Corporations Regulations (Amendment) (Cth)
__________________
I, THE
GOVERNOR-GENERAL of the Commonwealth of Australia, acting with the advice of
the Federal Executive Council, make the following Regulations under the
Dated 1 September 1992.
BILL HAYDEN
Governor-General
By His Excellency’s Command,
MICHAEL DUFFY
Attorney-General
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1.1 Regulation 6 is taken to have commenced at 4.50 p.m. Australian Eastern Standard Time on 23 July 1991.
[NOTE: The remainder of these Regulations commence on
gazettal: see
2.1 The Corporations Regulations are amended as set out in these Regulations.
3.1 Subregulation 1.02 (1):
Insert the following definitions:
“
4.1 After regulation 7.3.02, insert:
“7.3.02a (1) In this regulation:
The Commission may notify the management company of an unlisted property trust in writing that:
this regulation does not apply to the trust; or
(b) this regulation applies to the trust subject to the conditions set out in the notice.
For the purposes of section 786 of the Corporations Law, and in addition to the other conditions prescribed in this Part, a licence issued to the management company of a relevant property trust is subject to the conditions that:
(a) if the value of the gross assets of relevant property trusts managed by the management company does not exceed $50,000,000—the management company must, at all times, have net tangible assets of a value of at least $500,000; and
(b) if the value of the gross assets of relevant property trusts managed by the management company exceeds $50,000,000, but does not exceed $500,000,000—the management company must, at all times, have net tangible assets of a value of at least the sum of:
(i) $500,000; and
(ii) $10,000 for each $1,000,000 by which the assets exceed $50,000,000; and
(c) if the value of the gross assets of relevant property trusts managed by the management company exceeds $500,000,000—the management company must, at all times, have net tangible assets of a value of at least $5,000,000.”.
5.1 Definition
of
Omit the definition.
6.1 After regulation 7.12.12, insert:
“7.12.12a. (1) In this regulation:
(a) that does not hold property of which 20% or more by value is, or is likely to be, real property; or
(b) that has not been, or is not, being promoted as, or held out to be, a trust of which a significant proportion (being not less than 20% by value) of the trust property is, or is likely to be, real property;
Division 5a of Part 7.12 of the Corporations Law does not apply to a property securities trust that is a property trust only because:
(a) at least 20% by value of the trust property consists of estates in land derived from prescribed interests made available under a trust deed that is, or at any time has been, an approved deed; or
(b) at least 20% by value of the trust property consists of estates in land only because estates in land derived from prescribed interests which have been, or will be, made available under a trust deed that is, or at any time has been, an approved deed, are taken into account; or
(c) the trust:
(i) is being, or has been, promoted as; or
(ii) is being, or has been, held out to be;
a trust of which at least 20% by value of the trust property is to consist of estates in land derived from prescribed interests that have been, or will be, made available under a trust deed that is, or at any time has been, an approved deed; or
(d) the trust:
(i) is being, or has been, promoted as; or
(ii) is being, or has been, held out to be;
a trust of which at least 20% by value of the trust property is to consist of estates in land only because of estates in land derived from prescribed interests that have been, or will be, made available under a trust deed that is, or at any time has been, an approved deed are taken into account.
The purpose of this regulation is to avoid doubt as to the effect of Division 5a of Part 7.12 of the Corporations Law, and this regulation is not to be taken to affect, by implication, the interpretation of any other provision of that Law.”.
7.1 Paragraph 7.12.15 (1) (h):
Omit the paragraph.
7.2 Sub-subparagraph 7.12.15 (5) (d) (ii) (c):
Omit “will be”, substitute “was”.
7.3 Subparagraph 7.12.15 (5) (d) (ii):
Add at the end:
“(e) that the trust has sufficient resources to allow a reasonable period for the exposure of the property for sale; and
(f) that the trust has sufficient resources to negotiate an agreement for the sale of the property; and”.
7.4 After paragraph 7.12.15 (5) (g), insert:
“(ga) a covenant that the trustee will as soon as practicable arrange for the valuation of real property of the trust if the management company of the trust advises the trustee in writing that the management company reasonably believes that there has been a significant change in the value of the property;
(gb) if the trustee arranges for the valuation of more than 1 property under paragraph (g), or real property under paragraph (ga)—a covenant that the trustee will ensure that the times at which the properties are valued are arranged in a manner that, in the trustee’s opinion, best promotes the interests of the trust’s unitholders;
(gc) if the trustee arranges for the valuation of real property under paragraph (g), (ga) or (gb), including a valuation that is not complete when this regulation commences—a covenant that the trustee will, at the written request of a unitholder, inform the unitholder of:
(i) the current valuation of the property; and
(ii) the instructions that the trustee gave to the valuer; and
(iii) the period of time that the valuer expects would be required to sell the property if it were offered for sale immediately;”.
7.5 Subregulation 7.12.15 (5):
Add at the end:
“(q) a covenant that the trustee will not incur or authorise a borrowing that would make the value of an unlisted property trust’s liabilities (including capital commitments not funded from trust assets but not including outstanding redemption requests) more than 20 per cent of the value of the trust’s gross tangible assets;
(r) a covenant that if the value of an unlisted property trust’s liabilities (including capital commitments not funded from trust assets but not including outstanding redemption requests) exceeds 20 per cent of the value of the trust’s gross tangible assets, the trustee will, as soon as practicable, take action to have the value of the liabilities reduced to 20 per cent or less of the value of the assets;
(s) if the trust deed of an unlisted property trust provides for the redemption of units in the trust—a covenant that the trustee will ensure that the redemption price offered for units in the trust reflects, as far as practicable, the value of the trust’s assets on the day on which the redemption occurs.
[NOTE: Additional covenants that bind the trustee are prescribed in regulation 7.12.15a.]”.
7.6 After subregulation 7.12.15 (5), insert:
“(5a) The covenants set out in paragraphs (5) (q) and (r) do not apply to an unlisted property trust that is a fixed-term trust in relation to which there is no buy-back or redemption obligation.
“(5b) The covenant set out in paragraph (5) (r) does not require the trustee to take action to have the trust’s liabilities reduced in a manner that would materially reduce the value of units in the trust, calculated on the day on which the value of the trust’s liabilities (including capital commitments not funded from trust assets, but not including outstanding redemption requests) exceeds 20 per cent of the value of the trust’s gross tangible assets, unless there is no opportunity, foreseeable by the trustee within a reasonable time after that day, for the trustee to reduce the trust’s liabilities without materially reducing the value of the units.”.
7.7 Subregulation 7.12.15 (7):
Add at the end:
“(e) a covenant that the management company will not borrow funds for the purposes of the trust without the prior approval of the trustee;
(f) if the trustee has arranged for the valuation of real property of the trust—a covenant that the management company will provide the valuer with the information that the valuer requires to make an accurate valuation;
(g) a covenant that the management company will ensure that the buy-back price offered for units in the trust reflects, as far as practicable, the value of the trust’s assets on the day on which the buy-back occurs;
(h) a covenant that the management company will comply with the conditions to which its licence is subject;
(j) if the management company breaches a condition to which its licence is subject—a covenant that the management company will, not later than the day after the day on which it becomes aware of the breach, inform the Commission and the trustee of the trust in writing of the details of the breach.”.
7.8 Subregulation 7.12.15 (10):
Add at the end:
“(h) if:
(i) the proposal referred to in subparagraph 7.12.15a (6) (e) (ii) is adopted by a meeting of unitholders convened under the covenant prescribed in paragraph 7.12.15a (6) (d); or
(ii) the proposal referred to in subparagraph 7.12.15a (8) (c) (ii) is adopted by a meeting of unitholders convened under the covenant prescribed in subparagraph 7.12.15a (8) (b) (i).
[NOTE: Additional covenants that bind the management company are prescribed in regulation 7.12.15a.]”.
8.1 After regulation 7.12.15, insert:
“7.12.15a (1) In this regulation:
‘
(a) real property; or
(b) a loan, or an advance, made to an associate of the management company if the loan or advance is not fully secured and is not moneys on deposit with an Australian bank or a corporation declared under paragraph 65 (1) (a) of the Corporations Law, or under a corresponding law, to be an authorised dealer in the short term money market;
‘
‘
‘
(a) if the trust deed provides for the redemption of units in the trust—the trust liquidity; and
(b) an amount calculated using the formula:
;
‘
‘
(a) the liquid assets of the management company, including:
(i) cash available to the management company; and
(ii) cash that is to be received by the management company from the realisation of an asset during the buy-back period; and
(iii) cash that would be received by the management company from an asset that is reasonably able to be realised by the management company during the buy-back period; and
(iv) bank bills; and
(v) if a line of credit is made available to the management company by a banking corporation, or by a financial institution approved under subregulation (3)—the part of the line that:
(a) can be lawfully used by the management company in relation to the trust; and
(b) is not drawn on by the management company on the day that the manager’s liquidity is calculated; and
(c) the management company reasonably believes will be available to it during the whole of the buy-back period; and
(b) the management company’s liabilities, not including buy-back requests, due in the period commencing on the day on which the liquidity is calculated and ending at the end of the buy-back period;
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‘
‘
(a) holds a dealers licence, under Part 7.3 of the Corporations Law of this jurisdiction, that allows the person to manage an unlisted property trust; and
(b) in the opinion of the trustee of the trust is competent to act as the management company of the trust;
‘
(a) the trust’s:
(i) cash; and
(ii) bank bills; and
(iii) assets that are to be realised during the redemption period; and
(iv) assets, other than real property, that are reasonably able to be realised by the trustee during the redemption period; and
(v) if a line of credit is made available to the trustee of the trust by a banking corporation or by a financial institution approved under subregulation (3)—the part of the line that is not drawn on by the trustee, and may be drawn on by the trustee without breaching any restrictions imposed on the trust, on the day that the trust liquidity is calculated; and
(b) the trust’s liabilities, not including redemption requests, due in the period commencing on the day on which the liquidity is calculated and ending at the end of the redemption period.
The Commission may notify the management company and the trustee of an unlisted property trust in writing that this regulation does not apply to the trust.
For the purposes of:
(a) subparagraph (a) (v) of the definition of ‘
management company’s liquidity ’; and
subparagraph (a) (v) of the definition of ‘
the Commission may approve a financial institution as an institution whose line of credit is to be taken into account in calculating the management company’s liquidity or the trust liquidity.
If the Commission approves a financial institution, it must inform the management company and the trustee of the property trust in writing.
For the purposes of paragraph 1069 (1) (n) of the Corporations Law, the following covenants are prescribed to bind the management company of an unlisted property trust:
(a) a covenant that the management company will strive to ensure that, on each day, the average combined liquidity of the trust is at least 15 percent of the trust’s average assets value;
(b) a covenant that the management company will maintain records in a form that allows the Commission to calculate the trust’s average combined liquidity and the trust’s average assets value;
(c) a covenant that the management company will allow the trustee access, at reasonable times, to the records of the management company relating to:
(i) the value of the trust’s assets; and
(ii) the calculation of the trust’s combined liquidity;
(d) a covenant that if the trustee advises the management company that, in the trustee’s opinion, the trust’s average combined liquidity on a day is less than 15 percent of its average assets value on that day, the management company will, as soon as practicable, inform the trustee of the trust’s average combined liquidity on that day.
For the purposes of paragraph 1069 (1) (n) of the Corporations Law, the following covenants are prescribed to bind the management company of an unlisted property trust if the trust’s average combined liquidity on a day is less than 15 percent of its average assets value on that day:
(a) a covenant that the management company will, immediately and in writing, inform the trustee of the trust and the Commission that the trust’s combined liquidity is less than that figure;
(b) a covenant that the management company will inform the trustee and the Commission of:
(i) a material variation to the trust’s combined liquidity; and
(ii) circumstances that are expected to materially vary the trust’s combined liquidity;
as soon as practicable after the variation occurs or the circumstances are identified;
(c) a covenant that the management company will, as soon as practicable:
(i) notify the unitholders that the trust’s combined liquidity is less than that figure; and
(ii) notify the unitholders that the management company will convene a meeting of unitholders to allow the unitholders to vote on the proposals referred to in paragraph (e); and
(iii) give the unitholders details of the time and place at which the meeting will be held and the proposals; and
(iv) give the unitholders information that the unitholders reasonably require to allow them to cast an informed vote on the proposals; and
(v) give the unitholders details of the voting system that will be used at the meeting;
(d) a covenant that the management company will convene a meeting of the unitholders of the trust, to allow the unitholders to vote on the proposals referred to in paragraph (e), as soon as practicable after informing the Commission that the trust’s combined liquidity is less than that figure;
(e) a covenant that the management company will, at the meeting, ask the unitholders to consider and vote on the following proposals:
(i) whether the units in the trust should be quoted on a stock market of a securities exchange;
(ii) whether the management company of the trust should be replaced;
(iii) whether the trust should be terminated;
(iv) whether the buy-back notice period should be extended;
(v) if the trust deed of the trust provides for the redemption of units in the trust—whether the redemption period should be extended;
(vi) any other proposal that the Commission directs the management company to ask the unitholders;
(vii) any other proposal that the management company or the trustee considers relevant to the affairs of the trust;
(f) a covenant that the management company will ensure, in conducting the meeting, that:
(i) a unitholder may give a proxy to a person; and
(ii) the unitholders may vote on the proposals put to the meeting under paragraph (e) by using a voting method that allows the unitholders to express a clear sequence of preferences; and
(g) if, before the meeting, a suitable manager asks the management company for information that will assist the manager to make an informed decision whether to offer to manage the trust in place of the management company—a covenant that the management company will give the information to the manager as soon as practicable:
(i) if the trustee agrees to giving the information to the manager; and
(ii) if the manager agrees in writing to use the information solely for the purpose of making an informed decision;
(h) a covenant that the management company will as soon as practicable take all reasonable steps to ensure that the prospectus relating to the trust is withdrawn;
(j) a covenant that the management company will as soon as practicable stop:
(i) making offers for the issue of units in the trust; and
(ii) issuing invitations for application moneys for units in the trust; and
(iii) issuing units in the trust;
(k) a covenant that if the management company receives application moneys in respect of which units in the trust have not been issued, it will return the moneys to the applicant as soon as practicable;
(l) a covenant that if the Commission gives a notice to the management company, exempting the management company from complying with a covenant prescribed in paragraph (c), (d), (h), (j) or (k) on conditions set out in the notice, the management company will comply with the conditions.
[NOTE: Additional covenants that bind the management company are prescribed in regulation 7.12.15.]
For the purposes of paragraph 1069 (1) (n) of the Corporations Law, the following covenant is prescribed to bind the trustee of an unlisted property trust if the trustee is of the opinion that the trust’s average combined liquidity on a day is less than 15 percent of its average assets value on that day, namely, a covenant that the trustee will, as soon as practicable, inform the Commission and the management company in writing of the trustee’s opinion.
For the purposes of paragraph 1069 (1) (n) of the Corporations Law, the following covenants are prescribed to bind the trustee of an unlisted property trust if the trust’s average combined liquidity on a day is less than 15 percent of its average assets value on that day:
(a) if the management company does not give information to the unitholders in accordance with the covenant prescribed in paragraph (6) (c)—a covenant that the trustee will, as soon as practicable after becoming aware that the management company has not notified the unitholders:
(i) notify the unitholders that the trust’s combined liquidity is less than that figure; and
(ii) notify the unitholders that the management company will convene a meeting of unitholders to allow the unitholders to vote on the proposals referred to in paragraph (6) (e); and
(iii) give the unitholders details of the time and place at which the meeting will be held and the proposals; and
(iv) give the unitholders information that the unitholders reasonably require to allow them to cast an informed vote on the proposals; and
(v) give the unitholders details of the voting system that will be used at the meeting;
(b) if the management company does not convene a meeting of unitholders in accordance with the covenant prescribed in paragraph (6) (d)—a covenant that the trustee will:
(i) convene a meeting of the unitholders of the trust, to allow the unitholders to vote on the proposals referred to in paragraph (d), as soon as practicable after the trustee becomes aware that the management company has not convened the meeting; and
(ii) give the unitholders details of the time and place at which the meeting will be held and the proposals that the trustee will put to the meeting;
(c) if the trustee convenes a meeting of unitholders—a covenant that the trustee will, at the meeting, ask the unitholders to consider and vote on the following proposals:
(i) whether the units in the trust should be quoted on a stock market of a securities exchange;
(ii) whether the management company of the trust should be replaced;
(iii) whether the trust should be terminated;
(iv) whether the buy-back notice period should be extended;
(v) if the trust deed of the trust provides for the redemption of units in the trust—whether the redemption period should be extended;
(vi) any other proposal that the Commission directs the trustee to ask the unitholders;
(vii) any other proposal that the trustee considers relevant to the affairs of the trust;
(d) a covenant that the trustee will ensure that:
(i) a unitholder may give a proxy to a person; and
(ii) the unitholders may vote on the proposals put to the meeting under paragraph (c) by using a voting method that allows the unitholders to express a clear sequence of preferences; and
(e) if, before the meeting, a suitable manager asks the trustee or the management company for information that will assist the manager to make an informed decision whether to offer to manage the trust in place of the management company—a covenant that the trustee will give the information to the manager as soon as practicable if:
(i) the trustee is of the opinion that giving the information is in the best interests of the unitholders; and
(ii) the manager agrees in writing to use the information solely for the purpose of making an informed decision;
(f) a covenant that if the trustee receives application moneys in respect of which units in the trust have not been issued, the trustee will return the moneys to the applicant as soon as practicable;
(g) a covenant that if the Commission gives a notice to the trustee, exempting the trustee from complying with the covenant prescribed in paragraph (b) or (f) on conditions set out in the notice, the trustee will comply with the conditions.
[NOTE: Additional covenants that bind the trustee are prescribed in regulation 7.12.15.]
For the purposes of paragraph 1069 (1) (n) of the Corporations Law, the following covenants are prescribed to bind the trustee and the management company of an unlisted property trust whose average combined liquidity on a day is less than 15 percent of the trust’s average assets value on that day:
(a) a covenant that the trustee and the management company will strive (and, if necessary, amend the trust deed without complying with section 1069a of the Corporations Law) to implement:
(i) a proposal that receives more than 50 percent of the number of first preference votes that are eligible to be cast at a meeting convened under the covenant prescribed under paragraph (6) (d) or (8) (b); or
(ii) if no proposal receives more than 50 percent of the number of first preference votes—a proposal that, after preferences are distributed, receives more than 50 percent of the number of votes that are cast at that meeting;
(b) a covenant that the trustee and the management company will as soon as practicable strive (and, if necessary, amend the trust deed without complying with section 1069a of the Corporations Law) to have the units in the trust quoted on a stock market of a securities exchange if, at a meeting of unitholders that is convened in accordance with the covenant prescribed in paragraph (6) (d) or (8) (b):
(i) less than 25 percent of the votes that are eligible to be cast at the meeting are cast; or
(ii) if more than 25 percent of the votes that are eligible to be cast at the meeting are cast:
(a) no proposal receives more than 50 percent of the number of first preference votes that are cast at the meeting; and
(b) after preferences are distributed, no proposal receives more than 50 percent of the number of votes that are cast at the meeting;
(c) if it is not practicable to have the units in the trust quoted on a stock market of a stock exchange in accordance with the covenant prescribed in paragraph (b)—a covenant that the trustee and the management company will terminate the trust as soon as practicable.
[NOTE: Additional covenants that bind the trustee and the management company are prescribed in regulation 7.12.15.]”.
9.1 After regulation 7.12.16, insert:
“7.12.16a. For the purposes of paragraph 1076t (1) (b) of the Corporations Law, the conditions to be satisfied for a special variation proposal to be passed otherwise than at a special variation meeting are:
(a) that the passage of the special variation proposal is necessary to implement a proposal agreed to at a meeting of unitholders convened under the covenant prescribed in paragraph 7.12.15a (6) (d) or (8) (b); or
(b) that the passage of the special variation proposal is necessary to allow the trustee and the management company of an unlisted property trust to have the units in the trust quoted on a stock market of a securities exchange under the covenant prescribed in paragraph 7.12.15a (9) (b).
“7.12.16b. Paragraph 1076t (3) (b) of the Corporations Law does not have effect in relation to a person holding prescribed interests who:
(a) is an associate of a management company in respect of those interests; and
(b) holds units in a Subdivision C trust within the meaning of Division 5a of Part 7.12 of that Law in which all of the units are held by a person or persons mentioned in paragraph (a).”.
10.1 In this regulation:
10.2 The conditions prescribed in regulation 7.3.02a of the Corporations Regulations as amended by these Regulations, do not apply until 1 January 1993:
(a) to the management company of an existing property trust; and
(b) in relation to existing property trusts that are managed by the management company.
10.3 The covenants prescribed in paragraphs 7.12.15 (5) (q) and (r) of the Corporations Regulations, as amended by these Regulations, do not apply until 1 January 1994:
(a) to the trustee of an existing property trust; and
(b) in relation to existing property trusts of which the trustee is the trustee.
10.4 The covenants prescribed in regulation 7.12.15a of the Corporations Regulations, as amended by these Regulations, do not apply until 1 January 1994:
(a) to a trustee, or the management company, of an existing property trust; and
(b) in relation to existing property trusts:
(i) of which the trustee is the trustee; and
(ii) that are managed by the management company.
1. Notified in the
2. Statutory Rules 1990 No. 455 as amended by 1991 Nos. 218, 219, 281, 341, 453, 478 and 479; 1992 No. 230.
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