June 2008
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
Treasury has released a Green Paper entitled Financial Services and Credit Reform: Improving, Simplifying and Standardising Financial Services and Credit Regulation, proposing that the Commonwealth take over regulation of mortgage credit and advice, margin lending and trustee corporations. The Paper also proposes tighter regulation of debentures and property spruikers. It can be downloaded at:
The Trade Practices Legislation Amendment Bill 2008 has been introduced into Parliament. If enacted, it will clarify a number of issues regarding the predatory pricing provisions in the Trade Practices Act and the Competition Code. It will also repeal the thresholds for unconscionable conduct cases under section 51AC of the Trade Practices Act and section 12CC of the Australian Securities and Investments Commission Act and clarify the ACCC’s information gathering powers. The Bill and its Explanatory Memorandum are available at:
ACCC has issued guidance materials on carbon offsets claims. A booklet entitled Carbon claims and the Trade Practices Act and a consumer information web page on environmental issues can be viewed at:
http://www.accc.gov.au/content/index.phtml/itemId/833197/
APRA has released a consultation package relating to the authorisation and prudential oversight of providers of First Home Saver Accounts. The package is available on its website at:
http://www.apra.gov.au/Policy/First-Home-Saver-Accounts-Prudential-Requirements-June-2008.cfm
APRA has released its final general insurance refinements package following extensive industry consultation over the past year. The finalised package includes a response paper, prudential standards and prudential practice guides. The package is available on APRA's website at:
www.apra.gov.au/General/Refinements-to-the-General-Insurance-Prudential-Framework-June-2008.cfm
APRA has also released a consultation package setting out its draft prudential requirements for the use of the "internal model-based method" for determining the minimum capital requirements of general insurers. It can be viewed at:
http://www.apra.gov.au/Policy/GI-Internal-Model-Method-June-2008.cfm
ASIC has released Regulatory Guide 193: Notification of directors’ interests in securities – listed companies to provide information on how directors of listed companies should comply with the disclosure requirements under section 205G of the Corporations Act. It can be downloaded from:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg193.pdf/$file/rg193.pdf
ASIC and the NZ Securities Commission have jointly released Regulatory Guide 190: Offering securities in New Zealand and Australia under mutual recognition, providing guidance to issuers offering shares, debentures or managed or collective investment schemes in both countries. The guide explains what issuers have to do under the trans-Tasman mutual recognition scheme for offers of securities and the role of the regulators in both countries in relation to an offer. It can be downloaded from:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg190.pdf/$file/rg190.pdf
ASIC has been working on two projects that will bring into line the annual reporting obligations of super funds with companies, while ensuring that super fund members get more meaningful information about their super. The first will allow super funds to put their annual reports on a website as a default (consistent with companies), provided they give each super fund member information about longer-term returns in their personal member benefit statement. The second is a regulatory guide aimed at improving investor engagement with the long-term nature of their investment in super. See Media Release 08-128 and the accompanying Regulatory Guide 191: Superannuation: helping investors look at longer-term returns - ASIC’s best practice guide:
http://www.asic.gov.au/asic/asic.nsf/byheadline/08-128+Less+paper+in+super?openDocument
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg191.pdf/$file/rg191.pdf
Rio Tinto has paid a $100,000 penalty after ASIC served an infringement notice alleging the company had failed to comply with the continuous disclosure provisions of the Corporations Act 2001 and ASX Listing Rules in relation to its US$38.1 billion acquisition of Alcan Inc in 2007. See Media Release 08-117:
ASX has released a review of disclosure of directors’ interest notices lodged by listed entities, including securities trading by directors during the 'blackout' period between the close of a listed entity’s financial period and the release of its half-year or full-year results. The review can be downloaded from:
http://www.asx.com.au/about/pdf/mr270608_directors_trading_review_june08.pdf
ASX has also published an analysis of corporate governance disclosures in 2007 annual reports. It can be downloaded from:
http://www.asx.com.au/about/pdf/mr180608_corporate_gov_report2.pdf
ASX Market Rule Procedure 16.12.3 is to be amended to introduce 5 new ITS condition codes for the reporting of cash market block special crossings. See ASX Circular 273/08 and attachment:
SFE has released a new Order Cancellation and Trade Confirmation Policy providing greater transparency into the process by which SFE Market Control will cancel orders and confirm executed trades on behalf of participants. See SFE Notice 082/08:
http://www.sfe.com.au/content/notices/2008/notice2008_082.pdf
The Parliamentary Joint Committee on Corporations and Financial Services has published a report entitled Better shareholders – Better company: Shareholder engagement and participation in Australia. The report makes 21 recommendations for improving shareholder engagement and participation. For a summary, see Blake Dawson, Company Law & Governance Update - 26 June 2008:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=52113
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - June 2008:
http://www.aar.com.au/pubs/wr/fowrjul08.htm
The Rudd government has released the final version of the National Employment Standards which will apply from January 2010 when the "Forward with Fairness'' regime commences. For further details, see Blake Dawson, Government Announces Final National Employment Standards - 17 June 2008:
http://www.blakedawson.com:80/Templates/Publications/x_publication_content_page.aspx?id=51929
The Australian Government is moving to introduce a regulatory regime to facilitate offshore carbon capture and storage with the release of the exposure draft of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008. The Bill follows on from the recent amendment to the United Nation’s London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters, which enables the storage of carbon dioxide under the seabed. See Freehills, New Regime to Facilitate Offshore Carbon Capture and Storage - 20 June 2008:
http://www.freehills.com.au/publications/publications_7306.asp
Reporting of emissions and energy use and production under the National Greenhouse and Energy Reporting Act 2007 (Cth) becomes mandatory from 1 July of this year with reports for the 2008-09 financial year due in August 2009. See Gilbert & Tobin, Greenhouse Gas Reporting Requirements Kick Off in July - Are You Ready? - 5 June 2008:
http://innovativethinking.gtlaw.com.au/ve/ZZ2730SeZswLa9678
For a summary of the reforms proposed in the Federal Government's Green Paper on credit and financial services laws, see Mallesons Stephen Jaques, Major Reform of Credit and Financial Services Laws - 3 June 2008:
http://www.mallesons.com/publications/2008/Jun/9468761W.htm
The Full Federal Court has reversed the lower court decision in Brady King Pty Ltd v Commissioner of Taxation and restored the longstanding practice of the Australian Taxation Office on the application of the margin scheme. See Deacons, Legal Update: Margin Scheme Calm Restored - 30 June 2008:
http://www.deacons.com.au/legal-services/taxation/legal-updates/legal-update.cfm?objid=6496
A new final withholding tax regime has been enacted which applies to distributions of Australian source net income from Australian managed investment trusts to foreign investors. Amounts excluded from the regime include dividends, interest, royalties and capital gains that would otherwise be tax free. The new withholding tax regime replaces the existing 30% non-final withholding regime which previously applied to distributions from Australian trusts to non-residents. Under the new regime, certain eligible foreign investors will be subject to a reduced rate of withholding tax, with the withholding tax rate applying to distributions falling to a 7.5% final withholding tax once the new measures are fully implemented after 2 years. The new withholding tax regime is applicable to distributions made from 1 July 2008. For further details, see Mallesons Stephen Jaques, New Tax Rules - Distributions of Managed Investment Trust Income to Foreign Investors - 27 June 2008:
http://www.mallesons.com/publications/2008/Jun/9505937W.htm
In Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27, the High Court has continued its trend of giving greater primacy to contract law. The appellants, who respectively owned and occupied a block of land in Adelaide, entered into an oral "cost-plus" contract with a building company for the construction of a home on the land. As part of an internal restructure, the building company allegedly entered into an oral contract with the respondent, a closely related entity, for the respondent to perform the work due under the contract. This was done without the knowledge or approval of the appellants. The appellants paid all moneys claimed due under the contract by the building company. Some 3 years after the home had been completed, the liquidator of the respondent brought an action against the appellants for unjust enrichment, claiming that they had not paid the full "cost-plus" amount due for the construction of the home. The High Court dismissed the claim, holding that there was no contractual relationship between the appellants and the respondent and that the respondent had to look to the building company for payment, it being the only party against whom it had a contractual claim. The decision can be viewed at:
http://www.austlii.edu.au/au/cases/cth/HCA/2008/27.html
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