Review of the Insurance Contracts Act , Australian Government, Department of the Treasury

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Final Report on second stage: provision other than section 54

Chapter 3: Powers of Australian Securities and Investments Commission

3.1 Part IA of the IC Act specifies that ASIC has responsibility for administering the IC Act. Further, Part IA gives ASIC certain powers in relation to the IC Act.

3.2 The express powers ASIC has under the IC Act overlap with existing powers under the Australian Securities and Investments Commission Act 2001 (ASIC Act).

3.3 It has been suggested that Part IA of the IC Act should be repealed and in administering the IC Act, ASIC should rely solely upon its powers provided in the ASIC Act.

3.4 The Review Panel notes that this issue is being dealt with by the Government as part of a process to harmonise and rationalise powers available to ASIC, currently contained within a number of Acts administered by the Commission.

3.5 It has been suggested to the Review Panel that it would be desirable to include a power for ASIC to intervene in proceedings in matters arising under the IC Act. ASIC has similar powers in, for example, section 1330 of the Corporations Act and section 12GO of the ASIC Act. Although ASIC has appeared in past cases at the discretion of the court, a statutory power would provide certainty and would give ASIC rights to adduce evidence and raise issues in addition to those raised by the parties. Such a power would allow ASIC, as the body charged with administering the IC Act, to fulfil this function better.

3.6 The Review Panel considers that an intervention power in favour of ASIC would not greatly extend the scope of the IC Act but would be a desirable enhancement. It would be consistent with ASIC’s powers in other areas of its responsibility.42 With the constraints on its resources, ASIC is unlikely to abuse this power.

Recommendation

3.1 The Australian Securities and Investments Commission should be given a statutory right to intervene in any proceeding relating to matters arising under the IC Act.

 


42 The Insurance Council of Australia Limited submits that such a proposal would, inter alia, ‘remove the court’s present discretion to determine whether ASIC should be allowed to intervene in proceedings relating to matters arising out of the IC Act’ (see submission dated June 2004 at page 17). The Investment & Financial Services Association Ltd submitted that any extension of ASIC’s powers ‘should be limited to circumstances where such proceedings are in the interest of the public’ (see submission dated 11 June 2004).

 

Previous: Chapter 2 - Definitions and Procedural Provisions

 

 

© Commonwealth of Australia 2004
ISBN 0 642 74254 5