Corporations Act 2001: Legal Analysis of Key Provisions and Cases

This assignment analyzes the Corporations Act 2001 (Cth), examining key provisions, relevant case law, and regulatory guidelines. It begins by exploring Section 942C, focusing on the Financial Services Guide and its requirements, including documentation, remuneration, and licensing processes. The assignment then analyzes Australian Securities and Investments Commission v Ostrava Equities Pty Ltd [2016] FCA 1064, detailing the court's findings regarding contraventions of Section 942C and related implications for financial services. Finally, it examines Regulatory Guide 175, discussing the requirements for Financial Service Guides provided to retail clients and the circumstances under which they are not necessary. The assignment incorporates relevant hyperlinks and citations to legislation and case law, providing a comprehensive overview of the subject matter.

Running Head: CORPORATIONS ACT 2001 0
Corporations Act 2001
Student’s Name
9-1-2019

CORPORATIONS ACT 2001 1
Corporations Act, 2001 (Cth)
This Act explains all the rules and regulations beginning from the incorporation of an
organization to the day to day operations. The trade culture has evolved drastically since the
commencement of this act. This discussion highlights some of the aspects of this legislation.
Question 1(a)
(i)
Title: Corporations Act 2001 - SECT 942C, Financial Services Guide given by authorised
representative--main requirements.
Hyperlink: http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s942c.html
Date Accessed: 12th September 2019.
(ii)
The section 942C, of Corporations Act 2001 specifies the main guidelines that need to be
followed in order to run a financial services transaction. It clearly states, the important
requirements that need to be fulfilled in order to provide as well as accept the financial
services by the authorized representative. It includes the details like basic documentation,
remuneration involved, parties involved, process of licencing and as such. Section 942C,
talks about the processes involved and things to be taken care of while financial services are
being transacted (Fedral Register Of Legislation, 2010).

CORPORATIONS ACT 2001 2
(iii)
The penalty applicable upon breaching of Section 942C (8) of Corporations Act 2001,
includes either one-year imprisonment or 5 penalty units or even both (World Intellectual
Property Organization, 2015).
Question 2 (a)
(i)
Australian Securities and Investments Commission v Ostrava Equities Pty Ltd [2016] FCA
1064
Hyperlink: http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2016/1064.html?
context=1;query=ostrava;mask_path=au/cases/cth/FCA
Date Accessed: 12th September 2019.
(ii)
As per the declaration by court, the contravention by the First Defendant was that, in
February 2014, Richard Stringer and in 2010, William Tobin were not at all dated with the
financial services guide in question as per the demand by section 942C, subsection (5).
The financial services guide provided in January 2014 to clients WP and KE were again
misdated as per the section 924C, subsection (5). Also, it did not disclose the detailed level
of information required by section 942C, subsection (3) and it was not specifically cleared
out in an effective manner as was inflicted by the Section 942C, subsection (6A) as
mentioned in (Federal Court of Australia, 2016).

CORPORATIONS ACT 2001 3
(iii)
In earlier stages, ASIC reframed its indigenous idea of the original process being amended
in April 2016, in order to introduce the Defendants as the Equity Capital Partners, and to
look for the declarations regarding different infringements on their part in accordance with
the ASIC Act (2001) and Corporations Act against the Opposite Party, also known as the
Defendants (Federal Court of Australia, 2016) .
An agreed upon announcement of admissions and facts was submitted in June 2016 jointly on
behalf of the parties, as in the Mr. Grimm, ASIC, Equity Capital Partners (Corporate
Defendant without any provisional liquidation-the only corporate).
Depending upon the admission of facts and the abovementioned statements submitted by the
ASIC, it pursues:
 There was a great deal of contravention on the part of various provisions of Corporations
Act, the National Consumer’s Credit Protection Act (Cth), ASIC Act and\or the
Corporations Regulations 2001 (Cth).
 Defendants, Mr. Grimm and Ms. Ash being disqualified for the periods of 7 and 15 years
in order to management the Corporation.
 An injunction was passed, in accordance with the actions of Mr. Grimm and Ms. Ash
that prevents them from implementing or engaging in the business or\and any provisions
related to the same for allotted respective periods of 10 years and 20 years.
 Also, winding up all the corporate defendants (Fedral Court of Australia, 2016).

CORPORATIONS ACT 2001 4
Question 3(c)
(i)
Citation: REGULATORY GUIDE 175 Licensing: Financial product advisers—Conduct and
disclosure November 2017
Hyper link: https://download.asic.gov.au/media/4698465/rg175-published-10-april-2018.pdf
Date Accessed: 12 September 2019.
(ii)
The basic requirements that retail clients are stated or informed by the Financial Service
Guides (FSG’s) are such as a thumb rule, the retail clients are provided by the FSG’s
(Financial Service Guides) at all costs by the authorized representatives and financial service
licensees as they fulfil the required financial services needed by the client.
The main reason the above-mentioned act is done is, to keep the client informed and ensure
that the knowledge regarding the services that is being provided by the Financial Service
Provider and keep the client up to date regarding the same. The policies relating to the
Financial Service Guides are directly or indirectly linked to and are applied on both the
insurance as well as Corporations regimes excluding the requirements as per the financial
products when offering the financial services (Federal Legislation of Australia , 2019).
The FSG’s or the Financial Service Guides are not necessary in these scenarios; when the
client has already been informed in written form about the types of services provided and
executed by their Financial Service Provider, usually in cases where certain transitions are
happening or about to occur in near future, such information is provided but not in the
Financial Services Guide.

CORPORATIONS ACT 2001 5
Also, when the Financial Service Provider is dealing in not just a certain set of services but
wide variety of activities as well as its own products in the market. Then the FSG’s are not
necessary to be shared with the clients as instead of creating a confusion the relevant
information to the client is only provided (Federal Legislation of Australia , 2019).

CORPORATIONS ACT 2001 6
References
Federal Court of Australia, 2016. Australian Securities and Investments Commission v
Ostrava Equities Pty Ltd [2016]. [Online]
Available at: http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2016/1064.html?
context=1;query=ostrava;mask_path=au/cases/cth/FCA
[Accessed Thursday September 2019].
Federal Legislation of Australia , 2019. DISCLOSURE REQUIREMENTS. [Online]
Available at: http://archive.treasury.gov.au/documents/272/PDF/ch06.pdf
[Accessed Thursday September 2019].
Fedral Court of Australia, 2016. Australian Securities and Investments Commission v
Ostrava Equities Pty Ltd (2016). [Online]
Available at: http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2016/1064.html?
context=1;query=ostrava;mask_path=au/cases/cth/FCA
[Accessed Thusrday September 2019].
Fedral Register Of Legislation, 2010. Corporations Act 2001. [Online]
Available at: www.comlaw.gov.au › Legislation › Corps2001Vol04_760A1200U_WD02
[Accessed Thursday September 2019].
World Intellectual Property Organization, 2015. Companies Act 2001. [Online]
Available at: https://www.wipo.int/edocs/lexdocs/laws/en/au/au404en-part5.pdf
[Accessed Thursday September 2019].