Queensland: Financial Intermediaries Act 1996 (Qld)

Financial Intermediaries Act 1996 An Act to provide for the regulation of cooperative housing societies, terminating building societies and The Cairns Cooperative Weekly Penny Savings Bank Limited, and for other purposes Part 1 Preliminary Division 1 Introductory provisions 1 Short title This Act may be cited as the Financial Intermediaries Act 1996. 2 Commencement This Act (other than parts 2 and 3) commences on a day to be fixed by proclamation. Division 2 Interpretation 3 Dictionary The dictionary in schedule 2 defines particular words used in this Act. 4 Meaning of director (1) For this Act, director of a society includes a reference to— (a) a person (however described) occupying or acting in the position of director of the society, and whether or not validly appointed to occupy, or duly authorised to act in, the position; and (b) a person under whose directions or instructions the society's directors are accustomed to act. (2) However, a person is not taken to be a person under whose directions or instructions a society's directors are accustomed to act merely because the directors act on advice given by the person in the proper performance of the functions attaching to— (a) the person's professional capacity; or (b) the person's business relationship with the directors or the society. 5 Meaning of officer (1) For this Act, officer of a society includes— (a) a director, secretary, executive officer or employee of the society; and (b) a receiver and manager, appointed under a power contained in an instrument, of property of the society; and (c) a liquidator of the society appointed in a voluntary winding–up of the society; and (d) a trustee or other person administering a compromise or arrangement made between the society and other persons. (2) However, none of the following is an officer of the society— (a) a receiver who is not also a manager; (b) a receiver and manager appointed by a court; (c) a liquidator appointed by a court. Division 3 Operation of Act 6 Act binds the State (1) This Act binds the State. (2) However, this section does not permit the State to be prosecuted for an offence. Division 4 [Repealed] 7 [Repealed] Part 2 Prudential and advisory functions of registrar 8 Registrar's prudential and advisory functions The registrar's prudential and advisory functions under this Act are to— (a) institute, develop, and ensure the effective and efficient implementation of, a system of prudential and other standards for, and for the supervision of, societies; and (b) advise, and make recommendations to, the Treasurer about— (i) changes to this Act; or (ii) new laws, and changes to other existing laws, about or affecting societies; and (c) act under part 3. 9 Consultation In performing the registrar's functions and exercising the registrar's powers under this part, the registrar must consult with the Treasurer, the Reserve Bank of Australia, industry bodies and societies if it is appropriate and practicable to consult with them. Part 3 Standards 10 Making of standards (1) The registrar may make standards (whether prudential or otherwise) about— (a) the business and affairs of societies; and (b) the supervision of societies by the registrar; and (c) any other matters about which this Act authorises or requires (whether expressly or by implication) standards to be made. (2) A standard takes effect from— (a) the day a copy of the standard is published in the gazette; or (b) a later day stated in the standard. 11 Procedures before making of standards (1) A standard may be made only if this section or section 12 is complied with. (2) The registrar must, not later than 60 days before the making of the standard, publish a notice in the gazette, and in a newspaper circulating generally in the State, explaining succinctly the purpose, and intended operation, of the standard. (3) The notice must invite— (a) written suggestions on the proposed standard to be given to the registrar within 30 days after publication of the gazette notice; and (b) written comments on the suggestions to be given to the registrar within 21 days after the end of the period of 30 days. (4) The registrar must— (a) make copies of each suggestion and comment given to the registrar available for inspection and purchase at the registrar's public office; and (b) take reasonable steps to ensure that copies of each suggestion and comment given to the registrar are available for inspection and purchase at the registrar's public office. (5) The registrar must comply with subsection (4) for a suggestion or comment as soon as practicable after the suggestion or comment is given. (6) The registrar must consider all suggestions and comments given before making the standard, and may change the proposed standard to take account of suggestions and comments. (7) Contravention of this section for a standard does not affect the validity of the standard. 12 Urgent standards (1) If the registrar decides it is necessary, because of urgent circumstances, for a standard to be made without complying with section 11, the registrar may make the standard. (2) If the registrar makes a decision under subsection (1), the registrar must immediately publish a copy of the decision in the gazette, together with a succinct statement of the reasons for making the decision. (3) A standard made because of a decision under subsection (1) has effect for only— (a) 120 days; or (b) a lesser period stated in the standard. 13 Application of changed requirements (1) A standard may provide that its operation for a particular society may be varied by the registrar by temporarily changing a requirement of the standard as allowed under the standard. (2) This section does not limit by implication the power of the registrar to make standards. 14 Transitional arrangements (1) A standard imposing requirements, or increasing requirements already imposed by a standard, may make transitional provision allowing additional time to comply with the requirements. (2) This section does not limit by implication the power of the registrar to make standards. 15 Matters for which standards may make provision (1) A standard may make provision about a matter by applying, adopting or incorporating (with or without changes) provisions of— (a) a law of the Commonwealth, a State or a foreign country; or (b) a document. (2) If a standard makes provision about a matter by applying, adopting or incorporating provisions of a law or document, the provisions as in force at the time are to be attached to the standard, and are taken to be incorporated in the standard. (3) A standard may— (a) apply generally to all persons and matters or be limited in its application to— (i) particular persons or matters; or (ii) particular classes of persons or matters; and (b) otherwise apply generally or be limited in its application by reference to stated exceptions or factors. (4) A standard may— (a) make different provision for— (i) different persons or matters; or (ii) different classes of persons or matters; or (b) apply differently by reference to specified exceptions or factors. (5) A standard may authorise a matter to be decided, applied or regulated from time to time by a stated person or body. (6) A standard may make provision about a particular aspect of a matter even though provision is made by this Act about another aspect of the matter or about another matter. 16 Publication of standards (1) When the registrar makes a standard, the registrar must immediately— (a) gazette a copy of the standard; and (b) prepare a summary of its terms; and (c) publish a notice in a newspaper circulating generally in the State— (i) notifying the making of the standard; and (ii) explaining succinctly the purpose, and intended operation, of the standard. (2) The registrar must, as soon as practicable after the summary is prepared, give a copy of the summary to each society affected by the standard. (3) The registrar must take reasonable steps to ensure that copies of all standards are available for inspection and purchase at the registrar's public office. (4) Contravention of this section for a standard does not affect the validity of the standard. 17 Societies must comply with standards (1) A society must comply with all relevant standards. Maximum penalty—400 penalty units. (2) If a society contravenes a standard, any officer of the society who is in default commits an offence. Maximum penalty—400 penalty units. Part 4 Other functions and powers of registrar Division 1 General 18 Other functions The other functions of the registrar under this Act are to— (a) register, supervise and regulate societies; and (b) supervise and enforce compliance by societies with this Act and with standards; and (c) ensure that an effective and efficient system of prudential supervision is applied to societies; and (d) protect the interests of members of societies; and (e) administer the Cooperatives Supervision Fund; and (f) facilitate or direct the transfer of engagements of, or the merger of, societies; and (g) otherwise undertake the administration and enforcement of this Act; and (h) give information and statistics to the Treasurer about societies; and (i) advise, and make recommendations to, the Treasurer; and (j) carry out the functions conferred on the registrar by another provision of this Act, other than part 2. 19 General powers (1) The registrar has power to do all things necessary or convenient to be done for, or in connection with, the performance of the registrar's functions under this Act. (2) Without limiting subsection (1), the registrar has the powers conferred on the registrar under this Act. 19A Delegations (1) The registrar may delegate the registrar's powers under this Act to an appropriately qualified person. (2) However, the registrar may delegate a power under part 3 only to APRA under an agreement mentioned in section 64A. (3) A power, other than a power under part 3, may be subdelegated to an appropriately qualified person if the delegation expressly allows the subdelegation of the power. (4) In this section— appropriately qualified includes having the qualifications, experience or standing appropriate to the exercise of the power. Example of 'standing'— If the person is an employee of the department, the person's classification level in the department. 19B Registrar's seal The registrar must have a seal of office. 19C Registrar's public office The registrar must have a public office for this Act. 20 Application of variation under standards (1) If a standard provides that the operation of the standard for a particular society may be varied by the registrar by temporarily changing a requirement of the standard, the registrar may temporarily change the requirement as allowed under the standard. (2) Subsection (1) does not limit the registrar's other powers. 21 The registrar to keep Treasurer informed The registrar must— (a) keep the Treasurer informed of the operation, administration and enforcement of this Act; and (b) give the Treasurer reports and information about the matters as the Treasurer requires. 22 Inspection of documents at the registrar's public office (1) The registrar must keep at the registrar's public office— (a) rules of societies; and (b) documents required to be kept by the registrar under this Act. (2) A person may, on payment of the fee prescribed under a regulation— (a) inspect at the registrar's public office during ordinary business hours— (i) the rules of a society; and (ii) other documents of a class prescribed under a regulation filed with, created by or otherwise held by the registrar; and (b) obtain from the registrar— (i) a certified copy of a society's certificate of incorporation and a certified copy of, or of part of, a society's rules; or (ii) a certified copy of, or extract from, another document that the person may inspect under paragraph (a)(ii). 23 Power of the registrar to reject documents (1) This section applies if the registrar considers a document submitted to the registrar— (a) contains matter contrary to law; or (b) contains matter that, in a material particular, is false or misleading in the form or context in which it is included; or (c) because of an omission or misdescription, has not been duly completed; or (d) does not comply with the requirements of this Act; or (e) contains an error, alteration or erasure. (2) The registrar may refuse to register, or may reject, the document. (3) The registrar may ask— (a) that the document be appropriately amended or completed and resubmitted; or (b) that a fresh document be submitted in its place; or (c) if the document has not been duly completed—that a supplementary document be submitted. 24 The registrar may require further information The registrar may require a person who submits a document to the registrar to also produce another document, or to give any information, that the registrar considers necessary to form an opinion whether the registrar should refuse to register or should reject the document. 25 Extension or abridgment of time (1) The registrar may, on receipt of written application by a society or of the registrar's own initiative, extend or abridge the time within which anything is required to be done under this Act or the society's rules. (2) An application under subsection (1) may be made to the registrar even though the time sought to be abridged or extended has ended. Division 2 Specific powers Subdivision 1 Enforcement powers 26 Appointment of inspectors (1) The registrar may appoint a person, or class of persons, to be an inspector. (2) The registrar may appoint a person under subsection (1) only if— (a) the registrar considers the person has the necessary expertise or experience to be an inspector; or (b) the person has satisfactorily finished a course of training approved by the registrar. 27 Powers of inspectors (1) An inspector— (a) has the powers given under this Act; and (b) is subject to the direction of the registrar in exercising the powers. (2) The powers of an inspector may be limited— (a) under a regulation; or (b) under a condition of appointment; or (c) by written notice given by the registrar to the inspector. 28 Inspector's appointment terms (1) An inspector holds office on the terms stated in the instrument of appointment. (2) An inspector— (a) if the appointment provides for a term of appointment—ceases holding office at the end of the term; and (b) if the terms of appointment provide—ceases holding office on ceasing to hold another office stated in the appointment terms (the main office); and (c) may resign by signed notice of resignation given to the registrar. (3) However, an inspector may not resign from the office under this Act (the secondary office) if a term of employment to the main office requires the inspector to hold the secondary office. 29 Inspector's identity card (1) The registrar must give each inspector an identity card. (2) The identity card must— (a) contain a recent photo of the inspector; and (b) be signed by the inspector; and (c) identify the person as an inspector for this Act. (3) A person who ceases being an inspector must return the person's identity card to the registrar as soon as possible (but within 21 days) after the person ceases being an inspector, unless the person has a reasonable excuse. Maximum penalty—10 penalty units. (4) This section does not prevent the giving of a single identity card to a person for this and other Acts. 30 Production or display of inspector's identity card (1) An inspector may exercise a power in relation to someone only if— (a) the inspector first produces the inspector's identity card for the other person's inspection; or (b) the inspector has the inspector's identity card displayed so it is clearly visible to the other person. (2) However, if for any reason it is not practicable to comply with subsection (1) before exercising the power, the inspector must produce the identity card for inspection by the other person at the first reasonable opportunity. 31 Entry to places by inspector (1) An inspector may enter a place only if— (a) its occupier consents to the entry; or (b) the entry is authorised by a warrant; or (c) the place is premises occupied by a society and the entry is made when the premises are open for conduct of business or otherwise open for entry. (2) However, an inspector may, without the occupier's consent or a warrant, enter— (a) a public place when the place is open to the public; or (b) the land around premises to ask its occupier for consent to enter the premises. 32 Consent to entry (1) This section applies if an inspector intends to ask an occupier of a place to consent to the inspector or another inspector entering the place. (2) Before asking for the consent, the inspector must tell the occupier— (a) the purpose of the entry; and (b) that the occupier is not required to consent. (3) If the consent is given, the inspector may ask the occupier to sign an acknowledgment of the consent. (4) The acknowledgment must state— (a) that the occupier was told— (i) the purpose of the entry; and (ii) that the occupier is not required to consent; and (b) the purpose of the entry; and (c) that the occupier gives the inspector consent to enter the place and exercise powers under this subdivision; and (d) the time and date the consent was given. (5) If the occupier signs an acknowledgment of consent, the inspector must immediately give a copy to the occupier. (6) Subsection (7) applies to a court if— (a) an issue arises, in a proceeding in or before the court, whether the occupier of a place consented to an inspector entering the place under this subdivision; and (b) an acknowledgment under this section is not produced in evidence for the entry; and (c) it is not proved that the occupier consented to the entry. (7) The court may presume that the occupier did not consent. 33 Warrants to enter (1) An inspector may apply to a magistrate for a warrant for a place. (2) The application must be sworn and state the grounds on which the warrant is sought. (3) The magistrate may refuse to consider the application until the inspector gives the magistrate all the information the magistrate requires about the application in the way the magistrate requires. Example— The magistrate may require additional information supporting the application to be given by statutory declaration. (4) The magistrate may issue a warrant only if the magistrate is satisfied there are reasonable grounds for suspecting— (a) there is a particular thing or activity (the evidence) that may provide evidence of an offence against this Act; and (b) the evidence is, or may be within the next 7 days, at the place. (5) The warrant must state— (a) that a stated inspector may, with necessary and reasonable help and force, enter the place and exercise the inspector's powers under this subdivision; and (b) the offence for which the warrant is sought; and (c) the evidence that may be seized under the warrant; and (d) the hours of the day or night when the place may be entered; and (e) the date, within 7 days after the warrant's issue, when the warrant ends. 34 Warrants—applications made other than in person (1) An inspector may apply for a warrant by phone, fax, radio or other form of communication if the inspector considers it necessary because of— (a) urgent circumstances; or (b) other special circumstances, including, for example, the inspector's remote location. (2) Before applying for the warrant, the inspector must prepare an application stating the grounds on which the warrant is sought. (3) The inspector may apply for the warrant before the application is sworn. (4) After issuing the warrant, the magistrate must immediately fax a copy to the inspector if it is reasonably practicable to fax the copy. (5) If it is not reasonably practicable to fax a copy of the warrant to the inspector— (a) the magistrate must— (i) tell the inspector what the terms of the warrant are; and (ii) tell the inspector the date and time the warrant was issued; and (b) the inspector must complete a form of warrant (warrant form) and write on it— (i) the magistrate's name; and (ii) the date and time the magistrate issued the warrant; and (iii) the terms of the warrant. (6) The facsimile warrant, or the warrant form properly completed by the inspector, authorises the entry and the exercise of the other powers stated in the warrant issued by the magistrate. (7) The inspector must, at the first reasonable opportunity, send the magistrate— (a) the sworn application; and (b) if the inspector completed a warrant form—the completed warrant form. (8) On receiving the documents, the magistrate must attach them to the warrant. (9) Subsection (10) applies to a court if— (a) an issue arises, in a proceeding in or before the court, whether a power exercised by an inspector was not authorised by a warrant issued under this section; and (b) the warrant is not produced in evidence. (10) The court must presume that the exercise of the power was not authorised by a warrant issued under this section, unless the contrary is proved. 35 General powers after entering places (1) This section applies to an inspector who enters a place. (2) For monitoring or enforcing compliance with this Act, the inspector may— (a) search any part of the place; or (b) inspect or photograph any part of the place or anything at the place; or (c) copy a document at the place; or (d) take into or onto the place any persons or equipment the inspector reasonably requires for exercising a power under this subdivision; or (e) require the occupier of the place, or a person at the place, to give the inspector reasonable help to exercise the powers under paragraphs (a) to (d). (3) A person must comply with a requirement under subsection (2)(e), unless the person has a reasonable excuse. Maximum penalty—80 penalty units. (4) A requirement under subsection (2)(e) does not include a requirement to produce a document or give information. Note— For the power to require documents to be produced see section 44. For the power to require information see section 43. 36 Power to seize evidence (1) An inspector who enters a place with the occupier's consent may seize a thing in the place if— (a) the inspector reasonably believes the thing is evidence of an offence against this Act; and (b) seizure of the thing is consistent with the purpose of entry as told to the occupier when asking for the occupier's consent. (2) An inspector who enters a place with a warrant may seize the evidence for which the warrant was issued. (3) An inspector may also seize anything else at a place if the inspector reasonably believes— (a) the thing is evidence of an offence against this Act; and (b) the seizure is necessary to prevent the thing being hidden, lost, or destroyed or used to continue or repeat the offence. (4) Also, an inspector may seize a thing if the inspector reasonably believes it has just been used in committing an offence against this Act. 37 Powers supporting seizure (1) Having seized a thing, an inspector may— (a) move the thing from the place where it was seized (the place of seizure); or (b) leave the thing at the place of seizure but take reasonable action to restrict access to it. Examples of restricting access to a thing— 1 Sealing a thing and marking it to show access to it is restricted. 2 Sealing the entrance to a room where the seized thing is situated and marking it to show access to it is restricted. (2) If an inspector restricts access to a seized thing, a person must not tamper, or attempt to tamper, with the thing or something restricting access to the thing without an inspector's approval. Maximum penalty for subsection (2)—80 penalty units. 38 Receipt for seized things (1) As soon as practicable after an inspector seizes a thing, the inspector must give a receipt for it to the person from whom it was seized. (2) However, if for any reason it is not practicable to comply with subsection (1), the inspector must leave the receipt in a conspicuous position and in a reasonably secure way at the place of seizure. (3) The receipt must describe generally each thing seized and its condition. (4) This section does not apply to a thing if it is impracticable or would be unreasonable to give the notice required by the section given the thing's nature, condition and value. 39 Return of seized things (1) The inspector must return a seized thing to its owner at the end of— (a) 60 days; or (b) if a proceeding for an offence involving it is started within the 60 days—the proceeding and any appeal from the proceeding. (2) Despite subsection (1), the inspector must immediately return a thing seized as evidence to its owner if the inspector stops being satisfied its continued retention as evidence is necessary. 40 Access to seized things (1) Until a seized thing is returned, an inspector must allow its owner to inspect it and, if it is a document, to copy it. (2) Subsection (1) does not apply if it is impracticable or would be unreasonable to allow the inspection or copying. 41 Impersonating inspectors A person must not pretend to be an inspector. Maximum penalty—100 penalty units or 6 months imprisonment. 42 Obstruction of inspector (1) A person must not obstruct an inspector in the exercise of a power, unless the person has a reasonable excuse. Maximum penalty—800 penalty units or 7 years imprisonment. (2) In this section— obstruct includes hinder, intimidate, resist or threaten. 43 Power to require information (1) This section applies if the registrar reasonably believes— (a) an offence against this Act has just been committed; and (b) a society may be able to give information about the offence. (2) The registrar may, by written notice given to the society, require the society to give information about the offence. (3) When making the requirement, the registrar must warn the society it is an offence to fail to give the information, unless the society has a reasonable excuse. (4) The society must give the information, unless the society has a reasonable excuse. Maximum penalty—400 penalty units. (5) It is a reasonable excuse for a society to fail to give information if complying with the requirement might tend to incriminate the society. 44 Power to require production of certain documents (1) The registrar may, by written notice given to a person, require the person to produce for inspection by an inspector a document issued, or required to be kept, under this Act. (2) The person must comply with the requirement, unless the person has a reasonable excuse. Maximum penalty—400 penalty units. (3) An inspector to whom a document is produced may keep the document to make a copy of it. (4) If the inspector copies it, the inspector may require the person responsible for keeping the document to certify the copy as a true copy of the document. (5) The person must certify the copy, unless the person has a reasonable excuse. Maximum penalty—80 penalty units. (6) The inspector must return the document to the person as soon as practicable after making the copy. (7) It is a reasonable excuse for a person to fail to produce a document or certify a copy of a document, if complying with the requirement may tend to incriminate the person. 45 Inspector to give notice of damage (1) This section applies if— (a) an inspector damages something when exercising or purporting to exercise a power; or (b) a person (the other person) acting under the direction of an inspector damages something. (2) The inspector must promptly give written notice of particulars of the damage to the person who appears to be the owner of the thing. (3) If the inspector believes the damage was caused by a latent defect in the thing or circumstances beyond the inspector's or other person's control, the inspector may state it in the notice. (4) If, for any reason, it is impracticable to comply with subsection (2), the inspector must leave the notice in a conspicuous position and in a reasonably secure way where the damage happened. (5) This section does not apply to damage the inspector reasonably believes is trivial. (6) In this section— owner of a thing includes the person in possession or control of it. 46 Compensation (1) A person may claim compensation from the State if the person incurs loss or expense because of the exercise or purported exercise of a power under this subdivision, including, for example, in complying with a requirement made of the person. (2) Compensation may be claimed and ordered in a proceeding— (a) brought in a court with jurisdiction for the recovery of the amount of compensation claimed; or (b) for an offence brought against the person claiming compensation. (3) A court may order compensation to be paid only if satisfied it is just to make the order in the circumstances of the particular case. (4) A regulation may prescribe matters that may, or must, be taken into account by the court when considering whether it is just to make the order. Subdivision 2 Special meetings and inquiries 47 Special meeting and inquiry (1) The registrar may, on the written application of a majority of the directors of a society or of not less than 10% of the members of a society, or on the registrar's own initiative— (a) call a special meeting of the society; or (b) hold an inquiry into affairs (including the working and financial condition) of the society. (2) An application under subsection (1) must be supported by the evidence that the registrar directs to show that— (a) the applicants have good reason for requiring the meeting or inquiry; and (b) the application is made without malicious motive. (3) If the registrar directs, notice of the application must be given to the society. (4) Security for the expenses of a meeting or inquiry must be given— (a) if the meeting is called or inquiry is held on an application under subsection (1)—by the applicants; or (b) if paragraph (a) does not apply—by the persons and in the way the registrar directs. (5) The registrar may— (a) direct the time and place the meeting or inquiry is to be held; and (b) direct what matters are to be discussed or decided; and (c) despite the society's rules, give notice to members of the holding of the meeting or inquiry as the registrar considers appropriate. (6) The registrar may, by written notice, direct the directors and the other persons the registrar requires to attend the meeting or inquiry. (7) A person to whom a direction is given under subsection (6) must not fail to comply with the direction, unless the person has a reasonable excuse. Maximum penalty—800 penalty units or 4 years imprisonment. (8) A meeting held under this section has all the powers of a meeting called under the society's rules and has power to appoint a person to preside at the meeting, despite any rule of the society to the contrary. (9) The registrar, or a person nominated by the registrar, may attend and address a meeting held under this section. (10) The expenses of and incidental to the meeting or inquiry may be defrayed by the applicants, or out of the society's funds, or by an officer or member, or former officer or member, in the proportions agreed to between the registrar and those persons. (11) The expenses may be recovered as a debt in a court having jurisdiction for the recovery of debts up to the amount involved. (12) In default of agreement under subsection (10), the expenses must be defrayed by the persons, and in the proportions, that the Supreme Court, on the application of the registrar, directs. Subdivision 3 Special power of intervention 48 Intervention by the registrar (1) The registrar may, by written notice given to a society, place it under direction if the registrar considers that— (a) the society has contravened this Act and, after being given written notice of the contravention by the registrar, has allowed the contravention to continue or has again contravened this Act; or (b) the society is trading unprofitably or has an accumulated deficit in its profit and loss appropriation account; or (c) the society's affairs are being conducted in an improper or financially unsound way. (2) The registrar may, by written notice given to the society, revoke the notice. (3) While the society is under direction, the registrar may do all things the registrar considers necessary to do under this Act. (4) Without limiting subsection (3), the registrar may— (a) order an audit of the society's affairs at the society's expense by an auditor chosen by the registrar; or (b) direct the society to change a practice the registrar considers is undesirable or unsound; or (c) direct the society to cease or limit the raising or lending of funds or the exercise of other powers; or (d) remove a director, or all the directors, of the society from office and appoint another director or other directors; or (e) remove an auditor of the society from office and appoint another auditor; or (f) give other directions about how the society's affairs are, or are not, to be conducted. (5) A director or auditor appointed under this section holds office for the term directed by the registrar. (6) A society and any officer of the society who is in default each commit an offence if the society— (a) fails to comply with a direction given, or requirement made, under this section to the extent the society is capable of doing so, unless the society has a reasonable excuse; or (b) obstructs, hinders or resists the exercise of the registrar's powers under this section, unless the society has a reasonable excuse. Maximum penalty for subsection (6)—1600 penalty units or 7 years imprisonment. Subdivision 4 Power to suspend operations of society 49 Power to suspend operations (1) The registrar may act under subsection (2) if the registrar considers that it is necessary to do so— (a) in the interests of members, or persons who may become members, of a society; or (b) because a society has failed to comply with a standard. (2) The registrar may, by written notice given to the society, direct the society not to do all or any of the following— (a) give financial accommodation to members; (b) raise funds; (c) grant security over the society's assets. (3) A notice under subsection (2) continues in force until it expires or is withdrawn by the registrar. (4) The registrar may, by a further written notice given to the society— (a) extend the period for which a notice under subsection (2) is to have force; or (b) amend the terms of the notice; or (c) withdraw the notice. (5) If a society fails to comply with a notice under this section, the society and any officer of the society who is in default each commit an offence. Maximum penalty—1600 penalty units or 7 years imprisonment. (6) Subsection (5) does not apply if the failure to comply happens with the registrar's written permission. Subdivision 5 Administrators 50 Appointment of administrator (1) This section applies if— (a) the registrar considers that— (i) a society has contravened this Act or the society's rules and, after being given written notice of the contravention by the registrar, has allowed the contravention to continue or has again contravened this Act or the rules; or (ii) a society is trading unprofitably or has an accumulated deficit in its profit and loss appropriation account; or (iii) a society's affairs are being conducted in an improper or financially unsound way; or (b) after making the inquiries about a society the registrar considers appropriate, the registrar is satisfied that it is in the interest of members or creditors that the society's affairs be conducted by an administrator; or (c) the registrar has certified that any of the events mentioned in section 183(1)(a), (b) or (f) has happened in relation to a society. (2) The registrar may appoint an administrator to conduct a society's affairs. (3) The appointment must be made by written notice. (4) The notice of appointment must state— (a) the date of appointment; and (b) the appointee's name; and (c) the appointee's business address. (5) An administrator holds office until the administrator's appointment is revoked. 51 Notice of change of administrator's particulars to be given to the registrar If the administrator's name or business address changes, the administrator must immediately give the registrar written notice of the change. 52 Effect of administrator's appointment (1) On the appointment of an administrator of a society— (a) the society's directors cease to hold office; and (b) all contracts of employment with, or for providing administrative or secretarial services to, the society are terminated; and (c) the administrator may terminate a contract for providing other services to the society. (2) A director of a society may not be appointed or elected while the administrator is in office except in the circumstances mentioned in section 54(3). 53 Administrator's powers and functions An administrator of a society has the powers and functions of the society's board, including the board's powers of delegation. 54 Revocation of administrator's appointment (1) The registrar may revoke an administrator's appointment. (2) The revocation must happen by written notice. (3) Before revoking an administrator's appointment, the registrar must— (a) appoint another administrator; or (b) appoint a liquidator; or (c) ensure directors have been elected under the society's rules at a meeting called by the administrator under the rules; or (d) appoint directors of the society. (4) Directors elected or appointed under subsection (3)— (a) take office on the revocation of the administrator's appointment; and (b) for directors appointed under subsection (3)(d)—hold office, subject to section 58, until the end of the society's next annual general meeting. 55 Administrator's duty on revocation of appointment (1) Immediately on the revocation of an administrator's appointment, the administrator must prepare and give the registrar a report showing how the administration was carried out and, for that purpose, an administrator has access to the society's records and documents. (2) On giving the report and accounting fully for the society's administration to the registrar's satisfaction, the administrator is released from further duty to account for the society's administration other than because of fraud, dishonesty, negligence or wilful failure to comply with this Act. 56 Expenses of administration (1) The expenses of conducting a society's affairs by an administrator are payable from the society's funds. (2) The expenses include the administrator's remuneration at a rate approved by the registrar. (3) An administrator has, for the expenses of conducting a society's affairs, the same priority on the winding-up of a society as the liquidator of the society has. 57 Administrator's liability (1) If a society incurs a loss because of fraud, dishonesty, negligence or wilful failure to comply with this Act or the society's rules by an administrator, the administrator is liable for the loss. (2) An administrator is not liable for other loss but must account for the loss in a report given under section 55. 58 Additional powers of the registrar (1) If the registrar appoints directors of a society under section 54(3)(d), the registrar may, by written notice given to the society, state— (a) a time during which this section is to apply to the society; and (b) the terms on which all or any of the directors hold office; and (c) the rules that are to be the society's rules. (2) While this section applies to a society, the registrar may— (a) from time to time remove and appoint directors; and (b) vary, revoke or specify new terms in place of all or any of the terms stated under subsection (1); and (c) amend all or any of the rules stated under subsection (1). (3) The registrar may, by written notice given to the society, extend the time during which this section is to apply to a society. (4) A rule stated by the registrar under this section as a rule of a society— (a) is not to be amended or revoked except in the way set out in this section; and (b) if it is inconsistent with any other rule of the society—prevails over the other rule, and the other rule is to the extent of the inconsistency invalid; and (c) has the same evidentiary value as is by this Act given to the society's rules and to copies of them. 59 Stay of proceedings (1) This section applies if the registrar appoints an administrator to conduct a society's affairs. (2) A person must not begin or continue a proceeding in a court against the society until the administrator's appointment is revoked except with the leave of the Supreme Court and, if the court grants leave, under any terms the court imposes. (3) A person intending to apply for leave must give the registrar at least 10 days notice of intention to apply. (4) On the hearing of an application for leave, the registrar may be represented and may oppose the granting of the application. 60 Administrator to report to the registrar On the receipt of a request from the registrar, a society's administrator must, without delay, prepare and give the registrar a report showing how the administration is being carried out. Subdivision 6 Supervision fund and levy 61 Cooperatives Supervision Fund (1) The Cooperatives Supervision Fund is established. (2) The registrar must pay into the fund— (a) all amounts received as supervision levy under this subdivision; and (b) income from the investment of amounts credited to the fund and the proceeds of the sale of investments. (3) The registrar must pay out of the fund— (a) payments for or towards the expenses of performing the registrar's functions and exercising the registrar's powers under this Act; and (b) expenses incurred in administering the fund. (4) The registrar may invest amounts in the fund in the way the registrar considers appropriate. 62 Supervision levy (1) The registrar may decide that an amount must be paid to the registrar by societies as a supervision levy. (2) The amount of the levy may be fixed by the registrar as— (a) a stated amount; or (b) a stated percentage of an amount to be decided, on a stated day, by reference to stated factors about societies (including, for example, the number of members in a society, reserves, obligations and debts and total assets); or (c) both a stated amount and a stated percentage. (3) If the levy is fixed, wholly or partly, as mentioned in subsection (2)(b), the registrar may include in the decision directions about how the levy is to be decided. (4) The registrar may— (a) fix the amount of the levy differently for different societies; and (b) decide that the levy is not payable by stated societies. (5) The registrar may, in the decision, require the levy to be paid in 1 amount by a stated time or permit the levy to be paid by stated instalments. (6) If the registrar permits the levy to be paid by instalments, the registrar may, in the decision, allow a discount for payment in 1 amount by a stated time or require payment of an additional amount or percentage, by way of interest, in the instalments. (7) The registrar may, in the decision, require the payment of amounts, by way of late payment charge, interest or both, for amounts of levy not paid as required by the decision. (8) The registrar may include in the decision directions about how amounts of late payment charge and interest are to be decided. (9) Amounts of levy, when they are payable, are payable by the society concerned to the registrar, and may be sued for and recovered in a court having jurisdiction for the recovery of debts up to the amount of levy. (10) On the application of a society, the registrar may change— (a) an amount of levy payable by the society; or (b) the time within which an amount of levy is payable by the society. (11) An amount paid by a society as levy is treated as an expense in the society's accounts. (12) In subsections (9) to (11)— levy includes late payment charge and interest for levy. 63 Consultation In deciding the amount to be paid as supervision levy under section 62, the registrar may consult with industry bodies and societies if it is appropriate and practicable to consult with them. 64 Failure to make payment an offence If a society does not make a payment required to be made for a supervision levy, the society and any officer of the society who is in default each commit an offence. Maximum penalty—200 penalty units. Division 3 Prudential regulation or advice service agreements with APRA 64A State may enter into agreements with APRA (1) The registrar may with the approval of the Minister, enter into an agreement with APRA on behalf of the State under which APRA is, for a fee, to provide prudential regulation or advice services. (2) The agreement may— (a) provide for APRA to act on behalf of the registrar; and (b) make provision about the circumstances in which, and the extent to which, one party to the agreement is liable to the other party to the agreement for matters arising under the agreement. (3) In this section— prudential regulation or advice services means services of either or both of the following kinds— (a) services consisting of APRA performing a role in the prudential regulation or supervision of societies; (b) services consisting of APRA providing advice relating to the prudential regulation or supervision of societies. Part 5 Objects and powers of societies Division 1 Objects 65 Objects (1) The objects of a society are to apply its funds in providing financial accommodation to its members— (a) for the purchase of residential premises, or for residential development, by a member; or (b) for the refinancing or consolidation of residential loans provided by another society to a member; or (c) for the refinancing or consolidation of residential loans provided to a member by another entity; or (d) for another purpose authorised by this Act, a regulation or a standard. (2) A society must not provide financial accommodation to a member for another purpose. Maximum penalty—400 penalty units. (3) The application of the society's funds is subject to this Act, the relevant standards and the society's rules. Division 2 Powers 66 Powers (1) Without limiting section 75, but subject to this Act and the society's rules, a society has the powers mentioned in this division. (2) The fact that the doing of an act by a society would not be, or is not, in its best interests does not affect its power or legal capacity to do the act. 67 Control of certain financial transactions (1) In this section— approved financial contracts means— (a) futures contracts relating to— (i) securities issued or guaranteed by the Treasurer or the Government of the State or by the Commonwealth or another State; or (ii) bills of exchange payable within 200 days that have been accepted or endorsed by a bank prescribed under a regulation; but only if made, or dealt in, on a futures market or a futures exchange within the meaning of the Corporations Act; or (b) interest rate swap contracts, or forward interest rate contracts, to which a bank, or other body approved by the registrar for the purpose, is a party; or (c) options relating to contracts mentioned in paragraph (a) or (b); or (d) other contracts of a kind approved by the registrar under subsection (6). (2) Except as provided by this section, a society must not engage in transactions of the following kinds— (a) transactions relating to financial or other futures; (b) options in futures transactions; (c) forward interest rate transactions; (d) interest rate swap transactions; (e) other financial transactions of a kind specified in a standard. Maximum penalty—800 penalty units. (3) A society may enter into and deal in approved financial contracts only if it does so to reduce the risk of adverse variations— (a) in the costs of raising funds by the society; or (b) in the revenue obtainable by the society from investments made or financial accommodation provided by the society. (4) A society must not contravene subsection (3). Maximum penalty—800 penalty units. (5) A contract entered into by a society in contravention of this section may be enforced as if it were an approved financial contract entered into for a purpose mentioned in subsection (3) if another party to the contract entered into it in good faith and, when the other party entered into the contract, the other party did not suspect, and had no reason to suspect, the contravention. (6) The registrar may approve kinds of contracts under this section on terms the registrar considers appropriate. 68 Control of foreign currency transactions A society must not— (a) invest any of its funds in foreign currency; or (b) carry out any of its activities in foreign currency. Maximum penalty—800 penalty units. 69 Raising funds (1) A society may raise funds to carry out its objects. (2) Funds may be raised from a financial institution or another entity (including a trustee). (3) A society may raise funds whether the repayment of the funds is guaranteed by the Treasurer or not. (4) However— (a) if a society has raised funds the repayment of which is guaranteed and the funds have not been repaid—the society must not raise further funds the repayment of which is not guaranteed; and (b) if a society has raised funds the repayment of which is not guaranteed and the funds have not been repaid—the society must not raise further funds the repayment of which is guaranteed. Maximum penalty for subsection (4)—800 penalty units. Division 3 Guarantees 70 Treasurer's guarantee (1) The Treasurer may execute a guarantee in favour of a financial institution or another entity (including a trustee) (an approved entity) for the repayment of funds raised by a society. (2) The Treasurer may charge the society a fee prescribed under a regulation for executing the guarantee. 71 Provisions about guarantees (1) The following provisions apply to a guarantee executed by the Treasurer— (a) the guarantee is subject to the terms prescribed under a regulation and to any other terms the Treasurer decides; (b) the guarantee may include either or both of the following— (i) the interest, charges and expenses chargeable by the approved entity against the principal debtor in the normal course of its business; (ii) the expenses of enforcing, obtaining, or trying to enforce or obtain, payment of the debt guaranteed and the interest, charges and expenses; (c) the approved entity must obtain and take the security for the payment of the principal debt (including any interest, charges and expenses chargeable) that the Treasurer may require; (d) the guarantee is enforceable against the Treasurer or against the Consolidated Fund only if— (i) the approved entity has exhausted all other rights and remedies for the recovery of the amount secured by the guarantee; or (ii) the approved entity becomes entitled to appoint a receiver for the society; (e) an assignment of, or charge on, the rights conferred by the guarantee is effective against the Treasurer only if made with the Treasurer's written consent; (f) other provisions prescribed under a regulation. (2) A liability arising under a guarantee is to be satisfied out of amounts appropriated by the Parliament. Part 6 Societies Division 1 Formation and registration 72 Formation of societies (1) A body proposed to be a society may be formed by 5 or more adults. (2) A proposed society may be formed only if there has been a meeting to form the society at which 5 or more adults were present. (3) At the formation meeting, there must be presented— (a) a written statement showing— (i) the objects of the society; and (ii) the reasons for believing that— (A) an application for registration of the society would be granted; and (B) if registered, the society will be able to carry out its objects successfully; and (b) a copy of the society's proposed rules. (4) If, at the formation meeting or a subsequent or adjourned meeting, 5 or more adults, after considering the statement and the rules, approve the rules (with or without amendment) and sign an application for membership, they may proceed to elect the first directors of the society under the rules as so approved. (5) The expenses of, and incidental to, the formation of the society may be paid out of the society's capital or income. 73 Registration (1) A proposed society formed under this part may apply to the registrar, under a regulation, to be registered under this Act as a society. (2) An application for registration must— (a) be made within 2 months after the formation meeting at which the first directors of the society were elected; and (b) be accompanied by— (i) a statutory declaration by the person presiding at the formation meeting and the secretary of the meeting, stating that the requirements of section 72 have been complied with; and (ii) a copy of the statement presented to the meeting, signed by the person presiding and the secretary; and (iii) 2 copies of the proposed rules of the society, certified by the person presiding and the secretary to be the rules approved at the meeting; and (iv) a list containing the full name, date and place of birth, residential address and business occupation of each director; and (v) a list containing the full name, address and occupation of each of 5 or more adults who attended the meeting and applied for membership; and (vi) such evidence as the registrar requires— (A) that the society is eligible for registration; and (B) that the society, if registered, will be able to comply with this Act and all relevant standards; and (C) that the society, if registered, will be able to carry out its objects successfully. (3) The registrar may, for this section, accept a statutory declaration as adequate evidence of matters mentioned in the declaration. (4) If the registrar is satisfied that the society is eligible for registration, the registrar must— (a) register the society as a cooperative housing society; and (b) register its proposed rules. (5) A society is eligible for registration only if— (a) the society's application for registration complies with this Act; and (b) the proposed rules of the society are not contrary to this Act; and (c) there are reasonable grounds for believing the society will, if registered— (i) be able to comply with all relevant standards; and (ii) be able to carry out its objects successfully; and (d) there is no good reason why the society and its rules should not be registered. 74 Certificate of incorporation (1) On registering a society, the registrar must issue a certificate of incorporation to the society. (2) The certificate of incorporation is evidence that all requirements of this Act about registration and matters precedent or incidental to registration have been complied with. 75 Effect of incorporation On the issue of a certificate of incorporation to a society, the society is a corporation with perpetual succession and— (a) has, subject to this Act and the society's rules, the legal capacity of a natural person; and (b) has a common seal; and (c) may sue and be sued in its corporate name. Division 2 Rules 76 Rules (1) A society's rules must provide for the matters stated in a standard made for this subsection. (2) A society's rules may also provide for any matter that is necessary, expedient or desirable for the society's purposes. (3) If there is an inconsistency between a society's rule and this Act or a standard, this Act or the standard prevails and the rule is invalid to the extent of the inconsistency. 77 Copies of rules (1) A society must give a copy of its rules to a member or proposed member who asks for a copy and has paid the fee (if any) payable under subsection (2) to the society. Maximum penalty—10 penalty units. (2) A society may charge a fee for supplying the copy but only if the fee has been approved by its board. 78 Society and members to be bound by rules A society's rules bind the society, all its members, and all persons claiming through the society or a member, to the same extent as if— (a) each member had subscribed his or her name and attached his or her seal to the rules; and (b) there were contained in the rules a covenant on the part of each member and the member's legal representative to observe all the rules subject to this Act and the standards. 79 Alteration of rules by special resolution (1) A society's rules may be altered only if the alteration has been approved by special resolution of the members. (2) Subsection (1) applies subject to sections 80, 82 and 83. 80 Alteration of rules by board of directors (1) A society's rules may be altered by a resolution of its board if the alteration— (a) is required under this Act; or (b) is to give effect to a standard. (2) The society must give written notice of the alteration to its members not later than the day on which notice is given of the society's next general meeting. Maximum penalty—10 penalty units. (3) The notice may, with the written approval of the registrar, be given by advertisement published in a newspaper circulating generally in the area of the State in which the society operates. 81 Registration of alteration of rules (1) The registrar must register an alteration of a society's rules if the registrar is satisfied— (a) the alteration is not contrary to this Act or the standards; and (b) there is no good reason why the alteration should not be registered. (2) The alteration takes effect when it is registered. (3) The society's rules must be read subject to any registered alteration. 82 Power of the registrar to require changes of rules (1) This section applies if the registrar considers that a society's rules should be altered— (a) to comply with this Act; or (b) to give effect to a standard; or (c) in the interests of the society's members; or (d) in the public interest. (2) The registrar may, by written notice given to the society, require it, within a reasonable period stated in the notice, to alter its rules in a way stated in the notice or otherwise in a way approved by the registrar. (3) If the society fails to alter its rules as required by the notice, the registrar may alter its rules by notation on the registered copy of the rules. (4) The registrar must immediately give written notice to a society of— (a) an alteration of its rules made under this section; and (b) the day on which the alteration starts. (5) The society must give written notice of the alteration to its members not later than the day on which notice is given of the society's next general meeting. Maximum penalty—80 penalty units. (6) The notice may, with the written approval of the registrar, be given by advertisement published in a newspaper circulating generally in the area of the State in which the society operates. 83 Power of the registrar to change rules to facilitate transfer of engagements (1) If the registrar has directed a transfer of engagements under part 9, the registrar may alter the