Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 (44 of 2010)

Schedule 3   Amendment of corporations legislation

Part 4   Substantiation notices

Australian Securities and Investments Commission Act 2001

20   Before Subdivision H of Division 2 of Part 2

Insert:

Subdivision GC - Substantiation notices

12GY ASIC may require claims to be substantiated etc.

(1) This section applies if a person has made a claim or representation promoting, or apparently intended to promote, a supply, or possible supply, of financial services by that or any other person.

(2) ASIC may give the person who has made the claim or representation a written notice that requires the person to do one or more of the following:

(a) give information and/or produce documents to ASIC that could be capable of substantiating or supporting the claim or representation;

(b) give information and/or produce documents to ASIC that could be capable of substantiating:

(i) the quantities in which; and

(ii) the period for which;

the person is or will be able to make a supply to which the claim or representation relates (whether or not the claim or representation relates to those quantities or that period);

(c) give information and/or produce documents to ASIC that are of a kind specified in the notice;

within 21 days after the notice is given to the person.

(3) Any kind of information or documents that ASIC specifies under paragraph (2)(c) must be a kind that ASIC is satisfied is relevant to:

(a) substantiating or supporting the claim or representation; or

(b) substantiating the quantities in which, or the period for which, the person is or will be able to make such a supply.

(4) The notice must:

(a) name the person to whom it is given; and

(b) specify the claim or representation to which it relates; and

(c) explain the effect of sections 12GYA, 12GYB and 12GYC.

(5) The notice may relate to more than one claim or representation that the person has made.

(6) This section does not apply to a person in relation to a claim or representation made by the person if the person:

(a) is a prescribed information provider within the meaning of section 12DN; and

(b) made the claim or representation by publishing it on behalf of another person in the course of carrying on a business of providing information; and

(c) does not have a commercial relationship with the other person other than for the purpose of:

(i) publishing claims or representations promoting, or apparently intended to promote, the other person’s business or other activities; or

(ii) the other person supplying financial services to the person.

12GYA Extending periods for complying with substantiation notices

(1) A person who has been given a substantiation notice may, at any time within 21 days after the notice was given to the person, apply in writing to ASIC for an extension of the period for complying with the notice.

(2) ASIC may, by written notice given to the person, extend the period within which the person must comply with the notice.

12GYB Compliance with substantiation notices

(1) A person who is given a substantiation notice must comply with it within the substantiation notice compliance period for the notice.

(2) The substantiation notice compliance period for a substantiation notice is:

(a) the period of 21 days specified in the notice; or

(b) if the period for complying with the notice has been extended under section 12GYA - the period as so extended.

(3) Despite subsection (1), an individual may refuse or fail to give particular information or produce a particular document in compliance with a substantiation notice on the ground that the information or production of the document might tend to incriminate the individual or to expose the individual to a penalty.

12GYC False or misleading information etc.

(1) A person must not, in compliance or purported compliance with a substantiation notice:

(a) give to ASIC false or misleading information; or

(b) produce to ASIC documents that contain false or misleading information.

(2) This section does not apply to:

(a) information that the person could not have known was false or misleading; or

(b) the production to ASIC of a document containing false or misleading information if the document is accompanied by a statement of the person that the information is false or misleading.