Modernising Business Registers Business Advisory Group key messages 18 May 2022

Welcome and introductions

Chair, Director Lainie Alexander opened the meeting and welcomed attendees.

No conflicts were declared.

Program update

Lainie Alexander provided a program update:

• A business inbox co-design session is planned to be held in the June meeting.
• The 2022 modernising business registers (MBR) milestones and activity schedule has been updated to provide additional detail where available. While the aim of this document is to provide members with visibility, it remains subject to change and provides an indicative view only.
• A summary of communications issued to group members between meetings will be provided as a regular update in the papers for noting.

Carolyn Godwin provided an action item update.

Digital signatures update

An update was provided on the high-level design of digital signatures.

Late last year consultation was undertaken with members to understand current state pain points and whether there was an opportunity to transition to digital/electronic signatures across the MBR program.

The endorsed design recommends users interacting with Australian Business Registry Services (ABRS) to use digital signatures, implemented by a signed declaration, and supported by the data standards.

ABRS Law and Policy are currently in the process of developing the legal instruments to enable this approach, and to endorse the declaration wording.

Members provided the following feedback:

• It is important to understand the full client experience including a focus on what the industry can do (not just what the ABRS can or cannot do).
• There is a need to clarify what information an agent or practice needs to retain, that is, when an agent changes between software.

Director ID compliance

Over 500,000 director IDs have been issued, and group members were thanked for their support with raising awareness within their industries.

A larger proportion of new directors are applying. This aligns with the change in transitional arrangements from 5 April 2022, requiring new directors to apply for a director ID prior to their appointment.

Members were thanked for their feedback provided on director ID compliance notification correspondence. A common theme from the feedback received was the need to strengthen the language around the consequences of not applying.

As the ATO moves toward tax time, a key message will focus on encouraging the use of the digital option to apply for a director ID, as the fastest and most convenient approach.

Members provided the following feedback:

• There are situations where a director ID application cannot be completed online, requiring a phone call to apply.
• Some directors of charities or not for profit organisations are experiencing difficulties applying for a director IDs prior to appointment, where appointed at an Annual General Meeting.
• Difficulties are being experience when applying for a myGovID (as part of the process in applying for a director ID), where there has been a change of name.

Australian Securities and Investments Commission compliance role

Australian Securities and Investments Commission (ASIC) are using a range of channels to promote the obligation to apply for a director ID, and thanked members for their continuing support via their channels.

ABRS is responsible for undertaking compliance programs. Where persistent non-compliance is identified, these cases may be referred to ASIC to consider enforcement action.

ASIC’s enforcement approach will involve criminal prosecution. The maximum penalties are outlined on ASIC’s websiteExternal Link.

ASIC Info sheet 152External Link explains ASIC’s approach to public comment on regulatory activities by ASIC.

Law and Policy update

The MBR program is designed so that there will be a progressive transfer of the registers from ASIC to the ABRS platforms as these are progressively built.

Legislation which enables the MBR program received royal assent on 22 June 2020. This law provides for the legal transfer of registry functions and powers from ASIC to the Registrar to commence either by:

• proclamation
• auto-commencement on 23 June 2022 (for items that have not commenced within 24 months of when the legislation was enacted).

An amendment to the law was introduced to Parliament earlier this year under the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 that sought:

• to defer the auto commencement date from 23 June 2022 to 1 July 2024 to provide additional time for the program
• more flexible mechanisms to deal with transfer of registry functions in line with system releases.

This bill was not passed prior to the election and has now lapsed.

In response to this, agencies are undertaking the following actions:

• Introducing legislation to address this situation.
• Implementing interim data standards and disclosure frameworks prior to 23 June 2022.

Liquidators and auditors consultation outcomes

Several consultations have been held with liquidator and auditor representatives, and review undertaken by ASIC to refine and finalise the high-level design.

The scope of the experience pathways has been adjusted to cover the companies tranche interactions only.

This experience pathway will inform the detailed solution design and may change.

A detailed questions and answers document will be shared with group members.

Members were advised further feedback is welcomed and can be provided to the MBREngagement mailbox.

Wrap and close

Lainie Alexander thanked members and attendees for their contributions.

Meeting closed at 11:20am.