The Government has introduced the Financial Sector Reform (Hayne Royal Commission Response – Stronger Regulators (2019 Measures)) Bill 2019 into the House of Representatives. Background.
If passed the Bill will implement recommendations from the ASIC Enforcement Review Taskforce Report to:
• harmonise ASIC’s search warrant powers;
• improve ASIC’s ability to access certain telecommunications information;
• strengthen ASIC’s licensing powers; and
• extend ASIC’s banning powers to ban individuals from managing financial services businesses.
ASIC’s licensing powers
The Bill amends the Corporations Act and the National Credit Act to:
- update the requirements for obtaining an Australian financial services licence (AFS licence) by replacing the requirement that a person be of ‘good fame and character’ with the requirement that they be a ‘fit and proper person’ to provide the financial service covered by the licence.
- change the AFS licence and Australian credit licence regimes to ensure broader application of the respective fit and proper person tests to all officers, partners and trustees of an applicant, and to extend the test to their controllers. The ‘fit and proper person’ requirements must be satisfied on an ongoing basis.
- ensure that ASIC has access to adequate information in relation to an application or a licence, ensure that ASIC can refuse to grant a licence when a material particular in an application is false or misleading, and ensure that a licence can be suspended or revoked in certain circumstances (including where the financial services authorised by the licence have not been provided within 6 months of the licence being granted).
- expand the grounds on which ASIC can make a banning order against a person. The changes allow ASIC to take into account a broader range of activities related to non-compliance with financial service laws and the management or oversight of the conduct of a financial services or credit business.