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 7.11 - Division 3

Division 3 - Transfer of certain securities effected otherwise than through a prescribed CS facility

1073A Application of the Division to certain securities

(1) This Division applies to the following securities:

(a) shares in a company;

(b) debentures of a company;

(c) interests in a registered scheme, being interests that are covered by regulations made for the purposes of this paragraph;

(d) rights (whether existing or future, and whether contingent or not) to acquire, by way of issue, a security referred to in paragraph (a), (b) or (c) (whether or not on payment of any money or for any other consideration);

(e) securities declared by ASIC under section 1073E to be securities to which the regulations apply.

(2) This Division applies to an interest in a registered scheme as if:

(a) references to a company were instead references to the responsible entity of the registered scheme; and

(b) references to the constitution of a company were instead references to the constitution of the registered scheme; and

(c) references to members of a company were instead references to members of the registered scheme.

1073B Definitions

In this Division, unless the contrary intention appears:

transfer of a financial product means:

(a) a change in the ownership of the financial product; or

(b) if the financial product is a right - the renunciation and transfer of the right.

transfer document for the transfer of a financial product means a document, or electronic message or other electronic communication, by which the financial product is transferred.

1073C Application of Division to certain bodies as if they were companies

This Division applies to the following as if they were companies:

(a) a body corporate (other than a company) that:

(i) is incorporated in a State or Territory in this jurisdiction; and

(ii) is prescribed by regulations made for the purposes of this subparagraph;

(b) an unincorporated society, association or body, that:

(i) is formed or established in a State or Territory in this jurisdiction; and

(ii) is included in the official list of a licensed market; and

(iii) is prescribed by regulations made for the purposes of this paragraph.

1073D Regulations may govern transfer of certain securities

(1) The regulations may make provision in relation to transfers of securities that are not effected through a prescribed CS facility.

Regulations may make provision in relation to the transfer of securities

(2) The regulations may specify:

(a) the way in which a security may be transferred, including:

(i) the forms (if any) to be used; and

(ii) what amounts to a proper or sufficient transfer of a security; and

(b) the legal effect of a proper or sufficient transfer of a security; and

(c) the rights, liabilities and obligations of a person in relation to the transfer of a security, including the rights, liabilities and obligations of:

(i) the transferor and transferee; and

(ii) any other person involved in the transfer; and

(d) the circumstances in which a person will be taken to be involved in the transfer of a security for the purposes of the regulations; and

(e) the circumstances in which a person is required not to register, or give effect to, a transfer.

Sufficient transfer

(3) Without limiting paragraph (2)(a), the regulations may:

(a) specify the requirements for a document to be a sufficient transfer of a security; and

(b) provide that a document meeting specified requirements may be used:

(i) as a proper instrument of transfer for the purposes of section 1071B; and

(ii) as an instrument of transfer for the purposes of any other law or instrument governing or relating to the security.

Rights and liabilities in relation to transfer

(4) Without limiting paragraph (2)(c), the regulations may provide that a person:

(a) is taken to have:

(i) agreed to do, to accept or to be bound by a particular thing; or

(ii) done a particular thing; or

(iii) given particular warranties; or

(iv) done particular things on behalf of another person; or

(b) is taken to be authorised to do particular things on behalf of another person; or

(c) is taken to be bound by a particular act; or

(d) is liable to indemnify another person against particular loss or damage; or

(e) is entitled to assume a particular matter without inquiry.

Person involved in transfer

(5) Without limiting paragraph (2)(d), the regulations may provide for any of the following to be taken to be involved in a transfer of securities:

(a) a person who carries on a financial services business and who arranges for the transfer; and

(b) a person who operates a financial market on which the securities are sold; and

(c) a person who operates a licensed CS facility through which the securities are transferred; and

(d) a company with which the transfer is lodged for registration; and

(e) an associate of a person who is involved in the transfer.

The regulations may specify the circumstances in which a person will be taken to be an associate of another person for the purposes of the regulations.

Offences

(6) Without limiting subsection (2), the regulations may provide for offences in relation to:

(a) the use, or purported use, of a stamp of a person who:

(i) carries on a financial services business; or

(ii) operates a financial market; or

(iii) operates a clearing and settlement facility; or

(b) the execution of a document, or the transmission of an electronic message or other electronic communication, that may be used as a sufficient transfer under this Division; or

(c) the lodgment of a transfer document or title document for a security with the issuer of the security; or

(d) the use of identifying codes in relation to transfers of securities.

Jurisdiction

(7) The regulations may apply to conduct engaged in in this jurisdiction or elsewhere.

1073E ASIC may extend regulations to securities not otherwise covered

(1) ASIC may, by writing, declare that:

(a) particular securities; or

(b) a particular class of securities;

are securities to which this Division, and regulations made for the purposes of section 1073D, apply.

Note: The securities in respect of which a declaration under this subsection may be made are not limited to those covered by paragraphs 1073A(1)(a) to (d).

(2) ASIC may specify in the declaration modifications of the regulations that are to have effect in relation to the application of this Division and the regulations to the securities, or the class of securities, to which the declaration relates.

(3) A declaration under subsection (1) has effect accordingly.

(4) ASIC must cause a copy of a declaration under subsection (1) to be published in theGazette.

(5) If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under subsection (1) had not been made, that conduct does not constitute an offence unless, before the conduct occurred (in addition to complying with the gazettal requirement of subsection (4)):

(a) the text of the declaration was made available by ASIC on the Internet; or

(b) ASIC gave written notice setting out the text of the declaration to the person.

In a prosecution for an offence to which this subsection applies, the prosecution must prove that paragraph (a) or (b) was complied with before the conduct occurred.

1073F Operation of this Division and regulations made for its purposes

(1) This section deals with the effect of the provisions of:

(a) this Division; and

(b) the regulations made for the purposes of this Division.

(2) The provisions apply in relation to a transfer of securities despite anything to the contrary in:

(a) this Act (other than this Division); or

(b) another law, or instrument, relating to the transfer of the securities.

(3) Except as provided in the provisions, the provisions do not affect the terms and conditions on which securities are sold.

(4) Nothing in the provisions affects any right of the issuer of a security to refuse:

(a) to acknowledge or register a person as the holder of a security; or

(b) to issue a security to a person;

on a ground other than an objection to the form of document, or electronic message or other electronic communication, that is lodged with or sent to the issuer and purports to transfer the security to the person.

(5) The registration of a transfer, or the issue, of a security by means of a transfer effected in accordance with regulations made for the purposes of this Division does not breach any law, constitution, trust deed or other instrument relating to financial products.

(6) Nothing in the provisions prevents or affects the use of:

(a) any other form of transfer of securities; or

(b) any other mode of executing a document transferring securities;

that is otherwise permitted by law.

(7) A transfer of a security by or to a trustee or legal representative may be effected by means of a transfer in accordance with regulations made for the purposes of this Division. The transfer may be so effected despite the means required by any law or the provisions of the instrument (if any) creating, or having effect in relation to, the trust or will under which the trustee or legal representative is appointed.

(8) In subsection (7):

legal representative means:

(a) the executor, original or by representation, of a will of a dead person; or

(b) the administrator of the estate of a dead person.