January 2003
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In this edition:
| 1. | Regulator News | |
| APRA | ASIC | ASX | ||
| 2. | Articles | |
| Banking and Finance | ||
| Corporations | ||
| Employee Relations | ||
| Taxation | ||
| Torts | ||
| Trade Practices | ||
| 3. | Cases | |
| Corporations - reduction of capital by unanimous assent | ||
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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
APRA has released for public consultation a revised set of prudential returns requiring a greater level of disclosure of the composition of investments, investment performance and the level of fees and charges. For details, see Media Release 03-03:
http://www.apra.gov.au/media-releases/03_03.cfm
And for a copy of the proposed new returns, draft instructions and associated standards, go to:
http://www.apra.gov.au/Statistics/First-Round-of-Consultation-on-proposed-forms.cfm
ASIC has released updates to Policy Statement 146 Licensing: Training of financial product advisers dealing with the training requirements for financial product advisers who provide general advice only or who advise on basic deposit products and related non-cash payment products. For details, see Information Release IR 03-02:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/4BDAE9B67F283344CA256CB5007FD863?opendocument
ASIC has varied Class Order CO 02/214 to exempt an extended range of differential fee structures from the equal treatment requirement of section 601FC(1)(d) of the Corporations Act. The effect of the varied Class Order is to permit a responsible entity to offer differential fee structures that are based on the aggregation of a member's scheme interests, together with a member's interests in any superannuation and investment life insurance products issued by the responsible entity or a related body corporate. For details, see Information Release IR 03-01:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/44D1C2AD42676D9CCA256CA7007C6C9A?opendocument
The Financial Co-operative Dispute Resolution Scheme for member building societies and credit unions has been added to the list of ASIC-approved complaints resolution schemes for the purposes of Part 7.6 of the Corporations Act. For details, see Media Release 03-030:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/867FB28B9F238E60CA256CBE0001D105?opendocument
ASX has proposed amendments to its business rules to deal with the transition to the FSR regime. For details, see Participant Circular 023/03 and attachments:
ASX has issued an important circular to participants clarifying the obligation under Business Rule 2.15 to report certain transactions immediately and correcting an erroneous belief in the market that trading participants had up to 15 minutes to report a special crossing (which had led to a practice to wait the full 15 minutes irrespective of whether the transaction could have been reported earlier). For details, see Participant Circular 019/03:
For information about the new 2002 ISDA Master Agreement released on 8 January 2003, see Freehills, ISDA Launches New 2002 Master Agreement - 15 January 2003:
For details of the final regulations issued under the Uniform Consumer Credit Code to implement the compulsory comparison rate provisions of the Code, see Gadens, eBulletin - Compulsory Comparison Rate Legislation:
http://www.gadens.com.au/docushare/dscgi/admin.py/Get/File-2969/Compulsory_comparison_Jan_03.pdf
In Commonwealth Bank of Australia v Spira [2002] NSWSC 905, the court accepted a borrower's argument that a bank facility agreement contained an implied term of good faith, by which the bank was required to exercise its powers and discretions in the facility agreement and under the related security documentation in good faith, fairly and reasonably and for the purpose for which they were given. For a summary of the decision, see Clayton Utz, Financial Services Issues - Dec 2002/Jan 2003:
http://www.claytonutz.com.au/downloads/FinServ_Jan03.pdf
For a discussion of how ASIC's recently released Policy Statement and Class Order relating to section 707(3) of the Corporations Act (on-sales of securities) may affect employee share issues and the exercise of company-issued employee options, see Minter Ellison, Issuing Employee Shares and Options: Choosing the Right Prospectus Exemption:
http://www.minterellison.com/pubdocs/Issuingemployeesharesoptions.pdf
For a general summary of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - January 2003:
http://www.aar.com.au/pubs/pdf/wr/fowrjan03.pdf
For a general summary of recent developments in taxation law during November and December 2002, see Freehills, Tax Month: November 2002 Developments and Tax Month: December 2002 Developments:
For information about the exposure draft of the New Business Tax System (Taxation of Financial Arrangements) Bill 2002 released by Treasury in late December, see Freehills, Taxation of Financial Arrangements Bill: Exposure Draft Released - 15 January 2003:
Allens Arthur Robinson, Focus: Leasing - January 2003 contains an interesting summary of a recent case in Queensland where Franklins was held liable in negligence for an injury suffered by a customer in one of its store caused by the reckless behaviour of a small child pushing a shopping trolley. For details, see:
http://www.aar.com.au/pubs/pdf/fmres/foljan03.pdf
For a general summary of the legal provisions and practice relevant to cartel investigation, regulation and prosecution in Australia, see Clayton Utz, Cartel Regulation 2003 - Australia:
http://www.claytonutz.com.au/downloads/Cartel_Regulation_2003.pdf
In Breese v Cowper [2002] NSWSC 1225, the Supreme Court of NSW (Barrett J) held that a request by 2 shareholders for their shares to be cancelled, to which all of the other shareholders had individually assented, was sufficient to achieve that result even though no attempt had been made to comply with the Corporations Act formalities for a reduction of capital and there was no evidence that the company’s share capital account or register of members had been in any way adjusted to reflect the cancellation of the shares. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2002/december/2002nswsc1225.htm
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