January 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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
The Government has released draft regulations for consultation. The proposed regulations amend the ‘reasonably practicable’ criteria for disclosure requirements that were effected through Schedule 3 of the Corporations Amendment Regulations 2003 (No.8) and give effect to commitments made by the Government to the Senate during the debate on the Financial Services Reform Amendment Bill 2003. For a copy of the draft regulations and commentary, go to:
http://www.treasury.gov.au/documents/783/PDF/regs.pdf
http://www.treasury.gov.au/documents/783/PDF/comm.pdf
ASIC has finalised its policy on the regulation of managed discretionary account services. Under the policy, operators of MDA services are exempted from the managed investments provisions in Chapter 5C, and the product disclosure provisions in Part 7.9, of the Corporations Act. To have the benefit of this relief, MDA operators must comply with the licensing and conduct provisions in Parts 7.6 and 7.7 of the Corporations Act and some additional conduct requirements designed to promote consumer protection. For details, see ASIC Information Release IR 04-01:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/303B4CBB03C3639CCA256E120081F5A0?opendocument
ASX has warned participants that ASIC's earlier guidance note in September 2003 stating that warrants are classified either as derivatives or securities is not necessarily correct and that some warrants may also be classified as a managed investment product or an interest in an unregistered managed investment scheme. As the current AFSL application form does not enable AFSL applicants to select the option of dealing and/or advising in managed investment products or an interest in an interest in a managed investment scheme, participants who deal in these types of products will need to apply for a miscellaneous financial product authorisation covering these products. See Participant Circular 029/04 and attachment:
As part of its current operating rule re-write, SFE will be removing from the SFE and the SFE Clearing operating rules any provisions which impose obligations directly on sub-groups of employees or representatives of participants. The revised rules will become effective on 11 March 2004. This policy change will result in the discontinuance of the concept of SYCOM traders, and is consistent with cessation of SFE’s registered representative classification in November 2002. As a result, following 11 March 2004, the SFE and SFE Clearing will have no capacity to penalise employees or representatives of participants for engaging in activity which causes the participant to be in breach of the operating rules. For details, see Participant Circular 02/04:
http://www.sfe.com.au/Content/bulletins/sfe/2004/sfe2004_002.pdf
Gadens, Banking & Financial Services - January 2004 explains how the recent amendments to the Family Law Act enabling the Family Court to make orders binding third parties in relation to property settlements may affect the rights of creditors. See:
http://www.gadens.com.au/docushare/dscgi/admin.py/Get/File-4391/BFU1_2004.pdf
The ATO has released a draft determination (TD 2004/D1) relating to off market buy-backs of listed shares that is likely to impact on the pricing of off market buy-backs and their conduct through a tender process. For details, see Gilbert & Tobin, CORP.BIZ - Issue 2: The Buzz on Buy-Backs:
http://www.gtlaw.com.au/t/publications/default.jsp?pubid=535
Mallesons, Information Technology Alert - January 2004 will be of interest to anyone using Linux software. The alert relates to SCO's claims that Linux software infringes copyright in Unix System V. In December 2003, SCO stepped up its efforts to encourage Linux users to buy SCO Unix licences as protection against those claims, by issuing a series of letters of demand to companies around the world. SCO has also increased its focus on Australia and has just issued Australian prices for its SCO Unix licensing program. For details of the action and suggestions how to respond, see:
Allens Arthur Robinson, Client Update: Telemarketing – January 2004 looks at the new telemarketing rules in Victoria implemented via changes to the Fair Trading Act 1999 (Vic). The changes will introduce specific compliance obligations for telemarketers running call campaigns targeting Victorian consumers, including prescribed calling hours, cooling off periods and cancellation rights for consumers. See:
http://www.aar.com.au/pubs/cmt/cutelmktjan04.htm
For a general update on recent developments in employee relations, see Allens Arthur Robinson, Focus: Workplace Relations - January 2004:
http://www.aar.com.au/pubs/pdf/wr/fowrjan04.pdf
Phillips Fox, Employment eUpdate - January 2004 has an interesting discussion of the recent decision in Bennett v President, Human Rights and Equal Opportunity Commission, dealing with the issue of the constraints a public sector employer can put on employees about making media comment. See:
http://www.phillipsfox.com/vbscript/displaydoc.asp?ndocid=114073773
For a summary of the recent changes to the rules on quoting AFSL licence numbers in various documentation, see Blake Dawson Waldron, i-on-FSR - January 2004:
http://www.bdw.com.au/publications/i-on-fsr/i-on-FSR812004.pdf
Allens Arthur Robinsons, Focus: Native Title – January 2004 summarises four Federal Court decisions on native title in December 2003, including one (Neowarra v State of Western Australia) marking the end of one of the most important cases dealing with the extinguishment of native title. See:
http://www.aar.com.au/pubs/pdf/nat/fonatjan04.pdf
K & S Corporation Ltd v Sportingbet Australia [2003] SASC 96 involved a successful application by an employer to recover $3 million of its money a miscreant employee had transferred to a licensed bookmaker to pay for his gambling activities. The case has an interesting analysis of the law on constructive trusts and when information about the source of funds held by officers and employees of the bookmaker could be attributed to the bookmaker as a corporate entity. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/sa/2003/march/2003sasc96.htm
Application of Perpetual Trustee Company Ltd [2003] NSWSC 1185 has an interesting exposition of the law and pitfalls associated with applications by trustees for judicial advice under section 63 of the Trustee Act 1925 (NSW). That section is often used by responsible entities of managed investment schemes to gain judicial protection for commercial decisions they make in the administration of the scheme. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/december/2003nswsc1185.htm
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