EXPLANATORY STATEMENT
Statutory Rules 1983 No. 214
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL
COMPANIES REGULATIONS (AMENDMENT)
Section 577 of the Companies Act 19 81 (“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 regulation to the Federal Executive Council for making by the Governor-General.
4. The accompanying regulation is consistent with a resolution of the Council passed at its meeting held on 14 July 1983. The purpose of the regulation is to amend regulation 14 of the Companies Regulations (“the Regulations”) to declare “Sepon (Australia) Pty. Limited” (“SEPON”) to be an “authorized trustee corporation”.
5. 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 the Regulations 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. Regulation 14 of the Regulations lists those bodies corporate declared to be an “authorized trustee corporation” for the purposes of the Act.
6. To facilitate dealings in securities of Australian companies listed on the London Stock Exchange (“the Exchange”), the Exchange has established SEPON as a company in Victoria. SEPON’s function is to act as a nominee in respect of dealings on the Exchange in securities of Australian companies. Although SEPON will initially operate in Victoria, it is intended that it will extend its operations to other States and Territories.
7. As a consequence of the Council’s decision to approve the declaration of SEPON as an “authorized trustee corporation” for the purposes of the Act, regulation 14 of the Regulations will be amended by inserting a new paragraph (zaa) declaring SEPON to be an “authorized trustee corporation”.
Overview
The Companies Regulations (Amendment) Statutory Rules 1983 No. 214 were enacted in 1983 to address the need for streamlined securities transactions in Australian companies listed on international exchanges, particularly the London Stock Exchange. This amendment was issued under the authority of the Attorney-General, in accordance with Section 577 of the Companies Act 1981, which empowers the Governor-General to make regulations necessary for the Act’s execution, subject to advice consistent with resolutions of the Ministerial Council for Companies and Securities. The Council, established under an agreement between the Commonwealth and the States, plays a crucial role in ensuring a uniform system of law and administration in relation to company law and securities regulation across Australia. The policy objective of this amendment was to facilitate smoother dealings in securities by declaring Sepon (Australia) Pty. Limited as an “authorized trustee corporation,” thereby allowing for the use of simplified instruments of transfer in the context of securities transactions, as per Section 192 of the Act.
Scope and Application
The Companies Regulations (Amendment) Statutory Rules 1983 No. 214, issued under the authority of the Attorney-General, amends the Companies Regulations to declare Sepon (Australia) Pty. Limited as an "authorized trustee corporation" under the Companies Act 1981. This amendment follows a resolution by the Ministerial Council for Companies and Securities, established under an agreement between the Commonwealth and the States, aimed at creating a uniform system of law and administration in relation to company law and securities regulation across Australia. The inclusion of Sepon (Australia) Pty. Limited as an authorized trustee corporation is intended to facilitate the transfer of marketable securities for Australian companies listed on the London Stock Exchange by allowing the use of a simplified transfer instrument, as provided under the Act. The regulation applies to Sepon (Australia) Pty. Limited and its operations in Victoria, with the potential for extension to other States and Territories.
Key Provisions
The operative sections of these regulations are primarily concerned with amending existing legislation to recognise Sepon (Australia) Pty. Limited as an "authorized trustee corporation". Under section 5(1) of the Companies Act 1981, an "authorized trustee corporation" is defined as a body corporate declared by the Regulations to be such. Section 192 of the Act permits the use of a simplified instrument of transfer in respect of marketable securities transferred by an "authorized trustee corporation" to the beneficial owner. Regulation 14 of the Companies Regulations lists those bodies corporate that are currently declared to be "authorized trustee corporations". The amendment to Regulation 14 will include Sepon (Australia) Pty. Limited as a recognised "authorized trustee corporation" (reg. 14(zaa)).
The obligations and requirements imposed by these regulations are primarily administrative. Sepon (Australia) Pty. Limited must now meet the criteria set out in the Companies Act 1981 to be recognised as an "authorized trustee corporation". This includes ensuring that it can act as a nominee for dealings in securities of Australian companies listed on the London Stock Exchange, and that it complies with any other relevant provisions of the Act and Regulations. Additionally, Sepon (Australia) Pty. Limited must maintain the necessary records and documentation to demonstrate its compliance with these obligations.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in these regulations for breach. However, any breach of the Companies Act 1981 or the Companies Regulations by Sepon (Australia) Pty. Limited, as an "authorized trustee corporation", could lead to enforcement actions by the relevant authorities. These may include fines, orders for restitution, or even the revocation of its status as an "authorized trustee corporation", depending on the severity and nature of the breach. The maximum penalties for breaches of the Companies Act 1981 are detailed in the Act itself and can include substantial fines for both individuals and corporate entities, as well as imprisonment in certain circumstances.