June 2007
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 Federal Government has introduced into Parliament a Bill to amend the Trade Practices Act 1974 (Cth) to provide better protection for small business from misuse of market power and unconscionable conduct. For a copy of the Trade Practices Legislation Amendment Bill (No. 1) 2007, go to:
A Bill has been introduced to implement the recommendations of the Taskforce on Reducing Regulatory Burdens on Business to streamline and simplify the prudential regulation of the financial sector. For a copy of the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Bill 2007, go to:
The Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Bill 2007 implements the approach to the regulation of DMFs and DOFIs announced by the government in May 2007. Under the approach, DOFIs will be prudentially regulated under the Insurance Act. DMFs will not be prudentially regulated but information will be collected to determine the nature and scope of their operations. For a copy of the Bill, go to:
APRA has released a discussion paper and draft prudential standard setting out its proposed approach to market disclosure under the Basel II Framework. The approach applies to all locally incorporated authorised deposit-taking institutions in Australia. Both the discussion paper and the draft prudential standard are available on APRA's web site at:
http://www.apra.gov.au/ADI/Basel-II-implementation-in-Australia.cfm
APRA has also released a paper setting out its responses to submissions on its proposals to implement the advanced approaches under the Basel II Framework, as well as 3 final draft prudential standards and their respective prudential practice guides that incorporate a number of amendments suggested in the consultation process. Again, they are all available on APRA's website at:
http://www.apra.gov.au/ADI/Basel-II-implementation-in-Australia.cfm
From 5 July 2007, there will only be 4 types of regulatory documents published by ASIC. "Regulatory guides" will replace approximately 14 types of documents including policy statements, practice notes, guides, kits, information releases and frequently asked questions previously issued. The other 3 types of documents will be: consultation papers, reports and information sheets. Legal documents such as class orders, instruments and forms are unchanged. This rationalisation is part of ASIC’s Better Regulation initiatives developed to achieve better and more transparent regulation. See Information Release IR 07-30:
ASIC has released updated versions of Policy Statement 166 Licensing: Financial requirements and Pro Forma 209 Australian financial services licence conditions. ASIC has also withdrawn 3 superseded guides for Australian financial services licensees: Meeting the financial requirements for your AFS licence: Compliance with Policy Statement PS 166—An ASIC guide (January 2004); Responsible officers: Demonstrating compliance with organisational competency obligations—An ASIC guide (July 2003); and Small business and your AFS licence: Compliance with Policy Statements 164 and 181—An ASIC guide (December 2004). The updated Policy Statement and Pro Forma are available at:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/ps166.pdf/$file/ps166.pdf
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/pf209.pdf/$file/pf209.pdf
ASIC has updated Policy Statement 86 Tracing beneficial ownership, which provides guidance on how ASIC will exercise its powers under the beneficial ownership tracing provisions (Pt 6C.2) of the Corporations Act. For a copy of the updated Policy Statement, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/ps86.pdf/$file/ps86.pdf
ASIC has also reissued Policy Statement 184 Superannuation: Delivery of product disclosure strategies, dealing with how superannuation trustees can comply with section 1012IA of the Corporations Act and deliver product disclosure information about investment strategies to members. For a copy of the new Policy Statement, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/ps184.pdf/$file/ps184.pdf
ASIC has invited public comment on proposals for the regulation of investor directed portfolio services. For a copy of the proposals, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/CP_IDPS.pdf/$file/CP_IDPS.pdf
ASIC has released 4 templates designed to assist those parties considering offering an enforceable undertaking. The 4 templates are: a standard template applicable to all enforceable undertakings; sample terms for compliance program assessment; sample terms for compensation; and sample terms for corrective advertising on the Internet. A copy of the templates can be downloaded at:
ASIC has issued a Class Order, CO 07/447 Temporary extension of time for SOA delivery, to help retail investors get time critical financial advice in the lead-up to the new superannuation arrangements that started on 1 July. See Information Release IR 07-24:
ASIC has extended the existing transitional disclosure relief for general insurers and licensing relief for actuaries until 31 August 2007. See Information Release IR 07-25:
Following a review, ASIC has warned promoters of reverse mortgages to ensure their advertising and promotional material is clear and not misleading. It has mentioned a number of examples of misleading claims suggesting that reverse mortgages need not be repaid and did not affect Centrelink payments. See Media Release 07-152:
ASX has announced a number of changes to its supervisory investigation powers and processes, aimed at improving the efficiency and effectiveness of ASX supervision for the benefit of all market stakeholders. See ASX Circular 285/07:
ASX Market Rule Procedures – Appendix 20.4 Takeover Bids and Schemes has been amended to provide clarity to market participants in understanding the actions that ASX will take when it receives information in relation to a takeover bid or scheme. See ASX Circular 306/07 and attachments:
ASX has amended ASX Market Rule Procedure 7.11.5 relating to the approved foreign banks that can hold client segregated/trust accounts. See ASX Circular 320/07 and attachments:
ASX has amended its Derivatives Trading Procedures to update the class category for equity and index options. See ASX Circular 350/07 and attachments:
A reminder from Austrac that the correspondent banking obligations and compliance reporting provisions for banks and other organisations covered by Australia's new anti-money laundering legislation came into effect under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 on 12 June. See Media Releases 11 and 12 June 2007:
http://www.austrac.gov.au/11jun07.html
http://www.austrac.gov.au/12jun07.html
The list of individuals associated with the Government of Zimbabwe who are subject to financial sanctions under the Banking (Foreign Exchange) Regulations 1959 has been updated. See Information Circular 51:
http://www.austrac.gov.au/files/aic51_updated_rba_sanc.pdf
The mandatory use of comparison rates by providers of consumer credit has been extended until 30 June 2009 across all States and Territories. See Coors Chambers Westgarth, Comparison Rates Given Extended Life - 1 June 2007:
Minter Ellison, Contractual Risk Allocation Yielding to Proportionate Liability - 21 June 2007, discusses the recent decision of the Victorian Supreme Court in Woods v De Gabriele, holding that whether a claim is apportionable under Victoria's proportionate liability legislation will be determined by the facts as pleaded, rather than the specific label attached to the pleaded cause of action, and that proportionate liability may apply to claims under the implied term in services contracts that the party contracted to provide the services will exercise reasonable care and skill. This overrules the 2006 Victorian Civil and Administrative Tribunal decision of Lawley v Terrace Designs, which held that proportionate liability applied only to claims recognised at law as arising from a failure to take reasonable care and that purely contractual claims were not apportionable. See:
Mallesons, Takeovers Panel Releases Guidance Note on Insider Participation in Control Transactions - 12 June 2007 has a useful summary of the new Guidance Note 19: Insider Participation in Control Transactions released by the Takeovers Panel on 7 June 2007. The guidance note is primarily focussed on insiders participating in private equity deals. See:
http://www.mallesons.com/publications/2007/Jun/8970176W.htm
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - June 2007 and Blake Dawson Waldron, IR Bulletin - June 2007:
http://www.aar.com.au/pubs/pdf/wr/fowrjun07.pdf
http://www.bdw.com/publications/ir/ir062007.pdf
For a summary of the federal government’s new fairness test for AWAs and collective workplace agreements, see Mallesons, Fairness Test Passes Parliament - 21 June 2007:
http://www.mallesons.com/publications/2007/Jun/8987437W.htm
The Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 received Royal Assent on 28 June 2007. For a general overview of the amendments, see Blake Dawson Waldron, Company Law & Governance Update - 29 June 2007:
http://www.bdw.com.au/publications/governance/governance072007.pdf
For a summary of the Trade Practices Legislation Amendment Bill (No. 1) 2007 (mentioned above), see Allens Arthur Robinson, Focus: Competition Law - June 2007:
http://www.aar.com.au/pubs/pdf/comp/focomp26jun07.pdf
For those interested, the decision of the Federal Court of Australia in Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Limited [2007] FCA 963, rejecting ASIC's claims that Citigroup had breached the conflict of interest provisions of the Corporations Act and engaged in insider trading, can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2007/june/2007fca963.htm
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