June 2003
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 Financial Services Reform Amendment Bill 2003 has been tabled in Parliament. It will clarify and amend various aspects of the regulatory framework governing the licensing, conduct and disclosure of providers of financial services, and the licensing of financial markets and clearing and settlement facilities, contained in Chapter 7 and related provisions of the Corporations Act. It will also make minor amendments to the Income Tax Assessment Act 1997 and the Retirement Savings Accounts Act 1997. For a copy of the Bill and its explanatory memorandum, go to:
http://scaleplus.law.gov.au/html/bills/0/2003/0/2003070301.htm
http://scaleplus.law.gov.au/html/ems/0/2003/0/2003070301.htm
The Corporations Amendment Regulations 2003 (No 4) and (No 5) (SR 126/2003 and 127/2003 respectively) have come into effect. The former clarify or correct various provisions introduced by the FSR Act, while the latter extend the FSR reforms to the provision of medical indemnity insurance. For a copy of the regulations and their explanatory statements, go to:
http://scaleplus.law.gov.au/html/numrul/19/9774/top.htm
http://scaleplus.law.gov.au/html/numrul/19/9775/top.htm
http://scaleplus.law.gov.au/html/ess/0/2003/N/20030619126.htm
http://scaleplus.law.gov.au/html/ess/0/2003/N/20030619127.htm
Further draft regulations modifying the licensing and product disclosure rules for various products and making a number of technical amendments to the Corporations Act have been released by Treasury for public consultation. For a copy of the announcement and draft regulations, go to:
http://www.treasury.gov.au/contentitem.asp?pageId=&ContentID=658
http://www.treasury.gov.au/documents/658/PDF/corporationsamendmentregs.pdf
A bill to outlaw age discrimination has been tabled in Federal Parliament. For a copy of the Bill and its explanatory memorandum, go to:
http://scaleplus.law.gov.au/html/bills/0/2003/0/2003062606.htm
http://scaleplus.law.gov.au/html/ems/0/2003/0/2003062606.htm
ACCC has issued a leniency policy aimed at exposing and stopping secret corporate cartels operating in Australia. Under the policy, where the ACCC is unaware of a cartel, the first person (company or individual) to come forward will receive an offer of conditional immunity from ACCC-instituted court proceedings. Where the ACCC is aware of a cartel but has insufficient evidence to institute court proceedings, the first person (company or individual) to come forward will receive an offer of conditional immunity from pecuniary penalty. For a copy of the policy, go to:
http://www.accc.gov.au/pubs/publications/corporate/leniency_policy_cartel_conduct_Jun2003.pdf
APRA has announced that its revised prudential standards for the prudential supervision of ADI conglomerates will become effective 1 July 2003. The revised standards relate to Capital Adequacy (APS 110 and APS 111), Large Exposures (APS 221) and Associations with Related Entities (APS 222). For details, see Media Release 03.56:
http://www.apra.gov.au/media-releases/03_56.cfm
APRA has released transitional guidelines for local ADIs to transition to the Basel Committee on Banking Supervision’s new Basel Capital Accord, also known as Basel II, scheduled for implementation in 2007. For a copy of the guidelines, go to:
http://www.apra.gov.au/ADI/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=6101
APRA has also issued proposed guidelines to ADIs on the inclusion of certain types of capitalised expenses as intangible assets for prudential purposes and their deduction from Tier 1 capital in accordance with Prudential Standard APS 111 Capital Adequacy: Measurement of Capital. For a copy of the proposed guidelines, go to:
http://www.apra.gov.au/ADI/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=6110
ASIC has released a new Policy Statement PS 175 Licensing: Financial product advisers – conduct and disclosure, explaining how it will administer the FSR conduct and disclosure obligations for financial advisers. You can download a copy of the Policy Statement at:
http://www.cpd.com.au/asic/ps/ps175.pdf
ASIC has released final guidelines to assist listed Australian companies when valuing options in the disclosure of emoluments for directors and executive officers in their annual reports. For a copy of the guidelines, go to:
http://www.asic.gov.au/asic/asic_polprac.nsf/byid/E283F1A40DDD4295CA256D550016E1C7?opendocument
ASX has made a number of minor amendments to its business rules. For details, see Participant Circulars 259/03, 225/03 and 218/03 and attachments:
For a discussion of the ramifications of the recent decision of the Victorian Civil and Administrative Tribunal in Age Old Builders Pty Limited v Swintons Limited (holding that a contractual clause requiring an expert determination was in reality an agreement to arbitrate that was void under applicable legislation) and the effect it may have on the use of expert determination clauses, see Allens Arthur Robinson, Focus: Arbitration – 25 June 2003:
http://www.aar.com.au/pubs/ldr/foarbjun03.htm
For a general summary of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - 30 June 2003:
http://www.aar.com.au/pubs/pdf/wr/fowrjun03.pdf
For a discussion of the exposure draft of the Superannuation Safety Amendment Bill 2003, which if enacted will impose a new regime for universal licensing of superannuation trustees, see Mallesons, Superannuation Alert: APRA Licensing of Superannuation Fund Trustees - June 2003:
And for a discussion of the draft regulations issued by Treasury under the SIS Act and the RSA Act relating to the portability of superannuation balances, see Mallesons, Superannuation Alert: Portability of Member Balances - 24 June 2003:
Freehills, New Australian Privacy Right - 27 June 2003 discusses an important decision of the Queensland District Court (Grosse v Purvis) holding that Australian common law now recognises the right for an individual to recover damages for mental, psychological or emotional harm for wilful invasion of privacy. See:
The NSW Government has introduced a Bill to abolish the duty exemption for mortgages securing debentures. The change will take effect from 24 June 2003. See Minter Ellison, NSW Ends Exemption for Mortgages Securing Debentures - 25 June 2003:
In Macleod v The Queen [2003] HCA 24, the High Court held that a person may be convicted of fraudulently applying a company's property even though that person is the controlling mind of and the sole beneficial shareholder in the company. The court rejected a submission that the consent of a single shareholder company cures what otherwise would be a breach of section 173 of the NSW Crimes Act, with the majority stating that the self-interested consent of the shareholder, given in furtherance of a crime committed against the company, cannot be said to represent the consent of the company. The full text of the judgment can be viewed at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/24.html
Freedom Motors Australia Pty Limited v Vaupotic [2003] NSWSC 506 has an interesting discussion of the legal principles applicable to the master servant relationship, including the employee's implied duty of good faith and the ramifications of an employee using confidential information and trade secrets to establish a competing business. Likewise, WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102, in which a senior manager was held liable for equitable compensation for breaching his employment contract and fiduciary duties by setting up a business in competition with his employer during work hours. The full text of the judgments can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/june/2003nswsc506.htm
http://cclsr.law.unimelb.edu.au/judgments/states/wa/2003/may/2003wasc102.html
Those interested in reading the sentencing decision R v Rivkin [2003] NSWSC 447 will find the full text of the judgment at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/may/2003nswsc447.htm
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