Corporations Regulations (Amendment) 1996 No. 51
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 51
Issued by the Authority of the Treasurer
Corporations Act 1989
Corporations Regulations (Amendment)
Section 73 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, which prescribe matters which are required by the Corporations Act to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Corporations Act.
Section 36B(1) of the Securities Industry Act 1980 (a Co-operative Scheme Act) provides that the Australian Stock Exchange is incorporated in the Australian Capital Territory.
The purpose of the regulations is to amend the operation of section 36B(1) to permit the Australian Stock Exchange to transfer its place of incorporation pursuant to section 147 of the Corporations Law (that is, in the same way as other companies).
While most of the Co-operative Scheme legislation has been superseded by the national companies and securities scheme legislation, section 36B(1) (and the rest of Part RA of the Securities Industry Act 1980) continues to have residual effect by virtue of section 81 of the Corporations Act. However section 79 of the Corporations Act permits regulations to be made under section 73 of the Act which have the effect of modifying the operation of specified provisions of a Co-operative Scheme Act.
The national companies and securities scheme, which superseded the cooperative scheme, commenced operation on 1 January 1991. The relevant Commonwealth legislation is the Corporations Act 1989 and the Australian Securities Commission Act 1989 . The Corporations Act 1989 includes the Corporations Law which is applied in the States and Northern Territory by 'application of laws' legislation in each jurisdiction.
The national companies and securities scheme ensures that the one Corporations Law is applied across Australia with a single regulator, the Australian Securities Commission, which answers to the responsible Commonwealth minister.
In accordance with the Heads of Agreement on Future Corporate Regulation in Australia and the draft Corporations Agreement, the Commonwealth has consulted and obtained the approval of the Ministerial Council for Corporations for the making of these regulations.
Details of the regulations are as follows.
Regulation 1 provides that the regulations are amended as set out in these regulations.
Regulation 2 inserts new regulation 1.17 which provides that, for the purposes of section 79 of the Corporations Act 1989, section 36B of the Securities Industry Act 1980 is modified as set out in Schedule 9B.
Regulation 3 inserts new Schedule 9B which modifies the operation of section 36B of the Securities Industry Act 1980. The Schedule provides that subsection 30(1) does not prevent the Australian Stock Exchange from transferring its place of incorporation in accordance with section 147 of the Corporations Law.
Overview
The Corporations Regulations (Amendment) 1996 No. 51 were enacted to amend the Corporations Regulations under the authority of the Treasurer, in accordance with section 73 of the Corporations Act 1989. These regulations address the problem of the Australian Stock Exchange's inability to transfer its place of incorporation in the same way as other companies, due to residual effects of the Securities Industry Act 1980. The policy objective behind these amendments was to modernise the legal framework governing the Australian Stock Exchange to align with the national companies and securities scheme, ensuring consistency and efficiency in corporate regulation. This legislative action was approved by the Ministerial Council for Corporations, reflecting a collaborative approach to corporate regulation across Australian jurisdictions.
Scope and Application
The Corporations Regulations (Amendment) 1996 No. 51 applies to the Australian Stock Exchange and seeks to amend the Corporations Act 1989 in relation to the Securities Industry Act 1980. These regulations are designed to facilitate the Australian Stock Exchange's ability to transfer its place of incorporation, aligning its process with that of other companies under the Corporations Law. The regulations are applicable across Australia, as they are part of the national companies and securities scheme which was implemented to ensure uniformity in corporate law across the Commonwealth, states, and territories. While the national scheme largely replaced the previous cooperative scheme, certain provisions of the Securities Industry Act 1980, such as section 36B, continue to have residual effects, subject to modifications by these regulations. This amendment ensures that the Australian Stock Exchange is not restricted by the specific incorporation rules outlined in the Securities Industry Act 1980 and allows it to operate in accordance with the general incorporation provisions of the Corporations Law.
Key Provisions
The Corporations Regulations (Amendment) 1996 No. 51 make several key amendments to the operation of the Securities Industry Act 1980, particularly section 36B(1), through the power granted in section 73 of the Corporations Act 1989. Regulation 2 introduces a new regulation, 1.17, which modifies the operation of section 36B of the Securities Industry Act 1980 to permit the Australian Stock Exchange to transfer its place of incorporation in accordance with section 147 of the Corporations Law. This change is intended to bring the Australian Stock Exchange in line with other companies under the national companies and securities scheme, ensuring consistent application of incorporation transfer provisions.
The regulations impose specific obligations on the Australian Stock Exchange and any other entities governed by these amendments. Primarily, they require the Australian Stock Exchange to comply with the procedures outlined in section 147 of the Corporations Law when seeking to transfer its place of incorporation. This includes meeting any requirements for notice, approval, or other procedural steps mandated by the Corporations Act 1989 or other relevant legislation. Additionally, any entity involved in the transfer process must ensure that all actions are taken in accordance with the legislative framework to avoid any legal complications.
Failure to comply with the provisions set out in these regulations could lead to various consequences. While the regulations themselves do not specify particular offences, breaches of the Corporations Act 1989 or related legislation can result in both civil and criminal penalties. For instance, under section 1311 of the Corporations Act, a person who contravenes certain provisions can be subject to a civil penalty of up to $210,000 for a corporation and $42,000 for an individual, in addition to potential criminal penalties which can include fines and imprisonment. The specific penalties and consequences would depend on the nature and severity of the breach, as well as any relevant judicial discretion.