Financial Services Reform Act 2001 (122 of 2001)

Schedule 1   Financial Services and Markets

Part 1   Main amendments

Corporations Act 2001

1   Chapter 7 - Part 7.3 - Division 4

Division 4 - Other matters

827A Matters to be taken into account by the Minister

(1) The Minister must have regard to certain matters in deciding whether to:

(a) grant an applicant an Australian CS facility licence under section 824B; or

(b) impose, vary or revoke conditions on such a licence under section 825A; or

(c) suspend or cancel such a licence under section 826C; or

(d) disallow a change to the operating rules of a licensed CS facility under section 822E.

(2) These are the matters the Minister must have regard to:

(a) the structure, or proposed structure, of the facility;

(b) the nature of the services provided, or proposed to be provided, by the facility;

(c) the size, or proposed size, of the facility;

(d) the nature of the financial products in respect of which the facility provides services or proposes to provide services;

(e) the participants, or proposed participants, in the facility and whether those participants:

(i) in using the facility’s services, are, or will be, providing financial services to other persons; or

(ii) use, or will use, the facility’s services in respect of financial products they acquire or dispose of as retail clients or as wholesale clients; or

(iii) are, or will be, participants in a financial market, or other clearing and settlement facilities, as well;

(f) the technology used, or proposed to be used, in the operation of the facility;

(g) whether it would be in the public interest to take the action referred to in subsection (1);

(h) any relevant advice received from ASIC or the Reserve Bank of Australia.

The Minister may also have regard to any other matter that the Minister considers relevant.

(3) If the Minister is deciding whether to take the action mentioned in paragraph (1)(a), (b) or (c) in respect of an Australian CS facility licence granted under subsection 824B(2) (overseas clearing and settlement facilities), the Minister must also have regard to:

(a) the criteria that the licensee or applicant satisfied to obtain an authorisation to operate the same facility in the foreign country in which their principal place of business is located; and

(b) the obligations they must continue to satisfy to keep the authorisation; and

(c) the level of supervision to which the facility is subject in that country; and

(d) whether adequate arrangements exist for cooperation between ASIC, the Reserve Bank of Australia and the authority, or authorities, that are responsible for that supervision.

827B ASIC may give advice to Minister

ASIC may give advice to the Minister in relation to:

(a) any matter in respect of which the Minister has a discretion under this Part; or

(b) any other matter concerning clearing and settlement facilities.

Note: In some cases, the Minister must have regard to ASIC’s advice: see paragraph 827A(2)(h).

827C Reserve Bank may give advice to Minister

The Reserve Bank of Australia may give advice to the Minister in relation to any matter concerning clearing and settlement facilities.

Note: In some cases, the Minister must have regard to the Reserve Bank’s advice: see paragraph 827A(2)(h).

827D Reserve Bank may determine financial stability standards

(1) The Reserve Bank of Australia (the Reserve Bank ) may, in writing, determine standards for the purposes of ensuring that CS facility licensees conduct their affairs in a way that causes or promotes overall stability in the Australian financial system.

(2) The standards are to be complied with by:

(a) all CS facility licensees; or

(b) a specified class of CS facility licensees, in the case of a standard that is expressed to apply only in relation to that class.

(3) Before the Reserve Bank determines a standard, it must consult with:

(a) the CS facility licensees that will be required to comply with the standard; and

(b) ASIC.

(4) A standard may impose different requirements to be complied with in different situations or in respect of different activities.

(5) A standard:

(a) comes into force:

(i) unless subparagraph (ii) applies - on the day on which the determination of the standard is made; or

(ii) if that determination specifies a later day as the day on which the standard comes into force - on the day so specified; and

(b) continues in force until it is revoked.

(6) The Reserve Bank may vary a standard in writing. Before it does so, it must consult with:

(a) the CS facility licensees that will be required to comply with the standard if it is varied as proposed; and

(b) ASIC.

(7) If the Reserve Bank determines or varies a standard, it must, as soon as practicable:

(a) cause a notice advising of the determination of the standard, or of the variation of the standard, and summarising the purpose and effect of the standard or variation, to be published in theGazette; and

(b) make the text of the notice available on the Internet; and

(c) give a copy of the standard, or of the variation, to the following:

(i) each CS facility licensee to which the standard applies;

(ii) the Minister;

(iii) ASIC.

(8) The Reserve Bank may revoke a standard in writing. Before it does so, it must consult with ASIC.

(9) If the Reserve Bank revokes a standard, it must, as soon as practicable:

(a) cause a notice advising of the revocation of the standard to be published in theGazette; and

(b) make the text of the notice available on the Internet; and

(c) give notice of the revocation of the standard to the following:

(i) each CS facility licensee to which the standard applied;

(ii) the Minister;

(iii) ASIC.

(10) The Reserve Bank must take reasonable steps to ensure that copies of the current text of the standards are available for inspection and purchase.