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3. Reporting requisites, call up procedure and notifications to licensee

Date

Reporting to the Minister

The delegate must provide a quarterly report (the ASIC Regulatory Report) to the Minister and the RBA containing information on:

  • all known upcoming regulatory matters which will require the exercise of the delegated powers over the next quarter; and
  • all regulatory matters for which the delegate has exercised the delegated powers over the preceding quarter.

To the extent that matters relate to CS facilities, the delegate should seek the RBA’s input on the relevant parts of the ASIC Regulatory Report.

The ASIC Regulatory Report must include the following information, as practicable and applicable to each regulatory matter:

  • the nature of the regulatory matter;
  • information regarding the financial market(s) or FMI(s) involved, or affected by the regulatory matter;
  • background and a description of the regulatory matter, including:
    • the most relevant section of the Corporations Act under which the Minister’s powers relate to the regulatory matter, informal lodgement dates and any legislated timeframes imposed on the use of these powers for the regulatory matter, and
    • the reasons the Minister’s powers are required to, or may, be exercised for the particular regulatory matter;
  • whether the regulatory matter will require the Minister’s decision; and
  • any other details the Minister deem necessary and instruct the delegate to provide.

ASIC should also notify the Minister of applications received in between ASIC regulatory reports that fall within one of the call up circumstances identified below.

Publication of the ASIC Regulatory Report

To the extent permitted under the law, the delegate should publish on ASIC’s website, the section of the ASIC Regulatory Report that outlines the regulatory matters for which, during the previous quarter, the delegate has exercised the delegated functions and powers.

Call up procedure

If the Minister becomes aware of a matter (through the ASIC Regulatory Report or otherwise), they can request that a regulatory matter be ‘called up’ for the Minister’s decision. To call up a regulatory matter, the Minister will notify the delegate (and the RBA, in respect of CS facilities) that, in regards to the particular regulatory matter, it is appropriate that the Minister, and not the delegate, exercise the appropriate power(s) as ascribed to the Minister under Chapter 7 of the Corporations Act.

Upon receiving a notification that a regulatory matter will be called up for the Minister’s decision, the delegate will be required to provide to the Minister, once the financial market or FMI has made formal lodgement or as soon as is practicable, the documents required for the Minister to exercise these powers, including (as applicable):

  • any formal lodgement letter from the financial market or FMI;
  • a letter from ASIC providing advice on the regulatory matter;
  • a letter from the RBA providing advice on the regulatory matter; and
  • any other documents.

Matters to be called up

The Minister can still exercise the powers delegated as the Minister deems necessary. The Minister may particularly call up regulatory matters that:

  • are of national significance (for example, the introduction of a new clearing and settlement facility);
  • materially affect the structure or nature of the Australian financial system, including those of significant novelty (for example, the introduction of innovative ways to provide finance such as peer-to-peer lending);
  • are referred to the Minister by the delegate (for example, where the delegate does not agree with the advice of the regulators with respect to the relevant regulatory matter, matters of national significance and/or materially affect the structure or nature of the Australian financial system);
  • are otherwise referred to the Minister for decision by ASIC or the RBA (for example, where there is a disagreement between ASIC and the RBA with respect to matters related to the oversight of CS facilities); and
  • the Minister deems it necessary, particularly during events of financial turbulence.

Formal notification to licensee

  • To ensure that licensees understand the circumstances where there are regulatory concerns, ASIC should provide a formal written notification to the licensee explaining the reasons as to why the outcome of certain regulatory determination is negative (for example, ASIC disallows an operating rule amendment).
  • ASIC should take reasonable steps to provide an applicant with an opportunity to respond to any concerns prior to ASIC making a decision.