EXPLANATORY STATEMENT
Statutory Rules 1989 No. 214
Issued by the Authority of the Attorney-General
National Companies and Securities Commission Regulations
(Amendment)
Subsection 53(1) of the National Companies and Securities Commission Act 1979 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Subsection 53(4) of the Act provides that the power of the Governor-General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council for Companies and Securities (the Council).
2. The Council was established under an Agreement between the Commonwealth and the States, executed on 22 December 1978 (the Agreement), that provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration in relation to company law and the regulations of the securities and futures industries in the six States, the Australian Capital Territory and the Northern Territory of Australia.
3. Under subclause 45(1) of the Agreement, the Council may consider a proposal for the amendment of regulations made under the Commonwealth Acts enacted for the purpose of the cooperative companies and securities scheme. Should the Council approve any draft amending regulation which gives effect to such a proposal, the Commonwealth is then required, under subclause 45(2) of the Agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
4. The accompanying Regulations are in accordance with a resolution made by the Council.
5. The purpose of the Regulations is to increase the monetary limit on the size of a contract that may be entered into by the National Companies and Securities Commission (the Commission) without the express approval of the Council from $50,000 to $250,000.
6. Details of the accompanying Regulations are as follows.
Regulation 1: Commencement
This regulation prescribes 1 September 1989 as the date on which the proposed amendments to the Regulations will come into operation.
Regulation 2: Limitation on contracts
This regulation will, for the purposes of paragraph 33(a) of the Act, increase from $50,000 to $250,000 the monetary limit on the size of a contract that may be entered into by the Commission without the express approval of the Council.
Overview
The National Companies and Securities Commission Regulations (Amendment) 1989 were introduced to modify existing regulations concerning the monetary limits on contracts that could be entered into by the National Companies and Securities Commission without the need for explicit approval from the Ministerial Council for Companies and Securities. Enacted by the authority of the Attorney-General under the National Companies and Securities Commission Act 1979, these amendments were made to enhance the operational efficiency of the Commission by expanding the scope of its contractual authority. This change was driven by the need to accommodate larger transactions, thus reducing the administrative burden associated with seeking council approval for every significant contract. The primary objective of these regulations was to streamline the administrative process while maintaining the integrity and oversight of the Commission's activities.
Scope and Application
The National Companies and Securities Commission Regulations (Amendment) Statutory Rules 1989 No. 214 apply to the National Companies and Securities Commission, which is an entity established under Commonwealth law to administer and enforce the uniform system of company law and securities regulation across Australia. These regulations amend the existing regulations to increase the monetary limit on the size of a contract that the Commission can enter into without requiring express approval from the Ministerial Council for Companies and Securities. The increased limit, from $50,000 to $250,000, facilitates the Commission's ability to engage in larger contractual transactions independently. The regulations, which come into effect on 1 September 1989, are made under the authority of the National Companies and Securities Commission Act 1979, and are subject to the resolutions of the Ministerial Council for Companies and Securities as per the Agreement between the Commonwealth and the States. The amendment applies nationally, affecting the operations of the Commission across all states and territories in Australia.
Key Provisions
The main operative sections of these regulations concern the monetary limit on contracts that the National Companies and Securities Commission (the Commission) can enter into without the express approval of the Ministerial Council for Companies and Securities (the Council). Specifically, Regulation 2 increases the monetary limit from $50,000 to $250,000 (Reg. 2). This means that contracts worth up to $250,000 can now be executed by the Commission without needing explicit Council approval, which was previously limited to contracts worth up to $50,000 (Reg. 2).
The Act imposes certain obligations and requirements on the Commission. For example, it requires the Commission to ensure that any contracts entered into are within the specified monetary limit, unless the Council has already given its express approval (s. 33(a) of the Act). This requirement is intended to maintain a level of oversight over significant financial commitments made by the Commission while allowing for more flexibility in managing routine operations.
There are no explicit provisions in the accompanying Explanatory Statement that outline offences, penalties, or consequences for breaches of the regulations. However, it is reasonable to infer that any contract entered into by the Commission that exceeds the new monetary limit of $250,000 without the Council’s approval could be considered a breach of the regulations. Such a breach might lead to the contract being deemed invalid or subject to review, depending on the specific provisions of the underlying Act and any applicable laws. The potential consequences of such a breach would likely be determined by the Council and could involve administrative, financial, or legal repercussions for the Commission.