Financial Services Commission (Amendment) Act, 2024 (No. 22 of 2024)

Summary

This Act amends the Financial Services Commission Act, Revised Edition 2020, making wide-ranging changes to the Commission's powers, governance, and enforcement toolkit. It comes into force on a date to be appointed by the Minister by Gazette notice, so it is not yet automatically in effect on passage.

• Consumer duty framework: Introduces a 'consumer duty' concept and gives the Commission power to set principles on product governance, pricing, discrimination protection, contractual clarity, consumer understanding and support.
• Risk-based supervision: Requires the Commission to adopt a risk-based approach to supervising licensees, weighing licensee-specific risk, class-of-licensee risk, and territory-wide risk.
• Board governance changes: Sets Board meetings at a minimum of 6 per year, adds a new disqualification for Board membership (having been a member, director, senior officer or auditor of a regulated person within the preceding two years), and inserts new provisions (7A-7C) allowing the Chairman or Managing Director to take urgent decisions during 'exceptional circumstances' without quorum or majority-vote requirements.
• Duty to cooperate: New section 49B requires every licensee or other person subject to the Act or financial services legislation to cooperate with the Commission, including providing information, documents and material within their access; failure is an offence carrying a fine up to $20,000.
• Employee disclosure duty: New section 47A requires Commission employees to disclose personal, professional, business or pecuniary interests in matters they are involved in, and may be required to make annual or periodic declarations of interest; failure exposes them to disciplinary action.
• Compliance inspections: Expands the Commission's power to outsource compliance inspections or require a relevant person to appoint an independent inspector, and allows the Commission to pass inspection costs to the relevant person(s).
• Enhanced penalties: Substantially increases prescribed fines across multiple sections, for example raising penalties under section 33B from $5,000 to $50,000, section 53 from $5,000 to $75,000, section 54 fines to up to $25,000/$75,000, section 54A to up to $50,000, and section 54B to $25,000.
• Other changes: Broadens cooperation provisions to cover foreign non-regulatory authorities, allows the Commission to receive donations/contributions for financial literacy activities, and adds the Virtual Assets Service Providers Act to Schedule 2 of principal legislation.

Overall the Act strengthens the Commission's enforcement and crisis-management powers while imposing new direct duties on licensees (to cooperate) and on Commission employees (to disclose interests), alongside a significant increase in monetary penalties for various offences under the principal Act.

Key obligations

• Every licensee or other person subject to the Financial Services Commission Act or any financial services legislation must cooperate with the Commission by providing information, producing documents, and providing other material within their access and authority (section 49B); failure is an offence punishable by a fine not exceeding $20,000.
• A licensee who fails to comply with section 17A(4) commits an offence liable on summary conviction to a fine not exceeding $20,000.
• Commission employees must immediately disclose any personal, professional, business or pecuniary interest in a matter they are assigned to, involved in, or before a committee they sit on, and must not participate in or must withdraw from the matter unless authorised by a supervisor after specified safeguards are met (section 47A).
• Commission employees may be required to make annual or other periodic declarations of interest in a form determined by the Commission; failure to disclose or declare exposes the employee to disciplinary proceedings including suspension, termination or dismissal.
• Where the Commission outsources a compliance inspection or requires appointment of an independent inspector for a relevant person, that relevant person may be required to bear the cost of the inspection and must comply accordingly (section 35(7B)).
• An independent person appointed to conduct a compliance inspection under section 35(7A) must submit a copy of the inspection report to the Commission upon completion.
• The Board of Commissioners must meet at least 6 times per year (section 7), subject to modified requirements during declared exceptional circumstances.

Applies to

licensees, regulated persons, Commission employees, Board of Commissioners members, relevant persons subject to compliance inspections, foreign regulatory authorities and foreign non-counterparts

Deadlines

• such date as the Minister may by Notice published in the Gazette appoint: Commencement date of the Financial Services Commission (Amendment) Act, 2024

Related documents

• This document amends Financial Services Commission Act (Revised Edition 2020)