Corporations Amendment (Asia Region Funds Passport) Act 2018 (61 of 2018)

Schedule 1 Amendments inserting Chapter 8A

Corporations Act 2001

1 After Chapter 8

Insert:

Chapter 8A - Asia Region Funds Passport

Part 8A.1 - Preliminary

1210 Definitions

In this Chapter:

APFRN : see Australian Passport Fund Registration Number .

Australian Passport Fund Registration Number or APFRN means the number assigned to an Australian passport fund under paragraph 1212A(2)(a).

consideration period for a notice of intention to offer interests in a foreign passport fund to a person in this jurisdiction: see section 1213D.

home economy ,for a passport fund, means:

(a) if the passport fund is a regulated CIS, or a sub-fund of a regulated CIS, in only one participating economy - that participating economy; and

(b) if the passport fund is a regulated CIS, or a sub-fund of a regulated CIS, in more than one participating economy - the participating economy in which the fund is first registered or approved as a regulated CIS (however that registration or approval is described).

home regulator ,for a passport fund, means the entity that is the Passport Regulator for the home economy for the passport fund under the Passport Rules for this jurisdiction.

host economy : a participating economy is a host economy for a passport fund if:

(a) the participating economy is not the home economy for the fund; and

(b) either:

(i) it is permitted under the law of the participating economy to offer interests in the fund in that economy, on the basis that the fund is a passport fund; or

(ii) an application has been made under the law of the participating economy for permission to offer interests in the fund in that economy, on the basis that the fund is a passport fund.

host regulator , for a passport fund, means the entity that is the Passport Regulator for a host economy for the passport fund under the Passport Rules for this jurisdiction.

Memorandum of Cooperation means the Memorandum of Cooperation on the Establishment and Implementation of the Asia Region Funds Passport signed on behalf of Australia on 28 April 2016, as it applies in relation to Australia from time to time.

operator , of a passport fund, means the entity that is the operator of the fund under the Passport Rules for this jurisdiction.

participating economy : a Participant, within the meaning of the Memorandum of Cooperation, is a participating economy at a particular time if:

(a) the Asia Region Funds Passport Joint Committee established under the Memorandum of Cooperation has published notification on the Passport website under subparagraph 5.6 of the Memorandum, at or before that time, that the Participant has effected implementation; and

(b) at that time:

(i) the Memorandum of Cooperation has not been terminated; and

(ii) the Participant has not withdrawn from the Memorandum of Cooperation.

passport fund means a regulated CIS, or a sub-fund of a regulated CIS, registered as a passport fund in a participating economy.

Register of Passport Funds : see section 1214.

regulated CIS has the same meaning as in the Passport Rules for this jurisdiction.

sub-fund , in relation to a regulated CIS, has the same meaning as in the Passport Rules for this jurisdiction.

1210A List of participating economies

(1) The Minister must, by notifiable instrument, publish a list of participating economies.

(2) The Minister must:

(a) include in the instrument the date on which each Participant, within the meaning of the Memorandum of Cooperation, became a participating economy; and

(b) if a Participant, within the meaning of the Memorandum of Cooperation, ceases to be a participating economy - include in the instrument the date on which that Participant ceases to be a participating economy; and

(c) ensure that the instrument is updated as soon as is reasonably practicable after a Participant, within the meaning of the Memorandum of Cooperation, becomes, or ceases to be, a participating economy.

1210B Minister may determine that funds not to offer interests in this jurisdiction

(1) The Minister may, by legislative instrument, determine that the operators of passport funds, or a class of passport funds, the home economy for which is specified in the determination, must not offer interests in the funds in this jurisdiction.

(2) The Minister may only make a determination under subsection (1), if:

(a) the Minister is satisfied that:

(i) under the Memorandum of Cooperation, there are grounds for requiring the operators of the funds to which the determination applies not to offer interests in the funds in this jurisdiction; and

(ii) the processes that, under the Memorandum of Cooperation, are to be followed before requiring the operators of the funds to which the determination applies not to offer interests in the funds in this jurisdiction, have been complied with; or

(b) the Memorandum of Cooperation has been terminated; or

(c) Australia or the home economy for the funds to which the determination applies withdraws from the Memorandum of Cooperation.

(3) If the Minister makes a determination under this section, the regulations may deal with matters of a transitional nature relating to the movement of funds to which the determination applies from participation in this jurisdiction under this Chapter to participation in this jurisdiction under the other provisions of the Corporations legislation dealing with managed investment schemes.

Part 8A.2 - Passport Rules

1211 Minister may make Passport Rules for this jurisdiction

(1) The Minister may, by legislative instrument, make rules that provide for matters relating to passport funds, or entities connected with passport funds.

(2) The rules made by the Minister under subsection (1) must be substantially the same as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation.

(3) If the rules made by the Minister under subsection (1) taken together with other provisions of the Corporations legislation have substantially the same effect as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation, the rules made by the Minister under subsection (1) are taken to be substantially the same as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation.

1211A Definition of Passport Rules

Passport Rules for this jurisdiction

(1) Passport Rules for this jurisdiction, means rules made by the Minister under section 1211 as in force from time to time.

Passport Rules for a participating economy other than Australia

(2) Passport Rules for a participating economy other than Australia, means rules that are:

(a) substantially the same as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation; and

(b) in force from time to time in that participating economy.

1211B Compliance with the Passport Rules

(1) A person contravenes this subsection if:

(a) an obligation is imposed on the person in relation to an Australian passport fund under the Passport Rules for this jurisdiction; and

(b) the person does not comply with the obligation.

(2) A person contravenes this subsection if:

(a) an obligation is imposed on the person in relation to a notified foreign passport fund under the Passport Rules for this jurisdiction; and

(b) the person does not comply with the obligation; and

(c) the failure to comply results, or is likely to result, in a person in this jurisdiction who holds an interest in the fund suffering financial or other disadvantage.

(3) A person commits an offence if the person contravenes subsection (1) or (2).

Penalty: 2,000 penalty units or imprisonment for 5 years, or both.

(4) A person commits an offence of strict liability if the person contravenes subsection (1) or (2).

Penalty: 60 penalty units.

(5) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (3) or (4).

Part 8A.3 - Australian passport funds

1212 Application for registration

(1) A person may lodge an application with ASIC to have a managed investment scheme registered as a passport fund if:

(a) the scheme is a registered scheme and the person is the responsible entity for the scheme; or

(b) an application has been made for the scheme to be registered under section 601EB, and the person is the proposed responsible entity for the scheme.

(2) The application must:

(a) be in the prescribed form; and

(b) include a copy of the Product Disclosure Statement that the responsible entity for the scheme would be required to prepare if:

(i) the responsible entity were a regulated person required to give a Product Disclosure Statement to a retail client under subsection 1012B(3); and

(ii) the scheme were registered as a passport fund.

(3) The applicant may withdraw the application by notice lodged in the prescribed form at any time before the scheme is registered as an Australian passport fund.

(4) ASIC may, by legislative instrument, determine that information that is lodged with ASIC under this section will not be available for inspection or copying from ASIC if it is of a kind specified in the determination.

1212A Registration of registered scheme as a passport fund

(1) ASIC must register a registered scheme as a passport fund if ASIC isof the opinion that:

(a) the responsible entity for the scheme is an eligible entity, within the meaning of section 3 of Annex 2 of the Memorandum of Cooperation; and

(b) each of the following islikely to be complied with in relation to the scheme:

(i) this Act (including the Passport Rules for this jurisdiction);

(ii) the ASIC Act.

(2) A registered scheme is registered as a passport fund by ASIC:

(a) assigning a unique number to the passport fund (the Australian Passport Fund Registration Number or APFRN for the passport fund); and

(b) ensuring that details of the fund are entered on the Register of Passport Funds.

1212B All documents etc. lodged with ASIC to bear APFRN

After a registered scheme is registered as a passport fund, all documents relating to the fund that are lodged with ASIC must set out the scheme's APFRN.

1212C Notifying ASIC if offering interests in another participating economy in another name

(1) The operator of an Australian passport fund must notify ASIC in accordance with this section if:

(a) the operator of the fund offers interests in the fund in a participating economy other than Australia; and

(b) the name of the fund in the other participating economy is not the same as the name of the Australian passport fund.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(2) The notice must be given:

(a) in the prescribed form; and

(b) within 7 days after interests in the fund begin to be offered under that name.

Part 8A.4 - Notified foreign passport funds

Division 1 - Becoming a notified foreign passport fund

1213 Notice of intention to offer interests in a foreign passport fund

(1) The operator of a foreign passport fund may lodge with ASIC a notice of intention to offer interests in the fund to persons in this jurisdiction, provided the operator is a registered foreign company.

(2) The notice must:

(a) be in the prescribed form; and

(b) include a copy of the Product Disclosure Statement that the operator of the foreign passport fund would be required to prepare if:

(i) the operator were a regulated person required to give a Product Disclosure Statement to a retail client under subsection 1012B(3); and

(ii) the fund were a notified foreign passport fund.

(3) The operator of the foreign passport fund may withdraw the notice of intention by notice lodged in the prescribed form at any time during the consideration period for the notice.

1213A ASIC may notify operator that notice of intention lacks information required

(1) ASIC may, within the consideration period for the notice of intention, notify the operator of the foreign passport fund that ASIC is of the opinion that information required under the prescribed form has not been provided.

(2) ASIC's notification must be given in writing.

1213B Rejecting a notice of intention

Circumstances in which ASIC may reject a notice of intention

(1) ASIC may, within the consideration period for the notice of intention, reject the notice if:

(a) ASIC is of the opinion thatone or more of the following has not been, is not being or is not likely to be complied with in relation to the fund:

(i) this Act (other than the Passport Rules for this jurisdiction);

(ii) the ASIC Act;

(iii) the law of the home economy for the fund, to the extent that the law is administered by the home regulator for the fund (including the Passport Rules for the home economy for the fund); or

(b) ASIC is of the opinion that it is not in the public interest in this jurisdiction for the operator to offer interests in the passport fund in this jurisdiction; or

(i) an exemption has been given, or a modification made, to the Passport Rules for the home economy for the passport fund that affects the fund or entities connected with the fund;

(ii) ASIC does not consent to the exemption or modification; or

(d) the name of the passport fund in relation to which the operator has given notice is not available in this jurisdiction.

(2) In determining its opinion in relation to a matter mentioned in subparagraph (1)(a)(iii), ASIC must:

(a) make a request, in writing, to the home regulator for the fund for the opinion of the home regulator on the matter; and

(b) specify in the request the basis for ASIC's concerns about compliance with the law of the home economy; and

(d) if the home regulator replies to the request within that period - give effect to the opinion of the home regulator on the matter.

(3) In paragraph (1)(b), public interest does not include any benefit in this jurisdiction that may arise from limiting competition for managed investment schemes operating principally in this jurisdiction.

(4) Nothing in this section requires ASIC to conduct an assessment of the public interest in this jurisdiction in each case.

(5) A name is not availableto a foreign passport fund in this jurisdiction for the purposes of paragraph (1)(d) if:

(a) the name is:

(i) identical (under rules set out in the regulations) to a name that is reserved or registered under this Act for another body; or

(ii) identical (under rules set out in the regulations) to a name of a managed investment scheme that is the subject of an application for registration that has been lodged under section 601EA but not yet determined; or

(iii) identical (under rules set out in the regulations) to a name of a foreign passport fund in relation to which a notice of intention under section 1213 has already been lodged; or

(iv) identical (under rules set out in the regulations) to a name that is held or registered on the Business Names Register in respect of another individual or body who is not the operator; or

(v) unacceptable for registration under the regulations; and

(b) the operator of the fund has not notified ASIC and the home regulator for the fund in writing that it will adopt an available alternative name for the fund in this jurisdiction.

(6) The Minister may consent in writing to a name being available to a foreign passport fund in this jurisdiction even if the name would not otherwise be available because of paragraph (5)(a).

(7) The Minister's consent may be given subject to conditions.

Circumstances in which ASIC must reject a notice of intention

(8) ASIC must, within the consideration period for the notice of intention, reject the notice if:

(a) the Minister has made a determination under subsection 1210B(1) that the operators of passport funds, or a class of passport funds, the home economy for which is specified in the determination, must not offer interests in the fund in this jurisdiction; and

(b) the determination applies to the passport fund.

ASIC must notify operator of decision to reject

(9) The notice of intention is rejected by ASIC giving the operator of the foreign passport fund notification in writing of the rejection.

1213C Notified foreign passport funds - authority to offer interests in this jurisdiction

(1) A foreign passport fund becomes a notified foreign passport fund if:

(a) the operator of the fund has lodged a notice of intention to offer interests in the fund to persons in this jurisdiction with ASIC under section 1213; and

(b) the operator of the fund has not withdrawn the notice of intention under subsection 1213(3); and

(i) notification under section 1213Athat ASIC is of the opinion that information required under the prescribed form has not been provided; or

(ii) notification under section 1213B that the notice of intention has been rejected.

(2) The foreign passport fund becomes a notified foreign passport fund on the first day after the end of the consideration period for the notice of intention.

(3) The foreign passport fund ceases to be a notified foreign passport fund if it is removed as a notified foreign passport fund under Division 2 of Part 8A.7.

(4) A notified foreign passport fund may offer interests in the fund to persons in this jurisdiction.

1213D Definition of consideration period

(1) The consideration period , for a notice of intention to offer interests in a foreign passport fund in this jurisdiction,is:

(a) a period of 15 business days beginning on the day after the notice is lodged with ASIC; or

(b) if ASIC and the operator agree that the period is to be extended under subsection (2) - the extended period.

(2) ASIC and the operator of the foreign passport fund may agree, in writing, to one or more extensions of the consideration period. However, each extension must be for no more than 5 business days.

Division 2 - Treatment of notified foreign passport funds

1213E Notified foreign passport funds to be treated as managed investment schemes

(1) A notified foreign passport fund is a managed investment scheme for the purposes of this Act, even if it would not otherwise be a managed investment scheme for the purposes of this Act because of the way in which that term is defined in section 9.

Note: This subsection does not affect the other legal characteristics of a notified foreign passport fund for the purposes of this Act. For example, if a notified foreign passport fund is a body corporate, it remains a body corporate for the purposes of this Act.

(2) The constituent document (as defined in the Passport Rules for this jurisdiction) for the notified foreign passport fund is taken to be the constitution of the fund as a managed investment scheme.

1213F Operators and notified foreign passport funds not to be treated as companies etc.

To avoid doubt:

(a) neither the operator of a notified foreign passport fund nor the fund is to be treated as a company for the purposes of the corporations legislation, merely because the operator or the fund is registered as a foreign company under Division 2 of Part 5B.2; and

(b) a reference in the corporations legislation to a share does not include an interest in a notified foreign passport fund unless the fund is also a company.

1213G Offences relating to the operation of notified foreign passport funds

(1) This section applies if:

(a) one of the following persons engages in conduct that constitutes an alleged offence against this Act or the ASIC Act:

(i) a notified foreign passport fund;

(ii) the operator of a notified foreign passport fund;

(iii) a person with responsibilities in relation to a notified foreign passport fund; and

(b) the conduct occurs in relation to the operation of the fund; and

(d) the person who engages in the conduct is not:

(i) an Australian citizen; or

(ii) a body corporate incorporated by or under a law of the Commonwealth or of a State or Territory; and

(e) it is not otherwise a physical element of the offence that the conduct results, or is likely to result, in a person in this jurisdiction who has an interest in the fund suffering financial or other disadvantage.

(2) It is a physical element of the offence that the conduct results, or is likely to result, in a person in this jurisdiction who has an interest in the fund suffering financial or other disadvantage.

(3) In this section:

person with responsibilities in relation to a notified foreign 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.

Division 3 - Conduct of notified foreign passport funds in this jurisdiction

1213H Notified foreign passport funds must not issue debentures in this jurisdiction

The operator of a notified foreign passport fund commits an offence if the operator or the fund:

(a) makes an offer of debentures in this jurisdiction that needs disclosure to investors under Chapter 6D, or does not need disclosure to investors under Chapter 6D because of subsection 708(14) (disclosure document exclusion for debenture roll overs) or section 708A (sale offers that do not need disclosure); or

(b) makes an offer of debentures in this jurisdiction or elsewhere as consideration for the acquisition of securities under an off-market takeover bid.

Penalty: 60 penalty units.

Note: For rules about when an offer of debentures will need disclosure to investors under Chapter 6D, see sections 706, 707, 708, 708AA and 708A.

Division 4 - Providing key information in relation to notified foreign passport funds

Subdivision A - Obligations to provide information to members in this jurisdiction

1213J Constitution - right to obtain a copy

Right to a copy of the consolidated constitution

(1) The operator of a notified foreign passport fund commits an offence of strict liability if:

(a) a person makes an application to the operator in accordance with subsection (2) for a copy of the consolidated constitution of the fund; and

(b) the person is:

(i) an Australian member of the fund; or

(ii) a former member of the fund who acquired an interest in the fund in this jurisdiction, or is ordinarily resident in this jurisdiction; and

(c) the person pays the reasonable costs of the operator, up to a prescribed amount, in providing a copy of the consolidated constitution; and

(d) the operator fails, or refuses, to give the person a copy of the consolidated constitution in accordance with this section; and

(e) as a result, the person does not obtain a copy of the consolidated constitution of the fund in accordance with this section.

Penalty: 60 penalty units.

Application for a copy of the consolidated constitution

(2) An application to the operator of a notified foreign passport fund is in accordance with this subsection if the application is in writing.

Manner in which the consolidated constitution must be provided

(3) If, in the application, the applicant requests a paper copy of the consolidated constitution, the operator must post the applicant a copy of the consolidated constitution within 7 days after the application is made.

(4) Otherwise, the operator must give the applicant a copy of the consolidated constitution electronically, within 7 days after the application is made.

(5) ASIC may allow a longer period for the operator to give the applicant a copy of the consolidated constitution.

Language in which consolidated constitution must be provided

(6) If, in the application, the applicant requests that the copy of the consolidated constitution be in an official language of the home economy of the fund (other than English), the copy of the consolidated constitution given to the applicant must be in that language.

(7) Otherwise, the copy of the consolidated constitution given to the applicant must be in English.

Geographical jurisdiction

(8) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (1).

1213K Register of members - right to obtain a copy

Right to a copy of the register of members of a fund

(1) The operator of a notified foreign passport fund commits an offence of strict liability if:

(a) a person makes an application to the operator in accordance with subsection (2) for a copy of the register of members for the fund; and

(b) the person is:

(i) in this jurisdiction; or

(ii) an Australian member of the fund; or

(iii) a former member of the fund who acquired an interest in the fund in this jurisdiction, or is ordinarily resident in this jurisdiction; and

(c) the person pays the reasonable costs of the operator, up to a prescribed amount, in providing a copy of the register; and

(d) the operator fails, or refuses, to give the person a copy of the register in accordance with this section; and

(e) as a result, the person does not obtain a copy of the register of the fund in accordance with this section.

Penalty: 60 penalty units.

Application for a copy of the register

(2) An application to the operator of a notified foreign passport fund is in accordance with this subsection if:

(a) the application is in writing; and

(b) the application states each purpose for which the applicant wishes to obtain a copy of the register; and

Manner in which register must be provided

(3) If, in the application, the applicant requests a paper copy of the register, the operator must post the applicant a copy of the register within 7 days after the application is made.

(4) Otherwise, the operator must give the applicant a copy of the register electronically, within 7 days after the application is made.

(5) ASIC may allow a longer period for the operator to give the applicant a copy of the register.

Language in which register must be provided

(6) If, in the application, the applicant requests that the copy of the register be in an official language of the home economy of the fund (other than English), the copy of the register given to the applicant must be in that language.

(7) Otherwise, the copy of the register given to the applicant must be in English.

Geographical jurisdiction

(8) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (1).

1213L Use of information on register of members

Offence - using information obtained from the register to contact members

(1) A person who obtains a copy of a register of members of a notified foreign passport fund under section 1213K must not:

(a) use information about a person (the other member ) obtained from the register to contact or send material to the person; or

(b) disclose information of that kind knowing that the information is likely to be used to contact or send material to the other member.

Penalty: 60 penalty units.

Note: An example of using information to send material to a person is putting a person's name and address on a mailing list for advertising material.

Exception

(2) Subsection (1) does not apply if the use or disclosure of the information is:

(a) relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them; or

(b) approved by the operator of the fund.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Offence - using information obtained from the register for a prescribed purpose

(3) A person who obtains a copy of a register of members of a notified foreign passport fund under section 1213K must not:

(a) use information obtained from theregister for any purpose prescribed by regulations made for the purposes of paragraph 1213K(2)(c); or

(b) disclose information of that kind knowing that the information is likely to be used for any such purpose.

Penalty: 60 penalty units.

Strict liability

(4) An offence based on subsection (1) or (3) is an offence of strict liability.

Geographical jurisdiction

(5) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (1) or (3).

Liability to pay compensation

(6) A person who contravenes subsection (1) or (3) is liable to compensate anyone else who suffers loss or damage because of the contravention.

Returning profits made by contravening subsection (1) or (3)

(7) A person who makes a profit by contravening subsection (1) or (3) owes a debt to the fund. The amount of the debt is the amount of the profit.

(8) If a person owes a debt under subsection (7) to the fund:

(a) the debt may be recovered by the operator of the fund as a debt due to it; and

(b) any amount paid or recovered in respect of the debt forms part of the property of the fund.

1213M Reports required under the law of the home economy

Right to a copy of reports

(1) The operator of a notified foreign passport fund commits an offence of strict liability if:

(a) the operator or the fund is required under the law of the home economy for the fund to prepare a report (however described) in relation to the fund; and

(b) the operator or the fund makes the report available to members of the fund in the home economy without charge; and

(i) a copy of the report; and

(ii) if a summary in English of all or part of the report is required under subsection (5) - a summary in English of all or that part of the report.

Penalty: 60 penalty units.

Manner in which report must be made available

(2) The report must be given to Australian members of the fund within 7 days after the first day on which the report is made available to a member of the fund in the home economy without charge.

(3) The report may be given to Australian members of the fund by:

(a) putting the report on the fund's website so that it is accessible to Australian members of the fund; and

(b) if members of the fund in the home economy are notified that the report is available on the fund's website, or notified how those members may access it - giving equivalent notice to Australian members of the fund.

(4) The report must be given without charge.

English summary of the report

(5) If all or part of the report is not in English, the operator must also give an Australian member of the fund a summary of the report, or that part of the report, in English in the same manner as the operator gives the report under subsections (2), (3) and (4).

Exception

(6) Subsection (1) does not apply if the operator of the fund is required under another provision of this Act to lodge the report, or to give the report to Australian members of the fund.

Geographical jurisdiction

(7) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (1).

1213N Order for copies of books of a notified foreign passport fund

(1) A person may apply to the Court for an order under subsection (2) if the person is:

(a) an Australian member of the fund; or

(b) a former member of the fund who acquired an interest in the fund in this jurisdiction, or is ordinarily resident in this jurisdiction.

(2) On application by the member or former member, the Court may order the operator of the fund to give the member or former member an electronic copy of any or all of the following:

(a) all or a specified part of the books of the operator that relate to the fund;

(b) all or a specified part of the books of the fund;

(d) an English translation of all or a specified part of the books of the fund.

(3) The Court may make the order only if it is satisfied that:

(a) the applicant is acting in good faith; and

(b) the books, or the specified part of the books, are to be obtained for a proper purpose.

(4) The member or former member may make copies of the books, or the specified part of the books, unless the Court orders otherwise.

Subdivision B - Obligations to provide information to ASIC

1213P Register of members - ASIC may require lodgment

(1) The operator of a notified foreign passport fund commits an offence of strict liability if:

(a) ASIC requires the operator of the fund to lodge a copy of the whole or a specified part of the register of members of the fund, in accordance with subsections (2) and (3); and

(b) the operator fails, or refuses, to lodge a copy of the register in accordance with this section.

Penalty: 60 penalty units.

Notice requiring operator to lodge register of members

(2) ASIC may, by written notice given to the operator of a notified foreign passport fund, require the operator to lodge a copy of the whole or a specified part of the register of members of the fund.

(3) ASIC may, in the notice, require the copy of the whole or the specified part of the register to be lodged in English.

Manner in which register must be lodged

(4) The operator must lodge a copy of the register with ASIC electronically, within 7 days after being given notice to do so in accordance with subsections (2) and (3).

(5) ASIC may allow a longer period for the operator to lodge a copy of the register.

Language in which register must be provided

(6) If, in the notice, ASIC requires a copy of the whole or a specified part of the register to be lodged in English, the operator must lodge the whole or that part of the register in English.

Geographical jurisdiction

(7) Section 15.1 of the Criminal Code (extended geographical jurisdiction - category A) applies to an offence against subsection (1).

1213Q Destruction of records by ASIC

ASIC may destroy or otherwise dispose of any document that is lodged under, or for the purposes of, a provision of this Chapter or the Passport Rules for this jurisdiction if:

(a) ASIC is of the opinion that it is no longer necessary or desirable to retain it; and

(b) it has been in the possession of ASIC for such period as is specified in the regulations, either generally or in relation to a particular document or class of documents.

Part 8A.5 - Register of Passport Funds

1214 Register of Passport Funds

(1) ASIC must either:

(a) establish and maintain a Register of Passport Funds; or

(b) ensure that a Register of Passport Funds is established and maintained.

(2) If the Register of Passport Funds is established and maintained by ASIC, ASIC may do so in any form that ASIC considers appropriate.

(3) The Register of Passport Funds:

(a) must include the prescribed details of Australian passport funds and notified foreign passport funds; and

(b) must include the prescribed details of funds that have been deregistered as Australian passport funds and funds that have been removed as notified foreign passport funds; and

(4) For the purposes of the Corporations legislation, a reference to a register kept by ASIC under this Act is taken to include a Register of Passport Funds that ASIC ensures is established and maintained under paragraph (1)(b).

Part 8A.6 - Stop orders

1215 Stop order - Australian passport funds

ASIC may make stop orders

(1) ASIC may, by written instrument, order the operator of an Australian passport fund to do one or more of the following:

(a) cease to offer, or not to begin offering, interests in the fund to persons in this jurisdiction either indefinitely or for a period specified in the order;

(b) cease to offer, or not to begin offering, interests in the fund to persons in another participating economy either indefinitely or for a period specified in the order;

(d) cease to take other action specified in the order.

The order is a stop order .

(2) A stop order may include a statement that specified conduct engaged in contrary to the order will be regarded as not complying with the requirements of a specified provision of this Act.

Basis on which stop orders may be made

(3) However, ASIC may only make a stop order under this section if ASIC is of the opinion that:

(a) one or more of the following has not been, is not being or is not likely to be complied with in relation to the fund (whether in this jurisdiction or in any other place):

(i) this Act (including the Passport Rules for this jurisdiction);

(ii) the ASIC Act; or

(b) if the order is made under paragraph (1)(c) - taking the action specified in the order is reasonably necessary to ensure that an order made under paragraph (1)(a) or (b) is complied with; or

(c) if the order is made under paragraph (1)(d) - not taking the action specified in the order is reasonably necessary to ensure that an order made under paragraph (1)(a) or (b) is complied with.

Hearing before stop order made

(4) Before making a stop order, ASIC must:

(a) hold a hearing; and

(b) give a reasonable opportunity to any interested people to make oral or written submissions to ASIC on whether an order should be made.

ASIC must give notice if stop order made

(5) If ASIC makes a stop order under this section, ASIC must give the operator of the fund a copy of the order as soon as reasonably practicable after it is made.

1215A Stop order - notified foreign passport fund

ASIC may make stop orders

(1) ASIC may, by written instrument, order the operator of a notified foreign passport fund to do one or more of the following:

(a) cease to offer, or not to begin offering, interests in the fund to persons in this jurisdiction either indefinitely or for a period specified in the order;

(b) take other action specified in the order;

The order is a stop order .

(2) A stop order may include a statement that specified conduct engaged in contrary to the order will be regarded as not complying with the requirements of a specified provision of this Act.

Basis on which stop orders may be made

(3) However, ASIC may only make a stop order under this section if:

(a) subsections (4) and (7) are satisfied; or

(b) the operator of the fund has ceased to be a registered foreign company; or

(d) both of the following are satisfied:

(i) the Minister has made a determination under subsection 1210B(1) that the operators of passport funds, or a class of passport funds, the home economy for which is specified in the determination, must not offer interests in the fund in this jurisdiction;

(ii) the determination applies to the passport fund;

(e) if the order is made under paragraph (1)(b) - taking the action specified in the order is reasonably necessary to ensure that an order made under paragraph (1)(a) is complied with; or

(f) if the order is made under paragraph (1)(c) - not taking the action specified in the order is reasonably necessary to ensure that an order made under paragraph (1)(a) is complied with.

(4) For the purposes of paragraph (3)(a), this subsection is satisfied if ASIC is of the opinion that one or more of the following has not been, is not being or is not likely to be complied with in relation to the fund(whether in this jurisdiction or in any other place):

(a) this Act (including the Passport Rules for this jurisdiction);

(b) the ASIC Act;

(c) the law of the home economy for the fund, to the extent that the law is administered by the home regulator for the fund (including the Passport Rules for the home economy of the fund).

(5) In determining its opinion in relation to compliance with the Passport Rules for this jurisdiction, as mentioned in paragraph (4)(a), ASIC must make a request, in writing, to the home regulator for the fund for the opinion of the home regulator on the interpretation of any provision of the Passport Rules for the home economy that is equivalent to a provision of the Passport Rules for this jurisdiction under consideration by ASIC.

(6) In determining its opinion in relation to a matter mentioned in paragraph (4)(c), ASIC must:

(a) make a request, in writing, to the home regulator for the fund for the opinion of the home regulator on the matter; and

(b) specify in the request the basis for ASIC's concerns about compliance with the law of the home economy; and

(d) if the home regulator replies to the request within that period - give effect to the opinion of the home regulator on the matter.

(7) For the purposes of paragraph (3)(a), this subsection is satisfied if ASIC is of the opinion that the stop order is necessary, having regard to:

(a) the impact on the members and prospective members of the fund of the failure, or potential failure, to comply with a law mentioned in subsection (4); and

(b) any action taken, or that may be taken, by the home regulator for the fund.

Hearings before certain stop orders made

(8) Before making a stop order on the basis of subsections (4) and (7), ASIC must:

(a) hold a hearing; and

(b) give a reasonable opportunity to any interested people to make oral or written submissions to ASIC on whether an order should be made.

ASIC must give notice if stop order made

(9) If ASIC makes a stop order under this section, ASIC must give the operator of the fund a copy of the order as soon as reasonably practicable after it is made.

1215B Interim stop orders

(1) ASIC may make an interim stop order, if ASIC is of the opinion that:

(a) any delay in making a stop order under section 1215 or 1215A would be prejudicial to the public interest; and

(b) either:

(i) in the case of an order that is to be made in relation to an Australian passport fund - one or more of the circumstances mentioned in subsection 1215(3) exists; or

(ii) in the case of an order that is to be made in relation to a notified foreign passport fund - one or more of the circumstances mentioned in subsection 1215A(3) exists.

(2) An interim stop order under subsection (1):

(a) may be made without holding a hearing, or during a hearing; and

(b) must be in writing; and

(i) if the stop order is made during a hearing - until ASIC makes a stop order after the conclusion of the hearing, or the interim stop order is revoked; and

(ii) otherwise - for 21 days after the day on which it is made, unless sooner revoked.

(3) If ASIC makes an interim stop order, ASIC must give the operator of the fund a copy of the order as soon as reasonably practicable after it is made.

1215C Revocation of stop order made under section 1215 or 1215A

(1) The operator of an Australian passport fund may make an application to ASIC, in accordance with this section, to have a stop order that is in force in relation to the fund revoked on the basis that there are no longer grounds for the order under subsection 1215(3).

(2) The operator of a notified foreign passport fund may make an application to ASIC, in accordance with this section, to have a stop order that is in force in relation to the fund revoked on the basis that there are no longer grounds for the order under subsection 1215A(3).

(3) An application under subsection (1) or (2) must:

(a) be in the prescribed form; and

(b) without limiting paragraph (a), set out the basis on which the operator of the fund believes that there are no longer grounds for the stop order.

(4) ASIC must:

(a) revoke a stop order made under section 1215 in relation to an Australian passport fund if:

(i) an application is made under subsection (1) of this section; and

(ii) ASIC is of the opinion that there are no longer grounds for the stop order; and

(b) revoke a stop order made under section 1215A in relation to a notified foreign passport fund if:

(i) an application is made under subsection (2) of this section; and

(ii) ASIC is of the opinion that there are no longer grounds for the stop order.

(5) Nothing in this section limits the circumstances in which ASIC may revoke or vary a stop order made under section 1215 or 1215A.

1215D Compliance with stop orders

(1) This section applies if:

(a) ASIC gives the operator of an Australian passport fund a copy of a stop order under subsection 1215(5)or an interim stop order under subsection 1215B(3); or

(b) ASIC gives the operator of a notified foreign passport fund a stop order under subsection 1215A(9)or an interim stop order under subsection 1215B(3).

(2) The operator must not contravene the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(3) The operator must take reasonable steps to ensure that any other person who might engage in conduct that is contrary to the order, is aware of the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(4) A person who is aware of the order must not engage in conduct that is contrary to the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Part 8A.7 - Deregistration and denotification

Division 1 - Deregistration of Australian passport funds

Subdivision A - Voluntary deregistration

1216 Application to deregister

(1) The operator of an Australian passport fund may lodge an application for deregistration of the fund as an Australian passport fund.

(2) The application must be in the prescribed form.

1216A ASIC to deregister

(1) On an application under section 1216, ASIC must deregister a fund as an Australian passport fund if ASIC is satisfied that:

(a) there are no members of the fund who became members (whether in this jurisdiction or any host economy for the fund) after the fund became an Australian passport fund; and

(b) there are no members of the fund who became members (whether in this jurisdiction or any host economy for the fund) on the expectation that the fund would become an Australian passport fund.

(2) For the purposes of subsection (1), ignore any member of the fund that:

(a) is, or has at any time been, the operator of the fund; or

(b) is a related party of an entity that is, or has at any time been, the operator of the fund.

1216B When is there an expectation that a fund would become an Australian passport fund?

For the purposes of this Act (including the Passport Rules for this jurisdiction), a person becomes a member of a fund on the expectation that it would become an Australian passport fund if:

(a) a representation has been made by the fund or the operator of the fund in any document, or other means of communication, that might reasonably be expected to be available to persons considering acquiring an interest in the fund that the fund will become, or that it is intended or expected that the fund will become, an Australian passport fund; and

(b) the person acquires an interest in the fund after that representation was made.

Subdivision B - Deregistration initiated by ASIC

1216C Deregistration - initiated by ASIC

(1) ASIC may decide to deregister an Australian passport fund if ASIC is of the opinion that one or more of the following has not been, is not being or is not likely to be complied with in relation to an Australian passport fund (whether in this jurisdiction or in any other place):

(a) this Act (including the Passport Rules for this jurisdiction);

(b) the ASIC Act.

(2) However, ASIC must not decide to deregister an Australian passport fund if ASIC is of the opinion that to do so would not be in the interests of:

(a) members of the fund who became members (whether in this jurisdiction or any host economy for the fund) after the fund became an Australian passport fund; and

(b) members of the fund who became members (whether in this jurisdiction or any host economy for the fund) on the expectation that the fund would become an Australian passport fund.

(3) For the purposes of subsection (2), ignore any member of the fund that:

(a) is, or has at any time been, the operator of the fund; or

(b) is a related party of an entity that is, or has at any time been, the operator of the fund.

Note: See section 1216B for the circumstances in which a person becomes a member of a fund on the expectation that it would become an Australian passport fund.

(4) Before deciding to deregister the fund as an Australian passport fund, ASIC must give the operator of the fund a written notice that requires the operator to show cause, at a hearing before a specified person, why the fund should not be deregistered as an Australian passport fund.

(5) The notice must specify:

(a) the grounds on which it is proposed to deregister the fund as an Australian passport fund; and

(b) a reasonable time and place at which the hearing is to be held.

However, if the operator consents, the person conducting the hearing may fix a different time or place.

(6) The person conducting the hearing must:

(a) give the operator an opportunity to be heard at the hearing; and

(b) give ASIC:

(i) a report about the hearing; and

(ii) a recommendation about the grounds in the notice on which it is proposed to deregister the fund.

(7) After considering the report and recommendation, ASIC may decide to:

(a) take no further action in relation to the matter and give written advice of that decision to the operator; or

(b) deregister the fund as an Australian passport fund.

(8) Neither of the following is a legislative instrument:

(a) a notice under subsection (4);

(b) a report under subsection (6) (if it is in writing).

Subdivision C - Process for deregistration

1216D Process for deregistration

Notice before deregistration

(1) If ASIC proposes to deregister a fund as an Australian passport fund under subsection 1216A(1) or paragraph 1216C(7)(b), ASIC must give written notice setting out the date on which ASIC proposes to deregister the fund as an Australian passport fund to:

(a) the operator of the fund; and

(b) each host regulator for the fund.

(2) The notice must be given at least 5 business days before the fund is deregistered.

Deregistration

(3) The fund is deregistered as an Australian passport fund by including an annotation on the Register of Passport Funds that the fund has been deregistered. The fund ceases to be an Australian passport fund on the day on which the annotation is made.

Notice of deregistration

(4) If ASIC deregisters a fund as an Australian passport fund under subsection 1216A(1) or paragraph 1216C(7)(b), ASIC must give written notice that the fund has been deregistered and of the date of deregistration to:

(a) the operator of the fund; and

(b) each host regulator for the fund.

(5) The notice must be given within 5 business days after the fund is deregistered.

Division 2 - Denotification of notified foreign passport funds

Subdivision A - Voluntary denotification

1216E Application to be removed as a notified foreign passport fund

(1) The operator of a notified foreign passport fund may lodge an application for the fund to be removed as a notified foreign passport fund.

(2) The application must be in the prescribed form.

1216F ASIC to remove fund as a notified foreign passport fund

(1) On an application under section 1216E, ASIC must remove a fund as a notified foreign passport fund if ASIC is satisfied that:

(a) there are no members of the fund who became members in this jurisdiction after the fund became a notified foreign passport fund; and

(b) there are no members of the fund who became members in this jurisdiction on the expectation that the fund would become a notified foreign passport fund.

(2) For the purposes of subsection (1), ignore any member of the fund that:

(a) is, or has at any time been, the operator of the fund; or

(b) is a related party of an entity that is, or has at any time been, the operator of the fund.

1216G When is there an expectation that a fund would become a notified foreign passport fund?

For the purposes of this Act (including the Passport Rules for this jurisdiction), a person becomes a member of a fund on the expectation that it would become a notified foreign passport fund if:

(b) the person acquires an interest in the fund after that representation was made.

Subdivision B - Notified foreign passport fund deregistered in the fund's home economy

1216H ASIC to remove a fund as a notified foreign passport fund

ASIC must remove a fund as a notified foreign passport fund if the home regulator for the fund notifies ASIC that the fund has been deregistered as a passport fund in the home economy for the fund.

Subdivision C - Process for removal as a notified foreign passport fund

1216J Process for removal as a notified foreign passport fund

Notice before removal

(1) If ASIC proposes to remove a fund as a notified foreign passport fund under section 1216F or 1216H, ASIC must give written notice setting out the date on which ASIC proposes to remove the fund as a notified foreign passport fund to:

(a) the operator of the fund; and

(b) the home regulator for the fund and each other host regulator for the fund.

(2) The notice must be given at least 5 business days before the fund is removed.

Removing the fund as a notified foreign passport fund

(3) The fund is removed as a notified foreign passport fund by including an annotation on the Register of Passport Funds to that effect. The fund ceases to be a notified foreign passport fund on the day on which the annotation is made.

Notice of removal

(4) If ASIC removes a fund as a notified foreign passport fund under section 1216F or 1216H, ASIC must give written notice that the fund has been removed and of the date of removal to:

(a) the operator of the fund; and

(b) the home regulator for the fund and each other host regulator for the fund.

(5) The notice must be given within 5 business days after the fund is removed.

Division 3 - Continued application of the Corporations legislation

1216K ASIC's power to continue the application of the Corporations legislation

Declarations on continued application of the Corporations legislation

(1) ASIC may:

(a) declare that the Corporations legislation continues to apply:

(i) in relation to a fund that has been deregistered as an Australian passport fund or removed as a notified foreign passport fund; and

(ii) to an entity in relation to a fund that has been deregistered as an Australian passport fund or removed as a notified foreign passport fund; and

(b) declare that the Corporations legislation continues to apply:

(i) in relation to a fund that has been deregistered as an Australian passport fund or removed as a notified foreign passport fund; and

(ii) to an entity in relation to a fund that has been deregistered as an Australian passport fund or removed as a notified foreign passport fund;

as if specified provisions were omitted, modified or varied as specified in the declaration.

(2) The continued application of the Corporations legislation may:

(a) apply to all or specified provisions of the Corporations legislation; and

(b) apply to all entities, a specified class of entities or a specified entity; and

(c) apply to all former passport funds, a specified class of former passport funds or a specified former passport fund; and

(d) relate to any other matter generally or as specified.

Declarations relating to all or a class of entities or passport funds

(3) A declaration that relates to all entities, a specified class of entities, all former passport funds or a specified class of former passport funds, must be made by legislative instrument.

Declarations relating to specified entities or passport funds

(4) A declaration that relates to a specified entity or a specified former passport fund must be made by notifiable instrument.

(5) ASIC must also:

(a) give a copy of a declaration that relates to a specified entity to the entity; and

(b) give a copy of a declaration that relates to a specified former passport fund to the most recent operator of the fund.

ASIC must do so as soon as is reasonably practicable after the declaration is made.

1216L Regulations may continue the application of the Corporations legislation

The regulations may:

(a) provide that the Corporations legislation continues to apply:

(i) in relation to a fund, all funds of a specified class or all funds that have been deregistered as Australian passport funds or removed as notified foreign passport funds; and

(ii) to an entity, all entities of a specified class or all entities in relation to a fund, all funds of a specified class or all funds that have been deregistered as Australian passport funds or removed as notified foreign passport funds; and

(b) provide that the Corporations legislation continues to apply:

(i) in relation to a fund, all funds of a specified class or all funds that have been deregistered as Australian passport funds or removed as notified foreign passport funds; and

as if specified provisions were omitted, modified or varied as specified in the regulations.

Part 8A.8 - Exemptions and modifications

1217 ASIC's power to make exemptions and declare modifications etc. in relation to this Chapter

Exemptions and declarations on application of this Chapter

(1) ASIC may:

(a) exempt an entity from a provision of this Chapter; or

(b) declare that this Chapter applies to an entity as if specified provisions were omitted, modified or varied as specified in the declaration.

(2) The exemption or declaration may:

(a) apply to all or specified provisions of this Chapter; and

(b) apply to all entities, a specified class of entities or a specified entity; and

(d) relate to any other matter generally or as specified.

Imposition of conditions on exemption

(3) An exemption may apply unconditionally or subject to specified conditions.

(4) An entity to whom a condition specified in an exemption applies must comply with the condition.

(5) The Court may order the entity to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

Exemptions and declarations relating to all or a class of entities or passport funds

(6) An exemption or declaration that relates to all entities, a specified class of entities, all passport funds or a specified class of passport funds, must be made by legislative instrument.

Exemptions and declarations relating to specified entities or passport funds

(7) An exemption or declaration that relates to a specified entity or a specified passport fund must be made by notifiable instrument.

(8) ASIC must also:

(a) give a copy of an exemption or declaration that relates to a specified entity to the entity; and

(b) give a copy of an exemption or declaration that relates to a specified passport fund to the operator of the fund.

ASIC must do so as soon as is reasonably practicable after the exemption or declaration is made.

Definitions

(9) In this section:

provisions of this Chapter include:

(a) regulations made for the purposes of this Chapter; and

(b) definitions in this Act or the regulations as they apply to references in:

(i) this Chapter; or

(ii) regulations made for the purposes of this Chapter.

1217A ASIC's power to make exemptions and declare modifications etc. in relation to the Passport Rules

Exemptions and declaration on Passport Rules

(1) ASIC may:

(a) exempt an entity from a provision of the Passport Rules for this jurisdiction; or

(b) declare that the Passport Rules for this jurisdiction apply to an entity as if specified provisions were omitted, modified or varied as specified in the declaration.

(2) The exemption or declaration may:

(a) apply to all or specified provisions of the Passport Rules for this jurisdiction; and

(b) apply to all entities, a specified class of entities or a specified entity; and

(d) relate to any other matter generally or as specified.

(3) However:

(a) ASIC may only give an exemption or make a declaration under subsection (1) in relation to an Australian passport fund if each host regulator for the fund has agreed to the exemption being given or the declaration being made; and

(b) ASIC may only give an exemption or make a declaration under subsection (1) in relation to a foreign passport fund if the home regulator for the fund has granted an equivalent exemption or made a similar omission, modification or variation of the Passport Rules for the home economy for the fund.

Imposition of conditions on exemption

(4) An exemption may apply unconditionally or subject to specified conditions.

(5) An entity to whom a condition specified in an exemption applies must comply with the condition.

(6) The Court may order the entity to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

Exemptions and declarations relating to all or a class of entities or passport funds

(7) An exemption or declaration that relates to all entities, a specified class of entities, all passport funds or a specified class of passport funds, must be made by legislative instrument.

Exemptions and declarations relating to specified entities or passport funds

(8) An exemption or declaration that relates to a specified entity or a specified passport fund must be made by notifiable instrument.

(9) ASIC must also:

(a) give a copy of an exemption or declaration that relates to a specified entity to the entity; and

(b) give a copy of an exemption or declaration that relates to a specified passport fund to the operator of the fund.

ASIC must do so as soon as is reasonably practicable after the exemption or declaration is made.

1217B Exemptions and modification by regulations

The regulations may:

(a) exempt from all or specified provisions of the Corporations legislation (which includes this Chapter and the Passport Rules for this jurisdiction):

(i) a passport fund, all passport funds of a specified class or all passport funds; or

(ii) an entity, all entities of a specified class or all entities, in relation to a passport fund, all passport funds of a specified class or all passport funds;

(b) provide that the Corporations legislation (which includes this Chapter and the Passport Rules for this jurisdiction) applies in relation to:

(i) a passport fund, all passport funds of a specified class or all passport funds; or

(ii) an entity, all entities of a specified class or all entities, in relation to a passport fund, all passport funds of a specified class or all passport funds;

as if specified provisions of the Corporations legislation were omitted, modified or varied as specified in the regulations.

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