Corporations (Fees) Regulations (Amendment)

Overview

The Corporations (Fees) Regulations (Amendment) 1994 No. 34 were enacted to address specific regulatory needs arising under the Corporations Act 1989. These regulations, issued under the authority of the Attorney-General, aim to introduce lower fees for superannuation trustees who elect to be regulated as corporate entities under the Superannuation Industry (Supervision) Act 1993. This was done to provide a more streamlined regulatory environment for superannuation trustees, while also ensuring that these trustees adhere strictly to their intended purpose. The policy objective behind these amendments is to facilitate a more efficient regulatory process while preventing potential abuse of the fee concessions. The amendments will commence on the date of gazettal, following consultations with state and territory Attorneys-General as per the Heads of Agreement and the draft Corporations Agreement.

Scope and Application

The Corporations (Fees) Regulations (Amendment) 1994 No. 34 amends the Corporations (Fees) Regulations under the Corporations Act 1989. The amendment introduces lower incorporation and annual return fees for superannuation trustees who elect to be regulated as corporate entities for the purposes of the Superannuation Industry (Supervision) Act 1993. To be eligible for the lower fees, the trustees must state in the memorandum of the company that they are formed for the purpose of acting solely as the trustee of a regulated superannuation fund and must prohibit the distribution of the company's income or property among its members. The amendment also introduces a claw back mechanism to prevent abuse of the lower fees, whereby a company that commences activities other than acting solely as the trustee of a regulated superannuation fund must pay a one-off payment of $450 in addition to any annual return fee due. The amendment to the Corporations Regulations facilitates the operation of the lower annual return fee and the claw back mechanism by enabling the Australian Securities Commission to include questions in the annual return forms to determine whether a company is eligible for the lower fee. The amendments will commence on the date of gazettal. The amendments to the Corporations (Fees) Regulations and Corporations Regulations apply to superannuation trustees who elect to be regulated as corporate entities for the purposes of the Superannuation Industry (Supervision) Act 1993. The amendments provide for a lower incorporation fee of $100 for companies formed before 1 January 1995 and a lower annual return fee of $30 for eligible companies. The amendments also introduce a claw back mechanism to prevent abuse of the lower fees. The amendments have a national reach as they are made under the Corporations Act 1989, which applies throughout Australia. The amendments do not apply to companies that commence activities other than acting solely as the trustee of a regulated superannuation fund. The amendments extend the application of the Corporations (Fees) Regulations and Corporations Regulations through subordinate instruments.

Key Provisions

The Corporations (Fees) Regulations (Amendment) 1994 No. 34 introduces several amendments to the existing Corporations (Fees) Regulations. These amendments are primarily aimed at providing fee concessions for superannuation trustees who are regulated under the Superannuation Industry (Supervision) Act 1993. Section 22 of the Corporations Act 1989 allows the Governor-General to make regulations that prescribe fees for various chargeable matters. Section 25 further empowers the making of these regulations. The specific amendments include a reduced incorporation fee for superannuation trustees (regulation 1, subregulation 2.1), a lower annual return fee for such trustees (regulation 2, subregulations 2.2 and 2.3), and a claw-back mechanism to prevent the misuse of these fee concessions (regulation 2, subregulation 2.3, items 32A and 32B). The obligations imposed by these amendments include specific conditions that must be met for companies to be eligible for the reduced fees. Companies must state in their memorandum that they are formed solely to act as trustees of a regulated superannuation fund, and must prohibit the distribution of their income or property among their members (regulation 2, subregulation 2.1(a) and (b)). The Australian Securities Commission must be satisfied that these conditions are met when an annual return is lodged (regulation 2, subregulation 2.2). Additionally, companies must answer specific questions in their annual return to demonstrate their eligibility for the reduced fees (regulation 2, subregulation 2.1(ka)(i) and (ii)). The amendments also establish consequences for non-compliance with the new fee structures. Companies that do not meet the eligibility criteria for the reduced fees will be charged the standard fees, and will additionally be required to pay a claw-back fee of $450 to recover the concession provided (regulation 2, subregulation 2.3, item 32B). This claw-back fee is payable when a company lodges an annual return indicating it is no longer operating solely as a trustee of a regulated superannuation fund (regulation 2, subregulation 2.3, item 32B(b)). The amendments do not explicitly state penalties for non-compliance, but it can be inferred that failure to adhere to these requirements could lead to financial repercussions as stipulated in the claw-back provision.