EXPLANATORY STATEMENT Select Legislative Instrument 2010 No. 183

 

Issued by authority of the Minister for Financial Services, Superannuation and Corporate Law

Australian Securities and Investments Commission Act 2001

Australian Securities and Investments Commission Amendment Regulations 2010 (No. 3)

Subsection 251(1) of the Australian Securities and Investments Commission Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Recently, the Act was amended by the Corporations Amendment (Corporate Reporting Reform) Act 2010 (the Amending Act) for the purpose of, among other things, modifying the membership requirements of the Company Auditors and Liquidators Disciplinary Board (CALDB). The CALDB is a disciplinary body which receives and reviews applications made to it by the Australian Securities and Investments Commission (ASIC) or the Australian Prudential Regulation Authority (APRA) in respect of the conduct of either registered company auditors or liquidators.

Under paragraphs 203(1)(c) and (d), and subsection 203(1A) of the Act, the Minister for Financial Services, Superannuation and Corporate Law can select six persons who are eligible for appointment as accounting members of the CALDB. Subsection 203(1B) specifies that the member must be a resident of Australia and a member of a professional accounting body.

Additionally, the Act contains a power in subparagraph 203(1B)(b)(ii) to create regulations which prescribe additional bodies to which a person can be a member of and considered eligible for appointment as an accounting member. This is to ensure that all relevant professional bodies are able to nominate members for appointment to the CALDB.

The Regulations prescribe the Insolvency Practitioners Association (IPAA) of Australia as one of these bodies. The IPAA is the professional organisation within Australia for specialists practising in corporate and personal insolvency.

Under the Corporations Agreement 2002, the Commonwealth must consult with and obtain the approval of the Ministerial Council for Corporations before making amendments to certain provisions of the ASIC Regulations. The Council was consulted and has approved the Regulations and waived the period of public consultation, given the extensive consultation already undertaken.

The Regulations were exposed for a four week public consultation, along with the Corporate Reporting Reform Bill, ending on 3 February 2010. Over 50 stakeholders made written submissions and roundtable discussions were also held in Sydney and Melbourne. Key stakeholders consulted included the CALDB, ASIC, the Auditing and Assurance Standards Board, the Australian Institute of Company Directors, the Australian Accounting Standards Board, Chartered Secretaries Australia, the Joint Accounting Bodies and several major audit and accounting firms. Views were generally supportive of the intent of the Regulations.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Act does not specify any other conditions that need to be satisfied before the power to make the Regulations may be exercised.

The Regulations commenced on the commencement of the Corporations Amendment (Corporate Reporting Reform) Act 2010.