Telecom Australia Stock Regulations (Amendment) 1991 No. 291
EXPLANATORY STATEMENT STATUTORY RULES 1991 No. 291
Issued by the authority of the Minister for Transport and Communications
Australian Telecommunications Corporation Act 1989
Telecom Australia Stock Regulations (Amendment)
Section 105 of the Australian Telecommunications Corporation Act 1989 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.
Section 57 of the Act authorises the Australian Telecommunications Corporation (Telecom) to borrow money from persons other than the Commonwealth, ands section 58 authorises it to give security over its assets for those borrowings. The Telecom Australia Stock Regulations (the regulations) set out the manner in which securities, called Telecom Australia Stock, are to be applied for, issued and dealt with.
Up to the present, the regulations prohibited the notation of any trust in the Stock Ledger. This led to a view that Telecom Australia Stock could not be issued to trustees, executors of estates and representatives of small societies and community groups, and as a result Telecom Australia Stock was believed to be less attractive to small investors than some other Commonwealth and State instrumentalities which suffer under no such restriction. The regulations also prohibited the entering of the name of a person under the age of 18 as owner of stock. This restriction deterred some investors seeking a secure medium term investment for children.
Regulation 2 therefore deletes the words "must not" from subregulation 7(3), and substitutes "may", thereby permitting stock to be inscribed in the name of a person under the age of 18 years.
Regulation 3 repeals the former regulation 8 and thereby removes the prohibition on the receipt by Telecom, or entry in the Stock Ledger, of notice of a trust of any kind.
Regulation 4 repeals the former regulation 9, to remove the prohibition on the holder of stock being described as a trustee, executor or administrator, and substitutes a new regulation 9. The new regulation 9 provides:
that Telecom Australia Stock may be inscribed in the name of a person described as a trustee, executor or administrator; and
is it to be obliged to enquire as to the propriety of any dealings with the stock.
The proposed amendments will commence on the date of their notification in the Gazette.
The Minute recommends that Regulations be made in the form attached.
Authority: Section 105 of the Australian Telecommunications Corporation Act 1989
Overview
The Telecom Australia Stock Regulations (Amendment) 1991 No. 291 was enacted to amend the Australian Telecommunications Corporation Act 1989, addressing certain limitations on the issuance and registration of Telecom Australia Stock. Authorised by the Minister for Transport and Communications, the amendments aim to improve the flexibility and accessibility of Telecom Australia Stock, thereby enhancing its attractiveness to a broader range of investors. Previously, the regulations prohibited the notation of trusts and the registration of individuals under the age of 18, which limited potential investment avenues for trustees, executors, and parents looking to invest on behalf of minors. By amending these restrictions, the regulations seek to expand the types of entities and individuals who can own Telecom Australia Stock, aligning it more closely with other investment instruments available in the market.
The policy objective behind these amendments is to modernise and liberalise the regulatory framework governing Telecom Australia Stock, thereby encouraging broader participation in the investment market. This change is intended to make the investment vehicle more versatile and appealing, particularly to trustees, executors, and parents who might otherwise be deterred by the previous limitations. The amendments reflect a shift towards greater inclusivity and responsiveness to the evolving needs of investors, ensuring that Telecom Australia Stock remains a viable and attractive option within the broader financial landscape.
Scope and Application
The Telecom Australia Stock Regulations (Amendment) 1991 No. 291 amends the Telecom Australia Stock Regulations under the Australian Telecommunications Corporation Act 1989. These regulations govern the issuance, application, and management of Telecom Australia Stock, which is a form of security that Telecom, the Australian Telecommunications Corporation, can offer. The amendments are intended to broaden the applicability and attractiveness of Telecom Australia Stock by allowing it to be issued to trustees, executors, and representatives of small societies and community groups, as well as to persons under the age of 18. Previously, these groups were effectively excluded from participating due to restrictions in the existing regulations. The changes aim to facilitate a wider range of investors by removing barriers that previously prevented the notation of trusts in the Stock Ledger and the issuance of stock to individuals under 18 years old or those acting in a fiduciary capacity.
These amendments apply to the Commonwealth of Australia and are relevant to any entities or individuals interacting with Telecom Australia Stock. The regulations are designed to operate within the framework set by the Australian Telecommunications Corporation Act 1989, which authorises Telecom to borrow money and secure its assets. The changes are set to commence on the date of their notification in the Gazette, as recommended by the Minute of the Council of Ministers. This regulatory amendment ensures that the Telecom Australia Stock Regulations are more inclusive and reflective of contemporary investment practices.
Key Provisions
The Telecom Australia Stock Regulations (Amendment) 1991 No. 291 amends the existing Telecom Australia Stock Regulations under the Australian Telecommunications Corporation Act 1989. The main operative sections of this amendment are Regulations 2, 3, and 4. Regulation 2 changes the wording from "must not" to "may" in subregulation 7(3), allowing for the issuance of Telecom Australia Stock to individuals under the age of 18. Regulation 3 repeals the previous prohibition on entering notices of trusts into the Stock Ledger, thereby permitting such entries. Regulation 4 repeals the prohibition on describing holders of stock as trustees, executors, or administrators and introduces a requirement for Telecom to investigate the propriety of any dealings with such stock.
The amended regulations impose specific obligations and requirements on Telecom. They must now permit the issuance of stock to individuals under 18, accept entries for trusts in the Stock Ledger, and allow the description of stock holders as trustees, executors, or administrators. However, Telecom is also required to investigate the propriety of any transactions involving stock held by such individuals or entities. These changes aim to make Telecom Australia Stock more accessible and attractive to a broader range of investors, including minors and representatives of trusts and estates.
Breaches of the regulations could potentially lead to civil or criminal consequences, although the specific offences, penalties, or consequences are not detailed in the explanatory statement. Given that the Australian Telecommunications Corporation Act 1989 and related regulations primarily govern corporate and financial transactions, non-compliance could result in legal actions for breach of trust, misrepresentation, or other related offences. The maximum penalties for such offences would depend on the specific nature of the breach and the applicable laws at the time of the offence. It is important for parties involved to adhere strictly to the amended regulations to avoid any potential legal repercussions.