Financial Sector Reform (Hayne Royal Commission Response - Stronger Regulators (2019 Measures)) Act 2020 (3 of 2020)

Schedule 4   Banning orders

Part 1   Corporations amendments

Corporations Act 2001

5   At the end of Division 1 of Part 7.6

Add:

910B Meaning of control

(1) Control , of a body corporate, is:

(a) having the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the body corporate; or

(b) directly or indirectly holding more than one half of the issued share capital of the body corporate (not including any part of the issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital, and not including MCIs); or

(c) having the capacity to control the composition of the body corporate's board or governing body; or

(d) having the capacity to determine the outcome of decisions about the body corporate's financial and operating policies, taking into account:

(i) the practical influence that can be exerted (rather than the rights that can be enforced); and

(ii) any practice or pattern of behaviour affecting the body corporate's financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

(2) Control , of an entity other than a body corporate, is:

(a) having the capacity to control the composition of the entity's board or governing body (if any); or

(b) having the capacity to determine the outcome of decisions about the entity's financial and operating policies, taking into account:

(i) the practical influence that can be exerted (rather than the rights that can be enforced); and

(ii) any practice or pattern of behaviour affecting the entity's financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

910C Meaning of linked to a refusal or failure to give effect to a determination made by AFCA

(1) An entity is linked to a refusal or failure to give effect to a determination made by AFCA if:

(a) a complaint is made under the AFCA scheme; and

(b) AFCA makes a determination relating to the complaint; and

(c) AFCA becomes aware that a party to the complaint (the primary entity ) may have refused or failed to give effect to the determination; and

(d) AFCA gives particulars of the refusal or failure in accordance with subsection 1052E(1); and

(e) the first-mentioned entity is the primary entity or is covered by subsection (2) of this section.

(2) This subsection covers an entity if, at any time during the period starting when AFCA makes the determination and ending when AFCA so gives the particulars, the entity is:

(a) an officer of the primary entity; or

(b) if the primary entity is an individual - substantially or significantly involved in the management of:

(i) a financial services business carried on by the primary entity; or

(ii) credit activities (within the meaning of the National Consumer Credit Protection Act 2009) engaged in by the primary entity; or

(c) if the primary entity is the multiple trustees of a trust - one of the trustees of the trust.