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CORPORATIONS AMENDMENT REGULATIONS 2010 (NO. 3) (SLI NO 88 OF 2010) - REG 5

Transitional arrangements for unlicensed trustee companies

         (1)   For section 1496 of the Act, this provision applies to a trustee company listed in Schedule 8AA to these Regulations that does not hold an Australian financial services licence.

         (2)   On the commencement of these Regulations until the end of 30 April 2011:

                (a)    the trustee company is taken to have a licence covering the provision by the company of traditional trustee company services provided by the company; and

               (b)    section 601TAB of the Act does not apply to the company; and

                (c)    Part 7.7 does not apply to the traditional trustee company services provided by the company.

Note    If the company wants to continue to provide traditional trustee company services after 30 April 2011, it will need to apply (before the end of that period) to ASIC to obtain a licence covering those services.

         (3)   To avoid doubt, subregulation (2) does not limit ASIC's powers under Part 7.6 in relation to the licence the trustee company is taken to have.

Note    ASIC has power to vary, cancel or suspend the licence under Subdivision C of Division 4 of Part 7.6 of the Act.

         (4)   A trustee company that is taken to have an Australian financial services licence under subregulation (2) is, for paragraph 912A (1) (d) of the Act, taken to have available adequate resources to provide traditional trustee company services if the company maintains the amount of net tangible assets it held at the commencement of these Regulations for the period it is taken to have the licence.

         (5)   In subregulation (4) net tangible assets means the total assets of a trustee company:

                (a)    less total liabilities of the company; and

               (b)    less any intangible assets reported in the company's books of account;

calculated on the basis of assets and liabilities as they would appear if, at the time of calculation, a balance sheet were made up for lodgement as part of a financial report under Chapter 2M of the Act on the basis that the company is a reporting entity.

         (6)   For subregulation (5), a trustee company must:

                (a)    work out its total assets by excluding:

                          (i)    all receivables to be received from a related party as defined in AASB 124 and Part 2E.2 of Chapter 2E of the Act; and

                         (ii)    any assets that are subject to any charge that secures the liability of a person other than the company, to the extent of the value of that charge; and

                         (iii)    any assets to which the company is not legally and beneficially entitled or that are not held in the name of the company; and

                        (iv)    any assets that are not capable of being converted into cash in the short term; and

               (b)    include in its total liabilities all payables payable to a related party as defined in AASB 124 and Part 2E.2 of Chapter 2E of the Act.

         (7)   In this regulation:

"AASB" 124 means AASB 124, Related Party Disclosures , published by the Australian Accounting Standards Board.



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