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 8
Division 8 - Banning or disqualification of persons from providing financial services
Subdivision A - Banning orders
920A ASIC’s power to make a banning order
(1) ASIC may make a banning order against a person, by giving written notice to the person, if:
(a) ASIC suspends or cancels an Australian financial services licence held by the person; or
(b) the person has not complied with their obligations under section 912A; or
(ba) ASIC has reason to believe that the person will not comply with their obligations under section 912A; or
(bb) the person becomes an insolvent under administration; or
(c) the person is convicted of fraud; or
(d) if the person is a declared professional body - ASIC revokes the declaration; or
(e) the person has not complied with a financial services law; or
(f) ASIC has reason to believe that the person will not comply with a financial services law.
(2) However, ASIC may only make a banning order against a person after giving the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC on the matter.
(3) Subsection (2) does not apply in so far as ASIC’s grounds for making the banning order are or include the following:
(a) that the suspension or cancellation of the relevant licence took place under section 915B;
(b) that the person has been convicted of serious fraud.
920B What is a banning order ?
(1) A banning order is a written order that prohibits a person from providing any financial services or specified financial services in specified circumstances or capacities.
(2) The order may prohibit the person against whom it is made from providing a financial service:
(a) permanently; or
(b) for a specified period, unless ASIC has reason to believe that the person is not of good fame or character.
(3) A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:
(a) to do specified acts; or
(b) to do specified acts in specified circumstances;
that the order would otherwise prohibit them from doing.
920C Effect of banning orders
(1) A person against whom a banning order is made cannot be granted an Australian financial services licence contrary to the banning order.
(2) A person contravenes this subsection if:
(a) the person engages in conduct; and
(b) the conduct breaches a banning order that has been made against the person.
Note: A contravention of this subsection is an offence (see subsection 1311(1)).
920D Variation or cancellation of banning orders
(1) ASIC may vary or cancel a banning order, by giving written notice to the person against whom the order was made, if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the person against whom the order was made lodges with ASIC an application for ASIC to do so, which is accompanied by the documents, if any, required by regulations made for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(3) If ASIC proposes not to vary or cancel a banning order in accordance with an application lodged by a person under paragraph (2)(b), ASIC must give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC on the matter.
920E Date of effect and publication of banning order, variation or cancellation
(1) A banning order, or variation or cancellation of a banning order, takes effect when it is given to the person against whom the order is or was made.
(2) ASIC must publish a notice in theGazette as soon as practicable after making, varying or cancelling a banning order. The notice must state when the action took effect and:
(a) in the case of the making of a banning order - set out a copy of the banning order; or
(b) in the case of the variation of a banning order - set out a copy of the banning order as varied.
(3) However, if the banning order contains a provision of the kind referred to in subsection 920B(3) and ASIC considers that theGazette notice would be unreasonably long if that provision were included, the notice may instead set out a summary of the provision’s effect.
(4) If ASIC makes a banning order against a person who is a participant in a licensed market or a licensed CS facility, or varies a banning order against such a person, ASIC must give the operator of the market or facility written notice of the making of the order or the variation.
920F Statement of reasons
(1) A banning order given to a person must be accompanied by a statement of reasons for the order.
(2) If ASIC varies a banning order made against a person, ASIC must, on request by the person, give the person a statement of reasons for the variation.
Subdivision B - Disqualification by the Court
921A Disqualification by the Court
(1) ASIC may apply to the Court for an order or orders under this section in relation to a person if ASIC:
(a) cancels an Australian financial services licence held by the person; or
(b) makes a banning order against the person that is to operate permanently.
(2) The Court may make:
(a) an order disqualifying the person, permanently or for a specified period, from providing any financial services, or specified financial services, in specified circumstances or capacities; or
(b) any other order the Court considers appropriate.
(3) The Court may revoke or vary an order made under subsection (2).
(4) A person against whom such an order is made cannot be granted an Australian financial services licence contrary to the order.
(5) If the Court makes or varies an order under this section in relation to a person who is a participant in a licensed market or a licensed CS facility, ASIC must give the operator of the market or facility written notice of the making of the order or the variation.