Australian National Railways (A.N.R. Stock) Amendment Regulations 1998 (No. 1) 1998 No. 352
EXPLANATORY STATEMENT
Statutory Rules 1998 No. 352
Issued by the Authority of the Minister for Transport and Regional Services
Subject -Australian National Railways (A.N.R. Stock) Amendment Regulations 1998 (No. 1 )
These Regulations are made under Section 80 of the Australian National Railways Commission Act 1983 (the Principal Act) which provides the Governor-General with the authority to make regulations not inconsistent with this Act. The Australian National Railways Commission Sale Act 1997 (the Sale Act) was enacted on 30 June 1997 to amend the Principal Act and enable the business units of the Australian National Railways Commission ('AN') to be sold and remaining track assets to be vested in the Australian Rail Track Corporation (a Commonwealth owned Corporations Law company). While the sale process has been completed AN still exists as a legal entity and will continue to do so until all residual issues are finalised, which is expected by mid 1999. At that time the Principal Act is to be repealed.
One residual issue is the status of inscribed stock issued by AN pursuant to the Australian National Railways (A.N.R. Stock) Regulations 1980 (Stock Regulations). The Stock Regulations authorised AN to issue stock in order to raise money under the Australian National Railways Act 1917 (which was the predecessor to the Principal Act). The inscribed stock currently on issue has a face value of approximately $77,300,000 and a maturity date of 15 June 2000. The Commonwealth is the guarantor of the inscribed stock.
The Stock Regulations are currently a 'residual instrument' as defined in Part 2 of Schedule 3 of the Sales Act which means they will continue to have effect on and after the day the Principal Act is repealed as if a reference in the regulations to the Commission were a reference to the Commonwealth (item 3(3) of Schedule 3 of the Sales Act). However, for reasons of commercial and financial certainty the rights and obligations of AN in respect of its Commonwealth guaranteed liabilities (including the inscribed stock) need to be transferred to the Commonwealth before the repeal date of the Principal Act. Accordingly, it is expected that the Minister for Finance and Administration will, pursuant to section 67AH(1) of the Principal Act, shortly make a declaration transferring the Commonwealth guaranteed liabilities of AN to the Commonwealth on a day specified by the Minister.
Therefore the Stock Regulations need to be amended to reflect the fact that AN is no longer an operational business and that the Commonwealth is assuming responsibility for the inscribed stock from the date of the ministerial declaration. The amendments will ensure consistency and give the stockholders commercial certainty.
The Regulations will be cited as the Australian National Railways (A.N.R. Stock) Amendment Regulations 1998 and Schedule 1 of the Regulations will amend the Australian National Railways (A.N.R. Stock) Regulations.
The amending Regulations:
* facilitate the wind up of AN by regularising the position of stockholders before the repeal of the Principal Act;
* delete the regulatory power for AN to issue stock;
* provide that the registries, which were established to record each stock owner's name, address, designation and amount of stock owned, will continue to be kept as an ongoing record until the last of the inscribed stock has matured;
* outline the transitional arrangements that will apply before the Principal Act is repealed;
* ensure that the transitional arrangements are effective by providing that approvals made under the Regulations in effect immediately before the specified day (the day the Minister for Finance and Administration declares that specified Commonwealth guaranteed liabilities of AN become liabilities of the Commonwealth under the Sale Act) continue after the specified day; and
* ensure that there will be no material effect to stockholders caused by the transferral of AN's liability to the Commonwealth.
Details of the amending Regulations appear in the Attachment.
The amending Regulations commenced on gazettal.
The amending Regulations will be automatically repealed on 16 June 2001. This date is a year and a day after the date the inscribed stock matures and it is considered that all dealings with the stock will be concluded by then.
ATTACHMENT
PRELIMINARY
Clause 1 provides that the amending Regulations be cited as the Australian National Railways (ANR Stock) Amendment Regulations 1998.
Clause 2 provides that the amending Regulations commence on gazettal.
Clause 3 specifies that the amending Regulations amend the Australian National Railways (A.N.R. Stock) Regulations.
Clause 4 is a sunset provision that will repeal the Regulations on 16 June 2001. Without this provision an Act of Parliament would be needed to repeal the Regulations after they have served their purpose since the Principal Act is expected to be repealed during 1999. While the last of the stock holdings mature on 15 June 2000 and it is not expected that the Regulations will be required beyond that date, repeal on 16 June 2001 is considered sufficient time to deal with any unforseen contingencies.
SCHEDULE 1
Schedule 1 sets out the amendments to the Australian National Railways (A.N.R.. Stock) Regulations.
Item 1 substitutes the heading 'Name of Regulations' to replace the existing heading 'Citation' and changes the name of the Regulations to Australian National Railways (ANR Stock) Regulations 1980.
Item 2 substitutes the heading 'Definitions' instead of the heading 'Interpretation'.
Item 3 is a new regulation which amends the definition of "stock" to 'stock issued under these Regulations.' This amendment is required because the regulations presently define "stock" by reference to regulation 3 which is in Part II of the Regulations (to be omitted).
Item 4 omits Part II of the Regulations. Part II enables AN to issue stock in order to raise money and is now redundant.
Item 5 changes the heading of Regulation 6 from 'Establishment of registries', to 'Setting up and keeping registries', to reflect the fact that the existing registries which record each stock owner's name, address, designation and amount of stock owned need to continue, but as no further stock will be issued no further registeries will be established.
Item 6 omits 'the establishment of' from Regulation 6 and substitutes 'setting up and keeping' for the reason described under item 5.
Item 7 inserts a new part, Part 6, that deals with 'Transitional Arrangements'. Part 6 sets out the substantive amendments to the Stock Regulations.
New sub-regulation 25(1) relates to section 67AH(1) of the Principal Act which authorises the Minister for Finance and Administration to make a declaration transferring the Commonwealth guaranteed liabilities of AN to the Commonwealth on a day specified by the Minister. Paragraph (a) of sub-regulation 25(1) provides that if such a ministerial declaration is made then references to 'the Commission' in Parts I, III, IV and V of the Regulations take effect as references to 'the Commonwealth'.
Paragraph (a) of sub-regulation 25(1) provides that if such a ministerial declaration is made then references to 'a prospectus inviting applications to purchase stock' in Parts IV and V of the Regulations, takes effect as including a reference to the document called Information Memorandum issued for the issue of the stock and issued most recently before the commencement of this Part. This provision is intended to regularise the fact that AN has most recently issued documents called 'Information Memorandum', rather than prospectuses.
New sub-regulation 25(2) is a transitional provision the purpose of which is to ensure that an approval given under the Regulations before the specified day in a ministerial declaration under section 67AH(1) of the Principal Act continues to have effect on and after the specified day as if the approval had been given by the Commonwealth.
New sub-regulations 25(3) and 25(4) relate to marking of transfers and consents relating to stock respectively. The purpose of these subitems is to ensure that there is no material effect to stockholders caused by the transferral of AN's liability to the Commonwealth.
New sub-regulation 25(5) defines 'specified day' for the purpose of the Regulations to mean the day that liability for the stock issued by AN, which the Commonwealth is currently guarantor for, is transferred to the Commonwealth. In effect the specified day, as provided for under subregulation 25(1), will be the day the Minister for Finance and Administration declares under subsection 67AH(1) of the Principal Act that the Commonwealth has assumed AN's stock liabilities.
New sub-regulation 25(6) provides that sub-regulation 25(1)(a) ceases to have effect immediately before the commencement of item 3 of Schedule 3 of the Sale Act. This provision is necessary to ensure that the amending Regulations remain effective after the repeal day of the Principal Act. Part 2 of Schedule 3 of the Sales Act relevantly defines a 'residual instrument' as an instrument 'that [is] in force immediately before the Repeal Day..........in which a reference is made to the Commission'. The Stock Regulations therefore currently constitute a 'residual instrument'. By virtue of item 3(3) of Schedule 3 of the Sale Act 'residual instruments' continue to have effect on and after the day the Principal Act is repealed as if a reference in the regulations to the Commission were a reference to the Commonwealth. New sub-regulation 25(6) is a drafting mechanism designed to ensure that the Stock Regulations will remain a 'residual instrument' by providing that new sub-regulation 25(1)(a) (which provides that if a ministerial declaration is made under section 67AH(1) of the Principal Act transferring the Commonwealth guaranteed liabilities of AN to the Commonwealth on a specified day then references to 'the Commission' in Parts I, III, IV and V of the Regulations take effect as references to 'the Commonwealth') ceases to have effect immediately before the commencement of item 3 of Schedule 3 of the Sale Act. Accordingly, the effect of new sub-regulation 25(6) is that the references in Parts I, III, IV and V of the Regulations to 'the Commonwealth' resulting from new sub-regulation 25(1) will revert to 'the Commission' immediately before the repeal date of the Principal Act thereby ensuring that the Stock Regulations remain a 'residual instrument' and then item 3 of Schedule 3 of the Sale Act takes effect so that the reference in the regulations to 'the Commission' becomes a reference to 'the Commonwealth'.