Recommendations in Interim Report A
Yesterday the Government released the first exposure draft legislation in response to Interim Report A of the ALRC’s review of corporations and financial services legislation. The draft legislation implements aspects of several Recommendations from the Interim Report, and entirely implements Recommendation 13. Overall, adoption of this legislation will reduce the identified complexity of financial services regulation in relation to definitions and benefit both consumers and the industry.
Interim Report A provided the foundation for the review of corporations and financial services legislation — analysing the regulatory ecosystem, key concepts underpinning financial services regulation, and the use of definitions. The Interim Report contained 13 Recommendations for reform which related to relatively technical matters. For example, the draft legislation would repeal a number of definitions that the ALRC concluded are unnecessary, inappropriate, or contain errors. It would increase consistency in the headings of definitional provisions. The draft legislation also contains new definitions of ‘participant’, which was described in Interim Report A as ‘one of the most complexly constructed definitions in the Corporations Act’.
Stakeholders are invited to comment on the draft legislation and explanatory material.
Tackling other sources of complexity
The Government has also released exposure draft legislation that would address other sources of complexity identified in the ALRC’s review. In Interim Report A and ‘Complexity and Legislative Design’ (FSL2), the ALRC identified notional amendments and proliferating legislative instruments as sources of legislative complexity. The hundreds of regulations and ASIC instruments that notionally amend corporations and financial services legislation make the law deeply inaccessible.
The exposure draft legislation would repeal seven ASIC legislative instruments that contain notional amendments, and would substantially repeal one other ASIC legislative instrument. These instruments would be replaced by textual amendments to the Acts they notionally amend. These amendments would reduce the complexity that notional amendments currently bring to corporations and financial services legislation.
In Interim Report B, the ALRC will be consulting on a proposed legislative model that seeks to address the causes of notional amendments and proliferating legislative instruments.