Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1998-1999-2000-2001
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
CORPORATIONS (FEES) AMENDMENT BILL 2001
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Financial
Services & Regulation,
the Hon J.B. Hockey, MP)
ISBN: 0624 458898
Table of Contents
Contents Page
1. Outline 1
2. Regulation and Financial Impact Statements 2
3. Explanatory notes 3
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1.1 The Corporations (Fees) Amendment Bill 2001 is one of a package of bills which will complement the Financial Services Reform Bill 2001. The other bills are:
• the Financial Services Reform (Consequential Provisions) Bill 2001;
• the Corporations (National Guarantee Fund Levies) Amendment Bill 2001;
• the Corporations (Compensation Arrangements Levies) Bill 2001.
1.2 The object of this package is to put in place a competitively neutral regulatory system for the financial services industry. The new regime provides for licensing, conduct and disclosure in the financial services industry. It will replace Chapters 7 and 8 of the proposed Corporations Act 2001 and certain insurance and superannuation legislation.
1.3 Further background on these reforms is included in the explanatory memorandum to the Financial Services Reform Bill 2001.
1.4 The provisions included in Corporations (Fees) Amendment Bill 2001 will amend the proposed Corporations (Fees) Act 2001, which was introduced on 24 May 2001, to accommodate the fees which ASIC will charge in relation to two functions for which the proposed Financial Services Reform Act 2001 provides in relation to financial market supervision.
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2.1 The amendments to the proposed Corporations (Fees) Act 2001 are necessary as a consequence of provisions included in the Financial Services Reform Bill 2001.
2.2 On that basis, the Office of Regulation Review has advised that a Regulation Impact Statement is not required for this Bill.
2.3 There is no financial cost to the Commonwealth as a result of the measures contained in this Bill.
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3.1 This Bill makes amendments to the proposed Corporations (Fees) Act 2001 to address two functions of ASIC. As indicated above, both relate to market supervision.
3.2 The first function is ASIC's role in relation to self-listed markets — in particular, to address conflicts between the role of the market licensee as the supervisor of the market and its commercial interests, and for the purposes of ensuring the integrity of trading in the licensee's financial products (see proposed section 798C, which is included in the Financial Services Reform Bill 2001).
3.3 ASIC currently supervises the self-listing of the Australian Stock Exchange Limited (the Exchange) under section 772B of the Corporations Law. ASIC's role in this regard is outlined in a Memorandum of Understanding with the Exchange and it charges for the services performed (including supervision of the Exchange's compliance with its own Listing Rules). While proposed section 798C is comparable with current section 772B, the proposed amendment to the proposed Corporations (Fees) Act 2001 will change the legislative basis for the charges.
3.4 The second function referred to above is ASIC's role in other situations where there is a conflict or potential conflict between the commercial interests of a market licensee and the need for the licensee to ensure that the financial market operates in a way that promotes the objectives of fairness, orderliness and transparency (proposed section 798E, which is included in the Financial Services Reform Bill 2001).
3.5 Proposed section 798E addresses an issue which has been under consideration in recent years with the demutualisation of exchanges. While the initial obligation is on the market licensee to have adequate supervisory arrangements (see proposed paragraph 792A(c)), it may be necessary, at some time in the future, for ASIC to take a role where, for example, a listed entity or a participant on the market is in competition with the market licensee. The power to make regulations to address this situation is to be found in proposed section 798E.
3.6 This Bill therefore amends the proposed Corporations (Fees) Act 2001 to accommodate these two functions by:
• adding them to the list of chargeable matters in subsection 4(1) of the proposed Corporations (Fees) Act 2001 (Schedule 1, Item 1);
• providing that the fees charged with respect to:
− the functions performed by ASIC under proposed section 798C must not exceed a total of $100,000 for each market licensee each year; and
− the functions ASIC performs under proposed section 798E must not exceed $100,000 for the services provided in relation to each conflict or potential conflict experienced by a particular market licensee each year
(through amendments to section 6) (Schedule 1, Items 2 and 3); and
− nominating the market licensee affected as the person liable to make the payment and empowering the making of regulations which will address the time the liability is incurred (by amendments to section 7 included in Schedule 1, Item 4).
3.7 The relevant provisions are included in a separate Bill to meet the requirements of section 55 of the Constitution.
3.8 The proposed Corporations (Fees) Amendment Act 2001 will commence at the same time as Part 1 of Schedule 1 to the Financial Services Reform Act 2001 (clause 2).