EXPLANATORY STATEMENT

 

Select Legislative Instrument 2009 No. 198

Issued by the authority of the Minister for Financial Services, Superannuation and Corporate Law

 

Subject - Corporations Act 2001

Corporations Amendment Regulations 2009 (No. 7)

 

Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

Schedule 2 of the Corporations Regulations 2001 (the Regulations) prescribes the content of certain forms used by the Australian Securities and Investments Commission (ASIC).

 

The purpose these amendments is to correct a number of typographical errors and omissions in the content of prescribed Form 105, used to lodge notice with ASIC of relevant court orders and Form 529, lodged with ASIC to give notice of meetings held in relation to external administration. The amendments also remove prescribed Form 904, as the arrangements to which it relates have been superseded and to remove the prescription of Form 903B, used for applications to be an insolvency practitioner. This will enable ASIC to issue its own form under section 350 of the Corporations Act.

 

Details of the Regulations are set out in the Attachment.

 

Under the Corporations Agreement 2002, the Commonwealth must consult with and obtain the approval of the Ministerial Council for Corporations before making amendments to certain provisions of the Corporations Regulations. The Council was consulted about these amendments, and notified of the Minister’s intention to dispense with the period of public consultation, due to the minor and technical nature of the amendments.

 

The proposed Regulations would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence the day after they are registered on the Federal Register of Legislative Instruments.

ATTACHMENT

 

Details of the Corporations Amendment Regulations 2009 (No. 7)

 

Regulation 1 – Name of Regulations

 

This Regulation provides that these Regulations are the Corporations Amendment Regulations 2009 (No. 7).

 

Regulation 2 – Commencement

 

This Regulation provides for the Regulations to commence on the day after they are registered.

 

Regulation 3 – Definitions

 

Schedule 1 amends the Corporations Regulations 2001.

 

 

Schedule 1– Amendments

 

Item [1]

 

Item 1 to Schedule 1 amends regulation 1.0.20, which lists the court orders in relation to external administration that must be lodged with the Australian Securities and Investments Commission (ASIC). Previously paragraph 1.0.20(e) refered to a court order obtained under or for section 484 of the Corporations Act 2001 (Corporations Act). There are two different court orders that must be lodged with ASIC under this section. To clarify the requirement that both must be lodged, and to accurately reflect this in ASIC Form 105, the amendment inserts new paragraphs 1.0.20(e), which refers to subsection 484(1) ‘appointment of a special manager’ and 1.0.20(ea) which refers to paragraph 484(2)(c) ‘removal of a special manager’.

 

Item [2]

 

Item 2 to Schedule 1 repeals regulations 9.2.05, 9.2.06 and 9.2.07. These regulations relate to a previous arrangement where insolvency practitioners were required to obtain an insurance bond. Insolvency practitioners are no longer required to obtain these bonds. Insolvency practitioners are now required to obtain and maintain professional indemnity insurance and fidelity insurance.

Item [3]

 

Item 3 to Schedule 1 removes items 148 and 149 from Schedule 1 of the Regulations. Schedule 1 of the Regulations is a list of the forms prescribed in Schedule 2. Items 148 and 149 of Schedule 1 refer to Form 903B and Form 904.

 

Item [4]

 

Item 4 to Schedule 1 amends prescribed form 105 in Schedule 2 to correct an error. Form 105 is required when a court order related to external administration is lodged with ASIC under subsection 206G(4) of the Corporations Act. On the previous list of court orders on the Form, subsection 206G(4) is incorrectly described as ‘rectifying the charges register’. This has been amended to accurately reflect that a court order under subsection 206G(4) ‘grant[s] leave to manage corporations’.

 

Item [5]

 

Item 5 to Schedule 1 amends prescribed Form 105 to reflect the changes in Item 1. Item 5 replaces the reference to ‘484 appointing a special manager’ with ‘484(1) appointing a special manager’ and ‘484(2)(c) removing a special manager’ in the list of court orders required to be lodged with ASIC.

 

Item [6]

 

Item 6 to Schedule 1 amends the reference in the heading section of Form 529. Form 529 sets out the contents of a notice of meeting of creditors. In the heading section of the Form, the reference to ‘Sub regulation 5.6.12(2)’ has been replaced with a reference to ‘Subregulation 5.6.12(6)’. This subregulation requires the lodgement of Form 529.

 

Item [7]

 

Item 7 to Schedule 1 inserts three additional types of meetings into Form 529. These meetings are for eligible employee creditors; eligible unsecured creditors and consolidated meetings for pooled purposes.

 

Item [8]

 

Item 8 to Schedule 1 corrects a number of typographical errors in the Details of Meeting section of Form 529.

 

Item [9]

 

Item 9 to Schedule 1 removes the reference to ‘official management’ in Form 529. This type of external administration no longer exists.

 

Item [10]

 

Item 10 to Schedule 1 amends the persons who may sign Form 529 to include a liquidator, an administrator, a liquidator of a foreign company or an administrator of a foreign company.

 

Item [11]

 

Item 11 to Schedule 1 removes Forms 903B and 904 from Schedule 2 of the Corporations Regulations.

 

Form 904 is the form that was required to be lodged in relation to Item 2. Form 903B is the form of application for registration as an insolvency practitioner. The removal of this form will enable ASIC to approve its own form under section 350 of the Corporations Act. This will provide ASIC with greater flexibility in tailoring the form to collect all relevant information when determining a person’s fitness as an insolvency practitioner.