EXPLANATORY STATEMENT
STATUTORY RULES 1986 No. 33
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL COMPANIES REGULATIONS (AMENDMENT)
1. Section 577 of the Companies Act 1981 (“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 577(2) of the Act 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 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. (a) The purpose of accompanying regulation 1 is to declare the Public Trustee for the Australian Capital Territory, a corporation sole established by the Public Trustee Ordinance 1985 of the Australian Capital Territory, to be an “authorized trustee corporation” for the purposes of the Act.
(b) The purpose of the remaining accompanying regulations is to make amendments to the Companies Regulations (“CR”) consequent upon amendments made to the Act by the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985 (“the 1985 Act”).
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 Act have been proclaimed to come into operation on 31 March 1986.
9. Details of the accompanying regulations are set out as follows:
Regulation 1: Definition of “authorized trustee corporation”
10. The purpose of the regulation is to amend CR regulation 14 by adding a new paragraph (xa) declaring ‘Public Trustee for the Australian Capital Territory’ a corporation sole, established by the Public Trustee Ordinance 1985 of the Australian Capital Territory, to be an “authorized trustee corporation”.
11. Sub-section 5(1) of the Act provides that, unless the contrary intention appears, “authorized trustee corporation” means a body corporate that is declared by CR regulation 14 to be an “authorized trustee corporation”. Section 192 of the Act provides that in respect of a transfer of marketable securities by an “authorized trustee corporation” to the beneficial owner of the marketable securities, a simplified instrument of transfer may be used. CR regulation 14 lists those bodies corporate declared to be an “authorized trustee corporation” for the purposes of the Act.
Regulation 2: Stock exchanges declared for certain purposes
12. The 1985 Act introduced the concept of “securities exchanges” to the Companies and Securities legislation. Section 30 of the 1985 Act added a new definition of “securities exchange” to sub-section 5(1) of the Act with the effect that that expression means, where the expression appears in a provision for the purposes of which a regulation is in force defining that expression, a securities exchange as defined by that regulation.
13. In addition the expression will replace the existing references to “stock exchange” and “prescribed stock exchange” in those provisions listed in Schedule 2 of the 1985 Act.
14. CR regulation 15 is amended by the accompanying regulations by substituting the term “securities exchange” for “stock exchange” which required CR sub-regulation 15(1) to be amended by omitting “‘stock exchange’ in paragraphs 100(4)(a) and (b) and 552(4)(a), of the Act, and Schedule 9” and substituting “‘securities exchange’ in sub-section 5(1) of the Act, ‘securities exchange’ in paragraphs 100(4)(a) and (b), in the definition of ‘broker’ in sub-section 189(1), in paragraph (b) of the definition of ‘prescribed corporation’ in sub-section 189(1), in paragraph 195(1)(c), in sub-section 198(2) and in paragraph 552(4)(a), of the Act, in Forms 3 and 7 of Schedule 4 to the Act and in Schedule 9 to these Regulations”.
15. CR sub-regulation 15(2) has been amended to substitute “securities exchange” for “stock exchange” (wherever occurring) and to add a reference to new provision sub-section 141(1) introduced by the 1985 Act.
16. The named stock exchanges set out in each sub-regulation of CR regulation 15 otherwise remain and are the securities exchanges declared in respect of those provisions of the Act set out in the respective sub-regulations.
Regulation 3: Prescribed offices under sub-paragraph 8(8)(a)(ii) of the Act
17. CR regulation 17 prescribes offices for the purposes of sub-paragraph 8(8)(a)(ii) of the Act which 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.
18. The Council decided that it is appropriate that the office of the Public Trustee under the Administration and Probate Ordinance 1929 and the Public Trustee Ordinance 1985 of the Australian Capital Territory be a prescribed office under CR regulation 17.
Regulation 4: Prescribed information for the purposes of paragraph 315(2A)(b) and sub-paragraph 316(1)(a)(ii) of the Act
19. Section 92 of the 1985 Act introduced a new sub-section 315(2A) setting out the information which will be required to be contained in a draft explanatory statement accompanying a proposed compromise or arrangement between a company and its creditors or members.
20. Para. 315(2A)(b) of the 1985 Act requires that the draft explanatory statement include “such information as is prescribed”.
21. CR regulation 62 prescribes information for a similar Companies Act provision 316(1)(a)(ii) and it has now been amended to require the same information to be prescribed for the purposes of new provision para 315(2A)(b).
Regulation 5: Payments to employees: proof of debt
22. Section 105 of the 1985 Act amends section 441 of the Act to give employees of a company which goes into liquidation priority in a winding up for a part of their entitlement to retrenchment payments.
23. CR regulation 117 provides that one proof of debt or claim will be sufficient where there are numerous demands for wages or salaries of employees of a company, or for remuneration payable to those employees in respect of annual leave or long service leave.
24. CR sub-regulation 117(1) has been amended to refer also to retrenchment payments.
Regulation 6: Schedule 2
25. Sections 36 and 37 of the 1985 Act expand the circumstances in which the National Companies and Securities
Commission is precluded from registering persons as auditors or liquidators. Those circumstances have been expanded to include the situation where a person is subject to a s.562A notice under the Act.
26. Consequential amendments have been made to Item 7 and note (3) of Form 2 and Item 6 and note (1) of Form 3 of Schedule 2 to require applicants to provide particulars in relation to any S.562A notice which has been served upon them.
27. Section 38 of the 1985 Act amended sub-section 25(4) of the Act to require a registered auditor or liquidator who has become subject to a section 526A notice to lodge a notice with the National Companies and Securities Commission.
28. Consequential amendments have been made to -
(i) Items 2 and 3 and note (1) of Form 11;
(ii) Item 6 and note (1) of Form 12;
(iii) Item 5 and note (1) of Form 13.
to require particulars of any S.562A notice which has been served on a registered auditor or liquidator.
29. Section 70 of the 1985 Act amends para 238(2)(a) of the Act by requiring a register prescribed by s.238 to also specify the date and place of birth of each director. Sub-section 238(4) of the Act has been amended to require the same register to specify the date and place of birth of the principal executive officer and each secretary of the company.
30.Form 61 has been amended by including a column headed “Date and place of birth” and by inserting a new note (7) providing that the column need not be completed unless the director, principal executive officer or secretary concerned has been appointed or re-appointed after the commencement of the 1985 Act.
31. Section 30 of the 1985 Act expands the definition of ‘director’ in sub-section 5(1) of the Act so that it is no longer necessary to refer to “a member of the committee of management council or other governing body of a foreign company” anywhere in the Act or Regulations where “director” is also used.
32. Consequential amendments have been made to Form 113, Form 119 and Form 122.
Regulation 7: Schedule 9
33. The 1985 Act adds a new definition “securities exchange” to sub-section 5(1) of the Act.
34. As a consequence of CR regulation 15 being amended to substitute the term “securities exchange” for “stock exchange”, Schedule 9 has been amended by -
(a) omitting from paragraph 2(g), clause 8 and sub-clause 9(1) of Part III “Stock Exchange” (wherever occurring) and substituting “securities exchange”; and
(b) by omitting from sub-clause 9(2) of Part III “stock exchange” and substituting “securities exchange”.
Regulation 8: Schedule 10
35. CR regulation 148 provides that the prescribed offences and penalties for the purposes of S.570A of the Act are those set out in Schedule 10.
36. Sections 113 and 117 of the 1985 Act establish two new offences relating to the display of the names of banking corporations that are recognised companies or recognised foreign companies.
37. The Council has resolved that it is appropriate that the two new offences should be added to Column 2 of Schedule 10 together with the attached penalties for the purposes of Column 3 of Schedule 10.