FINANCIAL SECTOR REFORM BILL 2022

2022

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Financial Sector Reform Bill 2022

No. , 2022

(Treasury)

A Bill for an Act to deal with consequential

amendments and transitional matters arising from

the enactment of the Financial Accountability

Regime Act 2022, to establish the financial services

compensation scheme of last resort, to amend the

National Consumer Credit Protection Act 2009, and

for related purposes

No. , 2022

Financial Sector Reform Bill 2022

Contents

Short title ........................................................................................... 1

Commencement ................................................................................. 2

Schedules ........................................................................................... 3

Schedule 1--Consequential amendments

Part 1--Amendments for the start of the financial

accountability regime

Australian Prudential Regulation Authority Act 1998

Australian Securities and Investments Commission Act 2001

Banking Act 1959

Corporations Act 2001

Financial Regulator Assessment Authority Act 2021

Financial Sector (Transfer and Restructure) Act 1999

Insurance Act 1973

Life Insurance Act 1995

National Consumer Credit Protection Act 2009

Payment Systems and Netting Act 1998

Private Health Insurance (Prudential Supervision) Act 2015

Superannuation Industry (Supervision) Act 1993

Part 2--Amendments for the end of the banking executive

accountability regime

Australian Prudential Regulation Authority Act 1998

Banking Act 1959

Schedule 2--Application, saving and transitional provisions

Part 1--Preliminary

Part 2--Banking sector

Division 1--Key personnel obligations

Division 2--Deferred remuneration obligations

Division 3--Notification obligations

Division 4--Regulatory powers and enforcement

Part 3--Other sectors

Financial Sector Reform Bill 2022

No. , 2022

Division 1--Key personnel obligations

Division 2--Deferred remuneration obligations

Division 3--Insurance

Division 4--Life insurance

Division 5--Private health insurance

Division 6--Superannuation

Part 4--APRA and ASIC

Division 1--Transition from the BEAR

Division 2--Application of the FAR

Part 5--Transitional rules

Schedule 3--Financial services compensation scheme of last

resort

Part 1--Main amendments

Corporations Act 2001

Part 2--Other amendments

Australian Securities and Investments Commission Act 2001

Corporations Act 2001

National Consumer Credit Protection Act 2009

Schedule 4--Consumer credit reforms

Part 1--Small amount credit contracts

National Consumer Credit Protection Act 2009

Part 2--Consumer leases

National Consumer Credit Protection Act 2009

Part 3--Proscribed referrals

106

National Consumer Credit Protection Act 2009

106

Part 4--Avoidance

108

National Consumer Credit Protection Act 2009

108

Part 5--Consumer leases for indefinite terms

114

National Consumer Credit Protection Act 2009

114

No. , 2022

Financial Sector Reform Bill 2022

A Bill for an Act to deal with consequential

amendments and transitional matters arising from

the enactment of the Financial Accountability

Regime Act 2022, to establish the financial services

compensation scheme of last resort, to amend the

National Consumer Credit Protection Act 2009, and

for related purposes

The Parliament of Australia enacts:

1 Short title

This Act is the

Financial Sector Reform Act 2022

Financial Sector Reform Bill 2022

No. , 2022

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day after this Act receives the Royal

Assent.

2. Schedule 1,

Part 1

At the same time as the

Financial

Accountability Regime Act 2022

commences.

However, the provisions do not commence

at all if that Act does not commence.

3. Schedule 1,

Part 2

The day that is 6 months after the

Financial

Accountability Regime Act 2022

commences.

However, the provisions do not commence

at all if that Act does not commence.

4. Schedule 2

At the same time as the

Financial

Accountability Regime Act 2022

commences.

However, the provisions do not commence

at all if that Act does not commence.

5. Schedule 3

At the same time as the

Financial Services

Compensation Scheme of Last Resort Levy

Act 2022

commences.

However, the provisions do not commence

at all if that Act does not commence.

6. Schedule 4,

Parts 1 and 2

The day after the end of the period of 6

months beginning on the day this Act

receives the Royal Assent.

7. Schedule 4,

The seventh day after this Act receives the

No. , 2022

Financial Sector Reform Bill 2022

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

Part 3

Royal Assent.

8. Schedule 4,

Part 4

The day after this Act receives the Royal

Assent.

9. Schedule 4,

Parts 5 and 6

The day after the end of the period of 6

months beginning on the day this Act

receives the Royal Assent.

10. Schedule 4,

Part 7

The day after this Act receives the Royal

Assent.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

Schedule 1--Consequential amendments

Part 1--Amendments for the start of the financial

accountability regime

Australian Prudential Regulation Authority Act 1998

1 Subsection 3(1) (after paragraph (b) of the definition of

prudential regulation framework law)

Insert:

(ba) the

Financial Accountability Regime Act 2022

;

(bb) Schedules 1 and 2 to the

Financial Sector Reform Act 2022

;

2 Section 48

Omit "Under", substitute "(1) Under".

3 At the end of section 48

Add:

(2) Subsection (1) does not apply to an appointment made under, or for

the purposes of, the

Financial Accountability Regime Act 2022

4 Paragraph 53(1)(d)

Repeal the paragraph, substitute:

(d) amounts of any fees, charges or penalties paid to APRA, on

behalf of the Commonwealth, under section 51 or any other

law of the Commonwealth except the following:

(i) Part 3A of the

Financial Institutions Supervisory Levies

Collection Act 1998

;

(ii) the

Financial Accountability Regime Act 2022

;

5 Subsection 56(1) (after paragraph (cb) of the definition of

protected document)

Insert:

or (cc) a person in relation to whom information is, or was, required

to be given under the

Financial Accountability Regime Act

2022

;

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

6 Subsection 56(1) (after paragraph (d) of the definition of

protected document)

Insert:

(da) a document given or produced to ASIC under, or for the

purposes of, a provision of the

Financial Accountability

Regime Act 2022

, other than a document given or produced

to ASIC by APRA; or

7 Subsection 56(1) (after paragraph (cb) of the definition of

protected information)

Insert:

or (cc) a person in relation to whom information is, or was, required

to be given under the

Financial Accountability Regime Act

2022

;

8 Subsection 56(1) (after paragraph (d) of the definition of

protected information)

Insert:

(da) information given or produced to ASIC under, or for the

purposes of, a provision of the

Financial Accountability

Regime Act 2022

, other than information given or produced

to ASIC by APRA; or

9 Paragraph 56(2)(c)

Omit "or (7F)", substitute ", (7F), (7G), (7H), (7J), (7K) or (7L)".

10 After subsection 56(7F)

Insert:

(7G) It is not an offence if:

(a) the disclosure of protected information or the production of a

protected document is to an accountable entity (within the

meaning of the

Financial Accountability Regime Act 2022

);

and

(b) the information, or the information contained in the

document, as the case may be, is information contained in the

Financial Accountability

Regime Act 2022

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (7G) (see subsection 13.3(3) of the

Criminal Code

(7H) It is not an offence if:

(a) the disclosure of protected information or the production of a

protected document is to an individual; and

(b) the information, or the information contained in the

document, as the case may be, is only personal information

about the individual; and

document, as the case may be, is information contained in the

Financial Accountability

Regime Act 2022

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (7H) (see subsection 13.3(3) of the

Criminal Code

(7J) It is not an offence if:

(a) the disclosure of protected information or the production of a

protected document is by APRA; and

(b) the information, or the information contained in the

document, as the case may be, is information that discloses:

(i) whether a person is disqualified under section 42 of the

Financial Accountability Regime Act 2022

; or

(ii) a decision made under Division 2 of Part 3 of Chapter 3

of that Act (which is about disqualification of

accountable persons), or the reasons for such a decision.

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (7J) (see subsection 13.3(3) of the

Criminal Code)

(7K) It is not an offence if the disclosure of protected information or the

production of a protected document by a person is in accordance

with section 39 of the

Financial Accountability Regime Act 2022

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (7K) (see subsection 13.3(3) of the

Criminal Code

(7L) It is not an offence if:

(a) the disclosure of protected information or the production of a

protected document is by ASIC, for the purposes of the

performance of ASIC's functions, or the exercise of ASIC's

powers; and

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(b) the protected information was disclosed previously to ASIC,

or the protected document was produced previously to ASIC,

in accordance with section 39 of the

Financial Accountability

Regime Act 2022

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (7L) (see subsection 13.3(3) of the

Criminal Code

11 Paragraph 56(12)(a)

Omit "and (7F)", substitute ", (7F), (7G), (7H), (7J), (7K) and (7L)".

12 At the end of subsection 58(4)

Add:

; (d) section 101 or 102 of the

Financial Accountability Regime

Act 2022

13 After paragraph 59(2)(ba)

Insert:

(bb) information about investigations (including joint

investigations) conducted by APRA under Division 1 of

Part 4 of Chapter 3 of the

Financial Accountability Regime

Act 2022

during the period;

14 After subsection 59(3)

Insert:

(4) Paragraph (2)(bb) does not authorise the inclusion in the annual

report of information with respect to the affairs of a particular

person.

Australian Securities and Investments Commission Act 2001

15 Subsection 12A(1)

Omit "Acts".

16 At the end of subsection 12A(1)

Add:

; (m) the

Financial Accountability Regime Act 2022

;

(n) Schedules 1 and 2 to the

Financial Sector Reform Act 2022

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

17 After subsection 127(6)

Insert:

(7) A person (the

officer

) commits an offence if:

(a) the officer is or has been:

(i) a member of ASIC; or

(ii) a staff member; or

(iii) a Commonwealth officer within the meaning of the

Crimes Act 1914

; and

(b) the officer intentionally or recklessly, and directly or

indirectly:

(i) discloses information to any person or to a court; or

(ii) produces a document to any person or to a court; and

information disclosed to, or obtained by, ASIC for the

purposes of a function (a

FAR-related function

) conferred

on ASIC by:

(i) the

Financial Accountability Regime Act 2022

; or

(ii) Schedule 1 or 2 to the

Financial Sector Reform Act

2022

; and

(d) if subparagraph (b)(ii) applies--the document:

(i) is protected information and was given or produced to

ASIC for the purposes of a FAR-related function; or

(ii) contains protected information disclosed to, or obtained

by, ASIC for the purposes of a FAR-related function;

and

(e) the officer acquired the information, or has or had access to

the document, as the case may be, in the course of the

officer's duties as a member of ASIC, a staff member or a

Commonwealth officer within the meaning of the

Crimes Act

1914

Penalty: Imprisonment for 2 years.

(7A) Subsection (7) does not apply if the disclosure or production

constitutes authorised disclosure of the protected information for

the purposes of subsection (1).

Note:

A defendant bears an evidential burden in relation to the matter in this

subsection (see subsection 13.3(3) of the

Criminal Code

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(8) A document is an exempt document for the purposes of section 38

of the

Freedom of Information Act 1982

if the document:

(a) is protected information and was given or produced to ASIC;

(b) contains protected information disclosed to, or obtained by,

ASIC;

for the purposes of a function conferred on ASIC by:

Financial Accountability Regime Act 2022

; or

(d) Schedule 1 or 2 to the

Financial Sector Reform Act 2022

18 After paragraph 136(1)(da)

Insert:

(db) information about investigations (including joint

investigations) conducted by ASIC under Division 1 of Part 4

of Chapter 3 of the

Financial Accountability Regime Act

2022

during the period;

19 After subsection 136(2A)

Insert:

(3) Paragraph (1)(db) does not authorise the inclusion in the annual

report of information with respect to the affairs of a particular

person.

20 In the appropriate position

Insert:

Part 38--Transitional provisions relating to the

Financial Sector Reform Act 2022

340 Application--confidentiality

The amendment of section 12A made by Part 1 of Schedule 1 to

the

Financial Sector Reform Act 2022

, so far as it relates to the

definition of protected information in subsection 127(9) of this Act,

applies in relation to any use or disclosure of information after the

commencement of that Part, whether ASIC obtained the

information before or after that commencement.

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

341 Information to be included in ASIC's annual report

The amendment of section 136 made by Part 1 of Schedule 1 to the

Financial Sector Reform Act 2022

applies to reports on ASIC's

investigations during the financial year ending on 30 June 2024,

and later financial years.

Banking Act 1959

21 After subparagraph 9A(2)(b)(ii)

Insert:

(iia) a requirement of the

Financial Accountability Regime

Act 2022

;

22 After subparagraph 11AB(2)(a)(ii)

Insert:

(iia) a requirement of the

Financial Accountability Regime

Act 2022

;

23 Paragraph 15D(1)(a)

After "the

Financial Sector (Collection of Data) Act 2001

", insert "or

the

Financial Accountability Regime Act 2022

24 Paragraph 15D(1)(b)

Omit "that Act", substitute "those Acts".

25 At the end of subsection 16B(1)

Add "or the

Financial Accountability Regime Act 2022

26 Subparagraph 16BA(6)(a)(i)

Omit "the regulations or the

Financial Sector (Collection of Data) Act

2001

", substitute "the regulations, the

Financial Sector (Collection of

Data) Act 2001

or the

Financial Accountability Regime Act 2022

27 Section 16C

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

28 Paragraph 17(2)(a)

Omit "this Act or the prudential standards", substitute "this Act, the

prudential standards or the

Financial Accountability Regime Act 2022

29 After subparagraph 20(1)(a)(ii)

Insert:

(iia) the

Financial Accountability Regime Act 2022

; or

30 Section 69BA

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

Corporations Act 2001

31 After subparagraph 1317AA(5)(c)(iii)

Insert:

(iiia) the

Financial Accountability Regime Act 2022

;

Financial Regulator Assessment Authority Act 2021

32 Subparagraph 40(3)(a)(iv)

Omit "or".

33 At the end of paragraph 40(3)(a)

Add:

(v) subsection 72(1) or section 73 of the

Financial

Accountability Regime Act 2022

; or

Financial Sector (Transfer and Restructure) Act 1999

34 At the end of paragraph 36B(1A)(a)

Add:

(iv) section 64 of the

Financial Accountability Regime Act

2022

;

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

Insurance Act 1973

35 After subparagraph 15(1)(a)(ii)

Insert:

(iiaa) a requirement of the

Financial Accountability Regime

Act 2022

; or

36 After subparagraph 21(1)(a)(ii)

Insert:

(iiaa) a requirement of the

Financial Accountability Regime

Act 2022

; or

37 After subparagraph 25(1)(a)(ii)

Insert:

(iia) the

Financial Accountability Regime Act 2022

; or

38 After paragraph 43(2)(a)

Insert:

(aa) has failed to comply with a requirement of the

Financial

Accountability Regime Act 2022

; or

39 After subparagraph 44(1)(a)(i)

Insert:

(ia) the person has failed to comply with a requirement of

the

Financial Accountability Regime Act 2022

;

40 Paragraph 44(4)(a)

Omit "this Act and the prudential standards", substitute "this Act, the

prudential standards and the

Financial Accountability Regime Act

2022

41 After subparagraphs 48(1)(a)(i) and (2)(a)(i)

Insert:

(ia) the

Financial Accountability Regime Act 2022

; or

42 At the end of subsection 49(1)

Add "or the

Financial Accountability Regime Act 2022

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

43 Subparagraph 49A(6)(a)(iv)

Omit "this Act or a requirement under the

Financial Sector (Collection

of Data) Act 2001

", substitute "this Act, a requirement under the

Financial Sector (Collection of Data) Act 2001

or a requirement of the

Financial Accountability Regime Act 2022

44 Section 49B

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

45 After subparagraph 62M(1)(a)(iv)

Insert:

(ivaa) the general insurer has failed to comply with a

requirement of the

Financial Accountability Regime Act

2022

; or

46 Subsection 62W(1)

Repeal the subsection, substitute:

(1) None of the matters mentioned in subsection (2) affect:

(a) the continued operation of other Parts of this Act in relation

to a general insurer; or

(b) the operation of the

Financial Sector (Collection of Data) Act

2001

or the

Financial Accountability Regime Act 2022

relation to a general insurer; or

Parts and those Acts.

47 Subsection 62ZOY(1)

Repeal the subsection, substitute:

(1) None of the matters mentioned in subsection (2) affect:

(a) the continued operation of other provisions of this Act in

relation to a body corporate; or

(b) the operation of the

Financial Sector (Collection of Data) Act

2001

or the

Financial Accountability Regime Act 2022

relation to a body corporate; or

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

provisions and those Acts.

48 Section 129AA

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

Life Insurance Act 1995

49 Paragraph 21(3)(e)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

50 After subparagraph 26(1)(a)(ii)

Insert:

(iia) a requirement of the

Financial Accountability Regime

Act 2022

; or

51 After subparagraph 28C(1)(a)(ii)

Insert:

(iiaa) a requirement of the

Financial Accountability Regime

Act 2022

; or

52 After paragraph 85(1)(b)

Insert:

(ba) the person has failed to comply with a requirement of the

Financial Accountability Regime Act 2022

; or

53 Paragraph 88(1)(a)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

54 Subparagraph 88(3)(a)(i)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

55 Section 88A

Omit "this Act or under the

Financial Sector (Collection of Data) Act

2001

", substitute "this Act, the

Financial Sector (Collection of Data)

Act 2001

or the

Financial Accountability Regime Act 2022

56 Subsection 88B(1)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

57 Paragraph 89(2)(a)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

58 After paragraph 94(1)(b)

Insert:

(ba) the person has failed to comply with a requirement of the

Financial Accountability Regime Act 2022

; or

59 Paragraph 98(1)(a)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

60 Subparagraph 98(3)(a)(i)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

61 Section 98A

Omit "this Act or under the

Financial Sector (Collection of Data) Act

2001

", substitute "this Act, the

Financial Sector (Collection of Data)

Act 2001

or the

Financial Accountability Regime Act 2022

62 Subsection 98B(1)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

63 Paragraph 99(2)(a)

After "this Act", insert "or the

Financial Accountability Regime Act

2022

64 Paragraph 125A(2)(c)

Omit "the regulations or the

Financial Sector (Collection of Data) Act

2001

", substitute "the regulations, the

Financial Sector (Collection of

Data) Act 2001

or the

Financial Accountability Regime Act 2022

65 Subsection 166(1)

Repeal the subsection, substitute:

(1) None of the matters mentioned in subsection (2) affect:

(a) the continued operation of other Parts of this Act in relation

to a life company; or

(b) the operation of the

Financial Sector (Collection of Data)

Act 2001

or the

Financial Accountability Regime Act 2022

relation to a life company; or

Parts and those Acts.

66 Subsection 179AY(1)

Repeal the subsection, substitute:

(1) None of the matters mentioned in subsection (2) affect:

(a) the continued operation of other provisions of this Act in

relation to a body corporate; or

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(b) the operation of the

Financial Sector (Collection of Data) Act

2001

or the

Financial Accountability Regime Act 2022

relation to a body corporate; or

provisions and those Acts.

67 Paragraph 245(1)(a)

Omit "this Act or the

Life Insurance Act 1945

", substitute "this Act, the

repealed

Life Insurance Act 1945

or the

Financial Accountability

Regime Act 2022

68 Subsection 248(2)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

National Consumer Credit Protection Act 2009

69 Subsection 5(1) (definition of large ADI)

Omit "has the same meaning as in the

Banking Act 1959

", substitute

"means an ADI of a kind determined under subsection (1A)".

70 After subsection 5(1)

Insert:

(1A) The Minister may, by legislative instrument, determine the kinds of

ADIs that are large ADIs.

Payment Systems and Netting Act 1998

71 Section 5 (after paragraph (b) of the definition of direction

stay provision)

Insert:

(baa) subsection 77(2) of the

Financial Accountability Regime Act

2022

;

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

72 Section 5 (before paragraph (fc) of the definition of

specified provisions)

Insert:

(fca) subsections 77(3) and (4) of the

Financial Accountability

Regime Act 2022

;

73 Section 5 (after paragraph (e) of the definition of specified

stay provision)

Insert:

(eaa) subsection 77(2) of the

Financial Accountability Regime Act

2022

;

Private Health Insurance (Prudential Supervision) Act 2015

74 After subsection 21(1)

Insert:

(1A) APRA may, in writing, cancel the registration of a private health

insurer if APRA is satisfied that the private health insurer has

failed to comply with a requirement of the

Financial

Accountability Regime Act 2022

75 Subsections 84(1) and (2)

Omit "or of the

Private Health Insurance Act 2007

", substitute "the

Private Health Insurance Act 2007

or the

Financial Accountability

Regime Act 2022

76 After paragraph 107(2)(c)

Insert:

; and (d) the

Financial Accountability Regime Act 2022

77 Subsection 107(2) (note 2)

Omit "paragraphs (b) and (c)", substitute "paragraphs (b), (c) and (d)".

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

78 Paragraph 110(1)(a)

Omit "the

Private Health Insurance Act 2007

or the

Financial Sector

(Collection of Data) Act 2001

", substitute "the

Private Health

Insurance Act 2007

, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

79 Subparagraph 110(5)(a)(i)

Omit "the

Private Health Insurance Act 2007

or the

Financial Sector

(Collection of Data) Act 2001

", substitute "the

Private Health

Insurance Act 2007

, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

80 Subsections 111(1) and 112(1)

Omit "the

Private Health Insurance Act 2007

or the

Financial Sector

(Collection of Data) Act 2001

", substitute "the

Private Health

Insurance Act 2007

, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

81 Paragraph 113(2)(a)

Omit "the

Private Health Insurance Act 2007

or the

Financial Sector

(Collection of Data) Act 2001

", substitute "the

Private Health

Insurance Act 2007

, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

82 After subparagraph 119(1)(a)(iii)

Insert:

(iiia) the

Financial Accountability Regime Act 2022

; or

83 After subparagraph 120(4)(b)(iii)

Insert:

(iiia) the

Financial Accountability Regime Act 2022

;

84 Subsection 168(1) (after table item 3)

Insert:

to cancel the registration of a private health

insurer

subsection 21(1A)

Schedule 1

Consequential amendments

Part 1

Amendments for the start of the financial accountability regime

Financial Sector Reform Bill 2022

No. , 2022

Superannuation Industry (Supervision) Act 1993

85 Subsection 10(1) (after paragraph (c) of the definition of

RSE licensee law)

Insert:

(ca) the

Financial Accountability Regime Act 2022

; and

86 Section 38A (before paragraph (ab) of the definition of

regulatory provision)

Insert:

(aba) a provision of the

Financial Accountability Regime Act 2022

;

87 Paragraph 126H(3)(a)

Omit "this Act or the

Financial Sector (Collection of Data) Act 2001

substitute "this Act, the

Financial Sector (Collection of Data) Act 2001

or the

Financial Accountability Regime Act 2022

88 Subparagraph 129(1)(a)(ii)

After "

Financial Sector (Collection of Data) Act 2001

", insert "or the

Financial Accountability Regime Act 2022

89 Section 130A

Omit "the prudential standards or the

Financial Sector (Collection of

Data) Act 2001

", substitute "the prudential standards, the

Financial

Sector (Collection of Data) Act 2001

or the

Financial Accountability

Regime Act 2022

90 At the end of paragraph 130D(4)(a)

Add:

(iv) any duties required to be performed under the

Financial

Accountability Regime Act 2022

; or

91 Paragraph 131AA(2)(c)

Omit "the prudential standards or the

Financial Sector (Collection of

Data) Act 2001

", substitute "the prudential standards, the

Financial

Sector (Collection of Data) Act 2001

or the

Financial Accountability

Regime Act 2022

Consequential amendments

Schedule 1

Amendments for the start of the financial accountability regime

Part 1

No. , 2022

Financial Sector Reform Bill 2022

92 At the end of paragraph 131A(1)(a)

Add:

(iv) any duties required to be performed under the

Financial

Accountability Regime Act 2022

; or

93 Subparagraph 313(1)(a)(ii)

Omit "this Act or under the

Financial Sector (Collection of Data) Act

2001

", substitute "this Act, or under the

Financial Sector (Collection of

Data) Act 2001

or the

Financial Accountability Regime Act 2022

,".

Schedule 1

Consequential amendments

Part 2

Amendments for the end of the banking executive accountability regime

Financial Sector Reform Bill 2022

No. , 2022

Part 2--Amendments for the end of the banking

executive accountability regime

Australian Prudential Regulation Authority Act 1998

94 Subsection 56(1) (paragraph (cb) of the definition of

protected document)

Repeal the paragraph.

95 Subsection 56(1) (paragraph (cb) of the definition of

protected information)

Repeal the paragraph.

96 Paragraph 56(2)(c)

Omit "(7D), (7E), (7F),".

97 Subsections 56(7D), (7E) and (7F)

Repeal the subsections.

98 Paragraph 56(12)(a)

Omit "(7D), (7E), (7F),".

Banking Act 1959

99 Paragraph 2A(2)(e)

Repeal the paragraph.

100 Subsection 5(1) (definition of accountable person)

Repeal the definition.

101 Subsection 5(1) (paragraph (g) of the definition of

direction under this Act)

Omit "31F;", substitute "31F.".

Consequential amendments

Schedule 1

Amendments for the end of the banking executive accountability regime

Part 2

No. , 2022

Financial Sector Reform Bill 2022

102 Subsection 5(1) (paragraph (h) of the definition of

direction under this Act)

Repeal the paragraph.

103 Subsection 5(1)

Repeal the following definitions:

(a) definition of

large ADI

;

(b) definition of

medium ADI

;

non-ADI holding company

;

(d) definition of

remuneration

;

(e) definition of

small ADI

;

(f) definition of

variable remuneration

104 Subsection 11AF(1AC)

Repeal the subsection.

105 Paragraphs 11CG(1)(b) and (2)(a)

Omit ", 29 or 37DB", substitute "or 29".

106 Subsection 11CG(2A)

Omit ", 29 or 37DB", substitute "or 29".

107 Part IIAA

Repeal the Part.

Schedule 2

Application, saving and transitional provisions

Part 1

Preliminary

Financial Sector Reform Bill 2022

No. , 2022

Schedule 2--Application, saving and

transitional provisions

Part 1--Preliminary

1 Definitions

(1)

In this Schedule:

banking start time

means the time when Part 2 of Schedule 1

commences.

BEAR

means:

(a) Part IIAA of the old Banking Act; and

(b) any instruments made under that Part as in force immediately

before the banking start time; and

provision of that Part.

FAR Act

means the

Financial Accountability Regime Act 2022

FAR start time

for a body corporate that is an accountable entity under

subsection 9(3) of the FAR Act means the time when the body

corporate starts to be an accountable entity, as determined under

subsection 9(4) of the FAR Act.

old Banking Act

means the

Banking Act 1959

, and any instruments

made under that Act, as in force immediately before the banking start

time.

(2)

Expressions used in this Schedule that are defined for the purposes of

the FAR Act, and used in relation to that Act, have the same meaning as

in that Act.

(3)

Expressions used in this Schedule that were defined for the purposes of

the old Banking Act, and are used in relation to that Act, have the same

meaning as in that Act.

2 Section 7 of the Acts Interpretation Act 1901

This Schedule does not limit the effect of section 7 of the

Acts

Interpretation Act 1901

as it applies in relation to the repeals made by

this Act.

Application, saving and transitional provisions

Schedule 2

Preliminary

Part 1

No. , 2022

Financial Sector Reform Bill 2022

3 Compensation for acquisition of property

(1)

If the operation of the old Banking Act, or of this Act or the FAR Act as

it applies under this Act, would result in an acquisition of property

(within the meaning of paragraph 51(xxxi) of the Constitution) from a

person otherwise than on just terms (within the meaning of that

paragraph), the Commonwealth is liable to pay a reasonable amount of

compensation to the person.

(2)

Subitem (1) applies whether the acquisition of property occurred before

or occurs after the commencement of this Part.

(3)

If the Commonwealth and the person do not agree on the amount of the

compensation, the person may institute proceedings in:

(a) the Federal Court of Australia; or

(b) the Supreme Court of a State or Territory;

for the recovery from the Commonwealth of such reasonable amount of

compensation as the court determines.

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

Part 2--Banking sector

Division 1

--Key personnel obligations

4 Persons registered under BEAR

When this item applies

(1)

This item applies in relation to a person and an ADI if, immediately

before the banking start time:

(a) the person is an accountable person of the ADI, or of a

subsidiary of the ADI, under the old Banking Act; and

(b) the person is registered under section 37HA of the old

Banking Act.

Accountable persons taken to be registered under FAR

(2)

If, at the banking start time, the person is an accountable person of the

ADI or the subsidiary under section 10 of the FAR Act, then the person

is taken from the banking start time to be registered under the FAR Act

as an accountable person in respect of the ADI or the subsidiary.

Note 1: If the person was an accountable person of a subsidiary of the ADI, and the subsidiary is

not a significant related entity of the ADI under the FAR Act, then the person may not

be an accountable person of the ADI or the subsidiary under the FAR Act.

Note 2: See also item 13 (old accountability statement taken to be new accountability

statement).

Persons ceasing to be accountable persons

(3)

If, at the banking start time, the person is

not

an accountable person of

the ADI or the subsidiary under section 10 of the FAR Act, then:

(a) the person is taken to have ceased to be an accountable

person of the ADI or the subsidiary for the purposes of the

paragraph 32(a) of the FAR Act; and

(b) for the purposes of subparagraph 31(1)(a)(i) of the FAR Act,

that ceasing event is taken to have occurred at the banking

start time.

Note:

Events mentioned in section 32 of the FAR Act must be notified to the Regulator in

accordance with section 31 of the FAR Act (notification obligations of an accountable

Application, saving and transitional provisions

Schedule 2

Banking sector

Part 2

No. , 2022

Financial Sector Reform Bill 2022

entity). Failure to comply with a notification obligation is a contravention of a civil

penalty provision (see section 80 of the FAR Act).

5 Persons disqualified under BEAR

When this item applies

(1)

This item applies in relation to a person if:

(a) before the banking start time, the person is disqualified from

being, or acting as, an accountable person under section 37J

of the old Banking Act; and

(b) the disqualification is in effect immediately before the

banking start time.

Persons are taken to be disqualified under FAR

(2)

The person is taken, from the banking start time, to be disqualified from

being or acting as an accountable person under section 42 of the FAR

Act.

(3)

For the purposes of subsection 42(2) of the FAR Act, the

disqualification applies in accordance with the following table.

Disqualified accountable persons

Item

Column 1

If, before the banking start

time, the person is disqualified

under the old Banking Act in

relation to ...

Column 2

then, from the banking start time,

the person is taken to be disqualified

under the FAR Act in relation to ...

a particular ADI

the accountable entity that is that ADI.

a particular subsidiary of an ADI

if the subsidiary is a significant related

entity of the accountable entity that is

the ADI--that significant related

entity.

a class of ADIs

a class of accountable entities that

includes those ADIs.

a class of subsidiaries of ADIs

a class of significant related entities of

accountable entities that includes those

subsidiaries of ADIs.

any ADI

any accountable entity.

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

Disqualified accountable persons

Item

Column 1

If, before the banking start

time, the person is disqualified

under the old Banking Act in

relation to ...

Column 2

then, from the banking start time,

the person is taken to be disqualified

under the FAR Act in relation to ...

any subsidiary of an ADI

any significant related entity of an

accountable entity.

(4)

The period of disqualification ends when the period of the

disqualification under the old Banking Act would have ended.

(5)

Paragraphs 42(1)(a) and (b) and subsections 42(3) to (7) of the FAR Act

do not apply in relation to the disqualification.

Applications to vary or revoke disqualification

(6)

If:

(a) before the banking start time, the person applies to APRA

under section 37JA of the old Banking Act to vary or revoke

the disqualification; and

(b) as at the banking start time, the application has not been

withdrawn by the applicant, or dealt with by APRA;

the application is taken, after the banking start time, to have been made

under section 43 of the FAR Act.

6 Pending applications to register a person under BEAR

When this item applies

(1)

This item applies if:

(a) before the banking start time, an application is made to

APRA under section 37HA of the old Banking Act to register

a person as an accountable person; and

(b) as at the banking start time, the application has not been

withdrawn by the applicant, or dealt with by APRA.

Application taken to be made under FAR

(2)

The application is taken to be an application made under section 41 of

the FAR Act.

Application, saving and transitional provisions

Schedule 2

Banking sector

Part 2

No. , 2022

Financial Sector Reform Bill 2022

Note:

The Regulator may request further information under subsection 41(3) of the FAR Act.

(3)

For the purposes of paragraph 41(5)(a) of the FAR Act, the application

is taken to have been made at the banking start time.

7 Persons filling a temporary or unforeseen vacancy when

FAR starts

To avoid doubt, the period of 90 days referred to in paragraph 24(2)(a)

of the FAR Act begins no earlier than the banking start time, regardless

of when the person started to fill the temporary or unforeseen vacancy.

8 Applications to register under FAR

When this item applies

(1)

This item applies to a body corporate that is:

(a) an ADI; or

(b) an authorised NOHC of an ADI.

Early application for registration of accountable persons

(2)

From 30 days before the banking start time, the body corporate may

apply to the Regulator under section 41 of the FAR Act to register a

person as an accountable person in respect of the body or a significant

related entity of the body.

(3)

If the body corporate makes the application before the banking start

time, section 41 of the FAR Act (and any other provision of the FAR

Act that applies in relation to that section) applies in relation to the body

corporate as if the body corporate were an accountable entity.

Note:

Under paragraph 41(2)(d) of the FAR Act, if an accountable entity meets the enhanced

notification threshold under subsection 31(3) of the FAR Act, the application must

include an accountability statement for the person complying with section 33 of the

FAR Act.

When registration comes into force

(4)

The registration of the person as an accountable person comes into force

at the later of the following times:

(a) the banking start time;

(b) when the Regulator registers the person.

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

9 Disqualification under FAR for non-compliance with BEAR

APRA may, after the banking start time, disqualify a person under

section 42 of the FAR Act from being, or acting as, an accountable

person if APRA is satisfied that:

(a) the person has failed to comply with one or more of their

obligations under section 37CA of the old Banking Act; and

(b) the disqualification is justified, having regard to the

seriousness of the failure to comply.

Note:

A decision to disqualify a person is a reviewable decision under Part 5

of Chapter 3 of the FAR Act.

Division 2

--Deferred remuneration obligations

10 Deferral of variable remuneration continues under BEAR

after FAR starts

When this item applies

(1)

This item applies in relation to a person if:

(a) immediately before the banking start time, the person is an

accountable person of an ADI, or of a subsidiary of an ADI,

under the old Banking Act; and

(b) at the banking start time, the person is an accountable person

of the ADI or subsidiary under section 10 of the FAR Act.

Old Banking Act continues to apply until FAR applies

(2)

Despite the repeal of Part IIAA of the

Banking Act 1959

by Part 2 of

Schedule 1, the old Banking Act applies, after the banking start time, in

relation to the variable remuneration of the accountable person unless

Part 5 of Chapter 2 of the FAR Act applies to the variable remuneration

(see item 11 of this Schedule).

Note:

APRA may exercise powers etc. under repealed provisions for the purposes of this item:

see item 29.

Application, saving and transitional provisions

Schedule 2

Banking sector

Part 2

No. , 2022

Financial Sector Reform Bill 2022

11 Deferral of variable remuneration under FAR

When this item applies

(1)

This item applies in relation to a person who is an accountable person

under section 10 of the FAR Act of an entity (the

deferring entity

) that

is, at the banking start time:

(a) an accountable entity under subsection 9(1) of the FAR Act;

(b) a significant related entity of such an accountable entity.

FAR applies to financial years starting at least 6 months after

banking start time

(2)

Part 5 of Chapter 2 of the FAR Act applies in relation to the variable

remuneration of the accountable person only if the minimum deferral

period for the variable remuneration (see section 28 of the FAR Act)

starts in:

(a) the first financial year of the deferring entity that begins after

the end of the period of 6 months after the banking start time;

(b) a later financial year.

12 Deferral of variable remuneration under BEAR

--savings

provision

When this item applies

(1)

This item applies in relation to a person if:

(a) immediately before the banking start time:

(i) the person is an accountable person of an ADI, or of a

subsidiary of an ADI, under the old Banking Act; and

(ii) Division 4 of Part IIAA of the old Banking Act applies

in relation to the variable remuneration of the person;

and

(b) at the banking start time, the person is

not

an accountable

person of the ADI or the subsidiary under section 10 of the

FAR Act.

Note:

If the person was an accountable person of a subsidiary of the ADI, and the subsidiary is

not a significant related entity of the ADI under the FAR Act, then the person may not

be an accountable person of the ADI or the subsidiary under the FAR Act.

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

Old Banking Act continues to apply

(2)

Despite the repeal of Part IIAA of the

Banking Act 1959

by Part 2 of

Schedule 1, the old Banking Act continues to apply, after the banking

start time, in relation to the variable remuneration, as if that repeal had

not happened.

Division 3

--Notification obligations

13 Accountability statements under BEAR

When this item applies

(1)

This item applies if:

(a) before the banking start time, an ADI or a subsidiary of an

ADI gave APRA a document (the

old accountability

statement

) complying with section 37FA of the old Banking

Act for a person who was registered under section 37HA of

that Act; and

(b) at the banking start time, the person is an accountable person

of the ADI or of the subsidiary under section 10 of the FAR

Act.

Note:

For transfer of registration of the person, see item 4.

(2)

The old accountability statement (including any changes notified to

APRA before the banking start time) is taken, from the banking start

time, to have been given to the Regulator in accordance with section 33

of the FAR Act for the person.

Note:

Any material change to the information contained in the accountability statement must

be notified to the Regulator: see subsection 31(2) of the FAR Act.

14 Notification obligations under BEAR

--savings provision

(1)

Despite the repeal of Part IIAA of the

Banking Act 1959

by Part 2 of

Schedule 1, the old Banking Act continues to apply, after the banking

start time, in relation to an obligation covered by subitem (2) and

arising before that time, as if that repeal had not happened.

(2)

For the purposes of subitem (1), the obligations are any of the

following:

Application, saving and transitional provisions

Schedule 2

Banking sector

Part 2

No. , 2022

Financial Sector Reform Bill 2022

(a) an obligation under paragraph 37F(1)(a) of the old Banking

Act to notify APRA of a change to an accountability

statement;

(b) an obligation under paragraph 37F(1)(b) of the old Banking

Act to notify APRA of a change to an accountability map;

Act to notify APRA of an event.

Division 4

--Regulatory powers and enforcement

15 Directions about reallocating responsibilities given under

BEAR

When this item applies

(1)

This item applies if:

(a) before the banking start time, APRA gives a body corporate a

direction under section 37DB of the old Banking Act in

relation to a responsibility; and

(b) as at the banking start time, APRA has not revoked the

direction.

Direction under FAR Act taken to be given

(2)

After the banking start time, the direction continues in force (and may

be dealt with) as if it had been given by the Regulator under section 65

of the FAR Act.

(3)

For the purposes of section 65 of the FAR Act:

(a) the requirements in paragraphs 65(3)(a) and (c) are taken to

be met; and

(b) if the direction under section 37DB of the old Banking Act

did not specify a period within which the direction is to be

complied with--paragraph 65(3)(b) does not apply to the

direction.

Secrecy obligations

(4)

If, immediately before the banking start time, the direction was covered

by a determination under subsection 11CH(2) of the old Banking Act,

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

then it is taken after the banking start time to be covered by a

determination under subsection 67(2) of the FAR Act.

(5)

If, immediately before the banking start time, the direction was covered

by a determination under subsection 11CK(2) or (5) of the old Banking

Act, then it is taken after the banking start time to be covered by:

(a) for a direction covered by a determination under

subsection 11CK(2) of the old Banking Act--a determination

under subsection 70(2) of the FAR Act;

(b) for a direction covered by a determination under

subsection 11CK(5) of the old Banking Act--a determination

under subsection 70(4) of the FAR Act.

16 Directions under FAR for non-compliance with BEAR

When this item applies

(1)

This item applies if:

(a) APRA has reason to believe that a body corporate has

contravened a provision of Part IIAA of the old Banking Act

before the banking start time; and

(b) as at the banking start time, APRA has not given a direction

under section 11CA of the old Banking Act in relation to the

contravention; and

is an accountable entity.

APRA may give direction under FAR Act

(2)

Both of the following apply:

(a) APRA may give the body corporate a direction under

section 64 of the FAR Act;

(b) for the purposes of paragraph 64(3)(b) of the FAR Act, the

ground for giving the direction is the contravention of the old

Banking Act provision.

17 Revocation of authority for non-compliance with FAR

The amendment of section 9A of the

Banking Act 1959

made by Part 1

of Schedule 1 applies in relation to a body corporate's authority under

section 9 of that Act whether the authority was granted before or after

the banking start time.

Application, saving and transitional provisions

Schedule 2

Banking sector

Part 2

No. , 2022

Financial Sector Reform Bill 2022

18 Contraventions under BEAR

--savings provision

(1)

Despite the repeal of Part IIAA of the

Banking Act 1959

by Part 2 of

Schedule 1, the old Banking Act continues to apply, after the banking

start time, in relation to a contravention (or an alleged contravention) of

a provision of the BEAR that occurs before that time, as if that repeal

had not been made.

(2)

This item does not limit any other item of this Schedule.

Note:

As a result, APRA may have a choice as to whether to deal with BEAR non-compliance

under the old Banking Act or whether to take action under the FAR Act in reliance on

item 9 or 16 of this Schedule.

19 Directions under BEAR for non-compliance with BEAR

savings provision

When this item applies

(1)

This item applies if:

(a) before the banking start time, APRA gives a body corporate a

direction under section 11CA of the old Banking Act in

relation to a contravention of the BEAR; and

(b) as at the banking start time, APRA has not revoked the

direction.

Old Banking Act continues to apply

(2)

Despite the repeals and amendments of the

Banking Act 1959

made by

Part 2 of Schedule 1, the old Banking Act continues to apply, after the

banking start time, in relation to the direction, as if those repeals and

amendments had not been made.

20 Review of decisions under BEAR

--savings provision

Despite the repeal of Part IIAA of the

Banking Act 1959

by Part 2 of

Schedule 1, Part VI (review of decisions) of the old Banking Act

continues to apply, after the banking start time, in relation to a decision

made under Part IIAA of the

Banking Act 1959

(a) before the banking start time; or

(b) after the banking start time as a result of the operation of a

provision of this Schedule;

as if that repeal had not been made.

Schedule 2

Application, saving and transitional provisions

Part 2

Banking sector

Financial Sector Reform Bill 2022

No. , 2022

21 Enforceable undertakings and injunctions under BEAR

savings provision

To avoid doubt, the repeal of Part IIAA of the

Banking Act 1959

Part 2 of Schedule 1 does not affect:

(a) an enforceable undertaking given under section 18A of the

old Banking Act before the banking start time; or

(b) an injunction granted under section 65A of the old Banking

Act before the banking start time.

Application, saving and transitional provisions

Schedule 2

Other sectors

Part 3

No. , 2022

Financial Sector Reform Bill 2022

Part 3--Other sectors

Division 1

--Key personnel obligations

22 Applications to register under FAR

When this item applies

(1)

This item applies to a body corporate that is any of the following:

(a) a general insurer;

(b) an authorised NOHC of a general insurer;

(d) a registered NOHC of a life company;

(e) a private health insurer;

(f) an RSE licensee.

Early application for registration of accountable persons

(2)

From 30 days before the FAR start time for the body corporate, the

body may apply to the Regulator under section 41 of the FAR Act to

significant related entity of the body.

(3)

If the body corporate makes the application before the FAR start time,

section 41 of the FAR Act (and any other provision of the FAR Act that

applies in relation to that section) applies in relation to the body

corporate as if the body corporate were an accountable entity.

Note:

Under paragraph 41(2)(d) of the FAR Act, if the accountable entity meets the enhanced

notification threshold under subsection 31(3) of the FAR Act, the application must

include an accountability statement for the person complying with section 33 of the

FAR Act.

When registration comes into force

(4)

The registration of the person as an accountable person comes into force

at the later of the following times:

(a) the FAR start time for the body corporate;

(b) when the Regulator registers the person.

Schedule 2

Application, saving and transitional provisions

Part 3

Other sectors

Financial Sector Reform Bill 2022

No. , 2022

Division 2

--Deferred remuneration obligations

23 Deferral of remuneration under FAR

When this item applies

(1)

This item applies in relation to a person who is an accountable person

under section 10 of the FAR Act of:

(a) an accountable entity under subsection 9(3) of the FAR Act;

(b) a significant related entity of such an accountable entity.

Deferred remuneration obligations apply when entity becomes an

accountable entity

(2)

Part 5 of Chapter 2 of the FAR Act applies in relation to the variable

remuneration of the accountable person only if the day referred to in

paragraph 28(2)(a) of the FAR Act in relation to the remuneration

occurs after the FAR start time for the accountable entity referred to in

paragraph (1)(a) or (b) of this item.

Division 3

--Insurance

24 Revocation of authorisation for non-compliance with FAR

The amendment of section 15 of the

Insurance Act 1973

made by Part 1

of Schedule 1 applies in relation to a body corporate's authorisation

under section 12 of that Act whether the authorisation was granted

before or after the FAR start time for the body corporate.

Division 4

--Life insurance

25 Application for registration as a life company

The amendment of section 21 of the

Life Insurance Act 1995

made by

Part 1 of Schedule 1 applies in relation to an application under

section 20 of the

Life Insurance Act 1995

for registration as a life

company if:

(a) the application was made before the commencement of this

Part and, as at that commencement, APRA has not decided

the application; or

(b) the application is made after that commencement.

Application, saving and transitional provisions

Schedule 2

Other sectors

Part 3

No. , 2022

Financial Sector Reform Bill 2022

26 Revocation of registration for non-compliance with FAR

The amendment of section 26 of the

Life Insurance Act 1995

made by

Part 1 of Schedule 1 applies in relation to a body corporate's

registration under section 21 of that Act whether the registration was

made before or after the FAR start time for the body corporate.

Division 5

--Private health insurance

27 Cancellation of registration for non-compliance with FAR

The amendment of section 21 of the

Private Health Insurance

(Prudential Supervision) Act 2015

made by Part 1 of Schedule 1 applies

in relation to a body corporate's registration under section 15 of that

Act whether the registration was made before or after the FAR start

time for the body corporate.

Division 6

--Superannuation

28 Cancellation of RSE licence for non-compliance with FAR

The amendment of the definition of

RSE licensee law

subsection 10(1) of the

Superannuation Industry (Supervision) Act 1993

made by Part 1 of Schedule 1 applies in relation to a body corporate's

RSE licence under section 29D of that Act whether the RSE licence was

granted before or after the FAR start time for the body corporate.

Schedule 2

Application, saving and transitional provisions

Part 4

APRA and ASIC

Financial Sector Reform Bill 2022

No. , 2022

Part 4--APRA and ASIC

Division 1

--Transition from the BEAR

29 Doing things under repealed provisions

(1)

The amendments of the

Australian Prudential Regulation Authority Act

1998

and the

Banking Act 1959

made by Part 2 of Schedule 1 do not

apply for the purpose of APRA exercising any right or power,

performing any obligation or duty or doing any other thing (including

under a provision that is itself repealed or amended):

(a) in relation to variable remuneration to which the old Banking

Act applies under item 10 of this Schedule; or

(b) in relation to any other matter in relation to which an item of

this Schedule requires or permits APRA to do something

under the old Banking Act.

Secrecy

(2)

In addition to subitem (1), despite the amendments of section 56 of the

Australian Prudential Regulation Authority Act 1998

made by Part 2 of

Schedule 1, that Act as in force immediately before the banking start

time, continues to apply in relation to:

(a) information disclosed or obtained before or after the

commencement of that Part and relating to the affairs of a

person in relation to whom information is, or was, required to

be given under Part IIAA of the

Banking Act 1959

(including

that Part as it continues to apply under an item of this

Schedule); and

(b) a document given or produced before or after the

commencement of that Part and containing information

relating to the affairs of a person in relation to whom

information is, or was, required to be given under Part IIAA

of the

Banking Act 1959

(including that Part as it continues to

apply under an item of this Schedule)

Application, saving and transitional provisions

Schedule 2

APRA and ASIC

Part 4

No. , 2022

Financial Sector Reform Bill 2022

30 Agreement about exercise of powers

Section 38 of the FAR Act does not apply in relation to APRA

performing a function, or exercising a power, that an item of this

Schedule requires or permits APRA to perform or exercise.

Division 2

--Application of the FAR

31 Secrecy

The amendments of sections 3 and 56 of the

Australian Prudential

Regulation Authority Act 1998

made by Part 1 of Schedule 1 apply in

relation to:

(a) any disclosure of information after the commencement of

that Part, whether the information was disclosed or obtained

under, or for the purposes of, a prudential regulation

framework law before or after that commencement; and

(b) any production of a document after the commencement of

that Part, whether the document was given or produced

under, or for the purposes of, a prudential regulation

framework law before or after that commencement.

32 Information to be included in APRA's annual report

The amendment of section 59 of the

Australian Prudential Regulation

Authority Act 1998

made by Part 1 of Schedule 1 applies to reports on

APRA's investigations during the financial year ending on 30 June

2024, and later financial years.

33 Sharing information and documents between APRA and

ASIC

(1)

Section 39 of the FAR Act is taken to apply in relation to information

disclosed to or obtained by APRA or ASIC, or a document that is given

or produced to APRA or ASIC, under or for the purposes of:

(a) the BEAR; or

(b) this Schedule.

(2)

Section 39 of the FAR Act (including as it applies because of

subitem (1) of this item) applies in relation to information disclosed or

obtained, or a document that is given or produced, whether before or

after the FAR Act commences.

Schedule 2

Application, saving and transitional provisions

Part 5

Transitional rules

Financial Sector Reform Bill 2022

No. , 2022

Part 5--Transitional rules

34 Transitional rules

(1)

ASIC and APRA may jointly, by legislative instrument, make rules

prescribing matters of a transitional nature (including prescribing any

saving or application provisions) relating to:

(a) the amendments or repeals made by this Act; or

(b) the enactment of this Act or the FAR Act.

(2)

To avoid doubt, the rules may not do the following:

(a) create an offence or civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

(d) set an amount to be appropriated from the Consolidated

Revenue Fund under an appropriation in this Act;

(e) directly amend the text of this Act or the FAR Act.

(3)

This Act (other than subitem (2) of this item) does not limit the rules

that may be made.

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

Schedule 3--Financial services compensation

scheme of last resort

Part 1--Main amendments

Corporations Act 2001

1 Section 761A

Insert:

accumulation recovery day

means the day the Bill for the

Financial Sector Reform Act 2022

was introduced into the House

of Representatives.

AFCA's accumulated unpaid fees

has the meaning given by

subsection 1058B(4).

AFCA's unpaid fees

, for a month, has the meaning given by

subsection 1058B(2).

capital reserve establishment contribution

has the same meaning

as in the

Financial Services Compensation Scheme of Last Resort

Levy (Collection) Act 2022

CSLR operator

(short for financial services compensation scheme

of last resort operator) means the person for whom an authorisation

under section 1060 is in force.

CSLR staff member

means:

(a) a director, officer or employee of the CSLR operator; or

(b) a person engaged as a consultant to, or to perform services

for, the CSLR operator for the purposes of the financial

services compensation scheme of last resort.

financial services compensation scheme of last resort

means the

financial services compensation scheme of last resort established

under Part 7.10B.

financial services compensation scheme of last resort operator

see

CSLR operator

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

levy period

has the same meaning as in the

Financial Services

Compensation Scheme of Last Resort Levy Act 2022

pre-CSLR complaint

has the same meaning as in the

Financial

Services Compensation Scheme of Last Resort Levy (Collection)

Act 2022

relevant AFCA determination

has the meaning given by

section 1065.

revised claims, fees and costs estimate

has the same meaning as in

the

Financial Services Compensation Scheme of Last Resort Levy

Act 2022

sub-sector

has the same meaning as in the

Financial Services

Compensation Scheme of Last Resort Levy Act 2022

sub-sector levy cap

has the same meaning as in the

Financial

Services Compensation Scheme of Last Resort Levy Act 2022

2 At the end of Part 7.10A

Add:

Division 4--Information sharing and reporting

1058A Authorised use or disclosure of information

(1) An AFCA staff member may use or disclose information or

documents obtained by an AFCA staff member under or for the

purposes of this Part if:

(a) the use or disclosure is for the purposes of:

(i) this Part; or

(ii) Part 7.10B; or

(iii) the

Financial Services Compensation Scheme of Last

Resort Levy Act 2022

; or

(iv) the

Financial Services Compensation Scheme of Last

Resort Levy (Collection) Act 2022

; or

(b) the use or disclosure is to the CSLR operator for the purposes

of assisting the CSLR operator to perform its functions or

exercise its powers.

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(2) In this section:

use or disclosure

, for information or documents, includes making a

record of the information, disclosing the information, producing

the document or permitting access to the document.

1058B AFCA reporting to CSLR operator

Notification of unpaid fees to CSLR operator

(1) AFCA must notify the CSLR operator, in writing, of AFCA's

unpaid fees, for a month ending on or after the accumulation

recovery day, as soon as practicable after the end of the month.

Note:

The notification could include information about AFCA's unpaid fees,

including whether those fees relate to pre-CSLR complaints.

(2)

AFCA's unpaid fees

, for a month, is the sum of each fee that:

(a) relates to a complaint that:

(i) at the time the complaint is made, is a complaint against

a person (the

AFCA member

) who (at that time) is a

member of the AFCA scheme; and

(ii) is a complaint about a product, or service, of a kind

mentioned in subsection 1065(2); and

(iii) is a complaint that has been finalised by AFCA

(including by making a determination); and

(b) AFCA has charged to the AFCA member (or would have so

charged were the AFCA member still in existence); and

(d) AFCA finished taking steps to recover on or after the

accumulation recovery day and during the month, which may

have included taking one or more of the following steps if

AFCA considered them appropriate (or possible):

(i) seeking an explanation from the AFCA member for the

AFCA member not paying the fee;

(ii) explaining to the AFCA member the consequences of

not paying the fee;

(iii) discussing with the AFCA member a reasonable

payment plan or other alternatives to paying the fee;

(iv) if the AFCA member is (or has become) a Chapter 5

body corporate--engaging with an officer of the

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

Chapter 5 body corporate to assess whether the body

can pay the fee to AFCA.

Note:

In addition to the steps in subparagraphs (d)(i) to (iv), AFCA may take

any other steps it considers appropriate and cost effective.

AFCA's accumulated unpaid fees

(3) AFCA must notify the CSLR operator, in writing, of AFCA's

accumulated unpaid fees as soon as practicable after the

accumulation recovery day.

(4)

AFCA's accumulated unpaid fees

is the sum of each fee that:

(a) relates to a complaint that:

(i) at the time the complaint is made, is a complaint against

a person (the

AFCA member

) who (at that time) is a

member of the AFCA scheme; and

(ii) is a complaint about a product, or service, of a kind

mentioned in subsection 1065(2); and

(iii) is a complaint that has been finalised by AFCA

(including by making a determination); and

(b) AFCA has charged to the AFCA member (or would have so

charged were the AFCA member still in existence); and

(d) AFCA finished taking steps to recover during the period:

(i) starting on 1 November 2018; and

(ii) ending on the day before the accumulation

recovery

day;

which may have included taking one or more of the steps

mentioned in subparagraphs (2)(d)(i) to (iv) of this section if

AFCA considered them appropriate (or possible).

3 After Part 7.10A

Insert:

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

Part 7.10B--Financial services compensation

scheme of last resort

Division 1--Establishment of the scheme

1059 Establishment of the scheme

The financial services compensation scheme of last resort is

established by this Part.

1060 Minister may authorise an operator of the scheme

(1) The Minister may, by notifiable instrument, authorise a person to

operate the financial services compensation scheme of last resort if

the Minister is satisfied the person will meet the mandatory

requirements under section 1062.

Note:

The person who is authorised by the Minister to operate the scheme is

the CSLR operator (short for financial services compensation scheme

of last resort operator).

(2) An authorisation of a person to operate the financial services

compensation scheme of last resort must not come into force while

an authorisation of another person to operate that scheme is in

force.

(3) The Minister may, by notifiable instrument, vary or revoke an

authorisation.

(4) In an instrument made under subsection (1) or (3), the Minister:

(a) must specify the day the authorisation, variation or

revocation comes into force; and

(b) may impose, vary or revoke conditions relating to the

authorisation.

1061 Minister may appoint independent member

The Minister may, by written instrument, appoint an independent

person to be a member of the board of the CSLR operator.

Note:

The independent person appointed by the Minister is the Chair of the

board (see the mandatory requirement in paragraph 1062(3)(d)).

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

1062 Mandatory requirements

(1) The mandatory requirements for a person (the

operator

) to operate

the financial services compensation scheme of last resort are:

(a) the organisational requirement under subsection (2); and

(b) the operator requirements under subsection (3); and

(d) the compliance requirements under subsection (5).

Organisational requirement

(2) The organisational requirement is that the operator does not require

a person applying for compensation to pay any fee or charge to the

operator, or to any other entity, in relation to the application.

Operator requirements

(3) The operator requirements are that:

(a) the operator is a company limited by guarantee; and

(b) the operator's constitution provides that the operator must not

be operated for profit; and

operator by the Commonwealth must be maintained for the

purposes of the financial services compensation scheme of

last resort; and

(d) the operator's constitution provides that the Chair of the

board of the operator must be an independent person

appointed by the Minister as a member of the board; and

(e) the operator's constitution provides that, within 6 months

after the operator is authorised under section 1060, the

following must be appointed as members of the board:

(i) a person who is a director of AFCA, or who is the Chair

of the board of AFCA;

(ii) a person who is a Fellow of the Institute of Actuaries of

Australia and has at least 5 years' experience in

actuarial analysis.

Operational requirements

(4) The operational requirements are that:

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(a) the operator operates in accordance with the operator's

constitution; and

(b) the operator administers the financial services compensation

scheme of last resort in accordance with this Part and

regulations made for the purposes of this Part; and

is efficient, effective and economical; and

(d) the operator has appropriate expertise available to deal with

applications for compensation; and

(e) the operator has appropriate expertise available to undertake

actuarial analysis and modelling to estimate the value of

claims to be made against the financial services

compensation scheme of last resort.

Compliance requirements

(5) The compliance requirements are that:

(a) the operator is to ensure that any conditions of the

authorisation of the operator (see paragraph 1060(4)(b)) are

complied with; and

(b) the operator is to ensure that regulatory requirements issued

under section 1069K are complied with.

Division 2--Compensation payments under the scheme

1063 Compensation payments

(1) The CSLR operator must pay to a person an amount of

compensation for a relevant AFCA determination made in respect

of the person if:

(a) the person is eligible under section 1064 for compensation

for the determination; and

(b) the amount of compensation for the determination is the

amount referred to in section 1067; and

amount of compensation; and

(d) the person has accepted under section 1069 that offer of that

amount of compensation.

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

(2) The CSLR operator must pay the amount of compensation to the

person:

(a) in a single lump sum; or

(b) if a determination under subsection 1069H(2) specifies,

under subsection 1069H(3), a class of persons that includes

the person--in the instalments specified in the determination

for that class of persons over the period specified in the

determination.

(3) The CSLR operator must not pay an amount under this section

before:

(a) the start of the first levy period; or

(b) any later day prescribed by regulations made for the purposes

of this paragraph.

1064 Eligibility for compensation payments

Eligibility for compensation

(1) A person is eligible for compensation for a relevant AFCA

determination made in respect of the person if:

(a) the determination requires an amount to be paid to the person

by an entity or body (the

relevant entity

), whether or not the

relevant entity still exists; and

(b) the person has notified AFCA:

(i) within 12 months after the day the determination was

made; or

(ii) within such longer period as AFCA agrees with the

person;

that the person has not been paid the amount; and

(i) AFCA has finished taking steps to require the amount to

be paid to the person by the relevant entity, which may

have included taking one or more of the steps

mentioned in subsection (2) if AFCA considered them

appropriate; and

(ii) AFCA has notified the person, in writing, that AFCA

has finished taking such steps; and

(d) the amount has not been fully paid to the person; and

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(e) the person is not eligible to receive, under any other statutory

compensation scheme, compensation:

(i) for the matters covered by the determination; and

(ii) for an amount equal to or greater than the amount

required to be paid in accordance with the

determination; and

(f) the person applies in accordance with section 1066 to the

CSLR operator for compensation for the determination; and

(g) the person has not withdrawn that application for

compensation; and

(h) the CSLR operator reasonably believes, having regard to:

(i) the relevant entity's financial position (if the relevant

entity still exists); or

(ii) any other reason;

that the person is unlikely to be fully paid the amount in

accordance with the determination.

Note:

A person's application for compensation may be withdrawn at any

time before an offer of compensation is accepted by the person (see

subsection 1066(4)).

Appropriate steps by AFCA

(2) For the purposes of paragraph (1)(c), the steps are the following:

(a) seeking an explanation from the relevant entity for the

relevant entity not paying the amount to the person in

accordance with the relevant AFCA determination;

(b) explaining to the relevant entity the consequences of not

paying the amount to the person;

or other alternatives to paying the amount to the person;

(d) if the relevant entity is (or has become) a Chapter 5 body

corporate--engaging with an officer of the Chapter 5 body

corporate to assess whether the body will pay the amount to

the person.

Note:

In addition to these steps, AFCA may take any other steps it considers

appropriate and cost effective.

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

1065 Meaning of relevant AFCA determination

(1) A determination made by AFCA in respect of a person is a

relevant AFCA determination

if:

(a) the determination relates to a complaint by the person that:

(i) at the time the complaint is made, is a complaint against

another person (the

relevant entity

) who (at that time) is

a member of the AFCA scheme; and

(ii) is a complaint about a product, or service, of a kind

mentioned in subsection (2); and

(b) the determination:

(i) requires the relevant entity to pay an amount to the

person; and

(ii) is accepted by the person.

(2) For the purposes of subparagraph (1)(a)(ii), the kinds of products

and services are as follows:

(a) engaging in a credit activity (within the meaning of the

National Consumer Credit Protection Act 2009

(i) as a credit provider; or

(ii) other than as a credit provider;

(b) providing financial product advice that is personal advice

provided to a person as a retail client about one or more

products that include at least one relevant financial product

(within the meaning of Part 7.6 of this Act);

issuing securities.

(3) In this section:

credit provider

has the same meaning as in any Part of the

National

Consumer Credit Protection Act 2009

other than Part 3-2CA.

1066 Applications for compensation payments

(1) A person may apply, in the approved form, to the CSLR operator

for compensation for a relevant AFCA determination made in

respect of the person.

(2) An application is in the approved form if and only if:

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(a) it is in the form approved by the CSLR operator; and

(b) it includes any information (including any declarations)

required by the form; and

(3) The CSLR operator may approve a form for the purposes of

paragraph (2)(a).

(4) If a person makes an application for compensation for a relevant

AFCA determination made in respect of the person, the person

may:

(a) amend the application at any time before the CSLR operator

offers under section 1068 to the person an amount of

compensation for the determination; or

(b) withdraw the application any time before the person accepts

under 1069 such an offer.

1067 Amount of compensation payments

The amount of compensation for a person for a relevant AFCA

determination made in respect of the person must be an amount

equal to the lower of the following amounts:

(a) $150,000;

(b) the amount payable to the person in accordance with the

relevant AFCA determination, less:

(i) any amount paid to the person in accordance with the

relevant AFCA determination, including any partial

payments or any payments made to the person as an

unsecured creditor of a Chapter 5 body corporate for the

matters covered by the determination; and

(ii) any compensation to which the person is eligible under

any other statutory compensation scheme for the matters

covered by the determination; and

(iii) any other payments made to the person of a kind

prescribed by regulations made for the purposes of this

subparagraph.

Note:

This means, subject to the cap in paragraph (a), the amount payable to

the person must be the amount required to be paid in accordance with

the relevant AFCA determination. The amount payable cannot

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

include, for example, an additional interest component not mentioned

in that determination.

1068 Offer of compensation payments

Offer of compensation

(1) If a person is eligible under section 1064 for compensation for a

relevant AFCA determination made in respect of the person, the

CSLR operator must offer to the person, in writing, the amount of

compensation referred to in section 1067 for the determination.

(2) The offer must explain the effect of section 1069A (subrogation of

rights).

(3) Before the offer is accepted by the person, the CSLR operator may

vary or revoke the offer if the CSLR operator reasonably believes:

(a) there is an error relating to the offer; or

(b) there is fraud relating to the offer; or

(i) the person's eligibility under section 1064 for the

amount of compensation in the offer; or

(ii) the amount of compensation in the offer; or

(d) other exceptional circumstances exist that justify the

variation or revocation.

Notification that person is not eligible for compensation

(4) If a person:

(a) is not eligible under section 1064 for compensation for a

relevant AFCA determination made in respect of the person;

and

(b) has made an application under section 1066 for compensation

for the relevant AFCA determination;

the CSLR operator must, as soon as reasonably practicable, notify

the person, in writing, that the person is not eligible for

compensation.

(5) A notice to a person under subsection (4) must include reasons

why the person is not eligible for compensation.

Financial services compensation scheme of last resort

Schedule 3

Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

1069 Acceptance of offer of compensation payments

(1) A person accepts an offer made under section 1068 of an amount

of compensation if the person notifies the CSLR operator, in

writing, that the person accepts the offer.

(2) If the person does not accept the offer within 90 days after the day

the offer is made, the person is taken to have withdrawn their

application for compensation for the relevant AFCA determination

to which the offer relates.

1069A CSLR operator's right of subrogation if compensation is paid

If:

(a) the CSLR operator pays an amount of compensation:

(i) to a person under section 1063; and

(ii) for a relevant AFCA determination that required

payment of an amount by another person (the

AFCA

member

) who is, or was, a member of the AFCA

scheme; and

(b) the AFCA member is (or has become) a Chapter 5 body

corporate;

the CSLR operator is subrogated, to the extent of that amount of

compensation, to any rights and remedies that the person may

have, in relation to the relevant AFCA determination, that are

recognised by an officer of the Chapter 5 body corporate.

Division 3--Reimbursement of unpaid AFCA fees

1069B Payment of AFCA's unpaid fees

(1) The CSLR operator must pay to AFCA an amount equal to

AFCA's unpaid fees for a month starting on or after the

accumulation

recovery day if AFCA has notified the CSLR

operator of those fees in accordance with subsection 1058B(1).

(2) The CSLR operator must pay the amount to AFCA as soon as

reasonably practicable after AFCA's notification to the CSLR

operator of those fees.

Schedule 3

Financial services compensation scheme of last resort

Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

(3) However, the CSLR operator must not pay an amount under this

section before:

(a) the start of the first levy period; or

(b) any later day prescribed by regulations made for the purposes

of this paragraph.

1069C Payment of AFCA's accumulated unpaid fees

(1) The CSLR operator must pay to AFCA an amount equal to

AFCA's accumulated unpaid fees if AFCA has notified the CSLR

operator of those fees in accordance with subsection 1058B(3).

(2) The CSLR operator must pay the amount to AFCA as soon as

reasonably practicable after AFCA's notification to the CSLR

operator of those fees.

(3) However, the CSLR operator must not pay an amount under this

section before:

(a) the start of the first levy period; or

(b) any later day prescribed by regulations made for the purposes

of this paragraph.

Division 4--Powers, reporting and information sharing

Subdivision A--Powers of CSLR operator

1069D Power to obtain information and documents

(1) If the CSLR operator has reason to believe that a person is capable

of giving information or producing documents relevant to an

application for compensation under this Part, the CSLR operator

may, by written notice to the person, require the person:

(a) to give to the CSLR operator, by writing, any such

information; or

(b) to produce to the CSLR operator such documents or copies of

such documents as are stated in the notice;

in the manner and within the period specified in the notice.

(2) The period specified in a notice given under subsection (1) must be

at least 14 days after the day the notice is given.

Financial services compensation scheme of last resort

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Main amendments

Part 1

No. , 2022

Financial Sector Reform Bill 2022

(3) If documents (whether originals or copies) are so produced, the

CSLR operator:

(a) may take possession of, and may make copies of, or take

extracts from, the documents; and

(b) may keep the documents for as long as is necessary for the

purpose of dealing with the application; and

would be entitled to inspect any one or more of them (if the

documents were not in the possession of the CSLR operator)

to inspect at all reasonable times such of the documents as

that person would be so entitled to inspect.

(4) A person must not fail to comply with a requirement made by the

CSLR operator under subsection (1).

Penalty: 30 penalty units.

(5) Subsection (4) is an offence of strict liability.

(6) Subsection (4) does not apply to the extent that the person has a

reasonable excuse.

Note:

A defendant bears an evidential burden in relation to the matter in this

subsection (see subsection 13.3(3) of the

Criminal Code

(7) If a person who is, or was, a member of the AFCA scheme fails,

without a reasonable excuse, to comply with a requirement made

by the CSLR operator under subsection (1), the CSLR operator

must notify AFCA and ASIC of the person's failure to comply

with the notice.

(8) The CSLR operator must not require ASIC to give information or

produce documents under this section.

Note:

For information sharing between ASIC and the CSLR operator, see

subparagraph 127(4)(aa)(ia) of the

Australian Securities and

Investments Commission Act 2001

Schedule 3

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Part 1

Main amendments

Financial Sector Reform Bill 2022

No. , 2022

Subdivision B--Information sharing and reporting

1069E Authorised use or disclosure of information

A CSLR staff member may use or disclose information or

documents obtained by a CSLR staff member under or for the

purposes of this Part if:

(a) the use or disclosure is for the purposes of:

(i) this Part; or

(ii) Part 7.10A; or

(iii) the

Financial Services Compensation Scheme of Last

Resort Levy Act 2022

; or

(iv) the

Financial Services Compensation Scheme of Last

Resort Levy (Collection) Act 2022

; or

(b) the use or disclosure is to:

(i) ASIC; or

(ii) AFCA; or

(iii) the Information Commissioner; or

(iv) the Commissioner of Taxation;

for the purposes of assisting the entity or person to perform

its functions or exercise its powers.

1069F Reporting by CSLR operator

Reporting compensation payments

(1) If the CSLR operator pays an amount of compensation:

(a) to a person under section 1063; and

(b) for a relevant AFCA determination that required payment of

an amount by an entity or body (the

AFCA member

) who is,

or was, a member of the AFCA scheme;

the CSLR operator must, as soon as reasonably practicable, notify

ASIC, in writing, of details about the AFCA member and the

AFCA member's failure to pay the amount required by the relevant

AFCA determination.

(2) If the CSLR operator:

(a) pays an amount of compensation:

(i) to a person under section 1063; and

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(ii) for a relevant AFCA determination that required

payment of an amount by another person (the

AFCA

member

) who is, or was, a member of the AFCA

scheme; and

(b) becomes aware that the AFCA member is a Chapter 5 body

corporate while the determination is in force;

the CSLR operator must, as soon as reasonably practicable, notify

an officer of the Chapter 5 body corporate, in writing, of the

amount of compensation paid.

Reporting revised claims, fees and costs estimates that exceed cap

(3) If a revised claims, fees and costs estimate for a levy period and a

sub-sector comes into force that could cause the sub-sector levy

cap for the levy period and the sub-sector to be exceeded (or

further exceeded), the CSLR operator must notify the Minister of

this as soon as practicable.

(4) A notice to the Minister under subsection (3) must include the

information (if any) prescribed by regulations made for the

purposes of this subsection.

1069G Publishing reports

(1) The CSLR operator must, as soon as reasonably practicable after

the end of a levy period, prepare a report for the levy period that

contains information about the matters prescribed by regulations

made for the purposes of this subsection.

(2) The CSLR operator must publish the report on its website.

Subdivision C--Powers of the Minister

1069H Ministerial determination

Ministerial determination

(1) Subsection (2) applies if the Minister is notified under

subsection 1069F(3) that a revised claims, fees and costs estimate

for:

(a) a levy period; and

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(b) a sub-sector (the

primary sub-sector

);

could cause the sub-sector levy cap for the levy period and the

primary sub-sector to be exceeded (or further exceeded).

(2) The Minister may, by legislative instrument, make a determination

for the levy period and the primary sub-sector dealing with one or

more of the matters mentioned in subsections (3) to (5).

Manner of payment

(3) A determination made under subsection (2) may provide that an

amount of compensation payable by the CSLR operator to a person

in a specified class of persons must be paid in specified instalments

over a specified period of time.

Special levy for just the primary sub-sector

(4) For the purposes of paragraph 8(3)(b) of the

Financial Services

Compensation Scheme of Last Resort Levy Act 2022

, a

determination made under subsection (2) of this section may:

(a) specify that levy needs to be imposed by subsection 8(3) of

that Act for the levy period and the primary sub-sector; and

(b) specify the total amount of levy that needs to be imposed by

subsection 8(3) of that Act across all persons for the levy

period and the primary sub-sector, which must not exceed the

difference between:

(i) the revised claims, fees and costs estimate (referred to in

subsection (1) of this section) for the levy period and the

primary sub-sector; and

(ii) the total amount of levy already paid as worked out

under subsection (6) of this section.

Special levy for several sub-sectors not just the primary sub-sector

(5) For the purposes of paragraph 9(b) of the

Financial Services

Compensation Scheme of Last Resort Levy Act 2022

, a

determination made under subsection (2) of this section may:

(a) specify that levy needs to be imposed by section 9 of that Act

(

special levy

) for the levy period if the Minister is satisfied

that imposing special levy:

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(i) is necessary due to the number of persons accepting

amounts of compensation under section 1069 of this Act

for the levy period and the primary sub-sector, and due

to the size of the sum of those amounts; and

(ii) is the most effective way of enabling payment of those

amounts to those persons in a timely manner; and

(b) for each of one or more specified sub-sectors--specify a total

amount of special levy that needs to be imposed for the levy

period across all members of the specified sub-sector if the

Minister has had regard to:

(i) the impact that imposing that total amount of special

levy may have on the financial sustainability and

viability of the specified sub-sector; and

(ii) the impact that imposing that total amount of special

levy across all members of the specified sub-sector may

have on the financial system more broadly; and

under paragraph (b) of this subsection, which must not

exceed the difference between:

(i) the revised claims, fees and costs estimate (referred to in

subsection (1) of this section) for the levy period and the

primary sub-sector; and

(ii) the total amount of levy already paid as worked out

under subsection (6) of this section.

Working out the total amount of levy already paid

(6) For the purposes of subparagraph (4)(b)(ii) or (5)(c)(ii), work out

the sum of:

(a) the total amount of levy paid that was earlier imposed by

section 8 of the

Financial Services Compensation Scheme of

Last Resort Levy Act 2022

across all persons for the levy

period and the primary sub-sector; and

(b) the total amount of levy paid that was earlier imposed by

section 9 of that Act across all persons for all sub-sectors in

relation to any earlier revised claims, fees and costs estimate

for the levy period and the primary sub-sector.

Schedule 3

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Division 5--Regulating the CSLR operator

1069J Obligation to comply with mandatory requirements

The CSLR operator must ensure that the mandatory requirements

for the CSLR operator under section 1062 are complied with.

1069K ASIC may issue regulatory requirements

ASIC may, by legislative instrument, issue to the CSLR operator

regulatory requirements relating to compliance with the mandatory

requirements for the CSLR operator under section 1062.

1069L General directions to CSLR operator

Notice of intention to issue a direction

(1) If ASIC considers that the CSLR operator has not done all things

reasonably practicable to ensure compliance with:

(a) the mandatory requirements for the CSLR operator under

section 1062; or

(b) a condition of the authorisation of the CSLR operator

imposed by the Minister (see paragraph 1060(4)(b)); or

ASIC may give the CSLR operator written notice that it intends to

give the CSLR operator a specified direction under this section.

(2) The notice must set out:

(a) the specific measures that the direction will require the CSLR

operator to take to comply with the requirements or

condition; and

(b) the reasons for ASIC's intention to give the direction.

Issuing a direction

(3) If, after receiving the notice:

(a) the CSLR operator does not take those specific measures;

and

(b) ASIC still considers that it is appropriate to give the direction

to the CSLR operator;

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Financial Sector Reform Bill 2022

ASIC may give the CSLR operator the direction, in writing, with a

statement setting out the reasons for giving the direction.

(4) The direction must deal with the time by which, or the period

during which, it is to be complied with. The time or period must be

reasonable.

(5) A direction made under this section is not a legislative instrument.

Compliance

(6) The CSLR operator must comply with a direction made under this

section.

Note:

Failure to comply with this subsection is an offence (see

subsection 1311(1)).

(7) If the CSLR operator fails to comply with the direction, ASIC may

apply to the Court for, and the Court may make, an order that the

CSLR operator comply with the direction.

Varying or revoking a direction

(8) ASIC may vary a direction made under this section by giving

written notice to the CSLR operator.

(9) The direction has effect until ASIC revokes it by giving written

notice to the CSLR operator.

(10) ASIC may revoke the direction, by giving written notice to the

CSLR operator, if, at the time of revocation, ASIC considers that

the direction is no longer necessary or appropriate.

Division 6--Financial matters

1069M Costs for first levy period

Estimate of costs for first levy period

(1) The CSLR operator may, by notifiable instrument made at any

time before the start of the first levy period, determine for the first

levy period and a sub-sector an estimate that is the sum of:

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(a) the specified amount equal to what the CSLR operator

reasonably believes (having regard to actuarial principles)

will be the total amount of compensation payable under

section 1063:

(i) during the first levy period; and

(ii) for the sub-sector;

other than any such compensation relating to pre-CSLR

complaints; and

(b) the specified amount equal to what the CSLR operator

reasonably believes (having regard to actuarial principles)

will be the portion of the sum of the following that is

attributable to the sub-sector:

(i) the sum of AFCA's unpaid fees expected for each of the

months in the first levy period, other than any such fees

relating to pre-CSLR complaints;

(ii) the sum of AFCA's unpaid fees expected for each of the

months ending on or after the accumulation recovery

day but before the first levy period, other than any such

fees relating to pre-CSLR complaints;

(iii) the capital reserve establishment contribution;

(iv) the CSLR operator's expected administrative costs for

the first levy period.

Note:

A single instrument may determine estimates for several sub-sectors.

(2) The notifiable instrument must include each of the amounts

referred to in subparagraphs (1)(b)(i) to (iv).

Reconciliation of costs for first levy period

(3) The CSLR operator may, by notifiable instrument and as soon as

reasonably practicable after the first levy period, determine the

revised costs for the first levy period and a sub-sector by

calculating the sum of the following amounts:

(a) the total amount of compensation paid under section 1063

during the first levy period for the sub-sector, other than any

such compensation relating to pre-CSLR complaints;

(b) the amount equal to the portion of the sum of the following

amounts that the CSLR operator reasonably believes (having

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No. , 2022

Financial Sector Reform Bill 2022

regard to actuarial principles) are attributable to the

sub-sector:

(i) the sum of AFCA's unpaid fees for each of the months

in the first levy period, other than any such fees relating

to pre-CSLR complaints;

(ii) the sum of AFCA's unpaid fees for each of the months

ending on or after the accumulation recovery day but

before the first levy period, other than any such fees

relating to pre-CSLR complaints;

(iii) the capital reserve establishment contribution;

(iv) the CSLR operator's administrative costs for the first

levy period.

Note:

A single instrument may determine revised costs for several

sub-sectors.

1069N Payment to the CSLR operator of amount for the first levy

period for the scheme

(1) The Commonwealth must pay to the CSLR operator the amount

mentioned in subsection (2) for the first levy period for the

following purposes:

(a) the CSLR operator paying compensation under section 1063

during the first levy period, other than any such

compensation relating to pre-CSLR complaints;

(b) the CSLR operator paying AFCA's unpaid fees for each

month in the first levy period, other than any such fees

relating to pre-CSLR complaints;

month ending on or after the accumulation recovery day but

before the first levy period, other than any such fees relating

to pre-CSLR complaints;

(d) the CSLR operator establishing approximately one third of

the capital reserve (within the meaning of the

Financial

Services Compensation Scheme of Last Resort Levy

(Collection) Act 2022

);

(e) the CSLR operator paying the CSLR operator's

administrative costs for the first levy period.

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(2) For the purposes of subsection (1), the amount is equal to the sum

of each estimate determined under subsection 1069M(1) for the

first levy period and a sub-sector.

1069P Payment to the CSLR operator of amounts equal to levy

(1) The Commonwealth must pay to the CSLR operator an amount

equal to each amount received by ASIC, on behalf of the

Commonwealth, by way of:

(a) levy (within the meaning of the

Financial Services

Compensation Scheme of Last Resort Levy (Collection) Act

2022

); or

(b) late payment penalty (within the meaning of that Act); or

(2) The Consolidated Revenue Fund is appropriated for the purposes

of subsection (1).

1069Q Application of money by CSLR operator

(1) The money of the CSLR operator is to be applied only:

(a) to pay compensation under section 1063; and

(b) to pay AFCA's unpaid fees under section 1069B; and

section 1069C; and

(d) to pay the CSLR operator's administrative costs; and

(e) to reimburse to ASIC the costs that ASIC has notified to the

CSLR operator under subsection 9(4) of the

Financial

Services Compensation Scheme of Last Resort Levy

(Collection) Act 2022

; and

(f) to establish and restore the capital reserve (within the

meaning of the

Financial Services Compensation Scheme of

Last Resort Levy (Collection) Act 2022

(2) Subsection (1) does not prevent investment of money.

1069R Investment by CSLR operator

The CSLR operator must not invest money of the CSLR operator

unless:

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(a) the money is not immediately required for the purposes

mentioned in paragraphs 1069Q(1)(a) to (e); and

(b) the money is invested:

(i) on deposit with an ADI (within the meaning of the

Banking Act 1959

), including a deposit evidenced by a

certificate of deposit; or

(ii) in securities of, or securities guaranteed by, the

Commonwealth, a State or a Territory.

1069S Recovery of overpayments

(1) If:

(a) the CSLR operator pays an amount of compensation to a

person under, or purportedly under, this Part; and

(b) the amount paid exceeds the amount (if any) properly

payable to the person under this Part;

the amount of the excess is recoverable by the CSLR operator as a

debt due to the CSLR operator by action against the person in the

Federal Court or the Federal Circuit and Family Court of Australia

(Division 2).

(2) An amount equal to the excess may alternatively be deducted from

any other amount of compensation payable under this Part to, or

for the benefit of, the person.

Schedule 3

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Part 2

Other amendments

Financial Sector Reform Bill 2022

No. , 2022

Part 2--Other amendments

Australian Securities and Investments Commission Act 2001

4 After paragraph 12A(1)(b)

Insert:

(ba) the

Financial Services Compensation Scheme of Last Resort

Levy (Collection) Act 2022

;

5 After subparagraph 127(4)(aa)(i)

Insert:

(ia) the CSLR operator (within the meaning of Chapter 7 of

the

Corporations Act 2001

);

Corporations Act 2001

6 After subsection 601AB(1B)

Insert:

(1C) ASIC may also decide to deregister a company if the company is

liable to pay levy (within the meaning of the

Financial Services

Compensation Scheme of Last Resort Levy (Collection) Act 2022

)

and the company has not paid in full at least 12 months after the

due date for payment:

(a) the amount of the levy; and

(b) the amount of any late payment penalty payable in relation to

the levy; and

levy.

7 After subsection 601AH(1A)

Insert:

(1B) ASIC may reinstate the registration of a company deregistered

under subsection 601AB(1C) if:

(a) ASIC receives an application in relation to the reinstatement

of the company's registration; and

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Financial Sector Reform Bill 2022

(b) the levy (within the meaning of the

Financial Services

Compensation Scheme of Last Resort Levy (Collection) Act

2022

) imposed on the company is paid in full; and

the levy is paid in full; and

(d) the amount of any shortfall penalty payable in relation to the

levy is paid in full.

8 After paragraph 915B(1)(f)

Insert:

; or (g) is liable to pay levy (within the meaning of the

Financial

Services Compensation Scheme of Last Resort Levy

(Collection) Act 2022

) and has not paid in full at least 12

months after the due date for payment:

(i) the amount of levy; and

(ii) the amount of any late payment penalty in relation to the

levy; and

(iii) the amount of any shortfall penalty payable in relation

to the levy.

9 After subsection 915B(1A)

Insert:

(1B) ASIC must cancel an Australian financial services licence held by

an individual, by giving written notice to the individual, if:

(a) the individual is required to pay an amount to another person

in accordance with a relevant AFCA determination; and

(b) the CSLR operator has paid, under section 1063, an amount

of compensation to the other person for the relevant AFCA

determination.

10 After paragraph 915B(2)(e)

Insert:

; or (f) in the case of a partnership that is liable to pay levy (within

the meaning of the

Financial Services Compensation Scheme

of Last Resort Levy (Collection) Act 2022

)--the following

have not been paid in full at least 12 months after the due

date for payment:

(i) the amount of levy;

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(ii) the amount of any late payment penalty in relation to the

levy;

(iii) the amount of any shortfall penalty payable in relation

to the levy.

11 After subsection 915B(2A)

Insert:

(2B) ASIC must cancel an Australian financial services licence held by

a partnership, by giving written notice to the partnership, if:

(a) one or more of the partners is required to pay an amount to a

person in accordance with a relevant AFCA determination;

and

(b) the CSLR operator has paid, under section 1063, an amount

of compensation to the person for the relevant AFCA

determination.

12 After paragraph 915B(3)(e)

Insert:

; or (f) the body is liable to pay levy (within the meaning of the

Financial Services Compensation Scheme of Last Resort

Levy (Collection) Act 2022

) and has not paid in full at least

12 months after the due date for payment:

(i) the amount of levy; and

(ii) the amount of any late payment penalty in relation to the

levy; and

(iii) the amount of any shortfall penalty payable in relation

to the levy.

13 After subsection 915B(3A)

Insert:

(3B) ASIC must cancel an Australian financial services licence held by

a body corporate, by giving written notice to the body, if:

(a) the body is required to pay an amount to a person in

accordance with a relevant AFCA determination; and

(b) the CSLR operator has paid, under section 1063, an amount

of compensation to the person for the relevant AFCA

determination.

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Other amendments

Part 2

No. , 2022

Financial Sector Reform Bill 2022

14 After paragraph 915B(4)(e)

Insert:

; or (f) in the case of a licensee that is a single legal entity under

section 761FA of this Act and also liable to pay levy (within

the meaning of the

Financial Services Compensation Scheme

of Last Resort Levy (Collection) Act 2022

)--the following

have not been paid in full at least 12 months after the due

date for payment:

(i) the amount of levy;

(ii) the amount of any late payment penalty in relation to the

levy;

(iii) the amount of any shortfall penalty payable in relation

to the levy.

15 At the end of section 915B

Add:

(4B) ASIC must cancel an Australian financial services licence held by

the trustees of a trust, by giving written notice to the trustees, if:

(a) the trustees of the trust are required to pay an amount to a

person in accordance with a relevant AFCA determination;

and

(b) the CSLR operator has paid, under section 1063, an amount

of compensation to the person for the relevant AFCA

determination.

16 After paragraph 920A(1)(j)

Insert:

(ja) all of the following apply:

(i) an individual who holds an Australian financial services

licence, a partner in a partnership, a body corporate or a

trustee of a trust is required to pay an amount in

accordance with a relevant AFCA determination;

(ii) the CSLR operator has paid, under section 1063, an

amount of compensation for the relevant AFCA

determination;

(iii) at the time the payment is made by the CSLR operator,

the person is the individual licensee, a partner in the

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No. , 2022

partnership, an officer of the body corporate or the

trustee of the trust; or

17 After paragraph 1317C(gdc)

Insert:

(gdca) a decision by ASIC under subsection 915B(1B), (2B), (3B)

or (4B) (immediate cancellation of an Australian financial

services licence); or

18 In the appropriate position in Schedule 3

Insert:

Subsection 1069L(6)

(a) for an individual--100 penalty units for each

day, or part of a day, in respect of which the

offence is committed; and

(b) for a body corporate--1,000 penalty units

for each day, or part of a day, in respect of

which the offence is committed

National Consumer Credit Protection Act 2009

19 At the end of subsection 54(1)

Add:

; or (e) in the case of a licensee that is liable to pay levy (within the

meaning of the

Financial Services Compensation Scheme of

Last Resort Levy (Collection) Act 2022

)--the following have

not been paid in full at least 12 months after the due date for

payment:

(i) the amount of levy;

(ii) the amount of any late payment penalty in relation to the

levy;

(iii) the amount of any shortfall penalty payable in relation

to the levy.

20 After subsection 54(1A)

Insert:

(1B) ASIC must cancel a licensee's licence if:

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(a) the licensee is required to pay an amount to a person in

accordance with a relevant AFCA determination (within the

meaning of Chapter 7 of the

Corporations Act 2001

); and

(b) the CSLR operator (within the meaning of that Chapter) has

paid, under section 1063 of that Act, an amount of

compensation to the person for the relevant AFCA

determination.

21 After paragraph 80(1)(fb)

Insert:

(fba) if all of the following apply:

(i) an individual who holds a licence, a partner in a

partnership, a body corporate or a trustee of a trust is

required to pay an amount in accordance with a relevant

AFCA determination (within the meaning of Chapter 7

of the

Corporations Act 2001

);

(ii) the CSLR operator (within the meaning of that Chapter)

has paid, under section 1063 of that Act, an amount of

compensation for the relevant AFCA determination;

(iii) at the time the payment is made by the CSLR operator,

the person is the individual licensee, a partner in the

partnership, an officer (within the meaning of that Act)

of the body corporate or the trustee of the trust; or

22 Before paragraph 327(1)(a)

Insert:

(aa) a decision of ASIC under subsection 54(1B) (which deals

with immediate cancellation of a licence); or

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Part 1

Small amount credit contracts

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Schedule 4--Consumer credit reforms

Part 1--Small amount credit contracts

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

repayment date

: see subsection 133CD(3).

unsolicited communication to a consumer

: see

subsection 133CF(2).

2 Section

111 (paragraph beginning "Division 7")

Repeal the paragraph, substitute:

Division 7 prohibits a licensee from providing credit assistance to a

consumer in relation to short-term credit contracts, and imposes

requirements on a licensee who makes representations about

providing credit assistance in relation to small amount credit

contracts. It also imposes requirements in relation to recording the

preliminary assessment that a small amount credit contract is not

unsuitable.

3 Subsection 117(1A)

Omit "obtain and consider account statements that cover", substitute

"obtain and consider information about each transaction on the account,

and the balances of the account, during".

4 Subsection 118(3A)

Repeal the subsection.

5 Subsection 123(3A)

Repeal the subsection.

6 Section 124B

Repeal the section, substitute:

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124B Licensee who makes representations about credit assistance in

relation to small amount credit contracts must display

and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to

provide, credit assistance to consumers in relation to small amount

credit contracts, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making the determination under subsection (2), ASIC must take

into account the risks associated with small amount credit contracts

and the alternatives that may be available to consumers.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

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124C Written documentation required in relation to the preliminary

assessment for a small amount credit contract

(1) If, in a preliminary assessment made for the purposes of

paragraph 115(1)(c) or (2)(a), the licensee assesses that a small

amount credit contract is not unsuitable for a consumer, before

providing credit assistance to the consumer by:

(a) suggesting that the consumer apply, or assisting the

consumer to apply, for the small amount credit contract; or

(b) suggesting that the consumer apply, or assisting the

consumer to apply, for the increase to the credit limit of the

small amount credit contract which is the subject of that

preliminary assessment; or

credit contract;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of

paragraph 115(1)(d) or (2)(b) in relation to that preliminary

assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(d) and (e) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

7 Subsection 130(1A)

Omit "obtain and consider account statements that cover", substitute

"obtain and consider information about each transaction on the account,

and the balances of the account, during".

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8 Subsection 131(3A)

Repeal the subsection.

9 Subsection 133(3A)

Repeal the subsection.

10 Section

133C (paragraph beginning "Division 2")

Repeal the paragraph, substitute:

Division 2 prohibits a licensee from entering into, or increasing the

credit limit of, short-term credit contracts. It also imposes

requirements on a licensee who makes representations about

entering into small amount credit contracts and prohibits a licensee

from entering into, or offering to enter into, small amount credit

contracts in certain circumstances. Division 2 imposes

requirements in relation to recording the assessment that a small

amount credit contract is not unsuitable and prohibits a licensee

from making certain unsolicited communications in relation to

small amount credit contracts. It also provides that the consumer is

not liable to pay certain fees and charges under small amount credit

contracts in certain circumstances.

11 Section 133CB

Repeal the section, substitute:

133CB Licensee who makes representations in relation to small

amount credit contracts must display and give

information

Requirement

(1) If a licensee represents that the licensee enters into, or is able to

enter into, small amount credit contracts with consumers under

which the licensee would be the credit provider, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

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Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making a determination under subsection (2), ASIC must take

into account the risks associated with small amount credit contracts

and the alternatives that may be available to consumers.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

12 Subsection 133CC(1)

Repeal the subsection (not including the heading), substitute:

(1) A licensee must not enter into, or offer to enter into, a small

amount credit contract with a consumer who will be the debtor

under the contract if the repayments that would be required under

the contract would not meet the requirements prescribed by the

regulations.

Civil penalty:

5,000 penalty units.

Note:

For example, the regulations may provide that the amount of a

repayment must not exceed a specified percentage of the consumer's

income.

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13 At the end of section 133CC

Add:

Loss of certain fees and charges

(3) If a licensee enters into a small amount credit contract in

contravention of subsection (1), then:

(a) the consumer is not liable (and is taken never to have been

liable) to pay a fee or charge of a kind mentioned in

paragraph 31A(1)(a), (b), (c) or (d) of the National Credit

Code under that small amount credit contract (whether or not

the liability is imposed consistently with the National Credit

Code); and

(b) the consumer may recover as a debt due to the consumer any

amounts paid by the consumer that, in accordance with

paragraph (a) of this subsection, the consumer is not liable to

pay (or is taken never to have been liable to pay).

14 At the end of Division 2 of Part 3-2C

Add:

133CD Licensee must not enter into a small amount credit contract

if repayment amounts and intervals are not equal

Requirement

(1) A licensee must not enter into, or offer to enter into, a small

amount credit contract with a consumer who will be the debtor

under the contract if any of the following applies:

(a) repayments that would be required under the contract are not

equal;

(b) the intervals between repayment dates would not be equal;

provided under the contract and the first repayment date

would be longer than twice the interval between the first

repayment date and the second repayment date.

Civil penalty:

5,000 penalty units.

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(2) For the purposes of paragraph (1)(a), repayments that would be

required under a small amount credit contract are taken to be equal

if:

(a) each repayment is of the same amount; or

(b) both of the following apply:

(i) each repayment (other than the last repayment) is the

same amount;

(ii) the last repayment is up to 5% less than each other

repayment; or

under subsection (5).

(3) A

repayment date

in relation to a small amount credit contract is

the date on or by which a repayment is required to be made under

the contract.

(4) For the purposes of paragraph (1)(b), if a small amount credit

contract provides that:

(a) repayments that would be required under the contract are to

be made on or by a fixed day of each week, fortnight or

month; and

(b) if that fixed day falls on a day that is not a business day--the

repayment would be required to be made on or by the

immediately preceding or succeeding business day;

the intervals between repayment dates are taken to be equal.

(5) ASIC may, by legislative instrument, determine conditions for the

purposes of paragraph (2)(c).

(6) Nothing in this section is intended to limit the regulations which

may be made for the purposes of section 133CC.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

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Strict liability offence

(8) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

10 penalty units.

(9) Subsection (8) is an offence of strict liability.

133CE Written documentation required in relation to the

assessment for a small amount credit contract

(1) If, in an assessment made for the purposes of paragraph 128(c), the

licensee assesses that a small amount credit contract is not

unsuitable for a consumer, before:

(a) entering into the small amount credit contract with the

consumer; or

(b) making an unconditional representation to the consumer that

the licensee considers that the consumer is eligible to enter

into the small amount credit contract with the licensee; or

which is the subject of that assessment; or

(d) making an unconditional representation to the consumer that

the licensee considers that the credit limit of the small

amount credit contract between the consumer and the

licensee will be able to be increased;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(e) the assessment; and

(f) the inquiries and verification made for the purposes of

paragraph 128(d) in relation to that assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(e) and (f) are to be documented in

writing.

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(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

133CF Licensee not to make certain unsolicited communications in

relation to a small amount credit contract

Prohibition on certain unsolicited communications

(1) A licensee must not make, or arrange for the making of, an

unsolicited communication to a consumer (whether orally, in

writing or by electronic means) that contains:

(a) an offer to the consumer to enter into a small amount credit

contract; or

(b) an invitation to the consumer to apply for a small amount

credit contract;

if any of the following apply:

small amount credit contract with the licensee;

(d) the consumer has at any time applied for a small amount

credit contract with the licensee;

(e) the consumer:

(i) is, or has at any time been, a debtor under a small

amount credit contract with another credit provider; or

(ii) has at any time applied for a small amount credit

contract with another credit provider;

and a reasonable person in the licensee's position would, if

the person undertook such inquiries as are reasonable in the

circumstances, be aware of the matter in subparagraph (i) or

(ii) (whichever applies).

Civil penalty:

5,000 penalty units.

Meaning of unsolicited communication to a consumer

(2) An

unsolicited communication

to a consumer

is a communication

to a consumer or a consumer's agent that is made by a person by

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dealing directly with the consumer or the consumer's agent in any

of the following circumstances:

(a) no prior request has been made by the consumer to the

licensee for that communication;

(b) the consumer has made a prior request to the licensee for that

communication and that request was solicited by or on behalf

of the licensee;

However, the regulations may prescribe that specified kinds of

communications are not unsolicited communications to which this

section applies.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

Loss of certain fees and charges

(4) If:

(a) a licensee makes an unsolicited communication to a

consumer in contravention of subsection (1); and

(b) the licensee enters into a small amount credit contract with

that consumer within 30 days after that unsolicited

communication is made;

then:

liable) to pay a fee or charge of a kind mentioned in

paragraph 31A(1)(a), (b), (c) or (d) of the National Credit

Code under that small amount credit contract (whether or not

the liability is imposed consistently with the National Credit

Code); and

(d) the consumer may recover as a debt due to the consumer any

amounts paid by the consumer that, in accordance with

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paragraph (c) of this subsection, the consumer is not liable to

pay (or is taken never to have been liable to pay).

15 After section 31B of the National Credit Code

Insert:

31C Prohibition on unexpired monthly fees in relation to small

amount credit contracts

Requirement

(1) A credit provider must not require or accept payment by the debtor

under a small amount credit contract of an unexpired monthly fee.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

(2) An

unexpired monthly fee

in relation to a small amount credit

contract is each permitted monthly fee that is in respect of a month

that commences after the date on which the contract is paid out.

(3) If a credit provider contravenes subsection (1) in relation to a small

amount credit contract:

(a) the debtor is not liable (and is taken never to have been

liable) to make the payment of the unexpired monthly fee to

the credit provider; and

(b) the debtor may recover as a debt due to the debtor the amount

of any payment of the unexpired monthly fee made by the

debtor to the credit provider.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

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Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

10 penalty units.

(6) Subsection (5) is an offence of strict liability.

16 Subsection 72(3) of the National Credit Code

(paragraph (a) of the note)

After "such as", insert "family violence,".

17 Paragraph 82(2)(b) of the National Credit Code

Repeal the paragraph, substitute:

(b) either:

(i) for a credit contract that is not a small amount credit

contract--the interest charges and all other fees and

charges payable by the debtor to the credit provider up

to the date of termination; or

(ii) for a small amount credit contract--all fees and charges

payable by the debtor to the credit provider up to the

date of termination, excluding any unexpired monthly

fee;

18 After paragraph 111(1)(i) of the National Credit Code

Insert:

(ia) section 31C;

19 Subsection 204(1) of the National Credit Code

Insert:

unexpired monthly fee

: see subsection 31C(2).

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Consumer leases

Financial Sector Reform Bill 2022

No. , 2022

Part 2--Consumer leases

National Consumer Credit Protection Act 2009

20 Subsection 5(1)

Insert:

consumer lease for household goods

has the same meaning as in

section 204 of the National Credit Code.

household goods

has the same meaning as in section 204 of the

National Credit Code.

21 At the end of section 134

Add:

Division 7 imposes requirements on a licensee who makes

representations about providing credit assistance in relation to

consumer leases for household goods. It also imposes requirements

in relation to recording the preliminary assessment that a consumer

lease is not unsuitable.

22 After subsection 140(1)

Insert:

(1A) If:

(a) the consumer lease is a consumer lease for household goods;

and

(b) the consumer holds (whether alone or jointly with another

person) an account with an ADI into which income payable

to the consumer is credited;

the licensee must, in verifying the consumer's financial situation

for the purposes of paragraph 138(1)(d), obtain and consider

information about each transaction on the account, and the

balances of the account, during at least the immediately preceding

period of 90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c).

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Part 2

No. , 2022

Financial Sector Reform Bill 2022

23 At the end of Part 3-3

Add:

Division 7--Special rules for consumer leases for

household goods

147A Licensee who makes representations about credit assistance in

relation to consumer leases for household goods must

display and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to

provide, credit assistance to consumers in relation to consumer

leases for household goods, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making a determination under subsection (2), ASIC must take

into account the risks associated with consumer leases for

household goods and the alternatives that may be available to

consumers.

Offence

(4) A person commits an offence if:

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(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

147B Written documentation required in relation to the preliminary

assessment for a consumer lease for household goods

(1) If, in a preliminary assessment made for the purposes of

paragraph 138(1)(c) or (2)(a), the licensee assesses that a consumer

lease for household goods is not unsuitable for a consumer, before

providing credit assistance to the consumer by:

(a) suggesting that the consumer apply for a particular consumer

lease with a particular lessor; or

(b) assisting the consumer to apply for a particular consumer

lease with a particular lessor; or

lease with a particular lessor;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of

paragraph 138(1)(d) or (2)(b) in relation to that preliminary

assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(d) and (e) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

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Part 2

No. , 2022

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24 At the end of section 148

Add:

Division 5 prohibits a licensee from entering into, or offering to

enter into, a consumer lease for household goods in certain

circumstances and imposes requirements on a licensee who makes

representations about consumer leases for household goods. It also

imposes requirements in relation to recording an assessment that a

consumer lease is not unsuitable.

25 After subsection 153(1)

Insert:

(1A) If:

(a) the consumer lease is a consumer lease for household goods;

and

(b) the consumer holds (whether alone or jointly with another

person) an account with an ADI into which income payable

to the consumer is credited;

the licensee must, in verifying the consumer's financial situation

for the purposes of paragraph 151(d), obtain and consider

information about each transaction on the account, and the

balances of the account, during at least the immediately preceding

period of 90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c).

26 At the end of Part 3-4

Add:

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Consumer leases

Financial Sector Reform Bill 2022

No. , 2022

Division 5--Special rules for consumer leases for

household goods

156A Licensee who makes representations about consumer leases

for household goods must display and give information

Requirement

(1) If a licensee represents that the licensee enters into, or is able to

enter into, consumer leases for household goods with consumers

under which the licensee would be the lessor, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made be ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

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156B Licensee must not enter into a consumer lease for household

goods if the payments do not meet the prescribed

requirements

Requirement

(1) A licensee must not enter into, or offer to enter into, a consumer

lease for household goods with a consumer who will be the lessee

under the lease if the amount that would be required to be paid

under the lease by the lessee would not meet the requirements

prescribed by the regulations.

Civil penalty:

5,000 penalty units.

Note:

For example, the regulations may provide that the amount of a

payment must not exceed a specified percentage of the lessee's

income.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

Loss of certain amounts

(3) If the licensee enters into a consumer lease for household goods in

contravention of subsection (1), then:

(a) the lessee is not liable (and is taken never to have been liable)

to pay any amount under that consumer lease that exceeds the

base price of the goods hired under that consumer lease

(whether or not the liability is imposed consistently with the

National Credit Code); and

(b) the lessee may recover as a debt due to the lessee any

amounts paid by the lessee that, in accordance with

paragraph (a) of this subsection, the lessee is not liable to pay

(or is taken never to have been liable to pay).

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156C Written documentation required in relation to the assessment

for a consumer lease for household goods

(1) If, in an assessment made for the purposes of paragraph 151(c), the

licensee assesses that a consumer lease for household goods is not

unsuitable for a consumer, before:

(a) entering into the consumer lease with the consumer; or

(b) making an unconditional representation to the consumer that

the licensee considers that the consumer is eligible to enter a

consumer lease with the licensee;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the inquiries and verification made for the purposes of

paragraph 151(d) in relation to that assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(c) and (d) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

27 Part 6 of the National Credit Code (at the end of the

heading)

Add "

and lessors

28 After subsection 111(2) of the National Credit Code

Insert:

(2A) For the purposes of this Division, a

key requirement

in connection

with a consumer lease is any one of the requirements of this Code

contained in the following provisions:

(a) subsection 174(1A);

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(b) subsection 175AA(1);

(d) section 179VA.

29 Subsections 112(1) and (2) of the National Credit Code

Repeal the subsections, substitute:

(1) An application for an order under this Division may be made by:

(a) a party to a credit contract or consumer lease; or

(b) a guarantor in relation to a credit contract; or

(2) A debtor, lessee or guarantor may not make an application for an

order under this Division in respect of a contravention in

connection with a contract or consumer lease if the contravention is

or has been subject to an application for an order made by the

credit provider, lessor or ASIC anywhere in Australia under this

Code.

30 Subsection 113(1) of the National Credit Code

Repeal the subsection (not including the heading), substitute:

(1) The court must, on an application being made, by order declare

whether or not the credit provider or lessor has contravened a key

requirement in connection with the credit contract or contracts

concerned, or consumer lease or leases concerned.

31 Subsection 113(2) of the National Credit Code

After "credit provider" (wherever occurring), insert "or lessor".

32 Subsection 113(3) of the National Credit Code

Repeal the subsection, substitute:

Prudential standing

(3) The court, in considering the imposition of a penalty, must have

regard primarily to the prudential standing of:

(a) any credit provider or lessor concerned; or

(b) any subsidiary of the credit provider or lessor (within the

meaning of the

Corporations Act 2001

);

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if the credit provider, lessor or subsidiary takes deposits or is a

borrowing corporation (within the meaning of that Act). However,

the court is to have regard to that prudential standing only if the

credit provider or lessor requests the court to do so.

33 Paragraph 113(4)(a) of the National Credit Code

Before "the conduct", insert "in the case of a credit contract--".

34 After paragraph 113(4)(a) of the National Credit Code

Insert:

(aa) in the case of a consumer lease--the conduct of the lessor

and lessee before and after the consumer lease was entered

into;

35 Paragraph 113(4)(c) of the National Credit Code

After "debtor", insert "or lessee".

36 Paragraphs 113(4)(d), (e) and (f) of the National Credit

Code

After "credit provider", insert "or lessor".

37 Paragraph 113(4)(g) of the National Credit Code

Repeal the paragraph, substitute:

(g) any action taken by the credit provider or lessor to remedy

the contravention or compensate the debtor or lessee or to

prevent further contraventions;

38 After section 114 of the National Credit Code

Insert:

114A Penalty if application made by lessee

(1) On application being made by a lessee for an order in relation to a

consumer lease, the maximum penalty that may be imposed by the

court for a contravention of a key requirement is an amount not

exceeding the difference between:

(a) the total amount payable by the lessee under the consumer

lease; and

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(b) the base price of the goods hired under the lease.

(2) The court may, however, impose a greater penalty if the lessee

satisfies the court that the lessee has suffered a loss. The amount of

the penalty is to be not less than the amount of the loss.

(3) For the purposes of paragraph (1)(a), the amount payable under a

consumer lease to the extent it relates to amounts payable in the

future is to be calculated on the assumptions in sections 180 and

182.

39 Section 115 of the National Credit Code (heading)

After "

debtor

", insert "

, lessee

40 Subsection 115(1) of the National Credit Code

Repeal the subsection, substitute:

(1) An amount of penalty ordered by the court to be paid may:

(a) if the order was made on an application by a debtor or a

guarantor in relation to a credit contract--be set off by the

debtor or guarantor against any amount that is due or

becomes due to the credit provider under the contract; or

(b) if the order was made on an application by a lessee in relation

to a consumer lease--be set off by the lessee against any

amount that is due or becomes due to the lessor under the

lease.

If there is no such amount, the amount of the penalty is a debt due

by the credit provider or lessor to the debtor, lessee or guarantor

41 Subsection 115(3) of the National Credit Code

Repeal the subsection, substitute:

(3) An order made on application by a debtor, a lessee or a guarantor

may include such directions as the court considers appropriate

relating to the payment of the amount owed by the debtor or lessee,

or the credit provider or lessor, as a result of the order.

42 Sections 116 to 119 of the National Credit Code

Repeal the sections, substitute:

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116 Penalty if application made by credit provider, lessor or ASIC

(1) On application being made by a credit provider, a lessor or ASIC

for an order, the maximum penalty that may be imposed by the

court for a contravention of a key requirement relating to a contract

affected by the application is an amount calculated so that the total

penalty for all contraventions of the requirement in Australia (as

disclosed by the credit provider or lessor) does not exceed 5,000

penalty units.

(2) However, section 167B of the National Credit Act applies in the

same way in relation to the contravention of a key requirement as it

would apply in relation to a civil penalty provision under that Act.

117 Payment of penalty

An amount of penalty ordered by the court to be paid on an

application for an order made by a credit provider, a lessor or

ASIC must be paid by the credit provider or lessor to ASIC on

behalf of the Commonwealth.

118 Compensation for debtor, lessee or guarantor

(1) The court may, on application by a debtor, a lessee or a guarantor,

order that the credit provider or lessor pay to the debtor, lessee or

guarantor an amount by way of compensation for loss arising from

the contravention of a key requirement.

(2) The court may only order an amount to be paid by way of

compensation if the debtor, lessee or guarantor satisfies the court

that the debtor, lessee or guarantor has suffered a loss arising from

the contravention. The amount of compensation is not to exceed

the amount of the loss.

(3) The court may not make an order under this section if the debtor,

lessee or guarantor has previously obtained or been refused a

penalty referred to in section 115 relating to the same

contravention.

(4) An amount payable under this section does not affect the amount

of a penalty for the purposes of section 116.

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119 General provisions relating to applications by credit providers,

lessors or ASIC

(1) An application for an order by a credit provider, a lessor or ASIC:

(a) may apply to any one or more credit contracts or consumer

leases; and

(b) may apply to all or any class of credit contracts entered into

by the credit provider or lessor during a specified period (for

example, all credit contracts entered into during a specified

period which are affected by a specified contravention).

(2) The court may require notice of any such application to be

published by notice, in a form approved by the court, in a

newspaper circulating throughout one or more States or Territories,

as the court determines.

(3) Notice of an application by a credit provider or lessor must be

given by the credit provider or lessor to ASIC.

43 Section 120 of the National Credit Code (at the end of the

heading)

Add "

and lessees

44 At the end of section 120 of the National Credit Code

Add "or lessees".

45 Subsection 121(1) of the National Credit Code

Repeal the subsection, substitute:

(1) The court may, before disposing of an application by a debtor,

lessee or guarantor for an order under this Division, make such

directions as it considers appropriate to protect the interests of the

debtor, lessee or guarantor concerned.

46 Paragraph 121(2)(a) of the National Credit Code

After "guarantor)", insert ", or the lessee's obligations,".

47 Subsection 121(4) of the National Credit Code

After "credit provider", insert "or lessor".

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48 Subsection 124(1) of the National Credit Code

After "credit provider" (wherever occurring), insert "or lessor".

49 After subsection 174(1) of the National Credit Code

Insert:

(1A) A consumer lease for household goods must also contain:

(a) the base price of the goods hired under the consumer lease;

and

(b) the difference between:

(i) the base price of the goods hired under the lease; and

(ii) the total amount payable by the lessee in connection

with the lease (including any applicable taxes and any

add-on fees, but not including an amount described in

subsection 175AA(4)); and

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

50 After section 175A of the National Credit Code

Insert:

175AA Cap on fees and charges for consumer leases

Overall cap for every consumer lease

(1) A lessor must not enter into, or vary, a consumer lease so that the

total amount that would be payable by the lessee in connection

with the lease (including any applicable taxes and any add-on fees)

is more than the permitted cap for the lease.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

Monthly cap for consumer lease for indefinite period

(2) A lessor must not enter into, or vary, a consumer lease for an

indefinite period so that the total amount that would be payable by

the lessee in connection with the lease (including any applicable

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taxes and any add-on fees) in any month is more than

of the

permitted cap for the lease.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

What is an add-on fee?

(3) An

add-on fee

for a consumer lease is any fee or charge (whether

an interest charge or not) for which the following conditions are

met:

(a) the fee or charge is one that:

(i) the lessee is liable to pay to the lessor; or

(ii) the lessee is liable to pay to another person under an

agreement facilitated by or on behalf of the lessor or the

other person;

(b) the fee or charge relates to a service or product that either:

(i) facilitates or complements the lessee's use of the goods

hired under the consumer lease; or

(ii) is marketed or offered by the lessor or another person as

being complementary to the lessee's use of the goods

hired under the consumer lease;

(i) failure by the lessee to pay the fee or charge, or to

acquire a service or product to which the fee or charge

relates, affects the lessee's rights or obligations under

the consumer lease; or

(ii) the lessor or another person has represented to the lessee

that failure by the lessee to pay the fee or charge, or to

acquire a service or product to which the fee or charge

relates, will or may affect the lessee's rights or

obligations under the consumer lease.

Amounts that do not count against caps

(4) For the purposes of subsections (1) and (2), the following amounts

are not included in the total amount payable by the lessee in

connection with the consumer lease:

(a) a fee or charge that is payable in the event of a default in

payment under the consumer lease;

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(b) enforcement expenses of an amount not exceeding the

amount which could be recovered by the lessor under

subsection 179R(1).

What is the permitted cap?

(5) The

permitted cap

for a consumer lease is the sum of the following

amounts:

(a) the base price of the goods hired under the consumer lease;

(b) the amount worked out by multiplying the base price of the

goods hired under the consumer lease by:

(i) in the case of a consumer lease for a fixed term--0.04

multiplied by the number of whole months of the

consumer lease, up to a maximum of 48 months; or

(ii) in the case of a consumer lease for an indefinite

period--1.92;

(d) the permitted installation fees (if any) for the consumer lease;

(e) the permitted add-on fees (if any) for the consumer lease.

What is the base price of goods?

(6) The

base price

of the goods hired under a consumer lease is the

amount worked out in accordance with the regulations.

What is a permitted delivery fee?

(7) A fee or charge is a

permitted delivery fee

for a consumer lease if

it:

(a) is for the delivery to the lessee, at the lessee's request, of the

goods hired under the consumer lease; and

(b) is limited to the reasonable cost of delivery of the goods to

the lessee.

What are permitted installation fees?

(8) ASIC may, by legislative instrument, declare that specified fees

which relate to installation of particular kinds of goods hired under

a consumer lease are

permitted installation fees

for the lease.

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What are permitted add-on fees?

(9) ASIC may, by legislative instrument, declare that specified add-on

fees for a consumer lease are

permitted add-on fees

for the lease.

175AB Imposing fees or charges above the permitted cap--offence

A person commits an offence if:

(a) the person is subject to a requirement under

subsection 175AA(1) or (2); and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

175AC Lessee may recover fees and charges exceeding base price if

cap is breached

If a lessor contravenes subsection 175AA(1) or (2) in relation to a

consumer lease:

(a) the lessee is not liable (and is taken never to have been liable)

to pay any amount under the consumer lease that exceeds the

base price of the goods hired under the consumer lease

(whether or not the liability is imposed consistently with this

Code); and

(b) the lessee may recover as a debt due to the lessee the amount

of any payment made by the lessee that, in accordance with

paragraph (a), the lessee is not liable to pay.

51 Subsection 177B(3) of the National Credit Code

(paragraph (a) of the note)

After "such as", insert "family violence,".

52 At the end of Subdivision C of Division 8 of Part 11 of the

National Credit Code

Add:

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179GA Limit on amount that may be recovered if there is default

under a consumer lease

(1) If there is a default in payment under a consumer lease and the

regulations prescribe a way of working out a limit on the amount

that may be recovered for the default, the lessor must not recover

more than the limit for the default.

Civil penalty:

5,000 penalty units.

(2) Any provision of the lease that confers a greater right is void to the

extent that it does so. If an amount is in fact recovered in excess of

this limitation, it may be recovered back.

(3) This section does not apply to enforcement expenses.

Note:

Section 179R deals with enforcement expenses.

53 At the end of Division 10 of Part 11 of the National Credit

Code

Add:

179VA Canvassing of consumer leases for household goods

Requirement

(1) A lessor must not make, or arrange for the making of, an

unsolicited communication to consumer if:

(a) the communication is for the purpose of inducing the

consumer to apply for, or obtain, a consumer lease for

household goods; and

(b) when the consumer receives the communication, the

consumer is in the physical presence of the lessor or the

person making the communication; and

consumer is in:

(i) a public place; or

(ii) a place that is not a business premises of a business of

the lessor; or

(iii) a stall that is being used by the lessor or by the person

making the communication; or

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(iv) an aircraft, vehicle or vessel that is being used by the

lessor or by the person making the communication.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

Strict liability offence

(3) A person commits an offence of strict liability if the person

contravenes subsection (1).

Criminal penalty:

10 penalty units.

Loss of certain amounts

(4) If:

(a) a lessor makes, or arranges for the making of, an unsolicited

communication to a consumer in contravention of

subsection (1); and

(b) the lessor enters into a consumer lease for household goods

with that consumer within 30 days after that unsolicited

communication is made;

then:

liable) to pay any amount under that consumer lease that

exceeds the base price of the goods hired under that

consumer lease (whether or not the liability is imposed

consistently with the National Credit Code); and

(d) the consumer may recover as a debt due to the consumer any

amounts paid by the consumer that, in accordance with

paragraph (c) of this subsection, the consumer is not liable to

pay (or is taken never to have been liable to pay).

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179VB Using postal, telegraphic, telephonic or other like services to

enter into a consumer lease for an indefinite period

Requirement

(1) A lessor must not use postal, telegraphic, telephonic or other like

services (within the meaning of paragraph 51(v) of the

Constitution) to enter into a consumer lease for an indefinite period

if the lessor is not a constitutional corporation.

Civil penalty:

5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

179VC Entering into a consumer lease for an indefinite period in the

course of constitutional trade and commerce

Requirement

(1) A lessor must not, in the course of constitutional trade and

commerce, enter into a consumer lease for an indefinite period

unless the lessor is a constitutional corporation.

Civil penalty:

5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

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54 Subsection 204(1) of the National Credit Code

Insert:

add-on fee

: see subsection 175AA(3).

base price

: see subsection 175AA(6).

consumer lease for household goods

means a consumer lease to

which Part 11 applies where any of the goods hired under the lease

are household goods, but does not include a consumer lease where

the goods hired under the lease include:

(a) motor vehicles; or

(b) vehicles that:

(i) are not for use on a road; and

(ii) are of a kind intended primarily for use by persons with

restricted mobility; or

permanently or temporarily).

credit assistance

has the same meaning as in section 8 of the

National Credit Act.

household goods

means goods of a kind ordinarily acquired for

domestic or household purposes.

55 Subsection 204(1) of the National Credit Code (definition

of market value)

After "credit contract", insert "or consumer lease".

56 Subsection 204(1) of the National Credit Code

Insert:

permitted add-on fee:

see subsection 175AA(9).

permitted cap

: see subsection 175AA(5).

permitted delivery fee

: see subsection 175AA(7).

permitted installation fees

: see subsection 175AA(8).

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Part 3--Proscribed referrals

National Consumer Credit Protection Act 2009

57 Subsection 5(1)

Insert:

proscribed referral

: see subsection 160G(2).

58 At the end of section 160A

Add:

Division 6 prohibits licensees that carry on a business of providing

credit under small amount credit contracts from making certain

kinds of referrals (called proscribed referrals) in certain

circumstances.

59 At the end of Part 3-6A

Add:

Division 6--Proscribed referrals

160G Prohibition on proscribed referrals

Prohibition

(1) A licensee that carries on a business of providing credit under

small amount credit contracts must not make a proscribed referral

if:

(a) the licensee is a constitutional corporation; or

(b) the referral is made in the course of carrying on that business;

of banking, other than State banking (within the meaning of

paragraph 51(xiii) of the Constitution) not extending beyond

the limits of the State concerned; or

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(d) the referral is made using a service to which paragraph 51(v)

of the Constitution applies.

Civil penalty:

5,000 penalty units.

What is a proscribed referral?

(2) A referral of one or more persons (the

referred persons

) to another

person or persons (the

recipients

of the referral) is a

proscribed

referral

if, at the time when the referral is made, it is reasonable to

believe that one or more of the referred persons would or might, as

a direct or indirect result of the referral (including as a result of

conduct that any of the recipients of the referral engages in as a

result of the referral), enter into a contract or arrangement that

satisfies the following conditions:

(a) under the contract or arrangement, credit is to be, or may be,

provided to the referred person;

(b) the provision of that credit under the contract or arrangement

would not be a provision of credit to which the National

Credit Code applies.

Note:

For the kinds of provision of credit to which the National Credit Code

does or does not apply, see sections 5 and 6 of that Code.

(3) For the purposes of subsection (2), a recipient of a proscribed

referral need not be a person who would or might be a provider of

credit under a contract or arrangement of the kind mentioned in

that subsection.

(4) For the purposes of subsection (2), a referral of one or more

persons to another person or persons includes (but is not limited to)

the provision of information about the first-mentioned person or

persons to the second-mentioned person or persons, whether or not

the first-mentioned person or persons are aware of the provision of

that information.

(5) To avoid doubt, it does not matter for the purposes of

subsection (2) whether any person actually has, or had, the belief

mentioned in that subsection.

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Part 4--Avoidance

National Consumer Credit Protection Act 2009

60 Subsection 5(1)

Insert:

avoidance purpose

: see subsection 323A(2).

constitutional corporation

means a corporation to which

paragraph 51(xx) of the Constitution applies.

constitutional trade and commerce

means trade and commerce:

(a) between Australia and places outside Australia; or

(b) between the States; or

(d) between 2 Territories; or

(e) within a Territory.

scheme

means:

(a) any agreement, arrangement, understanding, promise or

undertaking, whether express or implied; or

(b) any scheme, plan, proposal, action, course of action or course

of conduct, whether unilateral or otherwise; or

because of paragraph (a) or (b).

61 Section 323

After:

This Part deals with miscellaneous matters.

insert:

Division 1A has rules that prohibit schemes that are designed to

avoid the application of this Act in relation to small amount credit

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contracts and consumer leases or to avoid the application of

product intervention orders.

62 After Division 1 of Part 7-1

Insert:

Division 1A--Avoidance schemes

323A Schemes for avoidance purposes

General prohibition

(1) A person must not, either alone or with others, engage in any of the

following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to any matters as required under

subsection 323B(1) or (3), it would be reasonable to conclude that

the purpose, or one of the purposes, of the person engaging in that

conduct was an avoidance purpose.

Civil penalty:

5,000 penalty units.

What is an avoidance purpose?

(2) Each of the following is an

avoidance purpose

(a) to prevent a contract from being a small amount credit

contract or a consumer lease;

(b) to cause a contract to cease to be a small amount credit

contract or a consumer lease;

amount credit contract or a consumer lease;

(d) to avoid the application of a provision of this Act to a

contract that has ceased to be a small amount credit contract

or a consumer lease;

(e) to avoid the application of a product intervention order made

under Part 6-7A.

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Constitutional corporations

(3) A constitutional corporation must not, either alone or with other

persons, engage in any of the following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to any matters as required under

subsection 323B(1) or (3), it would be reasonable to conclude that

the purpose, or one of the purposes, of the constitutional

corporation engaging in that conduct was an avoidance purpose.

Civil penalty:

5,000 penalty units.

Constitutional trade and commerce

(4) A person must not in the course of constitutional trade and

commerce, either alone or with others, engage in any of the

following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to any matters as required under

subsection 323B(1) or (3), it would be reasonable to conclude that

the purpose, or one of the purposes, of the person engaging in that

conduct was an avoidance purpose.

Civil penalty:

5,000 penalty units.

Use of communications service

(5) A person must not use postal, telegraphic, telephonic or other like

services (within the meaning of paragraph 51(v) of the

Constitution), either alone or with other persons, in order to engage

in any of the following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to any matters as required under

subsection 323B(1) or (3), it would be reasonable to conclude that

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the purpose, or one of the purposes, of the person engaging in that

conduct was an avoidance purpose.

Civil penalty:

5,000 penalty units.

Prohibitions independent of each other

(6) To avoid doubt, subsections (1), (3), (4) and (5) are independent

from and do not limit each other.

Note:

However, a person can be ordered to pay a pecuniary penalty under

only one of those subsections in relation to the same conduct: see

section 175.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1),

(3), (4) or (5); and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

323B Whether it is reasonable to draw conclusion as to purpose

Avoidance purposes relating to contracts

(1) Regard must be had to the following matters in determining, for the

purposes of section 323A, whether it would be reasonable to

conclude that a purpose of a person (the

first person

) entering into

or carrying out (to any extent) a scheme was an avoidance purpose

relating to a contract:

(a) whether the scheme or the contract was, is or would be:

(i) a means of providing a consumer with credit in a

manner more complex, or more costly to the consumer,

than a small amount credit contract would have been; or

(ii) a means of providing a consumer with financial

accommodation equivalent to providing the consumer

with credit in a manner more complex, or more costly to

the consumer, than a small amount credit contract

would have been; or

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(iii) a means of enabling a consumer to have the use of

goods in a manner more complex, or more costly to the

consumer, than a consumer lease would have been;

(b) whether representations were made (by the first person or

anyone else, and whether in an advertisement or otherwise)

about the scheme or the contract, or about schemes or

contracts of that kind, that:

(i) were similar to representations made (by the first person

or anyone else, and whether in an advertisement or

otherwise) about small amount credit contracts or

consumer leases; or

(ii) were made to persons in a group similar to a group of

persons to whom representations about small amount

credit contracts or consumer leases were made (by the

first person or anyone else, and whether in an

advertisement or otherwise);

(2) Subsection (1) does not limit the matters to which regard may be

had in making a determination described in that subsection.

Avoidance purposes relating to product intervention orders

(3) In determining, for the purposes of section 323A, whether it would

be reasonable to conclude that a purpose of a person entering into

or carrying out (to any extent) a scheme was a purpose referred to

in paragraph 323A(2)(e), regard must be had to any matters

prescribed by the regulations.

(4) Subsection (3) does not limit the matters to which regard may be

had in making a determination described in that subsection.

323C Presumption of avoidance for certain schemes in civil cases

(1) For the purposes of subsection 323A(1), (3), (4) or (5), it is

reasonable to conclude that a person entered into or carried out a

scheme for an avoidance purpose if:

(a) the scheme is of a kind prescribed by the regulations; or

(b) the scheme is of a kind determined by ASIC under

subsection (3).

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(2) A conclusion that this section provides for has effect except so far

as the contrary is proved by the person, having regard to any

matters as required under subsection 323B(1) or (3).

(3) ASIC may, by legislative instrument, determine a scheme, or a

class of schemes, for the purposes of this section.

(4) This section does not have effect for the purposes of

subsection 323A(7).

323D Exemption by ASIC

(1) ASIC may, by legislative instrument, exempt a scheme, or class of

schemes, from all or specified provisions of section 323A.

(2) An exemption may apply subject to any specific conditions

imposed by ASIC.

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Part 5--Consumer leases for indefinite terms

National Consumer Credit Protection Act 2009

63 Subsection 171(1) of the National Credit Code (heading)

Omit "

or indefinite

64 Subsection 171(1) of the National Credit Code

Omit all the words after "or less".

65 After subsection 171(1) of the National Credit Code

Insert:

Leases for an indefinite period

(1A) This Part does not apply to a consumer lease for an indefinite

period unless:

(a) the lessor is a constitutional corporation at the time that the

lease is entered into; or

(b) the lease was entered into in the course of constitutional trade

and commerce; or

telephonic or other like services (within the meaning of

paragraph 51(v) of the Constitution).

66 Subsection 175H(1) of the National Credit Code

Omit "not later than 90 days before the end of the fixed term of a

consumer lease", substitute "by the time specified in subsection (1A)".

67 After subsection 175H(1) of the National Credit Code

Insert:

(1A) The time by which the statement required by subsection (1) must

be given is:

(a) in the case of a consumer lease for an indefinite period--

before the end of the period of 7 business days after:

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(i) the lessor receives a request for the statement from the

lessee; or

(ii) if the lessor does not receive such a request before the

consumer lease ends--the day that the consumer lease

ends; or

(b) in the case of a consumer lease for a fixed term--not later

than 90 days before the end of the fixed term of the consumer

lease.

68 Before subsection 179(1) of the National Credit Code

Insert:

Early termination of consumer leases for fixed terms

69 Subsection 179(1) of the National Credit Code

After "consumer lease", insert "for a fixed term".

70 After subsection 179(1) of the National Credit Code

Insert:

Consumer leases for indefinite periods

(1A) A lessee under a consumer lease for an indefinite period may, at

any time, end the lease by returning the goods hired under the lease

to the lessor:

(a) during ordinary business hours; or

(b) at such other time as may be agreed with the lessor or fixed

by the court on the application of the lessee.

71 Before subsection 179(2) of the National Credit Code

Insert:

Amount payable by lessee on termination

72 Subsection 179(2) of the National Credit Code

Omit "before the end of its fixed term".

73 Subsection 204(1) of the National Credit Code

Insert:

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Part 6--Consequential and other amendments

National Consumer Credit Protection Act 2009

74 Subsection 5(1)

Insert:

constrained document

: see subsection 160CA(1).

constrained information

: see subsection 160CA(1).

hardship notice

has the same meaning as in section 204 of the

National Credit Code.

75 Section

160A (after the paragraph beginning "Division 2")

Insert:

Division 2A restricts the use and disclosure of certain documents

and information.

76 After Division 2 of Part 3-6A

Insert:

Division 2A--Use or disclosure of certain documents and

information

160CA Application of this Division

(1) This Division applies to a person who:

(a) is or was a licensee who has received or obtained a document

constrained document

) prescribed by the regulations, or

information (

constrained information

) prescribed by the

regulations, in connection with:

(i) a proposed small amount credit contract; or

(ii) a small amount credit contract; or

(iii) a proposed consumer lease for household goods; or

(iv) a consumer lease for household goods; or

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(b) is or was a licensee who has obtained information (also

constrained information

) as required under

subsection 117(1A), 130(1A), 140(1A) or 153(1A) for the

purposes of verifying a consumer's financial situation; or

constrained information, from a person described in

paragraph (a) or (b) of this subsection.

(2) However, this Division does not apply to a person in relation to:

(a) a constrained document; or

(b) information contained in a constrained document; or

that is about the financial affairs of the person (either alone or with

others).

160CB Prohibition on use or disclosure of certain documents and

information

Requirement

(1) A person must not use or disclose:

(a) a constrained document; or

(b) information contained in a constrained document; or

Civil penalty:

5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person uses or discloses a document or information; and

(b) any of the following apply:

(i) the document is a constrained document;

(ii) the information is contained in a constrained document;

(iii) the information is constrained information.

Criminal penalty:

100 penalty units.

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Strict liability offence

(3) A person commits an offence if the person uses or discloses:

(a) a constrained document; or

(b) information contained in a constrained document; or

Criminal penalty:

10 penalty units.

(4) Subsection (3) is an offence of strict liability.

Defence

(5) For the purposes of subsection (1), (2) or (3) it is a defence if the

use or disclosure by the person is:

(a) a disclosure to another person (the

recipient

)

of:

(i) a constrained document; or

(ii) information contained in a constrained document; or

(iii) constrained information;

that is about the financial affairs of the recipient (either alone

or with others); or

(b) necessary for the person to comply with the person's

obligations under this Act; or

Commonwealth, or of a State or Territory, or a court or

tribunal order; or

(d) for the purposes of considering a hardship notice; or

(e) for the purposes of assisting ASIC to perform its functions or

exercise its powers; or

(f) for the purposes of allowing the operator of the AFCA

scheme to perform its functions or exercise its powers.

Note:

For the purposes of subsection (2) or (3), a defendant bears an

evidential burden in relation to the matter in subsection (5) (see

subsection 13.3(3) of the

Criminal Code)

77 Section 335A

Repeal the section.

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Part 7--Application provisions

National Consumer Credit Protection (Transitional and

Consequential Provisions) Act 2009

78 In the appropriate position

Insert:

Schedule 19--Application provisions for

Schedule 4 to the Financial Sector

Reform Act 2022

1 Definitions

In this Schedule:

amending Schedule

means Schedule 4 to the

Financial Sector Reform

Act 2022

2 Amendments of the National Credit Act

--repeal of

rebuttable presumptions

The repeals of the following provisions of the National Credit Act, as

made by Part 1 of the amending Schedule, apply for the purposes of

proceedings relating to a contravention of a provision of the National

Credit Act if the proceedings commence on or after the commencement

of that Part:

(a) subsection 118(3A);

(b) subsection 123(3A);

(d) subsection 133(3A).

3 Amendments of the National Credit Act

--representations

and communications

(1)

The amendment, addition or insertion of the following sections of the

National Credit Act, as made by Parts 1 and 2 of the amending

Schedule, applies in relation to representations made on or after the day

those Parts commence:

(a) section 124B;

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(b) section 133CB;

(d) section 156A.

(2)

Section 133CF of the National Credit Act, as added by Part 1 of the

amending Schedule, applies in relation to:

(a) the making of an unsolicited communication on or after the

day that Part commences; and

(b) the arranging for the making of an unsolicited

communication if the arrangement is entered into on or after

that day.

4 Amendments of the National Credit Act

--assessments

The amendment, addition or insertion of the following sections of the

National Credit Act, as made by Parts 1 and 2 of the amending

Schedule, applies in relation to preliminary assessments and

assessments made on or after the day those Parts commence:

(a) section 124C;

(b) section 133CE;

(d) section 156C.

5 Amendments of the National Credit Act

--inquiries and

verifications

The amendments of the following sections of the National Credit Act,

as made by Parts 1 and 2 of the amending Schedule, apply in relation to

verifications made on or after the day those Parts commence:

(a) section 117;

(b) section 130;

(d) section 153.

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6 Amendments of the National Credit Act

--payments

required under small amount credit contracts or

consumer leases

The amendment, addition or insertion of the following sections of the

National Credit Act, as made by Parts 1 and 2 of the amending

Schedule, applies in relation to small amount credit contracts or

consumer leases entered into or offers made to enter into small amount

credit contracts or consumer leases, on or after the day those Parts

commence:

(a) section 133CC;

(b) section 133CD;

7 Application of section 160G of the National Credit Act

proscribed referrals

Section 160G of the National Credit Act, as added by Part 3 of the

amending Schedule, applies to a referral by a licensee if:

(a) the referral is made on or after the commencement of that

Part; and

(b) the licensee was not, immediately before that

commencement, under a contractual obligation to make the

referral.

8 Application of Division 1A of Part 7-1 of the National Credit

Act

--avoidance schemes

(1)

Division 1A of Part 7-1 of the National Credit Act, as inserted by Part 4

of the amending Schedule, applies to conduct that relates to schemes

connected with a contract if:

(a) the contract was:

(i) entered into on or after the day that Part 4 of the

amending Schedule commences; or

(ii) amended, on or after that day, to extend the term of the

contract; and

(b) the conduct occurs on or after the day that Part 4 of the

amending Schedule commences.

(2)

Division 1A of Part 7-1 of the National Credit Act, as inserted by Part 4

of the amending Schedule, also applies to conduct that relates to

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schemes connected with a product intervention order made under

Part 6-7A of the National Credit Act if the conduct occurs on or after

the day that Part 4 of the amending Schedule commences, whether the

product intervention order came into force before, or comes into force

on or after, that day.

9 Application of section 160CB of the National Credit Act

use or disclosure of documents and information

Section 160CB of the National Credit Act, as inserted by Part 6 of the

amending Schedule, applies to a use or disclosure of:

(a) a constrained document; or

(b) information contained in a constrained document; or

if the use or disclosure occurs on or after the day that Part commences.

10 Application of section 31C of the new Credit Code

unexpired monthly fees

Section 31C of the new Credit Code, as inserted by Part 1 of the

amending Schedule, applies to small amount credit contracts entered

into on or after the day that Part commences.

11 Application of subsection 82(2) of the new Credit Code

paying out credit contracts

Subsection 82(2) of the new Credit Code, as amended by Part 1 of the

amending Schedule, applies in relation to small amount credit contracts

entered into before, on or after the day that Part commences.

12 Amendments of the new Credit Code

--consumer leases

(1)

The amendment, addition or insertion of the following sections of the

new Credit Code, as made by Parts 2 and 5 of the amending Schedule,

applies in relation to consumer leases entered into on or after the day

those Parts commence:

(a) section 111;

(b) section 112;

(d) section 114A;

(e) section 115;

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(f) section 116;

(g) section 117;

(h) section 118;

(i) section 119;

(j) section 120;

(k) section 121;

(l) section 124;

(m) section 171;

(n) section 174;

(o) section 175AA;

(p) section 175AC;

(q) section 175H;

(r) section 179;

(s) section 179GA;

(t) section 179VB;

(u) section 179VC.

(2)

The insertion of sections 175AA and 175AC of the new Credit Code, as

made by Part 2 of the amending Schedule, also applies in relation to the

variation on or after the day that Part commences of consumer leases

(whether entered into before, on or after that day).

13 Application of section 179VA of the new Credit Code

canvassing of consumer leases for household goods

Section 179VA of the new Credit Code, as added by Part 2 of the

amending Schedule, applies in relation to:

(a) the making of an unsolicited communication on or after the

day that Part commences; and

(b) the arranging for the making of an unsolicited

communication if the arrangement is entered into on or after

that day.

Commonwealth of Australia Bills

FINANCIAL SECTOR REFORM BILL 2022