Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) APRA may give a body corporate that is an ADI or an authorised NOHC a direction of a kind specified in subsection (2) if APRA has reason to believe that:
(a) the body corporate has contravened a provision of:
(i) this Act; or
(ii) the Financial Sector (Collection of Data) Act 2001 ; or
(iii) the First Home Saver Accounts Act 2008 ; or
(b) the body corporate has contravened a prudential requirement regulation or a prudential standard; or
(c) the body corporate is likely to contravene this Act, a prudential requirement regulation, a prudential standard, the Financial Sector (Collection of Data) Act 2001 or the First Home Saver Accounts Act 2008 , and such a contravention is likely to give rise to a prudential risk; or
(d) the body corporate has contravened a condition or direction under this Act or the Financial Sector (Collection of Data) Act 2001 ; or
(e) the direction is necessary in the interests of:
(i) if the body corporate is an ADI--depositors of the ADI; or
(ii) if the body corporate is an authorised NOHC--depositors of any ADI that is a subsidiary of the NOHC; or
(f) the body corporate is, or is about to become, unable to meet its liabilities; or
(g) there is, or there might be, a material risk to the security of the body corporate's assets; or
(h) there has been, or there might be, a sudden material deterioration in the body corporate's financial condition; or
(i) the body corporate is conducting its affairs in an improper or financially unsound way; or
(j) the failure to issue a direction would materially prejudice the interests of:
(i) if the body corporate is an ADI--depositors of the ADI; or
(ii) if the body corporate is an authorised NOHC--depositors of any ADI that is a subsidiary of the NOHC; or
(k) the body corporate is conducting its affairs in a way that may cause or promote instability in the Australian financial system.
(1A) The direction must:
(a) be given by notice in writing to the body corporate; and
(b) specify the ground referred to in subsection (1) as a result of which the direction is given.
(2) The kinds of direction that the body corporate may be given are directions to do, or to cause a body corporate that is its subsidiary to do, any one or more of the following:
(aa) to comply with the whole or a part of:
(i) this Act; or
(ii) the Financial Sector (Collection of Data) Act 2001 ; or
(iii) the First Home Saver Accounts Act 2008 ;
(ab) to comply with the whole or a part of a condition or direction referred to in paragraph (1)(d);
(a) to comply with the whole or a part of a prudential requirement regulation or a prudential standard;
(b) to order an audit of the affairs of the body corporate, at the expense of the body corporate, by an auditor chosen by APRA;
(c) to remove a director or senior manager of the body corporate from office;
(d) to ensure a director or senior manager of the body corporate does not take part in the management or conduct of the business of the body corporate except as permitted by APRA;
(e) to appoint a person or persons as a director or senior manager of the body corporate for such term as APRA directs;
(f) to remove any auditor of the body corporate from office and appoint another auditor to hold office for such term as APRA directs;
(g) not to give any financial accommodation to any person;
(h) not to accept the deposit of any amount;
(i) not to borrow any amount;
(j) not to accept any payment on account of share capital, except payments in respect of calls that fell due before the direction was given;
(k) not to repay any amount paid on shares;
(l) not to pay a dividend on any shares;
(m) not to repay any money on deposit or advance;
(n) not to pay or transfer any amount to any person, or create an obligation (contingent or otherwise) to do so;
(o) not to undertake any financial obligation (contingent or otherwise) on behalf of any other person;
(p) anything else as to the way in which the affairs of the body corporate are to be conducted or not conducted.
A direction under paragraph (n) not to pay or transfer any amount does not apply to the payment or transfer of money pursuant to an order of a court or a process of execution.
(2A) Without limiting the generality of subsection (2), a direction referred to in a paragraph of that subsection may:
(a) deal with some only of the matters referred to in that paragraph; or
(b) deal with a particular class or particular classes of those matters; or
(c) make different provision with respect to different matters or different classes of matters.
(3) The direction may deal with the time by which, or period during which, it is to be complied with.
(4) The body corporate has power to comply with the direction despite anything in its constitution or any contract or arrangement to which it is a party.
(4A) If the direction requires the body corporate to cause a subsidiary to do, or to refrain from doing, an act or thing:
(a) the body corporate has power to cause the subsidiary to do, or to refrain from doing, the act or thing; and
(b) the subsidiary has power to do, or to refrain from doing, the act or thing;
despite anything in the subsidiary's constitution or any contract or arrangement to which the subsidiary is a party.
(4B) APRA may, by notice in writing to the body corporate, vary the direction if, at the time of the variation, it considers that the variation is necessary and appropriate.
(5) The direction has effect until APRA revokes it by notice in writing to the body corporate. APRA may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.
(5A) Part VI applies to a decision to give a direction under subsection (1) as a result of the ground referred to in paragraph (1)(a), (b), (c), (d) or (e).
(6) In this section, director has the same meaning as it has in the Corporations Act 2001 , and the affairs of a body corporate include those set out in section 53 of that Act.
Note 1: Senior manager is defined in section 5 of this Act.
Note 2: For further information about directions, see Subdivision C.
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