1 Subsection 3(1)

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 entities;

(b) services consisting of APRA providing advice relating to the prudential regulation or supervision of entities.

2 Section 9

9 APRA’s functions

APRA has the following functions:

(a) the functions conferred on it by or under this Act or any other law of the Commonwealth;

(b) the functions conferred on it by or under any law of a State or Territory in accordance with subsection 9A(1);

(c) the function of providing prudential regulation or advice services under agreements entered into in accordance with subsection 9A(2).

9A Conferral of functions by State or Territory laws or by agreements

Conferral of functions by or under State or Territory laws (1) APRA may have functions or powers conferred on it by or under a law of a State or Territory if the conferral of the functions or powers is in accordance with:

(a) provisions of an agreement entered into by the Commonwealth and the State or Territory, being provisions approved by the Minister for the purposes of this subsection; or

(b) an approval given by the Minister for the purposes of this subsection.

APRA has the functions and powers so conferred by that law. Agreements for performance of prudential regulation or advice services (2) APRA may, with the approval of the Minister, enter into an agreement with a State, Territory or other person under which APRA is, for a fee, to provide prudential regulation or advice services (whether in Australia or a foreign country). The agreement is only effective for the purposes of this Act to the extent to which APRA’s provision of the services is for a purpose or purposes within the Commonwealth’s legislative power. Subsection (2) agreement may deal with liabilities between the parties (3) An agreement entered into in accordance with subsection (2) may make provision in relation to the circumstances in which, and the extent to which, one party to the agreement is liable to the other party to the agreement in respect of matters arising under or out of the agreement. Delegation of Minister’s power to approve subsection (2) agreement (4) The Minister may, in writing, delegate the power under subsection (2) to approve the entering into of agreements to a person holding or performing the duties of a Senior Executive Service office in the Department.

3 After subsection 51(1)

(1A) Subsection (1) does not apply to a fee payable to APRA under an agreement entered into in accordance with subsection 9A(2).

4 Subsection 56(1) (after paragraph (c) of the definition of Act covered by this section)

(ca) the Financial Sector (Transfers of Business) Act 1999;

5 Paragraph 56(5)(a)

Omit “or any other agency (including foreign agencies) specified in the regulations”, substitute “, or any other agency (including foreign agencies) specified in the regulations,”.

6 Paragraph 56(5)(b)

Omit “if the disclosure”.

7 Subsections 57(1) and (2)

Omit “or an agent or other person carrying on any business of APRA”, substitute “or an agent of APRA, a Board member or an APRA staff member,”.

8 Subsection 57(3)

After “subsection”, insert “(1) or”.

9 Section 58

58 Protection from liability

(1) Subject to subsection (2), APRA, a Board member, an APRA staff member, or an agent of APRA, a Board member or an APRA staff member, is not subject to any liability to any person in respect of anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on APRA, the Board, a Board member or an APRA staff member by or under:

(a) this Act or another law of the Commonwealth; or

(b) a law of a State or Territory referred to in paragraph 9(b); or

(c) subject to subsection (3), an agreement referred to in paragraph 9(c).

(2) Subsection (1) does not apply to an act or omission in bad faith. (3) Subsection (1), as it applies in relation to powers, functions or duties conferred or imposed by an agreement referred to in paragraph 9(c), has effect subject to provisions of the agreement referred to in subsection 9A(3) (which allows the agreement to deal with liabilities as between the parties).

Schedule 2 Amendment of the Banking Act 1959

Schedule 2—Amendment of the Banking Act 1959

1 Subsection 5(1) (definition of bank)

2 Subsection 5(1) (definition of industry liquidity contract)

3 Subsection 5(1)

industry support contract means a contract under which emergency financial support is to be provided by parties to the contract to any ADI that is a party to the contract if a specified event occurs. The contract may also deal with matters associated with the provision of the financial support.

4 After section 6A

Insert in Part I:

6B Application of Criminal Code

The Criminal Code applies to all offences against this Act.

5 Sections 7 and 8

Repeal the sections, substitute:

7 Person other than a body corporate must not carry on banking business

(1) A person is guilty of an offence if:

(a) the person carries on any banking business in Australia; and

(b) the person is not a body corporate; and

(2) An offence against subsection (1) is an indictable offence. (3) If a person carries on banking business in circumstances that give rise to the person committing an offence against subsection (1), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

8 Only the Reserve Bank and bodies corporate that are ADIs may carry on banking business

(1) A body corporate is guilty of an offence if:

(a) the body corporate carries on any banking business in Australia; and

(b) the body corporate is not the Reserve Bank; and

(c) the body corporate is not an ADI; and

(d) there is no order in force under section 11 determining that this subsection does not apply to the body corporate.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(2) An offence against subsection (1) is an indictable offence. (3) If a body corporate carries on banking business in circumstances that give rise to the body corporate committing an offence against subsection (1), the body corporate is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the body corporate committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

6 Subsection 9(6)

(6) An ADI is guilty of an offence if:

(b) doing, or failing to do, the act results in a contravention of a condition of the ADI’s authority; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(6A) An offence against subsection (6) is an indictable offence. (6B) If an ADI does or fails to do an act in circumstances that give rise to the ADI committing an offence against subsection (6), the ADI is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

7 Subsection 10(3)

(3) An ADI is guilty of an offence if:

(a) an alteration is made to the Act, charter, deed of settlement, memorandum of association, articles of association, constitution or other document by which the ADI was constituted as a body corporate; and

(b) the ADI does not, within 3 months of the making of the alteration, give to APRA a written statement:

(i) that sets out particulars of the alteration; and

(ii) that is verified by a statutory declaration made by a senior officer of the ADI; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

8 Subsection 11(1)

Omit “or specified provisions”, substitute “provisions (other than section 63) or specified provisions (other than section 63)”.

9 Subsection 11(3)

(a) the person does, or fails to do, an act; and

(b) doing, or failing to do, the act results in a contravention of a condition to which an order under this section is subject (being an order that is in force and that applies to the person).

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(3A) An offence against subsection (3) is an indictable offence. (3B) If a person does or fails to do an act in circumstances that give rise to the person committing an offence against subsection (3), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

10 Subsection 11AA(5)

(5) The body corporate is guilty of an offence if:

(b) doing, or failing to do, the act results in a contravention of a condition of the authority; and

(c) there is no order in force under section 11 determining that this subsection does not apply to the body corporate.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(5A) An offence against subsection (5) is an indictable offence. (5B) If the body corporate does or fails to do an act in circumstances that give rise to the body corporate committing an offence against subsection (5), the body corporate is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the body corporate committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

11 Subsection 11AF(1)

Omit all the words from and including “by”, substitute:

by:

(a) all ADIs; or

(b) all authorised NOHCs; or

(c) a specified class of ADIs or authorised NOHCs; or

(d) one or more specified ADIs or authorised NOHCs.

12 After subsection 11AF(1)

(1A) A standard may impose different requirements to be complied with in different situations or in respect of different activities.

13 Subsection 11AF(4)

Omit “If APRA determines or varies a standard”, substitute “Subject to subsection (6A), if APRA determines or varies a standard referred to in paragraph (1)(a), (b) or (c)”.

14 After subsection 11AF(4)

(4A) If APRA determines or varies a standard referred to in paragraph (1)(d) it must, as soon as practicable, give a copy of the standard, or of the variation, to the ADI or authorised NOHC, or to each ADI or authorised NOHC, to which the standard applies. Whenever APRA gives a copy of a standard, or of a variation, to an ADI or authorised NOHC, it must also provide a copy to the Treasurer.

15 Subsection 11AF(5)

After “revokes a standard”, insert “referred to in paragraph (1)(a), (b) or (c)”.

16 After subsection 11AF(5)

(5A) If APRA revokes a standard referred to in paragraph (1)(d) it must, as soon as practicable, give notice of the revocation to the ADI or authorised NOHC, or to each ADI or authorised NOHC, to which the standard applied. Whenever APRA gives a notice of revocation to an ADI or authorised NOHC, it must also provide a copy to the Treasurer.

17 Subsection 11AF(6)

Before “APRA”, insert “Subject to subsection (6A),”.

18 After subsection 11AF(6)

(6A) If APRA considers that a standard, or a variation of a standard, contains commercially sensitive information:

(a) APRA is not required to include that information in a notice published under subsection (4) or in the version of the standard that is available under subsection (6); but

(b) APRA may include some or all of that information in either or both of those things if APRA considers it appropriate to do so.

19 Subsection 11AF(7)

Omit “, (5) or (6)”, substitute “, (4A), (5), (5A) or (6)”.

20 Subdivision A of Division 1BA of Part II (heading)

Subdivision A—Directions other than to enforce certified industry support contracts

21 After subsection 11CA(2)

(2A) Without limiting the generality of subsection (2), a direction referred to in a paragraph of that subsection may:

(a) deal with some only of the matters referred to in that paragraph; or

(b) deal with a particular class or particular classes of those matters; or

(c) make different provision with respect to different matters or different classes of matters.

22 Subdivision B of Division 1BA of Part II (heading)

Subdivision B—Directions to enforce certified industry support contracts

23 Section 11CB

Omit “liquidity”, substitute “support”.

Note: The heading to section 11CB is altered by omitting “liquidity” and substituting “support”.

24 Subsections 11CC(1), (4) and (6)

Omit “liquidity”, substitute “support”.

Note: The heading to section 11CC is altered by omitting “liquidity” and substituting “support”.

25 Subsections 11CG(1) and (2)

(1) An ADI or an authorised NOHC is guilty of an offence if:

(b) doing, or failing to do, the act results in a contravention of a direction given to it under Subdivision A or Subdivision B; and

(c) there is no order in force under section 11 determining that this subsection does not apply to the ADI or authorised NOHC.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1A) If an ADI or an authorised NOHC does or fails to do an act in circumstances that give rise to the ADI or NOHC committing an offence against subsection (1), the ADI or NOHC is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the ADI or NOHC committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

(2) An officer of an ADI or an authorised NOHC is guilty of an offence if:

(a) the officer fails to take reasonable steps to ensure that the ADI or NOHC complies with a direction given to it under Subdivision A or Subdivision B; and

(b) the officer’s duties include ensuring that the ADI or NOHC complies with the direction, or with a class of directions that includes the direction; and

(c) there is no order in force under section 11 determining that this subsection does not apply to the officer.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(2A) If an officer of an ADI or an authorised NOHC fails to take reasonable steps to ensure that the ADI or NOHC complies with a direction given to it under Subdivision A or Subdivision B in circumstances that give rise to the officer committing an offence against subsection (2), the officer is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the officer committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

26 Subsection 11CG(3)

(3) In this section, officer has the meaning given by section 9 of the Corporations Law.

27 Subsection 11E(2)

(2) A foreign ADI is guilty of an offence if:

(a) it accepts a deposit from a person in Australia; and

(b) before accepting the deposit, the foreign ADI did not inform the person, in a manner approved by APRA, of the requirements of this Act to which the foreign ADI is not subject because of subsection (1); and

(c) there is no order in force under section 11 determining that this subsection does not apply to the foreign ADI.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

28 Subsection 13(3)

Information to be supplied if ADI unable, or likely to be unable, to meet obligations (3) An ADI is guilty of an offence if:

(a) the ADI considers that it is likely to become unable to meet its obligations, or that it is about to suspend payment; and

(b) the ADI does not immediately inform APRA of the situation; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(3A) An offence against subsection (3) is an indictable offence.

29 Subsection 13A(4)

(4) An ADI is guilty of an offence if:

(a) it does not hold assets (excluding goodwill) in Australia of a value that is equal to or greater than the total amount of its deposit liabilities in Australia; and

(b) APRA has not authorised the ADI to hold assets of a lesser value; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(5) An offence against subsection (4) is an indictable offence. (6) If the circumstances relating to the asset holdings of an ADI are such that give rise to the ADI committing an offence against subsection (4), the ADI is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

30 Subsection 13B(1)

(1) A person appointed by APRA to investigate the affairs of an ADI under section 13 or 13A is entitled to have access to the books, accounts and documents of the ADI, and to require the ADI to give the person information or facilities to conduct the investigation. (1A) An ADI is guilty of an offence if:

(a) APRA has appointed a person to investigate the affairs of the ADI under section 13 or 13A; and

(b) the ADI:

(i) does not give the person access to its books, accounts and documents; or

(ii) fails to comply with a requirement made under subsection (1) for the provision of information or facilities; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1B) If the ADI does or fails to do an act in circumstances that give rise to the ADI committing an offence against subsection (1A), the ADI is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

31 Subsection 14A(2) (second sentence and penalty)

Repeal the sentence and the penalty.

32 After subsection 14A(2)

(2A) A person who is or has been an officer of an ADI is guilty of an offence if:

(a) there is an ADI statutory manager in relation to the ADI; and

(b) under subsection (2), the ADI statutory manager requires the person to give the ADI statutory manager information; and

(c) the person fails to comply with the requirement; and

(d) there is no order in force under section 11 determining that this subsection does not apply to the person.

Maximum penalty: Imprisonment for 12 months.

Note 2: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

33 Subsection 16B(1) (second sentence and penalty)

Repeal the sentence and the penalty.

34 After subsection 16B(1)

(1A) A person who is or has been an auditor of an ADI, an authorised NOHC, or a subsidiary of an ADI or an authorised NOHC, is guilty of an offence if:

(a) under subsection (1), APRA requires the person to provide information; and

(b) the person fails to comply with the requirement; and

Note 2: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

35 Subsections 16B(2), (3) and (4)

Additional duty to give information about ADIs (2) A person who is or has been an auditor of an ADI is guilty of an offence if:

(i) the ADI is insolvent, or there is a significant risk that the ADI will become insolvent; or

(ii) the ADI has failed to comply with a prudential standard, a requirement under this Act or the regulations, a direction under Division 1BA of Part II or a condition of its section 9 authority; or

(iii) an existing or proposed state of affairs may materially prejudice the interests of depositors of the ADI; and

Note 2: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

Additional duty to give information about authorised NOHCs (3) A person who is or has been an auditor of an authorised NOHC is guilty of an offence if:

(i) the NOHC is insolvent, or there is a significant risk that the NOHC will become insolvent; or

(ii) the NOHC has failed to comply with a prudential standard, a requirement under this Act or the regulations, a direction under Division 1BA of Part II or a condition of its NOHC authority; or

(iii) an existing or proposed state of affairs may materially prejudice the interests of depositors of any ADI that is a subsidiary of the NOHC; and

Note 2: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

Additional duty to give information about subsidiaries of ADIs or authorised NOHCs (4) A person who is or has been an auditor of a subsidiary of an ADI or an authorised NOHC (other than a subsidiary that itself is an ADI or an authorised NOHC) is guilty of an offence if:

(i) the subsidiary is insolvent, or there is a significant risk that the subsidiary will become insolvent; or

(ii) the subsidiary has failed to comply with a requirement under this Act or the regulations; or

(iii) if the subsidiary is a subsidiary of an ADI—an existing or proposed state of affairs may materially prejudice the interests of depositors of the ADI; or

(iv) if the subsidiary is a subsidiary of an authorised NOHC—an existing or proposed state of affairs may materially prejudice the interests of depositors of any ADI that is a subsidiary of the NOHC; and

Note 2: Subsection 4B(2) of the Crimes Act 1914 allows a court to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine a court may impose is worked out as provided in that subsection.

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the maximum fine worked out as mentioned in Note 2.

36 Subsection 23(1)

(1) An ADI is guilty of an offence if:

(a) it fails to comply with section 22 on any day; and

(b) that day is not a day to which subsection (2) applies; and

(1A) If an ADI is convicted of an offence against subsection (1), it is liable to a fixed penalty equal to the amount worked out using the formula:

View image in the official source

37 Subsection 33(4)

(4) An ADI is guilty of an offence if:

(a) the ADI receives a notice under subsection (1); and

(b) the ADI does not comply with the notice within:

(i) 7 days after receiving the notice; or

(ii) if a longer period for compliance is specified by the Reserve Bank—the period so specified; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(4A) An offence against subsection (4) is an indictable offence. (4B) If an ADI does or fails to do an act in circumstances that give rise to the ADI committing an offence against subsection (4), the ADI is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

38 Subsection 36(1)

Omit all the words after “ADIs”.

39 After subsection 36(1)

(1A) An ADI is guilty of an offence if:

(a) the Reserve Bank has made a determination under subsection (1) of a policy that applies to the ADI; and

(b) the ADI fails to follow the policy; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

40 Subsection 36(2)

Omit all the words after “ADIs”.

41 After subsection 36(2)

(2A) An ADI is guilty of an offence if:

(a) the Reserve Bank has given a direction under subsection (2) that applies to the ADI; and

(b) the ADI fails to comply with the directions; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(2B) An offence against subsection (2A) is an indictable offence.

Note: The heading to section 38A is altered by omitting “bank” and substituting “ADI”.

42 At the end of section 41

Add:

(2) A person is guilty of an offence if:

(a) the person contravenes subsection (1); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(3) An offence against subsection (2) is an indictable offence.

43 After subsection 42(1)

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

44 At the end of section 42

Add:

(a) the person fails to comply with subsection (2); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

45 After subsection 45(1)

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

46 At the end of section 45

Add:

(4) A person is guilty of an offence if:

(a) the person fails to comply with subsection (3); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(5) An offence against subsection (4) is an indictable offence.

47 At the end of section 46

Add:

(2) A person is guilty of an offence if:

(b) there is no order in force under section 11 determining that subsection (1) does not apply to the person; and

(c) there is no instrument in force under section 48 exempting the person from the application of subsection (1).

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(3) An offence against subsection (2) is an indictable offence.

48 Part VI (heading)

Part VI—Collection and publication of information about ADIs, authorised NOHCs and their subsidiaries

49 After subsection 61(2)

(2A) A body corporate is guilty of an offence if:

(a) under subsection (1), APRA has appointed a person to investigate and report on prudential matters in relation to the body corporate; and

(b) the body corporate:

(i) does not give the person access to its books, accounts and documents; or

(ii) fails to comply with a requirement made under subsection (2) for the provision of information or facilities; and

(c) there is no order in force under section 11 determining that this subsection does not apply to the body corporate.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(2B) If a body corporate does or fails to do an act in circumstances that give rise to the body corporate committing an offence against subsection (2A), the body corporate is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the body corporate committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

50 Subsection 62(1) (second sentence)

Repeal the sentence.

51 After subsection 62(1)

(a) under subsection (1), APRA requires the person to provide information; and

(b) the person fails to comply with the requirement; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1C) If a person fails to comply with a requirement under subsection (1) in circumstances that give rise to the person committing an offence against subsection (1A), the person is guilty of an offence against subsection (1A) in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

52 Subsection 63(1)

(1) An ADI, other than a foreign ADI, is guilty of an offence if:

(a) the ADI:

(i) enters into an arrangement or agreement for any sale or disposal of its business by amalgamation or otherwise, or for the carrying on of business in partnership with another ADI; or

(ii) effects a reconstruction of the ADI; and

(b) the Treasurer did not give prior consent in writing to the ADI entering into the arrangement or agreement or effecting the reconstruction.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1A) An offence against subsection (1) is an indictable offence.

53 Subsection 63(4)

(4) A foreign ADI is guilty of an offence if:

(a) there is a proposal that involves the ADI:

(i) entering into an arrangement or agreement for any sale or disposal of its business by amalgamation or otherwise, or for the carrying on of business in partnership with another ADI; or

(ii) effecting a reconstruction of the ADI; and

(b) the ADI does not give the Treasurer reasonable notice, in writing, of the proposal.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(4A) An offence against subsection (4) is an indictable offence.

54 Subsections 66(1) and (1A)

(1) A person is guilty of an offence if:

(a) the person carries on a financial business, whether or not in Australia; and

(b) the person assumes or uses, in Australia, a restricted word or expression in relation to that financial business; and

(c) neither subsection (1AB) nor subsection (1AC) allows that assumption or use of that word or expression; and

(d) APRA did not consent to that assumption or use of that word or expression; and

(e) there is no order in force under section 11 determining that this subsection does not apply to the person.

Note 1: For the meanings of restricted word or expression, assume or use and financial business, see subsection (4).

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1AA) If a person assumes or uses a word or expression in circumstances that give rise to the person committing an offence against subsection (1), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

(1AB) It is not an offence against subsection (1) for the Reserve Bank to assume or use the words bank, banker or banking in relation to its financial business. (1AC) It is not an offence against subsection (1) for an ADI to assume or use the word banking in referring to the fact that it has been granted an authority under this Act.

Note: For example, an ADI may, in its letterhead, refer to itself as being authorised under the Banking Act 1959 to carry on banking business.

55 After subsection 66(2A)

(2B) If APRA:

(a) grants a consent; or

(b) takes action under subsection (2) in relation to a consent;

APRA must give ASIC notice of the granting of the consent or the taking of the action.

56 Subsection 66(3)

(a) the person has been given a consent under this section; and

(b) the person contravenes a condition to which the consent is subject; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(3A) If a person does or fails to do an act in circumstances that give rise to the person committing an offence against subsection (3), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

57 Subsection 66A(1)

(1) A person, other than an ADI, is guilty of an offence if:

(a) the person carries on a financial business, whether or not in Australia; and

(b) the person assumes or uses, in Australia, the expression authorised deposit‑taking institution, or ADI, in relation to that financial business; and

Note 1: For the meanings of assume or use and financial business, see subsection (2).

Note 3: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1A) If a person assumes or uses an expression in circumstances that give rise to the person committing an offence against subsection (1), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

58 Subsection 67(1)

(1) A person, other than an ADI, is guilty of an offence if:

(a) the person carries on banking business in a foreign country but does not carry on banking business in Australia; and

(b) the person establishes or maintains an office in Australia wholly or partly in connection with the carrying on of that banking business in that foreign country; and

(c) APRA did not consent, in writing, to the establishment or maintenance of that office; and

(d) there is no order in force under section 11 determining that this subsection does not apply to the person.

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(1A) If a person establishes or maintains an office in circumstances that give rise to the person committing an offence against subsection (1), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

59 Subsection 67(3)

(a) the person has been given a consent under this section; and

(b) the person contravenes a condition to which the consent is subject; and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(4) If a person does or fails to do an Act in circumstances that give rise to the person committing an offence against subsection (3), the person is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

60 Subsection 68(2)

Omit “A bank”, substitute “An ADI”.

61 Subsection 68(2)

Omit “the bank”, substitute “the ADI”.

62 Subsection 68(4)

ADI includes the Reserve Bank.

63 Subsections 69(1), (2), (6), (7), (11) and (11A)

Omit “a bank”, substitute “an ADI”.

64 Subsection 69(3)

Omit “A bank”, substitute “An ADI”.

65 Subsection 69(3)

After “statement”, insert “, complying with subsection (4) and any regulations under subsection (3),”.

66 After subsection 69(3)

(3AA) The ADI is guilty of an offence if:

(a) it does not give the Treasurer a statement as required by subsection (3); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

67 Subsections 69(4), (5) and (7)

Omit “the bank” (wherever occurring), substitute “the ADI”.

68 After subsection 69(5)

(5A) The ADI is guilty of an offence if:

(a) it does not pay, at the time of the delivery of the statement, the amount specified in the statement, as required by subsection (5); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

69 Subsection 69(7)

Omit “that bank” (wherever occurring), substitute “that ADI”.

70 Subsection 69(7)

Omit “first‑mentioned bank”, substitute “first‑mentioned ADI”.

71 After subsection 69(7)

(7A) The ADI is guilty of an offence if:

(a) it does not pay moneys to a person as required by subsection (7); and

Note 2: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

72 Subsection 69(10)

73 Section 69A

74 Subsections 69C(1) and (2)

75 Subsection 69C(6)

Omit “(1) or”.

76 Subsection 69C(7)

77 At the end of section 69C

Add:

Note: For provisions relating to proof of offences by bodies corporate, see Part 2.5 of the Criminal Code.

78 Subsection 71(3)

Omit “banks”, substitute “ADIs or NOHCs”.

79 Schedule 1 (heading)

Schedule 1 State and Territory laws relating to ADI mergers

Schedule 1—State and Territory laws relating to ADI mergers

Note: See section 38A.

Schedule 3 Amendment of the Corporations Law

Schedule 3—Amendment of the Corporations Law

Part 1—Transfer of financial institutions and friendly societies

1 At the end of the Corporations Law

Add:

Schedule 4 Transfer of financial institutions and friendly societies

Schedule 4—Transfer of financial institutions and friendly societies

Note: See section 1465A.

Part 1—Preliminary

1 Definitions

In this Schedule, except so far as the contrary intention appears:

AFIC Code of this jurisdiction means the Australian Financial Institutions Commission Code as set out in the Australian Financial Institutions Commission Act 1992 of Queensland as in force immediately before the transfer date and as applied as a law of this jurisdiction.

Financial Institutions Code of this jurisdiction means the Financial Institutions Code set out in the Financial Institutions (Queensland) Act 1992 as in force immediately before the transfer date and as applied as a law of this jurisdiction.

Friendly Societies Code means the Friendly Societies Code set out in Schedule 1 to the Friendly Societies (Victoria) Act 1996 as in force immediately before the transfer date.

Friendly Societies Code of this jurisdiction means:

(a) the Friendly Societies Code as applied as a law of this jurisdiction; or

(b) if this Law is being applied as a law of Western Australia—the Friendly Societies (Western Australia) Code set out in the Friendly Societies (Western Australia) Act 1999.

member of a transferring financial institution means a person who, immediately before the transfer date, is a member of the institution under:

(a) the previous governing Code; or

(b) the rules of the institution.

membership share has the meaning given in subclause 12(3).

previous governing Code for a transferring financial institution means the Code or law under which the institution is registered immediately before the transfer date.

State Supervisory Authority (SSA) for a transferring financial institution means:

(a) the SSA for the institution within the meaning of the previous governing Code; or

(b) in the case of The Cairns Cooperative Weekly Penny Savings Bank Limited—the Queensland Office of Financial Supervision.

transfer date means the date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999.

transferring financial institution of this jurisdiction means:

(a) a building society of this jurisdiction (that is, a society that is registered under the Financial Institutions Code of this jurisdiction, and authorised to operate as a building society, immediately before the transfer date); or

(b) a credit union of this jurisdiction (that is, a society that is registered under the Financial Institutions Code of this jurisdiction, and authorised to operate as a credit union, immediately before the transfer date); or

(c) a friendly society of this jurisdiction (that is, a body that is registered as a friendly society under the Friendly Societies Code of this jurisdiction immediately before the transfer date); or

(d) a body registered as an association under Part 12 of the Financial Institutions Code of this jurisdiction immediately before the transfer date; or

(e) a body registered as a Special Services Provider under the AFIC Code of this jurisdiction immediately before the transfer date; or

(f) a body registered as an association under Part 12 of the Friendly Societies Code of this jurisdiction immediately before the transfer date; or

(g) The Cairns Cooperative Weekly Penny Savings Bank Limited referred to in section 263 of the Financial Intermediaries Act 1996 of Queensland if:

(i) this definition is being applied as a law of Queensland; and

(ii) a determination by APRA under subitem 7(2) of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 is in force immediately before the transfer date.

Note: If a determination is made, the Bank will be covered by the Banking Act 1959 from the transfer date. APRA may only make a determination if the Treasurer and the Queensland Minister responsible for the administration of the Financial Intermediaries Act 1996 of Queensland have agreed that the Bank should be covered by the Banking Act 1959.

transition period means the period of 18 months starting on the transfer date.

withdrawable share means a withdrawable share within the meaning of the Financial Institutions Code of this jurisdiction as in force immediately before the transfer date.

2 Objective

The objective of this Schedule is to facilitate the registration of:

(a) building societies and credit unions currently covered by the Financial Institutions Code of this jurisdiction; and

(b) friendly societies currently covered by the Friendly Societies Code of this jurisdiction; and

(c) related bodies and associations;

as Corporations Law companies with as little disturbance to the operations of, and as little conversion costs for, the bodies concerned as possible.

Part 2—Transfer to Corporations Law registration

Division 1—The transfer process

3 Registration of transferring financial institution as company

Registration as company on transfer date (1) On the transfer date, each transferring financial institution of this jurisdiction is taken to become registered as a company under the Law of this jurisdiction under the name under which the institution was registered under the previous governing Code immediately before the transfer date. (2) Subclause (1) applies even if the institution is an externally‑administered body corporate immediately before the transfer date. Type of company (3) The following table sets out the types of company the institution may be registered as under subclause (1):

<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.6pt; border-top:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table" style="page-break-after:avoid"><span style="font-weight:bold">Type of company that institution may be registered as</span></p></td></tr><tr><td style="width:17.55pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table" style="page-break-after:avoid"><span style="font-weight:bold"></span></p></td><td style="width:102.6pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table" style="page-break-after:avoid"><span style="font-weight:bold">Type of institution</span></p></td><td style="width:201.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table" style="page-break-after:avoid"><span style="font-weight:bold">Type of company</span></p></td></tr></thead><tbody><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>1</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>building society with shares on issue</span></p></td><td style="width:201.85pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>2</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>building society with no shares on issue</span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>3</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>credit union with shares on issue</span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>4</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>credit union with no shares on issue</span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by share and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>5</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>friendly society with no shares on issue</span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>6</span></p></td><td style="width:102.6pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>friendly society with shares on issue</span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-top:0.75pt dotted #000000; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>7</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>association registered under the Financial Institutions Code of this jurisdiction</span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>proprietary company limited by shares [see note]</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>8</span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>Special Services Provider incorporated under the AFIC Code of this jurisdiction</span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>9</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>friendly society association</span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>proprietary company limited by shares [see note]</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>10</span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>other</span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span style="font-size:8pt; vertical-align:3pt">*</span><span> public company limited by guarantee</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares</span></p></td></tr><tr><td style="width:17.55pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:0.75pt dotted #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>public company limited by shares and by guarantee</span></p></td></tr><tr><td style="width:17.55pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:102.6pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span></span></p></td><td style="width:201.85pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Table"><span>proprietary company limited by shares [see note]</span></p></td></tr></tbody></table>

Note: To be registered as a proprietary company, the institution would need to comply with subsection 113(1) (no more than 50 non‑employee shareholders). A proprietary company cannot engage in fundraising activities (see subsection 113(3)).

(4) The institution may elect which particular type of company it is to be registered as under subclause (1). The election:

(a) must be agreed to by a resolution of the board of the institution; and

(b) is to be made by written notice lodged with ASIC at least 7 days before the transfer date.

The election must be in the prescribed form. (5) The institution is taken to be registered under subclause (1) as the following type of company:

(a) if the institution’s board makes an election under subclause (4)—the type specified in the election; or

(b) if the institution’s board does not make an election under subclause (4):

(i) if regulations under this subparagraph are in force for that type of institution on the transfer date—the type of company prescribed by the regulations; or

(ii) if no regulations under subparagraph (i) are in force for that type of institution on the transfer date—the type of company that is specified in the table in subclause (3) for that type of institution and is marked with an asterisk.

4 Documents to be lodged with ASIC by SSA

(1) The SSA for a transferring financial institution of this jurisdiction must lodge with ASIC:

(a) a notice that sets out:

(i) the institution’s name; and

(ii) the address of the institution’s registered office;

under the previous governing Code immediately before the transfer date; and

(b) a copy of the institution’s rules as in force immediately before the transfer date; and

(c) a copy of any entry in its register of charges kept under section 265 of this Law (as applied by the previous governing Code) that relates to the institution; and

(d) any document lodged under section 263 or 264 of this Law (as applied by the previous governing Code) that relates to:

(i) the institution; and

(ii) a charge that is in force immediately before the transfer date.

(2) If the transferring financial institution is under external administration immediately before the transfer date, the notice referred to in paragraph (1)(a) must also set out:

(a) the type of external administration; and

(b) any other prescribed details.

5 Documents to be lodged with ASIC by transferring financial institution

(1) Within 1 month after a transferring financial institution of this jurisdiction is registered as a company under clause 3, it must lodge with ASIC a notice that sets out the personal details of each director and secretary of the company as at the transfer date. The notice must be in the prescribed form.

Penalty: 5 penalty units.

(2) The personal details of a director or secretary are the details that would need to be set out in the notice if it were being given under section 242.

6 Company to set up registers and minute books

Setting up registers and minute books (1) A company registered under clause 3 must, within 14 days after the transfer date:

(a) set up the registers required by sections 168 (registers of members, debenture holders and options holders) and 271 (charges); and

(b) include in those registers all the information that is required to be in those registers and that is available to the company on registration; and

(c) set up the minute books required by section 251A.

Incorporation of prior minute books (2) The minute books set up under paragraph (1)(c) must incorporate any minute books or similar records kept by the company prior to its registration under clause 3. Access to registers and minute books (3) During the 14 days, the company need not comply with a person’s request to inspect or obtain a copy of:

(a) information in a register; or

(b) a minute of a general meeting.

However, the period within which the company must comply with the request begins at the end of the 14 days.

7 ASIC to complete formalities of registration

(1) As soon as practicable after a transferring financial institution of this jurisdiction is registered as a company under clause 3, ASIC must:

(a) give the company an ACN; and

(b) keep a record of the company’s registration; and

(c) issue a certificate to the company that states:

(i) the company’s name; and

(ii) the company’s ACN; and

(iii) the company’s type; and

(iv) that the company is registered as a company under the Corporations Law of this jurisdiction; and

(v) the transfer date as the date of registration.

Note: For the evidentiary value of a certificate of registration, see subsection 1274(7A).

(2) If:

(a) the company is registered with a name that does not include “Limited” or “Proprietary Limited” (as the type of company requires), or an acceptable abbreviation; and

(b) the company is not exempt from the requirement to use that word or those words in its name by or under section 150 or 151;

ASIC may change the company’s name so that it includes the required words by altering the details of the company’s registration to reflect that change.

Note: For acceptable abbreviations see section 149.

(3) Subsections 1274(2) and (5) apply to the record of the company’s registration referred to in paragraph (1)(b) as if they were a document lodged with ASIC.

8 Registration of registered bodies

(1) If a registered body becomes registered as a company under clause 3, it ceases to be a registered body. ASIC must remove the body’s name from the appropriate register kept for the purposes of Division 1 or 2 of Part 5B.2. (2) ASIC may keep any of the documents relating to the company that were lodged because the company used to be a registered body.

Division 2—The consequences of the transfer

Subdivision A—General

9 Effect of registration under clause 3

General effect of registration (1) Registration of a transferring financial institution of this jurisdiction as a company under clause 3 does not:

(a) create a new legal entity; or

(b) affect the institution’s existing property, rights or obligations (except as against the members in their capacity as members); or

(c) render defective any legal proceedings by or against the institution or its members.

Members, officers, constitution and registered office (2) On registration of a transferring financial institution of this jurisdiction as a company under clause 3:

(a) each person who is a member of the institution immediately before the transfer date becomes a member of the company; and

(b) each person who was a director of the institution immediately before the transfer date becomes a director of the company; and

(c) each person who was a secretary of the institution immediately before the transfer date becomes a secretary of the company; and

(d) the institution’s rules, as in force immediately before the transfer date, become the company’s constitution; and

(e) the institution’s registered office under the previous governing Code immediately before the transfer date becomes the company’s registered office for the purposes of this Law.

Health benefits funds rules (3) The institution’s rules referred to in paragraph (2)(d) do not include rules within the meaning of the National Health Act 1953.

Note: These latter rules relate to the operation of health benefits funds.

Replaceable rules (4) The replaceable rules (as described in section 135) do not apply to a company registered under clause 3, despite section 135, unless the company repeals its constitution.

10 Provisions applying to company limited by shares and by guarantee

Section 1416 applies to a company that is taken under clause 3 to be registered as a company limited by shares and by guarantee.

11 Transferring financial institution under external administration

(1) If, immediately before the transfer date, provisions of Chapter 5 applied to:

(a) a compromise or arrangement between a transferring financial institution of this jurisdiction and its creditors; or

(b) a reconstruction of a transferring financial institution of this jurisdiction; or

(c) a receiver or other controller of property of a transferring financial institution of this jurisdiction; or

(d) the winding‑up or dissolution of a transferring financial institution of this jurisdiction;

because of Part 9 of the Financial Institutions Code, or Part 9 of the Friendly Societies Code, of this jurisdiction, those provisions of Chapter 5 continue to apply to that matter after the transfer date (but without any of the modifications made by the Code or the regulations made under the Code). (2) Without limiting the generality of subclause (1), a matter referred to in paragraph (1)(a), (b) or (d) includes an application or other step preliminary to the matter. (3) Subclause (1) does not limit the regulations that may be made under clause 28 or 39. (4) Any act done before the transfer date under or for the purposes of the provisions of Chapter 5 as applied by the Code has effect as if it had been done under or for the purposes of Chapter 5 as it applies after the transfer date. (5) If, before the transfer date, a liquidator of a transferring financial institution had been appointed under:

(a) section 341 of the Financial Institutions Code of this jurisdiction; or

(b) section 402 of the Friendly Societies Code of this jurisdiction;

the institution may be wound up in accordance with the provisions of Chapter 5. (6) For the avoidance of doubt, if, before the transfer date, the SSA for a transferring financial institution of this jurisdiction had given a certificate under:

(a) section 341 of the Financial Institutions Code of this jurisdiction; or

(b) section 402 of the Friendly Societies Code of this jurisdiction;

but had not yet appointed a liquidator of the institution, neither the SSA nor ASIC may appoint a liquidator of the institution on the basis of the certificate.

Subdivision B—Membership

12 Institution becoming a company limited by shares

(1) If a transferring financial institution of this jurisdiction is taken to be registered as a company limited by shares under clause 3, the following apply:

(a) any shares in the institution on issue immediately before the transfer date (other than withdrawable shares) become shares of the company

(b) any withdrawable shares of the institution on issue immediately before the transfer date become redeemable preference shares of the company

(c) in the case of a building society—each person who was a member of the society immediately before the transfer date, other than by virtue of only holding shares in the society, is taken to have been issued with a membership share on the transfer date

(d) in any case other than that of a building society—any person:

(i) who was a member of the institution immediately before the transfer date; and

(ii) who did not hold any shares in the institution;

is taken to have been issued with a membership share on the transfer date.

(2) If a person who is taken to have been issued with a membership share is a joint member, they hold the membership share jointly with the other member or members of the joint membership. This is so, even if the other member, or another member, held shares in the institution immediately before the transfer date. However, the joint membership does not have any more votes because of the membership share or shares than it had immediately before the transfer date. (3) In this Schedule:

building society means a transferring financial institution authorised under the Financial Institutions Code of its jurisdiction to operate as a building society immediately before the transfer date.

membership share means a share in a company that was a transferring financial institution:

(a) that is taken to have been issued under this clause; and

(b) that carries the rights and obligations that were conferred or imposed on the person in a capacity other than that of shareholder, by:

(i) the institution’s rules (as in force immediately before the transfer date); and

(ii) the previous governing Code; and

(c) on which no amount is paid; and

(d) on which no amount is unpaid; and

(e) that is not:

(i) transferable or transmissible; or

(ii) capable of devolution by will or by operation of law; and

(f) that can be cancelled as set out in subclause (4).

(4) A membership share can be cancelled at the option of the holder or the company in the circumstances (if any):

(a) set out in the company’s constitution; or

(b) in which the member who holds the share could have had their membership of the institution cancelled immediately before the transfer date.

Part 2J.1 does not apply to the cancellation of a membership share.

13 Institution becoming a company limited by guarantee

(1) If a transferring financial institution of this jurisdiction is taken to be registered as a company limited by guarantee under clause 3, the following apply:

(a) each person who is a member of the institution immediately before the transfer date is taken to have given a guarantee (but only for the purpose of determining whether the person is a member of the company)

(b) each person who becomes a member of the company after the transfer date and before the amount of the relevant guarantee is determined is taken to have given a guarantee (but only for the purpose of determining whether the person is a member of the company).

(2) If a person who is taken to have given a guarantee by subclause (1) is a joint member, they are taken to have given the guarantee jointly with the other member or members of the joint membership. However, the joint membership does not have any more votes because of giving the guarantee or guarantees than it had immediately before the transfer date.

14 Institution becoming a company limited by shares and guarantee

(1) If a transferring financial institution of this jurisdiction is taken to be registered as a company limited by shares and guarantee under clause 3, the following apply:

(a) each person who is a member of the institution immediately before the transfer date is taken to have given a guarantee (but only for the purpose of determining whether the person is a member of the company)

(b) each person who becomes a member of the company after the transfer date and before the amount of the relevant guarantee is determined is taken to have given a guarantee (but only for the purpose of determining whether the person is a member of the company)

(c) any shares in the institution on issue immediately before the transfer date (other than withdrawable shares) become shares of the company

(d) any withdrawable shares of the institution on issue immediately before the transfer date become redeemable preference shares of the company.

(2) If a person who is taken to have given a guarantee by subclause (1) is a joint member, they are taken to have given the guarantee jointly with the other member or members of the joint membership. However, the joint membership does not have any more votes because of giving the guarantee or guarantees than it had immediately before the transfer date.

15 Redeemable preference shares that were withdrawable shares

(1) This Law applies to a redeemable preference share that was a withdrawable share of a transferring financial institution of this jurisdiction immediately before the transfer date, except that:

(a) the share is redeemable on the same terms that the withdrawable share was withdrawable under the Financial Institutions Code of this jurisdiction and the institution’s rules or constitution; and

(b) the holder of the share continues to have the same rights and obligations that they had by holding the withdrawable share.

(2) The provisions of this Law that apply to redeemable preference shares apply:

(a) subject to subclause (1), to redeemable preference shares of a company registered under clause 3; and

(b) to redeemable preference shares of a company (other than a company referred to in paragraph (a)) that is permitted to use the expression building society, credit union or credit society under section 66 of the Banking Act 1959;

even if the shares are the only class of shares issued by the company. (3) For the purposes of this clause, this Law includes regulations made for the purposes of this Law.

16 Liability of members on winding up

(1) If a transferring financial institution of this jurisdiction that is registered under clause 3 is wound up, each person:

(a) who was a past member of the institution at the time it became registered; and

(b) who did not again become a member; and

(c) who had not held shares in the institution;

is not liable under Division 2 of Part 5.6 on the winding up.

Note: A person who was a past member at the time of registration and who held shares in the institution may be liable as a past member under Division 2 of Part 5.6.

(2) If a company that is registered under clause 3 is wound up, a person who is taken to have given a guarantee by subclause 13(1) or 14(1) is not liable under:

(a) section 515 merely because the person is or was a member who is taken to have given a guarantee; or

(b) section 517 or paragraph 518(b) merely because the person is taken to have given a guarantee.

Note: Section 1416 and clause 10 preserve the application of section 518 to transferring financial institutions that are taken to be registered as companies limited by shares and guarantee.

Subdivision C—Share capital

17 Share capital

Transfer of certain amounts to share capital (1) On registration of a transferring financial institution of this jurisdiction as a company under clause 3:

(a) any amount of withdrawable share capital (within the meaning of the Financial Institutions Code of this jurisdiction); and

(b) any amount standing to the credit of its share premium account; and

(c) any amount standing to the credit of its capital redemption reserve;

immediately before the transfer date becomes part of the company’s share capital. Use of amount standing to credit of share premium account (2) The company may use the amount standing to the credit of its share premium account immediately before the transfer date (if any) to:

(a) provide for the premium payable on redemption of debentures or redeemable preference shares issued before the transfer date; or

(b) write off:

(i) the preliminary expenses of the institution incurred before the transfer date; or

(ii) expenses incurred, payments made, or discounts allowed before the transfer date, in respect of any issue of shares in, or debentures of, the institution.

18 Application of no par value rule

(1) Section 254C applies to shares issued by a transferring financial institution of this jurisdiction before the transfer date as well as shares issued on and after that. (2) In relation to a share issued by the institution before the transfer date:

(a) the amount paid on the share is the sum of all amounts paid to the institution at any time for the share (but not including any premium); and

(b) the amount unpaid on the share is the difference between the issue price of the share (but not including any premium) and the amount paid on the share (see paragraph (a)).

19 Calls on partly‑paid shares

The liability of a shareholder for calls in respect of money unpaid on shares issued before the transfer date by a transferring financial institution of this jurisdiction (whether on account of the par value of the shares or by way of premium) is not affected by the share ceasing to have a par value.

20 References in contracts and other documents to par value

(1) This clause applies for the purpose of interpreting and applying the following after the transfer date:

(a) a contract entered into by a transferring financial institution of this jurisdiction before the transfer date (including the institution’s constitution)

(b) a trust deed or other document executed by or in relation to the institution before the transfer date.

(2) A reference to the par value of a share issued by a transferring financial institution of this jurisdiction is taken to be a reference to:

(a) if the share is issued before the transfer date—the par value of the share immediately before then; or

(b) if the share is issued on or after the transfer date but shares of the same class were on issue immediately before then—the par value that the share would have had if it had been issued then; or

(c) if the share is issued on or after the transfer date and shares of the same class were not on issue immediately before then—the par value determined by the directors.

A reference to share premium is taken to be a reference to any residual share capital in relation to the share. (3) A reference to a right to a return of capital on a share issued by the institution is taken to be a reference to a right to a return of capital of a value equal to the amount paid in respect of the share’s par value. (4) A reference to the aggregate par value of the institution’s issued share capital is taken to be a reference to that aggregate as it existed immediately before the transfer date and:

(a) increased to take account of the par value of any shares issued after then; and

(b) reduced to take account of the par value of any shares cancelled after then.

Subdivision D—Charges

21 Registration of prior charges

(1) If, immediately before the transfer date, a charge on property of a transferring financial institution of this jurisdiction was registered under section 265 of this Law (as applied by the previous governing Code), ASIC is taken to have entered in the Australian Register of Company Charges the time, date and particulars entered in the register under the previous governing Code. (2) ASIC is taken to have done so at the beginning of the transfer date, and in accordance with subsection 265(2). (3) An act or thing done by or in relation to the institution under, or for the purposes of, a provision of sections 262 to 277 of this Law (as applied by the previous governing Code) is taken to have been done under, or for the purposes of, that provision of this Law.

Part 3—Terminating the application of the Codes to financial institutions and friendly societies

22 Cancellation of Code registrations

On the transfer date, the registration of each transferring financial institution of this jurisdiction under the previous governing Code is cancelled.

23 No new registrations under the Codes

On and from the transfer date, there are to be no new registrations under:

(a) the Financial Institutions Code of this jurisdiction; or

(b) the AFIC Code of this jurisdiction; or

(c) the Friendly Societies Code of this jurisdiction.

Part 4—The transition period

24 Modifications of constitution

(1) A company registered under clause 3 must modify its constitution before the end of the transition period so that the constitution:

(a) gives effect to this Schedule; and

(b) is consistent with this Law; and

(c) sets out the rights and obligations attaching to each class of shares on issue, including shares that are taken to have been issued by a provision of this Schedule.

(2) A company registered under clause 3 is not prevented from:

(a) modifying its constitution to change the rights and obligations attaching to any membership shares on issue; or

(b) redeeming any membership shares on issue and not providing for them in the constitution;

merely because 1 or more members of the company are deemed to have been issued with membership shares by clause 12.

25 ASIC may direct directors of a company to modify its constitution

(1) If a company registered under clause 3 has not modified its constitution so that it complies with subclause 24(1) by the end of the transition period, ASIC may direct, in writing, the directors of the company to:

(a) take the necessary or specified steps to:

(i) ensure that the company modifies its constitution so that it does comply; or

(ii) ensure that the company makes the modifications to its constitution that ASIC specifies; and

(b) take those steps within a specified time (which must be more than 28 days).

A direction may require the directors to take steps that are inconsistent with the company’s constitution. (2) ASIC may issue a direction under subclause (1) before the end of the transition period if requested by a majority of directors of the company. (3) No civil or criminal liability arises from action taken by a director in good faith and in accordance with a direction issued under subclause (1). (4) A person contravenes this subclause if, without reasonable excuse, they contravene a direction under subclause (1). (5) A person who intentionally or recklessly contravenes a direction under subclause (1) is guilty of an offence.

Penalty: 100 penalty units or imprisonment for 2 years, or both.

26 ASIC’s power to make exemption and modification orders for the transition period

(1) ASIC may:

(a) exempt a company registered under clause 3 from a provision of this Law; or

(b) declare that this Law applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

The exemption or declaration ceases to have effect at the end of the transition period (the 18 months starting on the transfer date), unless ASIC specifies a shorter period in which it ceases to have effect. (2) Without limiting subclause (1), the exemption or declaration may relate to:

(a) a change of company type; or

(b) a change to a company’s constitution; or

(c) the issue and redemption of shares;

that is connected with a requirement of or under this Law, the Life Insurance Act 1995 or the Banking Act 1959. (3) The exemption or declaration may:

(a) apply to specified provisions of this Law; or

(b) apply to a specified company registered under clause 3, a specified class of those companies, or all of those companies; and

(c) relate to any other matter generally or as specified.

(4) An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order. (5) The exemption or declaration must be in writing and ASIC must publish notice of it in the Gazette.

27 When certain modifications of a company’s constitution under an exemption or declaration take effect

(1) If the constitution of a company registered under clause 3 is modified under an exemption or declaration made under clause 26, and that modification varies or cancels, or allows the variation or cancellation of:

(a) rights attached to shares in a class of shares; or

(b) rights of members in a class of members;

the following provisions apply, and to the exclusion of section 246D if it would otherwise apply. (2) If the company is not required to lodge a copy of the modification with ASIC by or under any other provision of this Law, the company must lodge a copy of the modification with ASIC within 14 days of the modification being made. (3) If:

(a) members in the class do not all agree (whether by resolution or written consent) to the modification of the company’s constitution; or

(b) the members in the class did not have an opportunity to vote on or consent to the modification;

10% or more of the members in the class may apply to the Court to have the modification set aside.

Note: If a company has only 1 class of shares, all members are members of the class.

(4) An application may only be made within 1 month after the modification is lodged. (5) The modification takes effect:

(a) if no application is made to the Court to have it set aside—1 month after the modification is lodged; or

(b) if an application is made to the Court to have it set aside—when the application is withdrawn or finally determined.

(6) The members of the class who want to have the modification set aside may appoint 1 or more of themselves to make the application on their behalf. The appointment must be in writing. (7) The Court may set aside the modification if it is satisfied that it would unfairly prejudice the applicants. However, the Court must confirm the modification if the Court is not satisfied of unfair prejudice. (8) Within 14 days after the Court makes an order, the company must lodge a copy of it with ASIC.

28 Modification by regulations for the transition period

(1) For the purpose of facilitating the transfer of the registration of transferring financial institutions to this Law, the regulations may modify the operation of this Law (including the provisions applied by clause 36) in relation to:

(a) a company registered under clause 3; or

(b) a specified class of companies registered under clause 3.

(2) Regulations made for the purposes of this clause may not:

(a) create an offence with a penalty greater than 10 penalty units; or

(b) increase the penalty for an existing offence; or

(c) substitute for an existing offence an offence with a penalty greater than the penalty for the existing offence; or

(d) modify an obligation, contravention of which will result in committing an offence, so as to make it more difficult to comply with.

(3) Regulations made for the purposes of this clause cease to have effect at the end of the transition period (the 18 months starting on the transfer day).

Part 5—Demutualisations

29 Disclosure for proposed demutualisation

(1) If a modification of the constitution of an unlisted company registered under clause 3 is proposed and the modification would have the effect of:

(a) varying or cancelling the rights of members, or a class of members, to the reserves of the company; or

(b) varying or cancelling the rights of members, or a class of members, to the assets of the company on a winding up; or

(c) varying or cancelling the voting rights of members or a class of members; or

(d) otherwise varying or cancelling rights so that Part 2F.2 (Class rights) applies; or

(e) allowing 1 of those variations or cancellations of rights;

the following rules apply:

(f) notice of the meeting of the company’s members at which the proposed modification is to be considered must be accompanied by the documents listed in subclause (4);

(g) notice of the meeting may not be shortened under subsection 249H(2);

(h) the company must lodge with ASIC the notice and the documents referred to in paragraphs (4)(a) and (c) within 7 days after notice of the meeting is given.

(2) If:

(a) an issue of shares by an unlisted company registered under clause 3 would have the effect of varying or cancelling rights so that Part 2F.2 (Class rights) applies; and

(b) at least 1 of the following is required to approve the share issue, or variation or cancellation of rights:

(i) a meeting of the company’s members;

(ii) a resolution passed at a meeting of the class of members concerned;

(iii) written consent of a specified proportion of members in the class concerned;

the following rules apply (in addition to those that apply under Part 2F.2):

(c) notice of the meeting or consent process must be accompanied by the documents listed in subclause (4);

(d) the company must lodge with ASIC the notice of the meeting or consent process and the documents referred to in paragraphs (4)(a) and (c) within 7 days after the notice is given;

(e) notice of the meeting may not be shortened under subsection 249H(2).

Paragraph (c) need not be complied with to the extent that a person has already been given the documents. (3) ASIC may exempt a company from this Part under clause 30. (4) The documents that must accompany the notice are:

(a) a disclosure statement that:

(i) satisfies clause 31; and

(ii) ASIC has registered under clause 32; and

(b) in the case of a proposed modification of the constitution of a company—an estimate of the financial benefits (if any) the member will be offered if the proposed modification occurs; and

(c) a report by an expert that:

(i) states whether, in the expert’s opinion, the proposed modification or share issue is in the best interests of the members of the company as a whole; and

(ii) gives the expert’s reasons for forming that opinion; and

(iii) complies with subclauses 33(2) and (3).

(5) If the company contravenes subclause (1) or (2) it is not guilty of an offence. (6) A person contravenes this subclause if they are involved in a contravention of subclause (1) or (2).

Note 1: This subclause is a civil penalty provision.

Note 2: Section 79 defines involved.

(7) A person commits an offence if they are involved in a contravention of subclause (1) or (2) and the involvement is dishonest.

Penalty: 2,000 penalty units or imprisonment for 5 years, or both.

(8) In this clause:

reserves includes general reserves and retained earnings of the company.

unlisted company means a company (registered under clause 3) that does not have voting shares quoted on a stock market of a securities exchange.

30 ASIC’s exemption power

(1) If ASIC is satisfied that a company does not have a mutual structure, it may exempt the company from this Part. (2) If ASIC is satisfied that:

(a) a proposed modification of the constitution of a company will not result in or allow a modification of the mutual structure of the company; or

(b) an issue of shares would not result in or allow a modification of the mutual structure of the company;

it may exempt the company from this Part in relation to the proposed modification or share issue. (3) In determining whether the company has a mutual structure, ASIC may take into account:

(a) the particular structure, circumstances and history of the company; and

(b) whether:

(i) each customer of the company (for example an account holder, mortgagor or policy holder) is required to be a member of the company; or

(ii) each member (or joint membership) has only 1 vote; and

(c) any other relevant matter in relation to the company or its members.

(4) In determining whether the proposed modification or share issue will result in or allow a modification of the mutual structure of the company, ASIC must take into account whether the proposed modification or share issue would have the effect of converting the company into a company run for the purpose of yielding a return to shareholders. (5) An exemption under subclause (2) may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order. (6) The exemption must be in writing and ASIC must publish notice of it in the Gazette. (7) For the purposes of this clause, the provisions of this Part include regulations made for the purposes of this Part.

31 Coverage of disclosure statement

The disclosure statement must give all the information that members would reasonably require and expect to be given to make an informed decision about the proposed modification or share issue.

32 Registration of disclosure statement

(1) ASIC must register the disclosure statement if satisfied that the statement adequately sets out or explains the following (if relevant):

(a) the variation or cancellation of members’ rights

(b) that the proposed modification will allow the variation or cancellation of members’ rights

(c) in relation to a share issue:

(i) who will and will not receive shares under the issue; and

(ii) the rights and obligations attached to the shares; and

(iii) the implications of the share issue for the management and structure of the company

(d) what financial benefits (if any) members will be offered if the proposed modification occurs and why the benefits are considered to be appropriate

(e) the basis upon which members’ entitlement to the financial benefits will be determined, including:

(i) any minimum period of membership that a member must satisfy to receive benefits; or

(ii) whether members must pay an amount or provide other value to receive benefits

(f) any preferential allocation of benefits to members, or a class of members, and how that allocation is to be determined

(g) any benefits officers of the company (including retiring officers) may receive (whether directly or indirectly) in connection with the proposed modification or share issue

(h) any other proposed changes to the company that are related to the proposed modification or share issue (for example, whether the company proposes to list its securities for quotation on a securities market of a stock exchange or merge with another company)

(i) the new name of the company, if the company’s name is to be changed in connection with the proposed modification or share issue, or that it is not proposed to change the company’s name

(j) the procedural steps required to vary or cancel the members’ rights

(k) the procedural steps required to issue the shares

(l) how voting on the proposed modification or share issue will take place.

(2) In deciding whether the disclosure statement adequately sets out or explains the matters in subclause (1), ASIC may also have regard to:

(a) the readability of the statement; and

(b) whether the statement would be readily comprehensible by the members of the company concerned.

(3) The disclosure statement must include a statement to the effect that registration of the disclosure statement:

(a) is on the basis that the statement adequately sets out or explains the matters in subclause (1); and

(b) does not mean that ASIC has considered whether the proposed modification or share issue is in the best interests of the members of the company as a whole.

(4) Subclause (1) does not limit clause 31.

33 Expert’s report

(1) If the company obtains 2 or more reports each of which could be used for the purposes of paragraph 29(4)(c), a copy of each report must:

(a) be lodged with ASIC; and

(b) be given to each member entitled to receive a disclosure statement.

Penalty: 25 penalty units or imprisonment for 6 months, or both.

(2) The report must be by an expert who is not an associate of the company. (3) The report must set out details of:

(a) any relationship between the expert and the company, including any circumstances in which the expert gives it advice, or acts on its behalf, in the proper performance of the functions attaching to the expert’s professional capacity or business relationship with the company; and

(b) any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert’s ability to give an unbiased opinion; and

(c) any fee, payment or other benefit (whether direct or indirect) that the expert has received or will or may receive in connection with making the report.

34 Unconscionable conduct in relation to demutualisations

(1) A person must not engage in:

(a) conduct that is, in all the circumstances, unconscionable; or

(b) conduct that is misleading or deceptive or is likely to mislead or deceive;

in relation to:

(c) a modification of the constitution of an unlisted company that is a modification to which this Part applies; or

(d) anything done in reliance on, in conjunction with or in connection with the modification; or

(e) a share issue to which this Part applies.

(2) In determining whether a person has engaged in conduct that contravenes paragraph (1)(a), have regard to:

(a) whether the person, or someone acting for the person, exerted undue influence or pressure on, or used unfair tactics against, members of the company; and

(b) whether the person, or someone acting for the person, engaged in conduct that resulted in a member or someone else gaining, or being in a position to gain, a benefit that the members generally did not, or would not be in a position to, gain.

This subclause does not limit subclause (1). (3) A person who contravenes subclause (1) is not guilty of an offence.

35 Orders the Court may make

(1) Without limiting the Court’s powers under Part 9.5, if the Court is satisfied that a person has engaged in conduct constituting a contravention of subclause 34(1), the Court may make 1 or more of the following orders:

(a) an order requiring the person or a person involved in the contravention to disclose to the public, to a particular person or to a particular class of persons, in the manner specified in the order, specified information, or information of a specified kind, (being information that is in the possession of the person to whom the order is directed or to which that person has access)

(b) an order requiring the person or a person involved in the contravention to publish, at their own expense, in a manner and at times specified in the order, advertisements the terms of which are specified in, or are to be determined in accordance with, the order

(c) any order that it thinks necessary or desirable:

(i) to protect the rights or interests of any person affected by the conduct; or

(ii) to ensure, as far as possible, that a proposed modification or share issue proceeds in the manner in which it would have proceeded if the conduct had not been engaged in

(d) without limiting the generality of paragraph (c):

(i) an order prohibiting the exercise of voting or other rights attached to specified shares; or

(ii) an order directing a company not to make payment, or to defer making payment, of any amount or amounts due from the company in respect of specified shares; or

(iii) an order prohibiting the acquisition or disposal of, or of an interest in, specified shares; or

(iv) an order directing the disposal of, or of an interest in, specified shares; or

(v) an order directing a company not to register a transfer or transmission of specified shares; or

(vi) an order that an exercise of the voting or other rights attached to specified shares be disregarded; or

(vii) an order directing a company not to issue shares to a person who holds shares in the company, being shares that were proposed to be issued to the person because the person holds shares in the company or pursuant to an offer or invitation made or issued to the person because the person holds shares in the company.

(2) Without limiting the Court’s powers under Part 9.5, if, in a proceeding, the Court is satisfied that:

(a) a person has engaged in conduct constituting a contravention of subclause 34(1); and

(b) a member of the company has suffered, or is likely to suffer, loss or damage because of that conduct;

the Court may make the orders that it thinks are appropriate to compensate the member (in whole or in part) or to prevent or reduce the loss or damage, including:

(c) an order directing the person or a person who was involved in the contravention to refund money or return property to the member

(d) an order directing the person or a person who was involved in the contravention to pay to the member the amount of the loss or damage

(e) an order listed in paragraph (1)(d).

(3) An application for an order under this clause may be made by ASIC or a member of the company.

Part 6—Continued application of fundraising provisions of the Friendly Societies Code

36 Friendly Societies Code to apply to offers of interests in benefit funds

(1) The following apply as a law of this jurisdiction as from the transfer date:

(a) Divisions 2 and 3 of Part 4B of the Friendly Societies Code

(b) Division 2 of Part 1, and Division 1 of Part 4B, of that Code to the extent to which they provide for the interpretation of terms used in the Divisions referred to in paragraph (a)

(c) sections 28, 29 and 128 of that Code to the extent to which they apply for the purposes of the Divisions referred to in paragraph (a)

(d) the regulations in force immediately before the transfer date under Part 4B of that Code to the extent to which they were made for the purposes of the provisions referred to in paragraphs (a), (b) and (c)

(e) standards adopted by that Code for the purposes of the provisions referred to in paragraphs (a), (b) and (c).

(2) The provisions referred to in subclause (1) apply as if:

(a) references in the provisions to a society were references to a friendly society within the meaning of the Life Insurance Act 1996; and

(b) references to a benefit fund were references to an approved benefit fund within the meaning of the Life Insurance Act 1996; and

(c) references in the provisions to an SSA (whether of this jurisdiction or another jurisdiction) were references to ASIC; and

(d) references in the provisions to lodging a document were references to lodging the document with ASIC; and

(e) references in the provisions to the Code were references to this Law; and

(f) references in the provisions to Part 4B of the Code were references to the provisions applied by this clause; and

(g) references to a penalty of $20,000 were references to a penalty of 200 penalty units; and

(h) references to a penalty of $5,000 were references to a penalty of 50 penalty units; and

(i) references to a penalty of $2,500 were references to a penalty of 25 penalty units; and

(j) references to a penalty of $1,000 were references to a penalty of 10 penalty units; and

(k) subsection 135(2) of the Friendly Societies Code were omitted; and

(l) paragraph 137(1)(e) of the Friendly Societies Code were omitted and replaced with a provision that requires a disclosure document to contain any other information that ASIC requires to be included in the document; and

(m) subsection 137(3) of the Friendly Societies Code were omitted and replaced with a provision that requires each copy of a disclosure document to:

(i) state that the document has been lodged with ASIC; and

(ii) specify the date of lodgment; and

(iii) state that ASIC takes no responsibility as to the contents of the document.

(3) If there is an inconsistency between:

(a) the provisions of Division 2 of Part 1, or Division 1 of Part 4B, of the Friendly Societies Code; and

(b) the provisions of Chapter 1 of this Law;

the provisions of the Code prevail for the purposes of interpreting the provisions applied by subclause (1).

Part 7—Transitional provisions

37 Unclaimed money

(1) On and from the transfer date, section 414 applies to a sum or other property that, immediately before the transfer date, is covered by section 414 as applied by:

(a) section 337 of the Financial Institutions Code of this jurisdiction; or

(b) section 399 of the Friendly Societies Code of this jurisdiction.

(2) On and from the transfer date, section 544 applies to an amount of money that, immediately before the transfer date, is covered by section 544 as applied by:

(a) section 342 of the Financial Institutions Code of this jurisdiction; or

(b) section 403 of the Friendly Societies Code of this jurisdiction.

(3) Sections 414 and 544, as applied by this clause, apply as if:

(a) references to Part 9.7 were references to the unclaimed money law of this jurisdiction; and

(b) references to the Commission or ASIC were references to the Minister administering the unclaimed money law of this jurisdiction.

(4) In this clause:

(a) the Unclaimed Money Act 1995 of New South Wales; or

(b) the Unclaimed Moneys Act 1962 of Victoria; or

(c) Part 8 of the Public Trustee Act 1978 of Queensland; or

(d) the Unclaimed Money Act 1990 of Western Australia; or

(e) the Unclaimed Moneys Act 1891 of South Australia; or

(f) the Unclaimed Moneys Act 1918 of Tasmania; or

(g) the Unclaimed Moneys Act 1950 of the Australian Capital Territory; or

38 Modification by regulations

(1) The regulations may modify the operation of this Law (including the provisions applied by clause 36) in relation to:

(a) a company registered under clause 3; or

(b) a company that is permitted to use the expression building society, credit union or credit society under section 66 of the Banking Act 1959; or

(c) a company that is a friendly society for the purposes of the Life Insurance Act 1995; or

(d) a specified class of any of those companies.

(2) Regulations made for the purposes of this clause may only modify this Law in relation to the following matters:

(a) issuing, cancelling or redeeming membership shares or redeemable preference shares

(b) inspection of the register of members required by section 169

(c) giving notice of a meeting of a company’s members

(d) members’ rights to request the directors to hold a general meeting or to move a resolution at a general meeting

(e) issuing share certificates for membership shares or redeemable preference shares, or numbering those shares

(f) the publication of the names and addresses of members in the annual return

(g) the report to members required by section 314

(h) disposing of securities in a company if the whereabouts of the holder of the securities is unknown as described in section 1343

(i) the treatment of members who hold shares jointly or who have jointly given a guarantee

(j) selective buy‑backs.

(3) Regulations made for the purposes of this clause may not:

(a) create an offence with a penalty greater than 10 penalty units; or

(b) increase the penalty for an existing offence; or

(c) substitute for an existing offence an offence with a penalty greater than the penalty for the existing offence; or

(d) modify an obligation, contravention of which will result in committing an offence, so as to make it more difficult to comply with.

39 Regulations may deal with transitional, saving or application matters

(1) The regulations may deal with matters of a transitional, saving or application nature relating to:

(a) the transfer of the registration of transferring financial institutions to this Law by this Schedule; or

(b) the amendments made by Schedule 3 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999.

(2) Without limiting subclause (1), the regulations may provide for a matter to be dealt with, wholly or partly, in any of the following ways:

(a) by applying (with or without modifications) to the matter:

(i) provisions of a law of the Commonwealth, or of a State or Territory; or

(ii) provisions of a repealed or amended law of the Commonwealth, or of a State or Territory, in the form that those provisions took before the repeal or amendment; or

(iii) a combination of provisions referred to in subparagraphs (i) and (ii)

(b) by otherwise specifying rules for dealing with the matter

(c) by specifying a particular consequence of the matter, or of an outcome of the matter, for the purposes of this Law.

(3) Without limiting subclause (1) or (2), the regulations may provide for the continued effect, for the purposes of this Law, of a thing done or instrument made, or a class of things done or instruments made, before the transfer date under or for the purposes of a provision of a previous governing Code of a transferring financial institution of this jurisdiction. In the case of an instrument, or class of instruments, the regulations may provide for the instrument or instruments to continue to have effect subject to modifications. (4) Without limiting subclause (3), regulations providing for the continued effect of things done or instruments made may permit all or any of the following matters to be determined in writing by a specified person, or by a person in a specified class of persons:

(a) the identification of a thing done or instrument made, or a class of them, that is to continue to have effect

(b) the purpose for which a thing done or instrument made, or a class of them, is to continue to have effect

(c) any modifications subject to which an instrument made, or a class of instruments made, is to continue to have effect.

(5) Without limiting subclause (1) or (2), the regulations may provide for the application of Chapter 5 of this Law or a similar law about external administration (in whole or in part and with or without modification) to a transferring financial institution of this jurisdiction if, immediately before the transfer date:

(a) the institution is under external administration (however described); and

(b) the provisions of Chapter 5 are not already applied to it, or in relation to it, by a law of this jurisdiction.

(6) In this clause, a reference to a law, whether of the Commonwealth or of a State or Territory, includes a reference to an instrument made under such a law.

40 Court may resolve transitional difficulties

(1) If a difficulty arises in applying a provision of this Law to a transferring financial institution of this jurisdiction that is registered as a company under clause 3, the Court may, on the application of an interested person, make such orders as it thinks proper to remove the difficulty. (2) An order under this clause has effect despite anything in a provision of this Law. (3) This clause has effect subject to the Constitution.

Part 2—Consequential amendments

2 Section 9 (definition of AFIC Codes)

3 Section 9

APRA means the Australian Prudential Regulation Authority.

4 Section 9 (definition of building society)

5 Section 9 (definition of building society special services provider)

6 Section 9 (paragraph (a) of the definition of constitution)

(a) a company’s constitution, which (where relevant) includes rules and consequential amendments that are part of the company’s constitution because of the Life Insurance Act 1995; or

7 Section 9 (at the end of the definition of constitution)

Add:

Note: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution. They override this Law. See Subdivision 2 of Division 4 of Part 2A of that Act.

8 Section 9 (definition of credit union)

9 Section 9 (definition of credit union special services provider)

10 Section 9 (definition of financial institution)

11 Section 9 (definition of Financial Institutions Codes)

12 Section 9 (paragraph (b) of the definition of public company)

Omit “a financial institution or”.

13 Section 9 (definition of registrable Australian body)

Omit “a financial institution or”.

14 Section 9 (definition of share)

15 Section 9 (definition of special services provider)

16 Section 9 (definition of withdrawable share)

17 Subsection 57A(3)

18 Paragraph 66A(1)(c)

19 Paragraph 66A(2A)(e)

20 Paragraph 66A(2)(b)

21 Paragraph 66A(2)(g)

22 Subsection 66A(3)

Omit “, other than a financial institution,”.

23 Paragraph 66A(4)(a)

24 Paragraph 66A(6)(a)

25 Paragraph 66A(7)(a)

26 Paragraph 69A(4)(c)

27 Paragraph 69A(5)(a)

28 After subsection 92(2)

(2A) In Parts 7.3 to 7.6 (inclusive):

securities includes an interest in a friendly society benefit fund.

29 Part 1.2B

Repeal the Part.

30 Subsection 136(1) (note)

Omit “Note”, substitute “Note 1”.

31 At the end of subsection 136(1)

Add:

Note 2: The Life Insurance Act 1995 has rules about how benefit fund rules become part of a company’s constitution and about amending those rules. They override this Law. Consequential amendments to the rest of the company’s constitution can be made under that Act or this Law. See Subdivision 2 of Division 4 of Part 2A of that Act.

32 At the end of subsection 137(1)

Add:

Note: The Life Insurance Act 1995 has rules about when approved benefit fund rules (which become part of the company’s constitution), and amendments to them, take effect. It also has rules about when consequential amendments to the rest of the company’s constitution made under that Act take effect. They override this Law.
See Subdivision 2 of Division 4 of Part 2A of that Act.

33 At the end of section 147

Add:

(4) The regulations may specify that a particular unacceptable name is available to a company if:

(a) a specified public authority, or an instrumentality or agency of the Crown in right of the Commonwealth, a State or the Capital Territory has consented to the company using or assuming the name; or

(b) the company is otherwise permitted to use or assume the name by or under:

(i) an Act of the Commonwealth, a State or the Capital Territory; or

(ii) a specified provision of an Act of the Commonwealth, a State or the Capital Territory.

The consent of the authority, instrumentality or agency may be given subject to conditions.

Note: If the consent is withdrawn, the company ceases to be permitted or the company breaches a condition, ASIC may direct it to change its name under section 158.

34 At the end of subsection 158(1)

Add:

; or (c) a consent given under subsection 147(4) to use or assume the name has been withdrawn; or

(d) the company has breached a condition on a consent given under subsection 147(4); or

(e) the company ceases to be permitted to use or assume the name (as referred to in paragraph 147(4)(b)).

35 Subsection 169(8)

Joint holders (8) For the purposes of this section:

(a) 2 or more persons who jointly hold shares in the company or interests in the scheme are taken to be a single member of the company or scheme in relation to those shares or interests; and

(b) 2 or more persons who have given a guarantee jointly are taken to be a single member of the company.

They may also be members of the company or scheme because of shares or interests that they hold, or a guarantee that they have given, in their own right or jointly with others.

36 After Part 2F.2 (heading)

Note: This Part does not apply to the adoption or amendment of benefit fund rules or to consequential amendments to the rest of the company’s constitution made under the Life Insurance Act 1995, see Subdivision 2 of Division 4 of Part 2A of that Act.

37 Subsection 249A(2)

Omit “If a share is held jointly, each of the joint members must sign”, substitute “Each member of a joint membership must sign”.

38 Subsection 249J(1)

Omit “If a share is held jointly, notice need only be given to 1 of the members”, substitute “Notice need only be given to 1 member of a joint membership”.

39 Paragraph 461(1)(j)

40 Paragraph 462(2)(h)

41 Subsection 462(3)

42 Subsection 482(1)

Omit “on the application of the liquidator or of a creditor or contributory”, substitute “on application”.

43 After subsection 482(1)

(1A) An application may be made by:

(a) in any case—the liquidator, or a creditor or contributory, of the company; or

(b) in the case of a company registered under the Life Insurance Act 1995—APRA.

44 After subsection 511(1)

(1A) APRA may apply to the Court under subsection (1) in relation to a company that is a friendly society within the meaning of the Life Insurance Act 1995 and which may be wound up voluntarily under subsection 180(2) of that Act.

45 At the end of section 601DC

Add:

(4) The regulations may specify that a particular unacceptable name is available to a registrable Australian body or foreign company if:

(a) a specified public authority, or an instrumentality or agency of the Crown in right of the Commonwealth, a State or the Capital Territory has consented to the body or company using or assuming the name; or

(b) the body or company is otherwise permitted to use or assume the name by or under a specified provision of an Act of the Commonwealth, a State or the Capital Territory.

The consent of the authority, instrumentality or agency may be given subject to conditions.

Note: If the consent is withdrawn, the body or company ceases to be permitted or it breaches a condition, ASIC may direct it to change its name under section 601DJ.

46 At the end of subsection 601DJ(1)

Add:

; or (c) a consent given under subsection 601DC(4) to use or assume the name has been withdrawn; or

(d) the body or company has breached a condition on a consent given under subsection 601DC(4); or

(e) the body or company ceases to be permitted to use or assume the name (as referred to in paragraph 601DC(4)(b)).

47 Paragraph 601KA(5)(a)

Omit “, building society or other financial institution”.

48 Division 5 of Part 7.11

Repeal the Division.

49 Subsection 1047(2AA)

50 Section 1083A

51 Subsection 1097(1) (paragraph (aa) of the definition of eligible body)

52 Paragraph 1301(1)(a)

53 Paragraph 1301(1)(d)

54 Subsection 1301(2)

55 Subsection 1301(3)

56 Subsection 1301(4)

57 Subsection 1302(7)

Omit “or a financial institution”.

58 Subsection 1306(3)

59 Subsection 1306(4)

60 At the end of section 1317DA

Add:

; Subclause 29(6) of Schedule 4.

61 After paragraph 1317E(1)(j)

(k) subclause 29(6) of Schedule 4.

62 At the end of Division 11 of Part 11.2

Add:

Division 11A—Transfer of financial institutions and friendly societies by the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999

1465A Transfer of financial institutions and friendly societies

Schedule 4 deals with the transfer of the registration of financial institutions and friendly societies to this Law.

Part 3—Other minor amendments

63 Paragraph 437D(3)(a)

Omit “bank”, substitute “ADI”.

Schedule 4 Amendment of the Life Insurance Act 1995

Schedule 4—Amendment of the Life Insurance Act 1995

1 Subsection 3(1)

Before “object”, insert “principal”.

Note: The heading to section 3 is altered by omitting “Object” and substituting “Objects”.

2 After subsection 3(1)

(1A) An additional object of this Act is to protect the interests of persons entitled to other kinds of benefits provided in the course of carrying on life insurance business (including business that is declared to be life insurance business).

3 Subsection 3(2)

Omit “this object”, substitute “these objects”.

4 At the end of section 3

Add:

(3) Generally, this Act achieves these objects by provisions applying to all life companies. However, there are a number of special provisions that apply only to friendly societies (see in particular Part 2A).

5 Subsection 9A(7)

Omit “within the meaning of section 67 of the National Health Act 1953”.

6 At the end of subsection 11(1)

Add:

Note: Declarations under sections 12A and 12B have the effect of extending the kinds of business that are life insurance business for the purposes of this Act.

7 Paragraph 11(3)(a)

Omit “friendly society or”.

8 At the end of subsection 11(3)

Add:

Note: This subsection has effect subject to sections 12A and 12B (under which certain business may be declared to be life insurance business for the purposes of this Act).

9 Subsection 12(2)

(2) APRA may, at the request of a life company, declare, in writing, that life insurance business carried on by the life company and included in one class of life insurance business is to be treated, for the purposes of this Act, as if it were included in the other class of life insurance business.

10 After section 12

12A Declarations that insurance or annuity business is life insurance business

(1) APRA may, on the application of a company, declare, in writing, that insurance business (other than health insurance business or business of insurance against loss of, or damage to, property) or business relating to the payment of annuities:

(a) that is carried on by the company; or

(b) that the company proposes to carry on;

is to be treated, for the purposes of this Act, as if it were life insurance business. (2) The application must comply with any applicable requirements in Prudential Rules. (3) APRA must only make the declaration if it is satisfied that:

(a) the company is a life company; or

(b) the company is not currently a life company, but the only business it proposes to carry on if the declaration is made is:

(i) the business in respect of which the declaration is sought; or

(ii) that business and other business that will be, or is likely to be declared to be, life insurance business.

(4) In deciding whether to make the declaration, APRA may also have regard to the following matters:

(a) whether the business in respect of which the declaration is sought is similar in nature to other life insurance business;

(b) whether it would be appropriate for the business to be regulated under this Act;

(c) whether it would be more appropriate for the business to be regulated under some other law (for example, the Insurance Act 1973);

(d) the tax treatment of benefits provided in the course of the business;

(e) if the company is not registered under this Act—whether the company would be able to be registered under this Act;

(f) any other matter that APRA considers is relevant.

(5) The declaration must also state the class of life insurance business in which the business is to be treated as being included. (6) If APRA makes a declaration:

(a) this Act has effect accordingly; and

(b) APRA must give a copy of the declaration to the company.

12B Declarations that other financial business is life insurance business

(1) This section applies to business consisting of the provision of eligible financial benefits. For this purpose, an eligible financial benefit is a benefit in relation to which the following conditions are satisfied:

(a) the benefit is to be provided by a company to a person in accordance with a contract;

(b) the person’s entitlement to the benefit is conditional on amounts being paid in accordance with the contract;

(c) the benefit is an amount of money (and is not, for example, the provision of a service or facility);

(d) the benefit is not an excluded benefit under any of the following subparagraphs:

(i) the benefit is an excluded benefit if the contract is entered into in the course of banking business, as defined in section 5 of the Banking Act 1959, carried on by the company;

(ii) the benefit is an excluded benefit if the right to the benefit constitutes an interest in a registered scheme, as defined in section 9 of the Corporations Law;

(iii) the benefit is an excluded benefit if the right to the benefit constitutes an interest in a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust or a public sector superannuation scheme, as defined in section 10 of the Superannuation Industry (Supervision) Act 1993;

(iv) the benefit is an excluded benefit if it is provided under a contract of insurance entered into in the course of carrying on health insurance business;

(v) the benefit is an excluded benefit if it is a benefit of a kind specified in regulations for the purposes of this subparagraph.

(2) APRA may, on the application of a company, declare, in writing, that business:

(a) that:

(i) is carried on by the company; and

(ii) is business to which this section applies; or

(b) that:

(i) the company proposes to carry on; and

(ii) will, when it is carried on, be business to which this section applies;

is to be treated, for the purposes of this Act, as if it were life insurance business. (3) The application must comply with any applicable requirements in Prudential Rules. (4) APRA must only make the declaration if it is satisfied that:

(a) the company is a life company; or

(b) the company is not currently a life company, but the only business it proposes to carry on if the declaration is made is:

(i) the business in respect of which the declaration is sought; or

(ii) that business and other business that will be, or is likely to be declared to be, life insurance business.

(5) In deciding whether to make the declaration, APRA may also have regard to the following matters:

(a) whether the business in respect of which the declaration is sought is similar in nature to other life insurance business;

(b) whether it would be appropriate for the business to be regulated under this Act;

(c) whether it would be more appropriate for the business to be regulated under some other law (for example, Chapter 5C of the Corporations Law);

(d) the tax treatment of benefits provided in the course of the business;

(e) if the company is not registered under this Act—whether the company would be able to be registered under this Act;

(f) any other matter that APRA considers is relevant.

(6) The declaration must also state the class of life insurance business in which the business is to be treated as being included. (7) If APRA makes a declaration:

(a) this Act has effect accordingly; and

(b) APRA must give a copy of the declaration to the company.

11 After Part 2

Part 2A—Special provisions relating to life companies that are friendly societies

Division 1—Preliminary

16A Overview

(1) The concept of a friendly society is defined for the purposes of this Act in section 16C. (2) A friendly society will be a life company if it carries on life insurance business in Australia. (3) In working out whether a friendly society does carry on life insurance business (within the meaning of section 11), the effect of Division 3 must be taken into account. The effect of any relevant declarations under section 12A or 12B must also be taken into account. (4) This Act applies to life companies that are friendly societies subject to:

(a) the modified operation of key concepts set out in Division 3; and

(b) the modifications relating to statutory funds set out in Division 4; and

(c) any other modifications set out in Division 5 or in regulations for the purposes of section 16ZC.

(5) In addition to the modifications set out in this Part and in regulations for the purposes of section 16ZC, this Act includes some other special provisions in relation to friendly societies. See in particular:

(a) various provisions in Division 2 of Part 6 about auditors of friendly societies; and

(b) various provisions in Division 2 of Part 8 about winding up of friendly societies.

(6) Unless a contrary intention appears, a reference in this Act to a particular provision of this Act also includes, if that provision has been modified as mentioned in subsection (4), a reference to that provision as so modified.

Note: So, for example, if a provision to which section 125A or 125B applies has been modified, an exemption order under that section may be made in relation to the provision as so modified.

16B Definitions

(1) For the purposes of this Act:

adequately adopted, in relation to benefit fund rules or an amendment of benefit fund rules, has the meaning given by subsection (2).

approved benefit fund means a benefit fund for which there are approved benefit fund rules.

approved benefit fund rules means rules (as amended from time to time by amendments in force under section 16T) in relation to which the following conditions are satisfied:

(a) an approval under section 16L is in force in relation to the rules; and

(b) the rules are in force under section 16N.

benefit fund means a fund:

(a) that is established to provide benefits in accordance with rules of a friendly society; and

(b) that is established in the records of the friendly society.

benefit fund rules, in relation to a benefit fund, means the rules referred to in paragraph (a) of the definition of benefit fund.

friendly society has the meaning given by section 16C.

jointly regulated friendly society has the meaning given by subsection 16ZB(2).

(2) For the purposes of this Act, benefit fund rules of a company have, or an amendment of benefit fund rules of a company has, been adequately adopted if:

(a) the rules have, or the amendment has, been adopted by or on behalf of the company, or by or on behalf of the members or a class of the members of the company, in a way set out in Prudential Rules for the purposes of this subsection; and

(b) APRA considers that adoption of the rules or the amendment in that way adequately takes into account the interests of members of the company.

APRA may consult ASIC in considering the matters referred to in paragraph (b).

Division 2—Friendly societies and how this Act applies to them

16C What is a friendly society?

(1) For the purposes of this Act, a friendly society is a body:

(a) that is registered as a company under the Corporations Law of a State or an internal Territory; and

(b) that is either:

(i) taken to be registered under this Act because of item 11 of Schedule 8 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999; or

(ii) covered by a determination under subsection (2).

(2) APRA may, in writing, determine that a specified body that is registered as a company under the Corporations Law of a State or an internal Territory is a friendly society for the purposes of this Act.

Note: A company may be specified by name, by inclusion in a specified class or in some other way.

(3) APRA may, in writing, vary or revoke a determination made under subsection (2). (4) APRA must comply with any applicable requirements in Prudential Rules relating to the circumstances in which the powers under subsections (2) and (3) may be exercised. (5) If APRA:

(a) makes a determination under subsection (2); or

(b) varies or revokes a determination under subsection (3);

APRA must cause notice of that action to be published in the Gazette. If the action relates to a particular company, otherwise than because the company is included in a specified class of companies, APRA must also give the company written notice of the action. (6) If APRA:

(a) makes a determination under subsection (2); or

(b) varies or revokes a determination under subsection (3);

APRA must also give notice of that action to ASIC.

16D Act applies to friendly societies in accordance with this Part

This Act applies to a friendly society subject to the provisions of this Part.

Note: As noted in subsection 16A(5), this Act also contains some other special provisions in relation to friendly societies.

16E Restriction on use of expression friendly society

(1) A body corporate is guilty of an offence if:

(a) it assumes or uses, in Australia, the expression friendly society in relation to a financial business carried on by the body corporate (whether or not in Australia); and

(b) it is not a friendly society; and

(c) APRA did not consent to that assumption or use of that expression.

Note: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(2) If a body corporate assumes or uses the expression friendly society in circumstances that give rise to the body corporate committing an offence against subsection (1), the body corporate is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the body corporate committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

(3) A consent may be expressed to apply to a particular body corporate or to bodies corporate included in a class of bodies corporate. (4) APRA may, at any time:

(a) impose conditions, or additional conditions, on a consent; or

(b) vary or revoke conditions imposed on a consent; or

(c) revoke a consent.

(5) The form of the granting of a consent, or the taking of action under subsection (4) in relation to a consent, is to be as follows:

(a) if the consent applies to a particular body corporate—notice in writing served on the body corporate;

(b) if the consent applies to a class of bodies corporate—notice in writing published in the Gazette.

(6) If APRA:

(a) grants a consent; or

(b) takes action under subsection (4) in relation to a consent;

APRA must also give ASIC notice of the granting of the consent or the taking of that action. (7) A body corporate is guilty of an offence if:

(a) it has been given a consent under this section; and

(b) it contravenes a condition to which the consent is subject.

Note: If a body corporate is convicted of an offence against this subsection, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty stated above.

(8) If a body corporate does or fails to do an act in circumstances that give rise to the body corporate committing an offence against subsection (7), the body corporate is guilty of an offence against that subsection in respect of:

(b) each subsequent day (if any) on which the circumstances that gave rise to the body corporate committing the offence continue (including the day of conviction for any such offence or any later day).

Note: This subsection is not intended to imply that section 4K of the Crimes Act 1914 does not apply to offences against this Act or the regulations.

(9) In this section:

financial business means a business that:

(a) consists of, or includes, the provision of financial services; or

(b) relates, in whole or in part, to the provision of financial services.

Division 3—Modified operation of key concepts

16F Issue, ownership etc. of policies

New interests in benefit funds (1) A friendly society is taken to issue a policy to a person when it accepts an application by the person for an interest in a benefit fund of the friendly society in accordance with the benefit fund rules. However, acceptance of an application for an increase to, or a continuation of, an existing interest in a benefit fund does not constitute the issue of a policy. Interests in benefit funds existing as at the transfer date (2) An interest that a person holds in a benefit fund of a friendly society on the date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 is taken to be a policy issued to the person by the friendly society. Terms etc. of the policy (3) If subsection (1) or (2) applies, then:

(a) the benefit fund rules are taken to be the terms of the policy referred to in that subsection; and

(b) the owner of the policy is taken to be:

(i) the person referred to in that subsection; or

(ii) if that person’s rights to the interest in the benefit fund have been assigned under this Act or transferred by the operation of the benefit fund rules—the person who has those rights; and

(c) an amount that is required or permitted, by the benefit fund rules, to be paid in respect of those rights is taken to be a premium in respect of the policy; and

(d) the policy is taken to be referable to the benefit fund.

Note 1: Approved benefit fund rules have effect as a contract (see section 16Z).

Note 2: The policy that a friendly society is taken by subsection (1) or (2) to issue or to have issued will, depending on the terms of the benefit fund rules, be:

(a) a life policy (see section 9); or
(b) a sinking fund policy (see the definition in the Schedule); or
(c) a section 12A or 12B policy (see the definition in the Schedule); or
(d) some other kind of policy.

(4) Subsections (1), (2) and (3) have effect:

(a) for the purposes of this Act; and

(b) for the purposes of all other laws of the Commonwealth, subject to the expression of a contrary intention.

policy is not limited to a life policy, a sinking fund policy or a section 12A or 12B policy.

Division 4—Modified operation of provisions relating to statutory funds

Subdivision 1—Modifications

16G Act generally applies as if references to a statutory fund were references to an approved benefit fund

(1) Subject to subsection (2), this Act applies to a friendly society as if each reference to a statutory fund were instead a reference to an approved benefit fund.

Note: An approved benefit fund is a benefit fund for which there are approved benefit fund rules (see the definition in section 16B). Benefit fund rules are approved benefit fund rules if an approval under section 16L is in force in relation to the rules and the rules are in force under section 16N.

(2) Subsection (1) has effect subject to:

(a) the other provisions of this Subdivision; and

(b) the expression of a contrary intention in a particular provision; and

(c) the expression of a contrary intention in a particular provision of regulations for the purposes of section 16ZC.

(3) Other laws of the Commonwealth have effect in relation to friendly societies as if any reference in such a law to a statutory fund of a life company also included a reference to an approved benefit fund of a friendly society, subject to the expression of a contrary intention.

16H Modification of section 34

Section 34 has effect in relation to a friendly society as if subsections (2), (3) and (4) were omitted and the following subsections were substituted: (2) Assets or investments obtained by the application of assets (other than money) of an approved benefit fund are themselves assets of the fund. If an investment is a joint investment (see subsection (4A)), the asset is an asset of each of the contributing funds in proportion to their respective contributions. (3) Subject to subsections (4) and (4A), a friendly society must keep assets of an approved benefit fund distinct and separate from assets of other approved benefit funds and from all other money, assets or investments of the friendly society. (4) A friendly society may maintain a single bank account for money that constitutes assets of 2 or more approved benefit funds if the account is maintained in accordance with Prudential Rules. (4A) A friendly society may invest assets of 2 or more approved benefit funds in a single investment if:

(a) the approved benefit fund rules of each of those funds provide for the assets of the fund to be invested together with the assets of the other fund or funds; and

(b) the investment complies with the applicable requirements (if any) in Prudential Rules relating to assets of one fund being invested together with assets of another fund or funds.

The investment is referred to as a joint investment, each of the funds is referred to as a contributing fund and the assets of a fund that are invested in the investment are referred to as the fund’s contribution.

16I Modification of section 38

Section 38 has effect in relation to a friendly society as if the following subsection were added at the end of the section: (8) Nothing in this section authorises a friendly society to apply assets of an approved benefit fund, or to mortgage or charge such assets, otherwise than as provided by the approved benefit fund rules.

16J Modification of section 43

Section 43 has effect in relation to a friendly society as if the following paragraph were inserted after paragraph (3)(b):

(ba) nothing in this Act authorises a friendly society to make an investment of assets of an approved benefit fund unless:

(i) the investment is of a kind provided for by the approved benefit fund rules; and

(ii) the investment complies with the requirements (if any) in Prudential Rules;

16K Modification of section 45

Section 45 has effect in relation to a friendly society as if the following subsection were added at the end of the section: (5) In this section as it applies to a company that is a friendly society, a reference to an approved benefit fund includes a reference to the management fund of the society. The management fund of the society is the fund of the society that consists of the assets and liabilities of the society that do not form part of an approved benefit fund of the society.

Subdivision 2—Approved benefit fund rules