EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 96

 

 

Subject - Electronic Transactions Act 1999

 

Electronic Transactions Amendment Regulations 2010 (No. 1)

 

Electronic Transactions Amendment Regulations 2010 (No. 2)

 

Section 16 of the Electronic Transactions Act 1999 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

The objects of the Act include facilitating the use of electronic transactions and enabling business and the community to use electronic communications in their dealings with the government. Subsection 8(1) of the Act generally provides that if a Commonwealth law requires or permits transactions to be in written form, that requirement is met if the transaction is made in electronic form.

 

However, under subsections 8(3) and 8(4) of the Act, certain transactions or certain laws of the Commonwealth may be exempted from the operation of subsection 8(1) of the Act by being specified in regulations. The effect of the exemption is that requirements in those laws for writing, signature, production and retention of documents cannot be met in an electronic form.

 

Section 14 of the Act provides default rules for determining the time and place of dispatch and receipt of electronic communications in the absence of an agreement between the parties. However, under subsections 14(7) and 14(8) of the Act, certain transactions or certain laws of the Commonwealth may be exempted from the operation of section 14 of the Act by being specified in regulations. The effect of the exemption is that the time and place of dispatch and receipt of the specified electronic transactions is not determined by the Act.

 

Section 15 of the Act provides that a person purporting to be the originator of an electronic communication will only be bound by the electronic communication if it was in fact sent by that person, or with that person’s authority. However, under subsections 15(3) and 15(4) of the Act, certain transactions or certain laws of the Commonwealth may be exempted from the operation of section 15 of the Act by being specified in regulations. The effect of the exemption is that a person purporting to be the originator of an electronic communication will be bound by the electronic communication in all circumstances.

 

The Electronic Transactions Regulations 2000 (the Principal Regulations) currently specify transactions and laws that are exempt from certain provisions of the Act.

 

The two sets of Regulations amend the Principal Regulations consequential to:

·        the National Consumer Credit Protection Act 2009 (the Credit Protection Act) under which the Commonwealth assumes responsibility for the regulation of consumer credit and financial services from the states and territories; and

·        the Insurance Contracts Amendment Act 2010 (the IC Amendment Act) which amends the Insurance Contracts Act 1984 (the IC Act) to remove impediments to the use of electronic communications for statutory notices and documents.

Consumer Credit Protection Amendments

 

These Regulations amend the Principal Regulations to replicate the electronic transactions such as a credit contract and a default notice, which were exempt under the credit regulation scheme administered by the states and territories. These Regulations also contain additional provisions concerning the manner of serving a notice or other document under the Credit Protection Act, and determination of the date of a notice or other document sent by fax. These will be consistent with the Act, but provide further detail to facilitate the transition of the regulatory framework.

 

The regulations form part of a package of amendments relating to the introduction of the Credit Protection Act and as part of a public consultation on the package, the Australian Government sought comments on the draft regulations in August 2009.

 

These Regulations commence on 1 July 2010, at the same time as the National Consumer Credit Protection Regulations 2010 commence.

 

Insurance Contracts Amendments

 

These Regulations omit references in the Principal Regulations to the IC Act and subordinate legislation made under the IC Act so that these transactions will no longer be exempt from the operation of subsection 8(1) and other provisions of the Act. The effect of this amendment will be that all transactions under the IC Act and subordinate legislation may be made or given in electronic form in addition to written paper form.

 

Consultation was unnecessary for this legislative instrument as this instrument is of a minor or machinery nature and does not substantially alter existing arrangements. It has no direct or substantial indirect effect on business.

 

These Regulations are consequential to the changes made by the IC Amendment Act and therefore commence on the commencement of Schedule 2 to that Act.

 

Details of the Regulations are provided in Attachments A and B.

 

The Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised.

 

The Regulations will be legislative instruments for the purposes of the Legislative Instruments Act 2003.

 

The Minute recommends that Regulations be made in the form proposed.

Authority: Section 16 of the Electronic Transactions Act 1999

ATTACHMENT A

 

Details of the Electronic Transactions Amendment Regulations 2010 (No. 1)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Electronic Transactions Amendment Regulations 2010 (No. 1).

 

Regulation 2 – Commencement

 

This regulation provides that the Regulations commence on 1 July 2010.

 

Regulation 3 – Amendment of Electronic Transactions Regulations 2000

 

This regulation provides that Schedule 1 amends the Electronic Transactions Regulations 2000 (the Principal Regulations).

 

Schedule 1 – Amendments

 

Item [1] – After regulation 2

 

This item inserts the heading ‘Part 1 Exemptions’ into the Principal Regulations. This creates a separate set of provisions in the Principal Regulations which are applicable to electronic transactions undertaken pursuant to the National Consumer Credit Protection Act 2009 (the Credit Protection Act) only.

 

Item [2] – After regulation 7

 

This item inserts a new Part 2 which contains four new regulations (regulations 8 ‑ 11).

 

Regulation 8 will be an application provision to provide that the Part is applicable to electronic transactions undertaken pursuant to the Credit Protection Act.

 

Regulation 9 inserts definitions of relevant terms. The regulation provides that the words ‘debtor’, ‘guarantor’, mortgage’, and ‘mortgagor’ have the same meaning as defined in the Credit Protection Act.

 

Regulation 10 provides for the process to obtain consent to receiving a notice or other document by electronic communication. This process outlines some additional obligations to ensure that informed consent has been obtained.

 

Regulation 11 provides a method of determining the date of a notice or other document sent by fax. Although the Electronic Transactions Act 1999 (the Act) includes fax transactions as an ‘electronic communication’, this provision specifically provides for fax transactions.

 

Item [3] – Schedule 1, after item 85

 

This item inserts new items 86 and 86A into Schedule 1 of the Principal Regulations to list provisions under the Credit Protection Act and the National Consumer Credit Protection (National Credit Code) Regulations 2010 which will be exempt from the Act. These exemptions replicate the transactions that were exempt from the electronic transactions legislation under the credit regulation scheme administered by the states and territories, and include documents such as guarantees, credit contracts, notices of change in the credit contract terms, default notices, notices of repossession, and written demands for satisfaction of a judgement.

ATTACHMENT B

 

Details of the Electronic Transactions Amendment Regulations 2010 (No. 2)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Electronic Transactions Amendment Regulations 2010 (No. 2).

 

Regulation 2 – Commencement

 

This regulation provides that the Regulations commence on the commencement of Schedule 2 to the Insurance Contracts Amendment Act 2010.

 

Regulation 3 – Amendment of Electronic Transactions Regulations 2000

 

This regulation provides that Schedule 1 amends the Electronic Transactions Regulations 2000 (the Principal Regulations).

 

Schedule 1 – Amendments

 

Item [1] – Schedule 1, items 71 and 72

 

This item omits the Insurance Contracts Act 1984 (the IC Act) and subordinate legislation made under the IC Act which are currently listed in the Principal Regulations. These items will no longer be exempt from the application of subsection 8(1), Division 2 of Part 2 and sections 14 and 15 of the Electronic Transactions Act 1999. The effect of this amendment will be that all transactions under the IC Act and subordinate legislation may be made or given in electronic form in addition to written paper form.