EXPLANATORY STATEMENT

Select Legislative Instrument 2007 No. 326

 

Issued by the authority of the Parliamentary Secretary to the Treasurer

 

Corporations (Fees) Act 2001

Corporations (Fees) Amendment Regulations 2007 (No. 1)

Section 8 of the Corporations (Fees) Act 2001 (the Act) provides that the Governor‑General may make regulations for the purposes of sections 5, 5A and 6 of the Act.

 

The Corporations (Fees) Amendment Regulations 2007 (No. 1) (the Regulations) clarify that the lodgement of a Replacement Product Disclosure Statement with the Australian Securities and Investments Commission does not attract a fee.

 

The Regulations also clarify that the lodgement of a notice in relation to a Product Disclosure Statement (PDS) or Supplementary PDS does not attract a fee if a change is made to the fees and charges in the Statement, or if the financial product to which the Statement relates is no longer recommended or offered to new clients in a recommendation, issue or sale situation.

 

Details of the Regulations are set out in the Attachment.

 

Under the Corporations Agreement 2002, the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 506(1) and 507(1) of the Corporations Agreement, the Commonwealth is required to consult with State and Territory Ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Commonwealth has consulted the Council regarding the Regulations and no comments were made.

 

The Act specifies no other conditions that need to be satisfied before the power to make the proposed Regulations may be exercised.

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

Regulations 1 to 3 and Schedule 1 of the Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments. Schedule 2 commences on 1 July 2008.

Attachment

 

Details of the Corporations (Fees) Amendment Regulations 2007 (No. 1)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Corporations (Fees) Amendment Regulations 2007 (No. 1).

 

Regulation 2 – Commencement

 

This regulation provides that regulations 1 to 3 and Schedule 1 of the Regulations commence on the day after the Regulations are registered. Schedule 2 commences on 1 July 2008. The commencement date for Schedule 2 is set in order to provide time for the Australian Securities and Investments Commission (ASIC) to develop the necessary technological infrastructure to make the requirements operational.

 

Regulation 3 – Amendment of Corporations (Fees) Regulations 2001

 

This regulation provides that the Corporations (Fees) Regulations 2001 (the Principal Regulations) are amended as set out in the Schedules.

 

Schedule 1 – Amendment

 

Item [1] – Item 46A

 

The Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (SRS Act) allows the use of a Replacement PDS to correct errors or omissions in a PDS for listed stapled securities. Replacement PDSs for financial products traded on a financial market must be lodged with ASIC. Lodgement of a document with ASIC may, in some cases, require a fee to be paid.

 

Item 1 of Schedule 1 inserts a new item 46A into Schedule 1 to the Principal Regulations to clarify that the lodgement of a Replacement PDS does not attract a fee. This mirrors the treatment extended to replacement prospectuses, where lodgement also does not require a fee to be paid.

 

Schedule 2 - Amendment

 

Item [1] – Item 44A

 

The SRS Act requires a person responsible for the lodgement with ASIC of a notice in relation to a Statement (either a PDS or Supplementary PDS) to lodge the notice if certain circumstances occur.

 

Item 1 inserts a new item 44A into Schedule 1 to the Principal Regulations to clarify that the lodgement of a notice under section 1015D of the Corporations Act 2001 does not attract a fee if a change is made to the fees and charges set out in the Statement; or if the financial product to which the Statement relates ceases to be available to be recommended or offered to new clients in a recommendation, issue or sale situation.

Consultation

 

Significant consultation was undertaken regarding the Regulations.

 

Initial proposals for the items were consulted on as part of the Corporate and Financial Services Regulation Review Proposals Paper, released by the Parliamentary Secretary to the Treasurer in November 2006.

 

Following these consultations, the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (SRS Act) was enacted in June 2007 with bipartisan support. Its accompanying Explanatory Memorandum explained that supporting regulations would be required to provide that the lodgement fee for the ‘in use’ notice is payable only once the original notice is lodged.

 

On 19 June 2007, the Parliamentary Joint Committee on Corporations and Financial Services (PJC) reported on its Inquiry into the Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007 and related bills after a one-month public consultation period and a public hearing. Stakeholders were given the opportunity to provide comments on the lodgement fee issue at that time.