EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO. 34
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL
COMPANIES (ACQUISITION OF SHARES) REGULATIONS (AMENDMENT)
Section 62 of the Companies (Acquisition of Shares) Act 1980 (“CASA”) provides in sub-section (1) that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Sub-section 62(2) of CASA provides that the power of the Governor-General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council for Companies and Securities (“the Council”).
2. The Council was established under an agreement between the Commonwealth and the States, executed on 22 December 1978, (“the agreement”) that provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration in relation to company law and the regulation of the securities industry in the six States and the Australian Capital Territory.
3. Under sub-clause 45(1) of the agreement, the Council may consider a proposal for the amendment of regulations made under the Commonwealth Acts enacted for the purpose of the co-operative companies and securities scheme. Should the Council approve any draft amending regulations which give effect to such a proposal, the Commonwealth is then required, under sub-clause 45(2) of the agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
4. The accompanying regulations are consistent with a resolution passed by the majority of members of the Council.
5. The purpose of the accompanying regulations is to amend the Companies (Acquisition of Shares) Regulations (“CASR”):
(a) as a consequence of amendments proposed to be made to CASA by the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985 (“the 1985 Amending Act”);
(b) as a consequence of the making of the Public Trustee Ordinance 1985 (A.C.T.) and the Public Trustee (Miscellaneous Amendments) Ordinance 1985 (A.C.T.); and
(c) to provide for an investigating accountant’s report and a director’s report to be required where certain cash offers are made under a take-over scheme.
6. The accompanying regulations are expressed to be made in pursuance of section 4 of the Acts Interpretation Act 1901. That section provides that where an Act that does not come into operation immediately upon its enactment amends another Act in such a manner that the other Act, as amended, will confer power to make regulations then, unless the contrary intention appears, that power may be exercised before the amending Act comes into operation.
7. Any regulations made in pursuance of section 4 of the Acts Interpretation Act 1901 take effect on the day on which the amending Act comes into operation or on the day on which the regulations would have taken effect if the amending Act had been in operation when the regulations were made, whichever is the later.
8. Various provisions of the 1985 Amending Act have been proclaimed to come into operation on 31 March 1986.
9. Details of the accompanying regulations are set out as follows.
Reg. 1: Securities exchanges and stock exchanges declared for the purposes of the Act
10. The 1985 Amending Act introduces the term “securities exchange” to replace the term “stock exchange” in co-operative companies and securities scheme legislation. “Securities exchange” will include a stock exchange or a secondary securities market approved by the Council.
11. Paragraph 4(f) of the 1985 Amending Act proposes to insert a definition of “securities exchange” to mean a body corporate declared by the regulations to be a securities exchange.
12. The effect of regulation 1 is that the stock exchanges set out in CASR regulation 4 are declared to be securities exchanges.
Reg. 2: Prescribed manner of dispatch for the purposes of paragraphs 8A(1)(b) and (c) of the Act
13. Several provisions in CASA require documents to be dispatched in a manner approved by the National Companies and Securities Commission (NCSC). It is proposed that these provisions will be amended to require instead that such documents be dispatched in “an approved manner” (1985 Amending Act paragraph 11(a), section 12, paragraphs 15(b) and (d) and section 21).
14. Paragraphs 8A(1)(b) and (c) of the 1985 Amending Act provide that a person shall be taken to dispatch a document in an approved manner if the document is dispatched in a manner approved by the NCSC or in the prescribed manner.
15. Regulation 2 introduces a new regulation which provides for two prescribed manners of dispatch:
(a) dispatch by pre-paid ordinary mail to shareholders within Australia; and
(b) dispatch by pre-paid airmail to shareholders outside Australia.
Reg. 3: Prescribed offices under paragraph 9(8)(b) of the Act
16. Section 8 of the Public Trustee Ordinance 1985 establishes a corporation sole by the name of the Public Trustee for the Australian Capital Territory. “Public Trustee” is defined to mean the person holding office as the Public Trustee for the Australian Capital Territory and, in relation to the exercise of the Public Trustee’s powers and the performance of the Public Trustee’s functions, the corporation referred to in section 8. The Public Trustee may act, inter alia, as a trustee, receiver, manager or as an executor or administrator of an estate and has wide powers to deal with property.
17. The Public Trustee (Miscellaneous Amendments) Ordinance 1985 amends the Administration and Probate Ordinance 1929 by replacing references to the Curator of Estates of Deceased Persons with references to the Public Trustee for the Australian Capital Territory. Any property previously vested in the Curator now vests in the Public Trustee.
18. Regulation 3 replaces the reference in CASR regulation 5(1)(zd) to the office of Curator of Deceased Persons under the Administration and Probate Ordinance 1929 with a reference to the office of the Public Trustee under the Administration and Probate Ordinance 1929 and the Public Trustee Ordinance 1985.
19. The effect of regulation 3 is that a relevant interest in a share held by the Public Trustee for the Australian Capital Territory in his official capacity will be disregarded for the purposes of the 20% shareholding threshold in CASA.
Reg. 4: Prescribed matters and requests for the purposes of paragraph 16(2A)(a) of the Act
20. The effect of regulation 4 is to amend CASR regulation 5A to require a Part A statement that an offeror under a take-over scheme is required to serve on a target company to contain an Investigating Accountant’s Report and a director’s report where:
(a) the consideration for the acquisition of shares is cash only; and
(b) each take-over offer is subject to a condition requiring the making of payment by the offeree to the offeror.
21. Similar reports are presently required under CASR regulation 5A where the consideration for the acquisition of shares is or includes shares or debentures.