EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO. 149
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL COMPANIES (ACQUISITION OF SHARES) REGULATIONS (AMENDMENT)
1. Section 62 of the Companies (Acquisition of Shares) Act 1980 (“the Act”) 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 the Act provides that the power of the Governor-General to make regulations shall be exercised 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 (“the agreement”), executed on 22 December 1978, that provides the framework 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 regulation which gives 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 identical in form and substance to draft regulations approved by the Council.
5. The purpose of the accompanying regulations is to amend regulation 5 of the Companies (Acquisition of Shares) Regulations (“C(AOS)R”) to -
(a) make amendments consequent upon the Northern Territory becoming a party to the Co-Operative Companies and Securities Scheme. The Northern Territory Application of Laws legislation which had been approved by the Council, was approved by the Northern Territory Legislative Assembly on 18 June 1986 with a commencement date of 1 July 1986; and
(b) to omit sub-regulation (2) which is no longer necessary in view of the application of Section 40, in conjunction with sub-section 33(2), of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980.
6. C(AOS)R regulation 5 is amended by adding new paragraphs to prescribe certain offices for the purposes of paragraph 9(8)(b) of the Act.
New paragraph (zg) declares the office of Treasurer of the Northern Territory a prescribed office for the purposes of paragraph 9(8)(b) of the Act.
New paragraph (zh) declares the office of Public Trustee for the Northern Territory, established under the Public Trustee Act 1979 of the Northern Territory, a prescribed office for the purposes of paragraph 9(8)(b) of the Act.
New paragraph (zi) declares the office of Master of the Supreme Court of the Northern Territory a prescribed office for the purposes of paragraph 9(8)(b) of the Act.
New paragraph (zj) declares the office of Commissioner for Corporate Affairs, established under section 4 of the Companies (Administration) Act 1986 of the Northern Territory,
a prescribed office for the purposes of paragraph 9(8)(b) of the Act.
7. Paragraph 9(8)(b) of the Act provides that a relevant interest in a share shall be disregarded if the relevant interest is that of a person who has it by reason of his holding a prescribed office. C(AOS)R regulation 5 lists those offices declared to be a prescribed office for the purposes of paragraph 9(8)(b).
Overview
The Companies (Acquisition of Shares) Regulations (Amendment) 1986 were enacted to amend the Companies (Acquisition of Shares) Regulations in light of the Northern Territory becoming a party to the Co-Operative Companies and Securities Scheme. This amendment ensures the regulatory framework remains consistent and comprehensive across jurisdictions, reflecting the Northern Territory's participation in the cooperative scheme. The regulations were issued by the authority of the Attorney-General under Section 62 of the Companies (Acquisition of Shares) Act 1980, with the Ministerial Council for Companies and Securities providing the necessary advice in accordance with the Council's resolutions. The policy objective of these amendments is to maintain the integrity and uniformity of the legal framework governing the acquisition of shares across all participating jurisdictions, ensuring that all relevant prescribed offices are appropriately recognised and integrated into the regulatory system.
Scope and Application
The Companies (Acquisition of Shares) Regulations (Amendment) Statutory Rules 1986 No. 149, issued by the authority of the Attorney-General, amends the Companies (Acquisition of Shares) Regulations 1980 to align with the inclusion of the Northern Territory in the Co-operative Companies and Securities Scheme. This amendment follows the Northern Territory's application of relevant laws, which was approved by the Council and subsequently by the Northern Territory Legislative Assembly on 18 June 1986, with an effective date of 1 July 1986. The amendment serves to update Regulation 5 of the Companies (Acquisition of Shares) Regulations by adding new paragraphs that declare certain Northern Territory offices as prescribed offices under section 9(8)(b) of the Companies (Acquisition of Shares) Act 1980. These include the offices of the Treasurer of the Northern Territory, the Public Trustee for the Northern Territory, the Master of the Supreme Court of the Northern Territory, and the Commissioner for Corporate Affairs. This amendment ensures that interests in shares held by these offices are disregarded under the Act, maintaining consistency across jurisdictions within the co-operative scheme.
Key Provisions
The Companies (Acquisition of Shares) Regulations (Amendment) Statutory Rules 1986 No. 149 are a set of amendments to the Companies (Acquisition of Shares) Regulations, primarily focusing on adapting these regulations to the Northern Territory's participation in the Co-Operative Companies and Securities Scheme. Regulation 5 of the amended regulations introduces new prescribed offices relevant to the Act, specifically for the Northern Territory (sections 5(zg), 5(zh), 5(zi), and 5(zj)). These prescribed offices include the office of the Treasurer of the Northern Territory, the Public Trustee for the Northern Territory, the Master of the Supreme Court of the Northern Territory, and the Commissioner for Corporate Affairs, all of which are now recognised for the purposes of disregarding a relevant interest in a share held by a person due to their holding a prescribed office (section 9(8)(b) of the Act).
These regulations impose specific obligations on entities and individuals who hold prescribed offices in the Northern Territory. By recognising these offices as prescribed, the Act effectively disregards any relevant interests in shares held by individuals in these positions, aligning with the broader framework of the Co-Operative Companies and Securities Scheme (section 9(8)(b)). This ensures that the interests of these officeholders do not affect the acquisition of shares, thereby maintaining a clear and consistent regulatory environment across the participating jurisdictions.
Breaches of the Companies (Acquisition of Shares) Regulations, including the amended regulations, may result in civil or criminal consequences, depending on the nature and severity of the breach. For example, under section 1311E of the Corporations Act 2001, individuals and entities may face fines, imprisonment, or both if they contravene the Act or its regulations. The maximum penalties can include substantial fines, such as up to $210,000 for individual offenders and $1,050,000 for corporate offenders, alongside or in addition to imprisonment terms of up to five years for serious breaches. These stringent measures underscore the importance of compliance with the regulations and the potential repercussions for non-compliance.
In summary, the Companies (Acquisition of Shares) Regulations (Amendment) Statutory Rules 1986 No. 149 serve to update and adapt the regulatory framework to include the Northern Territory within the Co-Operative Companies and Securities Scheme. By amending regulation 5 to recognise specific prescribed offices, these regulations aim to ensure consistent application of the Act across all participating jurisdictions. Compliance with these regulations is essential to avoid the serious civil and criminal penalties outlined in the Corporations Act 2001, reflecting the importance of adhering to the legislative framework governing the acquisition of shares.