provision were omitted, modified or varied as specified in the regulations. [Schedule 1, item 6, section 993DL of the Corporations Act] Consequences of breaching the new provisions The consequences of breaching the new provisions fall into two main categories. These are: liability to the state through civil penalty proceedings or criminal prosecution; and liability to persons suffering loss or damage through action. Civil and criminal penalties A contravention of every obligation in the new regime is both a civil penalty provision and an offence. This allows the regulator or prosecutor (as the case may be) to take a proportional approach to the enforcement of the new regime. The maximum penalties applicable to each obligation in the Bill are detailed in the following tables. The new law gives effect to the penalties by making the necessary amendments to existing subsection 1317E of the Corporations Act (in relation to civil penalties) and Schedule 3 of the Corporations Act (in relation to criminal penalties). [Schedule 1, items 6 and 7, subsection 1317E(1) and Schedule 3 of the Corporations Act] Penalties concerning obligations Obligation Penalty Design obligations Determining target market for Criminal 200 penalty units or – financial products imprisonment for 5 years, or both. Civil penalty $200,000 for an – individual; or 1 million for a body corporation Determining review triggers and Criminal: 200 penalty units or review period for target market imprisonment for 5 years, or both. determination Civil penalty $200,000 for an – individual; or 1 million for a body corporation Keeping records of decisions and Criminal 50 penalty units or – reasons for target market imprisonment for 12 months, or both. determination, review triggers and review period
provision were omitted, modified or varied as specified in the regulations. [Schedule 1, item 6, section 993DL of the Corporations Act] Consequences of breaching the new provisions The consequences of breaching the new provisions fall into two main categories. These are: liability to the state through civil penalty proceedings or criminal prosecution; and liability to persons suffering loss or damage through action. Civil and criminal penalties A contravention of every obligation in the new regime is both a civil penalty provision and an offence. This allows the regulator or prosecutor (as the case may be) to take a proportional approach to the enforcement of the new regime. The maximum penalties applicable to each obligation in the Bill are detailed in the following tables. The new law gives effect to the penalties by making the necessary amendments to existing subsection 1317E of the Corporations Act (in relation to civil penalties) and Schedule 3 of the Corporations Act (in relation to criminal penalties). [Schedule 1, items 6 and 7, subsection 1317E(1) and Schedule 3 of the Corporations Act] Penalties concerning obligations Obligation Penalty Design obligations Determining target market for financial products Criminal – 200 penalty units or imprisonment for 5 years, or both. Civil penalty – $200,000 for an individual; or 1 million for a body corporation Determining review triggers and review period for target market determination Criminal: 200 penalty units or imprisonment for 5 years, or both. Civil penalty – $200,000 for an individual; or 1 million for a body corporation Keeping records of decisions and reasons for target market determination, review triggers and review period Criminal – 50 penalty units or imprisonment for 12 months, or both.
c2017-t247556-Explanatory-Memorandum.docx