March 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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 draft FSR regulations released by Treasury in December for public comment have now been passed as the Corporations Amendment Regulations 2003 (No 1). These include important changes to the streamlined licensing regime. For a copy of the regulations and related explanatory memorandum, go to:
http://scaleplus.law.gov.au/html/numrul/19/9679/0/NL000060.htm
http://scaleplus.law.gov.au/html/ess/0/2003/0/20030311031.htm
Treasury has also released further draft FSR regulations for public comment that make a number of fairly technical amendments to earlier FSR regulations. For a copy of the draft regulations and associated commentary, go to:
http://www.treasury.gov.au/documents/567/PDF/regulations.pdf
http://www.treasury.gov.au/documents/566/PDF/commentary.pdf
ACCC has published a guide for the furnishing industry on country of origin representations. For a copy of the guide, go to:
http://www.accc.gov.au/pubs/publications/industry/furnishing/CofO_furnishing_industry_March2003.pdf
APRA has issued a warning to the superannuation industry about the use of hedge funds as an investment choice. It has published a list of issues that it expects trustees to address before deciding to allocate a percentage of their portfolio into a hedge fund. See Media Release 03.25:
http://www.apra.gov.au/media-releases/03_25.cfm
ASIC has reminded the financial services industry that there is just 12 months to go to the full implementation of the Financial Services Reform Act and that financial services providers who want to remain operational beyond 10 March 2004 will need to obtain their Australian financial services licence in time. See Media Release 03-085:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/FD3139C04BB0E1DCCA256CE500804C1F?opendocument
ASIC has announced that it will be releasing a new version 3 of its eLicensing system and the AFS licensing kit to reflect the new regulations that commenced on 11 March 2003 (see above). For details, see:
http://www.asic.gov.au/asic/asic_polprac.nsf/byid/8445CF5BDD1AB0FFCA256CE500012816?opendocument
ASIC has reissued Pro Forma 209, which sets out the standard conditions that are usually applied to AFS licences, to reflect changes made in the recently revised versions of Policy Statements 146 and 166, as well as new changes to be made to PS 166. See Information Release IR 03-08 and the accompanying marked up amended PF 209:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/287201F496C60401CA256CF4000AEDCA?opendocument
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/PF209-changes.pdf/$file/PF209-changes.pdf
ASIC has extended the transitional relief for passively managed and closed managed investment schemes, which were not required to become registered managed investment schemes under Chapter 5C of the Corporations Act, until 2010. For details, see Information Release IR 03-05:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/4390AFE589AE05EDCA256CE000136FA1?opendocument
ASIC has issued a new Class Order (CO 03/217) on differential fee arrangements, expanding upon the relief already provided through Class Order 02/214 by broadening the circumstances in which ASIC will exempt the responsible entity of a managed investment scheme from the equal treatment requirement in section 601FC(1)(d) of the Corporations Act. For details, see Information release IR 03-09:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/F9369D7A6BE5E3C9CA256CFA0004DBBA?opendocument
ASIC has announced the results of its ongoing campaign to improve the quality of information and levels of disclosure in fundraising documents. See Information Release IR 03-06:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/FC3B263B25F86C34CA256CE600189DE1?opendocument
ASX has issued a booklet entitled Principles of Good Corporate Governance and Best Practice Recommendations, articulating 10 core principles for good corporate governance, and a new Guidance Note 9A to assist listed entities in the preparation of reports on their main corporate governance practices now required to be included in their annual reports under listing rule 4.10.3. It has also updated Guidance Notes 10, 12, 16 and 20 to incorporate some of the best practice recommendations. For a copy of the booklet, new Guidance Note 9A and a summary of the changes to the other Guidance Notes, see:
http://www.asx.com.au/about/pdf/ASXRecommendations.pdf
http://www.asx.com.au/ListingRules/guidance/corpgovcouncil.pdf
http://www.asx.com.au/ListingRules/guidance/gnsummaryamendmentsmar2003.pdf
ASX has released proposed amendments to Business Rule 5D.1.6 so that the exemptions that apply to section 991F of the Corporations Act also apply to that rule. See Participant Circular 097/03 and attachment:
SFE has issued a bulletin clarifying the situations in which it may be appropriate to aggregate orders for entry into SYCOM and allocate trades on a pro-rata basis. The bulletin replaces SFE Circular No. 231/00 Aggregating Orders (issued 22 December 2000). For details, see SFE Bulletin 13/03:
http://www.sfe.com.au/Content/bulletins/sfe/2003/sfe2003_013.pdf
For a good introduction to the issues associated with project and infrastructure financing, see Mallesons Stephen Jaques, Project and Infrastructure Financing – March 2003:
http://www.mallesons.com/publications/alerts/Project_and_Infrastructure_Financing_March_2003.pdf
For a summary of the interest withholding tax measures to be introduced by the Taxation Laws Amendment Bill (No. 6) 2002, see Mallesons Stephen Jaques, Australian Withholding Tax Alert – March 2003:
http://www.mallesons.com/publications/alerts/Taxation_Alert_March_2003.pdf
For a summary of the changes to the Bankruptcy Act expected to come into effect in May 2003, see Gadens, The Bankruptcy Legislation Amendment Act 2002 - March 2003:
http://www.gadens.com.au/docushare/dscgi/admin.py/Get/File-3164/INS3_2003(BankLeg).pdf
For a useful outline of the legal issues associated with exclusion and limitation clauses, see Corrs Chambers Westgarth, Assessing Exclusion and Limitation Clauses:
http://www.corrs.com.au/WebStreamer?page_id=4261
For a discussion of the new Corporate Governance Best Practice Recommendations published by the ASX on 31 March 2003, see Allens Arthur Robinson, Focus: Corporate Governance - March 2003:
http://www.aar.com.au/pubs/ma/focg2mar03.htm
Blake Dawson Waldron, Corporate Governance Update - March 2003 has a useful summary of the decision in ASIC v Rich on the duties of chairpersons of boards of directors. See:
http://www.bdw.com.au/publications/governance/governance032003.pdf
For a general summary of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - March 2003:
http://www.aar.com.au/pubs/pdf/wr/fowrmar03.pdf
Allens Arthur Robinson, Focus: Employee Share & Option Plans - March 2003 sets out the steps an employer needs to take to ensure that its employees can sell shares recently issued under an employee share plan. See:
http://www.aar.com.au/pubs/cm/foesopmar03.htm
Clayton Utz, FSR Newsflash - 12 March 2003 has a concise summary of the changes to the FSR regulations introduced by the Corporations Amendment Regulations 2003 (No 1) (see also above). For a copy, go to:
http://www.claytonutz.com.au/downloads/FSRNF_12.pdf
For a timely reminder on how issuers and underwriters need to approach the uncertainties associated with war and acts of terrorism, see Allens Arthur Robinson, Focus: Capital Markets - March 2003:
http://www.aar.com.au/pubs/cm/focmmar03.htm
For a general summary of recent developments in IP law and in particular the proposed new Designs Bill, see Phillips Fox, Intellectual Property Bulletin - 1 March 2003:
http://www.phillipsfox.com/vbscript/displaydoc.asp?ndocid=98911
Queensland's native title 'alternate State provisions' for mining tenements are to be replaced by the Commonwealth 'right to negotiate' regime. The native title scheme will revert to the Commonwealth Native Title Act 1993 provisions for tenement applications made after 31 March 2003. For details, see Allens Arthur Robinson, Focus: Native Title – 3 March 2003:
http://www.aar.com.au/pubs/nat/fonatmar03.htm
For a concise summary of the issues addressed in the recent Pannell Kerr Foster case, dealing with "negative assurance" clauses in expert opinions and when they can be misleading, see Corrs Chambers Westgarth, It’s No Good Hiding Behind a Negative - 21 March 2003:
http://www.corrs.com.au/WebStreamer?page_id=4285
Those following the current debate on corporate governance will find the decision in ASIC v Rich & Others [2003] NSWSC 186 worth reading. In that case, Bryson J made agreed declarations and orders imposing a $92 million compensation award, $750,000 costs award and 10 year disqualification from managing corporations against Brad Keeling, the former joint managing director of One.Tel Ltd. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/march/2003nswsc186.htm
In Morris v Hanley [2003] NSWSC 42, a company's constitution conferred on permanent employees the right to apply for shares. A permanent employee who had been denied that right sued the company and its shareholders and directors alleging breach of fiduciary duty, conspiracy and negligence. The NSW Supreme Court (Hamilton J) dismissed the claim. The case is interesting for its exposition of the scope of fiduciary obligations owed to a shareholder by fellow shareholders and directors. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/february/2003nswsc42.htm
In ASIC v Young & Others [2003] QSC 029, it was held that the activities of real estate agents in raising finance from and selling property to participants in a so-called “Investors Club” constituted the unlawful operation of a managed investment scheme. The case is interesting for its analysis of the definition of managed investment scheme and its application to the facts, as well as its finding that the promotion of 7 property developments through the club was sufficient to mean that the schemes were promoted by a person in the business of promoting managed investment schemes and therefore the schemes required registration even though they each had less than 20 members. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/qld/2003/february/2003qsc029.htm
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