Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)3 Notes on individual clauses
3.2. Upon enactment, the Bill will be known as the Corporations Legislation Amendment Act 2002.
3.1. The covering clauses (Clauses 1, 2 and 3) will commence on Royal Assent.
3.3. However, the operative provisions of the Act (namely, Schedules 1 to 5) will commence at the times set out in the Table of commencement information in Clause 2.
3.4. The Acts specified in a Schedule to the Bill will be amended or repealed as set out in the applicable items in the Schedules and any other item in a Schedule will have effect according to its terms.
Schedule 1 Repeal of annual return requirements
3.5. The Bill will eliminate annual returns and replace them with an Extract of Particulars.
Description of principal changes
3.6. The requirements in Part 2N.1 of the Corporations Act, under which every company is required to lodge an annual return by 31 January each year, are to be replaced by new arrangements which:
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- require ASIC to send or make available to every company, or registered scheme within two weeks after the anniversary of its registration or such other date as may be approved by ASIC (the review date):
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- an Extract of Particulars setting out the company details recorded on the Register of Companies; and
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- an Invoice for payment of the companys annual fee;
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- require the company or its directors, within 28 days of the review date, to respond (in the prescribed form) to the extract of particulars if any particular in the extract is not correct as at the date of receipt of the Extract of Particulars;
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- require the company or its directors, within two months of the companys review date:
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- to pass a solvency resolution (unless Chapter 2M applies); and
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- to pay the annual fee set out on the Invoice;
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- enable ASIC to require a company to lodge a Return of Particulars where:
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- the company has failed to pay its annual fee within two months of the review date;
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- the company has not lodged any documents for a specified period of time; or
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- ASIC has grounds to suspect the information recorded on the Register of Companies maintained by it under section 1274 may be incorrect.
3.7. Payment of the review fee will mean that a company will be taken to have represented to ASIC, that as at the end of the 2 month period after the companys review date, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
3.8. If the annual review fee is not paid within 12 months of the date on which the invoice was issued, ASIC may initiate action to have the company removed from the register.
3.9. Equivalent amendments will be made to the requirements in respect of registered managed investment schemes.
3.10. In conjunction with these changes, companies will also be subject to new requirements to lodge information about changes to members of a company and any ultimate holding company. The Bill will align the obligation to lodge these details annually as against public companies, and as they occur, against proprietary companies.
3.11. This item will remove the definition of annual return.
3.12. This item will insert a new definition in the Corporations Act of an Extract of Particulars and its function. An Extract of Particulars is a statement given by ASIC within two weeks of the companys review date (see item 6 below generally the anniversary of the companys registration) of a company or the responsible entity of a registered scheme setting out some or all of the current particulars about a company or a registered scheme recorded in a register maintained by ASIC under section 1274. The extract of particulars may also contain a requirement to provide ASIC with a particular prescribed by regulation for the purposes of proposed new section 346B.
3.13. The directors of a company must, within 2 months after each review date for the company, resolve whether the business is solvent as defined under the Corporations Act. In the situation where the directors resolve that the company is not solvent, the company must notify ASIC. A negative solvency resolution indicates the company is not solvent and a positive solvency resolution indicates it is solvent.
3.14. This item will insert a new definition in the Corporations Act of a Return of Particulars and its function.
3.15. This item will insert in section 9 a reference to the definition of review date found in proposed new section 345A. The review date will generally be the anniversary date of the date the company or a registered scheme was first registered with ASIC. This review date can, however, be changed by agreement between ASIC and the business.
Item 9 Proposed new section 107
3.16. The item will insert a new section to ensure that when a company is providing information to ASIC regarding two or more of the top 20 shareholders in a class of shares who hold the same number of shares in that class of shares, the details of each of those members must be given in any notice required to be provided under certain proposed new provisions of the Corporations Act (notices relating to the top 20 members).
Item 10 Paragraphs 4.2 and 4.3 of the Small Business Guide in Part 1.5
3.17. This item will modify the Small Business Guide to remove references to annual returns and replace them with references to the extract of particulars and the return of particulars. It also removes references to the old Annual Return Fee and replaces them with references to the review fee. The review fee is of the same quantum as the original Annual Return Fee.
Item 11 Paragraph 4.4 of the Small Business Guide in Part 1.5 (table)
3.18. This table will modify the Small Business guide to ensure it is aligned with the new information lodgment system proposed to be implemented in the Corporations Act. Specifically, it details the notification requirements under the new system and where the requirements are located by section in the Corporations Act.
Item 12 Paragraph 5.4 of the Small Business Guide in Part 1.5
3.19. This item will remove the responsibilities of company secretaries in relation to the previous system of notification of changes and annual returns for company information with ASIC and replaces them with the new responsibilities relating to notification requirements including the extract of particulars and return of particulars requirements.
Items 13 and 14 Paragraph 5.4 of the Small Business Guide in Part 1.5 (note)
3.20. These items will update the Small Business Guide for consequential changes where the numbering in the Corporations Act has changed under the new information lodgment system.
Items 15, 16 and 17 Subsection 117(2)
3.21. These items will amend section 117 of the Corporations Act to provide that an application for registration of a company must state whether or not the shares held by a member will be fully paid on registration, whether or not the shares will be beneficially or non-beneficially owned by the member on registration, and whether, on registration, the company will have an ultimate holding company.
3.22. Item 18 of the Bill will amend subsection 163(3) to require a company applying to convert to a proprietary company to provide ASIC, at the time of making the application to convert, with any details relating to the companys register of members that are different from the information provided to the company by ASIC in the latest extract of particulars, or provided by the company to ASIC in response to the latest extract of particulars.
3.23. Proposed new subsection 163(3B) will ensure that where a company has more than 20 members, it need only provide details relating to the top 20 members of a class of the company.
3.24. This item adds a heading for a new section to Chapter 2C, that relating to ASICs business registers. Section 2C, Registers, will be divided into two Parts, 2C.1 (Registers generally) and 2C.2 (Notices by proprietary companies of changes to member register).
3.25. This item will require a company to include additional information on its members register regarding share allotted to members, including whether shares were fully paid or partially paid.
3.26. This item informs users of the Corporations Act that proprietary companies must also comply with provisions set out in Part 2C.2.
3.27. This item will insert a requirement for proprietary companies to notify ASIC of changes required to be made to particulars in the companys member (shareholders) register maintained under section 169 in Chapter 2C (Registers) of the Corporations Act. For example, where there is required to be a change in the particulars recorded in the register pursuant to subsection 169(1) (name and address and date of entry of members name into the register) or paragraph 169(3)(d) (the class of shares held by the member), the company will be required to lodge a notice in the prescribed form within the time determined under proposed section 178D.
3.28. Proposed new 178A lists changes of details relating to members shares that will be required to be notified to ASIC. Proposed new 178B will limit the requirement to notify changes to ASIC to details of the top 20 members only.
3.29. Proposed new 178C will provide, in addition to the changes to its member register that a proprietary company will be required to notify to ASIC under proposed new 178A, that the company will also be required to notify ASIC of any of the following details that are different from the details previously notified to ASIC, viz: the total number of the companys shares on issue; the classes into which shares are divided; and for each class of shares issued: the number of shares for the class; the total amount paid up for the class; and the total amount unpaid for the class.
3.30. Proposed new 178D will specify in tabular form the timeframe within which ASIC must be notified of the changes required to be made to the member register arising in connection with certain events.
3.31. Item 22 (proposed subsection 178A(1) and 178C(1)) will insert new offence provisions but will apply a penalty of 5 penalty units, which is within the range of existing penalties in the Corporations Act (see also item 44 of Schedule 1).
3.32. Item 23 of the Bill will replace the requirement in paragraph 188(1)(c), which imposes responsibilities on company secretaries in relation to the obligations imposed on companies by the Corporations Act to comply with the annual return requirements of the Act. This item will insert a new requirement to respond to the new extract of particulars and return of particulars requirements of the Bill.
3.33. Item 24 of the Bill will insert new requirements in sparagraph 188(1)(d) imposing new responsibilities on company secretaries, which generally arise out of the changes proposed to be made to the Corporations Act by the Bill in relation to the lodgment of company particulars. These include, for example, requirements in relation to notice of changes to member registers and the share structure of a company.
3.34. Subsection 188(2A) currently imposes a strict liability offence for breach of subsection 188(1), carrying a penalty of 5 penalty units. Items 23 and 24 will either substitute current obligations or insert new obligations into an existing provision and make no change to the existing penalty for that provision.
3.35. These items will insert cross-references to the requirements to be imposed on proprietary companies under proposed new Part 2C.2.
3.36. This item provides a new heading relating to the updating ASIC information about companies and registered schemes.
3.37. Proposed new Part 2N.1 will remove the existing 31 January date for annual return compliance and replace it with the compliance requirements based on a new review date. Instead of all companies being required to comply with the lodgment requirements for annual returns as of the end of January each year, companies will comply with the new information lodgement requirements that will be linked to a companys own specific review date. A companys review date will usually be the anniversary of the date the company was first registered with ASIC but a company or registered scheme will be able to choose another review date, subject however to ASICs approval.
3.38. Item 30 of the Bill will remove the existing Chapter 2N of the Corporations Act (annual returns and lodgment compliance provisions) and replace it with new information compliance requirements for companies and registered schemes (proposed new Chapter 2N Updating ASIC information about companies and registered schemes).
Item 30 Part 2N.2 Extract of particulars
3.39. ASIC will be obliged to issue each company or registered scheme with an extract of particulars within two weeks of the companys or schemes review date (generally the anniversary of the companys registration). The extract will include details of the company or registered scheme recorded on ASICs database or any particular sought by ASIC that is prescribed for that purpose (proposed new sections 346A and 346B), such as:
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- names and addresses of each director and company secretary;
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- issued shares and options granted;
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- details of its shareholders;
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- address of its registered office;
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- address of its principal place of business.
3.40. Proposed new section 346C in proposed new Part 2N.2 will require the company or registered scheme to respond (in the prescribed form) to the extract of particulars within 28 days of the issue of the extract of particulars if any particular in the extract is not correct as at the date of its receipt by the company or registered scheme.
3.41. The correction will be able to be lodged with ASIC on a printed form, or if an agreement is in place to lodge electronically, in accordance with the agreement.
3.42. Proposed new sections 346A, 346B and 346C will replace existing section 345 (Deadline for lodging annual return), which contains a strict liability offence for breaches of subsections 345(1), (2) and (3), carrying a penalty of 5 penalty units. Proposed new subsection 346C(6) will also impose a strict liability offence and carry a penalty of 5 penalty units (see also item 45 of Schedule 1).
Item 30 Part 2N.3 Solvency resolution
3.43. Current subsection 346(1), which requires the directors of a company to pass a solvency resolution within 1 month before the lodgment of the annual return, will be replaced by proposed new 347A and 347B.
3.44. Apart from small proprietary companies, most companies will not have to pass a solvency resolution under new section 347A and state whether the resolution was positive or negative because under new subsection 347A(2) (similar to the current requirement under subsection 346(2)) the requirement to pass a solvency resolution does not apply if the company has lodged a financial report with ASIC in the past 12 months. The financial report includes a directors' declaration which among other things includes a declaration by the directors whether there are reasonable grounds to believe the company will be able to pay its debts as and when they become due and payable (paragraph 295(4)(c)).
3.45. Proposed new section 347A will require the directors of a company to pass a solvency resolution within 2 months after each review date for the company. An offence based on this provision will be a strict liability offence (the requirement will not apply to a company that has lodged a financial report under Chapter 2M of the Corporations Act).
3.46. Proposed new subsection 347B(1) will provide that if the directors of the company make a negative solvency resolution, the company must notify ASIC of that fact within 7 days of after the resolution is passed.
3.47. Proposed new subsection 347B(2) will provide that if the directors do not make a solvency resolution within 2 months after the review date of the company, the company will be obliged to notify ASIC of that fact within 7 days after the end of the 2 month period after review date.
3.48. This avoids a self-incrimination problem that would otherwise arise for directors of companies if they were obliged to inform ASIC that they had not passed a solvency resolution under proposed new subsection 347A (directors must pass a solvency resolution within 2 months after each review date for the company).
3.49. The proposed subsection makes it clear that it is the company that would be obliged to comply with the requirement to notify ASIC, not the directors, thus avoiding the possibility of self-incrimination by directors. Self-incrimination cannot arise in relation to the company under proposed subsection 347B(2) because the privilege against self-incrimination is not available to a company under the Corporations Act.
3.50. An offence based on these new provisions will be a strict liability offence. It is proposed that an offence based on these provisions should carry a penalty of 10 penalty units. These proposed penalties are double the existing penalties based on current section 346 (directors must make a solvency resolution) to ensure that directors take these obligations to be serious obligations (see also item 46 of Schedule 1).
Item 30 Part 2N.4 Return of particulars
3.51. Under proposed new sections 348A, 348B and 348C, ASIC will be able to require a company to respond to a return of particulars provided to the company or registered scheme by ASIC where:
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- the company has failed to pay its annual fee within 2 months of its review date;
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- ASIC has grounds to suspect the information recorded on the Register of Companies maintained by ASIC under section 1274 may be incorrect; or
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- the company has not lodged any documents with ASIC for at least one year.
3.52. ASIC will also be empowered to include in a return of particulars, a requirement that a company respond to prescribed particulars (proposed section 348B). ASIC will also be empowered to include in a return of particular, a requirement that the company comply with subsection 348C(2) or subsection 348C(3) and require from the company a statement regarding a solvency resolution passed by the company in respect of the companys most recent review date (proposed subsection 348C). The company may choose which subsection of section 348C to comply with.
3.53. Proposed new section 348D will require a company or registered scheme to respond to a return of particulars that it receives in such a way that complies with the section: that is, the response must be lodged with ASIC within 28 days after the date of the issue of the return of particular, must be in the prescribed form and be signed or authenticated and must be correct as at the date the response is signed or authenticated. The response to the return must also, if required, provide a particular that was required by ASIC, or include a statement of a kind that complies with subsection 348C(2) or subsection 348C(3), if ASIC requires such a statement to be included in the return of particulars.
3.54. Proposed subsection 348D(3) will provide that a response to a return of particulars correcting a particular or providing a particular in accordance with the subsection will satisfy a requirement elsewhere in the Act to lodge the information in a prescribed form.
3.55. Proposed subsection 348D(5) provides for a strict liability offence, carrying a penalty of 5 penalty units. This proposed new penalty provision is consistent with the range of existing penalties in the Corporations Act (see also item 46 of Schedule 1).
Item 30 Part 2N.5 Notices by proprietary companies of changes to ultimate holding company
3.56. Under proposed new subsection 349A(1), proprietary companies will be required to notify ASIC of changes, in the prescribed form and within 28 days after the event, of the required details if another company becomes an ultimate holding company in relation to the proprietary company, if a company ceases to be an ultimate holding company in relation to a proprietary company, or if an ultimate holding company in relation to a proprietary company changes its name.
3.57. Proposed subsection 349A(2) will impose a strict liability offence based on an offence under subsection 349A(1), which will carry a penalty of 5 penalty units. This proposed new penalty provision is within the range of existing penalties in the Corporations Act (see also item 46 of Schedule 1).
3.58. Item 31 will omit the reference to the annual return for a company and substitute a reference to the response to a return of particulars given (by ASIC) to the company.
Item 32 After Subsection 601AB(1)
3.59. Item 32 will insert a new section (1A) providing that non-payment in full of a companys review fee at least 12 months after the due date for payment of the fee will be a condition that ASIC may take into account in deciding whether to deregister the company.
Item 33, Item 34, Item 35 Section 601BC
3.60. These items will amend section 601BC to provide that an application for registration of a body corporate as a company must state whether or not the shares held by a member will be fully paid on registration, whether or not the shares will be beneficially or non-beneficially owned by the member on registration, and whether, on registration, the company will have an ultimate holding company.
3.61. These items will also amend section 601BC to require the application for registration of a body corporate as a company to identify the top 20 members of each class (worked out according to the number and class of shares each member already holds or has agreed in writing to take up); and to set out the classes into which shares are divided and for each class of share issued: the number of shares in the class; the total amount paid up for the class; and the total amount unpaid for the class.
Item 36 Subparagraph 601PB(1)(e)(i)
3.62. Item 36 will omit the reference to the annual return for a registered scheme and substitute a reference to the response to a return of particulars given (by ASIC) to the responsible entity of the scheme.
3.63. Item 37 will insert a new subparagraph (ea) providing that non-payment in full of a schemes review fee at least 12 months after the due date for payment of the fee will also be a condition that ASIC may take into account in deciding whether to deregister the scheme.
Item 38 Subparagraph 1274(1)(a)(ii)
3.64. This item will delete the reference to an annual return in subsection 1274(10). Subsection 1274(10) empowers ASIC to destroy or dispose of certain documents after a specified period of time.
Item 39 Part 9.10 Fees imposed by the Corporations (Fees) Act 2001 and the Corporations (Review Fees) Act 2002
3.65. Item 39 inserts a new heading for Part 9.10 reflecting the addition of the Corporations (Review Fees) Act 2002.
3.66. Item 40 substitutes a new section 1351 that reflects the addition of the Corporations (Review Fees) Act 2002. It includes a table to calculate when review fees become payable.
Items 41 and 42 Sections 1359 and paragraph 1364(2)(m)
3.67. Items 41 and 42 amend sections 1359 and paragraph 1364(2)(m) to reflect the addition of the Corporations (Review Fees) Act 2002.
Items 43 Application section 601AB and 601PB
3.68. Item 43 will provide that despite the amendment of section 601AB and 601PB (deregistration if a companys annual return is more than 6 months late) by the Bill, those sections will continue to apply in relation to an obligation to lodge an annual return before the commencement of item 43 of the Bill, as if the amendments to the Act had not been made.
Items 44 to 46 Criminal offences and penalties
3.69. These items will insert in Schedule 3 of the Act (Offences) the penalties listed in items 44 to 46 in relation to the offences listed in items 44 to 46. The penalties listed in relation to offences in proposed subsections 178A(1) and 178C(1) are 5 penalty units. The penalties listed in relation to offences in proposed subsections 346C(1) and 346C(2) are 5 penalty units. The penalties listed in relation to offences in proposed sections 347A and 347B are 10 penalty units. The penalties listed in relation to offences in proposed subsections 348D(1) and 349A(1) are 5 penalty units.
Schedule 2 Use of ABN
3.70. It is proposed to make a number of minor and technical amendments that are intended to harmonise some lodgment requirements of the Corporations Act with similar requirements in the A New Tax System (Australian Business Register) Act 1999.
3.71. The Bill will provide that an ABN will be able to be used for any purposes for which an ACN, an ARBN or an ARSN may also be used if the last nine digits are identical.
3.72. Item 1 inserts a definition of ABN in section 9 of the Corporations Act.
Item 2 and 3 Small business guide
3.73. Items 2 and 3 make amendments to the Small Business Guide in Part 1.5 of the Corporations Act to describe the permitted use of ABNs under the Bill.
3.74. Item 4 substitutes a new paragraph 123(1)(b) which permits the ABN to be used instead of the ACN on the company seal if the last nine digits of the ABN are identical to the ACN.
3.75. Item 5 adds ABN as an acceptable abbreviation for Australian Business Number in a company name.
3.76. Item 6 substitute a new subsection 153(2). The new subsection will provide that where a company has been allocated an ABN, it may be used on public documents and negotiable instruments instead of the ACN. The new subsection also contains appropriate references in its notes to ABNs.
Items 7 & 8 Paragraph 601DE(1)(b) and note following subsection 601DE(1)
3.77. Item 7 substitutes a new paragraph 601DE(1)(b), which has a similar effect to item 6, except it applies to Australian registered bodies and registered foreign companies rather than companies.
3.78. Item 9 substitutes a new paragraph 601EC, which permits registered schemes to use and ABN instead of an ARSN on documents lodged with ASIC if the last nine digits are identical.
3.79. Item 10 of Schedule 2 of the Bill will insert a new section 1344 in Part 9.9, which will provide that where the ACN, ARBN or ARSN of a company, registered body or registered scheme is required to be used under a Commonwealth law administered by ASIC, the ABN may be used instead if the last nine digits of the ABN are identical to the last nine digits of the ACN, ARBN or ARSN (as the case may be).
Schedule 3 Electronic Lodgments
Description of principal changes
3.80. The changes proposed in Schedule 3 will replace a number of commonly lodged notification of change forms, including change in registered office and principal place of business, change in particulars of office holders and details of an issue of shares, with Multi-Purpose Forms. The changes will also facilitate and encourage electronic lodgment of documents.
Item 1 Chapter 2P Lodgments with ASIC
3.81. This item will replace the heading Part 2N2 Lodgments with ASIC with a new Chapter 2P with the same title.
3.82. This item will repeal subsection 352(2), which currently requires a person to keep a paper copy of documents electronically lodged with ASIC, and replace it with a provision providing that new subsection 353 will not apply to documents covered by subsection 352(1).
Item 3 New section 353 Electronic lodgment of certain documents
3.83. Item 3 of Schedule 3 will insert new section 353 under which ASIC will be able to determine conditions for the electronic lodgment of information which, under the Corporations Act, has to be given to a licensed market operator or to ASIC.
Item 3 New section 354 Telephone notice of certain changes
3.84. Item 3 of Schedule 3 will also insert a new section 354 to allow ASIC to accept telephone advice of a change to a particular in relation to a company where the change relates to a misspelling or other minor typographical error; or the information is of a type which ASIC has approved for telephone lodgment in a published notice made available on the Internet; and the information was lodged in accordance with authentication procedures approved by ASIC in a published notice made available on the Internet.
3.85. Item 4 of Schedule 3 of the Bill will insert a reference to new Chapter 2P in paragraph (c) of subsection 1311(1A) in Part 9.4 of the Corporations Act (Offences). Subsection 1311(1A) in turn refers to penalties set out in Schedule 3 to the Corporations Act.
Item 5 Regulations to permit refund of fee
3.86. Item 5 of Schedule 3 of the Bill will insert a paragraph (o) in subsection 1364(2) in Part 9.12 of the Corporations Act (Regulations) to permit regulations to be made, in relation to the payment of a fee, that in the event that the fee is paid by electronic means a refund of an amount or a proportion of the fee is payable.
Schedule 4 Extension of lodgment periods
3.87. It is proposed to make a number of minor and technical amendments that are intended to harmonise some lodgment requirements of the Corporations Act with similar requirements in the A New Tax System (Australian Business Register) Act 1999.
Items 17 Extension of lodgement periods
3.88. Items 1 to 8 in Schedule 4 of the Bill will standardise the prescribed period for the lodgment of company information with ASIC under sections 142, 146, 205B and 254X of the Corporations Act to 28 days, to harmonise these Corporations Act lodgment requirements with similar requirements in the A New Tax System (Australian Business Register) Act 1999.
3.89. Item 8 adds a new section 1448 that provides for transitional lodgement periods.
Schedule 5 Other Amendments
3.90. It is proposed to make some miscellaneous amendments to the ASIC Act and the Corporations Act.
3.91. Paragraph 137(1)(a) of the ASIC Act provides that ASIC must not, without the approval of the Minister, enter into a contract under which ASIC is to pay or receive an amount exceeding $250 000. This amount ($250,000) has remained the same since the inception of ASIC. It is proposed to increase the financial cap in paragraph 137(1)(a) to $1 million.
3.92. It is also proposed to amend Part 9 of the ASIC Act to clarify that the Chairperson of ASIC (who is appointed a member of the Corporations and Markets Advisory Committee (CAMAC) under subsection 147(1) of the ASIC Act may appoint an alternate person (being a member of the Commission or senior officer of ASIC) to attend any meeting of CAMAC that the Chairperson is unable to attend personally.
3.93. The Bill will make a number of consequential amendments to section 169 (register of members) as a consequence of the proposed new amendments to the Corporations Act in Schedule 1 of the Bill. It will also make a miscellaneous amendment to update a definition in section 9.
3.94. The Bill will repeal section 201C of the Corporations to remove the special requirements in the Act for the appointment or re-appointment as directors of public companies and subsidiaries of public companies, persons who are aged 72 years and older.
3.95. The Bill will remove charges over electronically-controlled securities from the application of the charges provisions consistently with the current exemption for certificated securities. The amendment complements the current exemption for certificated securities (paragraph 262(1)(g)(i)). It will relieve companies from the administrative burden of having to comply with the current charges provisions in relation to uncertificated securities and facilitate the use of uncertificated securities as collateral. The amendment is aimed at charges over securities where electronic control over the relevant holding is obtained through, for example, the use of CHESS sponsorship agreements, or comparable systems (such as a clearing and settlement facility licensed under Division 3 of Part 7.3 of the Financial Services Reform Act 2001).
Item 1 Paragraph 137(1)(a) ASIC Act
3.96. Item 1 of Schedule 5 of the Bill will substitute the amount of $250,000 with an amount of $1 million in paragraph 137(1)(a) of the ASIC Act.
Item 2 After subsection 153(1) ASIC Act
3.97. Item 2 of Schedule 5 of the Bill will insert a new provision after subsection 153(1) of the ASIC Act to provide that the Chairperson of ASIC may nominate a member of the Commission or a senior staff member of the Commission to attend a particular meeting or meetings of CAMAC at which the Chairperson is not present.
Item 3 Section 9 (definition of marketable securities)
3.98. Item 3 of Schedule 5 will substitute interest in a managed investment scheme in section 9 of the Corporations Act for prescribed interest. The term prescribed interest is now obsolete and has generally been replaced with the term interest in a managed investment scheme.
Items 4, 5 and 6 Consequential amendments of section 169 Corporations Act
3.99. Items 4, 5 and 6 of Schedule 5 of the Bill will make a number of consequential amendments to section 169 (register of members).
Item 7 Repeal of upper age limit for directors of public companies
3.100. Section 201C of the Corporations Act contains a general prohibition on the election or re-election of directors of a public company (or a subsidiary of a public company) who have reached 72 years of age. Section 201C also provides that the prohibition does not operate where the company resolves by a 75 per cent majority that a given person of 72 years or older may be appointed or re-appointed as a director of that company. A person can then act as a director until the next annual general meeting of the company.
3.101. Item 7 of Schedule 5 of the Bill will repeal section 201C of the Corporations Act.
Item 8 At the end of paragraph 262(1)(g) Charges over uncertificated securities
3.102. Item 8 of Schedule 5 will remove charges over uncertificated securities from the application of the charges provisions by including in the list of exclusions in paragraph 262(1)(g) a third exclusion, a charge where there is an agreement in force under which the chargee controls the sending of electronic instructions for the transfer of the underlying securities. The requisite control may be found in whole or in part in the charge instrument itself or in the tripartite sponsorship agreement that is typically a feature of transactions involving charges over CHESS registered securities or in rules of an exchange or clearing house that are deemed to constitute an agreement between a member and the exchange or clearing house. The amendment is consistent with the current exemption for certificated securities under subparagraph 262(1)(g)(i).
Item 9 At the end of Chapter 10
3.103. Item 9 of Schedule 5 will clarify what charges proposed subparagraph 262(1)(g)(iii) will apply to. The amendment made by item 9 of Schedule 5 will apply to charges created after the commencement of item 8 of Schedule 5 of the Bill.