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New Australian Consumer Law Regulations open for consultation
The Ministerial Council of Consumer Affairs has developed national regulations that will form a part of the new Australian consumer laws. The draft regulations have been released by the Federal Department of the Treasury for comment. The new Australian consumer laws are likely to commence by 1 January 2011. More...
Changes to the insolvency industry
A Senate Committee has found that greater regulation is needed in the insolvency industry and that the Australian Securities and Investment Commission (ASIC) has been “overburdened”.
One of the key recommendations from the Senate Committee is that ASIC’s responsibilities in relation to corporate insolvency should be transferred to the existing personal bankruptcy regulator, Insolvency and Trustee Service Australia (ITSA), to form the Australian Insolvency Practitioners Authority (AIPA).
Another significant reform proposal is the potential expansion of eligibility criteria for corporate insolvency practitioners (such as liquidators). It is recommended that legal practitioners with at least 5 years commercial experience, and holders of a Masters in Business Administration with at least 5 years commercial experience, are eligible to hold a corporate insolvency practitioner licence. Under the current laws, only accountants have the necessary qualifications to be a licensed insolvency practitioner. More...
New Australian Consumer Law website
The Ministerial Council on Consumer Affairs, through an agreement between the Federal, State and Territory Governments have launched a new consumer law website. The website has been developed to help consumers and industry understand the new national consumer laws that are likely to commence by 1 January 2011. The new national laws will replace many State and Territory consumer laws. More...
ASIC updates guidance on product disclosure statements
The Australian Securities and investment Commission (ASIC) has released an updated Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other disclosure obligations) (RG 168) (the ‘Guide’). The Guide was updated following ASICs recent report, Review of disclosure for capital protected products and retail structured or derivative product. The Guide seeks to ‘assist issuers of capital protected products and retail structured or derivative products to make more effective disclosure to prospective investors,’ said ASIC Commissioner Mr Medcraft. More...
CAMAC to report on executive remuneration
In March 2009 the Federal Government commissioned an inquiry into the director and executive remuneration for businesses under the Corporations Act 2001 (Cth) (the ‘Act’). As a result of the inquiry, the Productivity Commission released a report into the executive remuneration legal framework. The report made a number of recommendations including establishing an expert panel to review the Act and provide advice on how to best legislate remuneration reporting under the Act.
The Federal Government asked the Corporations and Market Advisory Committee (CAMAC) to examine and provide recommendations as to how to amend the Act to reduce the complex remuneration reporting requirements and simplify the incentive components of executive pay. CAMAC released an information paper and called for submissions from stakeholders regarding the proposed amendments to the Act. More...
In a submission by the Law Council of Australia, the Corporations Committee of the Business Law Section of the Law Council of Australia indicated that in their view there was general support for the simplification of the current reporting requirements under the Act. However, it did not support prescribing the form, size or structure of incentives.
The CAMAC is due to report to the Federal Government by 30 November 2010.
Changes to accessing company share registers
The Corporations Amendment (No 1) Bill 2010 (Cth) (the ‘Bill’) seeks to limit access to company share registers by applying a “proper purposes” test. Currently, anyone can obtain a copy of the register without providing any reasons. However, under the proposed Bill a person must state how they intend to use the information contained in the share register. If it is for an improper purpose, then a company can refuse to provide a copy.
The accompanying regulations specify a non-exhaustive list of improper purposes which include requesting access for the purposes of solicitation of a donation from a member, solicitation of a member by a broker, gathering information about the personal wealth of a member and making unsolicited off-market share offers. It is expected that genuine takeover bids will be exempt from the regime.
Other proposed changes include a new three-tiered fee structure for obtaining a copy of the register and prescribing the formats in which electronic copies of the register are to be made available.
The Bill was introduced into Parliament on 24 June 2010 but was terminated when the Federal election was called. The Bill was reintroduced into the House of Representatives on 29 September 2010. More...
Amendments to the Corporations Act to reverse the Sons of Gwalia decision
The Corporations Amendment (Sons of Gwalia) Bill 2010 (the ‘Bill’) was re-introduced into Parliament on 29 September 2010. The Bill, if passed, will reverse the effects of the High Court decision in Sons of Gwalia v Margaretic (2007) 25 ACLC 1 that certain compensation claims by shareholders against the companies rank alongside the claims of ordinary unsecured creditors in insolvencies. In effect, the Bill provides that all claims in relation to buying, selling, holding or otherwise dealing with shares are to be ranked equally but after all other creditors’ claims.
Specifically, the Bill will remove the right of shareholder claimants to:
- vote as creditors in a voluntary administration or winding-up, unless they receive permission from the court; or
- receive reports, notices or statements to creditors from an administrator or liquidator, unless the shareholder makes a request in writing.
Additionally, the Bill will eliminate restrictions on the ability of shareholders to recover damages from a company based on how they acquired the shares or whether they still hold the shares.
The Bill will not apply retrospectively and will not affect any claim that arises before its enactment. More...