January 2002

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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.

1. Regulator News

ACCC - guide - country of origin guidelines

The ACCC has published a guide for the textiles, clothing and footwear industries to help them comply with the country of origin guidelines in the Trade Practices Act. A copy can be downloaded from:

http://www.accc.gov.au/pubs/Publications/Industry/country_origin/TCF_country_origin.pdf

ASIC- survey - auditor independence

ASIC has released the findings on its survey into auditor independence. Not surprisingly, it concludes that the high level of fees earned by audit firms through non-audit services reinforces the potential for conflicts of interest. It also found a lack of rigour in processes to manage conflicts and a continuing reluctance to adopt robust audit rotation as an anti- conflicts measure. See media release 02/13:

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/C9C92D5EA901D2D8CA256B4200820589?opendocument

ASIC- survey - compliance with Accounting Standard AASB 1018

A survey of financial statements to 30 June 2001 by ASIC has identified a number of problems in the application of the new Accounting Standard AASB 1018 'Statement of Financial Performance'. It will be recommending changes to clarify and reinforce the spirit of the new Standard and monitoring compliance among listed companies that balance on 31 December 2001. See media release 02/22:

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/1AE881F86298E7BECA256B4A0083A241?opendocument

ASIC - enforcement action - use of licence conditions

ASIC has imposed restrictive licence conditions on an insurance broker and an index arbitrageur to address enforcement concerns. The insurance broker has had its registration suspended for 6 months but on conditions that will allow it to trade if it complies with certain requirements. These include upgrading its dispute resolution procedures, employing an office manager who will be responsible for the payment of creditors, monitoring debtors and supervising the processing of clients' claims and undertaking compliance assessment and such additional compliance training as is recommended by the National Insurance Brokers Association. The licence conditions for the arbitrageur require it to follow certain procedures and to exercise restraint in its index arbitrage activities at end of quarter trading. See media releases 02/18 and 02/20:

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/B96057F538174464CA256B45000D1EB0?opendocument

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/E51ECEEB9DC0F518CA256B4800047CE5?opendocument

ASIC- enforcement action - jail and life ban for advisers

A former Saxby Bridge Financial Planning Limited investment adviser has been imprisoned for a minimum of 2½ years and  permanently banned from being a representative of a dealer or an investment adviser after being convicted of misappropriating $140,000 from Saxby Bridge clients. A former MLC investment adviser has also been permanently banned and received a suspended jail sentence of 23 months conditional on entering into a 2 year good behaviour bond and serving 8 months home detention, after pleading guilty to 12 charges of defrauding a client of valuable securities worth $65,083 and one charge of fraudulently converting a client cheque of $10,375 for his own use or benefit. See media releases 02/01 and 02/06:

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/901BF5E52C04F09BCA256B350011443A?opendocument

http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/A73A80766A38F72ECA256B3B0009C7CE?opendocument

ASX - listing rules - proposed amendments for exempt foreign listings

ASX has released an exposure draft of proposed amendments to its Listing Rules increasing the size thresholds for admission to the Official List as an exempt foreign listing. The rule amendments are intended to take effect on 1 June 2002. The due date for comments is 15 March 2002. To download a copy of the exposure draft, go to:

http://www.asx.com.au/about/pdf/ExposureDraftASXForeignExempt.pdf

ASX - business rules - amendments for shared gateways, crossings and conditional trading

ASX has released amendments to its Business Rules dealing with shared gateways, crossings and conditional trading. To download a copy of the circular to participating organisations and temporary rulebook insertion, go to:

http://www.asx.com.au/pdf/026_02.pdf

http://www.asx.com.au/pdf/Gateway.pdf

ASX - guidance note - privacy requirements

ASX has released a new Guidance Note 1/02 setting out its approach to dealing with information and suggestions for participating organisations regarding the new Federal privacy laws introduced in December 2001. For a copy of the Guidance Note, go to:

http://www.asx.com.au/pdf/Privacy_provisions.pdf

AUSTRAC - information circulars

AUSTRAC has released 3 new information circulars: 26. Nauru; 27. The Philippines; and 28. Identification of Signatories to Cash Management Trusts. See:

http://www.austrac.gov.au/text/guidelines/circulars/infocirc26.html

http://www.austrac.gov.au/text/guidelines/circulars/infocirc27.html

http://www.austrac.gov.au/text/guidelines/circulars/infocirc28.html

2. Articles

Banking & finance

Tough new anti-money laundering measures have been introduced by the US that will affect Australian financial institutions that have correspondent banking arrangements with US banks. See Freehills, Global anti-money laundering 30 January 2002:

http://www.freehills.com.au/CA256AD900137BAA/page/Listing-abf-Global+anti-money+laundering15416?opendocument&1=50-Publications~&2=0-Banking+%26+Finance~&3=~&REFUNID=1E89698B64EA525E4A256B48001B020C~undefined

Corporations

For an interesting discussion of the decision in GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd [2001] FCA 1761 (GIO held to have engaged in misleading and deceptive conduct by failing to disclose information in its possession concerning its reinsurance losses at the time it and AMP simultaneously announced a proposed scheme of arrangement, even though the information was not sufficiently certain at the time to warrant disclosure in the absence of the scheme proposal), see Allens Arthur Robinson, Focus: Mergers & Acquisitions - January 2002:

http://www.aar.com.au/publications/foma2jan02.htm

Employee relations

For a general summary of recent developments in ER law, see Minter Ellison, HR & IR Update - January 2002:

http://www.minters.com.au/mintersV2/uploads/files/HR&IRUpdate170102.pdf

Tax

For a general summary of tax developments during December 2001, see Freehills, Tax Month - December 2001 Developments:

http://www.freehills.com.au/CA256AD900137BAA/page/Listing-at-Tax+Month%3a+December+2001+Developments18FD6?opendocument&1=50-Publications~&2=0-Taxation+~&3=~&REFUNID=FDF26862489446EA4A256B48001B60A3~undefined

For a discussion of the recently released draft GST Public Ruling on financial supplies and related issues, see Freehills, GST treatment of financial supplies and related supplies and acquisitions (GSTR 2001/D9) 24 January 2002:*

*For technical reasons, we are not able to include a direct hyperlink to this article. It can be accessed via the Taxation publications page on the Freehills web site:

http://www.freehills.com.au/CA256AD900137BAA/ListMaker?OpenForm&REFUNID=FDF26862489446EA4A256B48001B60A3~&1=50-Publications~&2=0-Taxation+~&3=~&V=DateListingD~&K=at~&Count=20~

3. Cases

Corporations - right of former director to inspect company records

In Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846, a former director of a company sought access under section 198F of the Corporations Act to all of the company’s books in connection with legal proceedings he had brought against the company for an alleged infringement of intellectual property rights. Held that the mere fact that a proceeding has been commenced does not entitle a former director to inspect all of the books of a company under section 198F and that he must specify specific categories or classes of books which have some bearing on the relevant legal proceedings. The court also expressed doubts, without reaching a final view, on whether a director could seek access to records under that section in relation to legal proceedings that did not involve him in his capacity as a director of the company. For the full judgment, see:

http://cclsr.law.unimelb.edu.au/judgments/states/federal/2001/september/2001fca1846.html

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