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This is a Bill, not an Act. For current law, see the Acts databases.
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Financial Intermediaries
FINANCIAL INTERMEDIARIES BILL
1996
EXPLANATORY NOTE
Short title
The short title of the Bill is the Financial Intermediaries Bill 1996.
Policy objectives of the Bill and the reasons for those objectives
The primary objective of the Bill is the introduction of a system of
prudential supervision for cooperative housing societies in particular and
certain other societies, including terminating building societies and a general
cooperative society, the Cairns Cooperative Weekly Penny Savings Bank
Limited, which operates as a financial intermediary.
As part of such a system, the Board of the Queensland Office of
Financial Supervision ("the QOFS Board") is empowered to institute and
develop the various prudential and other standards which will be
implemented in the supervision of societies by QOFS.
This Bill replaces very prescriptive legislation governing the activities of
cooperative housing societies which was enacted in 1958. That legislation
can not, and does not, reflect the new prudentially-based supervisory
systems which have been, or are in the process of being, introduced in
relation to building societies, credit unions and friendly societies.
Furthermore, it is considered that QOFS has the appropriate technical
expertise to supervise the general cooperative society, the Cairns
Cooperative Weekly Penny Savings Bank Limited, on a rigorous prudential
basis.
Such supervision is not possible under that society's current governing
legislation (the Co-operative and Other Societies Act 1967), and the
application of this proposed legislation to that society and supervision of it
by QOFS are essential.
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In these circumstances, the opportunity is being taken to introduce such a
system for the supervision of the type of societies nominated above, but
with particular emphasis on cooperative housing societies.
The Bill also attends to the repeal of the Cooperative Housing Societies
Act 1958 and the Building Societies Act 1985.
The way these policy objectives will be achieved by the Bill and why
this way of achieving the policy objectives is reasonable and
appropriate
The Bill provides for the achievement of the policy objectives mentioned
above by introducing a modern system of regulation and prudential
supervision of societies, with such supervision being carried out by QOFS.
QOFS is particularly suited to be responsible for these supervisory
requirements as it is already involved with the supervision of building
societies and credit unions under the Financial Institutions Scheme. That
Scheme incorporates a large variety of prudential and other standards
specifically designed for the prudential supervision of building societies and
credit unions.
The success of the Financial Institutions Scheme (now in its fourth year
of operation), particularly its modern legislation and the accompanying
system of prudential and other standards has been a major factor in
influencing both the format of this Bill and the choice of supervisor.
In turn, the prudential and other standards negotiated with industry in the
context of this Bill have been influenced by those standards already in place
under the Financial Institutions Scheme where those standards are
applicable to and appropriate for the societies affected by this Bill.
Alternative way of achieving the policy objectives
There is no alternative way of achieving the policy objectives other than
by means of the legislative initiatives and amendments contained in the Bill.
Administrative costs for Government implementation of the Bill
There are no such costs for Government arising from this Bill, as the Bill
deals with supervision by an established supervisory authority, the
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Queensland Office of Financial Supervision (QOFS), which is completely
funded by levies on the various societies for whose supervision it is
responsible for under relevant legislation.
Consistency with fundamental legislative principles
Care has been taken in drafting this Bill to ensure that no aspects of the
Bill infringe upon fundamental legislative principles.
Consultation
Consultation has taken place with the Department of Justice, the
Australian Financial Institutions Commission, QOFS, industry
associations, major providers of funds to the industry as well as within
Treasury during the preparation of the Bill.
Consultation with the abovementioned parties, where relevant, has also
taken place throughout the development of the prudential and other
standards which will be enforced by QOFS in its supervision of all societies
caught by the requirements of the Bill.
PART 1--PRELIMINARY
Division 1--Introductory provisions
Clause 1 specifies the short title.
Clause 2 provides for the commencement of the Act.
Division 2--Interpretation
Clause 3 provides for a dictionary of particular words used in the Act.
Clause 4 provides for the particular meaning of "director", where that
term is used in this Act.
Clause 5 provides for the particular meaning of "officer", where that
term is used in this Act.
Division 3--Operation of the Act
Clause 6 provides that the Act binds the State.
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Division 4--Effect of Primary Producers' Cooperative Associations Act
1923
Clause 7 provides that the Primary Producers' Cooperative
Associations Act 1923 does not apply to a society regulated under this Act.
This concerns the use of the word "cooperative" in the name of a society.
PART 2--FUNCTIONS OF QOFS'S BOARD
Clause 8 provides for the functions of the QOFS Board under this Act
with regard to the system of standards and also its functions regarding laws
affecting societies generally.
Clause 9 provides that the QOFS Board must consult with various
bodies in performing its functions and exercising its powers under this Act.
PART 3--STANDARDS
Clause 10 empowers the Board to make standards with respect to the
matters listed and any other matters necessary or desirable for the
achievement of the objects of this Act.
Clause 11 details the procedure the Board must follow when making,
amending or repealing standards. The procedure does not apply to the
making of urgent standards.
Clause 12 specifies the power of the Board to make urgent standards.
Clause 13 provides that a standard may provide that it be varied
temporarily in relation to a particular society by QOFS.
Clause 14 provides that a standard may make transitional provision for
the purpose of allowing additional time to comply with the standard.
Clause 15 details the matters for which a standard may make provision.
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Clause 16 provides for the publication of standards made by the Board.
Clause 17 provides that societies must comply with all applicable
standards.
PART 4--FUNCTIONS AND POWERS OF QOFS
Division 1--General
Clause 18 sets out the functions of QOFS under this Act.
Clause 19 provides for the general powers of QOFS in performing its
functions under this Act.
Clause 20 provides that QOFS may vary a standard if that standard
provides that it may be varied temporarily in relation to a particular society
by QOFS.
Clause 21 requires QOFS to keep the Treasurer informed on matters
concerning this Act.
Clause 22 requires QOFS to maintain a public office and provides for
the inspection of rules of societies and documents of a prescribed class. A
person may also obtain from QOFS a certified copy of certain documents.
Clause 23 sets out the circumstances in which QOFS may reject
documents submitted to it in relation to societies.
Clause 24 provides that QOFS may require the production of another
document or the giving of further information in order to assist QOFS in
forming the opinion to reject a document.
Clause 25 provides for the extension or abridgment of time within which
anything is required to be done under this Act or the society's rules.
Division 2--Specific powers
Subdivision 1--Enforcement powers
Clause 26 allows QOFS to appoint a person as an inspector if QOFS
considers the person has the necessary expertise or experience to be an
inspector, or the person has satisfactorily completed training approved by
QOFS.
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Clause 27 provides that an inspector is subject to QOFS' directions in
exercising the inspector's powers. It also specifies that the powers of an
inspector may be limited under a regulation, under a condition of
appointment, or by written notice given by QOFS to the inspector.
Clause 28 specifies that an inspector holds office on the conditions stated
in the instrument of appointment. It also outlines how an inspector can
resign or cease to hold office.
Clause 29 requires QOFS to issue an appropriate identity card to an
inspector and also provides for the surrender of that card after the person
ceases to be an inspector, including a penalty for contravention.
Clause 30 requires an inspector to produce the inspector's identity card
for inspection before exercising any powers under this Division of the Act.
Provision is made for the inspector to produce the identity card for
inspection at the first reasonable opportunity if it is not practicable to do so
when exercising a power.
Clause 31 allows an inspector to enter a place subject to certain
circumstances.
Clause 32 outlines the action an inspector must take if asking for an
occupier's consent to an inspector entering the place, including the
requirement to inform the person of the purpose of the entry and that the
person is not required to consent. This Clause also allows an inspector to
ask the occupier to sign an acknowledgment of the consent if the consent is
given. If the occupier signs an acknowledgment of consent, the inspector,
must immediately give a copy to the occupier.
Provision is made for a court to presume that consent to entry was not
given where, in a proceeding before the court, a question arises as to
whether the consent was given by the person and an acknowledgment of the
giving of consent to entry is not produced as evidence of the consent, or it is
not proved that the consent was given.
Clause 33 provides for an inspector to make an application to a
Magistrate for a warrant for a place and specifies the application must be
sworn and state the grounds on which the warrant is sought. It provides for
the Magistrate to refuse consideration of the application until the inspector
gives the Magistrate all the information the Magistrate requires.
The Clause also provides that a Magistrate may only issue a warrant if
satisfied there are reasonable grounds for suspecting there is a particular
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thing or activity that may provide evidence of an offence against this Act,
and that the evidence is, or may be within the next seven days, at the place.
Clause 34 provides for an inspector to apply for a warrant by phone, fax,
radio or other form of communication if the inspector considers it necessary
on certain grounds. The Clause provides for the inspector to prepare an
application stating the grounds on which the warrant is sought but apply for
the warrant before the application is sworn.
After a warrant is issued, this Clause provides for the Magistrate to
immediately fax a copy to the inspector if it is reasonably practicable to do
so. The Clause also provides for the issue of a warrant in the circumstances
where it is not reasonably practicable for the Magistrate to fax a copy of the
warrant to the inspector.
The Clause provides for either a facsimile warrant or a warrant form
properly completed by the inspector to authorise the entry and exercise of
other powers stated in the warrant issued by the Magistrate. The Clause
requires the inspector to send the sworn application and the completed
warrant form, if one has been completed, to the Magistrate at the first
reasonable opportunity.
Provision is also made for a court to presume, in a proceeding before the
court, that a power exercised by an inspector was not authorised by a
warrant issued under this Clause unless the warrant is produced in evidence,
or the contrary is proved.
Clause 35 allows an inspector to do certain things after entering a place
for the purpose of monitoring or enforcing compliance with this Act. This
includes searching any part of the place and inspecting or photographing
any part of the place or anything in the place.
An inspector may require the occupier of the place, or a person in or on
the place, to give the inspector reasonable help in the exercise of the
inspector's powers under this Clause. It is a reasonable excuse for the
person not to comply if the person is asked to give information or produce a
document (other than a document required to be kept by the person under
this part of the Act) that might incriminate the person.
Clause 36 provides that an inspector who enters a place with the
occupier's consent, may seize a thing in the place subject to certain
circumstances. Equally, an inspector entering a place with a warrant may
seize the evidence for which the warrant was issued.
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The Clause also authorises an inspector to seize anything else at the place
if the inspector reasonably believes it is evidence of an offence against this
Act, and that the thing must be seized to prevent it from being hidden, lost,
destroyed or used to continue or repeat the offence.
Provision is also made for an inspector to seize a thing if the inspector
reasonably believes the thing has just been used in committing an offence
against this Act.
Clause 37 describes the powers an inspector may exercise with regard to
a thing which the inspector has seized, including the power to move the
thing from the place where it was seized or leave the thing at the place of
seizure but take steps to restrict access to it.
Where an inspector restricts access to a seized thing, a person may not
tamper or attempt to tamper with the thing or something restricting access
to the thing without the inspector's approval.
Clause 38 requires an inspector who has seized a thing to give a receipt
generally describing the seized thing and its condition to the person from
whom the thing was seized as soon as practicable. If it is not practicable to
give a receipt to the person, the inspector must leave the receipt at the place
of seizure in a reasonably secure way. The Clause also provides for
circumstances when an inspector does not have to give a receipt for the
thing.
Clause 39 provides for the circumstances in which an inspector must
return a seized thing to its owner. Provision is also made for an inspector to
return a thing seized as evidence as soon as the inspector is satisfied that its
retention as evidence is no longer required.
Clause 40 requires an inspector to allow the owner of a thing seized as
evidence access to inspect the thing or, if a document, to take copies of the
document. The provision does not apply in circumstances in which it is
impractical or unreasonable to allow the owner of a thing seized as evidence
to inspect the thing or copy the document.
Clause 41 prohibits the impersonation of an inspector.
Clause 42 prohibits a person, without reasonable excuse, obstructing an
inspector in the exercise of a power.
Clause 43 provides a power for an inspector to require information from
persons where the inspector reasonably believes that an offence against the
Act has been committed and a person may be able to require information
about the offence.
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Clause 44 provides that an inspector may require any person to make
available or produce for inspection, at a reasonable time and place
nominated by the inspector, a document issued to the person under this Act
or required to be kept under this Act.
An inspector is authorised by this Clause to keep the document for the
purpose of taking a note on it or making a copy of it. If the inspector makes
a copy of document, the inspector may require the person responsible for
keeping the document to certify the copy as a true copy of the document.
The person responsible for keeping the document must comply with the
requirement to certify the copy as a true copy of the document unless the
person has a reasonable excuse.
The Clause also stipulates that an inspector must return the document to
the person as soon as practicable after making the note or the copy.
Clause 45 provides that while exercising a power, either an inspector or a
person acting under the direction of an inspector, damages anything, notice
must be given to the owner of any non-trivial damage
Clause 46 allows a person to claim compensation from the State if the
person incurs loss or expense because of the exercise or purported exercise
of the power under this Part. A court may only award compensation if it is
satisfied that it is just in the circumstances of the particular case. In addition,
a regulation may prescribe matters that may, or must, be taken into account
by a court when considering whether it is just to make a compensation
order.
Subdivision 2--Special meetings and inquiries
Clause 47 sets out the circumstances in which QOFS may call a special
meeting of a society or hold an inquiry into the affairs of a society. The
Clause also deals with the expenses of holding the meeting or an inquiry
and empowers QOFS to direct that directors and such other persons as it
requires to attend the meeting or inquiry and allows QOFS or any person
nominated by QOFS to attend and address a meeting held under this
provision.
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Subdivision 3--Special power of intervention
Clause 48 deals with the circumstances in which QOFS may place a
society under direction. QOFS has a general power of direction under those
circumstances to ensure that the society complies with the requirements of
this Act, giving examples of specific directions that QOFS may give. The
Clause also imposes a penalty for failure to comply with any direction.
Subdivision 4--Power to suspend operations of society
Clause 49 specifies the circumstances in which QOFS may suspend the
operations of the society and empowers QOFS to give a direction to the
society not to carry out certain activities. The provision also imposes a
penalty for failure to comply with the directions set out in the notice.
Subdivision 5--Administrators
Clause 50 specifies the circumstances in which QOFS may appoint an
administrator to conduct the affairs of the society.
Clause 51 provides that the administrator must give QOFS notice of
particular changes.
Clause 52 provides that on the appointment of an administrator, the
directors of the society cease to hold office and all contracts of employment
with, or for the provision of administrative or secretarial services to, the
society are terminated. The administrator may terminate any contract for the
provision of other services to the society.
Clause 53 provides that the administrator has the powers and functions
of the board of a society, including the board's power of delegation.
Clause 54 provides for the steps that need to be taken on the revocation
of the administrator's appointment.
Clause 55 provides that on revocation of the administrator's
appointment, the administrator must prepare and give a report to QOFS
showing how the administration was carried out.
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Clause 56 provides for the payment of the expenses of the
administration.
Clause 57 provides for the administrator's liability for a loss incurred by
a society in instances involving the administrator's fraud, dishonesty,
negligence or wilful failure to comply with the Act or the society's rules.
Clause 58 provides that where QOFS appoints directors of the society
after the revocation of the appointment of an administrator, QOFS by
written notice to the society may specify the extent to which this provision
is intended to apply to the society.
Clause 59 provides for a stay of proceedings where an administrator has
been appointed.
Clause 60 requires the administrator to prepare a report to QOFS,
immediately upon receipt of a request from QOFS.
Subdivision 6--Supervision Fund and levy
Clause 61 provides for the establishment of the Cooperatives
Supervision Fund and specifies moneys that are to be paid into and out of
the Supervision Fund and the manner in which QOFS may invest the
money in the Supervision Fund.
Clause 62 provides for a formula for the calculation of the supervision
levy. QOFS may fix the amount of the levy differently for different
societies or determine that the levy is not payable by specified societies.
QOFS may also determine that the levy may be paid by specified
instalments.
Clause 63 requires QOFS to consult with industry bodies and societies
in relation to the amount to be paid as a supervision levy.
Clause 64 provides that default in making a payment of a supervision
levy is an offence.
PART 5--OBJECTS AND POWERS OF SOCIETIES
Division 1--Objects
Clause 65 sets out the objects of societies, including certain limitations
attaching to those objects.
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Division 2--Powers
Clause 66 provides for the powers of a society.
Clause 67 deals with the control of certain types of financial transaction.
Clause 68 prohibits a society from carrying out any of its activities in
foreign currency.
Clause 69 provides for the raising of funds by a society and the security
for amounts so raised.
Division 3--Guarantees
Clause 70 provides that the Treasurer may execute a guarantee for the
repayment of an amount raised on loan by a society and may charge the
society a fee for doing so.
Clause 71 provides for details regarding the terms, contents and the
enforcement of a guarantee, as well as providing for the means of satisfying
any liability arising under a guarantee.
PART 6--SOCIETIES
Division 1--Formation and registration
Clause 72 sets out the requirements for the formation of a new society
under this Act.
Clause 73 deals with the procedure for registration of a new society,
including details of the necessary documents which must accompany an
application for registration of a new society. The provision also deals with
the eligibility of a proposed new society for registration.
Clause 74 sets out the requirements on QOFS once it has registered a
new society and also deals with the effect of the documents which QOFS
must issue to the society.
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Clause 75 sets out the effect of incorporation under the Act as a society
on a society.
Division 2--Rules
Clause 76 provides that a society must provide in its rules for those
matters set out in a relevant standard.
Clause 77 requires a society to provide a copy of its rules to a member or
proposed member upon payment of a fee, if any fee has been approved by
the society's board.
Clause 78 provides that a society and its members are bound by the rules
of the society.
Clause 79 provides that subject to other provisions of this Act the rules
of a society may only be altered by special resolution of the members.
Clause 80 provides that the rules of a society may be altered by
resolution of the board where the alteration is required by or under this Act
or is to give effect to a standard. The provision also specifies when notice is
to be given of such alteration of the rules and gives an instance of how such
notice may given to members.
Clause 81 provides the circumstances in which QOFS must register an
alteration of rules.
Clause 82 provides that QOFS may require modification of rules in
certain defined circumstances and specifies when notice must be given, and
how such notice may be given, to members.
Clause 83 provides that QOFS may modify rules to facilitate a transfer
of engagements and also specifies when notice must be given, and how
such notice may be given, to members.
Division 3--Membership
Clause 84 provides for who are the members of the society at various
times and under various conditions
Clause 85 sets out the requirements on a minor, if the rules of a society
permit a minor to be a member.
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Clause 86 sets out the requirements regarding joint membership, if the
rules of a society permit that type of membership.
Clause 87 provides for the circumstances in which a person's
membership of a society ceases.
Clause 88 provides for the circumstances in which a member may be
expelled or have his or her membership rescinded.
Clause 89 provides for the limited liability of a member of a society with
regard to his or her membership of the society.
Clause 90 provides that financial accommodation may only be provided
by a society to a member and requires the member and the society to
comply with certain provisions in that regard. The Clause also prohibits a
society from accepting a deposit of money from any person.
Division 4--Name and office
Clause 91 provides the mechanism regarding the registration of the
name, or a change of name, of a society by QOFS.
Clause 92 provides that a society must have certain words as part of its
name.
Clause 93 provides that a change of name of a society does not affect the
identity of the society, nor does such change affect rights, obligations or
proceedings involving the society.
Clause 94 provides that QOFS may direct a society to change its name if
QOFS is satisfied that its present registered name is likely to be confused
with the name of another body corporate or a registered business name.
Clause 95 provides that a society must ensure that its registered name is
used on all documentation etc. used by the society and that its registered
name and the words "Registered Office" are displayed outside its registered
office.
Clause 96 provides for the society's seal and the use of same.
Clause 97 provides that a society is to have a registered office and also
provides that prior notice of a change of registered office must be given to,
and registered by, QOFS.
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PART 7--MANAGEMENT
Division 1--Directors and officers
Clause 98 provides for the meaning of "employee" for the purposes of
this Division of the Act.
Clause 99 provides that the business and operations of a society are to be
managed and controlled by a board of directors. The provision also
provides for the exercise of the powers of the society and the board by the
board, subject to certain restrictions on such powers of the board.
Clause 100 provides for meetings of the board, including the time
between meetings and the quorum at a meeting of the board.
Clause 101 specifies that the number of directors of a society must not
be less than 5.
Clause 102 provides for the election or appointment of directors
including term of office, and the requirements for re-election or re-
appointment.
Clause 103 provides that a director may appoint a person who is eligible
to be a director of the society to be an alternate director in the place of that
director.
Clause 104 provides for the election of a chairperson of the board of the
society.
Clause 105 provides that certain persons are not eligible to be directors of
a society.
Clause 106 provides the circumstances in which the office of a director
becomes vacant.
Clause 107 provides the mechanism for causing the office of a director
to become vacant by a resolution passed by the society, subject to certain
conditions whereby the director is given the opportunity to respond.
Clause 108 requires a director of a society who has a direct or indirect
interest in a contract or proposed contract with the society to declare the
nature and the extent of that interest to the society's board. The provision
also sets out the manner in which the declaration is to be made.
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Clause 109 requires a director of a society who holds an office or has an
interest by which duties or interests might be created which could conflict
with the director's duties as a director to declare relevant particulars to the
society's board.
Clause 110 provides for the recording and the effect of declarations made
by a director to the society's board under Clauses 108 and 109 of the Bill.
Clause 111 provides for the reporting of declarations made under
Clauses 109 and 110 of the Bill to QOFS and to the society's members.
Clause 112 provides that Clauses 109 and 110 of the Bill are in addition
to any rule of law or a provision in a society's rules restricting a director
from engaging in activities in conflict with his duties as a director.
Clause 113 provides that a director of a society is to give written notice to
the society to enable the society to comply with the provisions relating to the
Register of Directors.
Clause 114 provides the conditions upon which financial
accommodation may be provided to a director of a society.
Clause 115 requires the remuneration of a director to be approved at a
general meeting of the society.
Clause 116 prohibits a society from entering into a management contract
without the prior written approval of QOFS.
Clause 117 sets out the duties and responsibilities of directors and
officers, including the duty to act honestly etc. The provision also outlines
the circumstances in which compensation may ordered to be paid to a
society for any loss or damage it has suffered.
Clause 118 provides for the effect of a contravention of Clause 117,
indicating that Clauses 117 and 118 are in addition to and do not derogate
from any other rule of law about the duties of directors, officers or
employees of a society.
Clause 119 provides that a person who is not a director or alternate
director of a society must not purport to act as a director of the society.
Clause 120 provides that the board must appoint a natural person over
the age of 18 years who is resident in the State as the secretary of the
society. The provision also deals with responses required when the office of
secretary is vacant and with certain signing requirements involving a person
who is both a director and the secretary of the society.
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Clause 121 provides for the circumstances affecting the liability of, and
any indemnity for, officers and employees of a society involving the
society.
Division 2--Meetings
Clause 122 provides for the holding of the first and each subsequent
annual general meeting of the society.
Clause 123 provides for the convening of a special general meeting of a
society.
Clause 124 provides for the quorum necessary at a general meeting of a
society.
Clause 125 provides the requirements for giving notices of an annual
general meeting and a general meeting of a society, including the timing
within which relevant notices are to be given. The provision also deals with
the failure by a member to receive, and a society to give, the relevant notice.
Clause 126 deals with the voting rights of a member of a society.
Clause 127 deals with the requirements relating to a special resolution of
a society, including the method of giving notice to members and the time
within which such notice must be given, as well as matters relating to the
registration of the special resolution by QOFS.
Clause 128 provides for the registration of a special resolution and the
effect of such registration.
Clause 129 provides for the keeping of full and accurate minutes of
every meeting of a society's board and every meeting of a society's
members.
Division 3--Registers and inspection
Clause 130 provides for keeping of certain registers by a society, as well
as providing for the place or places where the registers may be kept in this
State.
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Clause 131 provides that a society must keep a register, containing
specified particulars in relation to its directors, principal executive officer
and secretary. Provision is also made for the notification of changes in
particulars to QOFS, the searching of the register by members and others
and having the register available for scrutiny by members during the
society's annual general meetings.
Clause 132 provides for the keeping of a register of members by a
society and also makes provision for the searching of the register by
members and other persons duly authorised by the society.
Clause 133 provides for the keeping by a society of certain nominated
documents at its registered office and having such documents available for
inspection without fee by members, potential members and creditors.
Clause 134 provides that a society must, when asked by a member,
provide the member with details of the person's financial position with the
society as a member.
Clause 135 provides that a member may, subject to the regulations and
this Act, request a copy of a register or part of a register kept by a society
under this Act.
Division 4--Accounts
Clause 136 specifies the financial year of a society.
Clause 137 requires a society to keep its accounting records in a certain
form, for a defined period and within the State.
Clause 138 requires a society to make its accounting records available for
inspection at all reasonable times by a director of the society and any other
authorised person.
Clause 139 provides that the directors of a society must prepare a profit
and loss account and balance sheet at a specified time.
Clause 140 requires the directors of a society to ensure that the society's
accounts are audited.
Clause 141 provides that the directors of a society must ascertain certain
matters prior to the preparation of a society's profit and loss account and
balance sheet.
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Clause 142 provides that a society's accounts must comply with all
necessary requirements and accounting standards applicable to a society's
operations.
Clause 143 requires the directors of a society to attach to the accounts to
be laid before an annual general meeting, a signed director's statement
containing the various matters specified in the Clause.
Clause 144 deals with the preparation of a directors' report in relation to
the various particulars specified in the Clause which must be dealt with in
the report.
Clause 145 specifies the various accounts, statements and reports which
the directors of a society must cause to be laid before each annual general
meeting of the society.
Clause 146 provides for the penalties on a director of a society for
contravention of this Division of the Act.
Division 5--Audit
Clause 147 provides for the meaning of "officer" for the purposes of
Clauses 148 and 149 of the Bill.
Clause 148 provides for the qualifications necessary for a person to be
appointed as auditor of a society.
Clause 149 provides for the qualifications necessary for a firm to be
appointed as auditor of a society.
Clause 150 provides that a person or a member of a firm must not
knowingly disqualify himself or the firm while an appointment as auditor
continues.
Clause 151 sets out the procedures for the appointment of an auditor of a
society. The provision also requires a proposed appointee to consent in
writing to the appointment as the auditor of a society; specifies a time within
which a replacement auditor should be appointed by a society (failing
which, provision is then made for QOFS to appoint the replacement) and
provides penalties for directors and societies which contravene various
aspects of this Clause.
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Financial Intermediaries
Clause 152 provides that a member of a society must nominate a person
or firm for appointment as auditor of the society and indicates the manner in
which the society must deal with the nomination.
Clause 153 provides the requirements and procedures for the removal of
an auditor, including the notices which must be provided to various parties
(including QOFS) and the time within which these notices must be given.
Clause 154 provides the requirements for resignation of an auditor,
including the notices which must be given, the consents which must be
obtained and the timing of these events.
Clause 155 provides for notice of retirement or withdrawal as auditor to
be given to QOFS within certain time.
Clause 156 provides that an auditor of a society ceases to hold office if
the society commences to be wound-up.
Clause 157 requires a society to pay the reasonable fees and expenses of
its auditor.
Clause 158 requires an auditor to report to the members of a society on
specified matters and provides details of particulars which must be included
in that report. The provision also sets out how the auditor's report must be
dealt with by the society.
Clause 159 sets out the powers and duties of an auditor, including the
auditor's right of access to the society's accounting and other records,
power to require information from officers and entitlement to attend
meetings and receive notices. The provision also requires an auditor to
inform QOFS in writing as to certain non-compliances and contraventions.
Clause 160 requires the auditor to prepare a final report if the society is
dissolved as part of a merger or transfer of engagements.
Clause 161 prohibits the obstruction of an auditor by an officer of a
society and provides for certain penalties in the event of any obstruction.
Clause 162 provides for certain definitions relating to an auditor's
qualified privilege and specifies the circumstances in which qualified
privilege applies.
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Financial Intermediaries
Division 6--Returns and relief
Clause 163 provides that a society must lodge returns with QOFS in the
form in which QOFS requires it.
Clause 164 provides that the directors of a society may apply to QOFS
for relief from complying with requirements concerning accounts and audit
of the society. The provision also deals with the matters QOFS must give
consideration in dealing with the application, to whom notice of any relief is
to be given and how and where it must be published.
PART 8--CHARGES
Clause 165 provides for the registration of charges over a society's
assets by applying that Part of the Corporations Law relating to charges
(Part 3.5), to a society.
PART 9--MERGERS AND TRANSFERS OF
ENGAGEMENTS
Clause 166 provides for certain definitions of terms used throughout this
Part.
Clause 167 provides for the application of this Part.
Clause 168 provides the mechanism for a merger or transfer of
engagements of 2 or more societies, including the requirements for
approval of the relevant procedure by members and the contents of a
statement which might be sent to members under the particular procedure.
Clause 169 provides the circumstances in which QOFS may register a
merged society under this Division.
Clause 170 deals with the circumstances in which QOFS may issue a
certificate confirming a voluntary transfer of engagements under this
Division.
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Financial Intermediaries
Clause 171 provides the circumstances in which QOFS may direct a
society to transfer its engagements to another society if the board of the
other society has by resolution consented to the proposed transfer.
Clause 172 provides that a society must take all reasonable steps to
comply with the direction given by QOFS under this Division to transfer its
engagements.
Clause 173 provides for the time whereby QOFS must issue a certificate
of confirmation for a transfer of engagements by a direction from QOFS
under this Division.
Clause 174 provides that QOFS must give a certificate of confirmation
to the transferee society, which is party to a transfer of engagements by
direction under this Division.
Clause 175 provides that the transfer of engagements by direction takes
effect on the issue of the certificate of confirmation of the transfer BY
QOFS.
Clause 176 provides that QOFS must cancel the registration of the
society which had been directed to transfer its engagements to another
society under this Division.
Clause 177 describes the effect of a merger of societies under this
Division on a range of matters including members, assets and liabilities,
references in documents to the former societies, legal proceedings and other
rights and duties etc. of the former societies.
Clause 178 describes the effect of a transfer of engagements under this
Division on a similar range of issues to those discussed in Clause 177 (for
mergers) of the Bill.
Clause 179 describes the effect of a merger or a transfer of engagements
on guarantees issued by the Treasurer.
PART 10--EXTERNAL ADMINISTRATION
Division 1--Receivers and managers
Clause 180 provides for the application of Part 5.2 of the Corporations
Law with all necessary modifications and any prescribed modifications in
relation to the appointment of receivers and managers to societies.
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Financial Intermediaries
Division 2--Administration of society's affairs
Clause 181 provides for the application of the Corporations Law to the
administration of societies, subject to any necessary modifications.
Division 3--Winding-up
Clause 182 provides for the means by which a society may be wound-up
under this Act.
Clause 183 sets out the circumstances in which a society may be wound-
up on a certificate of QOFS. Provision is also then made for QOFS to
appoint the liquidator (who may be employed in the office of QOFS).
Clause 184 provides for the application of the Corporations Law to the
winding-up or dissolution of a society, subject to this Division.
Clause 185 provides for the appointment of a person employed in the
office of QOFS as liquidator of a society which is to be wound-up
voluntarily. Provision is also made for the circumstances in which that
person may be appointed.
Clause 186 deals with the appointment of a replacement to the office of
liquidator where a society is being wound-up voluntarily and the liquidator
was not appointed under the previous Clause.
Clause 187 provides that QOFS may control the amount of
remuneration paid to the liquidator of a society which is being wound-up
voluntarily.
Clause 188 provides for the registration of the dissolution and the
cancellation of the registration of a society by QOFS as soon as possible
after the society is dissolved or taken to be dissolved.
PART 11--SPECIAL INVESTIGATIONS
Clause 189 provides for the definition of an "officer" of a society for the
purposes of any special investigations conducted under this Part.
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Financial Intermediaries
Clause 190 sets out the requirements and procedures under which QOFS
may appoint an investigator to investigate a society's affairs under this Part.
Clause 191 provides that where 2 or more investigators are appointed
under the terms of this Part, each of the investigators may perform the
functions or exercise the powers of an investigator independently of the
other investigators.
Clause 192 provides the powers of an investigator under this Part,
including the power to require an officer of a society to produce all society
documents in the officer's possession or under the officer's control.
Provision is also made for an officer to appear before the investigator for
examination under oath or affirmation and for an investigator to administer
an oath or affirmation.
Clause 193 provides for the obligation of an officer to comply with the
requirements of an investigator. Provision is also made for the examination
of an officer before an investigator and for a legal practitioner to attend the
examination of an officer.
Clause 194 provides the circumstances under which an officer of a
society who is a legal practitioner may refuse to give information or
produce a document to an investigator.
Clause 195 provides for an investigator to certify to the Court a failure of
an officer to comply with a requirement of an investigator. The Court is
then empowered to make certain orders or impose certain punishments
upon the officer.
Clause 196 provides for the recording of an examination of an officer of
a society by an investigator. Provision is also made for copies of the record
of an examination to be given to certain persons, including a legal
practitioner. Penalties are provided for the misuse of the record of
examination by a legal practitioner.
Clause 197 provides for the delegation of most of an investigator's
powers by an investigator.
Clause 198 provides for the giving of interim reports and a final report
by an investigator to QOFS. Provision is also made for the delivery to
QOFS of any documents of the society in the possession of the
investigator, as well as providing for retention of such documents by QOFS
and access to those documents by other persons. Provision is also made for
the possible publication of the whole or part of the report.
25
Financial Intermediaries
Clause 199 provides for instituting of prosecution action by QOFS
against a person following a report made to it under this Part.
Clause 200 provides for the admissibility of a document certified by
QOFS as a copy of an investigator's report under this Part as evidence in
legal proceedings.
Clause 201 provides for responsibility for the payment of the expenses
of an examination under this Part, whether by QOFS or the society,
including requirements for reimbursement of QOFS by the society and
action for recovery of an amount by QOFS as a debt due to it in the
appropriate court.
Clause 202 specifies offences against a person who interferes with
documents of a society the affairs of which are being investigated under this
Part. Provision is also for a defence to a prosecution for an offence against
the provisions of this Clause.
PART 12--REVIEW OF DECISIONS AND APPEALS
Division 1--Review of decisions
Clause 203 provides that a person whose interests are affected by a
decision of QOFS may request QOFS to review that decision. The person's
right to receive a statement of the reasons for the original decision is also
established.
Clause 204 provides for the time within which an application for review
of the original decision must be made in differing circumstances and
empowers QOFS to extend the time for making applications. QOFS is
obliged to give the applicant an opportunity to appear before QOFS and
make a submission about the original decision.
Clause 205 provides for the dealing by QOFS with applications for
review and the times within which various actions must be taken by QOFS,
including the immediate giving of written notice of the review decision to
the applicant and details of what that notice must contain.
26
Financial Intermediaries
Division 2--Appeals against review decisions
Clause 206 provides for an appeal to a Magistrates Court against a
review decision by an affected person.
Clause 207 provides the mechanism for starting an appeal.
Clause 208 indicates that an appeal is by way of rehearing by the
Magistrates Court.
Clause 209 outlines the powers of the Magistrates Court in deciding an
appeal.
PART 13--MISCELLANEOUS
Division 1--Evidence
Clause 210 provides that certificates issued by QOFS or copies thereof
appearing to be certified as such by QOFS are evidence of the matters stated
in the certificate or copy.
Clause 211 provides that a printed copy of a society's rules is evidence
of the society's rules if appearing to be certified by the society's secretary.
Clause 212 provides that the registers kept under this act are evidence of
the particulars directed or authorised by or under the Act to be inserted in
the registers.
Clause 213 provides for the evidentiary effect of entries in the minutes of
a meeting of a society.
Clause 214 provides for the admissibility in evidence of copies of certain
entries in a book of a society.
Division 2--Offences
Clause 215 provides that a society is to give information to QOFS or
another person. Penalties are provided for contravention by a society and
any officer of a society who is in default.
27
Financial Intermediaries
Clause 216 provides that a society must not contravene restrictions
imposed on its powers or on the exercise of its powers under the Act.
Penalties are provided for contravention by a society and any officer of a
society who is in default.
Clause 217 provides for the interpretation of certain words for the
purposes of Clauses 218-220 of the Bill.
Clause 218 deals with offences by officers of societies, as well as
providing certain definitions relevant to whom the provisions cover, the
timing of certain events and stages within the life of a society when the
provision is relevant.
Clause 219 provides for an offence against an officer of a society who
has knowingly incurred debts not likely to be repaid by the society, and an
offence against a person who was knowingly a party to the carrying on of
business of a society for any fraudulent purpose.
Clause 220 provides for QOFS or a prescribed person to apply to the
Court for a declaration of liability of a person convicted of an offence under
the previous Clause.
Clause 221 prohibits a person from providing any inducements to a
member or creditor of a society relating to the appointment of a liquidator of
a society.
Clause 222 prohibits an officer of a society from falsifying the records of
a society.
Clause 223 provides for certain offences against an officer of a society
who commits fraud.
Clause 224 provides for the interpretation of certain words for the
purposes of Clauses 225-226 of the Bill.
Clause 225 provides for an offence where a person makes false or
misleading statements to QOFS or a relevant person (including an
inspector).
Clause 226 provides for an offence where a person gives QOFS or a
relevant person (including an inspector) a document containing information
which the person knows is false, misleading or incomplete.
Clause 227 provides that the Court has power to make certain orders in
relation to damages to a society against certain persons.
28
Financial Intermediaries
Clause 228 prohibits a person from giving or making false copies of the
rules of a society.
Clause 229 prohibits a person from obtaining possession of a property
of a society by false representation or imposition and withholding or
wilfully applying any part of such property for unauthorised purposes.
Clause 230 prohibits an officer of a society from accepting any
commission, fee or reward from any person in connection with that
person's transaction with the society.
Clause 231 provides for the extension of the reference to an officer in
default to any officer of the society who is in any way knowingly concerned
in or party to the contravention or offence.
Division 3--Legal proceedings
Clause 232 provides for indictable and summary offences against the
Act.
Clause 233 provides the mechanism for taking proceedings for an
indictable offence against the Act.
Clause 234 provides limitations on who may hear proceedings for
offences against this Act.
Clause 235 provides for a 2 year limitation for starting summary
proceedings.
Clause 236 provides for separate and further offences for continuing
offences.
Clause 237 provides that the Court may grant an injunction restraining a
person from engaging in certain conduct.
Clause 238 provides that the Court may grant relief from liability to
certain nominated persons.
Division 4--Other matters
Clause 239 provides for the secrecy of protected information and
protected documents.
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Financial Intermediaries
Clause 240 provides for the abolition of the doctrine of ultra vires in
relation to a society.
Clause 241 complements the preceding Clause by providing the
assumptions that a person having dealings with a society is entitled to make.
Clause 242 sets out the effect of the operation of the preceding Clause.
This Clause and the 2 preceding Clauses are based upon adopting a similar
position with regard to the abolition of the application of the doctrine of ultra
vires to societies as that adopted by the Corporations Law in relation to
companies.
Clause 243 provides for the abolition of the doctrine of constructive
notice in relation to a society.
Clause 244 provides that QOFS may approve forms for use under this
Act.
Division 5--Regulations
Clause 245 provides a general regulation-making power for the purposes
of this Act.
Clause 246 provides for a specific regulation-making power in relation to
the matters therein provided for.
Clause 247 provides for a further specific regulation-making power in
relation to the matters therein provided for.
PART 14--TRANSITIONAL
Clause 248 provides for the continuation of existing societies registered
under the previous legislation.
Clause 249 provides for the issue of a certificate of incorporation under
this Act to a continuing society by QOFS on application by the society.
Clause 250 provides for the continuation of guarantees executed under
the previous legislation.
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Financial Intermediaries
Clause 251 provides for the continuation of the existing rules of an
existing society, subject to this Act.
Clause 252 provides that where a society has commenced formation
procedures under the previous legislation but has not been registered under
that previous legislation, then subject to certain requirements imposed by
this Act, the previous legislation continues to apply to the formation of the
society and it may then be registered under this Act.
Clause 253 provides for changes to existing loans in order that such
loans comply with a standard dealing with the transition of such loans to
loans complying with the provisions of the Bill.
Clause 254 makes provision for those directors of societies whose terms
of office are longer than three years.
Clause 255 provides that copies of existing management contracts must
be given to QOFS within 1 month after the commencement of this Act.
Provision is also made in relation to the continuation of such contracts.
Clause 256 deals with the extension of time to hold an annual general
meeting, due to be held under the previous legislation.
Clause 257 deals with the registration of a special resolution passed by a
continuing society under the previous legislation but not registered prior to
the commencement of this Act.
Clause 258 provides for the appointment of a registered company auditor
as the auditor of a society within 6 months of the commencement of this
Act.
Clause 259 provides for continuation of a special meeting or inquiry in
relation to a continuing society as if the meeting or inquiry had been called
or commenced under this Act.
Clause 260 provides for the continuation under this Act of a winding-up
of a continuing society under a certificate issued under the previous
legislation.
Clause 261 provides for the continuation under the previous legislation
of a winding-up of a continuing society which was started, but not finished,
before the commencement of this Act.
Clause 262 provides for payment of an amount from a previously
established Cooperatives Supervision Fund into a similar Fund under
section 61 of this Act.
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Financial Intermediaries
PART 15--APPLICATION OF ACT WITH CHANGES
TO CERTAIN SOCIETIES
Clause 263 provides for the application of this Act to the Cairns
Cooperative Weekly Penny Savings Bank Limited and terminating building
societies as outlined in schedule 1 to the Act.
PART 16--REPEALS AND AMENDMENTS
Clause 264 provides for the repeal of the Building Societies Act 1985 and
the Cooperative Housing Societies Act 1958.
Clause 265 provides for the amendment of the Queensland Office of
Financial Supervision Act 1992 as outlined in schedule 3 to the Act.
SCHEDULE 1
ACT APPLIES TO CERTAIN ENTITIES AS IF AMENDED
PART 1--APPLICATION OF ACT TO THE CAIRNS
COOPERATIVE WEEKLY PENNY SAVINGS BANK
LIMITED
This Part provides for the application of the Act to the Cairns
Cooperative Weekly Penny Savings Bank Limited, subject to the express
non-applicability of various provisions and the modification or replacement
of other provisions of the Act as contained in this Part of the Schedule.
PART 2--APPLICATION OF ACT TO
TERMINATING BUILDING SOCIETIES
This Part provides for the application of the Act to terminating building
societies, subject to the express non-applicability of various provisions and
32
Financial Intermediaries
the modification or replacement of other provisions of the Act as contained
in this Part of the Schedule.
SCHEDULE 2
TERMINATING BUILDING SOCIETIES
This Schedule contains the names of the terminating building societies,
referred to in Clause 263 of the Bill.
SCHEDULE 3
AMENDMENT OF QUEENSLAND OFFICE OF FINANCIAL
SUPERVISION ACT 1992
This Schedule provides for amendments to the Queensland Office of
Financial Supervision Act 1992 as a consequence of the commencement of
the Financial Intermediaries Act 1996 and the repeal of the Building
Societies Act 1985 and the Cooperative Housing Societies Act 1958.
SCHEDULE 4
DICTIONARY
This Schedule provides the dictionary, defining particular words used in
the Act, referred to in Clause 3 of the Bill.
© The State of Queensland 1996
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