EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 54
Issued by the Authority of the Minister Financial Services, Superannuation and Corporate Law
Corporations Act 2001
Corporations Amendment Regulations 2010 (No. 1)
Section 1364 of the Corporations Act 2001 (the Act) provides, in part, that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for the carrying out or giving effect to the Act.
The Act was recently amended by the Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 (the Modernisation Act) in relation to a number of financial services matters, including the regulation of debentures.
Debentures are debt instruments used by the issuer to raise funds from investors, who receive interest in return. Debentures are principally regulated under Chapter 2L of the Act, which requires that any offer of debentures (that require a disclosure document for investors) is required to have in place a trust deed and a trustee to act in the interests of debenture holders.
New section 283BCA, as inserted into the Act by the Modernisation Act, requires that the Australian Securities and Investments Commission (ASIC) must establish and maintain a register of debenture trustees. That section also provides for regulations to prescribe the way in which the register is established or maintained, including the details that must be entered into the register by ASIC.
These Regulations insert a new chapter into the Corporations Regulations 2001 to complement the operation of the Act in relation to the establishment of the register of debenture trustees. Complementary regulations have also been made to prescribe that no fee is payable for access to the quarterly report which ASIC is also providing the public access to via the register, being the quarterly report the borrower must provide to the trustee and ASIC under section 283BF of the Act. Those regulations are known as the Corporations (Fees) Amendment Regulations 2010 (No. 1).
The new chapter 2L Debentures, sets out the information that ASIC must enter into the register:
• the name and address of the trustee;
• the trustee’s ACN or ABN, as applicable;
• the name and address of the borrower (also known as the issuer) who appointed the trustee;
• the name of the trust for which the trustee has been appointed to act; and
• the date the trust deed was executed, which is understood to be the date the document becomes legally effective.
The Regulations also:
• require ASIC to amend the register by removing relevant details on receipt of a notice from a borrower that the trust deed has been revoked;
• add the register of debenture trustees to the list of prescribed registers which ASIC must keep;
• similar to other prescribed registers, prescribe the information that can be obtained from the register, being information that ASIC considers is appropriate for a person to search, or for ASIC to make available.
Details of the Regulations are set out in Attachment A.
Public consultation on an exposure draft of the then Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 occurred in May/June 2009. The details to be included in the regulations were also considered as part of that process. Further consultation on the draft regulations was undertaken from 21 August 2009 for a four‑week period. No comments were received.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
ATTACHMENT A
Details of the Corporations Amendment Regulations 2010 (No. 1)
Regulation 1 – Name of Regulations
This regulation provides that the name of the Regulations is the Corporations Amendment Regulations 2010 (No. 1).
Regulation 2 – Commencement
This regulation provides for the Regulations to commence on the day after they are registered.
Regulation 3 – Amendment of Corporations Regulations 2001
This regulation provides that the Corporations Regulations 2001 (the Principal Regulations) are amended as set out in Schedule 1.
Schedule 1 – Amendments
Item [1] – After Chapter 2K
Item 1 inserts a new Chapter: Chapter 2L Debentures which sets out the details to be included in the register in relation to a trustee for debenture holders, the duties of the borrower and other related and enabling provisions.
Part 2L.2, Duties of borrower lists under subregulation 2L.2.01(1), the details that ASIC must enter into the register of debenture trustees:
• the name and address of the trustee;
• the trustee’s ACN or ABN, as applicable;
• the name and address of the borrower (also known as the issuer) who appointed the trustee;
• the name of the trust for which the trustee has been appointed to act; and
• the date the trust deed was executed, which is understood to be the date the document becomes legally effective.
Subregulation 2L.2.01(2) requires ASIC, on receipt of a notice from the borrower that the trust deed has been revoked (under subsection 283BC(2) of the Act), to amend the register by removing the relevant details.
Item [2] – paragraph 9.1.01(o)
This item makes a minor technical amendment to replace a full stop with a semi colon after the words “the Act”.
Item [3] – After paragraph 9.1.01(o)
This item inserts a new paragraph 9.1.01(p) to the list of prescribed registers in Chapter 9 of the Principal Regulations, being an additional register that ASIC is empowered to keep to carry out its duties, being the register relating to trustees for debenture holders.
Item [4] – Subparagraph 9.1.02(o) (ii)
This item makes a minor technical amendment to replace a full stop with a semi colon after the words “the Act”, similar to item 2 above.
Item [5] – After paragraph 9.1.02 (o) (ii)
This item inserts new paragraph 9.1.02(p) into the list which prescribes, for the purposes of the register, the information ASIC considers appropriate for a person to search, or for ASIC to make available.