September 2007
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 long awaited Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2007 has made its way into Parliament. If enacted, it will amend the Income Tax Assessment Act 1997 by including a new Division 230, which will define ‘financial arrangement’ and set out the methods under which gains and losses from financial arrangements will be brought to account for tax purposes. For a copy of the Bill and its Explanatory Memorandum, go to:
The Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007 has passed into law. For a copy of the Act and its explanatory memorandum, go to:
The International Trade Integrity Act 2007 has passed into law. It amends the Charter of the United Nations Act 1945, the Customs Act 1901, the Criminal Code Act 1995 and the Income Tax Assessment Act 1997 to implement the Australian Government’s response to the recommendations of the Cole Inquiry Report. For a copy of the Act and its explanatory memorandum, go to:
ACCC is conducting a sweep of Australian based websites for false and misleading testimonials, guarantees and endorsements. See Media Release 261/07:
http://www.accc.gov.au/content/index.phtml/itemId/799577/fromItemId/2332
APRA has released a discussion paper on proposed amendments to prudential standards on governance for authorised deposit-taking institutions, general insurers and life insurers. For a copy go to:
http://www.apra.gov.au/Policy/upload/Governance-Discussion-Paper-10-9-07.pdf
http://www.apra.gov.au/Policy/upload/APS-510-Governance-2.pdf
APRA has released its proposed reporting requirements for authorised deposit-taking institutions under the Basel II Framework. The requirements are set out in:
http://www.apra.gov.au/ADI/upload/Basel-II-reporting-Discussion-paper.pdf
APRA has released a discussion paper on its proposed approach to the supervisory review process under the Basel II Framework. The paper is available at:
http://www.apra.gov.au/ADI/upload/Discussion-paper-Supervisory-Review-Process.pdf
APRA has also released a discussion paper on proposals for the collection of data from discretionary mutual funds. The paper can be downloaded from:
http://www.apra.gov.au/RFC/DMFs.cfm
ASIC has released a consultation paper on a proposal to widen the disclosure exemption for rights issues to cover non-traditional features developed by issuers and their advisers to raise capital more effectively. ASIC’s proposal would extend the disclosure exemption to rights issues that allow accelerated institutional participation and other deviations from the ‘vanilla’ rights issue format, provided there is, in substance, an equality of opportunity to participate for all holders. For a copy of the paper, go to:
ASIC has released a report outlining its decisions on applications for relief from the corporate finance, financial services and managed investment provisions of the Corporations Act between 1 January and 31 May 2007. For a copy, go to:
ASX Market Rules Guidance Notes 15 and 16 have been updated to reflect the timing of publication of ASX waivers, which were previously recorded on the public record once a month. See ASX Circular 512/07 and attachments:
ASX Market Rule Procedures 16.12 and 21.5 have been amended to align the processes described in those procedures with the integrated trading platform functionality and the current practices used when trading on and reporting trades to ITS. ASX Market Rule Procedure 26 has also been amended to include the procedure to be used when reporting trades and crossings in wholesale loan securities. See ASX Circular 523/07 and attachments:
ASX has amended the Market Rules Procedure Appendices setting out the pro-forma ‘Auditors Report on Internal Control Procedures’ and ‘Auditors Report on Financial Information’. The amendments incorporate changes to Australian Auditing Standards and to auditor independence requirements. See ASX Circular 525/07 and attachments:
Amendments have been made to the ASX Market Rules and Procedures to give effect to SEC no-action relief granted in relation to ASX equity and index options. See ASX Circular 557/07 and attachments:
AUSTRAC has released draft rules on international funds transfer instructions, dealings in securities and derivatives, designated remittance arrangements and record keeping requirements. For a copy, go to:
http://www.austrac.gov.au/aml_ctf_rules.html
For those interested in the findings of the review into the market disruption on 25 July 2007, see SFE Notice 118/07:
http://www.sfe.com.au/content/notices/2007/notice2007_118.pdf
The Ministerial Council on Consumer Affairs has released urgent draft amendments to the Consumer Credit Code and Regulations. See Mallesons Stephen Jaques, Urgent Consumer Credit Code Amendments Fast-tracked - 14 September 2007:
http://www.mallesons.com/publications/2007/Sep/9108635W.htm
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - September 2007:
http://www.aar.com.au/pubs/pdf/wr/fowrsep07.pdf
The Takeovers Panel has released a draft Guidance Note on equity derivatives for comment. See Mallesons Stephen Jaques, Equity Derivatives - New Takeovers Panel Draft Guidance Note - 11 September 2007:
http://www.mallesons.com/publications/2007/Sep/9105230W.htm
For a summary of the recent High Court decision in CGU v AMP on settlements made without the consent of an insurer, see Allens Arthur Robinson, Focus: Insurance – September 2007:
http://www.aar.com.au/pubs/pdf/insur/foinssep07.pdf
Freehills, The Current Landscape of Legal Professional Privilege - 25 September 2007 has a useful summary of the law in this area. See:
http://www.freehills.com.au/publications/publications_6995.asp
For a summary of the recent Telstra decision (see below), refusing a claim for privilege because of a lack of evidence demonstrating the requisite measure of independence of Telstra's inhouse legal department, see Corrs Chambers Westgarth, Corrs In Brief: Recent Developments In Client Legal Privilege - 21 September 2007:
The recent case of Barnes v Commissioner of Taxation [2007] FCAFC 88 usefully highlights the commonly misunderstood position regarding copy documents, as distinct from original documents, in terms of legal professional privilege. See Corrs Chambers Westgarth, Legal Professional Privilege: Copy Documents Have a Life of Their Own - 21 September 2007:
The Australian Law Reform Commission has issued a discussion paper on the operation of legal professional privilege in investigations by federal agencies. For a summary, see Freehills, Claiming Privilege in Federal Regulatory Investigations: ALRC Discussion Paper - 26 September 2007:
http://www.freehills.com.au/publications/publications_6996.asp
For an outline of the Australian Law Reform Commission's discussion paper on reform of Australian privacy laws, see Blake Dawson Waldron, Privacy Update - September 2007:
http://www.bdw.com.au/publications/privacy/privacy24092007.pdf
And for a general roundup of developments in privacy law, including a proposal by the NSW Law Reform Commission for the introduction of a statutory tort of privacy in NSW, see Minter Ellison, Privacy Update -September 2007:
The Federal Government has approved further amendments to section 46 of the Trade Practices Act 1974 (Cth) which will introduce a new prohibition in Part IV of the TPA, aimed at targeting predatory, below-cost pricing by corporations with substantial market share. See Mallesons Stephen Jaques, Parliament Poised to Amend Section 46 to Prohibit Predatory Pricing - 14 September 2007:
http://www.mallesons.com/publications/2007/Sep/9106862W.htm
Legal Professional Privilege - necessity to establish independence of inhouse
lawyers In Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No. 2) [2007] FCA 1445, the Federal Court rejected a claim for legal professional privilege in relation to documents produced by the Telstra inhouse legal department. No evidence had been led by Telstra to establish the role which the lawyers in question performed within Telstra or to disclose their measure of independence or their ability to provide impartial legal advice, given the different roles they had to perform. The decision can be viewed at:
http://www.austlii.edu.au/au/cases/cth/federal_ct/2007/1445.html
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