Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.6 - LICENSING OF PROVIDERS OF FINANCIAL SERVICES  

Division 3 - Obligations of financial services licensees  

Subdivision A - General obligations  

SECTION 912A   GENERAL OBLIGATIONS  

General obligations

912A(1)  
A financial services licensee must:

(a)  do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and

(aa)  

have in place adequate arrangements for the management of conflicts of interest that may arise wholly, or partially, in relation to activities undertaken by the licensee or a representative of the licensee in the provision of financial services as part of the financial services business of the licensee or the representative; and

(b)  comply with the conditions on the licence; and

(c)  comply with the financial services laws; and

(ca)  

take reasonable steps to ensure that its representatives comply with the financial services laws, except to the extent that:

(i) those representatives are insurance fulfilment providers; and

(ii) the financial services laws relate to the provision of claims handling and settling services by those representatives; and

(cb)  if the licensee is the operator of an Australian passport fund, or a person with responsibilities in relation to an Australian passport fund, comply with the law of each host economy for the fund; and

(cc)  

comply with the Reference Checking and Information Sharing Protocol in relation to:

(i) if the licensee is an individual to whom the Protocol applies - the licensee; and

(ii) if a former, current or prospective representative of the licensee is an individual to whom the Protocol applies - the representative; and

(d)  

subject to subsection (4) - have available adequate resources (including financial, technological and human resources) to provide the financial services covered by the licence and to carry out supervisory arrangements; and

(e)  maintain the competence to provide those financial services; and

(f)  

ensure that its representatives are adequately trained (including by complying with the CPD provisions), and are competent, to provide those financial services; and

(g)  

if those financial services are provided to persons as retail clients:

(i) have a dispute resolution system complying with subsection (2) ; and

(ii) give ASIC the information specified in any instrument under subsection (2A) ; and

(h)  

subject to subsection (5) - have adequate risk management systems; and

(j)  comply with any other obligations that are prescribed by regulations made for the purposes of this paragraph.

Dispute resolution system

912A(2)  
To comply with this subsection, a dispute resolution system must consist of:

(a)  an internal dispute resolution procedure that:

(i) complies with standards, and requirements, made or approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

(ii) covers complaints against the licensee made by retail clients in connection with the provision of all financial services covered by the licence; and

(b) (Repealed)

(c)  

membership of the AFCA scheme.

912A(2A)  

ASIC may, by legislative instrument, specify information that financial services licensees must give ASIC relating to their internal dispute resolution procedures and the operation of their internal dispute resolution procedures.

912A(2B)  

An instrument under subsection (2A) must not specify any information that is personal information within the meaning of the Privacy Act 1988 .

912A(3)  

Regulations made for the purposes of subparagraph (2)(a)(i) may also deal with the variation or revocation of:

(a)  standards or requirements made by ASIC; or

(b)  approvals given by ASIC.

Reference Checking and Information Sharing Protocol

912A(3A)  

ASIC may, by legislative instrument, determine a protocol for:

(a)  sharing information about any or all of the following:

(i) a financial services licensee who is an individual;

(ii) individuals who are former, current or prospective representatives of a financial services licensee;

by that licensee with another financial services licensee; and

(b)  sharing information about any or all of the following:

(i) a financial services licensee who is an individual;

(ii) individuals who are former, current or prospective representatives of a financial services licensee;

by that licensee with a licensee within the meaning of the National Consumer Credit Protection Act 2009 ; and

(c)  keeping and retaining records of information shared, and the circumstances under which the information is shared.

912A(3B)  

The Reference Checking and Information Sharing Protocol must not:

(a)  require or permit personal information (within the meaning of the Privacy Act 1988 ) to be shared, other than with the consent of the individual to whom the information relates; or

(b)  require information to be shared in relation to conduct that occurred more than 5 years before the information is shared.

Application of Reference Checking and Information Sharing Protocol

912A(3C)  

The Reference Checking and Information Sharing Protocol applies to an individual mentioned in subparagraph (3A)(a)(i) or (ii) if there are reasonable grounds to suspect that the individual will provide personal advice to retail clients about relevant financial products if the individual becomes a representative of the other financial services licensee mentioned in paragraph (3A)(a) .

912A(3D)  

The Reference Checking and Information Sharing Protocol applies to an individual mentioned in subparagraph (3A)(b)(i) or (ii) if there are reasonable grounds to suspect that, if the individual becomes a representative of the licensee mentioned in paragraph (3A)(b) , the individual will:

(a)  provide credit assistance in relation to credit contracts secured by mortgages over residential property; and

(b)  be a mortgage broker or a director, employee or agent of a mortgage broker.

912A(3E)  

Expressions used in subsection (3D) that are also used in the National Consumer Credit Protection Act 2009 (other than Reference Checking and Information Sharing Protocol) have the same meaning in that subsection as they have in that Act. Qualified privilege

912A(3F)  

A person has qualified privilege in relation to information shared in accordance with the Reference Checking and Information Sharing Protocol about an individual to whom the Protocol applies.

912A(3G)  

A person who has qualified privilege under subsection (3F) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct. Adequate resources to provide financial services - APRA regulated bodies

912A(4)  

Paragraph (1)(d) :

(a)  does not apply to a body regulated by APRA, unless the body is an RSE licensee; and

(b)  does not apply to an RSE licensee, unless the RSE licensee is also the responsible entity of a registered scheme.

Adequate risk management systems - APRA regulated bodies

912A(5)  

Paragraph (1)(h) :

(a)  does not apply to a body regulated by APRA, unless the body is an RSE licensee that is also the responsible entity of a registered scheme; and

(b)  does not apply to an RSE licensee that is also the responsible entity of a registered scheme, to the extent that the risk relates solely to the operation of a regulated superannuation fund by the RSE licensee.

Civil penalty provision

912A(5A)  

A person contravenes this subsection if the person contravenes paragraph (1)(a) , (aa) , (ca) , (cc) , (d) , (e) , (f) , (g) , (h) or (j) .

Note: This subsection is a civil penalty provision (see section 1317E ).

Definitions

912A(6)  

In this section:

person with responsibilities in relation to an Australian passport fund
means a person (other than a regulator) who has functions or duties in relation to the fund under the Passport Rules for this jurisdiction.

regulated superannuation fund
has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

RSE licensee
has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .