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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Miscellaneous - Accessories and attribution of liability

534: Directors treated as having contravened in case of defective disclosure, financial reporting contravention, or climate-related disclosure contravention

You could also call this:

"Directors can get in trouble if their company doesn't follow the rules about sharing important information."

Illustration for Financial Markets Conduct Act 2013

If a company does something wrong, like not telling you something important, the court can say the directors did something wrong too. The directors are the people in charge of the company. They can get in trouble even if they did not do anything wrong themselves.

You can be treated as doing something wrong if you are a director of a company that did not follow the rules about telling people important information. This can happen if the company did not tell people about its finances, or about how it affects the climate. If you are treated as doing something wrong, you might have to pay a fine or give money to someone you wronged.

The company can still get in trouble too, even if the directors do. There are some rules that can help directors if they are treated as doing something wrong. You can look at sections 499(1)(a), 500, and 501 to learn more about these rules.

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Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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533: Involvement in contraventions, or

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Part 8Enforcement, liability, and appeals
Miscellaneous: Accessories and attribution of liability

534Directors treated as having contravened in case of defective disclosure, financial reporting contravention, or climate-related disclosure contravention

  1. This section applies if, in a proceeding under subpart 3, the court is satisfied that—

  2. an offeror has contravened section 82 (defective disclosure in PDS or register entry); or
    1. an issuer has contravened section 99 (defective ongoing disclosure); or
      1. a licensee or an authorised body has contravened section 427 (defective disclosure statement); or
        1. an FMC reporting entity has contravened any of sections 460 to 461B, 461D, and 461H (financial reporting obligations); or
          1. a climate reporting entity has contravened any of sections 461Z to 461ZC, 461ZH, and 461ZI (climate-related disclosure obligations); or
            1. an entity that provided a limited disclosure document under clause 26 of Schedule 1 has contravened clause 27 of that schedule (defective disclosure).

              1. However, this section does not apply in the prescribed circumstances.

              2. For the purposes of subpart 3, every director of the offeror, issuer, licensee, authorised body, FMC reporting entity, climate reporting entity, or entity at the time of the contravention must be treated as also having contravened the provision referred to in subsection (1)(a), (b), (c), (ca), (cb), or (d) (as the case may be).

              3. Every director that is treated as contravening a provision under this section may, under subpart 3, be ordered to pay to the Crown a pecuniary penalty, ordered to pay compensation under section 495, or subject to any other order under subpart 3.

              4. Nothing in this section limits the liability of the offeror, issuer, licensee, authorised body, FMC reporting entity, climate reporting entity, or entity referred to in subsection (1).

              5. See sections 499(1)(a), 500, and 501, which provide defences to a director.

              Notes
              • Section 534 heading: amended, on , by section 17(1) of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(1)(ca): inserted, on , by section 53(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
              • Section 534(1)(cb): inserted, on , by section 17(2) of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(1)(cb): amended, on , by section 30 of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(1)(d): replaced, on , by section 89 of the Regulatory Systems (Commercial Matters) Amendment Act 2017 (2017 No 12).
              • Section 534(3): amended, on , by section 17(3)(a) of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(3): amended, on , by section 17(3)(b) of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(3): amended, on , by section 53(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
              • Section 534(3): amended, on , by section 53(4) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
              • Section 534(5): amended, on , by section 17(4) of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 534(5): amended, on , by section 53(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).