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

Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 No. 87, 2024 An Act to amend the law relating to corporations, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Financial market infrastructure: resolution authority Part 1—Crisis resolution Corporations Act 2001 Part 2—Crisis prevention Corporations Act 2001 Part 3—Amendments of other Acts Australian Securities and Investments Commission Act 2001 Banking Act 1959 Insurance Act 1973 Life Insurance Act 1995 Payment Systems and Netting Act 1998 Personal Property Securities Act 2009 Reserve Bank Act 1959 Part 4—Amendments contingent on other Acts Corporations Act 2001 Reserve Bank Act 1959 Schedule 2—Financial market infrastructure: new and enhanced regulatory powers Part 1—Who may be granted an Australian CS facility licence? Division 1—Main amendments Corporations Act 2001 Division 2—Related amendments Corporations Act 2001 Part 2—Dealing with licences that are not being used etc. Corporations Act 2001 Part 3—Declared financial markets and widely held market bodies Division 1—Main amendments about declared financial markets Corporations Act 2001 Division 2—Other amendments about declared financial markets Bankruptcy Act 1966 Personal Property Securities Act 2009 Division 3—Widely held market bodies Corporations Act 2001 Part 5—Approval for control of certain Australian licensees Division 1—Controlled Australian financial bodies Corporations Act 2001 Division 2—Market licensees and CS facility licensees Corporations Act 2001 Division 3—Involvement with licensees Corporations Act 2001 Part 6—Limits on certain market licences and CS facility licences Corporations Act 2001 Part 7—Rule‑making power for CS facility licensees Corporations Act 2001 Part 8—Streamlining some of ASIC's existing directions powers Corporations Act 2001 Part 9—Enhancing regulator powers for CS facility licensees Division 1—Main amendments Corporations Act 2001 Division 2—Other amendments Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Reserve Bank Act 1959 Part 10—Enhancing ASIC powers for other licensees Corporations Act 2001 Part 11—Fit, proper, capable and competent person standards Division 1—Additional obligation for certain licensees Corporations Act 2001 Division 2—Financial market infrastructure banning orders Corporations Act 2001 Part 12—Arrangements under which certain foreign operators need to be licensed or exempt Corporations Act 2001 Part 13—Application and transitional provisions Corporations Act 2001 Part 14—Amendments contingent on the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 Reserve Bank Act 1959 Schedule 3—Financial market infrastructure: transfer of powers Part 1—Main amendments Division 1—Licensing of financial markets Corporations Act 2001 Division 2—Licensing of CS facilities Corporations Act 2001 Part 2—Application and transitional provisions Corporations Act 2001 Schedule 4—Sustainability reporting Part 1—Sustainability reporting Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Part 2—Audit Corporations Act 2001 Part 3—Sustainability and auditing standards Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Part 4—Application and transitional provisions Corporations Act 2001 Schedule 5—Other amendments Australian Securities and Investments Commission Act 2001 Corporations Act 2001 Insurance Act 1973 Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 No. 87, 2024 An Act to amend the law relating to corporations, and for related purposes [Assented to 17 September 2024] The Parliament of Australia enacts: 1 Short title This Act is the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 17 September 2024 2. Schedule 1, Parts 1 to 3 The seventh day after this Act receives the Royal Assent. 24 September 2024 3. Schedule 1, item 56 The seventh day after this Act receives the Royal Assent. Never commenced However, the provision does not commence at all if item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 commences on or before that day. 4. Schedule 1, items 57 and 58 Immediately after the commencement of item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024. Never commenced However, the provisions do not commence at all if: (a) that event occurs on or before the seventh day after this Act receives the Royal Assent; or (b) that event does not occur. 5. Schedule 1, item 59 The later of: 24 September 2024 (a) the start of the seventh day after this Act receives the Royal Assent; and (paragraph (a) applies) (b) immediately after the commencement of item 7 of Schedule 5 to the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur on or before the seventh day after this Act receives the Royal Assent. 6. Schedule 1, item 60 The seventh day after this Act receives the Royal Assent. 24 September 2024 However, the provision does not commence at all if item 17 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 commences on or before that day. 7. Schedule 1, item 61 The later of: 1 March 2025 (a) the start of the seventh day after this Act receives the Royal Assent; and (paragraph (b) applies) (b) immediately after the commencement of item 19 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur. 8. Schedule 1, item 62 The seventh day after this Act receives the Royal Assent. 24 September 2024 However, the provision does not commence at all if item 19 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024 commences on or before that day. 9. Schedule 2, Parts 1 to 10 The seventh day after this Act receives the Royal Assent. 24 September 2024 10. Schedule 2, Part 11 The day after the end of the period of 6 months beginning on the day this Act receives the Royal Assent. 17 March 2025 11. Schedule 2, Parts 12 and 13 The seventh day after this Act receives the Royal Assent. 24 September 2024 12. Schedule 2, Part 14 The later of: 1 March 2025 (a) immediately after the commencement of the provisions covered by table item 9; and (paragraph (b) applies) (b) the commencement of item 11 of Schedule 1 to the Treasury Laws Amendment (Reserve Bank Reforms) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur. 13. Schedule 3 The seventh day after this Act receives the Royal Assent. 24 September 2024 14. Schedules 4 and 5 The day after this Act receives the Royal Assent. 18 September 2024 Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 Schedules Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Financial market infrastructure: resolution authority Part 1—Crisis resolution Corporations Act 2001 1 Section 9 Insert: essential service means: (a) electricity; or (b) gas; or (c) water; or (d) a carriage service (within the meaning of the Telecommunications Act 1997). external administrator: (a) other than in Chapter 5 and Part 7.3B—has the same meaning as in Schedule 2; and (b) in Part 7.3B: (i) subject to subparagraph (ii)—means an external administrator (within the meaning of Schedule 2 to this Act), a receiver, manager, managing controller, receiver and manager or other controller; and (ii) does not include a statutory manager (within the meaning of this Act) or a Banking Act statutory manager (within the meaning of the Banking Act 1959). 2 Section 9 (after paragraph (h) of the definition of property) Insert: (ha) in Part 7.3B (crisis resolution for CS facility licensees)—has a meaning affected by subsection 833A(4); and 3 Section 9 Insert: statutory management has the meaning given by subsections 832C(3) and (4). statutory manager of a body corporate means: (a) if the Reserve Bank is in control of the body corporate's business under Part 7.3B—the Reserve Bank; and (b) each person appointed by the Reserve Bank to take control of a body corporate's business under Part 7.3B. Note: See section 836B for when there are 2 or more statutory managers of a body corporate. 4 Subsection 198G(9) (definition of external administrator) Repeal the definition. 5 At the end of subsection 459P(1) Add: Note: The Reserve Bank may also apply under this section to the Court for an order if a condition in section 831A is satisfied in relation to a CS facility licensee: see section 849AA. 6 Subparagraph 588FL(1)(a)(v) Omit "and". 7 At the end of paragraph 588FL(1)(a) Add: (vi) section 842A, or Subdivision C of Division 9 of Part 7.3B, begins to apply to a body corporate; and 8 Subsection 600F(2) (definition of essential service) Repeal the definition. 9 After section 794A Insert: 794AA ASIC's directions power—crisis resolution (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to give a direction to a market licensee under this subsection to do, or to refrain from doing, specified things, ASIC may give the licensee a written direction to do, or to refrain from doing, those things. (2) Without limiting subsection (1), the specified things may include: (a) suspending dealings in a specified financial product or class of financial products; or (b) taking: (i) any actions; or (ii) one or more specified actions; relating to dealings in a specified financial product or class of financial products. Example: Under paragraph (b), a direction could require the licensee to take actions to: (a) limit the kinds of dealings that are allowed in a financial product or class of financial products; or (b) require participants in a market to act in a specified manner in relation to dealings in a financial product or class of financial products. (3) The direction must specify a reasonable time by which, or a reasonable period during which, it is to be complied with. (4) The licensee must comply with the direction. Note: Failure to comply with this subsection is an offence: see subsection 1311(1). (5) If the licensee fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the licensee comply with the direction. 794AB Matters relating to ASIC directions—crisis resolution Variation or revocation (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to vary a direction given to a market licensee under subsection 794AA(1), ASIC may vary the direction by giving written notice to the licensee. (2) ASIC may revoke a direction given to a market licensee under subsection 794AA(1) by giving written notice to the licensee. Notifying other affected persons (3) As soon as practicable after: (a) directing a market licensee under subsection 794AA(1) to do a thing mentioned in subsection 794AA(2); or (b) varying or revoking such a direction; ASIC must give written notice of the direction, variation or revocation to the operator of each clearing and settlement facility with which the market licensee has clearing and settlement arrangements for transactions effected through the market. Directions are not legislative instruments (4) A direction given under subsection 794AA(1), a variation under subsection (1) of this section, or a revocation under subsection (2) of this section is not a legislative instrument. 10 After subsection 798G(5) Insert: Crisis resolution (5A) Despite subsection (3), ASIC may make a market integrity rule without the consent of the Minister if the Reserve Bank, under subsection 849AB(1), requests ASIC to make the rule. (5B) However, if ASIC does so, ASIC must provide the Minister, on the following day, with a copy of the request. (5C) The Minister may, if the Minister considers it appropriate after being given the copy of the request, direct ASIC to vary or revoke the rule. (5D) ASIC must comply with the direction given under subsection (5C) immediately. 11 At the end of subsection 798G(6) Add: ; (c) a direction given under subsection (5C). 12 Before section 798K Insert: 798JB ASIC's directions power—crisis resolution (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to: (a) give a direction to an entity under this subsection to suspend dealings in a financial product or class of financial products; or (b) give some other direction to an entity under this subsection in relation to dealings in a financial product or class of financial products; ASIC may give the direction, in writing, to the entity. Note: ASIC may also, at the request of the Reserve Bank, give directions to entities that are market licensees under section 794AA. A failure to comply with a direction under that section is an offence: see subsection 1311(1). (2) The entity must comply with the direction. (3) If the entity fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the entity comply with the direction. 798JC Matters relating to ASIC directions—crisis resolution Variation or revocation (1) If the Reserve Bank, under subsection 849AB(1), requests ASIC to vary a direction given to an entity under subsection 798JB(1), ASIC may vary the direction by giving written notice to the entity. (2) ASIC may revoke a direction given to an entity under subsection 798JB(1) by giving written notice to the entity. Directions are not legislative instruments (3) A direction given under subsection 798JB(1), a variation under subsection (1) of this section, or a revocation under subsection (2) of this section is not a legislative instrument. 13 At the end of section 824B Add: Grant to receiving body (3) If: (a) the Minister consents under paragraph 837A(1)(b) or 837B(1)(b) to a transfer in relation to a CS facility licensee; and (b) the Reserve Bank issues a certificate under subsection 838A(1) that the transfer is to take effect; the Minister may grant an Australian CS facility licence to a body corporate that, as a result of the transfer, becomes, or will become, the successor in law of the CS facility licensee. (4) A licence granted to a body corporate under subsection (3) is taken to be: (a) unless paragraph (b) of this subsection applies—a licence granted under subsection (1); or (b) if the licence states that it is to be taken to have been granted under subsection (2)—a licence granted under subsection (2) authorising the body corporate to operate a specified clearing and settlement facility in this jurisdiction. 14 Before Part 7.4 Insert: Part 7.3B—Crisis resolution for CS facility licensees Division 1—Preliminary 830A Simplified outline of this Part The Reserve Bank may take actions under this Part that are appropriate to manage or respond to a CS facility licensee in crisis. A CS facility licensee is in crisis if certain conditions are met in relation to the licensee (see section 831A). These conditions relate to acts or events that are likely to pose a threat to: (a) the stability of the financial system in Australia; or (b) the continuity of clearing and settlement facility services that are critical to the functioning of the financial system in Australia. Some of the conditions relate to related bodies corporate of the CS facility licensee. The actions the Reserve Bank may take include: (a) placing the licensee, or a related body corporate that is incorporated in Australia, under statutory management; and (b) compulsorily transferring all or part of the shares of, or business of, the licensee, or a related body corporate that is incorporated in Australia, to another body corporate; and (c) directing the licensee, or a related body corporate that is incorporated in Australia, to do or refrain from doing an act or thing. If a body corporate is under statutory management or subject to a transfer or direction, a moratorium applies to the body corporate. The Reserve Bank, on request, may exercise some of its functions and powers under this Part to assist foreign regulators to manage or respond to an overseas clearing and settlement facility licensee in crisis. 830B Object of this Part The object of this Part is to provide for the effective management and resolution of threats posed to: (a) the stability of the financial system in Australia; or (b) the continuity of clearing and settlement facility services that are critical to the functioning of the financial system in Australia; that arise from, or in relation to, CS facility licensees. Division 2—Crisis resolution for CS facility licensees 831A Reserve Bank may exercise crisis resolution powers if certain conditions are satisfied (1) The Reserve Bank may take action in accordance with this Part in relation to a CS facility licensee if any of the following conditions are satisfied in relation to the licensee: (a) the licensee requests the Reserve Bank to take action and the Reserve Bank reasonably believes that an event relating to the licensee is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (b) the licensee contravenes a direction issued under Part 7.3 by the Reserve Bank and the Reserve Bank reasonably believes that the contravention is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (c) the licensee notifies the Reserve Bank that: (i) the licensee has ceased, intends to cease or is likely to cease providing one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; or (ii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or (iii) in the absence of external support, the licensee is likely to be unable to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (d) the Reserve Bank reasonably believes that, in the absence of external support, the licensee is likely to be unable to: (i) continue to provide one or more clearing and settlement facility services in a way that causes or promotes stability in the Australian financial system; or (ii) continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (e) the licensee notifies the Reserve Bank that: (i) the licensee's financial viability is at risk or is likely to be at risk; or (ii) in the absence of external support, the licensee's financial viability is likely to be at risk; (f) the Reserve Bank reasonably believes that, in the absence of external support, the licensee's financial viability is likely to be at risk; (g) an external administrator of the licensee has been appointed; (h) the licensee notifies the Reserve Bank that it is considering appointing an external administrator of the licensee; (i) the Reserve Bank reasonably believes that a person is seeking to have an external administrator of the licensee appointed; (j) an external administrator of a related body corporate of the licensee has been appointed, or a similar appointment has been made under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (k) a related body corporate of the licensee, that is incorporated in Australia, notifies the Reserve Bank that it is considering appointing an external administrator of itself and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (l) the Reserve Bank reasonably believes that a person is seeking to have an external administrator of a related body corporate of the licensee appointed, or a person is seeking to make a similar appointment under a foreign law, and the Reserve Bank reasonably believes that the appointment is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia; (m) the licensee, or a related body corporate of the licensee that is incorporated in Australia, is doing or not doing any act or thing, and the Reserve Bank reasonably believes this is likely to pose a threat to: (i) the stability of the financial system in Australia; or (ii) the ability of the licensee to continue to provide one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia. (2) A reference in subsection (1) to taking action in accordance with this Part does not include a reference to taking action under Subdivision C of Division 9 (temporary suspension of termination rights). Note: The Reserve Bank may take action under that Subdivision if the Reserve Bank intends to take action under Division 3 or 4: see subsection 849BA(2). Overseas clearing and settlement facilities (3) Subsection (1) of this section does not apply in relation to a CS facility licensee whose licence was granted under subsection 824B(2) (overseas clearing and settlement facilities). (4) This section does not limit Division 8 (cross‑border crisis resolution). Note: Under Division 8, the Reserve Bank may take certain actions in accordance with this Part in relation to a CS facility licensee mentioned in subsection (3) of this section to assist a foreign authority to manage or respond to an event relating to the licensee. Division 3—Statutory management Subdivision A—Statutory management of body corporate in relation to CS facility licensee in crisis 832A Statutory manager takes control of body corporate (1) The Reserve Bank may take either or both of the actions in subsection (2), if the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition in section 831A being satisfied in relation to a CS facility licensee. (2) The actions are: (a) taking control of the business of the licensee as statutory manager of the licensee; and (b) appointing one or more persons to take control of the business of the licensee, as statutory manager of the licensee. Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager). (3) The Reserve Bank may take either or both of the actions in subsection (4), if: (a) a statutory manager has taken control of the business of a CS facility licensee, or the Reserve Bank intends that a statutory manager will take control of the business of a CS facility licensee; and (b) the Reserve Bank reasonably believes that the action is appropriate to manage or respond to a condition in section 831A being satisfied in relation to the licensee. (4) The actions are: (a) taking control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate; and (b) appointing one or more persons to take control of the business of a related body corporate of the licensee, that is incorporated in Australia, as statutory manager of the related body corporate. Note: Section 836B deals with when there are 2 or more statutory managers of a body corporate (for example, when the Reserve Bank decides that both itself and another person are to take control as statutory manager). (5) If the Reserve Bank decides to take an action under subsection (1) or (3), the Reserve Bank must give the following, in writing, notice that a statutory manager will take, or is taking, control of the body corporate's business: (a) the body corporate; (b) if the body is under external administration—the external administrator. Note: The appointment of the external administrator is terminated when a statutory manager takes control of the body corporate's business: see section 836A. Limits on individual exercise of powers (6) At the time a statutory manager (other than the Reserve Bank) is appointed, the Reserve Bank may give the statutory manager a notice, in writing, specifying any limits or conditions on the manager performing functions or exercising powers individually. (7) A notice under subsection (6) must also be given to each other statutory manager of the body corporate (other than the Reserve Bank) at that time. Instruments are not legislative instruments (8) An instrument made under this section is not a legislative instrument. 832B Termination of appointment of statutory manager Termination of control by Reserve Bank (1) The Reserve Bank may, in writing, decide to cease to be in control of the business of a body corporate as a statutory manager. Note: The Reserve Bank may also decide under section 832A to appoint another statutory manager to take control of the body corporate's business. (2) The Reserve Bank must notify the body corporate in writing of the decision. (3) If: (a) the Reserve Bank has taken control of the business of a related body corporate of a CS facility licensee under paragraph 832A(4)(a) for the purpose of managing or responding to a condition in section 831A being satisfied in relation to the licensee; and (b) the licensee ceases being under statutory management; the Reserve Bank must decide under subsection (1) of this section to cease to be in control of the business of the related body corporate. Termination of appoin