Commonwealth Numbered Regulations - Explanatory Statements

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Statutory Rules 1999 No. 237

Minute No       of 1999 - Minister for Financial Services and Regulation

Subject       - Corporations Act 1989

Corporations Amendment Regulations 1999 (No. 5)

Section 22 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act or the Corporations Law, prescribing, among other things, matters which are required by the Corporations Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Corporations Law.

The Corporations Agreement, reached between State, Northern Territory and Commonwealth Ministers who had responsibilities in relation to corporate regulation in June 1990, forms the political compact on which the national companies and securities scheme is based.

The responsible Ministers of the States and the Northern Territory on the Ministerial Council for Corporations have been consulted on the proposed regulations and have given approval to the regulations, as required by the Agreement.

The regulations are technical in nature. The amendment to paragraph 7.12.02(b) of the Corporations Regulations corrects a misdescription in previous amendments to that regulation. In the case of paragraph 10.1.11(1)(e), the amendment brings into line the references to relevant Ministers currently specified in that regulation with paragraph 1362B(1)(b) of the Corporations Law.

Details of the regulations are at Attachment A.

The Regulations commence on gazettal.


Proposed Regulation 1 - Name of regulations

Proposed regulation 1 provides for the name of the regulations.

Proposed Regulation 2- Commencement

Proposed regulation 2 provides that the regulations will commence on gazettal.

Proposed Regulation 3 Amendment of Corporations Regulations 1990

Proposed regulation 3 provides that Schedule 1 amends the Corporations Regulations 1990.

Schedule 1 - Amendments

Item [1] paragraph 7.12.02(b)

Item 1 in Schedule 1 amends paragraph 7.12.02(b).

Currently, paragraph 7.12.02(b) provides that the prospectus provisions in Division 2 and Division 3A of Part 7.12 of the Corporations Law do not apply in relation to offers of securities in relation to a compromise or arrangement subject to an order made by the Court under subsection 411 (1) or (1A) of the Corporations Law.

The amendment removes the reference to the Court from paragraph 7.12.02(b). The amendment corrects a misdescription in previous amendments to paragraph 7.12.02(b) (subregulation 2.2 of Statutory Rules 1992 No. 230).

The amendment clarifies the operation of the paragraph. It will ensure that paragraph 7.12.02(b) accurately refers to the point when offers might first be made under a compromise or arrangement where an order for a meeting of creditors or members is made under subsection 411(1) or (1A) of the Corporations Law.

This is a technical amendment to paragraph 7.12.02(b) which will not affect the policy underlying the exemption from the prospectus provisions.

Item [2] - paragraph 10.1.11(1)(e)

Item 2 in Schedule 1 amends paragraph 10.1.11(1)(e).

Paragraph 1362B(1)(b) of the Corporations Law requires, in respect of a transfer of registration of a company, the consent of both the Commonwealth Minister responsible for the Corporations Law and that of the responsible Minister of the jurisdiction in which the company is registered. Currently, paragraph 10.1.11(1)(e) makes no reference to requiring the consent of the Commonwealth Minister. Instead, it requires the consent of both the Minister for the jurisdiction in which the company is registered and the Minister for the jurisdiction into which a company is transferring its registration. This was not the intended result of amendments made to the Corporations Regulations following renumbering and relocation of provisions in the Law by the Company Law Review Act 1998.

Item 2 brings paragraph 10.1.11(1)(e) into line with paragraph 1362B(1)(b) of the Corporations

Law. The Australian Securities and Investments Commission will be required to issue the

certificate of transfer of jurisdiction where (the requirements of paragraphs 10.1.11(1)(a) to (d) having been met), the relevant Ministers have consented in writing under paragraph 1362B(1)(b) to the transfer.

The amendment is technical and removes the unintended regulatory burden of seeking the consent of the Minister of the jurisdiction into which a company is tranferring its registration.

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