ASIC Corporations (Amendment) Instrument 2018/483

Overview

The ASIC Corporations (Amendment) Instrument 2018/483 was enacted to amend the definition of foreign compromise or arrangement as initially established in the ASIC Corporations (Compromises and Arrangements) Instrument 2015/358. This amendment was introduced to ensure that a compromise or arrangement must also be regulated by a law of an eligible foreign country, aligning with the intent of the original instrument to provide relief for such compromises or arrangements. The Australian Securities and Investments Commission (ASIC) is the enacting body responsible for these amendments under sections 741 and 1020F of the Corporations Act 2001. The policy objective behind this instrument is to correct relatively minor errors in the existing regulations, thereby ensuring the law operates as intended without the need for public consultation. The instrument is compatible with human rights as it does not engage any of the applicable rights or freedoms outlined in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

ASIC Corporations (Amendment) Instrument 2018/483 applies to the definition of "foreign compromise or arrangement" as outlined in ASIC Corporations (Compromises and Arrangements) Instrument 2015/358, specifically under the Corporations Act 2001. The amendment ensures that a compromise or arrangement between a foreign company and its members or any class of them must be regulated by a law of an eligible foreign country to be recognised under the Act. This correction is intended to align with the original intention of Instrument 2015/358, which was to provide relief for compromises or arrangements governed by specified foreign laws. The instrument is applicable nationally, extending its reach across the Commonwealth of Australia, and does not introduce any new exclusions, exemptions, or thresholds beyond what was initially set out in Instrument 2015/358. No public consultation was conducted as the changes are minor corrections, and the instrument does not engage with any human rights issues, ensuring compatibility with the human rights recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2018/483 (Instrument 2018/483) serves to amend the definition of "foreign compromise or arrangement" found in ASIC Corporations (Compromises and Arrangements) Instrument 2015/358 (Instrument 2015/358). According to section 4 of the Instrument 2018/483, a "foreign compromise or arrangement" is now defined as a compromise or arrangement between a foreign company and its members or any class of them, which is also regulated by a law of an eligible foreign country. This change ensures that only those compromises or arrangements governed by the laws of an eligible foreign country are eligible for the relief provisions set forth in the Act. Additionally, Instrument 2018/483 corrects a typographical error in subsection 5(3) of Instrument 2015/358, ensuring the proper application of the legislation. The obligations imposed by Instrument 2018/483 on the entities it governs primarily revolve around the correct interpretation and application of the amended definition of "foreign compromise or arrangement". Companies and their members who enter into compromises or arrangements must ensure that these arrangements are not only between the company and its members but are also regulated by the laws of an eligible foreign country. This requirement ensures that the relief provisions are appropriately targeted and that only those entities governed by the intended laws benefit from the relief. Additionally, the correction of the typographical error in subsection 5(3) ensures that the instrument functions as intended, without any confusion or misinterpretation arising from the typo. Instrument 2018/483 does not introduce new offences or penalties. However, any failure to comply with the corrected definition of "foreign compromise or arrangement" or the corrected typographical error could potentially lead to legal challenges or disputes over the applicability of the relief provisions. Given that the instrument corrects minor errors and clarifies the scope of the definition, non-compliance could result in the affected arrangements not being eligible for the intended relief. While specific penalties are not mentioned in the Instrument, any legal disputes or challenges arising from non-compliance would be subject to the general provisions of the Corporations Act 2001, which could include fines or other civil remedies as deemed appropriate by the court.