Corporations Amendment Regulations 1998 (No. 9)

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Corporations Amendment Regulations 1998 (No. 9) 1998 No. 293

EXPLANATORY STATEMENT

STATUTORY RULES 1998 No. 293

Issued by the Authority of the Treasurer

Corporations Act 1989

Corporations Amendment Regulations 1998 (No. 9)

Section 97 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act or the Corporations Law, prescribing, among other things, matters which are required by the Corporations Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Corporations Law.

The Heads of Agreement on Future Corporate Regulation in Australia, reached between Commonwealth, State and Northern Territory Ministers who had responsibilities in relation to corporate regulation in June 1990 forms the political compact on which the national companies and securities scheme is based. The Corporations Agreement, a more formal agreement to supplement the Heads of Agreement, was finalised on 23 September 1997.

The responsible Ministers of the States and the Northern Territory on the Ministerial Council for Corporations have been consulted about the regulations and, to the extent required by the Corporations Agreement, the Council has approved them.

The regulations amend the Corporations Regulations to:

(a) reflect the change of name:

- of the regulator, which was previously known as the Australian Securities Commission and is now known as the Australian Securities and

Investments Commission (ASIC) (Regulations 5, 13, 14.2, 19 and Schedule);

- of the Act which establishes the Commission - this was previously the Australian Securities Commission Act 1989 and is now the Australian Securities and Investments Commission Act 1989 (Regulation 14.3);

(b) make the amendments which are necessary as a consequence of changes to the regulatory structure for deposit-taking institutions, insurance and superannuation:

- thus, references in Regulation 7.3.14 to 'Australian bank' have been changed to 'Australian ADI' ('ADI' stands for 'authorised deposit-taking

institution') (Regulation 10);

- the Australian Prudential Regulation Authority (APRA) has been prescribed as an agency which is entitled to apply to the Court for a company

to be wound up in insolvency and the prescription of the Insurance and Superannuation Commissioner (ISC) for this purpose deleted (Regulation 9);

the reason for this amendment is that the ISC has been abolished and the ISC's role in relation to the prudential supervision of insurance and superannuation is now undertaken by APRA which, in addition, undertakes the prudential regulation of authorised deposit-taking institutions;

(c) ensure that ASIC's power to make orders in relation to the financial reporting requirements imposed on certain entities is not substantially altered by the Company Law Review Act 1998 (Regulation 8);

(d) make some minor corrections (for example, to cross references) to the regulations which were amended following the Company Law Review Act 1998 (Regulations 6, 7, 11, 12, 15-17, 20-23); (e) rename the regulations the Corporations Regulations 1990 (Regulation 4).

The amendments referred. to in paragraphs (a) and (b) above are consequential on the Financial Sector Reform legislation which commenced recently. The Regulations commenced on gazettal. Details of the regulations are attached.

ATTACHMENT

Regulation 1 - Name

Regulation 1 provides that the regulations are the Corporations Amendment Regulations 1998 (No. 9).

Regulation 2 - Commencement

Regulation 2 provides that the amendments commence on gazettal.

Regulation 3 - Amendment

Regulation 3 provides that the Corporations Regulations are amended as set out in the regulations.

Regulation 4 - Citation

Regulation 4 substitutes a new Regulation 1.0.01 which renames the Regulations the Corporations Regulations 1990.

Regulation 5, 13, 14.2, 14.3, 19 and Schedule - references to ASIC

The amendments:

* omit references to 'the Commission' and substitute 'ASIC';

* omit references to 'the Australian Securities Commission' and substitute 'ASIC';

* omit a reference to 'Australian Securities Commission Act 1989' and substitute 'Australian Securities and Investments Commission Act 1989'; and

* omit references to 'ASC' and substitute 'ASIC'.

These amendments are consistent with the change in name of the Australian Securities Commission to the Australian Securities and Investments Commission and the change in the title of the relevant Act which were made by the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, the relevant provisions of which commenced on 1 July 1998.

Regulations 6, 7, 11, 12, 14,1-15-18, 20-23 - Corrections

Regulations 6, 7, 11, 12, 15-17, 20-23 make a number of minor corrections to Regulations which were recently amended as a consequence of the Company Law Review Act 1998 for example:

* to correct cross references;

* to omit an unnecessary '(1)';

* to change the order in which certain Regulations appear;

* to correct the date of commencement of certain amendments included in Statutory Rules 1998 No. 185.

Regulation 14.1 makes a minor technical amendment to the heading of Schedule 3 and Regulation 18 makes a minor technical amendment to the heading of Schedule 11.

Regulation 8 - Regulation 2M.6.01 (Modification of operation of Chapter 2M of Corporations Law)

Regulation 8 omits the existing regulation 2M.6.01 and inserts a new Part 'Part 2M.6 - Modification of the operation of Chapter 2M of the Corporations Law'.

The new Part contains three regulations:

(a) regulation 2M.6.01: Modifications (Corporations Law, s.343);

(b) regulation 2M.6.02: Specific exemption and class orders - certain corporations

(Corporations Law, Part 2M.6); and

Regulation 2M.6.01 provides that, for section 343 of the Law, the operation of Chapter 2M of the Law is modified in accordance with the regulations contained in Part 2M.6 of the Regulations.

Regulation 2M.6.02 modifies the operation of sections 340, 341 and 342 to enable the Australian Securities and Investments Commission to relieve specified companies or specified classes of company from the requirements of Part 2M.4 of the Law. The specified companies or specified classes of company listed in subregulation 2M.6.02(1) were the subject of orders made by the Australian Securities Commission under former section 313 of the Law. These orders had the effect of relieving the specified companies or specified classes of company of some or all of the requirements of the former Part 3.7 of the Law.

Regulation 2M.6.03 provides that the operation of Chapter 2M of the Corporations Law in relation to financial reporting by Australian banks and life offices is modified in accordance with Schedule 5A.

Regulation 9 - Application to Court for winding up

Paragraph 459P(1)(g) of the Corporations Law empowers a prescribed agency to apply to the Court for a company to be wound up in insolvency.

Previously, Regulation 5.4.01 prescribed the Insurance and Superannuation Commissioner for this purpose.

Regulation 9 omits from Regulation 5.4.01 the reference to the Insurance and Commissioner and substitutes a reference to the Australian Prudential Regulation Authority which, since 1 July 1998, has had responsibility for the prudential regulation of superannuation, insurance and deposit-taking institutions.

Regulation 10 - Australian ADIs

Regulation 7.3.14 provided that certain provisions of Chapter 7 (sections 780 and 842, and Parts 7.5, 7.6 and 7.7) do not have effect in relation to an. Australian bank only because, in relation to the carrying on of the business of banking, the Australian bank, for example, deals in securities issued by a government or acts as banker in respect of an issue of securities. It also provided a comparable exemption for employees of Australian banks.

Following the commencement of the amendments to the Banking Act 1959 which were included in the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, there is a new status of authorised deposit-taking institution (ADI), under the Banking Act. These bodies will be prudentially regulated under that Act by the Australian Prudential Regulation Authority.

Regulation 7.3.14 has therefore been amended to omit the references to 'Australian bank' and replace them with references to 'Australian ADI'. This term is defined in section 9 of the Corporations Law (by virtue of the amendments made by the Financial Sector Reform (Consequential Amendments) Act 1998).

Overview

The Corporations Amendment Regulations 1998 (No. 9), enacted under the authority of the Treasurer, were introduced to update and refine the regulatory framework for corporate entities in Australia, ensuring consistency with recent legislative changes and structural reforms within the financial sector. The Regulations were made under section 97 of the Corporations Act 1989, empowering the Governor-General to enact regulations that are necessary or convenient for carrying out or giving effect to the Corporations Law. These Regulations were developed following consultations with the Ministerial Council for Corporations and approved in line with the Heads of Agreement on Future Corporate Regulation in Australia and the Corporations Agreement. The primary objective of these Regulations is to reflect the changes in the names of the regulatory bodies and the legislative framework, such as the transition from the Australian Securities Commission (ASC) to the Australian Securities and Investments Commission (ASIC), and to align with the new regulatory structure for deposit-taking institutions, insurance, and superannuation, including the role of the Australian Prudential Regulation Authority (APRA). The Regulations also aim to ensure that ASIC's regulatory powers are not inadvertently altered by other legislative changes, and to correct minor errors in the regulations previously amended by the Company Law Review Act 1998.

Scope and Application

The Corporations Amendment Regulations 1998 (No. 9) apply to the Corporations Regulations 1990, which are part of the legislative framework governing corporate activities in Australia. The amendments cover a range of entities, including companies, financial institutions, and authorised deposit-taking institutions, and address their compliance with financial reporting and disclosure requirements under the Corporations Act 1989. The changes are largely in response to recent modifications to the regulatory structure for deposit-taking institutions, insurance, and superannuation, with specific adjustments made to reflect the shift in regulatory responsibilities from the Insurance and Superannuation Commissioner to the Australian Prudential Regulation Authority. These amendments ensure that the Corporations Regulations remain aligned with the evolving regulatory environment and the transfer of certain supervisory roles. The regulations are applicable nationally, in line with the national companies and securities scheme established under the Heads of Agreement on Future Corporate Regulation in Australia. While the primary focus is on updating references and roles to reflect legislative changes, the regulations also include minor technical corrections to ensure consistency and clarity within the existing regulatory framework.

Key Provisions

The Corporations Amendment Regulations 1998 (No. 9) (the Regulations) contain several key provisions that reflect changes to the Corporations Law and regulatory structures, particularly concerning the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA). Regulation 1 identifies the Regulations as the Corporations Amendment Regulations 1998 (No. 9), and Regulation 2 specifies that these amendments commence on gazettal. Regulation 3 details that the Corporations Regulations are amended as outlined in the Regulations. These Regulations impose a variety of obligations on parties governed by the Corporations Law. For example, Regulation 5 and others replace references to the former Australian Securities Commission with ASIC, aligning the terminology with the recent legislative changes. Similarly, Regulation 14.3 updates the title of the relevant Act to the Australian Securities and Investments Commission Act 1998. Additionally, Regulation 9 updates the regulatory authority responsible for applying to the Court for a company to be wound up in insolvency, replacing the Insurance and Superannuation Commissioner with the Australian Prudential Regulation Authority. These changes ensure consistency with the new regulatory framework and reflect the roles assumed by APRA. The Regulations also address compliance and enforcement mechanisms. Regulation 8 introduces modifications to the financial reporting requirements for certain entities, enabling ASIC to relieve specified companies or classes of companies from some reporting obligations, as outlined in Regulation 2M.6.02. This aims to streamline compliance processes while maintaining regulatory oversight. Regulation 10 further modifies the scope of certain provisions to apply to authorised deposit-taking institutions (ADIs) rather than just Australian banks, reflecting the expanded regulatory remit of APRA. Offences and penalties under the Regulations are not explicitly detailed in the provided text, but breaches of the Corporations Law itself can result in both civil and criminal penalties. Civil penalties can include fines up to $210,000 for individuals and significantly higher amounts for corporations, depending on the severity and nature of the offence. Criminal penalties may also apply, particularly for more serious breaches, with potential fines and imprisonment terms varying based on the specific provisions contravened. These penalties underscore the importance of compliance with the Corporations Law and the associated Regulations.

Area of Law: Corporate Law & Governance
Instrument: Regulation
Concepts: Definitions & Interpretation; Repeal & Amendment; Regulatory Standards; Licensing & Registration; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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