Commonwealth: Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth)

Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 No. 87, 2024 An Act to amend the law relating to corporations, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Financial market infrastructure: resolution authority Part 1—Crisis resolution Corporations Act 2001 Part 2—Crisis prevention Corporations Act 2001 Part 3—Amendments of other Acts Australian Securities and Investments Commission Act 2001 Banking Act 1959 Insurance Act 1973 Life Insurance Act 1995 Payment Systems and Netting Act 1998 Personal Property Securities Act 2009 Reserve Bank Act 1959 Part 4—Amendments contingent on other Acts Corporations Act 2001 Reserve Bank Act 1959 Schedule 2—Financial market infrastructure: new and enhanced regulatory powers Part 1—Who may be granted an Australian CS facility licence? Division 1—Main amendments Corporations Act 2001 Division 2—Related amendments Corporations Act 2001 Part 2—Dealing with licences that are not being used etc. Corporations Act 2001 Part 3—Declared financial markets and widely held market bodies Division 1—Main amendments about declared financial markets Corporations Act 2001 Division 2—Other amendments about declared financial markets Bankruptcy Act 1966 Personal Property Securities Act 2009 Division 3—Widely held market bodies Corporations Act 2001 Part 5—Approval for control of certain Australian licensees Division 1—Controlled Australian financial bodies Corporations Act 2001 Division 2—Market licensees and CS facility licensees Corporations Act 2001 Division 3—Involvement with licensees Corporations Act 2001 Part 6—Limits on certain market licences and CS facility licences Corporations Act 2001 Part 7—Rule‑making power for CS facility licensees Corporations Act 2001 Part 8—Streamlining some of ASIC's existing directions powers Corporations Act 2001 Part 9—Enhancing regulator powers for CS facility licensees Division 1—Main amendments Corporations Act 2001 Division 2—Other amendments Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Reserve Bank Act 1959 Part 10—Enhancing ASIC powers for other licensees Corporations Act 2001 Part 11—Fit, proper, capable and competent person standards Division 1—Additional obligation for certain licensees Corporations Act 2001 Division 2—Financial market infrastructure banning orders Corporations Act 2001 Part 12—Arrangements under which certain foreign operators need to be licensed or exempt Corporations Act 2001 Part 13—Application and transitional provisions Corporations Act 2001 Part 14—Amendments contingent on the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 Reserve Bank Act 1959 Schedule 3—Financial market infrastructure: transfer of powers Part 1—Main amendments Division 1—Licensing of financial markets Corporations Act 2001 Division 2—Licensing of CS facilities Corporations Act 2001 Part 2—Application and transitional provisions Corporations Act 2001 Schedule 4—Sustainability reporting Part 1—Sustainability reporting Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Part 2—Audit Corporations Act 2001 Part 3—Sustainability and auditing standards Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Part 4—Application and transitional provisions Corporations Act 2001 Schedule 5—Other amendments Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Insurance Act 1973 Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 No. 87, 2024 An Act to amend the law relating to corporations, and for related purposes [Assented to 17 September 2024] The Parliament of Australia enacts: 1 Short title This Act is the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. 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 this Act receives the Royal Assent. 17 September 2024 2. Schedule 1, Parts 1 to 3 The seventh day after this Act receives the Royal Assent. 24 September 2024 3. Schedule 1, item 56 The seventh day after this Act receives the Royal Assent. Never commenced However, the provision does not commence at all if item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 commences on or before that day. 4. Schedule 1, items 57 and 58 Immediately after the commencement of item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024. Never commenced However, the provisions do not commence at all if: (a) that event occurs on or before the seventh day after this Act receives the Royal Assent; or (b) that event does not occur. 5. Schedule 1, item 59 The later of: 24 September 2024 (a) the start of the seventh day after this Act receives the Royal Assent; and (paragraph (a) applies) (b) immediately after the commencement of item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur on or before the seventh day after this Act receives the Royal Assent. 6. Schedule 1, item 60 The seventh day after this Act receives the Royal Assent. 24 September 2024 However, the provision does not commence at all if item 17 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 commences on or before that day. 7. Schedule 1, item 61 The later of: 1 March 2025 (a) the start of the seventh day after this Act receives the Royal Assent; and (paragraph (b) applies) (b) immediately after the commencement of item 19 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur. 8. Schedule 1, item 62 The seventh day after this Act receives the Royal Assent. 24 September 2024 However, the provision does not commence at all if item 19 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 commences on or before that day. 9. Schedule 2, Parts 1 to 10 The seventh day after this Act receives the Royal Assent. 24 September 2024 10. Schedule 2, Part 11 The day after the end of the period of 6 months beginning on the day this Act receives the Royal Assent. 17 March 2025 11. Schedule 2, Parts 12 and 13 The seventh day after this Act receives the Royal Assent. 24 September 2024 12. Schedule 2, Part 14 The later of: 1 March 2025 (a) immediately after the commencement of the provisions covered by table item 9; and (paragraph (b) applies) (b) the commencement of item 11 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur. 13. Schedule 3 The seventh day after this Act receives the Royal Assent. 24 September 2024 14. Schedules 4 and 5 The day after this Act receives the Royal Assent. 18 September 2024 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—Financial market infrastructure: resolution authority Part 1—Crisis resolution Corporations Act 2001 1 Section 9 Insert: essential service means: (a) electricity; or (b) gas; or (c) water; or (d) a carriage service (within the meaning of the Telecommunications Act 1997). external administrator: (a) other than in Chapter 5 and Part 7.3B—has the same meaning as in Schedule 2; and (b) in Part 7.3B: (i) subject to subparagraph (ii)—means an external administrator (within the meaning of Schedule 2 to this Act), a receiver, manager, managing controller, receiver and manager or other controller; and (ii) does not include a statutory manager (within the meaning of this Act) or a Banking Act statutory manager (within the meaning of the Banking Act 1959). 2 Section 9 (after paragraph (h) of the definition of property) Insert: (ha) in Part 7.3B (crisis resolution for CS facility licensees)—has a meaning affected by subsection 833A(4); and 3 Section 9 Insert: statutory management has the meaning given by subsections 832C(3) and (4). statutory manager of a body corporate means: (a) if the Reserve Bank is in control of the body corporate's business under Part 7.3B—the Reserve Bank; and (b) each person appointed by the Reserve Bank to take control of a body corporate's business under Part 7.3B. Note: See section 836B for when there are 2 or more statutory managers of a body corporate. 4 Subsection 198G(9) (definition of external administrator) Repeal the definition. 5 At the end of subsection 459P(1) Add: Note: The Reserve Bank may also apply under this section to the Court for an order if a condition in section 831A is satisfied in relation to a CS facility licensee: see section 849AA. 6 Subparagraph 588FL(1)(a)(v) Omit "and". 7 At the end of paragraph 588FL(1)(a) Add: (vi) section 842A, or Subdivision C of Division 9 of Part 7.3B, begins to apply to a body corporate; and 8 Subsection 600F(2) (definition of essential service) Repeal the definition. 9 After section 794A Insert: 794AA ASIC's directions power—crisis resolution (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to give a direction to a market licensee under this subsection to do, or to refrain from doing, specified things, ASIC may give the licensee a written direction to do, or to refrain from doing, those things. (2) Without limiting subsection (1), the specified things may include: (a) suspending dealings in a specified financial product or class of financial products; or (b) taking: (i) any actions; or (ii) one or more specified actions; relating to dealings in a specified financial product or class of financial products. Example: Under paragraph (b), a direction could require the licensee to take actions to: (a) limit the kinds of dealings that are allowed in a financial product or class of financial products; or (b) require participants in a market to act in a specified manner in relation to dealings in a financial product or class of financial products. (3) The direction must specify a reasonable time by which, or a reasonable period during which, it is to be complied with. (4) The licensee must comply with the direction. Note: Failure to comply with this subsection is an offence: see subsection 1311(1). (5) If the licensee fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the licensee comply with the direction. 794AB Matters relating to ASIC directions—crisis resolution Variation or revocation (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to vary a direction given to a market licensee under subsection 794AA(1), ASIC may vary the direction by giving written notice to the licensee. (2) ASIC may revoke a direction given to a market licensee under subsection 794AA(1) by giving written notice to the licensee. Notifying other affected persons (3) As soon as practicable after: (a) directing a market licensee under subsection 794AA(1) to do a thing mentioned in subsection 794AA(2); or (b) varying or revoking such a direction; ASIC must give written notice of the direction, variation or revocation to the operator of each clearing and settlement facility with which the market licensee has clearing and settlement arrangements for transactions effected through the market. Directions are not legislative instruments (4) A direction given under subsection 794AA(1), a variation under subsection (1) of this section, or a revocation under subsection (2) of this section is not a legislative instrument. 10 After subsection 798G(5) Insert: Crisis resolution (5A) Despite subsection (3), ASIC may make a market integrity rule without the consent of the Minister if the Reserve Bank, under subsection 849AB(1), requests ASIC to make the rule. (5B) However, if ASIC does so, ASIC must provide the Minister, on the following day, with a copy of the request. (5C) The Minister may, if the Minister considers it appropriate after being given the copy of the request, direct ASIC to vary or revoke the rule. (5D) ASIC must comply with the direction given under subsection (5C) immediately. 11 At the end of subsection 798G(6) Add: ; (c) a direction given under subsection (5C). 12 Before section 798K Insert: 798JB ASIC's directions power—crisis resolution (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to: (a) give a direction to an entity under this subsection to suspend dealings in a financial product or class of financial products; or (b) give some other direction to an entity under this subsection in relation to dealings in a financial product or class of financial products; ASIC may give the direction, in writing, to the entity. Note: ASIC may also, at the request of the Reserve Bank, give directions to entities that are market licensees under section 794AA. A failure to comply with a direction under that section is an offence: see subsection 1311(1). (2) The entity must comply with the direction. (3) If the entity fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the entity comply with the direction. 798JC Matters relating to ASIC directions—crisis resolution Variation or revocation (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to vary a direction given to an entity under subsection 798JB(1), ASIC may vary the direction by giving written notice to the entity. (2) ASIC may revoke a direction given to an entity under subsection 798JB(1) by giving written notice to the entity. Directions are not legislative instruments (3) A direction given under subsection 798JB(1), a variation under subsection (1) of this section, or a revocation under subsection (2) of this section is not a legislative instrument. 13 At the end of section 824B Add: Grant to receiving body (3) If: (a) the Minister consents under paragraph 837A(1)(b) or 837B(1)(b) to a transfer in relation to a CS facility licensee; and (b) the Reserve Bank issues a certificate under subsection 838A(1) that the transfer is to take effect; the Minister may grant an Australian CS facility licence to a body corporate that, as a result of the transfer, becomes, or will become, the successor in law of the CS facility licensee. (4) A licence granted to a body corporate under subsection (3) is taken to be: (a) unless paragraph (b) of this subsection applies—a licence granted under subsection (1); or (b) if the licence states that it is to be taken to have been granted under subsection (2)—a licence granted under subsection (2) authorising the body corporate to operate a specified clearing and settlement facility in this jurisdiction. 14 Before Part 7.4 Insert: Part 7.3B—Crisis resolution for CS facility licensees Division 1—Preliminary 830A Simplified outline of this Part The Reserve Bank may take actions under this Part that are appropriate to manage or respond to a CS facility licensee in crisis. A CS facility licensee is in crisis if certain conditions are met in relation to the licensee (see section 831A). These conditions relate to acts or events that are likely to pose a threat to: (a) the stability of the financial system in Australia; or (b) the continuity of clearing and settlement facility services that are critical to the functioning of the financial system in Australia. Some of the conditions relate to related bodies corporate of the CS facility licensee. The actions the Reserve Bank may take include: (a) placing the licensee, or a related body corporate that is incorporated in Australia, under statutory management; and (b) compulsorily transferring all or part of the shares of, or business of, the licensee, or a related body corporate that is incorporated in Australia, to another body corporate; and (c) directing the licensee, or a related body corporate that is incorporated in Australia, to do or refrain from doing an act or thing. If a body corporate is under statutory management or subject to a transfer or direction, a moratorium applies to the body corporate. The Reserve Bank, on request, may exercise some of its functions and powers under this Part to assist foreign regulators to manage or respond to an overseas clearing and settlement facility licensee in crisis. 830B Object of this Part The object of this Part is to provide for the effective management and resolution of threats posed to: (a) the stability of the financial system in Australia; or (b) the continuity of clearing and settlement facility services that are critical to the functioning of the financial system in Australia; that arise from, or in relation to, CS facility licensees. Division 2—Crisis resolution for CS facility licensees 831A Reserve Bank may exercise crisis resolution powers if certain conditions are satisfied (1) The Reserve Bank may take action in accordance with this Part in relation to a CS facility licensee if any of the following conditions are satisfied in relation to the licensee: (a) the licensee requests the Reserve Bank to take action and the Reserve Bank reasonably believes that an event relating to the licensee is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (b) the licensee contravenes a direction issued under Part 7.3 by the Reserve Bank and the Reserve Bank reasonably believes that the contravention is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (c) the licensee notifies the Reserve Bank that: (i) the licensee has ceased, intends to cease or is likely to cease providing one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; or (ii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or (iii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (d) the Reserve Bank reasonably believes that, in the absence of external support, the licensee is likely to be unable to: (i) continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or (ii) continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (e) the licensee notifies the Reserve Bank that: (i) the licensee's financial viability is at risk or is likely to be at risk; or (ii) in the absence of external support, the licensee's financial viability is likely to be at risk; (f) the Reserve Bank reasonably believes that, in the absence of external support, the licensee's financial viability is likely to be at risk; (g) an external administrator of the licensee has been appointed; (h) the licensee notifies the Reserve Bank that it is considering appointing an external administrator of the licensee; (i) the Reserve Bank reasonably believes that a person is seeking to have an external administrator of the licensee appointed; (j) an external administrator of a related body corporate of the licensee has been appointed, or a similar appointment has been made under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (k) a related body corporate of the licensee, that is incorporated in Australia, notifies the Reserve Bank that it is considering appointing an external administrator of itself and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (l) the Reserve Bank reasonably believes that a person is seeking to have an external administrator of a related body corporate of the licensee appointed, or a person is seeking to make a similar appointment under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (m) the licensee, or a related body corporate of the licensee that is incorporated in Australia, is doing or not doing any act or thing, and the Reserve Bank reasonably believes this is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia. (2) A reference in subsection (1) to taking action in accordance with this Part does not include a reference to taking action under Subdivision C of Division 9 (temporary suspension of termination rights). Note: The Reserve Bank may take action under that Subdivision if the Reserve Bank intends to take action under Division 3 or 4: see subsection 849BA(2). Overseas clearing and settlement facilities (3) Subsection (1) of this section does not apply in relation to a CS facility licensee whose licence was granted under subsection 824B(2) (overseas clearing and settlement facilities). (4) This section does not limit Division 8 (cross‑border crisis resolution). Note: Under Division 8, the Reserve Bank may take certain actions in accordance with this Part in relation to a CS facility licensee mentioned in subsection (3) of this section to assist a foreign authority to manage or respond to an event relating to the licensee. Division 3—Statutory management Subdivision A—Statutory management of body corporate in relation to CS facility licensee in crisis 832A Statutory manager takes control of body corporate (1) The Reserve Bank may take either or both of the actions in subsection (2), if the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition in section 831A being satisfied in relation to a CS facility licensee. (2) The actions are: (a) taking control of the business of the licensee as statutory manager of the licensee; and (b) appointing one or more persons to take control of the business of the licensee, as statutory manager of the licensee. Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager). (3) The Reserve Bank may take either or both of the actions in subsection (4), if: (a) a statutory manager has taken control of the business of a CS facility licensee, or the Reserve Bank intends that a statutory manager will take control of the business of a CS facility licensee; and (b) the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee. (4) The actions are: (a) taking control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate; and (b) appointing one or more persons to take control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate. Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager). (5) If the Reserve Bank decides to take an action under subsection (1) or (3), the Reserve Bank must give the following, in writing, notice that a statutory manager will take, or is taking, control of the body corporate's business: (a) the body corporate; (b) if the body is under external administration—the external administrator. Note: The appointment of the external administrator is terminated when a statutory manager takes control of the body corporate's business: see section 836A. Limits on individual exercise of powers (6) At the time a statutory manager (other than the Reserve Bank) is appointed, the Reserve Bank may give the statutory manager a notice, in writing, specifying any limits or conditions on the manager performing functions or exercising powers individually. (7) A notice under subsection (6) must also be given to each other statutory manager of the body corporate (other than the Reserve Bank) at that time. Instruments are not legislative instruments (8) An instrument made under this section is not a legislative instrument. 832B Termination of appointment of statutory manager Termination of control by Reserve Bank (1) The Reserve Bank may, in writing, decide to cease to be in control of the business of a body corporate as a statutory manager. Note: The Reserve Bank may also decide under section 832A to appoint another statutory manager to take control of the body corporate's business. (2) The Reserve Bank must notify the body corporate in writing of the decision. (3) If: (a) the Reserve Bank has taken control of the business of a related body corporate of a CS facility licensee under paragraph 832A(4)(a) for the purpose of managing or responding to a condition in section 831A being satisfied in relation to the licensee; and (b) the licensee ceases being under statutory management; the Reserve Bank must decide under subsection (1) of this section to cease to be in control of the business of the related body corporate. Termination of appointments of statutory managers (4) The Reserve Bank may, in writing, terminate the appointment of a statutory manager. Note: The Reserve Bank may also decide under section 832A to take control of the body corporate's business or appoint another statutory manager to do so. (5) The Reserve Bank must notify the body corporate and statutory manager in writing of the termination. (6) If: (a) the Reserve Bank appoints a statutory manager of a related body corporate of a CS facility licensee under paragraph 832A(4)(b) for the purpose of managing or responding to a condition in section 831A being satisfied in relation to the licensee; and (b) the licensee ceases being under statutory management; the Reserve Bank must, under subsection (4) of this section, terminate the appointment of the statutory manager of the related body corporate. Instruments are not legislative instruments (7) An instrument made under this section is not a legislative instrument. 832C When a statutory manager is in control (1) A statutory manager takes control of a body corporate's business: (a) at the time specified in the notice given under subsection 832A(5) as the time when the statutory manager takes control of the business (which must not be earlier than when the notice is given); or (b) if the notice given under that subsection does not specify a time as the time when the statutory manager takes control of the business—at the time the notice is given. (2) A statutory manager ceases to be in control of a body corporate's business: (a) if the statutory manager is the Reserve Bank and the Reserve Bank decides under subsection 832B(1) to cease to be in control of the body corporate's business: (i) at the time specified in the notice given under subsection 832B(2) as the time when Reserve Bank ceases to be in control of the business (which must not be earlier than when the notice is given); or (ii) if the notice given under subsection 832B(2) does not specify a time as the time when the Reserve Bank ceases to be in control of the business—at the time the notice is given; or (b) if the Reserve Bank terminates the appointment of the statutory manager under subsection 832B(4): (i) at the time specified in the notice given to the body corporate under subsection 832B(5) as the time when the termination takes effect (which must not be earlier than when the notice is given); or (ii) if the notice given to the body corporate under subsection 832B(5) does not specify a time as the time when the termination takes effect—at the time the notice is given. (3) While a statutory manager is in control of a body corporate's business, the body corporate is under statutory management. (4) To avoid doubt, a body corporate does not cease to be under statutory management when a statutory manager of the body corporate is replaced with another statutory manager. (5) The Public Governance, Performance and Accountability Act 2013 does not apply to a body corporate under statutory management. Subdivision B—Powers of statutory manager 833A Role of the statutory manager (1) While a statutory manager of a body corporate is in control of the business of the body corporate the statutory manager: (a) has control of the body corporate's business, property and affairs; and (b) may carry on that business and manage that property and those affairs; and (c) at the direction of or with the written consent of the Reserve Bank: (i) may terminate or dispose of all or part of that business; and (ii) may dispose of any of that property; and (d) may perform any function, and exercise any power, that the body corporate or any of its officers could perform or exercise under the operating rules or procedures of a licensed CS facility of which the body corporate is the licensee; and (e) may perform any other function, and exercise any other power, that the body corporate or any of its officers could perform or exercise if a statutory manager were not in control of the body corporate's business. Note: An expert report on fair value may be required before taking action: see section 849CB. (2) Nothing in subsection (1) limits the generality of anything else in it. Limitations (3) This section does not permit the statutory manager to: (a) alter the body corporate's constitution or other arrangements for governance other than in accordance with section 833C; or (b) recapitalise other than in accordance with section 833D; or (c) effect a transfer of all or part of the shares in the body corporate or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers). Meaning of property (4) In this Part, property of a body corporate includes any PPSA retention of title property of the body corporate. Note: See also: (a) the definition of property in section 9; and (b) section 51F (meaning of PPSA retention of title property). 833B Powers to remove director etc. Without limiting section 833A, the statutory manager of a body corporate has power to do any of the following: (a) remove from office a director of the body corporate; (b) appoint a person as such a director, whether to fill a vacancy or not; (c) execute a document, bring or defend proceedings, or do anything else, in the body corporate's name and on its behalf; (d) whatever else is necessary for the purposes of this Part. 833C Power to alter body corporate's constitution etc. (1) The statutory manager of a body corporate may alter the body corporate's constitution or other arrangements for governance if the alteration is reasonably necessary for enabling or facilitating: (a) the performance of the statutory manager's functions and duties under this Part in relation to the body corporate; or (b) the exercise of the statutory manager's other powers under this Part in relation to the body corporate. This section does not permit transfers of shares or business (2) This section does not permit the statutory manager to effect a transfer of all or part of the shares in the body corporate or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers). Exercise of powers despite other laws etc. (3) A statutory manager may do an act under subsection (1) despite all of the following: (a) this Act; (b) the body corporate's constitution; (c) any arrangement to which the body corporate is party; (d) any listing rules of a financial market in whose official list the body corporate is included. 833D Powers to facilitate recapitalisation (1) A statutory manager of a body corporate may do one or more of the following acts on terms determined by the statutory manager, at the direction of or with the written consent of the Reserve Bank: (a) increase the body corporate's level of share capital to a level specified in the determination; (b) issue one or more classes of shares, or one or more specified classes of rights to acquire shares, in the body corporate, being a class or classes specified in the determination; (c) issue capital instruments; (d) acquire, cancel or sell: (i) shares in the body corporate; or (ii) rights to acquire shares in the body corporate; (e) reduce the body corporate's share capital; (f) vary or cancel rights or restrictions attached to shares in a class of shares in the body corporate. Note: An expert report on fair value may be required before taking action: see section 849CB. Notice to members (2) As soon as practicable after the statutory manager does an act under subsection (1), the statutory manager must give a written notice: (a) to the persons who were members of the body just before the act; and (b) that: (i) identifies the act; and (ii) explains the effect of the act on the members' interests. (3) A contravention of subsection (2) does not affect the validity of anything done under subsection (1). This section does not permit transfers of shares or business (4) This section does not permit the statutory manager to effect a transfer of all or part of the shares in the body corporate, or a total or partial transfer of the business of the body corporate, other than in accordance with Division 4 (compulsory transfers). Exercise of powers despite other laws etc. (5) A statutory manager may do an act under subsection (1) despite all of the following: (a) this Act; (b) the body corporate's constitution; (c) any operating rules or procedures of a licensed CS facility of which the body corporate is the licensee; (d) any arrangement to which the body corporate is party; (e) any listing rules of a financial market in whose official list the body corporate is included. 833E Statutory manager may request information etc. to be given (1) A statutory manager of a body corporate may, in writing, request a person to whom subsection (2) applies to: (a) attend on the statutory manager; or (b) give the statutory manager any information relating to the body corporate's business, assets and other property, affairs and financial circumstances that the statutory manager reasonably believes would assist the statutory manager in performing the statutory manager's functions, or exercising the statutory manager's powers; or (c) allow the statutory manager to inspect and take copies of the body corporate's books; at the times and in the manner reasonably required by the statutory manager. (2) This subsection applies to a person who: (a) is an officer of the body corporate; or (b) was an officer of the body corporate: (i) at any time when the body corporate was under statutory management; or (ii) any time occurring during the 3 years ending when the body corporate began to be under statutory management. (3) A request to give information may include a request to produce books, accounts or documents. Offence (4) A person must comply with a request under subsection (1). Note: Failure to comply with this subsection is an offence: see subsection 1311(1). Information may be given to the Reserve Bank (5) A statutory manager may give the Reserve Bank any information that the statutory manager receives under this Part. Note: The secrecy provision in section 79A of the Reserve Bank Act 1959 applies to information and documents obtained by the Reserve Bank under this section (either as statutory manager under subsection (1) of this section or from a statutory manager under this subsection). 833F Statutory manager acts as body corporate's agent When performing a function, or exercising a power, as the statutory manager of a body corporate, the statutory manager is taken to be acting as the body corporate's agent. Subdivision C—Effect of statutory manager assuming control 834A Exercise of directors' powers while body corporate under statutory management Powers of directors while body corporate under statutory management (1) While a body corporate is under statutory management, a director of the body must not perform or exercise a function or power of a director. Offence (2) A person commits an offence if: (a) the person is a director of a body corporate; and (b) the body corporate is under statutory management; and (c) the person purports to perform or exercise a function or power of a director. Exceptions (3) Subsections (1) and (2) do not apply to the extent that the director of the body corporate is acting with the written approval of the statutory manager of the body corporate or the Reserve Bank. Note: A defendant bears an evidential burden in relation to the matter in this subsection: see subsection 13.3(3) of the Criminal Code. Reserve Bank may revoke or vary the approval (4) If a statutory manager (other than the Reserve Bank) gives written approval for the purposes of subsection (3), the statutory manager must immediately notify the Reserve Bank in writing. (5) The Reserve Bank may decide to revoke or vary the approval. The Reserve Bank's decision takes effect from the time the director is notified of the decision in writing. Functions and powers of statutory manager prevail in case of conflict (6) If: (a) subsection (3) applies; and (b) there is a conflict between: (i) a function or power of the statutory manager of the body corporate; and (ii) a function or power of the director in relation to the body corporate; the statutory manager's function or power prevails. Effect of this section (7) This section does not remove a director of a body corporate from office. (8) Nothing in this section affects a secured creditor's right to realise or otherwise deal with a security interest. 834B Effect of things done during statutory management of body corporate A payment made, transaction entered into, or any other act or thing done, in good faith, by the statutory manager of a body corporate under statutory management or with the written consent of the statutory manager or the Reserve Bank: (a) is valid and effectual for the purposes of this Act; and (b) is not liable to be set aside in a winding up of the body corporate. 834C Effect of statutory management on body corporate's members Transfer of shares (1) A transfer of shares in a body corporate that is made during the statutory management of the body corporate is void except if: (a) both: (i) the statutory manager or the Reserve Bank gives written consent to the transfer; and (ii) that consent is unconditional; or (b) all of the following subparagraphs apply: (i) the statutory manager or the Reserve Bank gives written consent to the transfer; (ii) that consent is subject to one or more specified conditions; (iii) those conditions have been satisfied; or (c) the transfer is done to give effect to an action under section 833D (recapitalisation actions) by the statutory manager; or (d) the transfer is done to give effect to a transfer under Division 4 (compulsory transfers). Alteration in the status of members (2) An alteration in the status of members of a body corporate that is made during the statutory management of the body corporate is void except if: (a) both: (i) the statutory manager or the Reserve Bank gives written consent to the alteration; and (ii) that consent is unconditional; or (b) all of the following subparagraphs apply: (i) the statutory manager or the Reserve Bank gives written consent to the alteration; (ii) that consent is subject to one or more specified conditions; (iii) those conditions have been satisfied; or (c) the alteration is done to give effect to an action under section 833D (recapitalisation actions) by the statutory manager; or (d) the alteration is done to give effect to a transfer under Division 4 (compulsory transfers). (3) As soon as practicable after an alteration in the status of members of a body corporate is made during the statutory management of the body corporate, the statutory manager must give a written notice: (a) to the persons who were members of the body just before the alteration; and (b) that: (i) identifies the alteration; and (ii) explains the effect of the alteration on the members' interests. (4) A contravention of subsection (3) does not affect the validity of the alteration. Subdivision D—Additional duties of statutory manager 835A Reporting to Reserve Bank Duty to report to the Reserve Bank on request (1) If requested by the Reserve Bank, a statutory manager of a body corporate (other than the Reserve Bank) must give the Reserve Bank a written report showing how the control of the body corporate's business is being carried out. (2) The report must be given to the Reserve Bank within a reasonable time after the request. Duty to report to the Reserve Bank on termination of appointment (3) If the Reserve Bank terminates the appointment of a statutory manager of a body corporate, the statutory manager of the body corporate must give to the Reserve Bank a written report showing how the control of the body corporate's business was carried out over the period the statutory manager was in control. (4) The report must be given to the Reserve Bank within a reasonable time after the termination. 835B Reserve Bank's directions power—directions to statutory manager Duty to follow directions by the Reserve Bank (1) The Reserve Bank: (a) may give a statutory manager of a body corporate a direction relating to the control of the body corporate's business; and (b) may vary such a direction. (2) A statutory manager who is given a direction, or a varied direction, under subsection (1) must: (a) comply with the direction; or (b) immediately: (i) request the Reserve Bank to vary the direction; and (ii) provide the Reserve Bank with information relating to the control of the body corporate's business that is relevant to its request. (3) If the Reserve Bank refuses to vary the direction, the statutory manager must comply with the direction. 835C Consent to take action that may affect financial system stability in Australia If a statutory manager of a body corporate (other than the Reserve Bank) has reasonable grounds to believe that an action that the statutory manager proposes to take is an action that is likely to pose a threat to: (a) the stability of the financial system in Australia; or (b) the continuity of one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; the statutory manager must, before taking the action: (c) notify the Reserve Bank in writing as soon as practicable; and (d) obtain the Reserve Bank's written consent. Subdivision E—Other matters 836A Effect on external administration Termination of existing external administrator (1) The appointment of an external administrator of a body corporate is terminated when a statutory manager takes control of the body corporate's business. (2) Failure to give an external administrator notice under section 832A does not affect the operation of this section. External administrator may only be appointed with approval during statutory management (3) While a body corporate is under statutory management, an external administrator of the body corporate must not be appointed unless the Reserve Bank approves the appointment in writing. Invalid acts (4) If: (a) a person who ceased to be the external administrator of a body corporate under subsection (1); or (b) a purported external administrator of the body corporate appointed in contravention of subsection (3); purports to act in relation to the body corporate's business, those acts are invalid and of no effect. 836B Appointment of 2 or more statutory managers of body corporate If there are 2 or more statutory managers of a body corporate: (a) the functions and powers of a statutory manager of the body corporate may be performed or exercised by any one of them, or by any 2 or more of them together, subject to any limits or conditions specified in notices given under subsection 832A(6); and (b) a reference in this Act to a statutory manager, or to the statutory manager, of the body corporate is a reference to whichever one or more of those statutory managers the case requires. 836C Costs of statutory management (1) The Reserve Bank's costs (including costs in the nature of remuneration and expenses) of: (a) being in control of a body corporate's business as statutory manager; or (b) having a statutory manager in control of a body corporate's business; are payable from the body corporate's funds and are a debt due to the Reserve Bank. (2) Despite anything contained in this Act or any other law relating to the winding up of companies, debts due to the Reserve Bank by a body corporate under subsection (1) have priority in a winding‑up of the body corporate over all other unsecured debts. 836D Annual general meeting need not be held Despite sections 250N and 601BR, a body corporate need not hold an annual general meeting within a particular period if, at the end of that period, the body corporate is under statutory management. 836E Dealing with property subject to circulating security interests Scope (1) This section applies if a security interest in property (the secured property) of a body corporate under statutory management: (a) was a circulating security interest when the interest arose; but (b) has stopped being a circulating security interest because: (i) in the case of a PPSA security interest—the property has stopped being a circulating asset (within the meaning of the Personal Property Securities Act 2009); or (ii) in the case of a security interest that was a floating charge when it arose—the floating charge has since become a fixed or specific charge. Note 1: A circulating security interest can be either a PPSA security interest to which a circulating asset has attached or a floating charge: see the definition of circulating security interest in section 9. Note 2: For the meaning of circulating asset, see section 340 of the Personal Property Securities Act 2009. Security interest in circulating asset (2) Subject to section 836F in the case of a PPSA security interest, the statutory manager may deal with any of the secured property in any way the body corporate could deal with the secured property immediately before it stopped being a circulating asset. Floating charge (3) Subject to section 836F, if the secured interest was a floating charge when it arose, the statutory manager may deal with any of the secured property as if the security interest were still a floating charge. Note: Section 836F deals with the disposal of encumbered property by a statutory manager. 836F When statutory manager may dispose of encumbered property (1) The statutory manager of a body corporate under statutory management must not dispose of: (a) property of the body corporate that is subject to a security interest; or (b) property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the body corporate but of which someone else is the owner or lessor. Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) of this subsection: see the definition of PPSA retention of title property in section 51F. (2) Subsection (1) does not prevent a disposal: (a) in the ordinary course of the body corporate's business; or (b) with the written consent of the secured party, owner or lessor, as the case may be; or (c) at the direction of or with the written consent of the Reserve Bank. (3) If: (a) a body corporate is under statutory management; and (b) property of the body corporate is subject to a security interest; and (c) the statutory manager disposes of the property; the disposal extinguishes the security interest. (4) For the purposes of paragraph (2)(a), if: (a) property is used or occupied by, or is in the possession of, a body corporate; and (b) another person is the owner of the property; and (c) either: (i) the property is PPSA retention of title property; or (ii) the property is subject to a retention of title clause under a contract; and (d) the owner demands the return of the property; a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the body corporate's business. 836G Proceeds of sale of property Property subject to a possessory security interest (1) If: (a) a body corporate is under statutory management; and (b) property of the body corporate is subject to a possessory security interest; and (c) the statutory manager of the body corporate disposes of the property by way of sale; then: (d) if the net proceeds of sale equals or exceeds the total of the debts secured by: (i) the possessory security interest; and (ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest; the statutory manager of the body corporate must: (iii) set aside so much of the net proceeds as equals the total of those debts; and (iv) apply the amount so set aside in paying those debts; or (e) if the net proceeds of sale fall short of the total of the debts secured by: (i) the possessory security interest; and (ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest; then: (iii) the statutory manager must set aside the net proceeds; and (iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and (v) if any of those debts is not fully paid—so much of the debt as remains unpaid may be recovered from the body corporate as an unsecured debt. PPSA retention of title property (2) If the statutory manager of a body corporate disposes of PPSA retention of title property of the body corporate by way of sale, then the statutory manager must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the Personal Property Securities Act 2009, to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property. Note: PPSA retention of title property does not include property that is subject to a retention of title clause: see the definitions of PPSA retention of title property and retention of title clause in section 9. Subsection (3) of this section deals with property that is subject to a retention of title clause. Property subject to a retention of title clause (3) If: (a) a body corporate is under statutory management; and (b) property is used or occupied by, or is in the possession of, the body; and (c) another person is the owner of the property; and (d) the property is subject to a retention of title clause under a contract (the original contract); and (e) the statutory manager disposes of the property by way of sale; then: (f) if the net proceeds of sale equals or exceeds the total of: (i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and (ii) if there are one or more securities over the property—the debts secured by the securities; the statutory manager must: (iii) set aside so much of the net proceeds as equals that total; and (iv) apply the amount so set aside in paying that total; or (g) if the net proceeds of sale fall short of the total of: (i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and (ii) if there are one or more securities over the property—the debts secured by the securities; then: (iii) the statutory manager must set aside the net proceeds; and (iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and (v) if any of those debts is not fully paid—so much of the debt as remains unpaid may be recovered from the body as an unsecured debt. Note: Property that is subject to a retention of title clause does not include PPSA retention of title property: see the definitions of PPSA retention of title property and retention of title clause in section 9. Subsection (2) of this section deals with PPSA retention of title property. 836H Supply of essential services (1) If: (a) a statutory manager of a body corporate requests, or authorises someone else to request, a person or authority (the supplier) to supply an essential service to the body corporate in Australia; and (b) the body corporate owes an amount to the supplier in respect of supply of the essential service before the effective day; the supplier must not: (c) refuse to comply with the request for the reason only that the amount is owing; or (d) make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid. (2) If any conduct (including a refusal or failure to act) amounts or would amount to a contravention of paragraph (1)(c) or (d) in relation to a particular body corporate that is under statutory management, each of the following is taken, for the purposes of section 1324, to be a person whose interests are affected by the conduct: (a) the statutory manager; (b) the Reserve Bank. Note: Section 1324 provides for injunctions to enforce paragraphs (1)(c) and (d) of this section. (3) However, the statutory manager may apply for an injunction under section 1324 in respect of the conduct only if the statutory manager applies jointly with the Reserve Bank. (4) Subsection (3) of this section does not, by implication, limit the class of persons whose interests are affected by the conduct. (5) In this section: effective day, in relation to a body corporate that is under statutory management, is the day the body corporate began to be under statutory management. 836J Statutory manager has qualified privilege A person who is or has been the statutory manager of a body corporate has qualified privilege in respect of a statement that the person has made, whether orally or in writing, in the course of performing or exercising any of the person's functions and powers as statutory manager of the body corporate. 836K Protection of persons dealing with statutory manager (1) Sections 128 and 129 apply in relation to a body corporate under statutory management as if: (a) a reference in those sections to the company, or to an officer of the company, included a reference to the statutory manager of the body corporate; and (b) a reference in those sections to an assumption referred to in section 129 included a reference to an assumption that the statutory manager is: (i) acting within the statutory manager's functions and powers as statutory manager; and (ii) in particular, is complying with this Act. (2) The effect that sections 128 and 129 have because of subsection (1) of this section is additional to, and does not prejudice, the effect that sections 128 and 129 otherwise have in relation to a body corporate under statutory management. Division 4—Compulsory transfer of business or shares Subdivision A—Compulsory transfer of business or shares of body corporate in relation to CS facility licensee in crisis 837A Compulsory transfer of shares in body corporate Transfer of all or part of the shares in a CS facility licensee (1) The Reserve Bank may, in writing, make a determination that there is to be a transfer of all or part of the shares in a CS facility licensee (the target body) to another body corporate (the receiving body) if: (a) the Reserve Bank reasonably believes that the transfer is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and (b) the Minister consents to the transfer in writing; and (c) the Reserve Bank is satisfied that the board of the receiving body consents to the transfer. Note: An expert report on fair value may be required before taking action: see section 849CB. Transfer of all or part of the shares in a related body corporate (2) The Reserve Bank may, in writing, make a determination that there is to be a transfer of all or part of the shares in a body corporate (the target body) to another body corporate (the receiving body) if: (a) the Reserve Bank has made, or intends to make, a determination under subsection (1) that there is to be a transfer of shares in a CS facility licensee to another body corporate; and (b) the Reserve Bank reasonably believes that the transfer to the receiving body is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee; and (c) the target body is, or before the transfer of shares from the licensee referred to in paragraph (a) of this subsection was, a related body corporate o