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CORPORATIONS AMENDMENT REGULATIONS 2010 (NO. 3) (SLI NO 88 OF 2010) - SCHEDULE 1

Amendments commencing on commencement of Schedule 2 to Corporations Legislation Amendment (Financial Services Modernisation) Act 2009

(regulation 3)

 

[1]           After Chapter 5C

insert

Chapter 5D   Licensed trustee companies

Part 5D.1             Preliminary

   

5D.1.01   Meaning of trustee company

         (1)   For paragraph 601RAB (1) (b) of the Act, a company that is listed in Schedule 8AA is prescribed as a trustee company for the purpose of the Act.

         (2)   A company that performs the function of the Public Trustee of a State or Territory may only be listed in Schedule 8AA if:

                (a)    the State or Territory requests the Minister to prescribe the company as a trustee company; and

               (b)    the Minister agrees to the request.

5D.1.02   Meaning of traditional trustee company services and estate management functions

         (1)   For paragraph 601RAC (3) (f) of the Act, acting in any of the following capacities is prescribed:

                (a)    as trustee for the holders of debt securities of a body;

               (b)    as trustee of a trust established for purposes that include issuing debt securities (including loan-backed securities and mortgage-backed securities) or managing or servicing the assets of the trust;

                (c)    as trustee for the benefit of present or future creditors of another person when holding:

                          (i)    mortgages, charges, guarantees, indemnities or other rights or benefits that have been given to secure debts owing to the creditors; and

                         (ii)    the proceeds from the enforcement of any of the securities mentioned in subparagraph (i);

Note    Securities is defined in section 92 of the Act.

               (d)    as custodian for another trustee or for the responsible entity of a registered scheme or other commercial entity;

                (e)    as trustee of a managed investment scheme the main assets of which consist of land and improvements on the land where the trustee is not responsible for the daily management of the land or any business conducted on the land;

Note    Managed investment scheme is defined in section 9 of the Act.

                (f)    as trustee for employee share or benefit schemes;

                (g)    as trustee for trusts the main activities of which consist of making loans to, or otherwise investing in, companies or other commercial entities;

                (h)    as an escrow agent;

                 (i)    as a person named in a will as an executor when not actively providing a service or function;

                (j)    as a person named in a power of attorney as an attorney when not actively providing a service or function;

               (k)    preparing a power of attorney for a person's medical treatment or for guardianship of a person's affairs;

                 (l)    preparing a living will or advance health directive of any kind.

         (2)   In this regulation:

"custodian" does not include a trustee establishing and operating a common fund.

debt security means:

                (a)    any debenture, debenture stock, bond, note or other security of a corporation or body; or

               (b)    any convertible note issued by a company or any convertible note in a unit trust scheme issued by the trustee of a unit trust scheme; or

                (c)    any right to a security mentioned in paragraph (a) or (b);

whether or not it is a charge on the assets of the corporation, company, society or unit trust scheme.

"employee share or benefit scheme" means a scheme under which a company offers for issue or sale shares (or options over issued shares) in the company, or some other benefit in the company, only to a director or employee of the company, or of an associated body corporate, when the offer is made.

"escrow agent" means a person with whom is deposited a contract, deed, bond or other written agreement or property for delivery to the grantee, promisee or some other person on resolution of a dispute or fulfilment of some condition.

loan-backed security means:

                (a)    an instrument or property:

                          (i)    creating a right or interest (whether described as a unit, bond or otherwise) for a beneficiary; or

                         (ii)    conferring a right or interest (whether described as a unit, bond or otherwise) on a beneficiary; or

                         (iii)    consisting of a right or interest (whether described as a unit, bond or otherwise) of a beneficiary;

                        in a scheme under which the profits, distributions of capital or income in which beneficiaries share arise or arises from the acquisition, holding, management or disposal of a loan or pool of loans; or

               (b)    an instrument which evidences a right or interest mentioned in paragraph (a); or

                (c)    a debt security:

                         (i)     the payments under which by the person that issues or makes the instrument are derived mainly from the acquisition, holding, management or disposal of a loan or pool of loans; and

                        (ii)     that is secured by a mortgage or charge over a loan or pool of loans.

"mortgage-backed security" has the meaning given in regulation 5D.1.03.

5D.1.03   Meaning of mortgage-backed security

         (1)   A mortgage-backed security is:

                (a)    an interest in a trust that entitles the holder of, or beneficial owner under, the interest to:

                          (i)    the whole, or any part, of the rights or entitlements of a mortgagee and any other rights or entitlements in respect of a mortgage or pool of mortgages; or

                         (ii)    any amount payable by the mortgagor or mortgagors under a mortgage or mortgages (whether or not the amount is payable to the holder of, or beneficial owner under, the interest on the same terms as under the mortgage or mortgages); or

                         (iii)    payments that are derived mainly from the income or receipts of a mortgage or pool of mortgages;

                        and that may, in addition, entitle the holder, or beneficial owner, to a transfer or assignment of the mortgage or mortgages; or

               (b)    a debt security (whether or not in writing) the payments under which by the person who issues or makes the debt security are derived mainly from the income or receipts of a mortgage or pool of mortgages; or

                (c)    any of the following:

                          (i)    an interest in a trust:

                                   (A)     creating a right or interest (whether described as a unit, bond or otherwise) for a beneficiary; or

                                   (B)     conferring a right or interest (whether described as a unit, bond or otherwise) on a beneficiary; or

                                   (C)     consisting of a right or interest (whether described as a unit, bond or otherwise) of a beneficiary;

                                 in a scheme under which any profit or income in which the beneficiaries share arises from the acquisition, holding, management or disposal of a mortgage, pool of mortgages or the income or receipts of a mortgage or pool of mortgages;

                         (ii)    any instrument that evidences a right or interest mentioned in subparagraph (i);

                         (iii)    a security (whether or not in writing) the payments under which by the person who issues or makes the security are derived mainly from the income or receipts of a mortgage or pool of mortgages;

                        (iv)    an interest in a trust or a debt security (whether or not in writing);

                         (v)    an instrument or property that creates an interest in, or charge over an interest in, a trust;

                        (vi)    a debt security (whether or not in writing);

                        (vii)    any other property to which paragraph (a) or (b) or subparagraph (i), (ii) or (iii) applies.

         (2)   However, a mortgage-backed security does not include an instrument or property consisting of any of the following:

                (a)    a mortgage;

               (b)    the transfer of a mortgage;

                (c)    a declaration of trust.

5D.1.04   Interaction between trustee company provisions and State and Territory laws

         (1)   For paragraph 601RAE (4) (a) of the Act, the trustee company provisions are intended to apply to the exclusion of the provisions of State or Territory laws prescribed in Schedule 8AB.

         (2)   For paragraph 601RAE (4) (b) of the Act, the trustee company provisions are intended not to apply to the exclusion of the State or Territory laws, or the provisions of State or Territory laws, prescribed in Schedule 8AC, so far as those laws relate to an administrator of a person's estate.

         (3)   For paragraph 601RAE (4) (b) of the Act, the trustee company provisions are intended not to apply to the exclusion of the State or Territory laws, or the provisions of State or Territory laws, prescribed in Schedule 8AD.

Part 5D.2             Powers etc of licensed trustee companies

Division 2.1            Annual Information Returns

5D.2.01   Obligation on licensed trustee company to provide an annual information return if requested

         (1)   For section 601SAB of the Act, this regulation prescribes the obligation of a licensed trustee company to provide an annual information return.

         (2)   The licensed trustee company commits an offence if:

                (a)    a person mentioned in subregulation (3) requests an annual information return; and

               (b)    the company does not provide the return to the person in accordance with the requirements in subregulations (5), (6) and (8) and regulation 5D.2.02.

Penalty:   50 penalty units.

         (3)   A person may request an annual information return if the person is one of the following:

                (a)    in the case of the estate of a deceased person:

                          (i)    if the person died testate -- a beneficiary under the deceased person's will; or

                         (ii)    if the person died intestate -- a person who, under a law of a State or Territory, has, is entitled to, or claims to be entitled to, an interest in the deceased person's estate; or

                         (iii)    a person who has commenced a proceeding in a court, under a law of a State or Territory, to seek to be included as a beneficiary of the deceased person's estate;

               (b)    in relation to a charitable trust:

                          (i)    the settlor, or one of the settlors, of the trust; or

                         (ii)    a person who, under the terms of the trust, has power to appoint or remove a trustee of the trust or to vary (or cause to be varied) any of the terms of the trust; or

                         (iii)    a person, or a person's appointed successor, who is named in the instrument establishing the trust as a person who must, or may, be consulted by the trustee or trustees before distributing or applying money or other property for the purposes of the trust;

                (c)    in the case of any other trust:

                          (i)    the settlor, or one of the settlors, of the trust; or

                         (ii)    a person who, under the terms of the trust, has power to appoint or remove a trustee of the trust or to vary (or cause to be varied) any of the terms of the trust; or

                         (iii)    a beneficiary of the trust.

         (4)   The person must make the request for an annual information return in writing to the licensed trustee company and may indicate in the request which one of the following forms of return is required:

                (a)    by sending it to the person's postal address;

               (b)    by emailing it to a nominated email address.

         (5)   The annual information return must be provided within 30 days after the request from the person is received by the licensed trustee company, and then annually.

         (6)   The annual information return must be for the last financial year that the licensed trustee company has provided a service to the person who has requested the return.

         (7)   However, the licensed trustee company is not required to provide an annual information return covering a period:

                (a)    before 1 July 2010; or

               (b)    before it provided a service to the person.

         (8)   The annual information return must be provided as follows:

                (a)    if requested in a particular form -- in the form requested;

               (b)    in all other cases -- by sending it to the person's postal address.

5D.2.02   Information to be included in annual information return

                The annual information return provided by a licensed trustee company must include the following:

                (a)    for a person mentioned in subparagraphs 5D.2.01 (3) (a) (i) and (ii) and (c) (iii):

                          (i)    details of income earned on the person's interest in the trust or estate; and

                         (ii)    details of expenses in operating the trust or estate in relation to the person's interest in the trust or estate; and

                         (iii)    the net value of the person's interest in the trust or estate;

               (b)    for any other person mentioned in subregulation 5D.2.01 (3):

                          (i)    details of income earned on the trust's assets; and

                         (ii)    details of expenses in operating the trust's assets, including remuneration, commission or other benefits received by the trustee company; and

                         (iii)    the net value of the trust's assets;

                (c)    if required under the terms of the trust -- a copy of the trust's audit report and financial statements for the year.

Part 5D.3             Regulation of fees charged by licensed trustee companies

   

5D.3.01   Modification of section 601TAB of the Act: disclosure to clients of changed fees

                For paragraph 601YAB (1) (b) of the Act, Chapter 5D of the Act applies as if section 601TAB of the Act were modified by inserting after subsection (3) the following subsections:

            '(4)  A licensed trustee company is not required to comply with paragraph (1) (a) or (b) or (3) (a) in relation to a client who is a lost client, or an agent who is a lost agent.

             (5)  In subsection (4):

"lost client" means a client who, at a particular time, is uncontactable.

"lost agent" means an agent who, at a particular time, is uncontactable.

             (6)  In subsection (5):

"uncontactable" , in relation to a person who is a client or an agent of a licensed trustee company, means:

                     (a)  the licensed trustee company:

                              (i)  never had an address for the person; or

                             (ii)  sent at least 1 written communication to the person's last known address which was returned unclaimed and the person has not, since the communication, given the company a contact address; and

                     (b)  if the person is an agent, the licensed trustee company made a reasonable attempt to get the agent's address from the agent's client or the client's carers.'

[2]           After regulation 7.1.17B

insert

7.1.17C   Retail clients: traditional trustee company services

                For subsection 761G (6A) of the Act, a traditional trustee company service is not provided to a person as a retail client if:

                (a)    the service is provided to the person for use in relation to a business that is not a small business; or

               (b)    the person to whom the service is provided is a professional investor.

Note    Small business is defined in subsection 761G (12) of the Act and professional investor is defined in section 9 of the Act.

[3]           Before regulation 7.1.29

insert in Division 3

7.1.28A   Circumstances in which a person is taken to be provided a traditional trustee company service

                For subsection 766A (1B) of the Act, a person who is one of the following:

                (a)    a person who may request an annual information return under subregulation 5D.2.01 (3);

               (b)    a person who requests the preparation of a will, a trust instrument, a power of attorney or an agency arrangement;

is, in relation to an estate management function, prescribed as the person to whom the service is taken to be provided.

[4]           After subregulation 7.6.02 (5)

insert

         (6)   For paragraph 926B (1) (a) of the Act, a financial services licensee who provides a financial service in the capacity as administrator of the estate of an individual does not have to comply with paragraph 912A (1) (g) of the Act in relation to the provision of the service if complaints about the service provided by the licensee may be made under a State or Territory law listed in Schedule 8AC.

[5]           Subregulation 7.7.04 (3), except the heading

substitute

         (3)   The following information is required if the remuneration, commission or other benefits are able to be worked out at the time the Financial Services Guide is given to the client:

                (a)    in a case where the remuneration, commission or other benefits are to be received by a person who is a licensed trustee company, either:

                          (i)    the remuneration, commission or other benefits; or

                         (ii)    the remuneration, commission or other benefits stated as a percentage of the income from the estate or as a percentage of the capital value of the estate;

               (b)    in any other case -- the remuneration, commission or other benefits.

[6]           Subregulation 7.7.04 (4)

omit

the following information:

insert

the following information is required:

[7]           Subregulation 7.7.04 (5)

omit

the following information:

insert

the following information is required:

[8]           Subregulation 7.7.07 (3), except the heading

substitute

         (3)   The following information is required if the remuneration, commission or other benefits are able to be worked out at the time the Financial Services Guide is given to the client:

                (a)    in a case where the remuneration, commission or other benefits are to be received by a person who is a licensed trustee company, either:

                          (i)    the remuneration, commission or other benefits; or

                         (ii)    the remuneration, commission or other benefits stated as a percentage of the income from the estate or as a percentage of the capital value of the estate;

               (b)    in any other case -- the remuneration, commission or other benefits.

[9]           Subregulation 7.7.07 (4)

omit

the following information:

insert

the following information is required:

[10]         Subregulation 7.7.07 (5)

omit

the following information:

insert

the following information is required:

[11]         After Schedule 8A

insert

Schedule 8AA    Trustee companies

(regulation 5D.1.01)

   

Item

Trustee companies

1

ANZ Trustees (Canberra) Limited

2

ANZ Trustees Limited

3

Australian Executor Trustees Limited

4

Australian Executor Trustees (Canberra) Limited

5

Australian Executor Trustees (NSW) Limited

6

Australian Executor Trustees (SA) Limited

7

Bagot's Executor and Trustee Company Limited

8

Elders Trustees Limited

9

Equity Trustees Limited

10

Executor Trustee Australia Limited

11

Mutual Trust Proprietary Limited

12

National Australia Trustees Limited

13

Permanent Trustee Company (Canberra) Limited

14

Perpetual Limited

15

Perpetual Trustee Company (Canberra) Limited 

16

Perpetual Trustee Company Limited

17

Perpetual Trustees Consolidated Limited

18

Perpetual Trustees Queensland Limited

19

Perpetual Trustees S.A. Limited

20

Perpetual Trustees Victoria Limited

21

Perpetual Trustees W.A. Limited 

22

Plan B Trustees Limited

23

Sandhurst Trustees Limited

24

Tasmanian Perpetual Trustees Limited

25

The Myer Family Office Ltd

26

Trust Company Limited

27

Trust Company Fiduciary Services Limited

28

Union Trustee Company (Canberra) Limited

Schedule 8AB    Prescribed State and Territory provisions for paragraph 601RAE (4) (a) of the Act

(subregulation 5D.1.04 (1))

   

Item

State or Territory law and provisions

1

Trustee Companies Act 1984 (Vic), sections 40-42

2

Trustee Companies Act 1987 (WA), Part IV and section 34

3

Trustee Companies Act 1988 (SA), sections 15-15B and
19-21

4

Trustee Companies Act 1953 (Tas), subsections 18C (1),
(3) -(13)

5

Companies (Trustees and Personal Representatives) Act (NT), section 25

Schedule 8AC    Prescribed State and Territory laws and provisions for paragraph 601RAE (4) (b) of the Act -- estate administration

(subregulation 5D.1.04 (2) and subregulation 7.6.02 (6))

   

Item

State or Territory law and provisions

1

Children and Young Persons (Care and Protection) Act 1998 (NSW)

2

Guardianship Act 1987 (NSW)

3

NSW Trustee and Guardian Act 2009 (NSW)

4

Victorian Civil and Administrative Tribunal Act 1998 (Vic), Part 9 of Schedule 1

5

Guardianship and Administration Act 1986 (Vic)

6

Guardianship and Administration Act 2000 (Qld)

7

Guardianship and Administration Act 1990 (WA)

8

Guardianship and Administration Act 1993 (SA)

9

Guardianship of Infants Act 1940 (SA)

10

Guardianship and Administration Act 1995 (Tas)

11

Guardianship and Custody of Infants Act 1934 (Tas)

12

Guardianship and Management of Property Act 1991 (ACT)

13

Testamentary Guardianship Act 1984 (ACT)

14

Adult Guardianship Act (NT)

15

Guardianship of Infants Act (NT)

Schedule 8AD    Prescribed State and Territory laws and provisions for paragraph 601RAE (4) (b) of the Act

(subregulation 5D.1.04 (3))

   

Item

State or Territory law and provisions

 

NEW SOUTH WALES

1

Probate and Administration Act 1898 and any regulations made under that Act

2

NSW Trustee and Guardian Act 2009 and any regulations made under that Act

3

Trustee Act 1925 and any regulations made under that Act

4

Trustee Companies Act 1964 and any regulations made under that Act

 

VICTORIA

5

Administration and Probate Act 1958 and any regulations made under that Act

6

Guardianship and Administration Act 1986 and any regulations made under that Act

7

Instruments Act 1958 and any regulations made under that Act

8

Medical Treatment Act 1988 and any regulations made under that Act

9

State Trustees (State Owned Company) Act 1994 and any regulations made under that Act

10

Trustee Act 1958 and any regulations made under that Act

 

QUEENSLAND

11

Guardianship and Administration Act 2000 and any regulations made under that Act

12

Legal Profession Act 2007 and any regulations made under that Act

13

Public Trustee Act 1978 and any regulations made under that Act

14

Succession Act 1981 and any regulations made under that Act

15

Trustee Companies Act 1968 and any regulations made under that Act

16

Trusts Act 1973 and any regulations made under that Act

17

Uniform Civil Procedure Rules 1999 , Chapter 15 and rule 94

 

WESTERN AUSTRALIA

18

Guardianship and Administration Act 1990 and any regulations made under that Act

19

Trustees Act 1962 and any regulations made under that Act

 

SOUTH AUSTRALIA

20

Administration and Probate Act 1919 and any regulations made under that Act

21

Aged and Inform Persons' Property Act 1940 and any regulations made under that Act

22

Guardianship and Administration Act 1993 and any regulations made under that Act

23

Legal Practitioners Act 1981 , sections 35 and 77

24

Public Trustee Act 1995 and any regulations made under that Act

25

Trustee Act 1936 and any regulations made under that Act

 

TASMANIA

26

Administration and Probate Act 1935 and any regulations made under that Act

27

Supreme Court Civil Procedure Act 1932 and any regulations made under that Act

28

Trustee Act 1898 and any regulations made under that Act

 

AUSTRALIAN CAPITAL TERRITORY

29

Administration and Probate Act 1929 and any regulations made under that Act

30

Court Procedures Act 2004 and any regulations made under that Act

31

Guardianship and Management of Property Act 1991 and any regulations made under that Act

32

Legal Profession Act 2006 and any regulations made under that Act

33

Trustee Act 1925 and any regulations made under that Act

34

Trustee Companies Act 1947 and any regulations made under that Act

 

NORTHERN TERRITORY

35

Aged and Infirm Persons' Property Act and any regulations made under that Act

36

Public Trustee Act and any regulations made under that Act



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