Summary of recommendations by chapter Chapter 1: Self-reporting of contraventions by financial services and credit licensees Number Description 1 The ‘significance test’ in section 912D of the Corporations Act 2001 should be retained but clarified to ensure that the significance of breaches is determined objectively 2 Introduce a self-reporting regime for credit licensees equivalent to the regime for AFS licensees under section 912D of the Corporations Act 2001 3 The obligation for licensees to report should expressly apply to misconduct by an employee or representative 4 Significant breaches (and suspected breach investigations that are ongoing) must be reported within 30 days 5 The required content of breach reports should be prescribed by ASIC and be lodged electronically 6 Criminal penalties should be increased for failure to report as and when required 7 A civil penalty should be introduced in addition to the criminal offence for failure to report as and when required 8 Encourage a cooperative approach where licensees report breaches, suspected or potential breaches or employee or representative misconduct at the earliest opportunity 9 Streamline the reporting requirements for responsible entities of managed investment schemes by replacing the requirements in section 601FC(1)(l) of the Corporations Act with an expanded requirement in section 912D. 10 Require annual publication of breach report data for licensees by ASIC Chapter 2: Harmonisation and enhancement of search warrant powers Number Description 11 ASIC-specific search warrant powers in various acts should be consolidated into the ASIC Act
Table A: list of recommended increases to imprisonment penalties Relevant criminal offence Current criminal penalty Recommended criminal penalty Corporations Act 2001 Part 2D.1 – Duties and powers 184(1) 5 years 10 184(2) 5 years 10 184(3) 5 years 10 years Part 2D.6 – Disqualification from managing corporations 206A(1) 1 year 5 years Chapter 2M – Financial reports and audit 344(2) 5 years 10 years Part 5C.2 – Responsible entity of registered scheme 601FD(4) 5 years 10 601FE(4) 5 10 Part 5D.4 – Duties of officers and employees of licensed trustee companies 601UAA(1) 5 years 10 years 601UAB(1) 5 years 10 years Chapter 6B – Rights and liabilities in relation to Chapter 6 and 6A matters 670A(3) 1 year 5 years Chapter 6D – Fundraising 708AA(10) 6 months 2 years 708A(9) 6 months 2 years 727(1) 5 10 728(3) 5 years 10 Chapter 7 – Financial services and markets Part 7.2 – Licensing of financial markets 792D(1) 6 months 2 years Part 7.3 – Licensing of clearing and settlement facilities 821C(1) 6 months 2 years 821C(3) 6 months 2 years 821D 6 months 2 years 821E(2) 50pu 2 years Part 7.5 – Compensation regimes for financial markets
205G(4) (strict liability) 10pu and/or 3 months 50pu 240pu and/or 2 years 2400pu Part 6.1 – Prohibited acquisitions of relevant interests in voting shares 606(1) (absolute liability) 25pu and/or 6 months 125pu 600pu and/or 5 years 6000pu 606(2) (absolute liability) 25pu and/or 6 months 125pu 600pu and/or 5 years 6000pu 606(4) (absolute liability) 25pu and/or 6 months 125pu and/or 5 years 6000pu Chapter 6C – Information about ownership of listed companies and managed investment schemes 671B(1) (strict liability) 25pu and/or 6 months 125pu and/or 2 years 2400pu Chapter 2M – Financial reports and 286 (strict liability) 25pu and/or 6 months 125pu 240pu and/or 2 years 2400pu 307A (strict liability) 50pu 240pu and/or 2 years 2400pu Part 7.8 – Other provisions relating to conduct 989CA(strict liability) 50pu 250pu 240pu and/or 2 years 2400pu Table C: Complete list of new civil penalty provisions Corporations Act 670A 727 728 791A 792B