Commonwealth Numbered Regulations - Explanatory Statements

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CORPORATIONS (FEES) AMENDMENT REGULATIONS 2000 (NO. 2) 2000 NO. 38

Statutory Rules 2000 No. 38

Issued by the Authority of the Minister for Financial Services and Regulation

Corporations Act 1989

Corporations (Fees) Amendment Regulations 2000 (No. 2)

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. Section 25 provides that the regulations may prescribe fees for chargeable matters.

The purpose of the regulations is to prescribe the fee payable by small transferring financial institutions (small credit unions, building societies and friendly societies) on lodging their annual returns under the Corporations Law. The effect of the regulation is that small credit unions, building societies and friendly societies are liable to pay a fee of $200 on lodging their annual return. In the absence of the regulations these bodies would be liable to pay the fee payable by public companies on lodging their annual return, that is $870.

The bodies that are liable to pay the new fee are identified through the definition of "small transferring institution". The definition applies to institutions that are not liable to pay a supervisory levy under the Authorised Deposit-taking Institutions Supervisory Levy Imposition Act 1988 (ADISLIA) or the Life Insurance Supervisory Levy Imposition Act 1998 (LISLIA) or are liable to pay only the minimum supervisory levy under either of those Acts.

The responsible Ministers of the States and the Northern Territory on the Ministerial Council for Corporations have been consulted about the regulations as required by the Corporations Agreement which was reached between State, Northern Territory and Commonwealth Ministers who had responsibilities in relation to corporate regulation in June 1990. The approval of the Ministerial Council is not required for amendments to regulations relating to fees.

Details of the regulations are at Attachment A.

The regulations are taken to have commenced on 1 July 1999. They are not in breach of section 48 of the Acts Interpretation Act as the rights of persons are not affected so as to disadvantage those persons. The institutions that are affected were liable to pay a considerably higher fee on lodgment of their annual return ($870). The fee that they are required to pay on lodgment of their annual return under the regulations - $200 -applies to annual returns that were required to be lodged by 31 January 2000 as well as annual returns required to be lodged in later years. Institutions which have already lodged their annual returns for 31 January 2000 and paid the higher fee are entitled to lodge a claim in respect of the reduced fee with ASIC.

ATTACHMENT A

Regulation 1: Name of Regulation

Regulation 1 provides that the regulations are the Corporations (Fees) Amendment Regulations 2000 (No. 2).

Regulation 2: Commencement

Regulation 2 provides that the regulations are taken to have commenced on 1 July 1999.

Regulation 3: Amendment of Corporations (Fees) Regulations

Regulation 3 contains schedule 1 which provides for the amendments to the Corporations (Fees) Regulations.

Item [1] - Regulation 2A, heading

Item 1 amends the heading to Regulation 2A to "Definitions".

Item[2] - Regulation 2A, after definition of special purpose company

Item 2 inserts definitions of "small transferring financial institution" and "transferring financial institution of this jurisdiction" in regulation 2A after the definition of "special purpose company". It provides that "small transferring financial institution" means a transferring financial institution of this jurisdiction:

*       which is required to lodge its annual return by 31 January 2000 or 31 January in a later year or

       by a different date agreed to by the Australian Securities and Investments Commission

       (ASIC) and the institution; and

*       which is not liable to pay a levy under the Authorised Deposit-taking Institutions Supervisory

       Levy Imposition Act 1988 (ADISLIA) or the Life Insurance Supervisory Levy Imposition Act

       1998 (LISLIA) or is liable to the "minimum levy amount" payable under either of those Acts.

The ADISLIA imposes a levy on authorised deposit taking institutions including credit unions and building societies that will be prudentially regulated by the Australian Prudential Regulation Authority (APRA). The LISLIA imposes a levy on life insurance companies including certain friendly societies. The Financial Institutions Supervisory Levies Collection Act 1998 (the Collection Act) provides for the collection of the levies. The levies fund APRA and the cost to ASIC and the Australian Taxation Office of undertaking consumer protection functions for institutions in these industries.

The effect of the regulation is that credit unions, building societies and friendly societies that pay the minimum levy amount (currently $500), or are not subject to the APRA levy, will be liable to pay the fee payable by proprietary companies ($200) on lodging their annual return. The "minimum levy amount" is determined in accordance with subsec 7(3) of the ADISLIA and the LISLIA. An institution that is required to pay a levy marginally above the minimum levy amount would be required to pay the full annual return fee of a public company.

By virtue of para (a) the fee payable on lodgment of the annual return will apply to annual returns required to be lodged by 31 January 2000. Institutions which have already lodged their annual returns for 31 January 2000 and have paid the higher fee payable by a public company will be entitled to lodge a claim in respect of the reduced fee with ASIC.

"Transferring financial institution of this jurisdiction" has the meaning in clause 1 of Schedule 4. The definition includes credit unions, building societies and friendly societies registered under previous governing codes and special service providers registered under the Australian Financial Institutions Code.

Item 3 - Schedule, Item 7

Item 3 reproduces current Item 7 and, in particular, provides that the fee on lodging an annual return of a small transferring financial institution is $200. If a small transferring financial institution is also a special purpose company the fee to be paid is the fee payable by a special purpose company.