Corporations Regulations (Amendment) 1995 No. 398
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 398
Issued by the Authority of the Attorney-General
Corporations Act 1989
Corporations Regulations (Amendment)
Section 22 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations not inconsistent with the Act or the Corporations Law (the Law), prescribing matters which are required or permitted by the Law to be prescribed by regulations, or are necessary or convenient to be prescribed by regulation for carrying out or giving effect to the Law.
The purposes of the Regulations are to:
(a) make amendments relating to supervisors of an approved section 770A market for unquoted prescribed interests; and
(b) make a technical amendment to regulation 7.12.12(1) to ensure that section 1022AA of the Corporations Law applies to prescribed interests; and
(c) amend a technical deficiency in the regulations that relates to the secondary trading provisions of the Law.
Details of the amendments to the Corporations Regulations are at Attachment A.
As required under the Heads of Agreement and the draft Corporations Agreement between the Commonwealth, States and Northern Territory, the Attorney-General consulted with the State and Territory Attorneys-General on the amendments to the Corporations Regulations.
The Regulations commenced on the date of gazettal.
ATTACHMENT A
DETAILS OF CORPORATIONS REGULATIONS AMENDMENTS
Commencement
These Regulations commenced on the date of gazettal.
Regulation 1
Amendment
Subregulation 1.1 provides that the Corporations Regulations are amended as set out in these Regulations.
Regulation 2
Amendment to Regulation 7.2.02 (Compliance monitoring - section 770A markets)
Subregulation 2.1 amends regulation 7.2.02 to allow a partnership to be a supervisor of a section 770A market where a member of the partnership is a registered auditor.
Former regulation 7.2.02 provided that a person or partnership which was a supervisor of a section 770A market must not have been an associate of the management company and must have been registered as an auditor under Part 9.2 of the Corporations Law (the Law). Only natural persons can be registered as auditors under Part 9.2 of the Law. Partnerships can not be registered as auditors. Therefore, despite the intention of former regulation 7.2.02, partnerships could not be supervisors of section 770A markets. The amended regulation corrects this deficiency.
The amended regulation provides that a person may be a supervisor if the person is not an associate of the management company and is registered as an auditor under Part 9.2 of the Law. A partnership may be a supervisor if the partnership is not an associate of the management company and a member of the partnership is registered as an auditor under Part 9.2 of the Law.
This is consistent with other provisions of the Law, such as subsection 324(2), which allow a firm to act as an auditor where at least one member of the firm is registered as an auditor under Part 9.2 of the Law.
Regulation 3
New Regulation 7.3.18 (Extending qualified privilege to supervisors of section 770A markets)
Subregulation 3.1 inserts new regulation 7.3.18 to provide that a supervisor of a section 770A market will have qualified privilege in certain circumstances.
A supervisor will have qualified privilege in respect of a statement made in the course of the performance of the supervisor's duties and in respect of any notification to the Australian Securities Commission under paragraph 770A(3)(c).
This is consistent with other provisions of the Law which extend qualified privilege to persons in positions similar to supervisors. For example, section 1289 extends qualified privilege to statements made by auditors in the course their duties. Stock exchanges and futures exchanges also enjoy qualified privilege for statements made in relation to some of their activities (sections 779 and 1141A respectively).
Regulation 4
Amendment to Regulation 7.12,12 (Application of section 1022AA to Prescribed Interests)
Subregulation 4.1 amends regulation 7.12.12(1) by inserting the words "other than a prospectus to which section 1022AA applies".
Regulation 7.12.12(1) provides for the application of section 1022 of the Law to prescribed interests. Section 1022 of the Law was amended by the Corporate Law Reform Act 1994 to exempt an issuer of a prospectus from compliance with section 1022 where section 1022AA applies. The amendment to the section inserted the words "other than a prospectus to which section 1022AA applies". The amendment to regulation 7.12.12(1) mirrors the original amendment of the substantive provision.
The amendment to the regulation makes it clear that an issuer of prescribed interests is exempt from section 1022 where section 1022AA applies.
Regulation 5
Amendment to Schedule 9A (Amending a Technical Deficiency)
Subregulation 5.1 amends a technical deficiency in Schedule 9A.
Section 1043B requires a notice to be lodged with the Australian Securities Commission in respect of secondary trading in unquoted securities. Subsections 1043C(5) and (6) provide that the regulations may apply the provisions of Part 7.11 and Divisions 2 and 3 of Part 7.12 to a notice as if it were a prospectus. Schedule 9A contains the regulations which modify Part 7.11 and Divisions 2 and 3 of Part 7.12.
Section 1029(1)(a) of Part 2 of Schedule 9A is amended by replacing the word "or" with the word "of".