Commonwealth: Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth)

Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 No. 17, 2019 An Act to amend the law in relation to penalties and other enforcement mechanisms within legislation administered by ASIC, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Amendment of the Corporations Act 2001 Part 1—Amendments Corporations Act 2001 Part 2—Application and transitional provisions Corporations Act 2001 Schedule 2—Amendment of the Australian Securities and Investments Commission Act 2001 Part 1—Amendments Australian Securities and Investments Commission Act 2001 Part 2—Application and transitional provisions Australian Securities and Investments Commission Act 2001 Schedule 3—Amendment of the National Consumer Credit Protection Act 2009 Part 1—Amendments of the infrastructure provisions for civil penalties, offences and infringement notices National Consumer Credit Protection Act 2009 Part 2—Amendments of penalties under civil penalty provisions National Consumer Credit Protection Act 2009 Part 3—Amendments of penalties under offences National Consumer Credit Protection Act 2009 Part 4—Application and transitional provisions National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 Schedule 4—Amendment of the Insurance Contracts Act 1984 Part 1—Amendments Insurance Contracts Act 1984 Part 2—Application provisions Schedule 5—Contingent amendments Part 1—Amendments contingent on the Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019 Corporations Act 2001 Part 2—Amendments contingent on the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Act 2019 National Consumer Credit Protection Act 2009 Part 3—Amendments contingent on the commencement of Schedule 5 to the Treasury Laws Amendment (Banking Measures No. 1) Act 2018 Division 1—Amendments contingent on the commencement of Division 2 of Part 2 of Schedule 5 to the Treasury Laws Amendment (Banking Measures No. 1) Act 2018 National Consumer Credit Protection Act 2009 Division 2—Amendments contingent on the commencement of Parts 3 and 4 of Schedule 5 to the Treasury Laws Amendment (Banking Measures No. 1) Act 2018 National Consumer Credit Protection Act 2009 Part 4—Amendments contingent on the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 Division 1—Amendments contingent on Schedule 1 to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 Corporations Act 2001 Division 2—Amendments contingent on Schedule 2 to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 Corporations Act 2001 National Consumer Credit Protection Act 2009 Part 5—Amendments contingent on Schedule 6 to the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 Corporations Act 2001 Part 6—Amendments contingent on the commencement of the Federal Circuit and Family Court of Australia Act 2019 Insurance Contracts Act 1984 Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 No. 17, 2019 An Act to amend the law in relation to penalties and other enforcement mechanisms within legislation administered by ASIC, and for related purposes [Assented to 12 March 2019] The Parliament of Australia enacts: 1 Short title This Act is the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019. 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. 12 March 2019 2. Schedules 1, 2, 3 and 4 The day after this Act receives the Royal Assent. 13 March 2019 3. Schedule 5, Part 1 The later of: 6 April 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (b) applies) (b) immediately after the commencement of the Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 4. Schedule 5, Part 2 The later of: Never commenced (a) immediately after the commencement of the provisions covered by table item 2; and (b) immediately after the commencement of items 1 to 11 of Schedule 1 to the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 5. Schedule 5, Part 3, Division 1 The later of: 13 March 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (a) applies) (b) immediately after the commencement of Division 2 of Part 2 of Schedule 5 to the Treasury Laws Amendment (Banking Measures No. 1) Act 2018. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 6. Schedule 5, Part 3, Division 2 The later of: 13 March 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (a) applies) (b) immediately after the commencement of Parts 3 and 4 of Schedule 5 to the Treasury Laws Amendment (Banking Measures No. 1) Act 2018. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 7. Schedule 5, Part 4, Division 1 The later of: 5 April 2021 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (b) applies) (b) immediately after the commencement of Schedule 1 to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 8. Schedule 5, Part 4, Division 2 The later of: 6 April 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (b) applies) (b) immediately after the commencement of Schedule 2 to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 9. Schedule 5, Part 5 The later of: 6 April 2019 (a) immediately after the commencement of the provisions covered by table item 2; and (paragraph (b) applies) (b) immediately after the commencement of Schedule 6 to the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 10. Schedule 5, Part 6 The later of: Never commenced (a) immediately after the commencement of the provisions covered by table item 2; and (b) immediately after the commencement of sections 3 to 249 of the Federal Circuit and Family Court of Australia Act 2019. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 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—Amendment of the Corporations Act 2001 Part 1—Amendments Corporations Act 2001 1 Section 9 Insert: annual turnover, when used in a provision outside Chapter 7, has the same meaning as it has in Chapter 7. benefit derived and detriment avoided: (a) because of an offence—has the meaning given by section 1311D; and (b) because of a contravention of a civil penalty provision—has the meaning given by section 1317GAD. 2 Section 9 (after paragraph (b) of the definition of civil penalty order) Insert: (baa) a relinquishment order under section 1317GAB; 3 Section 9 (definition of civil penalty provision) Omit "subsection 1317E(1)", substitute "subsection 1317E(3)". 4 Section 9 (definition of compliance period) Repeal the definition. 5 Section 9 Insert: contravene, in relation to a civil penalty provision, has a meaning affected by subsection 1317E(4). 6 Section 9 (definition of corporation/scheme civil penalty provision) Omit "section 1317DA", substitute "subsection 1317E(3)". 7 Section 9 Insert: dishonest means dishonest according to the standards of ordinary people. 8 Section 9 (definition of financial services civil penalty provision) Omit "section 1317DA", substitute "subsection 1317E(3)". 9 Section 9 Insert: individual fine formula means the formula set out in subsection 1311B(3). 10 Section 9 (definition of infringement notice) Repeal the definition. 11 Section 9 (at the end of the definition of offence based on) Add: ; or (c) if another provision creates an offence relating to that provision—an offence against that other provision or section 1314 that relates to that other provision. 12 Section 9 Insert: Part 7.7A civil penalty provision means any of the following provisions: (a) subsections 961K(1) and (2) (financial services licensee responsible for breach of certain best interests duties); (b) section 961L (financial services licensee to ensure compliance with certain best interests duties); (c) subsection 961Q(1) (authorised representative responsible for breach of certain best interests duties); (d) section 962P (charging ongoing fee after termination of ongoing fee arrangement); (e) subsection 962S(1) (fee recipient must give fee disclosure statement); (f) subsections 963E(1) and (2) (financial services licensee must not accept conflicted remuneration); (g) section 963F (financial services licensee must ensure representatives do not accept conflicted remuneration); (h) subsection 963G(1) (authorised representative must not accept conflicted remuneration); (i) section 963J (employer must not pay employees conflicted remuneration); (j) section 963K (financial product issuer or seller must not give conflicted remuneration to financial services licensee or representative); (k) subsection 964A(1) (platform operator must not accept volume‑based shelf‑space fees); (l) subsections 964D(1) and (2) (financial services licensee must not charge asset‑based fees on borrowed amounts); (m) subsection 964E(1) (authorised representative must not charge asset‑based fees on borrowed amounts); (n) section 965 (anti‑avoidance of Part 7.7A provisions). payment period, in relation to an infringement notice issued under Part 9.4AB, has the meaning given by section 1317DAQ. relinquishment order has the meaning given by subsection 1317GAB(1). subject to an infringement notice under Part 9.4AB has a meaning given by section 1317DAN. 13 Paragraph 5.3 of the small business guide in Part 1.5 Omit: • may be guilty of a criminal offence with a penalty of $200,000 or imprisonment for up to 5 years, or both; and • may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000); and substitute: • may be guilty of a criminal offence with a penalty of imprisonment for up to 10 years or a fine, or both (the fine is the greater of 4,500 penalty units and 3 times the amount of the benefit derived and detriment avoided because of the offence); and • may contravene a civil penalty provision (and the Court may order the person to pay the Commonwealth an amount equal to the greater of 5,000 penalty units and 3 times the amount of the benefit derived and detriment avoided because of the contravention); and 14 Paragraph 184(1)(b) Omit "intentionally". 15 After subsection 184(2) Insert: (2A) To avoid doubt, it is not a defence in a proceeding for an offence against subsection (2) that the director, other officer or employee of the corporation uses their position dishonestly: (a) with the intention of directly or indirectly gaining an advantage for the corporation; or (b) with the result that the corporation directly or indirectly gained an advantage. 16 At the end of section 184 Add: (4) To avoid doubt, it is not a defence in a proceeding for an offence against subsection (3) that the person uses the information dishonestly: (a) with the intention of directly or indirectly gaining an advantage for the corporation; or (b) with the result that the corporation directly or indirectly gained an advantage. 17 Subsection 198G(2) (penalty) Repeal the penalty, substitute: Penalty: 30 penalty units. 18 Subsection 205G(1) Omit "under subsections (3) and (4)", substitute "in accordance with subsections (2), (3) and (4)". 19 Subsection 205G(9) Repeal the subsection (including the note), substitute: Fault‑based offence (9) A person commits an offence if the person contravenes subsection (1). Strict liability offence (10) A person commits an offence of strict liability if the person contravenes subsection (1). 20 Subparagraph 206C(1)(a)(i) After "contravened a corporation/scheme civil penalty provision", insert "or subsection 670A(4), 727(6), 728(4) or 1309(12)". 21 Section 250SA Before "At a listed company's AGM,", insert "(1)". 22 At the end of section 250SA Add: (2) An offence based on subsection (1) is an offence of strict liability. 23 Subsection 286(3) Repeal the subsection (including the note), substitute: Fault‑based offence (3) A person commits an offence if the person contravenes subsection (1) or (2). Strict liability offence (4) A person commits an offence of strict liability if the person contravenes subsection (1) or (2). 24 Subsection 307A(3) Repeal the subsection (including the note), substitute: Fault‑based offence (3) A person commits an offence if the person contravenes subsection (1) or (2). Strict liability offence (4) A person commits an offence of strict liability if the person contravenes subsection (1) or (2). 25 Subsection 347A(3) Repeal the subsection (including the note), substitute: (3) An offence based on subsection (1) is an offence of strict liability. 26 Subsection 347B(3) Repeal the subsection (including the note), substitute: (3) An offence based on subsection (1) or (2) is an offence of strict liability. 27 Subsection 428(3) Repeal the subsection (including the note), substitute: Strict liability offence (3) An offence based on subsection (1), (2), (2B) or (2C) is an offence of strict liability. 28 Subsection 588G(2) (note) Omit "subsection 1317E(1)", substitute "section 1317E". 29 At the end of subsection 601ED(5) Add: Note: Failure to comply with this subsection is an offence: see subsection 1311(1). 30 At the end of subsection 601ED(7) Add: Note: In criminal proceedings, a defendant in the prosecution of an offence under subsection (5) bears an evidential burden in relation to the matter in subsection (7). See subsection 13.3(3) of the Criminal Code. 31 At the end of section 601ED Add: (8) A person contravenes this subsection if the person contravenes subsection (5). Note: This subsection is a civil penalty provision (see section 1317E). 32 Subsection 606(4A) Repeal the subsection (including the note), substitute: Fault‑based offence (4A) A person commits an offence if the person contravenes subsection (1), (2) or (4). Absolute liability offence (4B) A person commits an offence of absolute liability if the person contravenes subsection (1), (2) or (4). 33 At the end of section 670A Add: Civil liability (4) A person contravenes this subsection if: (a) the person contravenes subsection (1); and (b) either: (i) the misleading or deceptive statement; or (ii) the omission or new circumstance; is materially adverse from the point of view of the holder of securities to whom the document is given. Note: This subsection is a civil penalty provision (see section 1317E). 34 Subsection 671B(1) After "to a listed company, or the responsible entity for a listed registered scheme, or the operator of a listed notified foreign passport fund", insert "in accordance with this section". 35 Subsection 671B(1A) Repeal the subsection. 36 At the end of section 671B Add: Fault‑based offence (8) A person commits an offence if the person contravenes subsection (1). Strict liability offence (9) A person commits an offence of strict liability if the person contravenes subsection (1). 37 At the end of section 727 Add: Civil liability (6) A person contravenes this subsection if the person contravenes subsection (1), (2), (3) or (4). Note: This subsection is a civil penalty provision (see section 1317E). 38 At the end of section 728 Add: Civil liability if statement, omission or new matter materially adverse (4) A person contravenes this subsection if: (a) the person contravenes subsection (1); and (b) either: (i) the misleading or deceptive statement; or (ii) the omission or new circumstance; is materially adverse from the point of view of an investor. Note: This subsection is a civil penalty provision (see section 1317E). 39 At the end of section 791A Add: (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 40 Section 792A Before "A market licensee", insert "(1)". 41 At the end of section 792A Add: (2) A person contravenes this subsection if the person contravenes paragraph (1)(a), (c), (d), (e), (f), (g), (h) or (i). Note: This subsection is a civil penalty provision (see section 1317E). 42 At the end of section 792B Add: (7) A person contravenes this subsection if the person contravenes subsection (1), (2), (3), (4) or (5). Note: This subsection is a civil penalty provision (see section 1317E). 43 Subsection 793E(4) Omit "paragraph 792A(a)", substitute "paragraph 792A(1)(a)". 44 Subsection 794C(2) Omit "paragraph 792A(c)", substitute "paragraph 792A(1)(c)". 45 Paragraph 795B(1)(c) Omit "paragraph 792A(a)", substitute "paragraph 792A(1)(a)". 46 Subparagraph 795B(1)(d)(i) Omit "paragraph 792A(a)", substitute "paragraph 792A(1)(a)". 47 Subsection 798E(1) Omit "paragraph 792A(a)", substitute "paragraph 792A(1)(a)". 48 Subsection 798G(2) Repeal the subsection. 49 Subsection 798K(2) Repeal the subsection, substitute: (2) The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a market integrity rule must not exceed: (a) for an individual—3,000 penalty units; and (b) for a body corporate—15,000 penalty units. 50 At the end of section 820A Add: (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 51 Section 821A Before "A CS facility licensee", insert "(1)". 52 At the end of section 821A Add: (2) A person contravenes this subsection if the person contravenes paragraph (1)(aa), (a), (c), (d), (e), (f), (g) or (h). Note: This subsection is a civil penalty provision (see section 1317E). 53 At the end of section 821B Add: (6) A person contravenes this subsection if the person contravenes subsection (1), (2), (3) or (4). Note: This subsection is a civil penalty provision (see section 1317E). 54 Paragraph 821BA(1)(b) Omit "subparagraph 821A(aa)(ii)", substitute "subparagraph 821A(1)(aa)(ii)". 55 Subsection 822E(4) Omit "paragraphs 821A(aa) and (a)", substitute "paragraphs 821A(1)(aa) and (a)". 56 Subsection 823C(1) Omit "paragraph 821A(aa)", substitute "paragraph 821A(1)(aa)". 57 Subsection 823C(2) Omit "paragraph 821A(c)", substitute "paragraph 821A(1)(c)". 58 Subsection 823CA(1) Omit "paragraph 821A(aa)", substitute "paragraph 821A(1)(aa)". 59 At the end of section 853F Add: (3) A person contravenes this subsection if the person contravenes subsection (2). Note: This subsection is a civil penalty provision (see section 1317E). 60 Subsection 901A(4) Repeal the subsection. 61 Subsection 901F(2) Repeal the subsection, substitute: (2) The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a derivative transaction rule must not exceed: (a) for an individual—200 penalty units; and (b) for a body corporate—1,000 penalty units. 62 Subsection 903A(4) Repeal the subsection. 63 Subsection 903E(2) Repeal the subsection, substitute: (2) The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a derivative trade repository rule must not exceed: (a) for an individual—200 penalty units; and (b) for a body corporate—1,000 penalty units. 64 Section 904A Before "A derivative trade repository licensee", insert "(1)". 65 At the end of section 904A Add: (2) A person contravenes this subsection if the person contravenes paragraph (1)(b) or (c). Note: This subsection is a civil penalty provision (see section 1317E). 66 After subsection 904C(1) Insert: (1A) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 67 At the end of section 905A Add: (3) A person contravenes this subsection if the person contravenes subsection (2). Note: This subsection is a civil penalty provision (see section 1317E). 68 Subsection 908BA(1) (penalty) Repeal the penalty, substitute: Penalty: 5 years imprisonment. 69 Section 908BB (penalty) Repeal the penalty, substitute: Penalty: 5 years imprisonment. 70 Subsection 908CF(1) (note 1) Repeal the note, substitute: Note 1: This subsection is a civil penalty provision (see section 1317E). For the maximum penalty for contravening a civil penalty provision, see section 1317G. For relief from liability to a civil penalty relating to this subsection, see section 1317S. 71 Subsection 908CG(2) Repeal the subsection, substitute: (2) The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a provision of the financial benchmark rules or the compelled financial benchmark rules must not exceed: (a) for an individual—1,110 penalty units; and (b) for a body corporate—5,550 penalty units. 72 Section 908CO Repeal the section, substitute: 908CO Requirements Each of the financial benchmark rules and compelled financial benchmark rules may deal with a matter by imposing requirements. 73 Section 908DC Repeal the section, substitute: 908DC Penalties for offences against this Division The penalty for an offence against this Division is 15 years imprisonment. Note: However, sections 1311A to 1311E will apply in relation to the penalty in the usual way. 74 After subsection 911A(5A) Insert: (5B) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 75 At the end of section 911B Add: (4) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 76 After subsection 912A(5) Insert: (5A) A person contravenes this subsection if the person contravenes paragraph (1)(a), (aa), (ca), (d), (e), (f), (g), (h) or (j). Note: This subsection is a civil penalty provision (see section 1317E). 77 At the end of section 912D Add: (3) A person contravenes this subsection if the person contravenes subsection (1B) or (2). Note: This subsection is a civil penalty provision (see section 1317E). 78 Subsection 920C(2) Repeal the subsection (including the note), substitute: (2) A person against whom a banning order is made must not engage in conduct in breach of the banning order. Fault‑based offence (3) A person commits an offence if the person contravenes subsection (2). Civil liability (4) A person contravenes this subsection if the person contravenes subsection (2). Note: This subsection is a civil penalty provision (see section 1317E). 79 Subsection 921L(7) (penalty) Repeal the penalty, substitute: Penalty: 30 penalty units. 80 Subsections 921M(1), (2) and (3) (penalty) Repeal the penalty, substitute: Penalty: 30 penalty units. 81 Subsection 921P(2) (penalty) Repeal the penalty, substitute: Penalty: 30 penalty units. 82 Section 922M Repeal the section, substitute: 922M Failing to comply with obligation to notify ASIC Failing to comply with obligation to notify ASIC (1) A person contravenes this subsection if: (a) the person is required to cause a notice to be lodged under a notice provision; and (b) the person fails to cause the notice to be lodged in accordance with that provision. Note: A notice must be lodged in accordance with section 922L in order to be lodged in accordance with a notice provision (see subsection (1) of the notice provision). (2) However, subsection (1) does not apply if: (a) the person fails to cause the notice to be lodged in accordance with section 922D; and (b) the only reason the person fails to cause the notice to be lodged in accordance with that section is because the information referred to in paragraph 922F(1)(h), (l) or (m) is not included in the notice; and (c) subsection 922F(3) provides that the notice does not need to include that information. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code). Fault‑based offence (3) A person commits an offence if the person contravenes subsection (1). (4) Subsection 4K(2) of the Crimes Act 1914 does not apply to subsection (1) of this section. Note: A person may commit an offence if the person knowingly gives false or misleading information (see section 1308 of this Act and section 137.1 of the Criminal Code). Civil liability (5) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 83 At the end of section 941A Add: (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 84 At the end of section 941B Add: (4) A person contravenes this subsection if the person contravenes subsection (1) or (2). Note: This subsection is a civil penalty provision (see section 1317E). 85 At the end of section 946A Add: (4) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 86 Section 952E Repeal the section, substitute: 952E Giving a defective disclosure document or statement (whether or not known to be defective) Financial services licensee gives a defective disclosure document or statement (1) A person (the providing entity), being a financial services licensee, contravenes this subsection if: (a) the providing entity: (i) gives (see subsection (5)) another person a disclosure document or statement in circumstances in which the document or statement is required by a provision of this Part to be given to the other person; or (ii) is a financial services licensee and gives (see subsection (5)), or makes available to, another person a disclosure document or statement, being a Financial Services Guide or a Supplementary Financial Services Guide, reckless as to whether the other person will or may rely on the information in it; and (b) the disclosure document or statement is defective. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsections 941C(1), (2), (3) and (3A). See subsection 13.3(3) of the Criminal Code. Authorised representative gives a defective disclosure statement or document (2) An authorised representative of a financial services licensee contravenes this subsection if: (a) the representative gives (see subsection (5)) a person a disclosure document or statement, being a Statement of Advice, or information, a statement or a copy of a record required by subsection 941C(5) or (7), 941D(2), 946AA(5), 946B(3), (6) or (8) or 946C(2), in circumstances in which the document or statement is required by a provision of this Part to be given to the person; and (b) the disclosure document or statement is defective. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsections 941C(1), (2), (3) and (3A). See subsection 13.3(3) of the Criminal Code. Exceptions (3) A person does not contravene subsection (1) or (2) if the person took reasonable steps to ensure that the disclosure document or statement would not be defective. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (3). See subsection 13.3(3) of the Criminal Code. (4) A person does not contravene subsection (2) if the disclosure document or statement: (a) was provided to the person by a financial services licensee for whom they were, at that time, an authorised representative; or (b) was defective because of information, or an omission from information, provided to them by a financial services licensee for whom they were, at that time, an authorised representative. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code. Meaning of give (5) In this section, give means give by any means (including orally), and is not limited to the meaning it has because of section 940C. Fault‑based offence (6) A person commits an offence if the person contravenes subsection (1) or (2). (7) For the purposes of an offence based on subsection (1), strict liability applies to the physical element of the offence specified in paragraph (1)(b). (8) For the purposes of an offence based on subsection (2), strict liability applies to the physical element of the offence specified in paragraph (2)(b). Civil liability (9) A person contravenes this subsection if the person contravenes subsection (1) or (2). Note: This subsection is a civil penalty provision (see section 1317E). 87 Section 952H Repeal the section, substitute: 952H Financial services licensee failing to ensure authorised representative gives disclosure documents or statements as required Obligation (1) A financial services licensee contravenes this subsection if the licensee does not take reasonable steps to ensure that an authorised representative of the licensee: (a) complies with their obligations under this Part to give disclosure documents or statements as and when required; and (b) without limiting paragraph (a), does not, in purported compliance with obligations under this Part, give disclosure documents or statements that are defective. Fault‑based offence (2) A person commits an offence if the person contravenes subsection (1). Civil liability (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 88 At the end of section 981B Add: (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 89 Section 981C Before "The regulations", insert "(1)". 90 At the end of section 981C Add: (2) A person contravenes this subsection if the person contravenes regulations made for the purposes of subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 91 Subsection 981K(3) Repeal the subsection. 92 Subsection 981N(2) Repeal the subsection, substitute: (2) The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a provision of client money reporting rules must not exceed: (a) for an individual—3,000 penalty units; and (b) for a body corporate—15,000 penalty units. 93 Subsection 989CA(3) Repeal the subsection (including the note), substitute: Fault‑based offence (3) A person commits an offence if the person contravenes subsection (1) or (2). Strict liability offence (4) A person commits an offence of strict liability if the person contravenes subsection (1) or (2). 94 Section 993D Repeal the section, substitute: 993D Failing to pay loan money into an account as required Failing to pay loan money into account as required (1) A financial services licensee contravenes this subsection if: (a) the licensee is required by subsection 982B(1) to pay particular money into an account in accordance with that subsection; and (b) the licensee does not pay the money into an account in accordance with that subsection. Fault‑based offence (2) A person commits an offence if the person contravenes subsection (1). Strict liability offence (3) A person commits an offence of strict liability if the person contravenes subsection (1). Civil liability (4) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 95 At the end of section 1012A Add: Civil liability (5) A person contravenes this subsection if the person contravenes this section. Note: This subsection is a civil penalty provision (see section 1317E). 96 At the end of section 1012B Add: Civil liability (6) A person contravenes this subsection if the person contravenes this section. Note: This subsection is a civil penalty provision (see section 1317E). 97 At the end of section 1012C Add: Civil liability (11) A person contravenes this subsection if the person contravenes this section. Note: This subsection is a civil penalty provision (see section 1317E). 98 After subsection 1017BA(4A) Insert: Civil liability (4B) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 99 After subsection 1017BB(5) Insert: (5AA) A person contravenes this subsection if the person contravenes subsection (1) or (2), or regulations made for the purposes of subsection (3). Note: This subsection is a civil penalty provision (see section 1317E). 100 Section 1020A Repeal the section, substitute: 1020A Offers etc. relating to certain managed investment schemes not to be made in certain circumstances Obligation (1) A person must not engage in conduct of a kind referred to in subsection (2) in relation to a financial product described in paragraph 764A(1)(ba) (which relates to certain managed investment schemes that are not registered schemes) if the managed investment scheme concerned needs to be, or will need to be, registered and has not been registered. This is so even if it is proposed to register the scheme. (2) Subject to subsection (3), the kinds of conduct that must not be engaged in in relation to such a managed investment product are as follows: (a) making a recommendation, as described in subsection 1012A(3), that is received in this jurisdiction; (b) making an offer, as described in subsection 1012B(3) or 1012C(3), that is received in this jurisdiction; (c) accepting an offer, made as described in subsection 1012B(3) or (4), that was received in this jurisdiction. Exceptions (3) Subsection (2) does not apply to a recommendation or offer made in a situation to which a subsection of section 1012D, other than subsection 1012D(1), applies. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of the Criminal Code. Fault‑based offence (4) A person commits an offence if the person contravenes subsection (1). Civil liability (5) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 101 Section 1021E Repeal the section, substitute: 1021E Preparer of defective disclosure document or statement giving the document or statement (whether or not known to be defective) Obligations (1) A person contravenes this subsection if: (a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and (b) the disclosure document or statement is defective; and (c) the person: (i) gives (see subsection (4)) another person the disclosure document or statement in circumstances in which it is required by a provision of this Part to be given to the other person; or (ii) gives (see subsection (4)), or makes available to, another person the disclosure document or statement, reckless as to whether the other person will or may rely on the information in it. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E. (2) A person contravenes this subsection if: (a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and (b) the disclosure document or statement is defective; and (c) the person gives (see subsection (4)), or makes available to, another person the disclosure document or statement, reckless as to whether the other person, or someone else, will or may give it, or make it available, to another person as mentioned in subparagraph (1)(c)(i) or (ii). Exception (3) A person does not contravene subsection (1) or (2) if the person took reasonable steps to ensure that the disclosure document or statement would not be defective. Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (3). See subsection 13.3(3) of the Criminal Code. Meaning of give (4) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C. Fault‑based offence (5) A person commits an offence if the person contravenes subsection (1) or (2). (6) For the purposes of an offence based on subsection (1), strict liability applies to the physical element of the offence specified in paragraph (1)(b). (7) For the purposes of an offence based on subsection (2), strict liability applies to the physical element of the offence specified in paragraph (2)(b). Civil liability (8) A person contravenes this subsection if the person contravenes subsection (1) or (2). Note: This subsection is a civil penalty provision (see section 1317E). 102 Section 1021G Repeal the section, substitute: 1021G Financial services licensee failing to ensure authorised representative gives etc. disclosure documents or statements as required Financial services licensee must ensure authorised representative gives etc. disclosure documents or statements as required (1) A financial services licensee contravenes this subsection if the licensee does not take reasonable steps to ensure that an authorised representative of the licensee complies with their obligations under this Part to give or communicate disclosure documents or statements as and when required by this Part. Fault‑based offence (2) A person commits an offence if the person contravenes subsection (1). Civil liability (3) A person contravenes this subsection if the person contravenes subsection (1). Note: This subsection is a civil penalty provision (see section 1317E). 103 Subsection 1041F(2) Repeal the subsection. 104 Subsection 1041G(1) Omit "(1)" (first occurring). 105 Subsection 1041G(2) Repeal the subsection. 106 Subsection 1211B(3) (penalty) Repeal the penalty, substitute: Penalty: (a) for an individual—5 years imprisonment, 2,000 penalty units, or both; and (b) for a body corporate—20,000 penalty units. 107 Subsections 1309(1) and (2) Omit "is guilty of an offence", substitute "contravenes this subsection". 108 At the end of section 1309 Add: Fault‑based offence (11) A person commits an offence if the person contravenes subsection (1) or (2). Civil liability (12) A person contravenes this subsection if the person contravenes subsection (2). Note: This subsection is a civil penalty provision (see section 1317E). 109 Subsections 1311(2) to (6) Repeal the subsections (including the note). 110 After section 1311 Insert: 1311A Penalty for committing an offence A person who commits an offence against this Act is punishable on conviction by a penalty not exceeding the penalty applicable to the offence. 1311B Penalty applicable to an offence committed by an individual (1) The penalty applicable to an offence committed by an individual is: (a) for an offence for which a fine is the only penalty specified—the fine specified; and (b) for an offence for which a term of imprisonment is the only penalty specified—either the term of imprisonment, the fine worked out under this section, or both. (2) If: (a) a term of imprisonment is the only penalty specified for an offence; and (b) the term of imprisonment is less than 10 years; the fine mentioned in paragraph (1)(b) is the number of penalty units worked out using the individual fine formula. (3) The individual fine formula is: (4) If: (a) a term of imprisonment is the only penalty specified for an offence; and (b) the term of imprisonment is 10 years or more; the fine mentioned in paragraph (1)(b) is the greater of: (c) 4,500 penalty units; and (d) if the court can determine the benefit derived and detriment avoided because of the offence—that amount multiplied by 3. (5) This section applies in relation to an offence committed by an individual unless there is a contrary intention under this Act in relation to the penalty applicable to the offence. In that case, the penalty applicable is the penalty specified for the offence. Note: The following are examples of cases in which a penalty is specified that would indicate a contrary intention: (a) the table item in Schedule 3 relating to subsection 794D(3), which specifies a penalty for each day, or part of a day, in respect of which an offence is committed; (b) a regulation made under paragraph 1364(2)(w) prescribing a penalty for an individual for a contravention of the regulations. 1311C Penalty applicable to an offence committed by a body corporate (1) The penalty applicable to an offence committed by a body corporate is: (a) for an offence for which a fine is the only penalty specified—the fine specified multiplied by 10; and (b) for an offence for which a term of imprisonment is the only penalty specified—the fine worked out under this section. (2) If: (a) a term of imprisonment is the only penalty specified for an offence; and (b) the term of imprisonment is less than 10 years; the fine mentioned in paragraph (1)(b) is the number of penalty units worked out using the individual fine formula, multiplied by 10. (3) If: (a) a term of imprisonment is the only penalty specified for an offence; and (b) the term of imprisonment is 10 years or more; the fine mentioned in paragraph (1)(b) is the greatest of: (c) 45,000 penalty units; and (d) if the court can determine the benefit derived and detriment avoided because of the offence—that amount multiplied by 3; and (e) 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 committed, or began committing, the offence. (4) This section applies in relation to an offence committed by a body corporate unless there is a contrary intention under this Act in relation to the penalty applicable to the offence. In that case, the penalty applicable is the penalty specified for the offence. Note: The following are examples of cases in which a penalty is specified that would indicate a contrary intention: (a) subsection 1211B(3), which specifies a penalty for a body corporate; (b) the table item in Schedule 3 relating to subsection 794D(3), which specifies a penalty for each day, or part of a day, in respect of which an offence is committed; (c) a regulation made under paragraph 1364(2)(w) prescribing a penalty for a body corporate for a contravention of the regulations. 1311D Meaning of benefit derived and detriment avoided because of an offence The benefit derived and detriment avoided because of an offence is the sum of: (a) the total value of all benefits obtained by one or more persons that are reasonably attributable to the commission of the offence; and (b) the total value of all detriments avoided by one or more persons that are reasonably attributable to the commission of the offence. 1311E Where is the penalty for an offence specified? (1) The penalty specified for an offence is: (a) if a penalty, pecuniary or otherwise, is specified in Schedule 3 for the provision under which the offence is created, or a provision or provisions in which that provision is included—that penalty; and (b) if a penalty, pecuniary or otherwise, is specified in any other provision of this Act for the provision under which the offence is created, or a provision or provisions in which that provision is included—that penalty. (2) To avoid doubt, a penalty is not specified for an offence if it is a consequence for committing the offence that is not a punishment on conviction for the offence. (3) Without limiting subsection (2), each of the following is a consequence for committing an offence that is not a punishment on conviction for the offence: (a) the availability of a pecuniary penalty order for the contravention of a civil penalty provision that relates to the same conduct as that which gave rise to the offence; (b) the availability of an infringement notice in relation to an alleged commission of the offence; (c) the availability of administrative consequences as a result of the commission of the offence, such as: (i) disqualification from any office; or (ii) consequences in relation to a licence; or (iii) other actions that may be taken by ASIC under this Act or any other Act; (d) the availability under any law of the Commonwealth or of a State or Territory (including the general law) of an order to refund money, pay compensation, relinquish a benefit or make any other payment if the offence is committed; (e) the availability under any law of the Commonwealth or of a State or Territory (including the general law) of an injunction or any other order directing a person to take, or refrain from taking, action if the offence is committed. 1311F If no penalty is specified If no penalty is specified for an offence: (a) the offence is an offence of strict liability; and (b) 20 penalty units is taken to be the penalty specified for the offence. 111 Sections 1312 and 1313 Repeal the sections. 112 Paragraph 1317C(gf) Repeal the paragraph, substitute: (gf) a decision of ASIC: (i) to give an infringement notice under section 1317DAM; or (ii) to extend, or to refuse to extend, the payment period for an infringement notice under section 1317DAR; or (iii) to make an arrangement, or to refuse to make an arrangement, to pay the amount payable under an infringement notice by instalments under section 1317DAS; or (iv) to withdraw, or not to withdraw, an infringement notice under section 1317DAT; or 113 After Part 9.4AA Insert: Part 9.4AB—Infringement notices for other alleged contraventions 1317DAM When an infringement notice may be given (1) If ASIC believes on reasonable grounds that a person has contravened a provision subject to an infringement notice under this Part, ASIC may give the person an infringement notice for the alleged contravention. (2) The infringement notice must be given within 12 months after the day on which the contravention is alleged to have taken place. (3) A single infringement notice must relate only to a single contravention of a single provision unless subsection (4) applies. (4) ASIC may give a person a single infringement notice relating to multiple contraventions of a single provision if: (a) the provision requires the person to do a thing within a particular period or before a particular time; and (b) the person fails or refuses to do that thing within that period or before that time; and (c) the failure or refusal occurs on more than 1 day; and (d) each contravention is constituted by the failure or refusal on one of those days. (5) If an alleged contravention would, if proved, constitute both a contravention of a civil penalty provision and of an offence provision, the infringement notice must relate to the alleged contravention of the offence provision. 1317DAN Provisions subject to an infringement notice The following provisions are subject to an infringement notice under this Part: (a) strict liability offences against this Act; (b) absolute liability offences against this Act; (c) other prescribed offences; (d) prescribed civil penalty provisions. 1317DAP Matters to be included in an infringement notice (1) An infringement notice must: (a) be identified by a unique number; and (b) state the day on which it is given; and (c) state the name of the person to whom the notice is given; and (d) state the name and contact details of the person who gave the notice; and (e) give brief details of the alleged contravention, or each alleged contravention, to which the notice relates, including: (i) the provision that was allegedly contravened; and (ii) the maximum penalty that a court could impose for each contravention, if the provision were contravened; and (iii) the time (if known) and day of, and the place of, each alleged contravention; and (f) state the amount that is payable under the notice; and (g) give an explanation of how payment of the amount is to be made; and (h) state that the payment period for the notice will be 28 days, beginning on the day on which the notice is given, unless the period is extended, an arrangement is made for payment by instalments or the notice is withdrawn; and (i) state that, if the person to whom the notice is given pays the amount within the payment period, then (unless the notice is withdrawn): (i) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision—the person will not be liable to be prosecuted in a court for the alleged contravention; or (ii) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision—the person is not liable to be prosecuted in a court, and proceedings seeking a pecuniary penalty order will not be brought, in relation to the alleged contravention; or (iii) if the alleged contravention is of a civil penalty provision—proceedings seeking a pecuniary penalty order will not be brought in relation to the alleged contravention; and (j) state that payment of the amount is not an admission of guilt or liability; and (k) state that the person may apply to ASIC to have the period in which to pay the amount extended or for an arrangement to pay the amount by instalments; and (l) state that the person may choose not to pay the amount and, if the person does so: (i) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision—the person may be prosecuted in a court for the alleged contravention; or (ii) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision—the person may be prosecuted in a court, or proceedings seeking a pecuniary penalty order may be brought, in relation to the alleged contravention; or (iii) if the alleged contravention is of a civil penalty provision—proceedings seeking a pecuniary penalty order may be brought in relation to the alleged contravention; and (m) set out how the notice can be withdrawn; and (n) state that if the notice is withdrawn: (i) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision—the person may be prosecuted in a court for the alleged contravention; or (ii) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision—the person may be prosecuted in a court, or proceedings seeking a pecuniary penalty order may be brought, in relation to the alleged contravention; or (iii) if the alleged contravention is of a civil penalty provision—proceedings seeking a pecuniary penalty order may be brought in relation to the alleged contravention; and (o) state that the person may make written representations to ASIC seeking the withdrawal of the notice. (2) The amount to be stated in the notice for the purposes of paragraph (1)(f) is: (a) for a single contravention of an offence provision—half the maximum penalty that a court could impose on the person for the contravention; and (b) for multiple contraventions of an offence provision—the amount worked out under paragraph (a) for a single contravention multiplied by the number of contraventions; and (c) for a single contravention of a civil penalty provision—12 penalty units for an individual and 60 penalty units for a body corporate; and (d) for multiple contraventions of a civil penalty provision—the amount worked out under paragraph (c) for a single contravention multiplied by the number of contraventions. 1317DAQ Payment period Usual payment period (1) The payment period for an infringement notice begins on the day after the notice is given and, unless otherwise specified in this section, continues for 28 days. Payment period extended under section 1317DAR (2) If, under section 1317DAR, ASIC extends the payment period for the notice, the payment period is as extended. (3) If ASIC refuses an application under subsection 1317DAR(1) for an extension of the payment period for the notice, the payment period ends on the later of the following days: (a) the last day of the period that, without the extension that has been refused, would be the payment period for the notice; (b) the day that is 7 days after the day the applicant was given notice of ASIC's decision not to extend; (c) the day that is 7 days after the day the application is taken to have been refused under subsection 1317DAR(4). Instalments (4) If, under section 1317DAS, ASIC makes an arrangement for the amount payable under the notice to be paid by instalments, the payment period ends on the earlier of the following days: (a) the last day on which an instalment is to be paid under the arrangement; (b) if the person fails to pay an instalment in accordance with the arrangement, the last day on which the missed instalment was to be paid. (5) If ASIC refuses an application made under subsection 1317DAS(1) to make an arrangement for the amount payable under the notice to be paid by instalments, the payment period ends on the earlier of the following days: (a) the last day of the period that, without the instalment arrangement, would be the payment period for the notice; (b) the day that is 7 days after the day the applicant was given notice of ASIC's decision not to make the arrangement; (c) the day that is 7 days after the day the application is taken to have been refused under subsection 1317DAS(4). Payment period if ASIC refuses to withdraw infringement notice (6) If ASIC refuses a representation made under subsection 1317DAT(1) for the notice to be withdrawn, the payment period ends on the later of the following days: (a) the last day of the period that, without the withdrawal, would be the payment period for the notice; (b) the day that is 7 days after the day the person was given notice of ASIC's decision not to withdraw the notice; (c) the day that is 7 days after the day on which, under subsection 1317DAT(5), ASIC is taken to have refused to withdraw the infringement notice. 1317DAR Extension of time to pay amount (1) A person to whom an infringement notice has been given may, during the payment period for the notice, apply to ASIC for an extension of the payment period for the notice. (2) ASIC may, in writing, extend the payment period for an infringement notice: (a) if a person makes an application in accordance with subsection (1); or (b) on ASIC's own initiative. ASIC may do so before or after the end of the payment period. (3) ASIC must do each of the following within 14 days after an application in accordance with subsection (1) is made: (a) grant or refuse to grant an extension of the payment period for the infringement notice; (b) give the applicant notice in writing of ASIC's decision. (4) If ASIC does not comply with subsection (3): (a) ASIC is taken to have refused to grant an extension of the payment period for the infringement notice; and (b) the refusal is taken to have occurred on the last day of the 14 day period. (5) ASIC may extend the payment period more than once under subsection (2). 1317DAS Payment by instalments (1) A person to whom an infringement notice has been given may, within 28 days after the infringement notice is given, apply to ASIC to make an arrangement to pay the amount payable under the infringement notice by instalments. (2) ASIC may, in writing, make an arrangement for a person to pay the amount payable under an infringement notice by instalments: (a) if a person makes an application in accordance with subsection (1); or (b) on ASIC's own initiative. ASIC may do so before or after the end of the payment period. (3) ASIC must do each of the following within 14 days after an application in accordance with subsection (1) is made: (a) decide to make, or refuse to make, an arrangement for the applicant to pay the amount payable under the infringement notice by instalments; (b) give the applicant notice in writing of ASIC's decision; (c) if ASIC decides to make the arrangement, specify in the notice: (i) the day by which each instalment is to be paid; and (ii) the amount of each instalment. (4) If ASIC does not comply with subsection (3): (a) ASIC is taken to have refused to make an arrangement for the applicant to pay the amount payable under the infringement notice by instalments; and (b) the refusal is taken to have occurred on the last day of the 14 day period. (5) ASIC may vary an arrangement for a person to pay the amount payable under an infringement notice by instalments. (6) If: (a) a person does not pay all of the instalments in accordance with an arrangement made under this section; and (b) the person is prosecuted, or proceedings seeking a pecuniary penalty order are brought, for the alleged contravention; ASIC must refund to the person the amount of any instalments paid. 1317DAT Withdrawal of an infringement notice Representations seeking withdrawal of notice (1) A person to whom an infringement notice has been given may, within 28 days after the infringement notice is given, make written representations to ASIC seeking the withdrawal of the notice. Withdrawal of notice (2) ASIC may withdraw an infringement notice given to a person: (a) if the person makes representations to ASIC in accordance with subsection (1); or (b) on ASIC's own initiative. ASIC may do so before or after the end of th