Commonwealth Numbered Acts Commonwealth Numbered Acts
Australian Securities and Investments Commission Act 2001
1 Subsection 12AC(2)
After "section 12GF", insert "or 12GFA".
2 Subsection 12BA(1)
Insert:
"add-on risk product " has the meaning given by subsection 12DMC(2).
"Australian Consumer Law " means Schedule 2 to the Competition and Consumer Act 2010 as applied under Subdivision A of Division 2 of Part XI of that Act.
"commission " includes:
(a) any financial or other benefit in the nature of a commission; and
(b) in relation to an add-on risk product provided to a person in connection with the person providing a warranty to another person--the amount (if any) by which the consideration for the warranty exceeds so much of the consideration for the add-on risk product as relates to the warranty.
It may take any form of monetary consideration, or any form of non-monetary consideration to which a monetary value can be assigned.
"long-term lease " , of a motor vehicle, means a contract for the hire of the motor vehicle for a fixed period of more than 4 months, or for an indefinite period .
"money " has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999 .
"motor vehicle " means:
(a) any motor-powered vehicle of a kind intended for use as land transport (other than rail transport), whether or not it is for use on a road; or
(b) any other vehicle of a kind intended to be towed by such a motor-powered vehicle;
but does not include a vehicle (other than a vehicle for use on a road) that is of a kind intended primarily for use by persons with restricted mobility.
"National Credit Code " has the same meaning as in the National Consumer Credit Protection Act 2009 .
3 After section 12DMB
Insert:
12DMC Caps on commissions for add-on risk products supplied in connection with motor vehicles
Commissions not to exceed determined caps
(1) A person contravenes this subsection if:
(a) the person provides a commission to another person, or receives a commission from another person, in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add-on risk product to a person (the product recipient ) in connection with:
(i) the sale or long-term lease of a motor vehicle to the product recipient; or
(ii) the provision of credit connected with the sale or long-term lease of a motor vehicle to the product recipient; or
(iii) the provision of a warranty by the product recipient in connection with the sale or long-term lease of a motor vehicle to another person by the product recipient; and
(c) the person acquiring the motor vehicle does so as a consumer (within the meaning of the Australian Consumer Law); and
(d) providing the add-on risk product is covered by a determination under subsection (3); and
(e) the value of the commission exceeds the cap that applies, under that determination, to providing the add-on risk product.
Note: For the value of the commission, see subsections (5) to (7).
Meaning of add-on risk product
(2) An add-on risk product is a financial product that is a facility through which, or through the acquisition of which, a person manages financial risk (within the meaning of subsection 12BAA(5)).
ASIC may determine caps
(3) ASIC may, by legislative instrument, determine a cap on the value of commissions provided in connection with an add-on risk product of a kind specified in the instrument.
(4) Without limiting subsection (5), the determination may do either or both of the following:
(a) limit the circumstances in which provision of an add-on risk product of that kind is covered by the determination;
(b) provide for the way in which the value of commissions is to be ascertained for the purposes of the determination.
Valuing commissions
(5) The value of a commission provided in connection with an add-on risk product is:
(a) the value ascertained in accordance with the determination under subsection (3) that covers the provision of the add-on risk product; or
(b) if the determination does not provide for the way in which the value is to be ascertained--the sum of:
(i) to the extent that the commission is expressed as an amount of money--that amount; and
(ii) otherwise--the market value of so much of the commission as is not expressed as an amount of money.
(6) In working out the market value of something for the purposes of subparagraph (5)(b)(ii) disregard anything that would prevent or restrict its conversion to money.
(7) If a commission is provided in connection with 2 or more add-on risk products, apportion the value of the commission between the add-on risk products:
(a) in accordance with the determination under subsection (3) that covers the provision of the add-on risk products; or
(b) if the determination does not provide for such apportionment--on a reasonable basis.
Multiple commissions
(8) For the purposes of this Act, if more than one commission is provided (by one or more persons to one or more persons) in connection with the add-on risk product, subsection (1) applies as if:
(a) one single commission is provided that comprises all of those commissions; and
(b) if those commissions are provided by more than one person--that single commission is jointly provided by all of those persons; and
(c) the value of that single commission is the sum of the values of all of those commissions.
Commissions for consumer credit insurance
(9) This section does not affect the application of section 145 of the National Credit Code to a commission paid in connection with consumer credit insurance (within the meaning of the National Credit Code) unless the insurance:
(a) is an add-on risk product of a kind covered by a determination under subsection (3); and
(b) is provided in connection with:
(i) the sale or long-term lease of a motor vehicle; or
(ii) the provision of credit connected with the sale or long-term lease of a motor vehicle.
Note: In the absence of an applicable determination under subsection (3), section 145 of the National Credit Code imposes a 20% cap on commissions provided in connection with consumer credit insurance.
4 After subsection 12GB(1)
Insert:
(1AA) A person commits an offence if the person contravenes section 12DMC.
Penalty: 60 penalty units.
(1AB) Subsection (1AA) is an offence of strict liability.
5 Paragraph 12GB(2)(a)
After "offences", insert "against subsection (1)".
6 Subsection 12GB(2)
Omit "that provision. This applies whether or not the person is also convicted of an offence or offences constituted by, or relating to, another contravention or other contraventions of that provision that were of a different nature or occurred at a different time.", substitute "subsection (1) in relation to that provision.".
7 After subsection 12GB(2)
Insert:
(2A) If:
(a) a person is convicted of 2 or more offences against subsection (1AA) constituted by contraventions of section 12DMC; and
(b) the contraventions appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time;
the Court must not, in respect of the offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against subsection (1AA).
(2B) Subsection (2) or (2A) applies whether or not the person is also convicted of an offence or offences constituted by, or relating to, another contravention or other contraventions of the provision in question that were of a different nature or occurred at a different time.
8 Subsections 12GB(3), (5) and (6)
After "subsection (1)", insert "or (1AA)".
9 After section 12GF
Insert:
12GFA Recovering commissions that exceed a cap under section 12DMC
(1) If:
(a) a person provides a commission to another person in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add-on risk product to another person (the consumer ) in connection with:
(i) the sale or long-term lease of a motor vehicle to the consumer; or
(ii) the provision of credit connected with the sale or long-term lease of a motor vehicle to the consumer; and
(c) providing the commission contravenes section 12DMC;
the consumer is entitled to recover the value of the commission from the person.
Note: For the value of the commission, see subsections 12DMC(5) to (7).
(2) If:
(a) a person (the motor vehicle dealer ) receives a commission in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add-on risk product to the motor vehicle dealer in connection with the giving of a warranty by the motor vehicle dealer in connection with the sale or long-term lease of a motor vehicle to another person (the consumer ); and
(c) providing the commission contravenes section 12DMC;
the consumer is entitled to recover the value of the commission from the motor vehicle dealer.
Note: For the value of the commission, see subsections 12DMC(5) to (7).
(3) This section does not affect the other person's right to recover loss or damage under section 12GF.
10 Section 12GG
After "section 12GF", insert "or 12GFA".
11 Subsection 12GM(1)
After "section 12GF", insert ", 12GFA".
12 Paragraph 12GN(1)(c)
After "subsection 12GF(1)", insert "or 12GFA(1) or (2)".
13 In the appropriate position
Insert:
Part 32 -- Application and transitional provisions relating to Schedule 4 to the Financial Sector Reform (Hayne Royal Commission Response) Act 2020
330 Application--caps on commissions
The amendments made by Schedule 4 to the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 apply to commissions provided in connection with supplies of add-on risk products that are supplies under contracts, arrangements or understandings entered into on or after the commencement of that Schedule.
National Consumer Credit Protection Act 2009
14 At the end of section 145 of the National Credit Code
Add:
ASIC determinations of caps on commissions
(6) Despite subsection (1), this section does not apply to commission mentioned in that subsection if the insurance:
(a) is an add-on risk product of a kind covered by a determination under subsection 12DMC(3) of the Australian Securities and Investments Commission Act 2001 ; and
(b) is provided in connection with:
(i) the sale or long-term lease of a motor vehicle; or
(ii) the provision of credit connected with the sale or long-term lease of a motor vehicle.
Note: Under subsection 12DMC(3) of the Australian Securities and Investments Commission Act 2001 , ASIC may determine caps for commissions provided in connection with consumer credit insurance for credit connected with the sale or long-term lease of a motor vehicle.
15 Subsection 204(1) of the National Credit Code
Insert:
"add-on risk product " has the meaning given by subsection 12DMC(2) of the Australian Securities and Investments Commission Act 2001 .
"long-term lease " , of a motor vehicle, has the meaning given by subsection 12BA(1) of the Australian Securities and Investments Commission Act 2001 .
"motor vehicle " has the meaning given by subsection 12BA(1) of the Australian Securities and Investments Commission Act 2001 .