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Ministerial Determination Trustee Company Transfer of Estate Assets and Liabilities Ch 5D Corporations Act 2001

Ministerial Determination Trustee Company Transfer of Estate Assets and Liabilities Ch 5D Corporations Act 2001

Administered by Department of the Treasury

Legislation au F2012L01904 Not in force Legislative Instrument

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MINISTERIAL DETERMINATION

TRUSTEE COMPANY TRANSFER OF ESTATE ASSETS

AND LIABILITIES

CH 5D CORPORATIONS ACT 2001

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Hon Bill Shorten MP, Minister for Employment and Workplace Relations and Minister for Financial Services and Superannuation makes this determination dated 6 August 2012 under paragraph 601WBD(1)(b) of the Corporations Act 2001 (the Act).

Paragraph 601WBD(1)(b) of the Act provides that the Minister's consent to the transfer of estate assets and liabilities is not required if the Minister has, in writing, determined that his or her consent is not required in relation to a class of transfers. If the Ministerial determination is expressed to apply to a class of transfers, it is a legislative instrument under subsection 601WBD(3) of the Act.

1. Background

Chapter 5D of the Act implements the transfer of certain regulatory responsibilities from the States and Territories to the Commonwealth in relation to trustee companies that provide “traditional trustee company services”, including performing estate management functions, preparing wills, applying for probate of a will and establishing and operating common funds.

The Chapter created a national licensing system for trustee companies. These trustee companies are required to hold an Australian financial services licence covering the provision of traditional trustee company services. The trustee companies to which Chapter 5D of the Act applies are those companies listed in Schedule 8AA to the Corporations Regulations 2001.

Under the former State and Territory regulatory regimes for trustee companies, many corporate groups operated subsidiaries in the States and Territories. The function of the subsidiaries was to hold the relevant trustee company authorisation in that jurisdiction. Following the introduction of the national regulatory framework for trustee companies, many corporate groups want to consolidate their traditional service business and transfer that business to a single Australian financial service licensee.

Part 5D.6 of the Act governs ASIC-approved transfers of estate assets and liabilities from one licensed trustee company to another. Under subsection 601WBA(1) of the Act, ASIC may, in writing, make a determination (a transfer determination) that there is to be a transfer of estate assets and liabilities from a specified trustee company to another specified trustee company. ASIC may make the transfer determination only if the Minister has consented to the transfer or if the Minister's consent to the transfer is not required (see section 601WBD).

2. Purpose of the Ministerial determination

The purpose of this Ministerial determination is to remove the requirement for the Minister’s consent to the transfer of estate assets and liabilities for a particular class of transfers under paragraph 601WBD(1)(b) of the Act.

3. Operation of the Ministerial determination

This Ministerial determination under paragraph 601WBD(1)(b) of the Act operates so that consent from the Minister under subparagraph 601WBA(2)(a)(i) is not required for:

all voluntary transfers of estate assets and liabilities between companies within the same corporate group (an intra-group transfer) ; and
voluntary transfers between unrelated companies (an arm's length transfer).

An intra-group transfer is a transfer between companies that are related bodies corporate by virtue of s50 of the Act. A transfer that is between unrelated companies is a transfer between companies that are not related bodies corporate by virtue of s50 of the Act.

4. Statement of Compatibility with Human Rights

This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Legislative Instrument is to is to remove the requirement for the Minister’s consent to the transfer of estate assets and liabilities for a particular class of transfers under paragraph 601WBD(1)(b) of the Act.

Human rights implications

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 because it does not engage any of the applicable rights or freedoms.

5. Consultation

ASIC has consulted with the Treasury in relation to this determination. No further consultation was undertaken as the determination is of a minor or machinery nature.

Overview

The Ministerial Determination titled "Trustee Company Transfer of Estate Assets and Liabilities" was enacted in 2012 by The Hon Bill Shorten MP, Minister for Employment and Workplace Relations and Minister for Financial Services and Superannuation under the Corporations Act 2001. This legislation was introduced to address the need for streamlined regulatory processes within the trustee company sector by facilitating the consolidation of business operations across multiple jurisdictions into a single Australian financial service licensee. The Australian Securities and Investments Commission (ASIC) is the enacting body for this determination, which aims to simplify the transfer of estate assets and liabilities between trustee companies, particularly within the same corporate group or between unrelated companies, without the need for Ministerial consent. This legislative instrument is designed to support the transition to a unified national regulatory framework, enhancing efficiency and compliance within the trustee services industry.

Scope and Application

The Ministerial Determination under the Corporations Act 2001, dated 6 August 2012, specifies that the Minister's consent is not required for certain transfers of estate assets and liabilities among trustee companies. This determination applies to intra-group transfers, which involve companies within the same corporate group, and arm's length transfers, which involve unrelated companies. The legislation is designed to facilitate the consolidation of traditional service businesses by corporate groups under a single Australian financial services licensee, aligning with the national licensing system for trustee companies established in Chapter 5D of the Act. The Act applies to trustee companies listed in Schedule 8AA of the Corporations Regulations 2001, which provide traditional trustee company services including estate management functions, will preparation, and common fund operations. This determination streamlines the regulatory process by removing the need for Ministerial consent for specified transfers, thereby supporting the operational efficiency of trustee companies operating under the national framework.

Key Provisions

The main operative sections of the Ministerial determination under paragraph 601WBD(1)(b) of the Corporations Act 2001 pertain to the removal of the requirement for Ministerial consent in specific transfer scenarios (paragraph 4). The determination allows for voluntary transfers of estate assets and liabilities between companies within the same corporate group, known as intra-group transfers, without needing Ministerial approval (subsection 601WBA(2)(a)(i)). Similarly, it permits voluntary transfers between unrelated companies, referred to as arm's length transfers, without requiring Ministerial consent. These provisions streamline the transfer process by eliminating the need for Ministerial consent for these specified types of transfers. The Act imposes specific obligations on trustee companies engaged in the transfer of estate assets and liabilities. Trustee companies must ensure that any transfers comply with the conditions set out in the Ministerial determination, which includes distinguishing between intra-group and arm's length transfers. Companies must also adhere to the requirements outlined in Part 5D.6 of the Corporations Act 2001 and the relevant regulations, including ensuring that the transfer determination is made in writing by the Australian Securities and Investments Commission (ASIC). Additionally, the corporate group must maintain proper records and documentation to substantiate the nature of the transfer as either intra-group or arm's length. Failure to comply with the provisions of this determination and the associated sections of the Act may result in legal consequences. Although the Ministerial determination itself does not specify penalties, breaches of the broader regulatory framework can lead to civil or criminal penalties. For instance, under section 1317E of the Corporations Act 2001, individuals or entities found guilty of certain breaches can be subject to substantial fines and, in serious cases, imprisonment. The exact penalties depend on the specific breach and the circumstances surrounding it, but they can be significant, reflecting the importance of compliance with corporate regulations.

Area of Law: Corporate Law & Governance
Instrument: Legislative Instrument
Concepts: Regulatory Standards; Reporting & Disclosure Obligations; Compliance Obligations

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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.

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