July 2005
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
Not for any reason apart from highlighting the conservative and moralistic times in which we live, we advise our readers that the Criminal Code Amendment (Suicide Related Material Offences) Act 2005 has come into law. The Act inserts significant new offences into the Commonwealth Criminal Code dealing with use of a carriage service to access, transmit or otherwise make available suicide related material, and the possession, production, supplying or obtaining of suicide related material for use through a carriage service. For a copy of the Act and its explanatory memorandum, go to:
ACCC has finally bowed to the increasing reluctance of the Federal Court to make orders requiring infringing parties to introduce trade practices compliance programs that comply with the "one size fits all" Australian Standard AS3806 and published 4 trade practices compliance program templates that are tailored for the size, resources, turnover and circumstances of the subject company. See the ACCC's website at:
http://www.accc.gov.au/content/index.phtml/itemId/54418
ACCC and ASIC have issued a second draft of the guideline on consumer protection laws for those involved in the debt collection industry. For a copy of the new draft guideline and the accompanying discussion paper, go to:
ACCC has launched an information package to raise awareness of the signs of possible cartel behaviour affecting government procurement. For a copy of the package, go to:
http://www.accc.gov.au/content/index.phtml/itemId/612295/fromItemId/612275
APRA has released two new discussion papers and accompanying draft prudential standards on the implementation of the Basel II capital adequacy regime, known as the Basel II Framework. The first paper introduces the draft prudential standard for the standardised approach to operational risk. The second paper outlines APRA’s approach to the implementation of the internal ratings‑based approach to credit risk. The discussion papers and draft prudential standards are available on APRA’s web site at:
http://www.apra.gov.au/adi/ADI-Publications.cfm and
ASIC has reminded Australian financial services licensees that they must notify ASIC of any significant breaches of their obligations under the financial services laws, even where these are the subject of the Government's FSR refinement proposals. This is notwithstanding ASIC's stated position that it will generally not take action for breaches of financial services provisions that are the subject of a refinement proposal where that conduct is more likely than not to be lawful if the refinement proposal became law. See Media Release 05-189:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/734085C2A60692AFCA25703100222184?opendocument
ASIC has released a draft guide entitled Disclosing Pro Forma Financial Information for public comment. The draft guide sets out proposed guidance on the use of pro forma financial information in financial reports, disclosure documents and announcements. For a copy of the draft guide, go to:
ASIC has released an update report outlining its decisions on recent relief applications made by financial service providers for relief from the licensing, conduct, disclosure and managed investments provisions of the Corporations Act 2001. For a copy of the updated report, go to:
ASIC has issued exemptions to give unlisted entities an extra month to complete their first financial reports under the new Australian equivalents to International Financial Reporting Standards. See Information Release IR 05-40:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/02CEF1E261AB05A4CA257038000995C8?opendocument
ASIC has announced updates to ASIC class order relief, practice notes and guidelines relating to the introduction of the Australian equivalents of International Financial Reporting Standards and certain CLERP 9 amendments. See Information Release IR 05-42:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/6708AC976BB6A1FCCA25704B0006AB65?opendocument
AUSTRAC has published an on-line educational tool entitled Anti-Money Laundering eLearning Application to assist cash dealers, industry associations, members of the public and other interested stakeholders in understanding the various reporting and 'know your customer' obligations under the Financial Transaction Reports Act 1988. To access the application, go to:
http://www.austrac.gov.au/aml_elearning/index.html
ASX has amended Market Rules Procedure 3.6.5 dealing with the criteria for recognising responsible executives and Market Rule Procedure 4.1.3 to correct typographical errors. It has also updated ASX Market Rule Guidance Note No 27: Ongoing Compliance & Supervision – Responsibilities of Responsible Executives. See Participant Circular 349/05 and attachments:
As foreshadowed in ASX Circular 331/05, ASX has published amendments to ASX Market Rules Procedure 4.9.5 and 4.9.7 and Appendices to ASX Market Rule Procedures 4.9.5-2 and 4.9.7, amending the form of audit report required to be lodged with ASX and the timing of lodgement of annual audited returns and other returns. See Participant Circulars 366/05 and 371/05 and attachments:
Following a review of wash trades self reported in accordance with Operating Rules 2.2.10 and 2.3.10, the SFE has undertaken to grant to participants a partial exemption from those rules with effect from 1 August 2005. See SFE Notice No 101/05:
http://www.sfe.com.au/content/notices/2005/notice2005_101.pdf
Continuing the uncertainty in this area, the House of Lords has held that the purported fixed charge over book debts contained in the typical form of all assets charge used in finance transactions only gives rise to a floating charge, at least where the chargee does not take control of the proceeds. See Allens Arthur Robinson, Focus: Banking & Finance - July 2005 and Focus: Insolvency - July 2005:
http://www.aar.com.au/pubs/baf/fobafjul05.htm
http://www.aar.com.au/pubs/insol/foinsjul05.htm
In June 2005, ISDA published international standard documentation for credit default swaps on asset backed securities. The documentation is likely to enhance industry efficiency in the growing synthetic asset backed securities sector. See Mallesons, Banking and Finance Alert - 15 July 2005:
For a summary of the current regulatory regime for finance brokers and proposals for national regulation, see Gadens, Regulation of Credit Providers and Finance Brokers - 4 July 2005:
http://www.gadens.com.au/Documents/banking040705-839-2.pdf
For an overview of the proposals in the Corporations and Markets Advisory Committee discussion papers Personal Liability for Corporate Fault and Corporate Duties Below Board Level, see Allens Arthur Robinson, Focus: Corporate Governance - July 2005:
http://www.aar.com.au/pubs/ma/focgjul05.htm
Following the lapse of ASIC relief from the AASB 1046 requirements, directors' and executives' remuneration must now be disclosed in financial reports of listed schemes or unlisted schemes that have 100 or more retail investors. See Allens Arthur Robinson, Focus: Executive Remuneration – July 2005:
http://www.aar.com.au/pubs/fmres/fofmresjul05.htm
For a general update on employee share schemes, including a discussion of the possible requirement for the trustees of those schemes to hold an Australian financial services licence, see Minter Ellison, Australian Employee Share Schemes Update - 1 August 2005:
A recent decision of the Australian Takeovers Panel has raised the spectre that cash settled equity swaps over shares in an Australian listed company may need to be disclosed in the same way as physical holdings of listed shares. See Gilbert & Tobin, Potential New Requirement to Disclose Swap Transactions - 28 July 2005:
For a general discussion of recent developments in employee relations law, see Blake Dawson Waldron, Discrimination Bulletin - July 2005:
http://www.bdw.com.au/publications/discrimination/discrimination072005.pdf
For a useful summary of the Federal Court's decision in Universal Music Australia Pty Ltd v Cooper (see below), see Freehills, MP3s at Considerable Cost: ISP Infringement by Inaction and Indifference - 21 July 2005:
http://www.freehills.com.au/publications/publications_5146.asp
For an interesting discussion of the decision in Woolworths Ltd v Olson 63 IPR 258, where Woolworths was able to obtain an Anton Pillar order confiscating an employee's wife's computer to which the employee had sent confidential material about his employer by email prior to accepting a job with a competitor, see Freehills, Confidentiality and Copyright: Emails Covered Too - 28 July 2005:
http://www.freehills.com.au/publications/publications_5148.asp
Those interested in the recent insider trading prosecution in R v Frawley [2005] NSWSC 585 and the non-prosecution (aka civil penalty proceedings) in ASIC v Vizard [2005] FCA 1037, can view the decisions at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2005/june/2005nswsc585.htm
http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1037.html
In Universal Music Australia Pty Ltd v Cooper [2005] FCA 972, the Federal Court held the owner and operator of www.mp3s4free.net liable for authorising infringements of copyright by users of the website who downloaded copyrighted music. However, it dismissed claims that the website and domain name conveyed misrepresentations regarding the legality of downloading music from the internet. The decision can be viewed at:
http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/972.html
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