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 7.6 - Division 5
Division 5 - Authorised representatives
916A How representatives are authorised
(1) A financial services licensee may give a person (the authorised representative ) a written notice authorising the person, for the purposes of this Chapter, to provide a specified financial service or financial services on behalf of the licensee.
(2) The financial services specified may be some or all of the financial services covered by the licensee’s licence.
(3) An authorisation under subsection (1) is void to the extent that it purports to authorise a person to provide a financial service:
(a) that is not covered by the licensee’s licence; or
(b) contrary to a banning order or disqualification order under Division 8.
(3A) A person must not give a purported authorisation if that purported authorisation is void to any extent under subsection (3).
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(4) An authorisation may be revoked at any time by the licensee giving written notice to the authorised representative.
916B Sub-authorisations
(1) Subject to subsection (3), an authorised representative of a financial services licensee cannot, in that capacity, make a person their authorised representative or an authorised representative of the licensee.
(2) A purported authorisation contrary to this section is void.
(2A) A person must not give a purported authorisation if that purported authorisation is contrary to this section.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(3) A body corporate that is an authorised representative of a financial services licensee may, in that capacity, give an individual a written notice authorising that individual, for the purposes of this Chapter, to provide a specified financial service or financial services on behalf of the licensee, but only if the licensee consents in writing given to the body corporate.
(4) The financial services specified may be some or all of the financial services covered by the licensee’s licence.
(5) The licensee may give consent under subsection (3) in respect of either a specified individual or a specified class of individuals (the membership of which might change from time to time).
(5A) If a licensee gives consent under subsection (3) to a body corporate, the licensee must keep a copy of the consent for 5 years after the day on which it ceases to have effect.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(6) An individual who is authorised as mentioned in subsection (3) is an authorised representative of the relevant licensee.
(7) An authorisation of an individual as mentioned in subsection (3) may be revoked at any time by:
(a) the licensee; or
(b) the body corporate that gave the individual the authorisation;
giving written notice to the individual.
(8) If a person revokes the authorisation of an individual under subsection (7), that person must inform, in writing, the other person who could have revoked the authorisation.
(9) To avoid doubt, an authorisation given as mentioned in subsection (3) is taken, for the purposes of sections 916C to 916F, to be given by the body corporate, not the licensee.
916C Authorised representative of 2 or more licensees
(1) One person can be the authorised representative of 2 or more financial services licensees, but only if:
(a) each of those licensees has consented to the person also being the authorised representative of each of the other licensees; or
(b) each of those licensees is a related body corporate of each of the other licensees.
(2) A purported authorisation given in breach of this requirement is void.
(3) A person must not give a purported authorisation if that purported authorisation is in breach of this requirement.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
916D Licensees cannot authorise other licensees
(1) A financial services licensee cannot be the authorised representative of another financial services licensee.
Note 1: Instead, the first licensee could use their own licence to provide financial services on behalf of the second licensee (assuming that the first licensee’s licence covered the provision of those services). See paragraph 911B(1)(d).
Note 2: There is an exception to this rule in section 916E.
(2) A purported authorisation given in breach of this requirement is void.
(2A) A person must not give a purported authorisation if that purported authorisation is given in breach of this requirement.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(2B) The requirement in subsection (1) does not prohibit a financial services licensee from being an authorised representative in circumstances covered by section 916E.
Note: In a prosecution for an offence based on subsection (2A), a defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of theCriminal Code.
(3) As well, an authorisation that starts to breach this requirement, because the person authorised is subsequently granted an Australian financial services licence, is void.
916E Licensees acting under a binder
(1) Despite section 916D, a financial services licensee (the authorised licensee ) may be the authorised representative of another financial services licensee who is an insurer, if the authorised licensee acts under a binder given by the insurer.
(2) For all purposes connected with contracts that are risk insurance products, or with claims against the insurer, in respect of which the authorised licensee acts under the binder:
(a) the authorised licensee is taken to act on behalf of the insurer and not the insured; and
(b) if the insured in fact relied in good faith on the conduct of the authorised licensee, the authorised licensee is taken to act on behalf of the insurer regardless of the fact that the authorised licensee did not act within the scope of the binder.
916F Obligation to notify ASIC etc. about authorised representatives
(1) A person must lodge with ASIC a written notice (in accordance with subsection (2)), within 10 business days, if the person authorises a representative to provide a financial service as mentioned in section 916A or 916B.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(1A) A person who authorises an individual to provide a financial service on behalf of a financial services licensee as mentioned in section 916B must give the licensee written notice (in accordance with subsection (2)), within 10 business days of the individual being authorised to provide the financial service, if the licensee’s consent to the authorisation was given in respect of a specified class of individuals.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(2) The notice must include the following details:
(a) the name and business address of the representative;
(b) details of the authorisation, including the date on which it was made and what the representative is authorised to do on behalf of the relevant licensee;
(c) details of each other financial services licensee on behalf of whom the representative is an authorised representative.
(3) A person must notify ASIC, by lodging a written notice, within 10 business days if:
(a) the person authorised a representative under section 916A or 916B and there is a change in any details relating to the representative that are required to be included under subsection (2); or
(b) the person revokes the authorisation of a representative under section 916A or 916B.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(4) For the purposes of an offence based on subsection (3), strict liability applies to the physical element of circumstance of the offence, that the details mentioned in subsection (3) changed.
Note: For strict liability , see section 6.1 of theCriminal Code.
916G ASIC may give licensee information about representatives
(1) If ASIC considers it appropriate to do so, it may give information to a financial services licensee about a person who ASIC believes is, or will be, a representative of the licensee. However, ASIC may only do so if it believes, on reasonable grounds, that the information is true.
(2) A financial services licensee to whom the information is given may only make use of, make a record of, or give to another person, the information for a purpose connected with:
(a) the licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving the information; or
(b) the licensee taking action pursuant to such a decision.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(3) A person to whom information has been given for a purpose or purposes under subsection (2) or this subsection, may only make use of, make a record of, or give to another person, that information for that purpose or any of those purposes.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(4) A person has qualified privilege in respect of an act done by the person under subsection (2) or (3).
(5) A person to whom information is given in accordance with this section must not give any of the information to a court, or produce in a court a document that sets out some or all of the information, except:
(a) for a purpose connected with:
(i) a financial services licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving some or all of the information; or
(ii) a financial services licensee taking action pursuant to that decision; or
(iii) proving in a proceeding in that court that particular action taken by a financial services licensee in relation to the representative was taken pursuant to that decision; or
(b) in a proceeding in that court, in so far as the proceeding relates to an alleged breach of this section; or
(c) in a proceeding in respect of an ancillary offence relating to an offence based on this section; or
(d) in a proceeding about giving to a court false information some, at least, of which was the information given under this section.
(6) A reference in this section to a financial services licensee taking action in relation to a representative is a reference to the licensee:
(a) taking action by way of making, terminating or varying the terms and conditions of an agreement; or
(b) otherwise taking action in relation to an agreement;
to the extent that the agreement relates to the representative acting on behalf of the licensee.
(7) Subsection (5) also has the effect it would have if:
(a) a reference in it to a court were a reference to a court of an external Territory or of a country outside Australia and the external Territories; and
(b) paragraphs (5)(b) and (c) were omitted.