EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO. 263
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR JUSTICE FOR AND ON BEHALF OF THE ATTORNEY-GENERAL
SECURITIES INDUSTRY REGULATIONS (AMENDMENT)
Section 150 of the Securities Industry Act 1980 (the Act) provides in subsection (1) that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Subsection 150(5) 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 regulation of the securities industry in the six States and the Australian Capital Territory. The Northern Territory became a party to the agreement in 1986.
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 co-operative 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 regulation to the Federal Executive Council for making by the Governor-General.
4. The Council has resolved that the accompanying regulations should be made under the Act.
5. The purpose of the accompanying regulations is to amend regulation 2 of the Securities Industry Regulations (SIRs) by inserting definitions of ‘franchise’ and ‘mark’.
6. These definitions are relevant to regulation 5A of the SIRs which provides that for the purposes of the definition of ‘prescribed interest’ in subsection 4(1) of the Act, any right to participate, or any interest, as franchisee in a franchise is declared to be an exempt right or interest. The effect of regulation 5A is that any offer to the public of any franchise right or interest is not subject to the licensing provisions of the Act. In the absence of regulation 5A any promoter of a franchise scheme that was a ‘prescribed interest’ would be required to hold a dealers licence under section 43 of the Act.
7. The new definitions in the accompanying regulations will give guidance to the business community as to what arrangements are exempted as franchises.