65Direction to reallocate responsibilities

65 Direction to reallocate responsibilities

Power to give direction (1) The Regulator may give an accountable entity a direction to reallocate a responsibility to which paragraph 23(1)(a) applies if the Regulator has reasonable grounds to believe that the current allocation of the responsibility has given rise to, or is likely to give rise to: (a) a prudential risk; or (b) a risk of significant and systemic non‑compliance with a law, instrument, direction or order referred to in any of subparagraphs 21(1)(d)(i) to (x).

Note 1: A decision to give a direction under this section is a reviewable decision (see Part 5 of this Chapter).

Note 2: For variation and revocation of a direction given under this section, see subsection 33(3) of the Acts Interpretation Act 1901.

(2) If: (a) the person who currently has the responsibility is an accountable person of the accountable entity or of a significant related entity of the accountable entity; and (b) the accountable entity or significant related entity has given an accountability statement for the accountable person under section 31; the Regulator must have regard to the responsibilities set out in the accountability statement. (3) The direction must: (a) be given by notice in writing to the accountable entity; and (b) specify the time by which, or period during which, the direction is to be complied with; and (c) state that the accountable entity could commit an offence or be liable to a civil penalty if the accountable entity fails to comply with the direction.

Note: See section 66 (offence for non‑compliance with a direction) and paragraph 23(1)(c) (key personnel obligations of accountable entities) and section 80 (civil penalty provisions).

(4) The Regulator must give a copy of the direction to each of the following: (a) the person who currently has the responsibility; (b) the person to whom the responsibility is to be reallocated; (c) if a person referred to in paragraph (a) or (b) is an accountable person of a significant related entity of the accountable entity—the significant related entity. (5) Subsections 64(5) and (6) apply to a direction under this section in the same way as they apply to a direction under section 64. Direction not a legislative instrument (6) A direction under subsection (1) is not a legislative instrument.

Note: Under paragraph 11(2)(c) of the Legislation Act 2003, the Regulator may register a direction under this section as a notifiable instrument.