Commonwealth Authorities and Companies Act 1997 - Approval of Manners of Investment 2008/01

Overview

The Commonwealth Authorities and Companies Act 1997, enacted by the Australian Parliament, was introduced to regulate the investments of Commonwealth authorities, ensuring that they are conducted in a manner consistent with the objectives of the Act. One significant aspect of this legislation is the provision under paragraph 18(3)(d) that allows Commonwealth authorities to seek approval from the Minister for Finance and Deregulation to invest in manners of investment outside the conservative scope defined in paragraphs 18(3)(a) to (c) of the Act. This provision facilitates flexibility in investment strategies while maintaining a safeguard to protect the interests of these authorities. The explanatory statement for the 2008 Investment Approval, which is subject to parliamentary disallowance and sunsetting, revokes previous investment approvals for ten authorities and issues new approvals to nine others, including the Australian Broadcasting Corporation and the Export Finance and Insurance Corporation, to accommodate their specific business needs. Consultation with the Australian Government Solicitor and all affected authorities was conducted, ensuring that the new approvals align with the authorities’ requirements and the overall legislative intent.

Scope and Application

The Commonwealth Authorities and Companies Act 1997 (CAC Act) governs the permissible investment strategies for Commonwealth authorities, with the Commonwealth Authorities and Companies Act 1997 – Approval of Manners of Investment 2008/01 (Investment Approval) under paragraph 18(3)(d) providing specific approval for certain manners of investment. This Investment Approval applies to nine designated Commonwealth authorities, including entities such as the Australian Broadcasting Corporation, the Export Finance and Insurance Corporation, and the Commonwealth Scientific and Industrial Research Organisation, among others. The approval allows these authorities to invest in dematerialised securities, which are securities that exist solely in electronic form, a category of investment not covered under the conservative investment parameters outlined in paragraphs 18(3)(a) to (c) of the CAC Act. The directors of these Commonwealth authorities are tasked with ensuring compliance with section 18 of the Act, including adherence to the conditions specified in the new investment approvals issued under this Instrument. The Investment Approval revokes previous approvals for ten authorities, leaving nine with new, tailored approvals. This legislative measure applies to the Commonwealth jurisdiction and is subject to parliamentary disallowance and sunsetting provisions as outlined in the Legislative Instruments Act 2003.

Key Provisions

The Commonwealth Authorities and Companies Act 1997 (CAC Act) governs how Commonwealth authorities can invest their surplus money. Under section 18(3)(d) of the CAC Act, authorities can seek approval to invest in ways outside the normal permitted investments. The Investment Approval discussed here, under paragraph 18(3)(d), specifically concerns the investment in dematerialised securities (section 18(3)(b) and (c)). The approval covers investments by nine Commonwealth authorities, including the Australian Broadcasting Corporation and the Commonwealth Scientific and Industrial Research Organisation, among others. This approval allows these authorities to invest in securities that are created, registered, and traded electronically, as opposed to traditional paper securities. The Investment Approval imposes certain obligations on the relevant authorities. The directors of these Commonwealth authorities are responsible for ensuring compliance with the terms of the approval. They must ensure that their investments align with the conditions set out in the specific schedules attached to the approval, which detail the approved manners of investment for each authority. Additionally, the authorities must adhere to the general guidelines provided in the CAC Act and any other legislative requirements pertinent to their operations. Failure to comply with the provisions of the Investment Approval may result in legal consequences. The authorities could face civil penalties if they do not adhere to the conditions set out in their individual investment approvals. While the Act does not explicitly state the maximum penalties for breaches, similar provisions within the CAC Act suggest that penalties could include fines or other corrective measures. Furthermore, ongoing non-compliance could lead to revocation of the approval, impacting the authority's ability to invest in certain ways in the future. The Investment Approval is also subject to parliamentary disallowance and sunsetting. Parliament has the power to disallow the approval under section 42 of the Legislative Instruments Act 2003. This means that if Parliament wishes to challenge the approval, it can do so within a specified period. Additionally, the approval is subject to sunsetting provisions outlined in Part 6 of the Legislative Instruments Act 2003, which means it may automatically cease to have effect unless renewed by Parliament. These mechanisms ensure that the approval remains subject to ongoing scrutiny and review by the legislative body.