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CORPORATIONS AMENDMENT REGULATIONS 1998 (NO. 9) 1998 NO. 293
EXPLANATORY STATEMENTSTATUTORY RULES 1998 No. 293
Issued by the Authority of the Treasurer
Corporations Act 1989
Corporations Amendment Regulations 1998 (No. 9)
Section 97 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act or the Corporations Law, prescribing, among other things, matters which are required by the Corporations Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Corporations Law.
The Heads of Agreement on Future Corporate Regulation in Australia, reached between Commonwealth, State and Northern Territory Ministers who had responsibilities in relation to corporate regulation in June 1990 forms the political compact on which the national companies and securities scheme is based. The Corporations Agreement, a more formal agreement to supplement the Heads of Agreement, was finalised on 23 September 1997.
The responsible Ministers of the States and the Northern Territory on the Ministerial Council for Corporations have been consulted about the regulations and, to the extent required by the Corporations Agreement, the Council has approved them.
The regulations amend the Corporations Regulations to:
(a) reflect the change of name:
- of the regulator, which was previously known as the Australian Securities
Commission and is now known as the Australian Securities and
Investments Commission (ASIC) (Regulations 5, 13, 14.2, 19 and
Schedule);
- of the Act which establishes the Commission - this was previously the
Australian Securities Commission Act 1989 and is now the Australian
Securities and Investments Commission Act 1989 (Regulation 14.3);
(b) make the amendments which are necessary as a consequence of changes to the regulatory structure for deposit-taking institutions, insurance and superannuation:
- thus, references in Regulation 7.3.14 to 'Australian bank' have been
changed to 'Australian ADI' ('ADI' stands for 'authorised deposit-taking
institution') (Regulation 10);
- the Australian Prudential Regulation Authority (APRA) has been
prescribed as an agency which is entitled to apply to the Court for a company
to be wound up in insolvency and the prescription of the Insurance and
Superannuation Commissioner (ISC) for this purpose deleted (Regulation 9);
the reason for this amendment is that the ISC has been abolished and the ISC's role in relation to the prudential supervision of insurance and superannuation is now undertaken by APRA which, in addition, undertakes the prudential regulation of authorised deposit-taking institutions;
(c) ensure that ASIC's power to make orders in relation to the financial reporting requirements imposed on certain entities is not substantially altered by the Company Law Review Act 1998 (Regulation 8);
(d) make some minor corrections (for example, to cross references) to the regulations which were amended following the Company Law Review Act 1998 (Regulations 6, 7, 11, 12, 15-17, 20-23); (e) rename the regulations the Corporations Regulations 1990 (Regulation 4).
The amendments referred. to in paragraphs (a) and (b) above are consequential on the Financial Sector Reform legislation which commenced recently. The Regulations commenced on gazettal. Details of the regulations are attached.
ATTACHMENT
Regulation 1 - Name
Regulation 1 provides that the regulations are the Corporations Amendment Regulations 1998 (No. 9).
Regulation 2 - Commencement
Regulation 2 provides that the amendments commence on gazettal.
Regulation 3 - Amendment
Regulation 3 provides that the Corporations Regulations are amended as set out in the regulations.
Regulation 4 - Citation
Regulation 4 substitutes a new Regulation 1.0.01 which renames the Regulations the Corporations Regulations 1990.
Regulation 5, 13, 14.2, 14.3, 19 and Schedule - references to ASIC
The amendments:
* omit references to 'the Commission' and substitute 'ASIC';
* omit references to 'the Australian Securities Commission' and substitute 'ASIC';
* omit a reference to 'Australian Securities Commission Act 1989' and substitute 'Australian Securities and Investments Commission Act 1989'; and
* omit references to 'ASC' and substitute 'ASIC'.
These amendments are consistent with the change in name of the Australian Securities Commission to the Australian Securities and Investments Commission and the change in the title of the relevant Act which were made by the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, the relevant provisions of which commenced on 1 July 1998.
Regulations 6, 7, 11, 12, 14,1-15-18, 20-23 - Corrections
Regulations 6, 7, 11, 12, 15-17, 20-23 make a number of minor corrections to Regulations which were recently amended as a consequence of the Company Law Review Act 1998 for example:
* to correct cross references;
* to omit an unnecessary '(1)';
* to change the order in which certain Regulations appear;
* to correct the date of commencement of certain amendments included in Statutory Rules 1998 No. 185.
Regulation 14.1 makes a minor technical amendment to the heading of Schedule 3 and Regulation 18 makes a minor technical amendment to the heading of Schedule 11.
Regulation 8 - Regulation 2M.6.01 (Modification of operation of Chapter 2M of Corporations Law)
Regulation 8 omits the existing regulation 2M.6.01 and inserts a new Part 'Part 2M.6 - Modification of the operation of Chapter 2M of the Corporations Law'.
The new Part contains three regulations:
(a) regulation 2M.6.01: Modifications (Corporations Law, s.343);
(b) regulation 2M.6.02: Specific exemption and class orders - certain corporations
(Corporations Law, Part 2M.6); and
(c) regulation 2M.6.03: Financial reporting - Australian banks and life offices.
Regulation 2M.6.01 provides that, for section 343 of the Law, the operation of Chapter 2M of the Law is modified in accordance with the regulations contained in Part 2M.6 of the Regulations.
Regulation 2M.6.02 modifies the operation of sections 340, 341 and 342 to enable the Australian Securities and Investments Commission to relieve specified companies or specified classes of company from the requirements of Part 2M.4 of the Law. The specified companies or specified classes of company listed in subregulation 2M.6.02(1) were the subject of orders made by the Australian Securities Commission under former section 313 of the Law. These orders had the effect of relieving the specified companies or specified classes of company of some or all of the requirements of the former Part 3.7 of the Law.
Regulation 2M.6.03 provides that the operation of Chapter 2M of the Corporations Law in relation to financial reporting by Australian banks and life offices is modified in accordance with Schedule 5A.
Regulation 9 - Application to Court for winding up
Paragraph 459P(1)(g) of the Corporations Law empowers a prescribed agency to apply to the Court for a company to be wound up in insolvency.
Previously, Regulation 5.4.01 prescribed the Insurance and Superannuation Commissioner for this purpose.
Regulation 9 omits from Regulation 5.4.01 the reference to the Insurance and Commissioner and substitutes a reference to the Australian Prudential Regulation Authority which, since 1 July 1998, has had responsibility for the prudential regulation of superannuation, insurance and deposit-taking institutions.
Regulation 10 - Australian ADIs
Regulation 7.3.14 provided that certain provisions of Chapter 7 (sections 780 and 842, and Parts 7.5, 7.6 and 7.7) do not have effect in relation to an. Australian bank only because, in relation to the carrying on of the business of banking, the Australian bank, for example, deals in securities issued by a government or acts as banker in respect of an issue of securities. It also provided a comparable exemption for employees of Australian banks.
Following the commencement of the amendments to the Banking Act 1959 which were included in the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, there is a new status of authorised deposit-taking institution (ADI), under the Banking Act. These bodies will be prudentially regulated under that Act by the Australian Prudential Regulation Authority.
Regulation 7.3.14 has therefore been amended to omit the references to 'Australian bank' and replace them with references to 'Australian ADI'. This term is defined in section 9 of the Corporations Law (by virtue of the amendments made by the Financial Sector Reform (Consequential Amendments) Act 1998).