Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise on behalf of the shadow Treasurer and the coalition to speak on this Corporations and Financial Sector Legislation Amendment Bill 2013. Let me say at the outset that the coalition will not be opposing this bill. As was made clear in the introductory speech and in the explanatory memorandum it deals with a number of issues that largely flow from the global financial crisis, where the G20 endorsed a global transition of over-the-counter derivatives and products that are currently traded through bilateral agreements towards recognised exchanges or trading platforms, where appropriate, in order to boost market transparency. The G20 also agreed that certain trading activities should be cleared through a central counter-party to reduce systemic risk and should be reported to trade repositories in order to enhance market information.

The key measures are intended to:

The bill is divided into seven parts. Part 1 deals with the payments system and netting, and seeks to amend the Payments System and Netting Act 1998, the PSN Act, in order to provide a range of protections and carve-outs for certain retail payment systems. The amendments within this bill to the PSN Act allow client positions and associated collateral of a defaulting participant in a clearing facility to be ported to another, solvent participant regardless of obstacles presented by other legislation, including the insolvency provisions in the Corporations Act. The amendments will also ensure that central counterparties can enforce they security they hold over all types of assets, including dematerialised securities.

Part 2 of the bill deals with a review of licences. The amendments will enable ASIC to focus on reviewing some aspects of a licensee's operations each year, with a full review taking place over a number of years. Reviewing licences in this way may allow for a more comprehensive examination of their operations. These amendments seek to reduce the misallocation of resources that results from the requirement to conduct annual assessments on all licences and will allow ASIC to allocate resources to assessments in which they will be more effective.

Part 3 deals with international business regulators. In this section, the bill will amend the Mutual Assistance in Business Regulation Act 1992 and the Australian Securities and Investments Commission Act 2001. The proposed amendments to both acts will bring pan-European regulators such as the European Securities and Markets Authority, and the European Systemic Risk Board into the definition of 'foreign regulator', and thereby put beyond doubt ASIC's ability to render assistance in their administration and enforcement of foreign business laws.

Part 4 deals with reporting on ASIC's information-gathering powers. The amendments address concerns raised back in 2010 in the Senate economics committee about the lack of reporting by ASIC in relation to its use of information-gathering powers. So these amendments seek to formalise ASIC's reporting commitments by imposing a statutory obligation on ASIC to report annually, and insert a provision for Treasury ministers—such as the parliamentary secretary opposite—with notice given to ASIC, to request that ASIC report additional information if required.

Part 5 of the bill deals with the disclosure of information by the Reserve Bank. The amendments relate to section 79A of the Reserve Bank Act 1959 and contain a number of provisions relating to the sharing of information by RBA officers. The intention of these amendments is to provide permission for the RBA to share protected information and documents to a person approved by the RBA governor or prescribed delegates in writing. A similar provision was previously in the Reserve Bank Act but was automatically repealed under a sunset provision; it is now proposed to reinstate it. A further amendment allows the RBA to impose confidentiality restrictions on persons to whom protected information is provided.

Part 6 of the bill deals with consequential amendments relating to derivative trade repositories and arises from the passage of the Corporations Legislation Amendment (Derivative Transactions) Act 2012—that is, the act that provided the legislative framework for implementing Australia's G20 commitments in relation to over-the-counter derivative reforms. It contains a number of consequential amendments to the Carbon Credits (Carbon Farming Initiative) Act 2011 and the Clean Energy Regulator Act 2011 that have become necessary, according to the government.

As members in this chamber are aware, the coalition remain opposed to the government's carbon tax. In government we will repeal the carbon tax. Whilst these measures are linked to this government, the passage of this legislation does improve the framework in which these products are traded. So we will repeal the carbon tax and, given the overriding importance of this legislation, we will not be opposing these amendments. The last section seeks to rewrite section 1317E(1) of the Corporations Act, which lists those provisions in the act which are the subject of the civil penalty provisions of part 9.4B, in order to simplify the legislation without changing its substance.

In conclusion I point out that the parliamentary secretary, on introduction, pointed out that ministerial council approval—that is, MINCO approval—had occurred with respect to the ASIC changes in the bill.

Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

In summing up on this bill, the Corporations and Financial Sector Legislation Amendment Bill 2013, I want to thank all the honourable members who have shown interest in this particular area. I want to particularly mention the member for Casey, who has made some brief comments in relation to this bill and shown support for the good things that are being done with these amendments. I also want to note that the member for Robertson was due to speak on this bill but, being in the chair, that is not quite possible so at least I wanted to note that she would have made a contribution because she has an enormous interest in all these bills and in the corporations and financial services sector as well.

This bill delivers a number of very important measures to improve the functioning of our financial system. While many of the amendments in the bill may seem highly technical in nature, they have a very real impact on the work of our financial markets and our regulators. They will also complement the existing legislative framework to implement our core G20 commitments in relation to over-the-counter derivatives. Passage of the bill will provide crucial protections to clearing facilities, which are critical parts of our financial system. These important reforms will allow our clearing facilities to better protect themselves against a default by one of their participants. The work of clearing facilities is at the heart of our financial system and the reforms in this bill are therefore important in guaranteeing market confidence in the stability of the financial system, which ultimately benefits the economy as a whole and ultimately everyone in Australia. The reforms in the bill will also allow ASIC and the RBA to better focus their resources on supervising those licensed markets as well as clearing and settlement facilities, which pose the highest risk to our system and to retail investors.

Finally, the bill will provide appropriate powers to our regulators, allowing them to cooperate as required with other regulators and official bodies. This in turn will facilitate the business activities of our financial industry in overseas markets. These important reforms are part of the Gillard government's broad agenda to promote Australia as a leading financial services hub and boost our reputation as one of the most attractive investment destinations in that world. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.