Corporations Amendment (Trustee Companies) Regulation 2016

Administered by Department of the Treasury

Legislation au F2016L01902 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Minister for Revenue and Financial Services

Corporations Act 2001

Corporations Amendment (Trustee Companies) Regulation 2016

Section 1364 of the Corporations Act 2001 (the Corporations Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Corporations Amendment (Trustee Companies) Regulation 2016 (the Regulation) is to allow Australian Unity Trustees Limited (ACN 162 061 556) to operate as a trustee company under the Act. This would give effect to the Minister for Revenue and Financial Service’s decision to approve the entity to act as a trustee company following its application to be a trustee company under Chapter 5D of the Corporations Act. Subsection 601RAB(2A) of the Corporations Act states that, before the Governor-General makes a regulation that includes a company in a list set out for the purposes of  paragraph 601RAB(2)(a), (effectively Schedule 8AA), the company must satisfy the Minister of the matters set out in paragraphs 601RAB(2A)(a)-(f) which has been done.

A licensed trustee company is a trustee company that holds an Australian Financial Services Licence covering the provision of traditional trustee company services. 'Trustee company' in this context means a company that is a constitutional corporation and is prescribed by the Corporations Regulations 2001 (the Principal Regulations) as a trustee company for the purposes of the Corporations Act. Taken together, a licenced trustee company must:

  • be listed on Schedule 8AA of the Principal Regulations; and
  • hold an Australian Financial Services Licence granted by the Australian Securities and Investments Commission covering the provision of 'traditional trustee company services.'

This is the first application approved by a Commonwealth Minister from an entity seeking to become a licensed trustee company. In July 2008, the Council of Australian Governments agreed that the Commonwealth would assume responsibility for the regulation of trustee companies. On 6 May 2010 amendments to the Corporations Act dealing with licenced trustee companies and the provision of traditional trustee company services came into effect.

Prior to the commencement of the Principal Regulations, trustee companies had been regulated at an entity level under State and Territory regulatory regimes. The trustee company provisions allow private trustee companies to enter the market for personal trustee and estate administration work (for example, acting as an executor or administrator of a deceased estate), thereby removing the limitation that these duties could only be undertaken by natural persons.

An advantage of operating as a licenced trustee company is that they are permitted to operate common funds to enable the efficient pooling and investment of moneys from different estates.

Another advantage of operating as a licenced trustee company is that a licensed trustee company may charge fees for the provision of traditional trustee company services. This overcomes a prohibition under the general trust law against a trustee charging fees except in limited circumstances.

Details of the Regulation are set out in Attachment A.

The Corporations Act specifies no other conditions that need to be satisfied before the power to make the Regulation may be exercised.

No consultation was undertaken given the decision to approve a trustee company application lies with the Minister for Revenue and Financial Services and the entity’s ability to satisfy legislative requirements.

Under the Corporations Agreement 2002, the Commonwealth must consult with the Legislative and Governance Forum for Corporations before making amendments to certain provisions of the Principal Regulations. The Council has been consulted. No adverse views have been expressed.

 

A Regulation Impact Statement was not required to be provided.

 

The Regulation is an instrument for the purposes of the Legislation Act 2003.

A statement of the Regulation’s compatibility with human rights is set out in Attachment B. The Regulation commences on the day after it is registered.


 

ATTACHMENT A

Details of the Corporations Amendment (Trustee Companies) Regulation 2016

Part 1 - Name

This section provides that the title of the Regulation is the Corporations Amendment (Trustee Companies) Regulation 2016.

Part 2 - Commencement

This section provides that the Regulation commences on the day after it is registered.

Part 3 – Authority

This section prescribes that the Regulation is made under the following Acts:

•                 Corporations Act 2001

•                 Superannuation Industry (Supervision) Act 1993; and

•                 Payment Systems and Netting Act 1998.

Part 4 – Schedules

Schedule 1 – Amendments

Item 1 in Schedule 1 would provide that Australian Unity Trustees Limited is to be inserted as a trustee company under the Corporations Act 2001 at item 6A of Schedule 8AA of the Corporations Regulations 2001.


 

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Corporations Amendment (Trustee Companies) Regulation 2016

 

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 Corporations Amendment (Trustee Companies) Regulation 2016 is to allow Australian Unity Trustees Limited (ACN 162 061 556) to operate as a trustee company under the Corporations Act 2001.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Corporations Amendment (Trustee Companies) Regulation 2016 was enacted to facilitate the operation of Australian Unity Trustees Limited as a trustee company under the Corporations Act 2001. The regulation was issued under the authority of the Minister for Revenue and Financial Services, following the Minister's decision to approve the entity's application to become a licensed trustee company. This regulation marks the first instance of a Commonwealth Minister approving an application from an entity to become a licensed trustee company. The underlying policy objective is to provide a federal framework for the regulation of trustee companies, allowing these companies to offer traditional trustee services, such as personal trustee and estate administration, thereby expanding the entities capable of performing these duties beyond natural persons. Additionally, operating as a licensed trustee company enables the pooling and investment of funds from different estates through common funds, and it permits the charging of fees for services, which is not generally allowed under trust law. The regulation is grounded in the Corporations Act 2001, which empowers the Governor-General to make regulations necessary for the Act's implementation. The enactment of this regulation follows the Council of Australian Governments' agreement in July 2008, which shifted the regulation of trustee companies from state and territory regimes to the Commonwealth. The regulation was formulated in compliance with legislative requirements and after consultation with relevant stakeholders, including the Legislative and Governance Forum for Corporations, as mandated by the Corporations Agreement 2002. It has been assessed for compatibility with human rights and found to not engage any applicable rights or freedoms, thereby ensuring its alignment with human rights standards.

Scope and Application

The Corporations Amendment (Trustee Companies) Regulation 2016 provides the legal framework for Australian Unity Trustees Limited to operate as a licensed trustee company under the Corporations Act 2001. This regulation applies to Australian Unity Trustees Limited, a constitutional corporation, and serves to facilitate its operation as a trustee company for personal trustee and estate administration services, thereby allowing the entity to act as an executor or administrator of a deceased estate. The regulation ensures that Australian Unity Trustees Limited satisfies all necessary requirements, including holding an Australian Financial Services Licence covering traditional trustee company services, and is listed on Schedule 8AA of the Corporations Regulations 2001. The regulation is made under the authority of the Corporations Act 2001, the Superannuation Industry (Supervision) Act 1993, and the Payment Systems and Netting Act 1998, and it is compatible with human rights as it does not engage any applicable rights or freedoms. The regulation commenced on the day after it was registered and applies nationally within the Commonwealth of Australia.

Key Provisions

The Corporations Amendment (Trustee Companies) Regulation 2016, made under the Corporations Act 2001, primarily aims to allow Australian Unity Trustees Limited (ACN 162 061 556) to operate as a trustee company. The regulation prescribes matters required or permitted by the Act to enable Australian Unity Trustees Limited to function as a licensed trustee company (section 1364). This is achieved by inserting Australian Unity Trustees Limited into Schedule 8AA of the Corporations Regulations 2001 at item 6A, thus permitting the company to undertake traditional trustee company services. The regulation is effective from the day after it is registered. In terms of obligations, Australian Unity Trustees Limited must satisfy the Minister for Revenue and Financial Services of certain criteria as stipulated in subsection 601RAB(2A) of the Corporations Act before being listed as a trustee company. These criteria include, but are not limited to, the company's constitution, governance structure, and its ability to provide traditional trustee company services. The regulation also requires that Australian Unity Trustees Limited hold an Australian Financial Services Licence from the Australian Securities and Investments Commission, which covers the provision of these services. This ensures that the company meets all necessary regulatory standards to operate as a licensed trustee company. The Corporations Act 2001 does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with the Corporations Amendment (Trustee Companies) Regulation 2016. However, failure to meet the regulatory requirements, including not holding the necessary Australian Financial Services Licence or not satisfying the Minister on the required criteria, could result in the company being ineligible to operate as a trustee company. This could lead to regulatory actions against the company, including fines or other penalties imposed by the Australian Securities and Investments Commission. Furthermore, operating without the required licence or approval could also result in legal consequences for the company and its directors, as it would be in breach of the Corporations Act and related regulations.

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Area of Law
Corporate Law & Governance
Instrument
Regulation
Concepts
Definitions & Interpretation
Licensing & Registration
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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.