November 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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 final form of the Financial Services Reform Amendment Bill 2003 to be debated in Parliament (foreshadowed in our updates for the last 2 months) is now available on SCALEplus. A copy of the Bill and its explanatory memorandum can be downloaded at:
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 Government has promulgated the Corporations Amendment Regulations 2003 (No. 8) SR 282/2003 making a series of technical changes and corrections to the regulations implementing the FSR reforms. For a copy of the Regulations and their explanatory statement, go to:
http://scaleplus.law.gov.au/html/numrul/19/9930/top.htm
http://scaleplus.law.gov.au/html/ess/0/2003/0/20031113282.htm
The Government's superannuation reforms announced in the last budget have finally been enacted. The reform measures are contained in the Superannuation (Government Co-Contribution For Low Income Earners) Act 2003, Superannuation (Government Co-contribution For Low Income Earners) (Consequential Amendments) Act 2003 and Superannuation (Surcharge Rate Reduction) Amendment Act 2003. For a copy of the Acts and their explanatory memoranda, go to:
http://scaleplus.law.gov.au/html/comact/11/6716/top.htm
http://scaleplus.law.gov.au/html/ems/0/2003/0/2003053009.htm and http://scaleplus.law.gov.au/html/ems/0/2003/0/2003092302.htm
http://scaleplus.law.gov.au/html/comact/11/6717/top.htm
http://scaleplus.law.gov.au/html/ems/0/2003/0/2003053008.htm and http://scaleplus.law.gov.au/html/ems/0/2003/0/2003092301.htm
http://scaleplus.law.gov.au/html/comact/11/6718/top.htm
http://scaleplus.law.gov.au/html/ems/0/2003/0/2003053010.htm and http://scaleplus.law.gov.au/html/ems/0/2003/0/2003091101.htm
The Australian Competition and Consumer Commission has issued guidelines on country of origin claims made by the electrical goods industry. For a copy of the guidelines, go to:
http://www.accc.gov.au/pubs/publications/business_general/product_safety/electrical_goods_print.pdf
APRA has released a discussion paper on a proposed second round of reforms to the general insurance industry, implementing a number of the recommendations made by the HIH Royal Commission in April this year. The paper outlines proposals to revise existing prudential standards and guidance notes and for increased disclosure by general insurers. For a copy of the discussion paper, go to:
http://www.apra.gov.au/general/register/Discussion%20paper.PDF
APRA has also released a discussion paper proposing the introduction of more detailed criteria for authorised deposit taking institutions to qualify for the concessional risk weighting of residential mortgage lending for capital adequacy purposes. For a copy of the discussion paper, go to:
http://www.apra.gov.au/ADI/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=6559
ASIC has updated the industry guide for responsible entities and IDPS operators to better explain the 'deal in derivatives' authorisation and the ability to streamline non-cash payments and released a new industry guide for horse racing syndicate promoters. For a copy of the guides, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/guide_RE_IDPS.pdf/$file/guide_RE_IDPS.pdf
ASIC has released a new Class Order CO 03/911, which provides licensing relief for certain entities that provide general advice in offer documents given to wholesale clients. The relief applies to bodies that do not require a licence for dealing in particular financial products because of s766C(4) of the Corporations Act (the self dealing exception). Where an offer document given to wholesale clients by such a body contains general advice about its own securities, no licence is now required for the provision of that advice. See Information Release 03-36 and accompanying Class Order:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/5CC99F58B0417C5ACA256DDC0006ED0A?opendocument
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/co03-911.pdf/$file/co03-911.pdf
ASIC has issued a new Class Order CO 03/957, which addresses the inconsistent treatment of managed investment warrants, compared to the treatment of share warrants and stapled security warrants, under Part 7.9 of the Corporations Act. The class order harmonises the regulatory regime for warrants by removing the additional disclosure requirements that only applied to warrants over managed investment products under the Act. See Information Release IR 03-37 and accompanying Class Order:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/0A29B58F03044531CA256DE10014704A?opendocument
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/co03-957.pdf/$file/co03-957.pdf
ASIC has announced the settlement of its civil penalty proceedings against Southcorp for contravening the continuous disclosure provisions in the Corporations Act. The action concerned an email sent to selected analysts containing information about the likely impact of the poor 2000 vintage for premium wines on Southcorp's 2003 gross profit. Under the settlement, Southcorp has consented to a declaration that it contravened the Corporations Act and been ordered to pay a pecuniary penalty of $100,000 plus ASIC's costs. See Media Release 03-376:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/2D9A2D7DF8328BB1CA256DEB001A2163?opendocument
ASX has released a Market Consultation Paper entitled ASX Market Reforms - Enhancing the Liquidity of the Australian Equity Market, outlining proposals to provide investors with a greater range of trading options and to enhance general market liquidity. The most significant change relates to the dissemination of broker identification numbers where it is proposed that investors have the same access to such numbers as brokers currently have. Other key issues and proposals for which feedback is sought include a discussion of alternative models aimed at improving mid to small cap liquidity in the market, a proposal to reduce tick sizes for low priced stocks and the introduction of a new order type (the “Iceberg” order) to provide a version of ‘undisclosed’ order with which international investors are more familiar. For a copy of the announcement and paper, see ASX Participant Circular 558/03 and attachment:
http://www.asx.com.au/about/pdf/ASX_MARKET_REFORMS.pdf
Amendments have been made to the ASX Business Rules affecting the options and warrants markets. See ASX Participant Circular 557/03 and attachment:
ASX has issued a new Guidance Note No 6/03 entitled Responsible Executives and Affiliates: Requirements for Initial Qualifications and Continuing Education. The new Guidance Note replaces Guidance Note No 7/02 issued in November 2002. See ASX Participant Circular 546/03 and attachment:
ASX has issued a new Guidance Note 7/03 regarding the effect of ASX Business Rule 8.4.2 as it relates to market-making by warrant issuers. See Participant Circular 572/03 and attachment:
For a general update on recent developments in employee relations, see Allens Arthur Robinson, Focus: Workplace Relations - November 2003:
http://www.aar.com.au/pubs/wr/fowrnov03.htm
The use of asbestos in Australia will be banned from 31 December this year. The ban is intended to prohibit the importation, storage, supply, sale, installation, use or re-use of products containing asbestos and will be implemented by uniform legislation around Australia. See Allens Arthur Robinson, Client Update: Workplace Relations - 26 November 2003:
http://www.aar.com.au/pubs/wr/cu26nov03.htm
For a short and interesting article on the pitfalls on joint ownership of copyright between collaborators, see Freehills, Joint Ownership of Copyright by Collaborators - 27 November 2003:
For an interesting article on whether communications between lawyers and investment bankers who act for the same client in a transaction are protected by legal professional privilege, see Allens Arthur Robinson, Focus: Commercial Litigation - November 2003:
http://www.aar.com.au/pubs/ldr/foclnov03.htm
The Queensland Government recently passed two new Acts that will replace the current cultural heritage legislation in Queensland and will provide a more prescriptive regime for managing and protecting cultural heritage than is presently the case. See Allens Arthur Robinson, Focus: Native Title – November 2003:
http://www.aar.com.au/pubs/nat/fonatnov03.htm
For a discussion of the Taxation Laws Amendment (Superannuation Contributions Splitting) Bill 2003 recently introduced into Parliament, see Mallesons Stephen Jaques, Superannuation Alert - Splitting of Contributions:
Amended portability regulations (replacing those criticised as Choice of Fund by stealth) were gazetted on 10 October 2003, with an operative date of 1 July 2004. This is one year in advance of the amended timetable for the introduction of Choice of Fund, which Senator Coonan now proposes for 1 July 2005. See Mallesons Stephen Jaques, Superannuation Alert - Portability Regulations - November 2003:
The New South Wales Parliament has passed two Bills which significantly amend the stamp duty law affecting land rich entities and are accompanied by miscellaneous anti-avoidance provisions. See Minter Ellison, NSW Stamp Duty Changes - 20 November 2003:
http://www.minterellison.com/ajpe/resources/file/eb00040f799856a/NSWstampDuties.pdf
In Purvis v New South Wales Department of Education and Training [2003] HCA 62, a majority of the High Court held that the suspension and subsequent expulsion from a State high school of a pupil who had suffered brain damage in infancy and who had repeatedly assaulted other pupils and teachers did not contravene the Disability Discrimination Act 1992. The majority held that the question to be asked was how would have the school treated a person without the disability who had committed the assaults in question and, if the appellant had been treated less favourably, was that attributable to his disability. In this case, the school had in fact been more tolerant of the appellant because of his disability than it would have of a person without the disability and therefore there was no discrimination. A copy of the judgment can be downloaded at:
http://www.austlii.edu.au/au/cases/cth/HCA/2003/62.html
In ACCC v Davis & Others [2003] FCA 1227, the ACCC instituted proceedings against Esanda Finance Corporation, a tow truck company and six individuals (three debt collectors and three tow truck operators) alleging that their conduct in entering the customer's home and pinning him to the ground while they re-possessed a car amounted to undue harassment and unconscionable conduct in breach of the Trade Practices Act and, in the case of the individuals, the WA Fair Trading Act. Consent orders were made against Esanda and some of the other defendants, including an order requiring Esanda to pay $20,000 compensation to the customer and his wife. The individual tow truck operators, who were not part of the consent orders, were found to have aided and abetted and to have been knowingly concerned in Esanda's unconscionable conduct by not stopping their attempts to re-possess the car when they had reasonable cause to believe a physical confrontation may occur if they continued. Two of them were also found to have contravened section 23 of the WA Fair Trading Act by physically restraining the customer while the vehicle was being removed. This is apparently the first time that the prohibition on the use of physical force in section 60 of the Trade Practices Act and its counterpart in the State Fair Trading Acts has been considered by the courts. A copy of the judgment and ACCC Media Release 237/03 giving details of the consent orders can be downloaded at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2003/november/2003fca1227.htm
http://203.6.251.7/accc.internet/digest/view_media.cfm?RecordID=1159
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