05. Financial Legislation

1. 05. Financial Legislation Lecture by M.O. Sopiha

3. Plan: • Financial Legislation • Administrative Legislation

5. Financial Legislation Government to operate in accordance with sound financial management principles (1) The government must establish and maintain a budgeting and reporting framework that is consistent with the principles of sound financial management to form a basis for the provision of sustainable social and economic services and infrastructure fairly to all ACT residents. (2) The principles of sound financial management are that the government must-- (a) manage financial risks faced by the Territory prudently, having regard to economic circumstances; and (b) pursue spending and taxing policies that are consistent with a reasonable degree of stability and predictability in the level of the tax burden; and (c) maintain the integrity of the Territory's tax system; and (d) ensure that it takes into account the financial impact on future generations when making its policy decisions; and (e) give full, accurate and timely disclosure of financial information relating to the activities of the government and its agencies. (3) In this section: financial risks include the following: (a) risks arising from the level of the Territory's general government sector debt; (b) commercial risks arising from ownership of corporations and public enterprises; (c) risks arising from changes in the structure of the Territory's tax base; (d) risks arising from management of the Territory's assets and liabilities.

6. Financial Legislation Financial policy objectives and strategies statement (1) The Treasurer must prepare 2 financial policy objectives and strategies statements for each financial year. (2) The 1st statement must be for the Territory budget for the financial year. (3) The 1st statement must be presented to the Legislative Assembly with the proposed budgets and consolidated financial management statements mentioned in section 10 for the financial year. (4) The 2nd statement must be for the budget update for the financial year. (5) The 2nd statement must be presented to the Legislative Assembly with the budget update for the financial year. Purpose of financial policy objectives and strategies statement The purpose of a financial policy objectives and strategies statement is to make transparent the government's financial strategies and to establish a benchmark for evaluating the government's conduct of financial policy.

7. Financial Legislation Contents of financial policy objectives and strategies statement (1) A financial policy objectives and strategies statement must be based on the principles of responsible fiscal management. (2) The financial policy objectives and strategies statement for the Territory budget or budget update for a financial year must-- (a) state the government's long-term financial objectives within which financial policy for the financial year and the following 3 financial years will be framed; and (b) explain the broad strategic priorities on which the budget or budget update is based; and (c) state the key financial measures that the government has identified as being important and against which financial policy will be set and assessed; and (d) state, for the financial year and the following 3 financial years-- (i) the government's short-term financial objectives; and (ii) the targets for each stated key financial measure; and (e) explain how the financial objectives and strategic priorities mentioned in paragraphs (a), (b) and (d) relate to the principles of responsible fiscal management; and (f) state any financial policy actions taken or to be taken that are temporary in nature, the reasons for taking them and indicate the process for their revision; and (g) identify the reporting basis on which subsequent financial reports will be prepared; and (h) state the reasons for any changes from the previous financial policy objectives and strategies statement. (3) However, if particular information required to be included in the financial policy objectives and strategies statement is unchanged from information set out in full in an earlier statement, the statement may instead summarise the information and state that it is unchanged from that set out in the earlier statement. (4) In this section: principles of responsible fiscal management

8. Financial Legislation • Territory budgets A proposed budget must also include-- • (a) a statement of the economic or other assumptions used to make the budget estimates; and • (b) a statement about the sensitivity of the budget estimates to changes in the economic or other assumptions; and • (c) a statement of the risks, quantified if possible, that may affect the budget estimates. • Budget update • (1) The Treasurer must prepare a budget update for each financial year. • (2) The Treasurer must present the budget update for a financial year to the Legislative Assembly on the 1st sitting day in the 2nd half of the financial year. • Purpose of budget update • The purpose of the budget update for a financial year is to give updated information to allow the assessment of the government's financial performance against the financial policy objectives and strategies set out in the financial policy objectives and strategies statement for the Territory budget for the financial year. • Contents of budget update • (1) The budget update for a financial year must be based on the financial policy objectives and strategies statement for the Territory budget for the financial yearand generally accepted accounting practice. • (2) The budget update for a financial year must-- • (a) include updated financial statements mentioned in section 11 (1) for the financial year; and • (b) include updated budget estimates mentioned in section 11 (3) for each of the next 3 financial years; and • (c) take into account government decisions and other circumstances that may have material effect on the financial statements and budget estimates; and • (d) state the date as at when the updating was done. • (3) However, if particular information required to be included in the budget update is unchanged from information set out in full in the financial statements or budget estimates for the financial year, the update may instead summaries the information and state that it is unchanged from that set out in the financial statementsor budget estimates.

10. Aims of Regulation The aims of financial regulators are usually: • To prevent cases of market manipulation, such as insider trading • To ensure competence of providers of financial services • To protect clients, and investigate complaints • To maintain confidence in the financial system • To reduce violations under laws

12. In most cases, financial regulatory authorities regulate all financial activities. But in some cases, there are specific authorities to regulate each sector of the finance industry, mainly banking, securities, insurance and pensions markets, but in some cases also commodities, futures, forwards, etc. For example, in Australia, the Australian Prudential Regulation Authority (APRA) supervises banks and insurers, while the Australian Securities and Investments Commission (ASIC) is responsible for enforcing financial services and corporations laws. • Sometimes more than one institution regulates and supervises the banking market, normally because, apart from regulatory authorities, central banks also regulate the banking industry. For example, in the USA banking is regulated by a lot of regulators, such as the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Office of Thrift Supervision, as well as regulators at the state level. • In addition, there are also associations of financial regulatory authorities. In the European Union, there are the Committee of European Securities Regulators (CESR), the Committee of European Banking Supervisors (CEBS) and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), which are Level-3 committees of the EU in the Lamfalussy process. And, at a world level, we have the International Organization of Securities Commissions (IOSCO), the International Association of Insurance Supervisors, the Basel Committee on Banking Supervision, the Joint Forum, and the Financial Stability Board. • The structure of financial regulation has changed significantly in the past two decades, as the legal and geographic boundaries between markets in banking, securities, and insurance have become increasingly "blurred" and globalized.

14. Financial Regulation • Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non-government organization.

16. Administrative Legislation Administrative law of Ukraine is a homogeneous, isolated in a system of jurisprudence legal matter, which is characterized as: • the branch of law, • science, • academic discipline.

17. Administrative Legislation Administrative law of Ukraine as a branch of the law, a science and a discipline In the judgment of ValentynGalunko, the matter of the branch of the administrative law of Ukraine is the system of broad social relations between the public administration and the objects of public management, which arise in the sphere of authoritative-administrative activity, rendering of administrative services with the aim of public guaranteeing of rights and liberties of the person and the citizen and normal functioning of the civil society and the state, with the possibility of applying of measures of administrative compulsion and administrative responsibility to disturbers of the administrative-legal regulations. The foremost method of the administrative law is the administrative-legal method of legal regulation of social relations, the essence of which consists in the fact that the subject of the public management is empowered with authoritative competence, and the object is obliged to fulfill his legal requirements. Under the conditions of the democratic lawful state the mentioned method has lost authoritarian features, because it is balanced by strict compliance with legality by the public administration and by the possibility of the object of public management to appeal against his actions to several independent instances.

18. An administrative-legal regulation is an established, approved or ratified by the state, officially defined, legally compulsory and protected by the means of state compulsion norm of behavior of participants of administrative-legal relations with the aim of guaranteeing of public rights and liberties of the person and the citizen and normal functioning of the civil society and the state. Administrative-legal relations is the form of social interaction of the public administration and the objects of public management, which arises on the grounds of the administrative-legal regulations, with the aim of guaranteeing of rights and liberties of the person and the citizen and normal functioning of the civil society and the state, the participants of which have subjective rights and bear legal liabilities. The administrative-legal relations have the structure characterized by interrelationship of all its constituents. Here belong subjects of legal relations, objects, legal facts and essence of legal relations.

19. Principles of the administrative law • The principles of the administrative law are the basic initial, impartially conditioned grounds, on which the activity of subjects of the administrative law is formed, the rights and liberties of the person and the citizen as well as normal functioning of the civil society and the state is guaranteed.

20. Mechanism of the administrative-legal regulation • The mechanism of the administrative-legal regulation is the means of functioning of the common system of administrative-legal regulation with the aim of guaranteeing of rights, liberties and public legal interests of natural and legal persons and functioning of the civil society and the state. The administrative-legal regulation is the purposeful impact of regulations of the administrative law on social relations with the aim of guaranteeing with aid of administrative-legal measures of rights, liberties and public legal interests of natural and legal persons and normal functioning of the civil society and the state.

21. Sources of the administrative law • The source of the administrative law is the way of external registration of the administrative-legal regulations that verifies the state general obligation of authorities thereof (ways and forms of expression and strengthening of state liberty).

22. The subjects of the administrative law • The subjects of the administrative law are natural and legal persons, which have subjective rights and legal liabilities and which are empowered with specific legal properties connected as to the realization thereof. With regard to the structure of the public management, to the subjects of the administrative law belong both the subjects of public administration and the objects of public management.

23. Forms of the administrative law • The form of the administrative law is the external expression of similar by character and legal nature groups of administrative actions of the public administration, executed within the procedure of legality and competence for achievement of the administrative-legal aim – public guaranteeing of rights and liabilities of the person and the citizen and normal functioning of the civil society and the state.

24. Methods of the administrative law • Under the methods of the administrative law one understands the ways and modes of purposeful impact on the behavior of the participants of the administrative-legal relations. The main methods of the administrative law are persuasion and compulsion. • Public service and administrative-legal regulation • Public service is the activity on public positions, professional activity of courts, public prosecutors, military service, alternative (not military) service, diplomatic service, other state service, and service in government authorities of the Autonomous Republic of Crimea and in local government authorities.

25. Execution in cases about administrative offenses • Execution in cases about administrative offenses is the special kind of activity of the district (municipal) court and the public administration as to execution of procedural actions on examining of the case about administrative offense and pronouncing of the resolution on it, which is directed to bringing to administrative responsibility of the persons, who have committed the administrative offenses. Administrative-legal protection of rights, liberties and legal interests of natural and legal persons • The administrative-legal protection of rights, liberties and legal interests of natural and legal persons – is the legally applied and law-enforcement authoritative activity of the public administration as to solving of individual cases with the aim of prevention and renovation of the breach of rights, liberties and legal interests of natural and legal persons, reimbursement of losses to victims and bringing of guilty persons to administrative responsibility and/or creation of conditions for bringing of them to another kind of legal responsibility.