ASIC Corporations (Uncontactable Members) Instrument 2016/187
About this compilation
Compilation No. 1
This is a compilation of ASIC Corporations (Uncontactable Members) Instrument 2016/187 as in force on 18 September 2018. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
Contents
Part 1—Preliminary
1 Name of legislative instrument
3 Authority
4 Definitions
Part 2—Order
5 Relief from sending out hard copies of financial reports to uncontactable members
6 Condition
Endnotes
Endnote 1—Instrument history
Endnote 2—Amendment history
Part 1—Preliminary
1 Name of legislative instrument
This is the ASIC Corporations (Uncontactable Members) Instrument 2016/187.
3 Authority
This instrument is made under subsection 341(1) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
relevant entity means a company, registered scheme, notified foreign passport fund or disclosing entity.
Part 2—Order
5 Relief from sending out hard copies of financial reports to uncontactable members
A relevant entity does not have to comply with subsection 314(1) or 314A(1) (as applicable) of the Act by the time specified in section 315 of the Act in relation to a member of the entity to whom all of the following apply:
(a) the member:
(i) in relation to a company, registered scheme or disclosing entity—has made the election referred to in paragraph 314(1AB)(a) and has in accordance with paragraph 314(1AB)(c) elected to receive a copy of the reports as a hard copy;
(ii) in relation to a notified foreign passport fund—has made the election referred to in paragraph 314A(3)(a) and has in accordance with paragraph 314A(3)(c) elected to receive a copy of the reports as a hard copy;
(b) the entity has reasonable grounds to believe that the member does not reside at the address shown in the register of members;
(c) the entity has been unable to find out the current address for the member after the exercise of reasonable diligence.
6 Condition
A relevant entity that relies on the relief in section 5 must send to the address shown in the register of members a notice that states:
(a) in relation to a company, registered scheme or disclosing entity—the dispatch of concise reports or financial reports, directors’ reports and auditor’s reports to that person has been suspended but will be resumed on receipt of instructions (including a current address to do so);
(b) in relation to a notified foreign passport fund—the dispatch of financial reports and auditor’s reports to that person has been suspended but will be resumed on receipt of instructions (including a current address to do so).
The notice must be sent at least once a year for 6 years after the date on which both paragraphs 5(b) and (c) first applied to the member.
Endnotes
Endnote 1—Instrument history
Instrument number | Date of FRL registration | Date of commencement | Application, saving or transitional provisions |
2016/187 | 25/8/2016 (see F2016L01322 | 26/8/2016 | |
2018/697 | 13/9/2018 (see F2018L01281) | 18/9/2018 | - |
Endnote 2—Amendment history
ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Section 2 | rep. s48D LA |
Section 4 | am. 2018/697 |
Section 5 | am. 2018/697 |
Section 6 | rs. 2018/697 |
Overview
The ASIC Corporations (Uncontactable Members) Instrument 2016/187 was enacted in 2016 and is a legislative instrument designed to address the issue of uncontactable members within companies, registered schemes, notifying foreign passport funds, and disclosing entities. This instrument is made under the authority of the Corporations Act 2001, specifically subsection 341(1). The primary aim of this instrument is to provide relief to relevant entities from the obligation of sending hard copies of financial reports to members who are uncontactable, thereby reducing administrative burdens and costs while ensuring that companies can still fulfil their disclosure requirements. The relief applies when a member has elected to receive reports as hard copies but the entity has reasonable grounds to believe the member does not reside at the registered address and has been unable to ascertain the current address despite reasonable efforts. The policy objective is to strike a balance between maintaining corporate transparency and accommodating the challenges posed by uncontactable members.
Scope and Application
The ASIC Corporations (Uncontactable Members) Instrument 2016/187 applies to specific entities within the Australian business landscape, namely companies, registered schemes, notified foreign passport funds, and disclosing entities. The instrument provides relief to these entities by exempting them from the obligation to send hard copies of financial reports to members who are considered uncontactable. This relief applies under certain conditions, primarily where the entity has reasonable grounds to believe the member does not reside at the address provided, and despite exercising reasonable diligence, the entity has been unable to ascertain the member's current address. The legislative instrument extends its application to the Commonwealth level, as it is made under the authority of the Corporations Act 2001. Additionally, the relief can be extended through subordinate instruments, which may modify the scope or conditions of the exemption. However, entities must still notify the member, at least once a year for six years, that the dispatch of reports has been suspended and will resume upon receipt of updated information from the member.
Key Provisions
The ASIC Corporations (Uncontactable Members) Instrument 2016/187 provides relief to relevant entities such as companies, registered schemes, notifying foreign passport funds, and disclosing entities from sending out hard copies of financial reports to members who are uncontactable (sections 5 and 6). Specifically, section 5 states that a relevant entity is not required to comply with the Act’s requirement to send financial reports to a member if the entity reasonably believes the member does not reside at the address listed in the register and has been unable to determine the member’s current address despite exercising reasonable diligence.
Under the Instrument, a relevant entity must send a notice to the member’s last known address at least once a year for six years stating that the dispatch of the reports has been suspended and will resume upon receipt of instructions, including a current address (section 6). This notice requirement is intended to ensure that members are still informed of their right to receive financial reports, while allowing entities to avoid unnecessary costs and efforts in attempting to deliver reports to uncontactable members.
The Instrument imposes several obligations on relevant entities. Firstly, entities must determine whether a member is uncontactable by exercising reasonable diligence to ascertain the member’s current address (section 5(b) and (c)). Secondly, entities must send the required notice to the member’s last known address for six years (section 6). These obligations ensure that entities make a reasonable effort to keep members informed while also avoiding unnecessary costs.
Failure to comply with the requirements of the Instrument may have legal consequences. While the Instrument does not explicitly outline specific offences or penalties, non-compliance with the Corporations Act 2001, from which this Instrument derives its authority, may result in penalties. Under the Act, relevant entities could face civil penalty provisions, including fines of up to $210,000 for companies and $42,000 for individuals, as well as criminal penalties, including imprisonment for up to five years for serious or repeated breaches. These potential penalties underscore the importance of adhering to the obligations set out in the Instrument.