Commonwealth Numbered Regulations

1992 No. 281 CORPORATIONS REGULATIONS (AMENDMENT) - REG 7

  7.1   Paragraph 7.12.15 (1) (h):
Omit the paragraph.
  7.2   Sub-subparagraph 7.12.15 (5) (d) (ii) (c):

Omit "will be", substitute "was".
  7.3   Subparagraph 7.12.15 (5) (d) (ii):
Add at the end:

"(E) that the trust has sufficient resources to allow a reasonable period for
the exposure of the property for sale; and

                (F)  that the trust has sufficient resources to negotiate an
                     agreement for the sale of the property; and".
  7.4   After paragraph 7.12.15 (5) (g), insert:


"(ga) a covenant that the trustee will as soon as practicable arrange for the
valuation of real property of the trust if the management company of the trust
advises the trustee in writing that the management company reasonably believes
that there has been a significant change in the value of the property;

   (gb) if the trustee arranges for the valuation of more than 1 property
        under paragraph (g), or real property under paragraph (ga)-a covenant
        that the trustee will ensure that the times at which the properties
        are valued are arranged in a manner that, in the trustee's opinion,
        best promotes the interests of the trust's unitholders;

   (gc) if the trustee arranges for the valuation of real property under
        paragraph (g), (ga) or (gb), including a valuation that is not
        complete when this regulation commences-a covenant that the trustee
        will, at the written request of a unitholder, inform the unitholder
        of:

        (i)    the current valuation of the property; and

        (ii)   the instructions that the trustee gave to the valuer; and

        (iii)  the period of time that the valuer expects would be required to
               sell the property if it were offered for sale immediately;".
  7.5   Subregulation 7.12.15 (5):
Add at the end:

"(q) a covenant that the trustee will not incur or authorise a borrowing that
would make the value of an unlisted property trust's liabilities (including
capital commitments not funded from trust assets but not including outstanding
redemption requests) more than 20 per cent of the value of the trust's gross
tangible assets;

   (r)  a covenant that if the value of an unlisted property trust's
        liabilities (including capital commitments not funded from trust
        assets but not including outstanding redemption requests) exceeds 20
        per cent of the value of the trust's gross tangible assets, the
        trustee will, as soon as practicable, take action to have the value of
        the liabilities reduced to 20 per cent or less of the value of the
        assets;

   (s)  if the trust deed of an unlisted property trust provides for the
        redemption of units in the trust-a covenant that the trustee will
        ensure that the redemption price offered for units in the trust
        reflects, as far as practicable, the value of the trust's assets on
        the day on which the redemption occurs. (NOTE: Additional covenants
        that bind the trustee are prescribed in regulation 7.12.15A.)".
  7.6   After subregulation 7.12.15 (5), insert:


"(5A) The covenants set out in paragraphs (5) (q) and (r) do not apply to an
unlisted property trust that is a fixed-term trust in relation to which there
is no buy-back or redemption obligation.

"(5B) The covenant set out in paragraph (5) (r) does not require the trustee
to take action to have the trust's liabilities reduced in a manner that would
materially reduce the value of units in the trust, calculated on the day on
which the value of the trust's liabilities (including capital commitments not
funded from trust assets, but not including outstanding redemption requests)
exceeds 20 per cent of the value of the trust's gross tangible assets, unless
there is no opportunity, foreseeable by the trustee within a reasonable time
after that day, for the trustee to reduce the trust's liabilities without
materially reducing the value of the units.".
  7.7   Subregulation 7.12.15 (7):
Add at the end:

"(e) a covenant that the management company will not borrow funds for the
purposes of the trust without the prior approval of the trustee;

   (f)  if the trustee has arranged for the valuation of real property of the
        trust-a covenant that the management company will provide the valuer
        with the information that the valuer requires to make an accurate
        valuation;

   (g)  a covenant that the management company will ensure that the buy-back
        price offered for units in the trust reflects, as far as practicable,
        the value of the trust's assets on the day on which the buy-back
        occurs;

   (h)  a covenant that the management company will comply with the conditions
        to which its licence is subject;

   (j)  if the management company breaches a condition to which its licence is
        subject-a covenant that the management company will, not later than
        the day after the day on which it becomes aware of the breach, inform
        the Commission and the trustee of the trust in writing of the details
        of the breach.".
  7.8   Subregulation 7.12.15 (10):
Add at the end:

"(h) if:

        (i)    the proposal referred to in subparagraph 7.12.15A (6) (e)

        (ii)   is adopted by a meeting of unitholders convened under the
               covenant prescribed in paragraph 7.12.15A (6) (d); or

        (ii)   the proposal referred to in subparagraph 7.12.15A (8) (c) (ii)
               is adopted by a meeting of unitholders convened under the
               covenant prescribed in subparagraph 7.12.15A (8) (b) (i).
               (NOTE: Additional covenants that bind the management company
               are prescribed in regulation 7.12.15A.)".