Australian Securities and Investments Commission Regulations 2001

The Regulations rely on a number of central concepts that underpin the Act's regulatory architecture. The concept of a financial product is elaborately defined through several provisions. Regulation 2B prescribes a wide range of credit facilities as financial products, including the provision of credit for any period, bill facilities, pawnbroker credit, employer-to-employee credit, mortgages, guarantees, and non-cash payment facilities that are debited to a credit facility. The definition of credit itself is expansive, covering any contract, arrangement or understanding under which payment of a debt is deferred or a deferred debt is incurred, and includes hire purchase agreements, credit cards, charge cards, redeemable preference shares, letters of credit, and leases of real or personal property. Significantly, consumer credit insurance that includes a contract of general insurance under the Insurance Contracts Act 1984 is expressly excluded from being a credit facility under regulation 2B(2). Regulation 2BA declares margin lending facilities to be financial products. Conversely, the Regulations also specify what are not financial products: the MasterCard, VISA, Visa Debit, ATM, EFTPOS, Debit MasterCard, MasterCard Prepaid, and Visa Prepaid payment systems are all excluded (regulation 2BAA). Australian carbon credit units and eligible international emissions units were initially not financial products under regulation 2BB, but on 1 July 2012 they became financial products. Tradeable water rights and certain physical-settlement-only forward arrangements involving water rights are also excluded from the financial product definition (regulation 2BC), as are guarantees issued by the National Housing Finance and Investment Corporation in the performance of its function under paragraph 8(1)(ca) of the National Housing Finance and Investment Corporation Act 2018 (regulation 2BD).

The concept of a financial service is extended by regulation 2C to include making an unsolicited off-market offer to purchase a financial product from a person who acquired it as a retail client. Traditional trustee company services are addressed through regulation 2D, which prescribes who is taken to be provided such services for the purposes of Division 2 of Part 2 of the Act. The concept of acquiring financial services as a consumer is given a monetary threshold of $100,000 by regulation 2DA, meaning that a person who acquires financial services for an amount not exceeding $100,000 is taken to have acquired them as a consumer for the purposes of paragraph 12BC(3)(a) of the Act. The Regulations also create an important concept in the area of false billing: a statement that asserts a right to payment must include the text "This is not a bill. You are not required to pay any money." as the most prominent text in the document (regulations 2E and 2F). The same requirement applies to warning statements under paragraphs 12DM(1AA)(b) and 12DMB(2)(b) of the Act.

The Regulations affect a broad range of persons and entities. The compulsory information-gathering powers and the forms prescribed for their exercise affect anyone who is the subject of an ASIC investigation or examination, including directors, officers, employees, and advisers of corporations, as well as any person who may have information relevant to an investigation. The prescribed agencies listed in regulation 3 that can receive confidential information from ASIC include the Clean Energy Regulator, the Australian Competition and Consumer Commission, the Australian Prudential Regulation Authority, the Australian Taxation Office, the Australian Transaction Reports and Analysis Centre, state and territory Directors of Public Prosecutions, all state and territory police forces, and numerous state and territory fair trading and consumer affairs offices. The professional accounting bodies prescribed in regulation 2AC (CPA Australia, the Institute of Chartered Accountants in Australia, and the Institute of Public Accountants) affect all members of those bodies, as do the prescribed professional disciplinary bodies listed in regulation 8AA, which include the Australian Restructuring Insolvency and Turnaround Association, CPA Australia, Chartered Accountants Australia and New Zealand, the Institute of Public Accountants, the New South Wales Bar Association, the Law Society of New South Wales, the Victorian Legal Services Commissioner and Board, the Bar Association of Queensland, the Queensland Law Society, the Legal Practice Board of Western Australia, the Law Society of South Australia, the Legal Profession Conduct Commissioner of South Australia, the Law Society of Tasmania, the Law Society of the Australian Capital Territory, and the Law Society Northern Territory. The prescribed professional standards schemes (regulation 3A) affect members of the legal, accounting, and surveying professions who are covered by those schemes, as they limit the civil liability of those members. The deferred sales model exemptions in Part 2A affect insurers and consumers who purchase add-on insurance products in connection with credit cards, motor vehicle loans, residential mortgages, personal loans, and motor vehicle hire. The add-on insurance products affected include comprehensive motor vehicle or vessel insurance, compulsory third party motor vehicle insurance, home and contents insurance, home building insurance, landlord insurance, limited motor vehicle or vessel insurance, transport and delivery insurance, travel insurance, business-related add-on insurance (where the price exceeds $1,000), and superannuation-related add-on insurance. The Takeovers Panel procedures in Part 3 affect parties to takeovers and their advisers, including companies, directors, shareholders, and bidders. The Financial Services and Credit Panel provisions in Part 2B affect relevant providers who are subject to the disciplinary and supervisory functions of those panels. The clearing and settlement facility provisions in Part 5 affect market operators such as National Stock Exchange of Australia Limited and Bendigo Stock Exchange Limited, and their participants and agents.

The Regulations impose several key duties and confer corresponding rights. A person who receives a notice under section 19 of the Act requiring them to attend an examination must comply by appearing at the specified time and place and giving all reasonable assistance in connection with the investigation (Form 1). A person who receives a notice to produce books under section 30, subsection 31(1), or section 32A or 33 of the Act must produce the specified books at the time and place stated (Form 2). However, a person who is required to submit to an examination has the right to have their lawyer attend the examination, and the lawyer may address the inspector or ask the person questions about matters raised with the person by the inspector (subsection 23(1) of the Act, as noted on Form 1). A person who is summoned as a witness before the Commission, the Takeovers Panel, the Companies Auditors Disciplinary Board, or a Financial Services and Credit Panel must attend and, where specified, produce documents (Form 3). Such a person is entitled to be paid allowances and expenses in accordance with Schedule 2. The Schedule provides that a witness with professional, scientific or other special skill or knowledge must be paid an amount equal to lost wages, salary or fees, or if not remunerated in that way, between $81 and $407 per day. Other witnesses must be paid lost wages, salary or fees, or between $46 and $76 per day, plus reasonable transport costs and, if required to be absent overnight, meals and accommodation.

The Regulations also impose duties on ASIC. Under regulation 12N, ASIC must convene a Financial Services and Credit Panel in specified circumstances relating to a relevant provider, including if the provider becomes an insolvent under administration and ASIC is aware of the insolvency, if the provider is convicted of fraud, if ASIC reasonably believes the provider is not a fit and proper person to provide personal advice to retail clients, if ASIC reasonably believes the provider has contravened specified education and training standards or the prohibition on unregistered providers giving personal advice, if the provider has committed a serious contravention of a financial services law, or if the provider has been linked at least twice to a refusal or failure to give effect to an AFCA determination that has resulted or is likely to result in material loss or damage, material benefit, or involves dishonesty or fraud. A contravention is serious for these purposes if it has resulted or is likely to result in material loss or damage to a client, material benefit to the provider, or involves dishonesty or fraud. Annual reports of ASIC under subsection 136(1) of the Act must include information about the number of times ASIC used prescribed information gathering powers in the report year and the previous financial year, and for each use, the provision of the Act or other law that conferred the power (regulation 8AAA). The prescribed information gathering powers are extensive and include powers under the Act itself (sections 19, 30, 30A, 30B, 31, 32A, 33, 49, 58), the Corporations Act 2001 (sections 601FF, 601HD, 672A, 672B, 792D, 912C, 912E, 1213P, 1226C, 1317R), the Crimes Act 1914 (section 3E), the Mutual Assistance in Business Regulation Act 1992 (subsection 10(2)), and the National Consumer Credit Protection Act 2009 (subsections 37(4), 49(1), sections 51, 253, 266, 267, and item 17 of Schedule 2).

While the Regulations themselves do not create many penalty provisions, they are integral to the enforcement framework of the Act. A person who fails to comply with a notice under section 19 of the Act to attend an examination and give assistance, or a notice to produce books, without reasonable excuse commits an offence under section 63 of the Act. It is not a reasonable excuse that giving information or producing a book might tend to incriminate the person or expose them to a penalty (subsection 68(1) of the Act), although an individual who makes a claim of self-incrimination before making an oral statement or signing a record is protected by a use immunity: the statement or the fact of signing is not admissible in criminal or penalty proceedings against that person other than for falsity (subsection 68(2) of the Act). A body corporate is not entitled to this protection (subsection 68(3) of the Act). A witness who fails to attend in response to a summons under section 58 or 192 of the Act, or who refuses to be sworn or answer questions, may be dealt with for contempt. The annual reporting requirement in regulation 8AAA is a transparency mechanism: ASIC must disclose how often it used each prescribed information gathering power in the relevant financial year, which allows public scrutiny of the regulator's enforcement activity. The professional standards schemes prescribed in regulation 3A operate to limit the civil liability of members of the relevant professions, but they do not affect criminal liability or liability for conduct that involves dishonesty, fraud, or certain other excluded conduct. The deferred sales model exemptions in Part 2A have a time-limited effect: regulation 12B(2) provides that the exemptions do not apply to an add-on insurance product relating to a principal product or service if a person enters into a commitment to acquire the principal product or service after the end of the period of five years beginning on the day the regulation commences, or acquires the principal product or service after that period without previously having entered into such a commitment. This sun-setting mechanism will cause the exemptions to expire after five years, bringing those add-on insurance products back within the deferred sales model unless further regulatory action is taken.

The Regulations operate at the intersection of several Commonwealth Acts. They are made under the Australian Securities and Investments Commission Act 2001 and give effect to numerous provisions of that Act. They also interact extensively with the Corporations Act 2001: the definition provisions cross-reference Part 1.2 of that Act; the Takeovers Panel procedures in Part 3 relate to applications under sections 656A, 657C, and 657EA of the Corporations Act; the information gathering powers prescribed in regulation 8AAA include powers under the Corporations Act; and the clearing and settlement facility provisions in Part 5 relate to financial products defined in section 764A of the Corporations Act. The Regulations also interact with the National Consumer Credit Protection Act 2009: the delegation provisions in regulation 8AAAA cross-reference Registrars appointed under that Act, and the prescribed information gathering powers include numerous powers under that Act. The payment systems exclusions in regulation 2BAA refer to designations made under section 11 of the Payment Systems (Regulation) Act 1998, identifying specific systems such as MasterCard, VISA, Visa Debit, the ATM system, EFTPOS, Debit MasterCard, and various prepaid card systems as not being financial products. The water rights exclusion in regulation 2BC uses the definition of "tradeable water rights" from the Water Act 2007 and cross-references subsection 97(1) of that Act concerning transformation arrangements. The carbon unit exclusions in regulation 2BB refer to the Carbon Credits (Carbon Farming Initiative) Act 2011, the Clean Energy Act 2011, and the Australian National Registry of Emissions Units Act 2011. The NHFIC guarantee exclusion in regulation 2BD cross-references the National Housing Finance and Investment Corporation Act 2018. The Crimes Act 1914 is relevant to the information gathering powers prescribed in regulation 8AAA (section 3E concerning search warrants) and to the fit and proper person assessment in regulation 12N(2)(c), which is subject to Part VIIC of the Crimes Act (spent convictions). The Mutual Assistance in Business Regulation Act 1992 is also referenced in the prescribed information gathering powers. The Financial Transaction Reports Act 1988 is relevant to regulation 47, which provides that specified disclosure prohibitions in that Act do not prevent a cash dealer from communicating information to approved securities organisations or in accordance with ministerial conditions on exempt stock markets or futures markets. The Insurance Contracts Act 1984 is relevant to the exclusion of consumer credit insurance from the definition of credit facility in regulation 2B(2). The Commonwealth Registers Act 2020 is referenced in the delegation provision in regulation 8AAAA. The National Housing Finance and Investment Corporation Act 2018 is referenced in regulation 2BD.

The source text reflects several recent amendments. The table in regulation 3A prescribing professional standards schemes includes schemes that were published as recently as June 2025 (CPA Australia scheme) and March 2025 (Chartered Accountants Australia and New Zealand scheme, New South Wales Bar Association scheme, Victorian Bar scheme). These updates reflect the ongoing renewal of professional standards schemes that limit the civil liability of professionals, which are typically time-limited and require extension or replacement. The association of consulting surveyors scheme had its extension published in March 2025, taking effect on 1 July 2025. The inclusion of the National Housing Finance and Investment Corporation guarantee exclusion in regulation 2BD reflects a policy decision to ensure that guarantees issued by that Corporation in the performance of its housing functions are not treated as financial products, which would otherwise trigger the licensing, disclosure, and conduct obligations under the Act. The Fraud Fusion Taskforce provisions in regulation 8AC and the transitional provision in regulation 49 (inserted in 2023) enable ASIC to share confidential information with entities that are part of that taskforce for its purposes, reflecting a policy response to the need for enhanced multi-agency cooperation in combating fraud. The annual reporting requirement in regulation 8AAA was introduced to increase transparency around ASIC's use of its extensive information gathering powers, responding to concerns about the scope of those powers and the need for accountability. The deferred sales model exemptions in Part 2A are time-limited (five years from commencement), reflecting a policy of providing a temporary exemption for certain add-on insurance products while maintaining the overall deferred sales framework designed to protect consumers from being sold inappropriate add-on insurance at the point of sale for a principal product.

The source text does not refer to any specific court challenges or controversies. However, several provisions are susceptible to legal challenge. The compulsory information gathering powers, particularly the exclusion of the privilege against self-incrimination for individuals (subject to the use immunity) and the complete exclusion of that privilege for bodies corporate, have historically been contentious. The breadth of the definition of "credit facility" in regulation 2B, which captures a very wide range of credit arrangements including employer loans, pawnbroker credit, leases, and letters of credit, has the potential to draw many arrangements within the regulatory perimeter that might not otherwise be thought of as financial products. The professional standards schemes in regulation 3A, which limit the civil liability of professionals, could be challenged on the basis that they effectively cap liability without a clear statutory mandate. The discretionary nature of many of the Takeovers Panel's powers under Part 3 (including the power to disregard submissions that are not in accordance with the regulations or that are frivolous or vexatious, and the power to continue proceedings without regard to late documents) could give rise to judicial review proceedings if a party considers that procedural fairness has not been observed. The definition of "serious" contravention for the purposes of the mandatory convening of a Financial Services and Credit Panel (regulation 12N(4)), which includes conduct that has resulted or is likely to result in material loss or damage, material benefit, or involves dishonesty or fraud, may be the subject of interpretive disputes.

Several provisions in the Regulations contain traps for the unwary. The definition of "credit" in regulation 2B(3) is extraordinarily broad: it includes not only traditional loans but also hire purchase agreements, leases of goods (unless full payment is made before or when the goods are provided and a deposit at least equal to the value of the goods is paid), credit cards, charge cards, redeemable preference shares, financial benefits from loans or assistance in obtaining them, promissory notes, negotiable instruments, leases of real or personal property, and letters of credit. Any arrangement that falls within this definition will be a credit facility and therefore a financial product, unless an exclusion applies. The exclusion for consumer credit insurance in regulation 2B(2) only applies if the insurance includes a contract of general insurance under the Insurance Contracts Act 1984; other types of insurance sold with credit may still be credit facilities. The payment systems exclusions in regulation 2BAA are specific to the named systems as designated on particular dates; a payment system that is not one of those specifically listed, or that has not been designated under the Payment Systems (Regulation) Act 1998, may still be a financial product. The tradeable water rights exclusion in regulation 2BC applies only to arrangements that do not permit cash settlement or set-off and where market practice does not allow the seller's obligations to be closed out by matching offsetting positions; if an arrangement permits cash settlement, it will be a financial product. The NHFIC guarantee exclusion in regulation 2BD applies only to guarantees issued in the performance of the Corporation's function under paragraph 8(1)(ca) of the National Housing Finance and Investment Corporation Act 2018; other NHFIC guarantees may be financial products. The warning statement requirements in regulations 2E and 2F require the text "This is not a bill. You are not required to pay any money." to be the most prominent text in the document; burying this text in fine print or in a less prominent location will not satisfy the requirement. The professional standards schemes in regulation 3A are limited to the schemes listed; a professional who is a member of a body that has a scheme but who carries on practice in a jurisdiction not covered by the scheme may not be protected. The annual reporting requirement in regulation 8AAA applies only to the prescribed information gathering powers listed in the table; if ASIC uses a power that is not prescribed, no report is required. The Takeovers Panel's power to disregard matters in submissions that are frivolous or vexatious (regulation 26) and the requirement to note such disregard on the submission (regulation 27) mean that a party who makes a frivolous or vexatious submission will have that fact recorded on the submission itself. The time limit for deferred sales model exemptions in regulation 12B(2) means that the exemptions will expire after five years; industry participants who rely on the exemptions must anticipate their expiry and plan accordingly.

Compliance with the Regulations requires a multi-dimensional approach. Persons who receive a notice under section 19 of the Act requiring them to attend an examination should immediately engage legal representation, carefully review Form 1 for the time, date, place, and the identity of the examining officer, attend as required, and give all reasonable assistance. They should be aware that the privilege against self-incrimination is abrogated but that a use immunity applies to oral statements and signed records if a claim is made before the statement is made or the record is signed. A body corporate does not have this protection. Persons who receive a notice to produce books under Form 2 must produce the specified books at the time and place stated; they should ensure that the description of books in the notice is sufficiently clear and should consider whether any legal professional privilege or other valid claim may apply. A witness who receives a summons under Form 3 must attend and produce any documents specified; they are entitled to be paid allowances and expenses under Schedule 2. ASIC itself must comply with the annual reporting requirement in regulation 8AAA, maintaining records of how many times it uses each prescribed information gathering power in each financial year and reporting those figures in its annual report. Relevant providers who are subject to the circumstances specified in regulation 12N should be aware that ASIC must convene a Financial Services and Credit Panel in those circumstances unless ASIC has exercised or proposes to exercise its own powers in relation to the matter. This creates an important procedural safeguard: ASIC cannot simply let a matter lie without action if one of the specified circumstances applies. Insurers and distributors of add-on insurance products must assess whether their products fall within any of the exemptions in Part 2A and must be prepared for the expiry of those exemptions after five years. The exemptions are product-specific and defined in detail in regulations 12C to 12M; a product that does not meet the precise definition of an exempt product will be subject to the deferred sales model under the Act. Market operators and participants in National Stock Exchange of Australia Limited and Bendigo Stock Exchange Limited must ensure that they meet the requirements of regulation 46 to avoid being treated as operating a clearing and settlement facility. Professional disciplinary bodies listed in regulation 8AA should be aware that ASIC may disclose confidential information to them for disciplinary purposes. Bodies corporate listed in Schedule 3 may receive confidential information from ASIC under regulation 8AB. Professionals covered by the professional standards schemes listed in regulation 3A should ensure that they are familiar with the terms of their scheme, including any limits on liability and any exclusions.