EXPLANATORY STATEMENT
Statutory Rules 2004 No. 400
Issued by the Parliamentary Secretary to the Treasurer
Corporations (Fees) Act 2001
Corporations (Fees) Amendment Regulations 2004 (No. 2)
Section 8 of the Corporations (Fees) Act 2001 (the Act) provides that the
Governor-General may make regulations for the purposes of sections 5 and 6 of the Act. Section 5 provides that (subject to section 6) the regulations may prescribe fees for chargeable matters, as defined in subsection 4(1) of the Act.
The purpose of the Regulations is to clarify the basis on which the Takeovers Panel charges fees in respect of applications made to the Takeovers Panel, and to increase the amount of the fees, prescribed in the Corporations (Fees) Regulations 2001 (Corporations (Fees) Regulations).
Currently, persons have to pay $540 when they make an application to the Takeovers Panel in accordance with item 23(b) of the Schedule 1 to the Corporations (Fees) Regulations. The policy objective of the fee is to deter frivolous applications and recover a portion of the costs associated with the expected private benefit that accrues to an applicant. The current fee was not set specifically in relation to applications made to the Takeovers Panel but in relation to any application under Chapters 6,6A,6B and 6C (the takeovers provisions) of the Corporations Act 2001 (the Corporations Act) for which a fee is not already provided (see item 23(b)). The current fee is not set high enough to achieve the policy objectives and therefore needs to be increased substantially. $2010 is the amount charged in relation to the lodgement of a bidder's statement under the Corporations Act and is the maximum amount charged in relation to the takeovers provisions. The fee for an application to the Takeovers Panel is being increased to $2010 by inserting a new item in Schedule 1 which specifically covers that matter.
The purpose of the Regulations is also to prescribe a fee payable where a company refers a financial report to the Financial Reporting Panel for consideration.
Providing for a fee to be charged where a company refers a financial report to the Financial Reporting Panel allows an offsetting of costs in relation to the operations of the Panel. There is no fee currently prescribed for referrals to the Financial Reporting Panel as it is a new body established under the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (the CLERP Act), which received Royal Assent on 30 June 2004. The CLERP Act provides that the Financial Reporting Panel provisions commence on 1 January 2005.
In addition, the purpose of the Regulations is to prescribe a fee payable by a clearing and settlement facility licensee (CS facility licensee) upon giving its annual report to the Australian Securities and Investments Commission (ASIC).
Currently no fee is prescribed for the provision of annual reports to ASIC for CS facility licensees. However, a fee of $330 applies to the provision of annual reports by financial market licensees. The new fee of $330 will make the obligations of CS facility licensees consistent with the obligations of financial market licensees when providing annual reports to ASIC. The new fee was intended to be prescribed at the same time as the current fee applicable to financial market licensees; however, it was erroneously omitted. The Regulations seek to correct this error by prescribing equal fees for CS facility licensees and financial market licensees.
Details of the Regulations are set out in the Attachment.
The Regulations commence on the date of gazettal.
Attachment
Details of the Corporations (Fees) Amendment Regulations 2004 (No. 2)
Regulation 1 provides that the name of the Regulations is the Corporations (Fees) Amendment Regulations 2004 (No. 2).
Regulation 2 provides that the Regulations commence on the date of gazettal.
Regulation 3 provides that Schedule 1 to the Regulations amends the Corporations (Fees) Regulations 2001 (the Principal Regulations).
Schedule 1 – Amendments
Item 1
This item inserts a fee of $330 to be charged on giving an annual report under subsection 821E(1) of the Corporations Act 2001 (Corporations Act).
Item 2
This item inserts a fee of $2010 to be charged when an application is made to the Takeovers Panel under the Corporations Act.
Item 3
This item inserts a fee of $2010 to be charged when a lodging entity refers a matter to the Financial Reporting Panel under section 323EG of the Corporations Act.
Overview
The Corporations (Fees) Amendment Regulations 2004 (No. 2) were introduced by the Parliament of Australia to amend the Corporations (Fees) Regulations 2001, addressing the need to clarify and adjust fees associated with various applications and reports within corporate regulatory frameworks. These amendments were enacted to ensure that the fees charged align more closely with the costs incurred and the policy objectives of deterring frivolous applications and offsetting operational costs. Specifically, the Regulations increased the fee for applications made to the Takeovers Panel from $540 to $2010 to better reflect the actual costs and provide a stronger deterrent against frivolous applications. Additionally, the Regulations introduced fees for referrals to the Financial Reporting Panel and for annual reports submitted by clearing and settlement facility licensees to the Australian Securities and Investments Commission, thereby aligning these fees with those charged to financial market licensees and correcting an earlier omission. The intent behind these changes is to ensure a consistent and fair fee structure across different types of corporate regulatory activities.
Scope and Application
The Corporations (Fees) Amendment Regulations 2004 (No. 2) extend the application of the Corporations (Fees) Act 2001 by amending the Corporations (Fees) Regulations 2001. These regulations are applicable to entities and individuals who are required to make applications to the Takeovers Panel or refer matters to the Financial Reporting Panel under the Corporations Act 2001. Additionally, clearing and settlement facility licensees must pay a fee when they provide their annual reports to the Australian Securities and Investments Commission (ASIC). The amendments establish specific fees for these activities, which were previously either not charged or set at a lower rate than similar activities, thereby aligning the obligations and costs associated with these processes. The amendments are effective from the date of gazettal and are part of the broader legislative framework designed to ensure that fees reflect the costs associated with these regulatory activities.
Key Provisions
The Corporations (Fees) Amendment Regulations 2004 (No. 2) introduces changes to the fees prescribed under the Corporations (Fees) Act 2001, particularly targeting applications to the Takeovers Panel, referrals to the Financial Reporting Panel, and annual reports submitted to the Australian Securities and Investments Commission (ASIC) by clearing and settlement facility licensees (Regulation 1). These amendments are effective from the date of gazettal (Regulation 2). The primary changes are detailed in Schedule 1, which amends the Corporations (Fees) Regulations 2001 (Regulation 3).
Under the new Regulations, an application made to the Takeovers Panel under the Corporations Act will incur a fee of $2010 (Schedule 1, Item 2). This represents a significant increase from the previous fee of $540 and is intended to better align with the costs associated with processing such applications and to achieve the policy objective of deterring frivolous applications. Additionally, a fee of $2010 will be charged when a company refers a financial report to the Financial Reporting Panel for consideration (Schedule 1, Item 3). This fee is being introduced to offset the costs related to the operations of the Financial Reporting Panel, which is a new body established under the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004.
Furthermore, Schedule 1 includes a provision for a fee of $330 to be charged when a clearing and settlement facility licensee submits an annual report to ASIC (Schedule 1, Item 1). This new fee seeks to align the obligations of clearing and settlement facility licensees with those of financial market licensees, which currently pay a fee of $330 for similar annual reports. The omission of this fee in previous regulations is being corrected by the current amendments.
The Regulations impose specific obligations on entities required to pay fees for various applications and reports. For instance, entities making applications to the Takeovers Panel must now be prepared to pay a fee of $2010, and companies referring financial reports to the Financial Reporting Panel must pay a fee of the same amount. Similarly, clearing and settlement facility licensees must pay a fee of $330 when they submit annual reports to ASIC. These obligations are intended to ensure that entities bear a portion of the costs associated with the services provided by these regulatory bodies.
Failure to comply with the fee requirements specified in the Regulations may result in penalties under the Corporations Act 2001. Specifically, entities that do not pay the prescribed fees when submitting applications or reports may face civil consequences, including the possibility of their applications being deemed invalid or their reports not being processed. The exact penalties are not detailed in the explanatory statement but can be found in the relevant sections of the Corporations Act. It is important for entities to adhere to these fee obligations to avoid any adverse consequences.