- One small step forward
- Meanwhile back on the hill
- PJSC urges passage of corporations and ASIC bills
- CLERP 6 has landed
- ASIC's 7Ps on FSR
All the States have indicated their agreement to work towards a referral of State Corporations Law powers to the Commonwealth by 1 July 2001. This agreement is a significant breakthrough in the impasse between the Commonwealth, South Australia and Tasmania with respect to the referral of these powers. (Eds: The Corporations Bill 2001 and the ASIC Bill 2001 have been introduced into Federal Parliament. See next article).
In a further development, NSW and VIC have passed referral legislation to refer their corporations and financial products and services power to the Commonwealth. The legislation reflects the terms of the Corporations Agreement reached between the Commonwealth, NSW and VIC (Eds: The terms of the Corporations Agreement can be found in ITM No. 3). A sunset period of 5 years has also been set for the referral with the right for early termination of the referral.
Developments in the resolution of the Corporations Law deadlock are updated on our FSR site.
(Source: Minister for Financial Services & Regulation Press Release, No. FSR/024. )
The Corporations Bill 2001 and the Australian Securities and Investment Commission Bill 2001 (ASIC Bill) were introduced into Federal Parliament on 4 April 2001 after the commencement of the NSW referral legislation. The Corporations Bill mirrors substantially the current Corporations Law. The ASIC Bill will provide, inter alia, for the:
- functions, powers and business of ASIC;
- establishment of a Companies and Securities Advisory Committee to provide informed and expert advice to the Minister about content, operation and administration of the corporations legislation, and about corporations, securities and futures markets; and
- establishment of a Corporations and Securities Panel
PJSC urges passage of corporations and ASIC bills
The Parliamentary Joint Statutory Committee on Corporations and Securities (PJSC) has in its report to Federal Parliament, recommended that both the Corporations Bill 2001 and the ASIC Bill 2001 be passed without amendments forthwith so as to meet the targeted commencement date of 1 July 2001. According to the PJSC, the ASIC and Corporations Bills do not make any substantial policy changes to the Acts they are replacing.
The PJSC has also urged the other States to pass, as soon as practicable, legislation similar to the Corporations (Commonwealth Powers) Act 2001 (NSW) when referring their corporations and securities law powers to the Commonwealth.
The much anticipated CLERP 6 legislation, the Financial Services Reform Bill 2001 (FSR Bill) was introduced into Federal Parliament on 5 May 2001. It has now been referred to the Parliamentary Joint Statutory Committee on Corporations and Securities. The key elements in the FSR Bill are:
-
product disclosure;
- the licensing and conduct of financial services providers; and
- the licensing of financial markets and clearing and settlement systems.
The FSR Bill will apply to a broad range of financial products such as securities, derivatives, means of payment services such as smart cards, general and life insurance and superannuation. Also included in the FSR Bill is the lifting of the 5% ownership rule applying to the ASX. There will instead be a 15% limit on markets and facilities deemed to be of national significance and prescribed under the regulations. The FSR Bill is expected to commence on 1 October 2001.
(Source: Minister for Financial Services & Regulation Press Release, No FSR/025.)
For more information about the FSR Bill, please visit our FSR site.
ASIC has released 7 policy proposal papers for public comment and discussion to assist it in developing policies under the FSR Bill. They are:
- Building the FSRB Administrative Framework;
- FSRB Policy Proposal Paper No. 1 - Licensing: The scope of the licensing regime: Financial product advice and dealing;
- FSRB Policy Proposal Paper No. 2 - Licensing: Organisational capacities;
- FSRB Policy Proposal Paper No. 3 - Licensing: Adapting IPS 146 to the Finance Services Reform;
- FSRB Policy Proposal Paper No. 4 - Disclosure: Product disclosure statements and other disclosure obligations;
- FSRB Policy Proposal Paper No. 5 - Discretionary powers and transition;
- Process Guideline - How do you get an Australian financial service licence?
According to ASIC the policies will be developed after consultation with affected parties. Policies will be developed in 2 stages:
- first, by issuing policy proposal papers setting the policies ASIC is thinking of adopting and asking for comment; and
- secondly, issuing a policy statement describing the policy and the rationale behind its adoption.
In addition, ASIC will also release both general process guidelines and industry specific guidelines to assist in the management of the transition to the new legislative framework. Written comments on the policy proposal papers are due by 7 June 2001.
(Source: ASIC Media Releases, 01/135.)
