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Client Update: Corporate and Financial Services – 3 July 2007

Simpler Regulatory System regulations

In brief: Regulations to give effect to some of the measures implemented under the Federal Government's 'Simpler Regulatory System' legislation have now been made. Senior Associate Justine Woodford looks at some of the detail.

We recently reported that the Federal Government's new simpler regulatory system laws, implemented through the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (Cth) (the Simpler Regulatory Act) and other supporting legislation, received Royal Assent on 28 June 2007 (see the AAR Client Update of 29 June 2007 and AAR Focus of 28 June 2007). While the Government had announced details of supporting regulations required to implement some of the legislative provisions (in particular, dealing with electronic registration of charges), more regulations were still to be made.

Some of these supporting regulations have now been made. Some of the new regulations are for the specific purpose of implementing measures under the Simpler Regulatory Act and related laws. They support a number of the legislative provisions that came into effect either on, or before, 1 July 20071. Other new regulations have been made to give effect to related issues included in the reference guide released by the Government as part of the 'Simpler Regulatory System Package' on 24 May 2007 (the reference guide).

Brief details of these new regulations are as follows.

Corporations Amendment Regulations 2007 (No 2) (Cth)

They:

  • insert the disclosure requirements for director and executive remuneration that are currently in the accounting standards into regulation 2M.3.03 of the Corporations Regulations (the Regulations) (and we assume that the relevant requirements in the accounting standards will need to be repealed); and
  • repeal existing regulation 2M.6.04 and the associated schedule 5B to the Regulations relating to annual financial reports of listed companies (which have now been made redundant by amendments to the Corporations Act 2001 (the Act)).
Corporations Amendment Regulations 2007 (No 4) (Cth)

These regulations remove prescribed paper forms from the Regulations and to allow the Australian Securities & Investments Commission (ASIC) to create approved forms for the registration of company charges that may be lodged electronically.

Corporations Amendment Regulations 2007 (No 5) (Cth)

They remove the requirement for public companies and registered managed investment schemes to notify ASIC of their top 20 shareholders or members.

Corporations Amendment Regulations 2007 (No 7) (Cth)

They:

  • increase to $5000 the amount up to which a financial benefit can be given to certain related parties without the need for member approval, for the purposes of section 213(1) of the Act; and
  • include a company's contact address and principal place of business as 'prescribed information' about the company on ASIC's register, allowing people searching the company's details to find out this information.
Corporations (Review Fees) Amendment Regulations 2007 (No 1) (Cth)

They enable a company to pay their annual review fees as a single payment once every 10 years. The amounts prescribed for the upfront payment of these fees (which are discounted to allow for foregone interest on monies paid upfront) are:

  • $7700 for a public company or a registered scheme;
  • $1600 for a proprietary company; and
  • $300 for a special purpose company.

In addition to the above, other new regulations have been made to complement s912B of the Act, which requires Australian financial services licensees, providing a financial service to retail clients, to have arrangements for compensating them in case of monetary losses suffered due to breaches of relevant obligations under the law.

We will continue to monitor any new changes to this legislation. If you have any queries about this or any other related matter please feel free to contact us.

Footnotes
  1. There are still further supporting regulations that will be needed to give full effect to other measures under the Simpler Regulatory Act (eg, in relation to the scope of financial services advice, the cross endorsement of authorised representatives, the new product activity and data collection provisions and some of the fundraising provisions). For further details on these and other related measures to be implemented through regulations, refer to our table (which contains a comprehensive summary of this information).

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