Explanatory Memorandum(Circulated by authority of the Parliamentary Secretary to the Treasurer, the Hon Ross Cameron, MP)
1 -Outline and financial impact
1. The Financial Services Reform Amendment Bill 2003 (FSR Amendment Bill) will clarify and amend various aspects of the regulatory framework governing the licensing, conduct and disclosure of providers of financial services, and the licensing of financial markets and clearing and settlement facilities, contained in Chapter 7 and related provisions of the Corporations Act 2001 (Corporations Act). The FSR Amendment Bill will also make related amendments to the Australian Securities and Investments Commission Act 2001 as well as minor amendments to the Income Tax Assessment Act 1997 and the Retirement Savings Accounts Act 1997.
2. The Financial Services Reform Act 2001 (FSR Act) commenced on 11 March 2002. It amended the Corporations Act and related legislation, introducing a new regulatory framework governing the licensing, conduct and disclosure of providers of financial services, along with a licensing regime for financial markets and clearing and settlement facilities.
3. The amendments to the Corporations Act made by the FSR Act are subject to a two-year transition period, such that they come into full effect on 11 March 2004.
4. During the transition period, the Government has continued a consultation process with industry and consumer representatives that began during the development of the FSR Act, with a view to ensuring that the implementation of the new arrangements occurs as smoothly as possible.
5. As a result of this consultation process, a number of issues have been identified which require clarification or amendment to enable industry participants to transition to the new regulatory arrangements prior to the end of the transition period.
6. Many of these issues have been capable of resolution through the making of regulations or the provision of policy guidance by the Australian Securities and Investments Commission.
7. However, some issues require amendment to the legislation itself, and the FSR Amendment Bill is directed to this end. The amendments contained in the FSR Amendment Bill will provide industry participants with the necessary certainty to transition to the new licensing, conduct and disclosure framework introduced by the FSR Act.
1.8 The financial impact of the new regulatory framework introduced by the FSR Act was set out in the Explanatory Memorandum to the Financial Services Reform Bill. The FSR Amendment Bill will not involve any additional costs. Rather, it will assist in achieving the compliance cost reductions outlined in the financial impact statement for the Financial Services Reform Bill.