October 2005
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 released for public comment draft regulations to implement a number of the proposed refinements to financial services regulation. These include allowing the tailoring of FSGs; exempting basic deposit products, related non-cash payment facilities and travellers’ cheques from PDS requirements; exempting cash management trusts from the requirements to provide an FSG and SOA; allowing an authorised representative to ‘sub-authorise’ an individual; and amending the definition of personal investor. An overview of the regulations, a detailed explanatory statement and the draft regulations can be downloaded at:
http://www.treasury.gov.au/documents/1020/PDF/Overview%20-%20Draft%20Regulations.pdf
The Federal Government has finally released details of its second wave of industrial relations reform in a 68 page booklet entitled WorkChoices - A New Workplace Relations System. The booklet is available at:
https://www.workchoices.gov.au/
The draft Bill to implement the reforms and its explanatory memorandum can be viewed at:
https://www.workchoices.gov.au/NR/rdonlyres/BE7CFBA5-50EE-4DD1-A395-9E93B2FA0A39/0/wrawcbill2005.pdf
Treasury has released details of a package of reforms to improve the operation of Australia’s insolvency laws. It is anticipated that draft legislation will be circulated for public comment early in 2006. For a summary of the proposed reforms, see:
http://www.treasury.gov.au/documents/1022/PDF/Corporate_Insolvancy_Reform_attachment.pdf
A Bill to implement the long standing promise of the Government to allow spouses to split superannuation contributions has finally been tabled in Parliament. For a copy of the Tax Laws Amendment (Superannuation Contributions Splitting) Bill 2005, go to:
ACCC and ASIC have jointly produced publications aimed at improving standards in the debt collection industry and assisting consumers dealing with debts and debt collection. A copy of Debt collection guideline: for collectors and creditors and Debt Collection: your rights and responsibilities can be downloaded at:
APRA has released its discussion paper and accompanying draft prudential standard and guidelines on the implementation of the Basel II advanced measurement approaches to operational risk. The discussion paper and draft standards and guidelines can be downloaded at:
http://www.apra.gov.au/RePEc/RePEcDocs/Archive/discussion_papers/dp0025.pdf
http://www.apra.gov.au/Policy/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9256
http://www.apra.gov.au/Policy/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9257
http://www.apra.gov.au/Policy/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9258
APRA has issued a discussion paper and draft prudential standards and guidelines outlining a proposed strengthening of the prudential supervision of general insurance in the areas of capital adequacy, assets in Australia and custodian requirements. The discussion paper and draft standards and guidelines can be downloaded at:
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9365
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9366
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9367
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9368
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9369
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9370
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=9371
ASIC has announced relief for licensees from the authorisation requirements for distributors of general insurance products. The relief, which is provided under ASIC Class Order 05/1070 General insurance distributors, allows Australian financial services licensees the option to appoint people to deal in general insurance products on their behalf, without having to appoint them as authorised representatives. Under the relief, the licensee will be responsible for the activities of distributors they appoint under the relief and the distributors must tell retail clients who they act for, what remuneration they get and how retail clients can access the licensee's dispute resolution system. See Information Release IR 05-59:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/25A4C6F538AC4AACCA2570A700143D4F?opendocument
ASIC has released a new version of the FS 53 PDS in-use notice form for product disclosure statements. The new in-use notice includes a second part that deals with superannuation fee data. See Information Release IR 05-56:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/950D2BC71C210FD8CA25708F0005ED45?opendocument
ASIC has stated that retained profits previously reported on a pre-AIFRS basis cease to be relevant for paying dividends after the first half-year financial report of a disclosing entity, or full year financial report of a non-disclosing entity, prepared using AIFRS is completed. Only retained profits and current year profits recorded under AIFRS will be relevant from that time forward in determining whether a company has profits from which to pay a dividend. See Information Release IR 05-57:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/9B53FEC111990ECBCA257091000BD2AE?opendocument
ASIC and the ASX have urged company directors to ensure they are complying with the requirement to notify their interests, or changes in their interests, to the market under the Listing Rules and the Corporations Act 2001. See Media Release 05-324 and the accompanying ASIC Information Sheet:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/397990B6919BB6DACA25709F00077253?opendocument
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/CA256AF60076AF11CA256AF6007F5E9B?opendocument
ASX and Australia’s peak biotechnology industry body, AusBiotech, have released the world’s first Code of Best Practice for Reporting by Life Science Companies. A copy of the code is available at:
http://www.asx.com.au/investor/pdf/biotech_best_practice.pdf
As foreshadowed in our last edition, ASX has now amended ASX Market Rules 4.10 and 7.9 relating to the despatch of confirmations, accumulation and price averaging. It has also re-issued ASX Market Rules Guidance Note 3 Reporting to Clients - Confirmations. See Participant Circular 487/05 and attachments:
ASX has amended section 10 of the ASX Market Rules and Market Rule Procedures to remove the need to obtain certain routine waivers and to implement other key changes to the rules governing warrants. To reflect these changes, ASX has also re-issued ASX Market Rule Guidance Note 9 Expiry of Unexercised Deliverable Warrants. See Participant Circular 518/05 and attachments:
ASX has lodged with ASIC amendments to its Market Rules and Clearing Rules to reflect the impending replacement of its SEATS trading platform with CLICK XT and to implement certain aspect of its equity market reform project. See Participant Circular 527/05:
As a result of recent review of relevant risk parameters and having regard to current market conditions, especially in relation to growth and increase volatility in equity markets, SFE has revised the Initial Margin parameters for its major equity and debt products. See SFE Notice 136/05:
http://www.sfe.com.au/content/notices/2005/notice2005_136.pdf
For a general discussion of recent developments in banking and finance law, see Allens Arthur Robinson, Finance & Banking Update - October 2005:
http://www.aar.com.au/pubs/baf/fabuoct05.htm
For a general guide to the legal issues involved in securitisation, see Blake Dawson Waldron, Securitisation Law and Practice in Australia - October 2005:
http://www.bdw.com.au/publications/securitisationlaw/securitisationlaw102005.pdf
The Security Interests in Goods Act 2005 (NSW) received assent on 19 October 2005 and is expected to become operative in the near future. The Act repeals and replaces the Bills of Sale Act 1898 (NSW) and the Liens on Crops and Wool and StockMortgages Act 1898 (NSW). See Corrs Chambers Westgarth, Thank God It’s Friday: Security Interests in Goods Act 2005 (NSW) - 28 October 2005:
The Victorian Supreme Court recently determined in Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL that no general duty of good faith attaches to commercial contracts as a matter of legal incident. It held that a contractual duty of good faith arises in commercial contracts only where it is necessary to protect a vulnerable party from exploitative conduct. The decision places Victoria at odds with New South Wales judicial authorities and makes the operation of the contractual duty of good faith even more uncertain than before. See Deacons, Legal update: Goliath still has duty of good faith, but only to David - 21 October 2005:
http://www.deacons.com.au/news/article.asp?nID=816
Blake Dawson Waldron, Company Law & Governance Update - October 2005 has a useful guidance on the preparation of board minutes:
http://www.bdw.com.au/publications/governance/governance102005.pdf
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations – October 2005:
http://www.aar.com.au/pubs/wr/fowroct05.htm
For a summary of the main features of the Government's new WorkChoices national workplace relations system, see Blake Dawson Waldron, Industrial Relations and Employment Alert - October 2005:
http://wwwint.bdw.com/publications/irca/irca10-10-2005.pdf
In Westpac Banking Corporation v 789TEN Pty Ltd [2005] NSWCA 321, the NSW Court of Appeal has held that audit comfort letters provided by a law firm to a company's auditors were not prepared for the dominant purpose of providing legal advice and therefore were not protected by legal professional privilege. The case can be downloaded at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2005/september/2005nswca321.html
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