October 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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
On 12 October 2008, the Prime Minister announced a Government guarantee of the deposits and wholesale funding of Australian deposit-taking institutions. On 24 October 2008, the Treasurer announced further design and operational parameters for those guarantees. Details are available on Treasury's website at:
http://www.treasury.gov.au/contentitem.asp?NavId=017&ContentID=1431
A package of legislation has also been introduced to give effect to the announcements. To view the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008, Financial Claims Scheme (ADIs) Levy Act 2008 and Financial Claims Scheme (General Insurers) Levy Act 2008 and their respective explanatory memoranda, go to:
The Federal Government has released the final draft of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008. A copy is available on Treasury's website at:
http://www.treasury.gov.au/contentitem.asp?NavId=014&ContentID=1426
ACCC has instituted legal proceedings in the Federal Court against Bill Express Limited and Technology Business International Pty Ltd (both in liquidation) for alleged third line forcing in relation to the failed Bill EXPRESS electronic bill payment network. It alleges that the third line forcing consisted of the former offering to supply businesses with electronic products and services under a merchant agreement, on condition that the businesses rented electronic equipment needed to operate the network from the latter. ACCC has joined BNY Trust Company of Australia Limited and Mobius Financial Services Pty Ltd to the proceedings, alleging that they were knowingly concerned in the alleged contraventions. For details, see Media Release 304/08:
http://www.accc.gov.au/content/index.phtml/itemId/847526
APRA has released the results of research on the performance of large APRA-regulated superannuation funds from 1 July 2001 to 30 June 2006. For a copy, go to:
http://www.apra.gov.au/Research/upload/APRA_WP_LSF_102008-3.pdf
ASIC has released a consultation paper proposing changes to the Electronic Funds Transfer Code of Conduct. For a copy, go to:
ASIC has extended the ban on covered short selling for non-financial securities for a further 28 days until 18 November 2008, when it is expected the ban will be lifted. ASIC proposes to issue a further release at least 3 trading days before 18 November 2008 on its expectation of lifting the ban on non-financials. In addition, it has announced the arrangements for disclosure and reporting of short sales when the ban is lifted. It has also expanded its existing relief from the covered short selling ban for people who hold a convertible security (eg a convertible bond) to hedge their exposure to the underlying share. The change means that people can short sell to hedge exposure through a fixed conversion price or ratio convertible security. For more information, see:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Short+selling?openDocument
ASIC has announced a new account switching service designed to make it easier for consumers to switch accounts by reducing the hassle involved in updating direct debit, direct credit and other automatic payments. Under the service, a customer’s existing ADI will provide them with a list of their direct debit, direct credit and other automatic payments going back 13 months. The customer’s new ADI, in return, will assist them with re-establishing these direct debits and credits. See Media Release 08-213:
http://www.asic.gov.au/asic/asic.nsf/byheadline/08-213+New+account+switching+service?openDocument
ASIC has announced measures that will facilitate operators of mortgage funds providing early withdrawal for members where there is hardship. See Media Release 08-214:
ASIC has issued an update of Regulatory Guide 43 Financial reports and audit relief. It can be downloaded from:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg43.pdf/$file/rg43.pdf
ASX has released its recommendations in response to the Government’s recent exposure draft of the Corporations Amendment (Short Selling) Bill 2008. For a copy, go to:
http://www.asx.com.au/about/pdf/mr_021008_asx_position_shortselling_securities.pdf
ASX has confirmed that until further notice, where a trading participant has a nil net short sale position as at 7.00pm on a trading day, they are required to report the nil position to ASX by no later than 9.00am on the next trading day via email. See Market Circular 495/08:
ASIC has released a circular pointing out the key differences between the ASX Listing Rules and the new AQUA rules for exchange traded funds, managed funds and structured products. See Market Circular 527/08 and attachment:
Appendix 8.2.1 of the ASX market rule procedures has also been amended to cater for the new AQUA market service. See Market Circular 511/08 and attachment:
ASX has issued a consultation paper concerning possible market enhancements for the exchange traded options market, including the settlement methodology in takeover situations and the number of shares per contract. See:
http://www.asx.com.au/about/pdf/20081020_eto_consultation_paper.pdf
AUSTRAC has released Public Legal Interpretation No. 6 of 2008 Suspect transactions and suspicious matter reports. It can be viewed at:
http://www.austrac.gov.au/files/pli6_sustrs_and_smrs.pdf
AUSTRAC has also released Information Circulars No. 55 and 59 summarising the Reserve Bank's amended sanctions against Burma and Iran. See:
http://www.austrac.gov.au/files/aic55_rba_media_release_burma_oct2008.pdf
http://www.austrac.gov.au/files/aic59_rba_media_release_iran_sanctions.pdf
SFE has released a notice outlining changes to the process for the consideration of requests for exemptions to the operating rules. See SFE Notice 156/08:
http://www.sfe.com.au/content/notices/2008/notice2008_156.pdf
For a summary of the Federal government's guarantee arrangements for ADI deposits, see Blake Dawson, Banking & Finance Update - 16 and 30 October 2008:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=53421
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=53539
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - October 2008:
http://www.aar.com.au/pubs/wr/fowroct08.htm
According to Allen Arthur Robinson, Focus: Information Technology & Climate Change - October 2008, the need to meet new emissions reporting requirements in 2009 will require many organisations to procure new information technology systems or modify existing systems to provide enhanced reporting capability. For further details, see:
http://www.aar.com.au/pubs/cmt/foitccoct08.htm
For an update on the inter-governmental plan for the national regulation of credit, see Mallesons, National Consumer Credit Regulation: 18-24 Months and National Consumer Law - 3 October 2008:
http://www.mallesons.com/publications/2008/Oct/9633706W.htm
For an outline of ASIC's proposed disclosure and reporting framework for short selling, see Blake Dawson, Financial Services Update - 29 October 2008:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=53531
The Federal government has released the stages 3 and 4 exposure draft of its proposed regime for taxation of financial arrangements. See Blake Dawson, Tax Bulletin - 3 October 2008:
http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=53355
For a summary of the Board of Taxation's long awaited discussion paper Review of the Tax Arrangements Applying to Managed Investment Trusts, see Mallesons Stephen Jacques, Tax Review of Managed Investment Trust Arrangements - 29 October 2008:
http://www.mallesons.com/publications/2008/Oct/9671950W.htm
An Act to restore the original income tax treatment of rights has now received Royal Assent. For details, see Mallesons Stephen Jacques, Legislative Amendments to Restore the Tax Treatment of Rights Issues - 3 October 2008:
http://www.mallesons.com/publications/2008/Oct/9639788W.htm
A post-Enron provision in the United States Internal Revenue Code which comes into effect at the end of this year could have a significant impact on deferred compensation arrangements for executives. The provision applies to companies which have a US listing of any kind, as well as to US citizens or tax residents working abroad and to non-residents working in the US. See Freehills, New United States Tax Code Impacts on Australian Entities - 10 October 2008:
http://www.freehills.com.au/4125.aspx
Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48 is the latest High Court pronouncement on native title. The case deals with whether steps taken preparatory to an intended sale of land near Wagga Wagga constituted lawful use and occupation of the land under section 36(1)(b) of Aboriginal Land Rights Act 1983 (NSW) and therefore made it claimable Crown lands. The decision can be viewed at:
http://www.austlii.edu.au/au/cases/cth/HCA/2008/48.html
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