February 2004
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
Two more sets of FSR Regulations have been promulgated - the Corporations Amendment Regulations 2004 (No 2) SR 25/2004 and the Corporations Amendment Regulations 2004 (No 3) SR 26/2004. For a copy of the regulations and their explanatory statements, go to:
http://scaleplus.law.gov.au/html/numrul/20/10053/0/NL000060.htm
http://scaleplus.law.gov.au/html/ess/0/2004/N/20040226025.htm
http://scaleplus.law.gov.au/html/numrul/20/10054/top.htm
http://scaleplus.law.gov.au/html/ess/0/2004/N/20040226026.htm
ASIC has outlined the interim licensing and disclosure relief it is willing to consider for loyalty or reward schemes that constitute or include a non-cash payment facility and for low value non-cash payment facilities that are conducted on a small scale or for a limited purpose and are not part of another financial product. See Information Releases IR 04-06 and IR 04-07:
http://www.asic.gov.au/asic/asic_pub.nsf/byid/10289369A1B49BABCA256E440016FF99?opendocument
http://www.asic.gov.au/asic/asic_pub.nsf/byid/B25CF1B37ACA3FFACA256E440019715E?opendocument
ASIC has issued some practical guidance for wholesale foreign financial services providers seeking to rely on relief from the requirement to hold an Australian financial services licence under the various class orders issued in December 2003. See Information Release IR 04-04:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/84671A1E29506BE2CA256E3D00781556?opendocument
ASIC has announced transitional relief for Australian financial services licensees from the obligation under section 912F of the Corporations Act to cite their AFS licence numbers on Product Disclosure Statements. The extension applies to stocks of PDSs, supplementary PDSs and associated application forms that have been printed and are available for distribution before the date on which the licensee was granted its AFSL, where this date is before 11 March 2004. See Information Release IR 04-03:
http://www.asic.gov.au/asic/asic_pub.nsf/byid/5BE5AA7A24DBA69BCA256E3D001EA999?opendocument
ASX has adopted new ASX Market Rules, ACH Clearing Rules and ASTC Settlement Rules to come into operation on 11 March 2004 (subject to Ministerial non-disallowance). For details, see Participant Circular 064/04:
To access the new rules, go to:
https://www.asxonline.com/participants/CSSR_FSR/NewDraftRules.htm
SFE has adopted new Operating Rules that will come into operation on 11 March 2004. It has also released a new volume of Procedures, Determinations and Practice Notes. For details, see SFE Bulletin 09/04:
http://www.sfe.com.au/Content/bulletins/sfe/2004/sfe2004_009.pdf
To access the new rules and procedures, go to:
http://www.sfe.com.au/content/aboutsfe/sfe_rules/sfe_operatingrules.pdf
http://www.sfe.com.au/content/aboutsfe/sfe_rules/procedures_determinations.pdf
Following the removal of pre-trade mnemonics, SFE has published a warning that under no circumstances should participants disseminate any information relating to the identity of a participant working a SYCOM order where that particular order has not been executed in the market. In addition, participants should not attempt to take advantage of the absence of pre-trade mnemonics to make claims regarding activity in the market that is deliberately false (eg falsely claiming to have participated in trades or to having orders in the market). See SFE Bulletin 07/04:
http://www.sfe.com.au/Content/bulletins/sfe/2004/sfe2004_007.pdf
The Supreme Court of New South Wales has upheld the operation of the flawed asset provision in the ISDA Master agreement, holding that the court did not have the power to rewrite it in the liquidation of a counterparty. See Mallesons, Financial Services Law Alert - 24 February 2004:
Off-market share buy-backs have become a popular mechanism for managing a company's capital and returns for shareholders. For a short overview of the off-market tender process and the various features of an off-market buy-back, see Mallesons, Mergers and Acquisitions Alert - February 2004:
http://www.mallesons.com/publications/alerts/Mergers_and_Acquisitions_Alert_February_2004.pdf
A recent decision handed down in the Western Australian Industrial Relations Commission may have significant implications nationally for liquidators, receivers and administrators. The decision opens the door to the possibility that more than one entity is an employer (ie joint employment). This raises a number of questions if a company goes into liquidation, including: who is responsible for the employees’ entitlements; and who is entitled to control employees’ work or terminate their employment? It also sets out a number of factors to be taken into account when determining who the employer is. See Hunt & Hunt, Legal Update: Who’s the Boss? – Joint Employment:
http://www.deacons.com.au/news/article.asp?nID=529
For a paper on the impact that various Australian tax issues may have on the design and operation of employee share and option plans, see Allens Arthur Robinson, Using Employee Share/Option Plans to Attract and Retain Employees – Tax Issues:
http://www.aar.com.au/pubs/pdf/tax/tax17feb04.pdf
And for a discussion of the payroll tax and stamp duty ramifications of employee share schemes, see Allens Arthur Robinson, Employee Shares and Options:
http://www.aar.com.au/pubs/pdf/tax/taxfeb04.pdf
For a summary of the key impacts of the Australia-United States Free Trade Agreement for intellectual property owners, see Mallesons, Intellectual Property Alert - February 2004:
For general overviews of the key aspects of the Australia-United States Free Trade Agreement, see Allens Arthur Robinson, Focus: Free Trade Agreement – February 2004 and Corrs Chambers Westgarth, Free Trade Agreement - 13 February 2004:
http://www.aar.com.au/pubs/ip/foftafeb04.htm
http://www.corrs.com.au/WebStreamer?page_id=4705
As part of the Attorney General's review of the Privacy Act, a discussion paper has been released on the employee exemption. See Minter Ellison, Discussion Paper on the Employee Exemption Released - 16 February 2004:
The Commissioner of Taxation has sent letters to 1500 chairpersons of major Australian listed companies to reinforce the message that boards should become more involved in the tax aspects of major transactions. See Freehills, Michael Carmody's Letter to 1500 Chairs - 13 February 2004:
For those interested in reading the appeal court decision in R v Rivkin [2004] NSWCCA 7, it is available online at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2004/february/2004nswcca7.htm
In Bashford v Information Australia (Newsletters) Pty Limited [2004] HCA 5, a majority of the High Court held that the common law defence of qualified privilege was available in respect of a report of judicial proceedings published in a subscription publication concerning occupational health and safety, notwithstanding that it was published for reward and notwithstanding that the defence of fair and accurate report of judicial proceedings was not available (because the report was inaccurate). The judgment is available online at:
http://www.austlii.edu.au/au/cases/cth/HCA/2004/5.html
Murphy v Overton Investments Pty Ltd [2004] HCA 3 contains an exposition by the High Court of the meaning of "loss or damage" for the purposes of sections 82 and 87 of the Trade Practices Act. The judgment is available online at:
http://www.austlii.edu.au/au/cases/cth/HCA/2004/3.html
In Arakella v Paton [2004] NSWSC 13, the NSW Supreme Court held that section 81 of Trustee Act (NSW) empowers the court to amend a trading trust instrument and confer on the trustee a power of amendment affecting rights of beneficiaries. It also held that such an amendment would not offend the Gambotto principles. The judgment is available online at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2004/january/2004nswsc13.htm
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