Appendix 3Legislation administered by ASIC
1.1As the corporate and financial services regulator, ASIC is responsible for administering and enforcing several pieces of Commonwealth legislation. This includes legislation in which ASIC has a considerable administrative role (class 1 legislation) as well as legislation in which ASIC has a reduced administrative role (class 2 legislation). In total, ASIC is responsible for 10 pieces of Commonwealth legislation. Each of these statutes is outlined in brief below along with ASIC’s role in their administration and enforcement.
Class 1 legislation administered by ASIC
1.2ASIC is responsible for administering core elements of the following legislation:
the Australian Securities and Investments Commission Act 2001;
the Business Names Registration Act 2011;
the Corporations Act 2001;
the Insurance Contracts Act 1984; and
the National Consumer Credit Protections Act 2009.
1.3Each of these statutes is outlined in detail below alongside ASIC’s role in their administration and enforcement.
Australian Securities and Investments Commission Act 2001
1.4The Australian Securities and Investments Commission Act 2001 (ASIC Act) establishes the Australian Securities and Investments Commission (ASIC) and outlines its core functions, powers, and responsibilities. The ASIC Act establishes several bodies associated with ASIC including the Takeovers Panel, Companies Auditors Disciplinary Board, Financial Reporting Council, Australian Accounting Standards Board, Auditing and Assurance Standards board and the Parliamentary Joint Committee on Corporations and Financial Services.
1.5The ASIC Act mandates that in performing its functions and exercising its powers, ASIC must aim to improve the performance of the financial system, promote the participation of actors in the financial system, administer relevant laws, appropriately store information, provide this information to the public, and do whatever else is required to give effect to the laws of the Commonwealth.
Business Names Registration Act 2011
1.6The Business Names Registration Act 2011 (the Act) establishes a National Business Names Registration System. The national register was designed to ensure that entities behind businesses or corporations can be easily identified in a single registration system. The Act imposes penalties on entities carrying on a business under an unregistered business name or otherwise failing to adequately display or use their official business name.
1.7Under the Act, ASIC can provide online services relating to the administration and convenience of the national register and request information from entities relating to the maintenance of the national register. ASIC also has responsibility for providing extracts of entries on the register requested by an individual. Further, ASIC can engage with the Registrar of the Australian Business Register for the purpose of performing its functions outlined above.
Corporations Act 2001
1.8The Corporations Act 2001 (Corporations Act) outlines the laws governing the corporate and financial sectors of the Australian economy. The Corporations Act is the foundation of Australian corporate law and applies nationwide. The Corporations Act outlines key areas of Australian corporate law such as company registration, the basic features of a company, corporate officers and employees, appointment and cessation of directors, corporate meetings and other related matters.
1.9ASIC has a wide variety of responsibilities and functions under the Corporations Act. For example, ASIC is responsible for the general administration of the Corporations Act and exercises several associated enforcement and direction powers. The legislation also permits ASIC to notionally amend the Corporations Act via delegated legislation.
Insurance Contracts Act 1984
1.10The Insurance Contracts Act 1984 (ICA) provides standards for insurance contracts at the federal level. The ICA imposes duties on an insurer and an insured party to protect the interests of insurers, insured parties, and other members of the public.
1.11ASIC is responsible for the general administration of the ICA subject to the directions of the Minister. The legislation provides ASIC with the power to take necessary measures to administer the ICA including promoting the development of facilities for handling insurance inquiries, monitoring complaints, liaising with stakeholders, and reviewing relevant documents among other activities.
1.12Further, the ICA provides ASIC with supervisory powers to obtain insurance documents and review administrative arrangements. The ICA also provides ASIC with the ability to intervene in proceedings relating to a matter arising under the legislation.
National Consumer Credit Protections Act 2009
1.13The National Consumer Credit Protections Act 2009 (NCCP Act) established the current national consumer credit regime. Under the legislation, ASIC is responsible for administrating the licensing regime for actors engaging in credit activities with an Australian credit license.. ASIC has the power to refuse an application of registration and suspend or cancel a license or registration.
1.14The NCCP Act also provides ASIC with the ability to seek a court declaration for contravention of a civil penalty in the legislation and seek a pecuniary penalty accordingly. ASIC can also issue infringement notices for strict liability offences and civil penalties prescribed in the regulations.
Class 2 legislation administered by ASIC
1.15ASIC has a reduced role in administering the following legislation:
Banking Act 1959;
Life Insurance Act 1995;
Medical Indemnity (Prudential Supervision and Product Standards) Act 2003;
Retirement Savings Account Act 1997; and
Superannuation Industry (Supervision) Act 1993.
1.16Each of these statutes is outlined in detail below alongside ASIC’s role in their administration and enforcement.
Banking Act 1959
1.17The Banking Act 1959 (Banking Act) outlines the core features of Australian banking law. The objectives of the Banking Act include protecting the interests of depositors, fostering the development of a viable, competitive, and innovative banking industry, and promoting the stability of financial systems.
1.18The Banking Act prescribes several prudential standards for the Australian banking and financial services industry and maintains supervision of banks and other financial institutions. The Banking Act contains several provisions requiring the Minister to consult with ASIC prior to making declarations under the legislation and provides the Minister with the ability to delegate powers to ASIC or ASIC officials and request formal advice from the regulator.
Life Insurance Act 1995
1.19The Life Insurance Act 1995 (LIA)regulates insurance companies in Australia including their operation, composition, sale, and closure. The official objects of the LIA include to protect the interests of owners of life insurance policies, promote the development of the insurance industry, and protect the stability of financial systems in Australia.
1.20ASIC is also responsible for the general administration of Part 10 of the LIA relating to life insurance policies. Under Part 10, ASIC may request information from life insurance companies regarding their policies and take adverse action if life insurance policies are inconsistent with the LIA. Life insurance companies under the legislation must also provide a statement detailing the amount of unclaimed money to ASIC at the end of each calendar year.
Medical Indemnity (Prudential Supervision and Product Standards) Act 2003
1.21The Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (Medical Indemnity Act) regulates medical indemnity insurance for health care professionals. The objects of the legislation include to ensure that health care professionals have access to properly registered medical indemnity cover and provide minimum standards for this cover.
1.22ASIC is responsible for the general administration of Part 3 of the Medical Indemnity Act relating to product standards for medical indemnity insurance contracts. Section 30(2) provides that the Minister may give ASIC directions about the performance or exercise of its functions under Part 3.
Retirement Savings Account Act 1997
1.23The Retirement Savings Account Act 1997 (RSA Act) provides for retirement savings accounts to be offered by certain financial institutions. The RSA Act sets out the definition of retirement savings accounts, places restrictions on these accounts consistent with similar superannuation products and provides for the concessional taxation and social security treatment of these accounts. The RSA Act also outlines which institutions can offer these accounts.
1.24ASIC has responsibility for the general administration of Part 5 and Part 7 of the legislation relating to the duties of retirement savings account providers and employers and associated prohibited conduct respectively. Part 5 provides ASIC with the ability to establish regulations relating to dispute resolution systems involving RSA providers. Parts 1 to 2, 10, 12 to 15, and 16 of the RSA Act confer powers and duties on ASIC associated with the regulator’s administration of provisions for which it is responsible.
Superannuation Industry (Supervision) Act 1993
1.25The Superannuation Industry (Supervision) Act 1993 (SIS Act) provides a legal framework for the supervision of entities engaged in the superannuation industry such as superannuation funds, approved deposit funds, and pooled superannuation trusts.
1.26Sections 5 and 6 provide that APRA, ASIC and the Commissioner of Taxation are responsible for the general administration of the legislation. ASIC’s powers under these provisions extend to investigations, information sharing with other regulators, and the general enforcement of the legislation.