Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.2A - SUPERVISION OF FINANCIAL MARKETS  

SECTION 798F  

798F   ASIC TO SUPERVISE FINANCIAL MARKETS  


ASIC has the function of supervising financial markets the operators of which are licensed under subsection 795B(1).

SECTION 798G   MARKET INTEGRITY RULES  

798G(1)    
ASIC may, by legislative instrument, make rules (the market integrity rules ) that deal with the following:


(a) the activities or conduct of licensed markets;


(b) the activities or conduct of persons in relation to licensed markets;


(c) the activities or conduct of persons in relation to financial products traded on licensed markets.

Note: The market integrity rules will not apply in relation to all licensed markets: see subsection 798H(2).


798G(2)    
(Repealed by No 17 of 2019, s 3, Sch 1 [ 48] (effective 13 March 2019).)

798G(3)    
ASIC must not make a market integrity rule unless the Minister has consented, in writing, to the making of the rule.

Emergency rules

798G(4)    
Despite subsection (3), ASIC may make a market integrity rule without the consent of the Minister if ASIC is of the opinion that it is necessary, or in the public interest, to protect people dealing in a financial product or class of financial products.

798G(5)    
However, if ASIC does so, ASIC must:


(a) provide the Minister, on the following day, with a written explanation of the need for the rule; and


(b) amend or revoke the rule in accordance with any written directions of the Minister.

Minister ' s instruments are not legislative instruments

798G(6)    
None of the following is a legislative instrument:


(a) a consent given under subsection (3);


(b) a direction given under paragraph (5)(b).

SECTION 798H   COMPLYING WITH MARKET INTEGRITY RULES  

798H(1)    
The following entities must comply with the market integrity rules:


(a) operators of licensed markets;


(b) participants in licensed markets;


(c) entities prescribed by the regulations for the purposes of this paragraph.

Note: This subsection is a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.


798H(2)    
Subsection (1) does not apply in relation to a financial market the operator of which is licensed under subsection 795B(2) (overseas markets).

798H(3)    


If there is an inconsistency between the market integrity rules and the derivative transaction rules or the derivative trade repository rules, the market integrity rules prevail to the extent of the inconsistency.

SECTION 798J   DIRECTIONS BY ASIC  

798J(1)   [ Advice of opinion that direction necessary]  

If ASIC is of the opinion that it is necessary, or in the public interest, to protect people dealing in a financial product or class of financial products by:


(a) giving a direction to an entity to suspend dealings in the financial product or class of financial products; or


(b) giving some other direction in relation to those dealings;

ASIC may give written advice to the entity of that opinion and the reasons for it.

Note: ASIC may also give directions to entities that are market licensees under section 794D. A failure to comply with a direction under that section is an offence (see subsection 1311(1)).

798J(2)   [ When direction may be given]  

If, after receiving ASIC ' s advice and reasons, the entity does not take:


(a) in the case of a proposed direction to suspend dealings in the financial products - action to prevent such dealings; or


(b) in any other case - such other action as in ASIC ' s view is adequate to address the situation raised in the advice;

and ASIC still considers that it is appropriate to give the direction to the entity, ASIC may give the entity the written direction with a statement setting out its reasons for making the direction.

798J(3)   [ Period for compliance]  

The direction has effect for the period specified in it (which may be up to 21 days). During that period, the entity must comply with the direction and must not allow any dealings to take place contrary to it.

798J(4)   [ Failure to comply]  

If the entity fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the entity comply with the direction.

798J(5)   [ Referral to Minister]  

If, at any time after the entity receives ASIC ' s advice under subsection (1), the entity requests in writing that ASIC refer the matter to the Minister, ASIC must do so immediately. In that event, the Minister may, if he or she considers it appropriate, require ASIC not to make, or to revoke, the direction. ASIC must immediately comply with such a requirement.

798J(6)   [ Variation of direction]  

ASIC may vary a direction by giving written notice to the entity if ASIC is of the opinion that the variation is necessary, or in the public interest, to protect people dealing in a financial product or class of financial products.

798J(7)   [ Revocation of direction]  

ASIC may revoke a direction by giving written notice to the entity.

798J(8)   [ Direction not a legislative instrument]  

A direction given under subsection (2) is not a legislative instrument.

SECTION 798K   ALTERNATIVES TO CIVIL PROCEEDINGS  

798K(1)    
The regulations may provide for a person who is alleged to have contravened subsection 798H(1) (complying with market integrity rules) to do one or more of the following as an alternative to civil proceedings:


(a) pay a penalty to the Commonwealth;


(b) undertake or institute remedial measures (including education programs);


(c) accept sanctions other than the payment of a penalty to the Commonwealth;


(d) enter into a legally enforceable undertaking.

798K(2)    


The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a market integrity rule must not exceed:


(a) for an individual - 3,000 penalty units; and


(b) for a body corporate - 15,000 penalty units.


798K(3)    
Without limiting regulations that may be made under paragraph (1)(d), those regulations may provide for one or more of the following kinds of undertakings:


(a) an undertaking to take specified action within a specified period;


(b) an undertaking to refrain from taking specified action;


(c) an undertaking to pay a specified amount within a specified period to the Commonwealth or to some other specified person.


SECTION 798L   EXEMPTIONS AND MODIFICATIONS BY REGULATIONS  

798L(1)   [ Regulations may exempt or modify]  

The regulations may:


(a) exempt a person or class of persons from all or specified provisions of this Part; or


(b) exempt a financial market or class of financial markets from all or specified provisions of this Part; or


(c) provide that this Part applies in relation to a person or a financial market, or a class of persons or financial markets, as if specified provisions were omitted, modified or varied as specified in the regulations.

798L(2)   [ Part includes definitions]  

For the purpose of this section, the provisions of this Part include definitions in this Act, or in the regulations, as they apply to references in this Part.

SECTION 798M   EXEMPTIONS BY MINISTER  

798M(1)    
The Minister may exempt a particular financial market, or class of financial markets, from all or specified provisions of this Part. An exemption may be unconditional, or subject to conditions specified in the exemption.

Note: The provisions of this Part include regulations made for the purposes of this Part (see section 761H ).


798M(2)    
The Minister may, at any time:


(a) vary an exemption to:


(i) impose conditions, or additional conditions, on the exemption; or

(ii) vary or revoke any of the conditions on the exemption; or


(b) revoke an exemption.

798M(3)    
However, the Minister may only take action under subsection (2) after:


(a) giving notice, and an opportunity to make submissions on the proposed action, to the operator of each financial market known by the Minister to be covered by the exemption; and


(b) if the exemption covers a class of financial markets - a notice has been published on ASIC ' s website allowing a reasonable period within which the operator of each financial market covered by the exemption may make submissions on the proposed action, and that period has ended.

798M(4)    
If an exemption is expressed to apply in relation to a class of financial markets (whether or not it is also expressed to apply in relation to one or more financial markets otherwise than by reference to membership of a class), then the exemption, and any variation or revocation of the exemption, is a legislative instrument.

798M(5)    
If subsection (4) does not apply to an exemption, then the exemption, and any variation or revocation of the exemption, must be in writing and the Minister must publish notice of it in the Gazette.