Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.6 - LICENSING OF PROVIDERS OF FINANCIAL SERVICES  

Division 3 - Obligations of financial services licensees  

Subdivision B - Providing information and assistance to ASIC  

SECTION 912D   WHAT ARE REPORTABLE SITUATIONS?  

912D(1)  


There is a reportable situation in relation to a financial services licensee if one of the following paragraphs is satisfied:

(a)  

the financial services licensee or a representative of the financial services licensee has breached a core obligation and the breach is significant;

(b)  

the financial services licensee or a representative of the financial services licensee is no longer able to comply with a core obligation and the breach, if it occurs, will be significant;

(c)  the financial services licensee or a representative of the financial services licensee conducts an investigation into whether there is a reportable situation of the kind mentioned in paragraph (a) or (b) and the investigation continues for more than 30 days;

(d)  an investigation described in paragraph (c) discloses that there is no reportable situation of the kind mentioned in paragraph (a) or (b) ;

(e)  an obligation of a representative of the licensee under the financial services law, so far as it relates to provisions of this Act or the ASIC Act referred to in paragraphs (a) , (b) , (ba) and (c) of the definition of financial services law in section 761A .

912D(2)  
There is also a reportable situation in relation to a financial services licensee if:

(a)  in the course of providing a financial service, the financial services licensee or a representative of the financial services licensee has engaged in conduct constituting gross negligence; or

(b)  the financial services licensee or a representative of the financial services licensee has committed serious fraud; or

(c)  any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

912D(3)  


Each of the following is a core obligation :

(a)  an obligation under section 912A or 912B , other than the obligation under paragraph 912A(1)(c) ;

(b)  the obligation under paragraph 912A(1)(c) , so far as it relates to provisions of this Act or the ASIC Act referred to in paragraphs (a) , (b) , (ba) and (c) of the definition of financial services law in section 761A ;

(c)  in relation to financial services, other than traditional trustee company services provided by a licensed trustee company - the obligation under paragraph 912A(1)(c) , so far as it relates to Commonwealth legislation that is covered by paragraph (d) of that definition and that is specified in regulations made for the purposes of this paragraph;

(d)  in relation to traditional trustee company services provided by a licensed trustee company - the obligation under paragraph 912A(1)(c) , so far as it relates to Commonwealth, State or Territory legislation, or a rule of common law or equity, that is covered by paragraph (d) or (e) of that definition.

912D(4)  
For the purposes of this section, a breach of a core obligation is taken to be significant if:

(a)  the breach is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:


(i) if the offence involves dishonesty - 3 months or more; or

(ii) in any other case - 12 months or more; or

(b)  the breach is constituted by the contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by the regulations for the purposes of this paragraph; or

(c)  the breach is constituted by a contravention of subsection 1041H(1) of this Act or subsection 12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial product or a financial service); or

(d)  the breach results, or is likely to result, in material loss or damage to:


(i) in the case of a managed investment scheme - a member or members of the scheme; or

(ii) in the case of a superannuation entity - a member or members of the entity; or

(iii) in all cases - a person or persons to whom the financial services licensee or a representative of the financial services licensee provides a financial product or a financial service as a wholesale or retail client; or

(e)  any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

912D(5)  
Otherwise, for the purposes of this section, a breach of a core obligation is significant having regard to the following:

(a)  the number or frequency of similar breaches;

(b)  the impact of the breach on the financial services licensee ' s ability to provide financial services covered by the licence;

(c)  the extent to which the breach indicates that the financial services licensee ' s arrangements to ensure compliance with those obligations are inadequate;

(d)  any other matters prescribed by regulations made for the purposes of this paragraph.

912D(6)  


Regulations for the purposes of paragraph (4)(b) may prescribe a civil penalty provision to the extent that it relates to the following:

(a)  contraventions of specified provisions;

(b)  specified matters.


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