EXPLANATORY STATEMENT
Select Legislative Instrument 2012 No. 266
Issued by the Minister for Financial Services and Superannuation
Subject - Corporations Act 2001
Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2)
The Corporations Act 2001 (the Act) provides for the regulation of corporations, financial markets, products and services, including in relation to licensing, conduct, financial product advice and disclosure.
Subsection 1364(1) of the Act provides 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 such regulations for carrying out or giving effect to the Act.
Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2) (the Regulation) makes some amendments to the Corporations Regulations 2001 (the Principal Regulations).
The Regulation amends the Corporations Amendment Regulations 2010 (No. 3) to extend the transitional arrangements under which trustee companies are deemed to have a licence as required under the Act, from its current expiration date of 31 December 2012 to 30 June 2013. This allows time for the State Governments to pass complementary legislation.
Under the Corporations Agreement 2002 (the Corporations Agreement), the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 506(1) and 507(1) of the Corporations Agreement, the Commonwealth is required to consult with State and Territory Ministers of the Legislative and Governance Forum for Corporations (LG Forum) before making a regulation under the national law. The LG Forum has been consulted about the Regulation as required by the Corporations Agreement.
The Australian Securities and Investments Commission (ASIC) were consulted in preparing the Regulation.
Section 1 provides that the title of the Regulation is the Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2).The Regulation commences the day after it is registered on the Federal Register of Legislative Instruments.
Item 1 of the regulation provides that the current transitional arrangements for unlicensed trustee companies that are listed in Schedule 8AA to the Principal Regulations are extended until 30 June 2013.
This extension allows the States and Territories to pass complementary legislation enabling ASIC to make determinations under the Act. This legislation is necessary to facilitate transfers of estate assets and liabilities from a transferring trustee company to a receiving trustee company.
Item 2 provides that trustee companies who wish to continue providing trustee company services must apply to ASIC for a licence before 30 June 2013.
The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012
(No. 2)
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of the Legislative Instrument is to maintain the effectiveness of the national regulation of trustee companies.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Overview
The Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2) was enacted to extend the transitional arrangements for trustee companies under the Corporations Act 2001, allowing these companies to continue operating without a formal licence until 30 June 2013. This extension was necessitated by the need for state and territory governments to enact complementary legislation that would facilitate the transfer of assets and liabilities from transferring trustee companies to receiving ones. The regulation was issued by the Minister for Financial Services and Superannuation and was developed in consultation with relevant stakeholders, including the Australian Securities and Investments Commission (ASIC) and the Legislative and Governance Forum for Corporations. The objective of this legislative instrument is to ensure the continued smooth operation of trustee services and to maintain the effectiveness of the national regulation of these entities during the transitional period.
Scope and Application
The Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2) serves to extend the transitional arrangements under the Corporations Act 2001, thereby ensuring that trustee companies are deemed to hold a necessary licence. This regulation applies to trustee companies, specifically those listed in Schedule 8AA of the Corporations Regulations 2001, and aims to facilitate the continued operation of these companies until they can obtain proper licensing from the Australian Securities and Investments Commission (ASIC). The extension, which was initially set to expire on 31 December 2012, has been pushed to 30 June 2013 to accommodate the passage of complementary state and territory legislation. This adjustment is crucial for the seamless transfer of estate assets and liabilities between transferring and receiving trustee companies. Additionally, trustee companies intending to continue their services must apply for a formal licence from ASIC by the new deadline. The Regulation operates nationally under the Commonwealth's authority, as per the Corporations Agreement 2002, and adheres to the necessary consultation processes with state and territory governments as stipulated by the Corporations Agreement.
Key Provisions
The Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2) primarily focuses on extending the transitional arrangements for unlicensed trustee companies (Section 1). This extension allows trustee companies to continue operating without a specific licence under the Corporations Act 2001, but only until 30 June 2013. This period of extension is provided to give State and Territory Governments time to pass complementary legislation that will facilitate the transfer of estate assets and liabilities from transferring trustee companies to receiving trustee companies (Item 1). Additionally, trustee companies that wish to continue providing their services must apply to the Australian Securities and Investments Commission (ASIC) for a licence before the expiration of this transitional period (Item 2).
The Regulation imposes specific obligations on trustee companies that fall under the extended transitional arrangements. These companies are required to apply for a licence with ASIC before the extended deadline of 30 June 2013 if they intend to continue providing trustee services. This ensures that all trustee companies are adequately regulated and compliant with national standards. The Regulation also mandates that the State and Territory Governments pass necessary complementary legislation by this date, to enable ASIC to make determinations under the Act and facilitate the smooth transfer of assets and liabilities between trustee companies.
Failure to comply with the requirements set out in this Regulation can lead to significant consequences. Trustee companies that do not apply for a licence by 30 June 2013 may be unable to legally continue providing trustee services. This could result in operational disruptions and legal penalties for non-compliance. While the Regulation does not explicitly state specific penalties, non-compliance with the Corporations Act 2001 and related regulations can result in substantial fines and potential criminal charges, depending on the severity of the breach. The specific penalties would be determined based on the relevant provisions of the Corporations Act 2001 and other applicable laws.
In summary, the Corporations Amendment Regulations 2010 (No. 3) Amendment Regulation 2012 (No. 2) extends the transitional period for unlicensed trustee companies until 30 June 2013 and requires these companies to apply for a licence with ASIC if they wish to continue their operations. The Regulation also mandates that State and Territory Governments enact complementary legislation to facilitate the transfer of assets and liabilities. Failure to comply with these requirements can result in significant legal and financial repercussions.