Commonwealth Numbered Regulations - Explanatory Statements

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CORPORATIONS REGULATIONS (AMENDMENT) 1992 NO. 395

STATUTORY RULES 1992 No. 395

Issued by the Authority of the Attorney-General

Corporations Act 1989

Corporations Regulations (Amendment)

Section 22 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act or the Corporations Law (the Law) prescribing, inter alia, matters which are required by the Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Law.

In accordance with the Heads of Agreement and the draft Corporations Agreement between the Commonwealth, State and Northern Territory Ministers having responsibilities in relation to corporate regulation, the Attorney-General has consulted the relevant State and Territory Ministers in relation to the proposed regulation.

At present interests in limited partnerships agreements are included in the definition of participation interest in section 9 of the Corporations Law if the partnership agreement relates to an undertaking, scheme, enterprise or investment contract promoted by or on behalf of a person whose ordinary business is or includes the promotion of similar undertakings, schemes, enterprises or investment contracts, whether or not that person is, or is to become, a party to the agreement or proposed agreement.

The purpose of Regulation 2 is to include interests in the following additional limited partnerships in the definition of participation interest in section 9 of the Corporations Law:

(a)       limited partnerships where any promoter of the limited partnership is not a party to the partnership;

(b)       limited partnerships which relate to a scheme promoted by an associate of a person whose ordinary business is or includes the promotion of similar schemes; and

(c)       limited partnerships which have or which are intended to have more than 15 partners, whether general or limited.

By including interests in such limited partnerships in the definition of participation interest in section 9 of the Corporations Law, interests in these limited partnerships are securities for the purposes of section 92 of the Law and fall within the definition of prescribed interest in section 9 of the Law.

As a result of the Regulations, persons offering interests in such limited partnerships will be required, subject to any exemption given by the Australian Securities Commission pursuant to section 1084 of the Law, to comply with the prospectus provisions contained in Division 2 of Part 7.12 and the approved deed provisions contained in Division 5 of Part 7.12 and in particular sections 1018 and 1065.

Details of the Regulations are at Attachment A.

ATTACHMENT A

Regulation 1

Amendment Regulation 1 provides that the Regulations amend the Corporations Regulations.

Regulation 2

New regulation 1.13A.

Regulation 1.13A includes in the definition of participation interest in section 9, the following limited partnerships:

(a)       limited partnerships which relate to a scheme promoted by an associate of a person whose ordinary business is or includes the promotion of similar schemes;

(b)       limited partnerships where any promoter of the limited partnership is not a party to the partnership; and

(c)       limited partnerships which have or which are intended to have more than 15 partners, whether general or limited.