Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)General outline and financial impact
Schedule 1 - Avoidance of certain product intervention orders
Outline
Schedule 1 to the Bill introduces new rules that prohibit schemes designed to avoid the application of a product intervention order (in relation to a credit facility) made under Part 7.9A of the Corporations Act.
Date of effect
Schedule 1 to the Bill will commence on the day after Royal Assent.
Financial impact
Nil.
Human rights implications
Schedule 1 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.
Compliance cost impact
Schedule 1 to the Bill is expected to have a minor regulatory impact.
Schedule 2 - Recognising experience in the financial advice industry
Outline
Schedule 2 to the Bill amends the Corporations Act to deliver the Government's election commitment to better recognise the experience of existing financial advisers as equivalent to tertiary study. This Schedule also addresses technical limitations in the current framework, relevant to both new entrants into the financial advice industry and tax agents providing a tax (financial) advice service to retail clients.
Date of effect
Other than the contingent amendments in Parts 5 and 6, the amendments in Schedule 2 to the Bill commence on the day after Royal Assent.
Proposal announced
Schedule 2 to the Bill fully implements the Government's election commitment to Better Recognise the Experience of Long-serving Advisers announced by the Government on 8 December 2021.
Financial impact
Nil.
Impact Analysis
The Impact Analysis relating to the experienced provider pathway amendments in Schedule 2 to the Bill has been included in Attachment 1.
Human rights implications
Schedule 2 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.
Compliance cost impact
Nil.
Schedule 3 - Competition in the clearing and settlement of cash equities
Outline
Part 1 of Schedule 3 to the Bill provides ASIC with a rule-making power to facilitate competitive outcomes in the provision of CS services.
Part 2 of Schedule 3 to the Bill creates a new arbitration regime for persons seeking to access CS services. The ACCC is provided with additional powers to facilitate access to CS services on terms and conditions that are transparent, non-discriminatory, fair and reasonable.
Date of effect
The amendments in Parts 1 and 2 of Schedule 3 to the Bill commence on the day after Royal Assent. The amendments in Part 3 of Schedule 3 to the Bill are contingent on the commencement of the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Bill 2023.
Proposal announced
Schedule 3 to the Bill partially implements the Modernising Australia's financial system measure announced on 14 December 2022.
Financial impact
Nil.
Impact analysis
The following reports from the CFR were certified as equivalent to a Policy Impact Analysis for the amendments in Schedule 3 to the Bill. The executive summaries and recommendations contained in each report are included in this explanatory memorandum at Attachment 2:
- 1.
- Competition in Clearing Australian Cash Equities: Conclusions
[1]
, December 2012
- a.
- This review drew conclusions from a discussion paper on competition in the clearing and settlement of Australian cash equities. In the review the CFR Agencies adopted a position of openness to competition but recommended that further work be undertaken to assess the appropriate conditions for competition to occur.
- 2.
- Review of Competition in Clearing Australian Cash Equities: Conclusions
[2]
, June 2015
- a.
- This review outlined the CFR Agencies' conclusions from a further consultation paper focusing on the clearing of ASX-listed cash equity securities and made recommendations that government confirm a policy stance of openness to competition, and implement legislative changes to facilitate safe and effective competition, should it emerge. It also recommended the Agencies set out regulatory expectations for the conduct of monopoly clearing and settlement services, and legislative changes to enable regulators to enforce these in a monopoly environment. The CFR recommended that ASIC be granted a rule-making power and the ACCC an arbitration power in respect of cash equity clearing and settlement services.
- 3.
- Safe and Effective Competition in Cash Equity Settlement in Australia: Response to Consultation
[3]
, September 2017
- a.
- This response to consultation focussed on whether the prospect of competition in the settlement of cash equities in Australia had increased and led to the development of the Minimum Conditions for Safe and Effective Competition in Cash Equity Settlement in Australia.
- 4.
- Regulatory Expectations for Conduct in Operating Cash Equity Clearing and Settlement Services in Australia
(the Regulatory Expectations)
[4]
,
September 2017
- a.
- The Regulatory Expectations set out the CFR Agencies' expectations regarding activity, conduct and governance of the ASX's monopoly clearing and settlement services. These include expectations around user input to governance; transparent, non-discriminatory, and fair and reasonable pricing of clearing and settlement services; and commercial, transparent and non-discriminatory access to clearing and settlement services.
- 5.
- Minimum Conditions for Safe and Effective Competition in Cash Equity Clearing in Australia
(Minimum Conditions Clearing)
[5]
,
September 2017
- a.
- The Minimum Conditions Clearing set out the adequate regulatory arrangements for ensuring competition in the provision of clearing services is undertaken in a way that is safe and effective. This includes appropriate safeguards in the settlement process; access to securities settlement infrastructure on non-discriminatory, transparent, fair and reasonable terms; and appropriate interoperability arrangements between competing clearing services providers.
- 6.
- Minimum Conditions for Safe and Effective Competition in Cash Equity Settlement in Australia
(Minimum Conditions Settlement)
[6]
, September 2017
- a.
- The Minimum Conditions Settlement set out the appropriate regulatory arrangements for ensuring competition in the provision of settlement services is undertaken in a way that is safe and effective. This includes access to services on non-discriminatory, transparent, fair and reasonable terms, and appropriate links between competing settlement facilities services providers.
Human rights implications
Schedule 3 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.
Compliance cost impact
This measure is estimated to have an average annual compliance cost for business of $0.27 million.
Schedule 4 - Improving the flexibility of the First Home Super Saver Scheme
Outline
Schedule 4 to the Bill amends the TAA and ITAA 1997 to make technical changes to the FHSS Scheme to improve the scheme's flexibility.
Date of effect
Schedule 4 to the Bill will commence on a single day to be fixed by Proclamation. However, if it does not commence within the period of 12 months beginning on the day the Bill receives Royal Assent, it commences on the day after the end of that period.
Financial impact
Nil.
Human rights implications
Schedule 4 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.
Compliance cost impact
Schedule 4 to the Bill is expected to have an unquantifiable but small impact on receipts over the forward estimates period.