Explanatory Memorandum(Circulated by the authority of the Parliamentary Secretary to the Treasurer, the Hon Bernie Ripoll MP)
Chapter 2 - Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Corporations and Financial Sector Legislation Amendment Bill 2013
2.1 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
2.2 The Bill amends a range of legislation to introduce a range of miscellaneous measures related to the regulation of over-the-counter derivatives and other financial products. The key measures are intended to:
- assist clearing facilities in managing defaults of clearing participants;
- improve the allocation of resources by the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (the RBA) in assessing the compliance of Australian market licensees and clearing and settlement facility licensees with their legal obligations;
- allow certain Australian regulators including the RBA to exchange protected information with other entities in Australia and overseas in the execution of their duties subject to appropriate safeguards; and
- allow ASIC to gather and share protected information with regulatory entities overseas for supervision and enforcement purposes; and require ASIC to report on the use of those powers.
Human rights implications
2.3 The amendments to Parts 3, 5 and 6 of the Bill may have an impact on the right to privacy, as they allow various regulators including ASIC and the RBA to share 'protected information' with other entities. 'Protected information' may include personal information as defined in section 6 of the Privacy Act 1988 .
2.4 It is noted that the amendments pursue a legitimate objective and the limitations imposed on the right to privacy are not arbitrary. Effective regulation of financial markets and products in today's world is dependent on the exchange of information among regulators and with other entities, given the increasing complexity and globalisation of financial markets. Regulators generally have strict conditions imposed on them through their enabling legislation with respect to the use and disclosure of protected information, including appropriate penalties for breaches of those conditions.
2.5 Care has been taken to ensure that the provisions allowing for the use and disclosure of protected information in the Bill are drafted narrowly enough to ensure that personal information is not disclosed unnecessarily, and that its use and disclosure is necessary for, or directly related to, the powers and functions of the regulators.
2.6 The Bill is compatible with human rights because, to the extent that it may limit those rights, it does so only where justified by legitimate reasons and only to the extent required by those reasons.