EXPLANATORY STATEMENT
Statutory Rules 1989 No. 297
Issued by the Authority of the Attorney-General
Companies Regulations (Amendment)
Subsection 577(1) of the Companies Act 1981 (the Act) provides 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. Subsection 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).
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 and futures industries in the six States, the Australian Capital Territory and the Northern Territory of Australia.
Under subclause 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 subclause 45(2) of the Agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
The accompanying Regulations are in accordance with a resolution made by the Council.
The Regulations are also expressed to be made under 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. Any regulations made under section 4 of the Acts Interpretation Act 1901 take effect on the day on which the Act concerned 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.
It is expected that Part 3 of the Co-operative Scheme Legislation Amendment Act 1989 (the 1989 Act), being the Part of the 1989 Act with which these Regulations are concerned, will come into operation on 1 November 1989.
The purpose of the Regulations is to amend the Companies Regulations to:
(i) define “securities exchange” for the purpose of the Buy-Back amendments in Part 3 of the 1989 Act by reference to a list of stock exchanges set out in subregulation 15(2) of the Companies Regulations; and
(ii) prescribe maximum fees which may be charged to shareholders and other persons inspecting and/or receiving copies of registers of buy-backs which the amendments effected by Part 3 of the 1989 Act will require companies to maintain.
Overview
The Companies Regulations (Amendment) Statutory Rules 1989 No. 297 were enacted to address gaps and provide further clarity in the Companies Regulations concerning the amendments introduced by the Co-operative Scheme Legislation Amendment Act 1989. These regulations were issued under the authority of the Attorney-General and were made in accordance with resolutions of the Ministerial Council for Companies and Securities. The primary objective of these regulations was to define "securities exchange" in alignment with the Buy-Back amendments outlined in Part 3 of the 1989 Act, and to establish maximum fees that could be charged to shareholders and other individuals inspecting or receiving copies of buy-back registers, which would be required under the new amendments. The regulations were also designed to take effect on the same day as the Co-operative Scheme Legislation Amendment Act 1989, ensuring that the amendments and the regulatory framework supporting them would be implemented simultaneously.
Scope and Application
The Companies Regulations (Amendment) Statutory Rules 1989 No. 297 apply to all companies within the jurisdiction of the Commonwealth of Australia, including those incorporated under the Commonwealth Companies Act 1981. The regulations are designed to amend the existing Companies Regulations to align with the provisions of the Co-operative Scheme Legislation Amendment Act 1989. Specifically, they define "securities exchange" in relation to buy-back amendments, referencing a list of stock exchanges and setting maximum fees that can be charged to shareholders and others for inspecting or receiving copies of buy-back registers required by the amendments. These regulations are made under the authority of the Ministerial Council for Companies and Securities and are in accordance with resolutions of the Council, ensuring a uniform approach across the Commonwealth, States, and Territories of Australia. The regulations come into effect on 1 November 1989, or later, depending on the operation date of the amending Act.
Key Provisions
The Companies Regulations (Amendment) Statutory Rules 1989 No. 297 introduce specific changes to the Companies Regulations to support the implementation of the Buy-Back amendments in the Co-operative Scheme Legislation Amendment Act 1989 (1989 Act). These amendments, which are set to take effect on 1 November 1989, are made in accordance with the powers granted under section 577 of the Companies Act 1981, with the advice and approval of the Ministerial Council for Companies and Securities, and in line with the framework established by the Agreement between the Commonwealth and the States. The primary changes introduced by these Regulations include the definition of "securities exchange" (section 15(2)) and the specification of maximum fees that can be charged to shareholders and others for accessing registers related to buy-backs (section 15(4)).
The Regulations impose certain obligations on companies and other entities governed by the Companies Act 1981. Specifically, companies must define their transactions with securities exchanges as per the new definition of "securities exchange" provided in section 15(2) of the Regulations. Additionally, when maintaining and providing access to registers of buy-backs, companies must adhere to the maximum fee limits set out in section 15(4). These requirements ensure that the operations of companies in relation to buy-backs are transparent and that shareholders and other stakeholders are not unfairly charged for accessing important documents.
Failure to comply with the provisions of these Regulations may result in legal consequences. While the Regulations themselves do not explicitly outline specific offences or penalties for non-compliance, breaches of the Companies Act 1981 can lead to enforcement actions by the relevant regulatory authorities. Penalties for contravening the Companies Act 1981 can include fines, with the exact amount depending on the nature and severity of the breach. In some cases, directors and officers of a company may also face personal liability for breaches that occur under their watch. These potential consequences underscore the importance of adhering to the regulatory framework established by the Companies Regulations (Amendment) Statutory Rules 1989 No. 297.