Explanatory Memorandum(Circulated by authority of the Minister for Financial Services & Regulation the Hon Joe Hockey, MP)
Outline and impact statements
1.1 The Financial Services Reform (Consequential Provisions) Bill provides for the transition to the new regulatory regime for the financial services industry outlined in the proposed Financial Services Reform Act 2001 (proposed FSR Act). 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 (proposed Corporations Act) and the Insurance (Agents and Brokers) Act 1984 (IABA). It will also bring in elements of the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Retirement Savings Account Act 1997 (RSA Act), as well as impacting upon aspects of the Insurance Act 1973 and the Insurance Contracts Act 1984 .
1.2 The new regulatory regime for the financial services industry is outlined in greater detail in the Explanatory Memorandum to the Financial Services Reform Bill (FSR Bill).
1.3 The Financial Services Reform (Consequential Provisions) Bill provides for the transition from these existing regulatory regimes to the Financial Services Reform (FSR) regime. The transitional provisions are divided into two categories:
- Those dealing with when the FSR regime begins to apply to different groups of people; and
- Those dealing with how a person moves from any one of the existing regulatory regimes into the FSR regime.
1.4 It also contains other consequential amendments to a range of Commonwealth legislation as a result of the provisions contained in the proposed FSR Act. Those consequential amendments broadly take two forms:
- Primary consequential amendments involving the repeal of provisions which are to be superseded by the FSR regime; and
- Secondary consequential amendments which involve changes in terminology and section references as a result of the proposed FSR Act.
1.5 This Explanatory Memorandum only addresses the more significant consequential amendments individually, while noting the general approach taken in relation to other consequential amendments.
1.6 A Regulatory Impact Statement (RIS) was prepared for the FSR Bill and is outlined in the Explanatory Memorandum to that Bill. As the Financial Services Reform (Consequential Provisions) Bill deals with machinery and minor matters flowing from the FSR Bill, the Office of Regulation Review has advised that a separate RIS is not required for this Bill.
1.7 As indicated in the Explanatory Memorandum to the FSR Bill, the Australian Securities and Investments Commission (ASIC), as the regulatory body responsible for administering the new regulatory regime, will incur some additional costs in the transition to the new requirements.