271.Subsection (1) enables the Authority to make rules about the disclosure and use of information held by an authorised person.  These rules are commonly known as “Chinese walls” rules.  Chinese walls are barriers in the form of procedures, systems, management and physical separation which firms may employ in order to ensure that information obtained by one part of a firm is not communicated in inappropriate circumstances to another part of the firm (for example, where it would advantage one client at the expense of another).  This power is broadly in line with that currently contained in section 48(2)(h) of the FS Act 1986.
272.Under subsections (2)(a) and (c), rules may require that information be withheld or not used for a customer’s benefit where it would otherwise have to be disclosed or used, while subsections (2)(b) and (d) provide that rules may specify circumstances in which an authorised person may withhold or not use information which would otherwise have to be disclosed or used.  This means that, if an authorised person maintains Chinese walls in accordance with Authority rules made under the section, then he will not be subject to obligations as to the disclosure and use of information that would otherwise apply.
Commentary on Sections Part X: Rules and Guidance Chapter I: Rule-Making Powers Section 147: Control of information rules