Commonwealth Numbered Regulations - Explanatory Statements

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CORPORATIONS REGULATIONS (AMENDMENT) 1997 NO. 10

STATUTORY RULES 1997 No. 10

Issued by the Authority of the Treasurer

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, prescribing, inter alia, 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 State, Northern Territory and Commonwealth 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. It is envisaged that this Agreement will be supplemented by a more formal agreement, to be known as the Corporations Agreement.

Both the Heads of Agreement and the draft Corporations Agreement require the Commonwealth to consult the States and. the Northern Territory on legislative proposals relating to matters falling within Chapters 7 and 8 of the Corporations Law. The regulations relate to matters within Chapters 7 and 8. The responsible Ministers of the States and the Northern Territory were consulted about the regulations.

The purpose of the regulations is to provide that Chapter 8 of Corporations Law has no effect in relation to gaming and wagering contracts on sporting events.

Details of the regulations are contained in the Attachment.

The regulations commenced on the date of gazettal.

ATTACHMENT

Regulation 1

Regulation 1 provides that the Corporations Regulations are amended as set out in these regulations.

Regulation 2

Certain gaming and wagering contracts on sporting events may constitute 'futures contracts' under the Corporations Law. In view of this possibility it is necessary to exclude such transactions from the application of Chapter 8 of the Corporations Law. The Corporations Law authorises the establishment of futures markets essentially to enable businesses to insure or hedge against risks associated with movements in interest rates, share prices, foreign currencies and the prices of commodities. It was not intended that the Corporations Law regulate gaming and wagering contracts per se.

Reg 8.1.01A ensures that Chapter 8 of the Corporations Law does not have effect in relation to gaming and wagering contracts on sporting events which have the features of an 'adjustment agreement' (generally a cash settled futures contract).

The exemption of this form of gaming and wagering from the Corporations Law allows State and Territory earning and wagering laws to have their normal application to such transactions and allows the States and Territories to approve such betting or not within their jurisdictions.