EXPLANATORY STATEMENT
STATUTORY RULE 1987 No 338 ISSUED BY THE AUTHORITY OF THE MINISTER FOR TRANSPORT AND COMMUNICATIONS
Section 112 of the Telecommunications Act 1975 (‘the Act’) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted to be prescribed by the regulations, or which are necessary or convenient to be prescribed by the regulations, for carrying out or giving effect to the Act.
Section 72A of the Act provides, inter alia, that the Australian Telecommunications Commission (‘Telecom’) may, with the approval of the Treasurer, borrow money, or raise money otherwise than by borrowing, by dealing with securities.
Regulation 3 of the Telecommunications (Telecom Australia Stock) Regulations (‘the Stock Regulations’) provides that Telecom may issue securities by way of inscribed stock, called Telecom Australia Stock (‘stock’).
Subregulation 13(2) of the Stock Regulations formerly provided that the owner of stock shall not transfer stock having a face value that is less than $100 or is not a multiple of $100. That restriction was making it difficult for Telecom to deal in new instruments such as Managed Investment Bond products, and handle the increasing demand for transfers of past holdings of stock in amounts that were not multiples of $100.
This was causing overheads in Telecom administration and was resulting in inconvenience to the investor.
The statutory rule omits subregulation 13(2), removing those restrictions on transfer of stock.
Overview
The Statutory Rule 1987 No 338, issued under the authority of the Minister for Transport and Communications, amends the Telecommunications (Telecom Australia Stock) Regulations to address an issue impacting the operational efficiency and investor convenience of Telecom Australia. Enacted in 1987, this statutory rule seeks to resolve a gap in the regulatory framework that previously restricted the transfer of Telecom Australia Stock to amounts of $100 or multiples thereof. This restriction hindered Telecom's ability to engage with new financial instruments and manage increasing demands for stock transfers in non-standard amounts, leading to administrative overheads and inconvenience for investors. The policy objective of the rule is to enhance the flexibility and efficiency of Telecom's stock transfer processes, thereby facilitating smoother operations and better service for investors.
Scope and Application
The Statutory Rule 1987 No. 338, issued under the authority of the Minister for Transport and Communications, amends the Telecommunications (Telecom Australia Stock) Regulations, which are subordinate instruments of the Telecommunications Act 1975. The principal objective of the statutory rule is to facilitate the transfer of Telecom Australia Stock by removing the previous restriction that prevented the transfer of stock with a face value less than $100 or not a multiple of $100. This amendment applies to Telecom, the Australian Telecommunications Commission, and to any person or entity that holds or intends to transfer Telecom Australia Stock. The rule operates within the national jurisdiction of Australia, governed by the Commonwealth. The statutory rule specifically targets the regulatory constraints outlined in subregulation 13(2) of the Stock Regulations, thereby easing administrative overheads and enhancing the efficiency of stock transactions for Telecom and its investors. There are no stated exclusions or exemptions in this statutory rule, and its scope is limited to the amendment of the specified subregulation. The rule does not extend beyond the removal of the stated restrictions on stock transfers, nor does it introduce any new substantive changes to the overarching Act or its regulations.
Key Provisions
The Statutory Rule 1987 No 338, issued under the authority of the Minister for Transport and Communications, primarily focuses on modifying existing regulations related to the issuance and transfer of Telecom Australia Stock. This amendment is made to facilitate smoother financial operations and investor convenience by removing certain restrictions on the transfer of stock. Specifically, section 1 of the Statutory Rule omits subregulation 13(2) of the Telecommunications (Telecom Australia Stock) Regulations, which previously restricted the transfer of stock with a face value that was less than $100 or not a multiple of $100. This change is intended to help the Australian Telecommunications Commission (Telecom) manage new financial instruments and accommodate the increasing demand for transferring past stock holdings in non-standard amounts.
Under the amended regulation, Telecom is now permitted to issue and transfer securities without the previously imposed restrictions. This alteration is crucial for enabling Telecom to deal with various new financial instruments, such as Managed Investment Bond products, more effectively. The removal of these restrictions is expected to reduce administrative overheads and improve the overall convenience for investors dealing with Telecom Australia Stock.
The obligations and requirements imposed by the Statutory Rule are straightforward. Telecom, with the approval of the Treasurer, must now comply with the amended regulation that allows the issuance and transfer of Telecom Australia Stock in any amount, regardless of its face value being less than $100 or a multiple of $100. This change necessitates that Telecom adjust its internal processes to accommodate the new flexibility in stock transfers, ensuring that all transactions are conducted in accordance with the updated regulatory framework.
Failure to comply with the provisions of the Statutory Rule could potentially lead to administrative and financial complications for Telecom and its investors. While the Statutory Rule itself does not explicitly outline specific offences, penalties, or consequences for non-compliance, any breaches of the underlying Telecommunications Act 1975 or associated regulations could result in legal action. The Act provides for a range of penalties, including fines, which could be substantial depending on the severity and nature of the breach. It is important for Telecom to ensure adherence to the new regulatory requirements to avoid any potential legal repercussions.