November 2009
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 has now become law. For a copy of the Act and its explanatory memorandum, go to:
The Corporations Amendment (Improving Accountability on Termination Payments) Act 2009 and associated regulations (the Corporations Amendment Regulations 2009 (No. 9)) have also now become law. For a copy of the Act and its explanatory memorandum and the Regulations and their explanatory statement, go to:
The Corporations Act 2001 Corporations Amendment Regulations 2009 (No. 8), which set out the details required to be disclosed in relation to short sales of section 1020B products, have now been promulgated. The Regulations and their explanatory statement can be viewed at:
The Federal Government has released for public comment a suite of draft regulations for the proposed new national consumer credit laws. The draft regulations and related explanatory material can be viewed at:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1670
Treasury has prepared an issues paper outlining various options for clarifying the scope of the unconscionable conduct provisions of the Trade Practices Act 1974. The issues paper can be downloaded from:
http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1676
ACCC has released a guide to its approach to requests to exclude information from the public register in relation to exclusive dealing notifications. The guide can be viewed at:
APRA has released its prudential requirements on remuneration for authorised deposit‑taking institutions and general and life insurance companies. The response paper and associated prudential standards and prudential practice guide can be found on the APRA website at:
http://www.apra.gov.au/Policy/remuneration-governance-extensions-November-2009.cfm
ASIC has decided to withdraw current class order relief that allows issuers of investment products to cite credit ratings without the consent of credit rating agencies. This is intended to make credit rating agencies more accountable for ratings cited in disclosure documents. It has also outlined a number of changes to the regulation of credit rating agencies in Australia. See Advisory 09-225AD and Media Release 09-224MR:
ASIC has released Consultation Paper 124 Directors' duty to prevent insolvent trading: Guide for directors, which sets out the relevant legal background to the duty of directors to prevent insolvent trading and the key principles that ASIC considers directors need to take into account in performing their duty in that regard. The Consultation Paper can be downloaded at:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/CP124.pdf/$file/CP124.pdf
ASIC has released a second consultation paper CP125 Compensation requirements for credit licensees: Further consultation seeking further feedback on particular aspects of ASIC's proposals on the compensation requirements that should apply to credit licensees. It can be viewed at:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/CP125.pdf/$file/CP125.pdf
In an important precedent for banks, ASIC is overseeing a refund process to approximately 2,000 St George Bank customers who, when the Bank sought to recover legal fees on mortgage enforcement action, were not passed on the benefit of volume rebates provided by the law firms acting for the bank. See Advisory 09-232AD:
ASIC has commenced civil proceedings in the Supreme Court of Queensland against 3 subsidiary companies of the formerly listed MFS Ltd and 4 former officers and one manager of MFS Investment Management Ltd. The proceedings relate to the use of $147.5 million in funds of the Premium Income Fund, for which MFS Investment Management Ltd was the responsible entity at the relevant time. The action should be an important test case in relation to the core obligations of a responsible entity and its directors and officers to operate the fund with care and diligence, and in the best interest of members. See Advisory 09-214AD:
Another insider trading scalp for ASIC - a former director of Lion Selection Ltd has pleaded guilty to insider trading in the Melbourne Magistrates Court. See Advisory 09-235AD:
The ASX market rules have been amended to remove the 10 second delay requirement to execute on-market crossings in cash products. See Market Circular 414/09 and attachment:
ASX Market Rule Guidance Note 19 and ASX Market Rule Procedures Appendices 13.3.5(A) and 13.3.5(B) have been updated to reflect amendments last month to the market rules on automated order processing. See Market Circular 412/09 and attachments:
AUSTRAC has issued its first remedial direction for non-compliance with Australia's anti-money laundering and counter-terrorism financing legislation. See media release dated 5 November 2009:
http://www.austrac.gov.au/5nov09.html
AUSTRAC has also accepted its third enforceable undertaking, this time from PayPal Australia. See media release dated 23 November 2009:
http://www.austrac.gov.au/23nov09.html
For a summary of some of the key provisions in the recently released national consumer credit regulations, see Minter Ellison, Alert - Revised consumer credit regulations released - 27 November 2009:
For a summary of the new rules regarding termination payments for company officers, see Blake Dawson, Company Law & Governance Update - 13 November 2009:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=57101
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - 6 November 2009:
http://www.aar.com.au/pubs/wr/fowrnov09.htm
For a summary of the Parliamentary Joint Committee's report into financial products and services in Australia, see Mallesons Stephen Jaques, PJC Reports - Fanning the Winds of Change - 24 November 2009:
http://www.mallesons.com/publications/2009/Nov/10155908W.htm
A Bill has been introduced into Federal Parliament that will make it difficult for individuals with an income of $250,000 or more to claim deductions from non-commercial business activities. For further details, see Deacons, Legal Update: Tough Non-Commercial Loss Rules for High Income Earners - 6 November 2009:
http://www.deacons.com.au/legal-services/taxation/legal-updates/legal-update.cfm?objid=7352
The NSW government has introduced a Bill proposing further amendments to the landholder duty provisions, as well as other provisions of the Duties Act 1997. For details, see Minter Ellison, Alert - NSW Government proposes more amendments to landholder duty and clarifies types of dutiable property - 4 November 2009:
http://www.minterellison.com/public/connect/Internet/Home/Legal+Insights/Alerts/NA-LHduty+amends
Mallesons, Step towards the next phase of the Australian Consumer Law - 19 November 2009 summaries a consultation paper released by the Standing Committee of Officials of Consumer Affairs with draft best practice and product safety reform proposals. This consultation paper formally kicks off the second phase of the Australian Consumer Law (the first phase being the national unfair contract terms regime and new consumer protection enforcement powers currently before the Senate). See:
http://www.mallesons.com/publications/2009/Nov/10149210W.htm
For those interested, the decision of the New South Wales Supreme Court in ASIC v Rich [2009] NSWSC 1229 dismissing ASIC's civil proceedings against two of the former senior executives of One.Tel, can be viewed at:
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