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CORPORATIONS REGULATIONS (AMENDMENT) 1994 NO. 251EXPLANATORY STATEMENT
STATUTORY RULES 1994 No. 251
Issued by the Authority of the Attorney-General
Corporations Act 1989
Corporations Regulations (Amendment)
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, inter alia, 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 regulations are in support of amendments made by the Corporations Legislation Amendment Act 1994 and amend the Corporations Regulations made under the Corporations Act. The purpose of the regulations is to specify how current information kept in a register or index by a company must be and to specify how current such information must be when a person wishes to inspect a register or index.
The regulations also amend the forms to be used when applying to change the status of a company. The amendments to the relevant forms will facilitate the change in status for a limited company that is a mining company to convert to a no liability company.
In accordance with the Heads of Agreement and the draft Corporations Agreement between Commonwealth, State and Territory Ministers having responsibilities in relation to corporate regulation, the Attorney-General has consulted State and Territory Ministers who are members of the Ministerial Council for Corporations. The Ministerial Council for Corporations has approved the proposed amendments insofar as they relate to matters within its deliberative function under the Heads of Agreement and the draft Corporations Agreement.
Details of the regulations are contained in the Attachment.
The regulations commenced on 15 July 1994.
Regulation 1 provides that the regulations commence on 15 July 1994.
The Corporations Regulations are amended as set out in these regulations.
New Part 9.4A
The legislative package for the facilitation of the Clearing House Electronic Subregister System (CHESS) contained in the Corporate Law Reform Act 1992 and in the Corporations Legislation Amendment Bill 1994 is supplemented by new regulations 9.4A.01 and 9.4A.02, the introduction of which were foreshadowed in the Explanatory Memorandum to the Corporate Law Reform Act 1992.
New Regulation 9.4A.01
New regulation 9.4A.01 defines the terms 'index', 'issuing body' and 'register' that are used in new regulation 9.4A.02.
New Regulation 9.4A.02
Register and index must be kept up to date: subsection 1306(4A) of the Corporations Law
New regulation 9.4A.02 is made under subsection 1306(4A) of the Corporations Law and provides that a company that is an issuing body required by the law to make a copy of a register (of members, debenture holders or holders of prescribed interests) available for public inspection, must ensure that the copy is not more than 20 business days out of date (new subregulation 9.4A.02(1)). New subregulation 9.4A.02(2) provides that if a person wishing to inspect the register gives the company a notice, the company must ensure that at the beginning of the next business day the copy of the register available for public inspection is not more than 5 business days out of date.
Although the above mentioned Explanatory Memorandum foreshadowed that the regulation provide for a 5 day update, there have been some concerns that smaller listed companies will be subjected to an unnecessary financial burden connected with down loading of data from the CHESS every 5 days. The regulation therefore represents a sensible compromise between policy objectives of having an up-to-date register available for public inspection and the costs to the companies. It should be noted that the regulation only provides the minimum standard and it is anticipated that most listed companies will have more frequent updates as part of their internal practice.
Subregulation 4.1 omits current Forms 205 and 206 in Schedule 2 to the Corporations Regulations and substitutes new Forms 205 and 206.
An application by a company to change to a different status is to he made on Form 206. The application must be accompanied by certain documents including a printed copy of a resolution of the company resolving to change the status of the company and specifying the status sought. Notice of the special resolution must be lodged with the Australian Securities Commission on a Form 205.
The regulation is consequent upon the amendment to subsection 167(1) of the Corporations Law by item 9 in Schedule 8 to the Corporations Legislation Amendment Bill 1994. The amendment allows an additional change in status for companies so as to allow a limited company that is a mining company to convert to a no liability company.
The new Forms facilitate the proposed change in status.