December 2009
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In this edition:
Note: All hyperlinks below were correct at the time of publication. Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
The National Consumer Credit Protection Act 2009 and National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 have now become law. For a copy of the Acts and their explanatory memoranda, go to:
The Personal Property Securities Act 2009 and Personal Property Securities (Consequential Amendments) Act 2009 have also now become law. For a copy of the Acts and their explanatory memoranda, go to:
The Federal government has also released a consultation draft of the Personal Property Securities (Corporations and Other Amendments) Bill 2009. The Bill proposes changes to the Corporations Act 2001 resulting from the enactment of the Personal Property Securities Act 2009. The draft Bill and related explanatory material can be downloaded at:
Some minor amendments have been made to the Corporations Regulations to update Australian Standards references and to implement the intermediated general insurance business data collection regime. For a copy of the Corporations Amendment Regulations 2009 (No. 10) and Corporations Amendment Regulations 2009 (No. 11) and their explanatory statements, go to:
The government has also released draft regulations requiring a short form product disclosure statement for any registered managed investment scheme that invests at least 80% of its assets in financial assets and for all superannuation products. The draft Regulations, explanatory materials and sample short form PDSs can be viewed at:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1695
The government has released a consultation paper and draft legislation proposing reforms to the supervision of Australia's financial markets. If implemented, the proposals will facilitate ASIC's supervision of domestically licensed financial markets, create a new rule making power for ASIC and provide additional powers for ASIC to enforce these rules. The consultation paper and draft legislation can be downloaded at:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1673
The government has also released draft reforms aimed at improving Australia's corporate reporting framework. The proposed reforms affect payment of dividends, reductions of capital, annual reporting requirements for listed registered schemes and protection of "solicitor representation letters". The draft proposed amending legislation, regulations and explanatory material can be viewed at:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1677
Treasury has published a consultation paper about a proposed product rationalisation framework for managed investment schemes and life insurance products. The paper can be downloaded from:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1694
APRA has released for consultation a discussion paper, accompanied by proposed amendments to relevant prudential standards and prudential practice guides, on proposals to enhance the Basel II Framework in Australia. The discussion paper can be found on the APRA website at:
http://www.apra.gov.au/Policy/Proposed-Basel-II-Enhancements-2009.cfm
APRA has released a consultation package proposing changes to prudential reporting for general insurers to align prudential reporting more closely with statutory reporting. The discussion paper and accompanying draft standards, reporting forms and instruction guides are available on APRA's website at:
www.apra.gov.au/policy/Proposed-changes-to-General-Insurance-Prudential-Reporting.cfm
ASIC has released a swag of new materials on the new national credit regime, including Information Sheet 96 Getting ready for credit, Information Sheet 97 Guidance for small credit businesses, Regulatory Guide 202 Credit registration and transition, Regulatory Guide 203 Do I need a credit licence?, Regulatory Guide 204 Credit licensing: Applying for and varying a credit licence, Regulatory Guide 205 Credit licensing: General conduct obligations, Regulatory Guide 206 Credit licensing: Competence and training, Regulatory Guide 207 Credit licensing: Financial requirements and Regulatory Guide 208 How ASIC charges fees for credit relief applications. It has also released updates to Regulatory Guide 51 Applications for relief and Regulatory Guide 108 No Action letters to reflect the new regime. The new materials can be downloaded from:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Getting+ready+for+credit?openDocument
http://www.asic.gov.au/asic/asic.nsf/byheadline/Guidance+for+small+credit+businesses?openDocument
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg202.pdf/$file/rg202.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg203.pdf/$file/rg203.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg204.pdf/$file/rg204.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg205.pdf/$file/rg205.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg206.pdf/$file/rg206.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg207.pdf/$file/rg207.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg208.pdf/$file/rg208.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg51.pdf/$file/rg51.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg108.pdf/$file/rg108.pdf
ASIC has updated Regulatory Guide 2 AFS Licensing Kit: Part 2 - Preparing your AFS licence application, Regulatory Guide 3 AFS Licensing Kit: Part 3 - Preparing your additional proofs, Regulatory Guide 146 Licensing: Training of financial product advisers, Regulatory Guide 166 Licensing: Financial requirements and Pro Forma 209 Australian financial services licence conditions to reflect the new licensing, conduct and disclosure requirements for margin lending facilities. The updated regulatory guides and pro forma can be downloaded from:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg2.pdf/$file/rg2.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg3.pdf/$file/rg3.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg146.pdf/$file/rg146.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg166.pdf/$file/rg166.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/pf209.pdf/$file/pf209.pdf
ASIC has released Consultation Paper 129 Non-standard margin lending facilities – improving disclosure for retail clients. It sets out the key features and risks which ASIC proposes should be disclosed in a Product Disclosure Statement for non-standard margin lending facilities. The consultation paper is available at:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp129.pdf/$file/cp129.pdf
ASIC has released Consultation Paper 126 Facilitating Debt Raisings intended to assist with the development of a sustainable listed corporate bond market in Australia. It proposes relief from long form prospectus requirements, including a shorter prospectus for bond offers focused on the terms of the offer and the ability of the bond issuer to meet its interest and repayment obligations, and a two-part prospectus designed to provide successive bond offers offering greater flexibility and speed-to-market in making bond offers. To view the consultation paper, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp126.pdf/$file/cp126.pdf
ASIC has published proposed best practice guidelines to help improve market practices relating to the handling of confidential information by listed entities. For a copy of Consultation Paper 128 Handling confidential information and the attached draft regulatory guide, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp128.pdf/$file/cp128.pdf
ASIC has released an updated Regulatory Guide 60 Schemes of arrangement and Consultation Paper 127 Schemes of arrangement: Statements under s411(17)(b). They can be downloaded from:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg60v1.pdf/$file/rg60v1.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp127.pdf/$file/cp127.pdf
Yet another insider trading scalp for ASIC, this time a person accused of disposing of shares in a company at a time he was aware that a lender to the company was considering demanding the repayment of several loan facilities. See Advisory 09-254AD:
ASX has released a consultation draft of proposed listing rules on trading windows and blackout periods. Under the proposals, ASX will require listed entities to adopt and disclose a trading policy on trading in entity securities by directors and other key management personnel, include restrictions and clearance procedures in the policy as to when trading can and cannot occur and publicly disclose whether any trading by directors occurred during an otherwise restricted period. The proposed Listing Rule amendments can be found at:
http://www.asx.com.au/about/pdf/20091203_asx_consultation_paper_listing_rule_amendments.pdf
ASX has amended its market rules and procedures to reflect changes to the transactional reporting requirements for short selling introduced as part of the new short selling legislation and regulations that came into effect on 11 December 2009. See ASX Circular 443/09 and attachments:
ASX is introducing new minimum core capital requirements for ACH Participants effective 1 July 2010. For details, see ASX Circular 465/09 and attachment:
ASX has amended its market rules and procedures relating to portfolio special crossings & ETF special trades. See ASX Circular 474/09 and attachments:
ASX has deleted market rule 20.1 requiring the lodgment of a deed of indemnity for on-market takeover bids and the associated Schedule 10. See ASX Circular 482/09 and attachments"
Minor amendments have been made to several of the ASX market rules to correct various oversights, typographical and numbering errors. See ASX Circular 486/09 and attachment:
ASX is introducing a new electronic return lodgment system which will be used by all ASX market participants (excluding principal traders) who are subject to the risk based capital requirements or the NTA requirements and by all SFE full participants and clearing participants who are subject to the NTA requirements. See ASX Circular 483/09 and SFE Notice 222/09:
http://www.sfe.com.au/content/notices/2009/notice2009_222.pdf
AUSTRAC has released the due dates for businesses to report on their compliance with Australia's anti-money laundering and counter-terrorism financing laws, a guide and a brochure on the 2009 reporting requirements and a sample 2009 AML/CTF compliance report. See media release dated 1 December 2009 and the other document links below:
http://www.austrac.gov.au/1dec09.html
http://www.austrac.gov.au/amlctf_compliance_report.html
http://www.austrac.gov.au/files/cr09_brochure.pdf
http://www.austrac.gov.au/files/sample_cr09_form.pdf
AUSTRAC has also released a swag of proposed new AML/CTF Rules in draft, relating to the register of providers of designated remittance services, the definition of 'designated business group', reporting requirements for signatories to non-individual accounts and risk only life policy interests in a superannuation fund. They can be viewed on the AUSTRAC website at:
http://www.austrac.gov.au/aml_ctf_rules.html
SFE has made miscellaneous amendments to its operating rules, procedures, determinations and practice notes, its clearing rules and the Austraclear regulations. See SFE notice 223/09:
http://www.sfe.com.au/content/notices/2009/notice2009_223.pdf
A recent decision of the Supreme Court of New South Wales provides a timely reminder for lenders to monitor their relationships with third party brokers closely and be aware of how brokers present themselves to potential borrowers. The accepted position has been that brokers are the agent of the borrower, not the lender. Consequently, if the broker misrepresents the position to either or both parties, they do so as the borrower's agent not as the lender's. However, the court's decision has, to some extent, reversed the position. See Minter Ellison, Your broker or mine? - 8 December 2009:
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - 3 and 21 December 2009:
http://www.aar.com.au/pubs/wr/fowrdec09.htm
http://www.aar.com.au/pubs/wr/fowr21dec09.htm
Mallesons, Happy NES Year! - December 2009 has a timely reminder that employers should be preparing for the introduction of the National Employment Standards and Modern Awards on 1 January 2010. See:
http://www.mallesons.com/publications/2009/Dec/10169601W.htm
Safe Work Australia has indicated that some important amendments to the model Safe Work Act 2009 will be recommended to the Workplace Relations Ministers' Council when it is next due to meet. See Blake Dawson, Model Work Health and Safety Laws - Another step closer - 10 December 2009:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=57455
Clayton Utz, Litigation and Dispute Resolution Insights - 18 December 2009 has some useful tips on how to manage the risks of employees using social networking websites such as Facebook and Twitter. See:
A speech by the Treasurer, Wayne Swan, has clarified the Australian Government’s approach to assessing foreign investment proposals, particularly in relation to the national interest test and general policy. He also announced some changes to how FIRB will operate in 2010. For further details, see Blake Dawson, Australia - Foreign Investment Update - December 2009:
http://www.blakedawson.com/WorkArea/DownloadAsset.aspx?id=57543
The Commissioner of Taxation has released two important draft determinations dealing with the taxation of foreign private equity entities and the application of the general anti-avoidance provisions in Part IVA to treaty shopping structures. See Mallesons Stephen Jaques, New draft tax rulings on private equity and treaty shopping - 16 December 2009:
http://www.mallesons.com/publications/2009/Dec/10186351W.htm
Treasury has released exposure draft legislation providing for the repeal of the current foreign investment fund regime and the deemed present entitlement rules that apply to foreign trusts. See Mallesons Stephen Jaques, New opportunities for offshore funds: end of FIF - 21 December 2009:
http://www.mallesons.com/publications/2009/Dec/10190688W.htm
Treasury has also released exposure draft legislation allowing eligible managed investment trusts to make an irrevocable election to apply capital gains tax provisions as the primary code for taxing gains and losses on the disposal of certain assets - primarily shares, units and land. The draft legislation provides much needed certainty for investors and fund managers alike in the Australian financial services industry. See Minter Ellison, Capital account safe harbour for Australian Managed Investment Trusts - 17 December 2009:
Perhaps confirming what should have been self-evident, in Re Murchison Holdings Ltd [2009] VSC 528, the Supreme Court of Victoria held that a primary tracing notice under section 672A(1)(a), and a secondary tracing notice under section 672A(1)(b), of the Corporations Act must relate to a current shareholding and cannot be given in relation to a former shareholding. It also held that a notice cannot be given under section 672A in relation to options. The decision can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/vic/2009/november/2009vsc528.htm
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