Explanatory Memorandum
(Circulated by authority of the Parliamentary Secretary to Treasurer, Senator the Hon Ian Campbell)Schedule 2 - Amendment to the Corporations Act 2001
8. The Financial Services Reform Act 2001 (FSR Act) received Royal Assent on 27 September 2001. As a result of a drafting error, Item 329 of Part 2 of Schedule 1 of the FSR Act, commencing on 11 March 2002, would repeal section 95A of the Corporations Act. Section 95A defines the term "insolvency" generally for the purposes of the Corporations Act. It was intended only that subsection 95A(3) be repealed. Subsection 95A(3) indicated what the term 'insolvency" meant for a particular purpose, that is for the operation of the National Guarantee Fund provisions in Part 7.10 (now dealt with in regulations).
9. Item 1 reinserts section 95A into the Corporations Act 2001, effectively restoring subsections 95A(1) and 95A(2) to the Corporations Act .
10. There is no change to existing policy. The wording of subsections 95A(1) and 95A(2) was first included in the Corporations Law by the Corporate Law Reform Act 1992 and has been the operative definition since 23 June 1993.
11. The repeal of section 95A made by the Financial Services Reform Act is due to take effect on 11 March 2002. The reinsertion of section 95A will commence immediately after item 329 of Schedule 1 of the Financial Services Reform Act 2001 commences.