant proceeding or application,
the transferor court may take action under whichever of
subsections (3) and (4) applies.
(3) If the other court is also a lower court, the transferor court may
transfer the relevant proceeding or application to the other court.
(4) If the other court is a superior court, the transferor court may:
(a) transfer the relevant proceeding or application to the relevant
Supreme Court; and
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(b) recommend that the relevant proceeding or application be
transferred by the Supreme Court to the other court.
(5) The relevant Supreme Court is not bound to comply with a
recommendation under subsection (4) and it may instead decide:
(a) to deal with the relevant proceeding or application itself; or
(b) to transfer the relevant proceeding or application to some
other court (which could be the transferor court).
(6) Nothing in this section allows the relevant Supreme Court to
transfer the relevant proceeding or application to another court
otherwise than in accordance with section 1337H and the other
requirements of this Division.
(7) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
(8) In this section:
relevant Supreme Court means the Supreme Court of the State or
Territory of which the transferor court is a court.
1337L Further matters for a court to consider when deciding
whether to transfer a proceeding
In deciding whether to transfer under section 1337H, 1337J or
1337K a proceeding or application, a court must have regard to:
(a) the principal place of business of any body corporate
concerned in the proceeding or application; and
(b) the place or places where the events that are the subject of the
proceeding or application took place; and
(c) the other courts that have jurisdiction to deal with the
proceeding or application.
1337M Transfer may be made at any stage
A court may transfer under section 1337H, 1337J or 1337K a
proceeding or application:
(a) on the application of a party made at any stage; or
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(b) of the court’s own motion.
1337N Transfer of documents
If, under section 1337H, 1337J or 1337K, a court (the transferor
court) transfers a proceeding, or an application in a proceeding, to
another court:
(a) the Registrar or other proper officer of the transferor court
must transmit to the Registrar or other proper officer of the
other court all documents filed in the transferor court in
respect of the proceeding or application, as the case may be;
and
(b) the other court must proceed as if:
(i) the proceeding had been originally instituted in the other
court; and
(ii) the same proceedings had been taken in the other court
as were taken in the transferor court; and
(iii) in a case where an application is transferred—the
application had been made in the other court.
1337P Conduct of proceedings
(1) Subject to sections 1337S, 1337T and 1337U, if it appears to a
court that, in determining a matter for determination in a
proceeding, the court will, or will be likely to, be exercising
relevant jurisdiction, the rules of evidence and procedure to be
applied in dealing with that matter are to be the rules that:
(a) are applied in a superior court in Australia or in an external
Territory; and
(b) the court considers appropriate to be applied in the
circumstances.
(2) If a proceeding is transferred or removed to a court (the transferee
court) from another court (the transferor court), the transferee
court must deal with the proceeding as if, subject to any order of
the transferee court, the steps that had been taken for the purposes
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of the proceeding in the transferor court (including the making of
an order), or similar steps, had been taken in the transferee court.
(3) In this section:
relevant jurisdiction means:
(a) jurisdiction conferred on the Federal Court of Australia or the
Family Court with respect to civil matters arising under the
Corporations Legislation; or
(b) jurisdiction conferred on a court of a State, the Capital
Territory or the Northern Territory with respect to matters
referred to in subsection 1337B(3).
1337Q Rights of appearance
(1) This section applies if a proceeding (the transferred proceeding) in
a court (the transferor court) is transferred to another court (the
transferee court) under this Division.
(2) A person who is entitled to practise as a barrister or a solicitor, or
as both a barrister and a solicitor, in the transferor court has the
same entitlements to practise in relation to:
(a) the transferred proceeding; and
(b) any other proceeding out of which the transferred proceeding
arises or to which the transferred proceeding is related, being
another proceeding that is to be determined together with the
transferred proceeding;
in the transferee court that the person would have if the transferee
court were a federal court exercising federal jurisdiction.
1337R Limitation on appeals
An appeal does not lie from a decision of a court:
(a) in relation to the transfer of a proceeding under this Division;
or
(b) as to which rules of evidence and procedure are to be applied
pursuant to subsection 1337P(1).
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Subdivision D—Rules of court
1337S Rules of the Federal Court
(1) The power to make rules of court conferred by section 59 of the
Federal Court of Australia Act 1976 extends to making rules of
court:
(a) with respect to proceedings, and the practice and procedure,
of the Federal Court of Australia under the Corporations
legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules about meetings ordered by the Federal Court of
Australia.
(2) In this section:
Corporations legislation does not include rules of court.
1337T Rules of the Supreme Court
(1) The Judges of the Supreme Court of the Capital Territory, or a
majority of them, may make rules of court:
(a) with respect to proceedings, and the practice and procedure,
of that court under the Corporations legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
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(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules as to meetings ordered by that Court.
(2) When a lower court of the Capital Territory is exercising
jurisdiction with respect to matters arising under the Corporations
legislation, the court must apply the rules of court made under
subsection (1), with such alterations as are necessary.
(3) In this section:
Corporations legislation does not include rules of court.
1337U Rules of the Family Court
(1) The power to make rules of court conferred by section 123 of the
Family Law Act 1975 extends to making rules of court:
(a) with respect to proceedings, and the practice and procedure,
of the Family Court under the Corporations legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules about meetings ordered by the Family Court.
(2) In this section:
Corporations legislation does not include rules of court.
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Division 2—Criminal jurisdiction
1338A Operation of Division
(1) This Division provides in relation to the jurisdiction of courts in
respect of criminal matters arising under the Corporations
legislation and so provides to the exclusion of sections 68, 70 and
70A of the Judiciary Act 1903.
(2) This Division does not limit the operation of the provisions of the
Judiciary Act 1903 other than sections 68, 70 and 70A.
(3) Without limiting subsection (2), this Division does not limit the
operation of subsection 39(2) of the Judiciary Act 1903 in relation
to criminal matters arising under the Corporations legislation.
1338B Jurisdiction of courts
(1) Subject to this section, the several courts of each State, the Capital
Territory and the Northern Territory exercising jurisdiction:
(a) with respect to:
(i) the summary conviction; or
(ii) the examination and commitment for trial on
indictment; or
(iii) the trial and conviction on indictment;
of offenders or persons charged with offences against the
laws of the State, the Capital Territory or the Northern
Territory, and with respect to:
(iv) their sentencing, punishment and release; or
(v) their liability to make reparation in connection with
their offences; or
(vi) the forfeiture of property in connection with their
offences; or
(vii) the proceeds of their crimes; and
(b) with respect to the hearing and determination of:
(i) proceedings connected with; or
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(ii) appeals arising out of; or
(iii) appeals arising out of proceedings connected with;
any such trial or conviction or any matter of a kind referred
to in subparagraph (a)(iv), (v), (vi) or (vii);
have the equivalent jurisdiction with respect to offenders or
persons charged with offences against the Corporations legislation.
(2) The jurisdiction conferred by subsection (1) is not to be exercised
with respect to the summary conviction, or examination and
commitment for trial, of any person except by a magistrate.
(3) The jurisdiction conferred by subsection (1) includes jurisdiction in
accordance with provisions of a relevant law of a State, the Capital
Territory or the Northern Territory, and:
(a) the reference in paragraph (1)(b) to “any such trial or
conviction” includes a reference to any conviction or
sentencing in accordance with the provisions of a relevant
law; and
(b) unless the contrary intention appears, a reference to
jurisdiction conferred by subsection (1) includes a reference
to such included jurisdiction.
(4) A person may be dealt with in accordance with a relevant law even
if, apart from this section, the offence concerned:
(a) would be required to be prosecuted on indictment; or
(b) would be required to be prosecuted either summarily or on
indictment.
(5) For the purposes of the application of a relevant law as provided by
subsection (3):
(a) a reference in that law to an indictable offence is taken to
include a reference to an offence that may be prosecuted on
indictment; and
(b) in order to determine the sentence that may be imposed on a
person by a court pursuant to the relevant law, the person is
taken to have been prosecuted and convicted on indictment in
that court.
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(6) Subject to subsection (8), the jurisdiction conferred on a State or
Territory court by subsection (1) is conferred despite any limits as
to locality of the jurisdiction of that court under the law of that
State or Territory.
(7) If:
(a) jurisdiction is conferred on a State or Territory court in
relation to the summary conviction of persons charged with
offences against the Corporations legislation by
subsection (1); and
(b) the court is satisfied that it is appropriate to do so, having
regard to all the circumstances including the public interest;
the court may decline to exercise that jurisdiction in relation to an
offence committed in another State or Territory.
(8) The jurisdiction conferred on a court of a State, the Capital
Territory or the Northern Territory by subsection (1) in relation to:
(a) the examination and commitment for trial on indictment; and
(b) the trial and conviction on indictment;
of offenders or persons charged with offences against the
Corporations legislation is conferred only in relation to:
(c) offences committed outside Australia; and
(d) offences committed, begun or completed in the State or the
Territory concerned.
(9) In this section:
appeal includes an application for a new trial and a proceeding to
review or call in question the proceedings, decision or jurisdiction
of a court or judge.
Australia does not include the coastal sea.
relevant law means a law providing that where, in proceedings
before a court, a person pleads guilty to a charge for which he or
she could be prosecuted on indictment, the person may be
committed, to a court having jurisdiction to try offences on
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Section 1338C
464 Corporations Act 2001
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indictment, to be sentenced or otherwise dealt with without being
tried in that last-mentioned court.
1338C Laws to be applied
(1) Subject to this Division, the laws of a State, the Capital Territory or
the Northern Territory respecting:
(a) the arrest and custody in the State or Territory of offenders or
persons charged with offences; and
(b) criminal procedure in the State or Territory in relation to such
persons; and
(c) the rules of evidence applied in criminal procedure in the
State or Territory in relation to such persons;
apply in the State or Territory, so far as they are applicable, to
persons who are charged with offences against the Corporations
legislation.
(2) In this section:
criminal procedure means the procedure for:
(a) the summary conviction; and
(b) the examination and commitment for trial on indictment; and
(c) the trial and conviction on indictment; and
(d) the hearing and determination of appeals arising out of any
such trial or conviction or out of any related proceedings;
of offenders or persons charged with offences, and includes the
procedure for holding accused persons to bail.
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Part 9.7—Unclaimed property
1339 ASIC to deal with unclaimed property
(1) Unclaimed property held by ASIC is to be dealt with in accordance
with this Part.
Note: Unclaimed property is held by ASIC for and on behalf of the
Commonwealth (see subsections 8(3) and (4) of the ASIC Act).
(2) If property (other than money) becomes unclaimed property, ASIC
must, on behalf of the Commonwealth, sell or dispose of the
property as ASIC thinks fit.
1340 No liability to pay calls on shares etc.
Where unclaimed property is or includes shares in a body
corporate, neither the Commonwealth nor ASIC is subject to any
obligation:
(a) to pay any calls; or
(b) to make any contribution to the debts and liabilities of the
body corporate; or
(c) to discharge any other liability; or
(d) to do any other act or thing;
in respect of the shares, whether the obligation arises before or
after the shares become unclaimed property, but this section does
not affect the right of a body corporate to forfeit a share.
1341 Entitlement to unclaimed property
(1) If:
(a) unclaimed property is or was held by ASIC; and
(b) the unclaimed property is an amount of money; and
(c) a person claims to be entitled to that amount; and
(d) ASIC is satisfied that the person is entitled to that amount;
ASIC must:
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(e) pay the person an amount equal to that amount; and
(f) do so out of money appropriated by the Parliament for the
purposes of this section.
(2) If:
(a) ASIC has, under subsection 1339(2), sold or disposed of
unclaimed property; and
(b) the amount of the proceeds is or was held by ASIC; and
(c) a person claims to be entitled to that amount; and
(d) ASIC is satisfied that the person is entitled to that amount;
ASIC must:
(e) pay the person an amount equal to that amount; and
(f) do so out of money appropriated by the Parliament for the
purposes of this section.
(3) A person who is dissatisfied with the decision of ASIC in respect
of a claim made by the person in accordance with subsection (1) or
(2) may appeal to the Court and the Court may confirm, disallow
or vary the decision of ASIC.
(3A) If ASIC pays an amount to a person under subsection (1) or (2) on
or after 1 July 2013, ASIC must:
(a) also pay to the person the amount of interest (if any) worked
out in accordance with the regulations; and
(b) do so out of money appropriated by the Parliament for the
purposes of this section.
(3B) Regulations made for the purposes of paragraph (3A)(a) may
prescribe different rates for different periods over which the
interest accrues. For this purpose, rate includes a nil rate.
(3C) Interest under subsection (3A) does not accrue in relation to a
period before 1 July 2013.
(4) Where a person claims to be entitled to money that has been paid
to another person in accordance with this section, neither the
Commonwealth nor ASIC is under any liability to that
first-mentioned person in respect of that money, but, if the
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first-mentioned person is entitled to that money, that person may
recover that money from the other person.
1342 Commonwealth or ASIC not liable for loss or damage
Neither the Commonwealth nor ASIC is liable for any loss or
damage suffered by a person arising out of the exercise of, or the
failure to exercise, any of the powers which are conferred on ASIC
under this Part or which ASIC has in relation to unclaimed
property.
1343 Disposal of securities if whereabouts of holder unknown
Where a person has been shown in an appropriate register of a
company as the holder of securities of the company for a period of
at least 6 years and the company has, for a period of at least 6
years:
(a) had reasonable grounds for believing that the person was not
residing at the address shown in the register as the person’s
address; and
(b) on each occasion during that last-mentioned period when,
whether or not in accordance with a provision of this Act, it
sought to communicate with the person, being unable after
the exercise of reasonable diligence to do so;
the company may, by executing a transfer for and on behalf of the
person, transfer to ASIC:
(c) the securities; and
(d) any rights in respect of the securities;
to be dealt with under this Part.
1343A Disposal of interests in registered scheme if whereabouts of
member unknown
If, during a period of at least 6 years while a person has been
shown in the register of members of a registered scheme as the
holder of interests in the scheme:
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(a) the responsible entity has had reasonable grounds for
believing that the person was not residing at the address
shown in the register as their address; and
(b) the responsible entity’s attempts to communicate with the
person have been made using reasonable diligence but have
all been unsuccessful;
the responsible entity may, by executing a transfer for and on
behalf of the person, transfer the interests and any rights in respect
of them to ASIC to be dealt with under this Part.
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Part 9.9—Miscellaneous
1344 Use of ABN
Despite any provision in this Act or any other Act, in any case
where:
(a) the ACN of a company; or
(b) the ARBN of a registered body; or
(c) the ARSN of a registered scheme;
is required or permitted to be used under a law of the
Commonwealth administered by ASIC, the ABN of the company,
body or scheme may be used instead if the last 9 digits of the ABN
are the same, and in the same order, as the last 9 digits of the ACN,
ARBN or ARSN.
1345A Minister may delegate prescribed functions and powers
under this Act
(1) The Minister may, by signed instrument, delegate to an officer of
the Department such of the Minister’s functions and powers under
this Act as are prescribed.
(1A) The Minister may, by signed instrument, delegate the function or
power under subsection 147(2) or 601DC(2) to:
(a) a member of ASIC (within the meaning of paragraph (a) of
the definition of member in subsection 5(1) of the Australian
Securities and Investments Commission Act 2001); or
(b) a staff member of ASIC.
(2) A delegate is, in the performance or exercise of a delegated
function or power, subject to the Minister’s directions.
1346 Non-application of rule against perpetuities to certain schemes
(1) The rules of law relating to perpetuities do not apply, and are taken
never to have applied, to the trusts of any fund or scheme for the
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benefit of any employee of a corporation, whether the fund or
scheme was established before, or is established after, the
commencement of this section.
(2) In this section:
(a) a reference to a corporation includes a reference to a body
corporate or society incorporated or formed, or otherwise
duly constituted, whether before, at or after the
commencement of this section, by or under:
(i) a law of the Commonwealth, of a State or Territory, of
an external Territory or of a country outside Australia
and the external Territories; or
(ii) letters patent or a royal charter; and
(b) a reference to a fund or scheme includes a reference to a
provident, superannuation, sick, accident, assurance,
unemployment, pension or co-operative benefit fund,
scheme, arrangement or provision or other like fund, scheme,
arrangement or provision; and
(c) a reference to an employee of a corporation includes a
reference to:
(i) a director of the corporation; and
(ii) a spouse, child, grandchild, parent or any dependant of
an employee or of a director of the corporation.
1348 Operation of Life Insurance Act
Nothing in this Act is taken to affect any of the provisions of the
Life Insurance Act 1995.
1349 Privilege against exposure to penalty—disqualification etc.
Court or Tribunal proceeding
(1) In the case of:
(a) a civil or criminal proceeding under, or arising out of, this
Act or the ASIC Act; or
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(b) a proceeding before the Tribunal arising out of this Act or the
ASIC Act;
a person is not entitled to refuse or fail to comply with a
requirement:
(c) to answer a question or give information; or
(d) to produce a book or any other thing; or
(e) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend to make the person liable to a penalty by way of:
(f) a disqualification under Part 2D.6 of this Act; or
(g) a declaration under section 853C of this Act; or
(h) a suspension or cancellation under section 915B of this Act;
or
(i) a suspension or cancellation under section 915C of this Act;
or
(j) a banning order under section 920A of this Act; or
(k) an order under section 921A of this Act; or
(l) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(m) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(n) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(na) a direction under section 40-15 of Schedule 2; or
(nb) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(nc) a cancellation or suspension under Division 40 of
Schedule 2; or
(o) an order under section 12GLD of the ASIC Act.
(2) Subsection (1) applies whether or not the person is a defendant in,
or a party to, the proceeding or any other proceeding.
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Statutory requirement
(3) A person is not entitled to refuse or fail to comply with a
requirement under this Act or the ASIC Act:
(a) to answer a question or give information; or
(b) to produce a book or any other thing; or
(c) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend to make the person liable to a penalty by way of:
(d) a disqualification under Part 2D.6 of this Act; or
(e) a declaration under section 853C of this Act; or
(f) a suspension or cancellation under section 915B of this Act;
or
(g) a suspension or cancellation under section 915C of this Act;
or
(h) a banning order under section 920A of this Act; or
(i) an order under section 921A of this Act; or
(j) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(k) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(l) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(la) a direction under section 40-15 of Schedule 2; or
(lb) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(lc) a cancellation or suspension under Division 40 of
Schedule 2; or
(m) an order under section 12GLD of the ASIC Act.
Admissibility
(4) Paragraph 597(12A)(d) of this Act, and paragraph 68(3)(b) of the
ASIC Act, do not apply to a proceeding for the imposition of a
penalty by way of:
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(a) a disqualification under Part 2D.6 of this Act; or
(b) a declaration under section 853C of this Act; or
(c) a suspension or cancellation under section 915B of this Act;
or
(d) a suspension or cancellation under section 915C of this Act;
or
(e) a banning order under section 920A of this Act; or
(f) an order under section 921A of this Act; or
(g) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(h) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(i) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(ia) a direction under section 40-15 of Schedule 2; or
(ib) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(ic) a cancellation or suspension under Division 40 of
Schedule 2; or
(j) an order under section 12GLD of the ASIC Act.
Other provisions
(5) Subsections (1) and (3) have effect despite anything in:
(a) section 1317L; or
(b) any other provision of this Act; or
(c) the ASIC Act; or
(d) the Administrative Appeals Tribunal Act 1975.
Definition
(6) In this section:
penalty includes forfeiture.
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Section 1350
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1350 Compensation for compulsory acquisition
(1) If:
(a) apart from this section, the operation of this Act would result
in the acquisition of property from a person otherwise than
on just terms; and
(b) the acquisition would be invalid because of
paragraph 51(xxxi) of the Constitution;
the person who acquires the property is liable to pay compensation
of a reasonable amount to the person from whom the property is
acquired in respect of the acquisition.
(2) If the 2 people do not agree on the amount of the compensation, the
person to whom compensation is payable may institute proceedings
in the Court for the recovery of such reasonable amount as the
court determines from the other person.
(3) Any damages or compensation recovered or other remedy given in
a proceeding that is commenced otherwise than under this section
is to be taken into account in assessing compensation payable in a
proceeding that is commenced under this section and that arises out
of the same event or transaction.
(4) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
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Act 2003 Part 9.10
Section 1351
Corporations Act 2001 475
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Part 9.10—Fees imposed by the Corporations
(Fees) Act 2001 and the Corporations
(Review Fees) Act 2003
1351 Fees are payable to the Commonwealth
(1) The fees imposed under the Corporations (Fees) Act 2001 are
payable to the Commonwealth.
(2) The fees imposed under the Corporations (Review Fees) Act 2003
are payable to the Commonwealth.
(3) The date on which a fee imposed under the Corporations (Review
Fees) Act 2003 becomes due and payable is worked out under this
table.
Due date for review fees
Item For a review fee imposed on... The due date is...
1 a company 2 months after the review date to
which the fee relates
2 a registered scheme 2 months after the review date to
which the fee relates
3 a registered Australian body the date prescribed by the
regulations
4 a natural person registered as an
auditor under Part 9.2
the date prescribed by the
regulations
6 a person holding an Australian
financial services licence under
Part 7.6
the date prescribed by the
regulations
(4) However, a fee imposed under the Corporations (Review Fees) Act
2003 is not payable to the Commonwealth by a company in
relation to a review date in a year if:
(a) both of the following apply:
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(i) ASIC has given notice of the proposed deregistration of
the company in accordance with
paragraph 601AA(4)(c), and published notice of the
proposed deregistration of the company in accordance
with paragraph 601AA(4)(d);
(ii) the review date for that year falls in the 2 month period
before or after the publication of the notice published in
accordance with paragraph 601AA(4)(d); or
(b) in the case of a company, a registered scheme or a registered
Australian body—the company, scheme or body has, in a
previous year, paid the fee in respect of the review date for
that year in accordance with regulations made under the
Corporations (Review Fees) Act 2003 for the purposes of this
section.
1354 Lodgment of document without payment of fee
(1) This section applies where:
(a) a fee is payable under section 1351 for the lodgment of a
document; and
(b) the document was submitted for lodgment without payment
of the fee.
(2) The document is not taken not to have been lodged merely because
of non-payment of the fee.
1355 Doing act without payment of fee
If a fee is payable under section 1351 for a matter involving the
doing of an act by the Minister or ASIC, the Minister or ASIC may
refuse to do that act until the fee is paid.
1356 Effect of sections 1354 and 1355
Sections 1354 and 1355 have effect despite anything in another
Part of this Act.
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1359 Waiver and refund of fees
Nothing in this Part, the Corporations (Fees) Act 2001 or the
Corporations (Review Fees) Act 2003 prevents the Commonwealth
from:
(a) waiving or reducing, in a particular case or in particular
classes of cases, fees that would otherwise be payable under
this Act; or
(b) refunding, in whole or in part, in a particular case or in
particular classes of cases, fees paid under this Act.
1360 Debts due to the Commonwealth
ASIC may, on behalf of the Commonwealth, recover a debt due
under this Part.
1362 Payment of fee does not give right to inspect or search
To avoid doubt, nothing in this Part, and nothing done under this
Part:
(a) imposes on ASIC a duty to allow the inspection or search of
a register or document, or to make available information; or
(b) confers a right to inspect or search a register or document or
to have information made available;
except so far as such a duty or right would, but for the effect of
section 1355, exist under a provision of another Part of this Act or
under some other law.
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Part 9.12—Regulations
1363 Definitions
In this Part, unless the contrary intention appears:
prescribed means prescribed by the regulations.
the regulations means the regulations made under section 1364.
1364 Power to make regulations
(1) The Governor-General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed by
regulations; or
(b) necessary or convenient to be prescribed by such regulations
for carrying out or giving effect to this Act.
(2) Without limiting subsection (1), the regulations may make
provision:
(c) for or in relation to the keeping of registers by ASIC, the
lodging of documents with ASIC, the registration of
documents by ASIC, the time and manner of lodging or
registration, and the requirements with which documents
lodged or to be lodged are to comply; and
(d) prescribing forms for the purposes of this Act and the method
of verifying any information required by or in those forms;
and
(e) prescribing the manner in which, the persons by whom, and
the directions or requirements in accordance with which, the
forms prescribed for the purposes of this Act, or any of them,
are required or permitted to be signed, prepared, or
completed, and generally regulating the signing, preparation
and completion of those forms, or any of them; and
(f) for or in relation to the convening of, conduct of, and
procedure and voting at, meetings of creditors, meetings of
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eligible employee creditors, meetings of contributories and
meetings of holders of debentures, and joint meetings of
creditors and members of companies, the number of persons
required to constitute a quorum at any such meeting, the
sending of notices of meetings to persons entitled to attend at
meetings, the lodging of copies of notices of, and of
resolutions passed at, meetings, and generally regulating the
conduct of, and procedure at, any such meeting; and
(g) prescribing the persons by whom, and the circumstances and
manner in which, proxies may be appointed and generally
regulating the appointment and powers of proxies; and
(h) for or in relation to the proving of debts in the winding up of
a company, the manner of proving debts and the time within
which debts are required or permitted to be proved and
generally regulating the proving of debts; and
(j) prescribing the manner in which a liquidator appointed by the
Court may:
(i) exercise powers and perform functions under
subsection 478(1); and
(ii) exercise any powers conferred, and perform any duties
imposed, on the liquidator by regulations made for the
purposes of subsection 488(1); and
(k) prescribing the manner in which a liquidator in a voluntary
winding up may exercise powers and perform functions
under section 506; and
(m) prescribing times for the lodging of any documents; and
(n) prescribing penalties for late payment of a review fee
imposed by the Corporations (Review Fees) Act 2003; and
(o) prescribing that, in relation to the payment of a fee imposed
by the Corporations (Fees) Act 2001 or the Corporations
(Review Fees) Act 2003, in the event that the fee is paid by
electronic means, a refund of an amount or proportion of the
fee is payable; and
(s) for or in relation to the giving to ASIC of information in
addition to, or in variation of, the information contained in a
prescribed form lodged with it; and
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(t) for or in relation to the times within which information
required to be given to ASIC under this Act must be so
given; and
(u) for or in relation to the manner in which:
(i) orders made under this Act may be served on persons
affected by the orders; and
(ii) documents that are required or permitted by this Act to
be served on a person may be so served; and
(w) prescribing penalties not exceeding 50 penalty units for
contraventions of the regulations.
Note: Because of section 1312, if a body corporate is convicted of an
offence against the regulations a court may impose a penalty of up to
5 times the penalty specified for the offence.
1365 Scope of particular regulations
Except as otherwise expressly provided in this Act, the regulations
may be of general or specially limited application or may differ
according to differences in time, locality, place or circumstance.
1366 Verifying or certifying documents
The regulations may:
(a) where documents required by or under this Act to be lodged
in accordance with this Act are required to be verified or
certified and no manner of verification or certification is
prescribed by or under this Act—require that the documents
or any of them be verified or certified by statement in writing
made by such persons as are prescribed by the regulations;
and
(b) where no express provision is made in this Act for
verification or certification of documents—require that the
documents be verified or certified by statement in writing by
such persons as are prescribed.
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1367 Documents lodged by an agent
The regulations may provide, in such cases as are prescribed, that,
if a document that is required by or under this Act to be lodged is
signed or lodged on behalf of a person by an agent duly authorised
by writing, there must be:
(a) lodged with; or
(b) endorsed on; or
(c) annexed to;
that document, the original, or a verified copy, of the authority.
1367A Publication in the prescribed manner
(1) If a particular provision of this Act requires a person (other than
ASIC) to:
(a) publish a notice, or a copy of a notice, in the prescribed
manner; or
(b) cause a notice, or a copy of a notice, to be published in the
prescribed manner;
the regulations may provide that:
(c) the person is taken to have complied with that requirement if,
and only if, the person lodges the notice or copy under
subsection (2); and
(d) if the person lodges the notice or copy under subsection (2),
ASIC must publish the notice or copy in the manner specified
in the regulations.
(2) A person may lodge a notice, or a copy of a notice, under this
subsection if the notice or copy is covered by regulations made for
the purposes of subsection (1).
1368 Exemptions from Chapter 6D or 7
The regulations may provide that, subject to any prescribed terms
and conditions, Chapter 6D or 7, or specified provisions of
Chapter 6D or 7:
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(a) do not have effect in relation to a specified person or class of
persons; or
(b) have effect in relation to a specified person or class of
persons to such extent only as is prescribed; or
(c) do not have effect in relation to a specified transaction or
class of transactions; or
(d) do not have effect in relation to a specified transaction or
class of transactions entered into by a specified person or
class of persons;
and may provide that a contravention of a prescribed term or
condition is an offence against the regulations.
1369 Penalty notices
(1) The regulations:
(a) may prescribe offences against this Act (not being offences
the penalties applicable to which include a term of
imprisonment or a pecuniary penalty that exceeds $1,000), or
offences against the regulations, for the purposes of
section 1313; and
(b) must, in relation to each offence that is prescribed under this
subsection:
(i) prescribe the particulars of that offence that are to be
given in a notice served on a person under that section
in relation to the offence; and
(ii) prescribe the amount of the penalty (being not more
than half the amount of the penalty applicable to the
offence) that is payable in respect of the offence under a
notice served on a person under that section in relation
to the offence.
(2) In subsection (1), a reference to a penalty applicable to an offence
is a reference to the penalty that is applicable to that offence
because of any of the provisions of section 1311.
(3) The particulars of an offence required to be prescribed by
subparagraph (1)(b)(i) may be prescribed by being set out in the
Authorised Version C2017C00210 registered 06/07/2017
Miscellaneous Chapter 9
Regulations Part 9.12
Section 1369A
Corporations Act 2001 483
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
form prescribed for the purposes of section 1313 in relation to the
offence.
1369A State termination of reference
(1) The regulations may make provision in relation to circumstances
that arise because a State ceases to be a referring State.
Note: For example, the regulations may prevent companies that have their
registered office or financial records in the State from committing
offences and give them time to relocate their office or records.
(2) Without limiting subsection (1), regulations made under that
subsection may modify the operation of this Act in relation to the
circumstances dealt with in the regulations.
Authorised Version C2017C00210 registered 06/07/2017