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CORPORATIONS ACT 2001 - SECT 1317G

Pecuniary penalty orders

Court may order person to pay pecuniary penalty

  (1)   A Court may order a person to pay to the Commonwealth a pecuniary penalty in relation to the contravention of a civil penalty provision if:

  (a)   a declaration of contravention of the civil penalty provision by the person has been made under section   1317E; and

  (b)   if the contravention is of a corporation/scheme civil penalty provision, the contravention:

  (i)   materially prejudices the interests of the corporation, scheme or fund, or its members; or

  (ii)   materially prejudices the corporation's ability to pay its creditors; or

  (iii)   is serious; and

  (c)   if the contravention is of a financial services civil penalty provision (other than one excluded by subsection   (1A)) , the contravention:

  (i)   materially prejudices the interests of acquirers or disposers of the relevant financial products; or

  (ii)   materially prejudices the issuer of the relevant financial products or, if the issuer is a corporation, scheme or fund, the members of that corporation, scheme or fund; or

  (iii)   is serious; and

  (d)   if the contravention is of subsection   1211B(1) or (2) (complying with the Passport Rules for this jurisdiction), the contravention:

  (i)   materially prejudices the interests of the passport fund or its members; or

  (ii)   is serious.

The order is a pecuniary penalty order .

  (1A)   The civil penalty provisions in the following table are excluded by this subsection.

 

Excluded civil penalty provisions of Part   7.7A

Item

Provision

Matter

1

Subsections   961K(1) and (2)

Financial services licensee responsible for breach of certain best interests duties

2

Section   961L

Financial services licensee to ensure compliance with certain best interests duties

3

Subsection   961Q(1)

Authorised representative responsible for breach of certain best interests duties

4

Subsection   962G(4)

Fee recipient must give fee disclosure statement

5

Section   962P

Charging ongoing fee after termination of ongoing fee arrangement

6

Subsection   962R(4)

Fee recipient must not deduct ongoing fees without consent

7

Subsection   962S(5) or (8)

Fee recipient must not arrange for deduction of ongoing fees without consent or accept such deductions

8

Subsection   962U(3)

Fee recipient must confirm receipt of variation or withdrawal of consent for deductions of ongoing fees

9

Subsection   962V(3)

Fee recipient must give written notice of cessation of consent to account provider

10

Subsections   963E(1) and (2)

Financial services licensee must not accept conflicted remuneration

11

Section   963F

Financial services licensee must ensure representatives do not accept conflicted remuneration

12

Subsection   963G(1)

Authorised representative must not accept conflicted remuneration

13

Section   963J

Employer must not pay employees conflicted remuneration

14

Section   963K

Financial product issuer or seller must not give conflicted remuneration to financial services licensee or representative

15

Section   963P

Person covered by section   963M must pay amount etc. in accordance with regulations

16

Subsection   964A(1)

Platform operator must not accept volume - based shelf - space fees

17

Subsections   964D(1) and (2)

Financial services licensee must not charge asset - based fees on borrowed amounts

18

Subsection   964E(1)

Authorised representative must not charge asset - based fees on borrowed amounts

19

Section   965

Anti - avoidance of Part   7.7A provisions

Maximum pecuniary penalty

  (2)   The pecuniary penalty must not exceed the pecuniary penalty applicable to the contravention of the civil penalty provision.

Pecuniary penalty applicable to the contravention of a civil penalty provision--by an individual

  (3)   The pecuniary penalty applicable to the contravention of a civil penalty provision by an individual is the greater of:

  (a)   5,000 penalty units; and

  (b)   if the Court can determine the benefit derived and detriment avoided because of the contravention--that amount multiplied by 3.

Pecuniary penalty applicable to the contravention of a civil penalty provision--by a body corporate

  (4)   The pecuniary penalty applicable to the contravention of a civil penalty provision by a body corporate is the greatest of:

  (a)   50,000 penalty units; and

  (b)   if the Court can determine the benefit derived and detriment avoided because of the contravention--that amount multiplied by 3; and

  (c)   either:

  (i)   10% of the annual turnover of the body corporate for the 12 - month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision; or

  (ii)   if the amount worked out under subparagraph   (i) is greater than an amount equal to 2.5 million penalty units--2.5 million penalty units.

Contrary intention in relation to pecuniary penalty applicable

  (5)   Subsections   (3) and (4) apply in relation to a contravention of a civil penalty provision by an individual or a body corporate unless there is a contrary intention under this Act in relation to the pecuniary penalty applicable to the contravention. In that case, the pecuniary penalty applicable is the penalty specified for the civil penalty provision.

Determining pecuniary penalty

  (6)   In determining the pecuniary penalty, the Court must take into account all relevant matters, including:

  (a)   the nature and extent of the contravention; and

  (b)   the nature and extent of any loss or damage suffered because of the contravention; and

  (c)   the circumstances in which the contravention took place; and

  (d)   whether the person has previously been found by a court (including a court in foreign country) to have engaged in similar conduct; and

  (e)   in the case of a contravention by the trustee of a registrable superannuation entity--the impact that the penalty under consideration would have on the beneficiaries of the entity.


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