Senate

Revised Explanatory Memorandum

(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)

Chapter 4: Publication requirements and other amendments

Outline of chapter

4.1 Part 4 of Schedule 1 to the Bill amends various Treasury laws to modernise existing requirements that require notices to be published in newspapers.

Context of amendments

4.2 Several Treasury laws require or permit notices to be published in newspapers, reflecting the historical role of newspapers as places of record. To reflect advances in technology and the development of new platforms for disseminating information of record to the public, the new law intends to expand and provide additional flexibility to the ways in which these publication requirements can be met. The new requirements are designed to be adaptive to developments in methods of information-sharing to allow for effective communication of notices to the intended audience.

Summary of new law

4.3 Part 4 of Schedule 1 to the Bill replaces provisions that require or permit notices to be published in newspapers with technology neutral rules. The amendments ensure the relevant notices are published in manner which result in them being publicly available and reasonably prominent.

4.4 Generally, where a Commonwealth entity is required or permitted to publish a notice in a newspaper, the new law now permits the Commonwealth entity to publish the relevant notice in a manner that results in the notice being accessible to the public and reasonably prominent.

4.5 Generally, where a non-Commonwealth entity is required or permitted to publish a notice in a newspaper, the non-Commonwealth entity may now publish the relevant notice:

•

in a manner that results in the notice being accessible to the public and reasonably prominent; and

•

where required, in a manner determined by the relevant regulator

4.6 Part 4 of Schedule 1 to the Bill also repeals a number of newspaper publication provisions, and associated provisions, which no longer serve any purpose.

Comparison of key features of new law and current law

Table 4.1 Comparison of new law and current law

Detailed explanation of new law

4.7 Part 4 of Schedule 1 to the Bill replaces newspaper publication requirements and permissions across Treasury laws with technology neutral publication requirements and permissions.

4.8 Generally, the amendments ensure the relevant notices are published in a manner that allows the notices to be:

•

accessible to the public and reasonably prominent; and

•

if a regulator determination concerning the publication of the notice is in force, published according to the determination.

4.9 The intention is that the regulator would only make a determination if there were differences of opinion or uncertainty as to what was required for the notice to be reasonably prominent.

Example 4.1 Notice that is accessible to the public and reasonably prominent

A share in a no liability company is forfeited and will be offered for sale by public auction in 2 weeks. Section 254Q of the Corporations Act requires the company to advertise the sale of the share in a manner which is accessible to the public and reasonably prominent.

The company advertises its sale of the share by putting a notice on its company website, which has broad public reach. The notice is placed on the website in a manner that makes it easily noticeable and can be accessed from the company website. The notice contains a description of the sale which can be easily understood. The notice also includes a link to another webpage that provides further details relating to the sale of the share and the public auction.

Example 4.2 Where notice is not considered accessible to the public and reasonably prominent

A general insurance company changes its name. Section 29 of the Insurance Act requires the company to publish notice of its change of name in a manner which is accessible to the public and reasonably prominent.

The company arranges for a note to be put on the ASX platform containing information about the old and new names of the company and the date of that change.

In these circumstances, the company has not published notice of its change of name in a manner that is accessible to the public and reasonably prominent. The notice is not reasonably prominent to members of the public likely to be interested in the information, as persons generally do not access the ASX platform for information on the company.

The general insurance company could have published notice of its change of name on its company website or in a newspaper in a manner that is reasonably noticeable and can be accessed by members of the public who would be interested in this information or the company.

Competition and Consumer Act 2010

4.10 Several provisions in the CCA require the ACCC to publish certain notices in national newspapers. The new law requires the regulator to publish the notices in a manner that results in the notices being accessible to the public and reasonably prominent. [Schedule 1, items 82-86, paragraph 28(2)(a), subsections 44GA(10), 44LD(10), 44NC(10), 44ZZOA(10) of the CCA]

Corporations Act 2001

Notices

4.11 Section 254Q of the Corporations Act concerns the forfeiture and sale of shares for a failure to meet a call on the shares. Notice of the sale of forfeited shares is required to be advertised in a national newspaper. Notice of the sale of forfeited shares, or the postponement of the sale of forfeited shares, must now meet the technology neutral publication requirements. [Schedule 1, items 90 and 91, subsections 254Q(3), (4) and (5A)-(5C) of the Corporations Act]

4.12 Paragraph 601WBH(1)(b) of the Corporations Act contains the rules for ASIC to publish notice of the issue of a certificate of transfer in a manner prescribed by the Corporations Regulations. ASIC is required to publish such a notice in the Gazette and on their website. The amendments require ASIC to make a notifiable instrument setting out notice of the issue of the certificate and publish notice on their website. [Schedule 1, items 96-98, section 601WBH, paragraphs 601WBH(1)(b) and (c) and subsection 601WBH(2) of the Corporations Act]

4.13 Subsections 601WDA(1) and (3) of the Corporations Act contain rules about the cancellation of the Australian Financial Services Licence of a trustee company and voluntary transfer determinations under section 601WBA of the Corporations Act. The companies covered by these sections are required to publish certain notices in a national newspaper and on their website. The amendments require the covered companies to publish the notices on their website (if any) and according to the technology neutral publication requirements. [Schedule 1, items 99-101, paragraph 601WDA(1)(b) and subsections 601WDA(3)-(6) of the Corporations Act]

4.14 Sections 601CC and 601CL of the Corporations Act contain rules about the cessation of business of a registered Australian body and a registered foreign body, respectively. Liquidators of these bodies are required to publish notices in newspapers before making any distribution of the bodies' property. The amendments require liquidators to publish the notices in accordance with the technology neutral publication requirements. However, ASIC may determine that the notices must be published in the prescribed manner. [Schedule 1, items 92-95, paragraph 601CC(14)(a), section 601CCA, paragraph 601CL(15)(a) and section 601CLA of the Corporations Act]

Miscellaneous provisions

4.15 Section 103 of the Corporations Act concerns the effect of certain contraventions of the Corporations Act. As notices may now be published in more than one way, references to specific manners of publication in the section are repealed. [Schedule 1, item 89, paragraph 103(2)(b) of the Corporations Act]

4.16 The definitions of 'daily newspaper' and 'national newspaper' are repealed as newspaper references throughout the Corporations Act are repealed. [Schedule 1, item 87 to 88, section 9 (definition of 'daily newspaper') and (definition of 'national newspaper') of the Corporations Act]

4.17 Section 1070D of the Corporations Act contains rules about the loss or destruction of title documents for certain securities. The owner of lost or destroyed title documents may apply to the relevant company for a duplicate title document. The directors of the company can, before accepting the application, require the applicant to place an advertisement in a daily newspaper stating the title documents had been lost destroyed and the owner intended to apply for duplicate certificates. Part 4 of Schedule 1 to the Bill amends the Corporations Act so that the directors can now specify the manner in which the notice is published. [Schedule 1, item 102, paragraph 1070D(6)(a) of the Corporations Act]

4.18 Section 1071D of the Corporations Act contains rules about the registration of the transfer of a security of a company at the request of transferor. Under the section, lists of certain documents can be advertised in such newspapers as the company thinks fit. Part 4 of Schedule 1 to the Bill amends the section so that a list of documents can now be published in a manner specified by the directors of the company, in addition to being published in the Gazette. [Schedule 1, item 103, paragraph 1071D(6)(b) of the Corporations Act]

4.19 Clause 38 of Schedule 4 to the Corporations Act allows the regulations to modify the operation of that Act in relation to the giving of notice of a meeting of a company's members. A new subclause is inserted into clause 38 to ensure that regulations may be made providing for ASIC to determine by legislative instrument the manner in which notices may be published. [Schedule 1, item 104, subclause 38(2A) of Schedule 4 to the Corporations Act]

4.20 This regulation-making power is limited. Any regulations made under this provision can only stipulate that ASIC has the power to determine how notices of meetings of a company's members may be given. The regulations would only apply to a small class of companies (mainly building societies, credit unions and friendly societies). This ensures that any additional requirements for publishing notices, where a manner for publication has not been prescribed, can be prescribed by ASIC. If ASIC makes a determination under the regulations, it must take the form of a legislative instrument and be published on the Federal Register of Legislation. Legislative instruments that ASIC publishes under this clause are subject to the usual safeguards, including sunsetting and disallowance by Parliament.

Income Tax Assessment Act 1936

Serving notices

4.21 Section 45D of the ITAA 1936 concerns determinations made under sections 45A, 45B and 45C of that Act. The Commissioner of Taxation can serve a notice of a determination under section 45A by publishing the notice in certain daily newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1936 so that the Commissioner can now serve the notice by publishing the notice in a manner that accords with the technology neutral publication requirements. [Schedule 1, items 105 and 106, subsection 45D(2) of the ITAA 1936]

4.22 Section 177EA of the ITAA 1936 concerns the creation of franking debits and the cancellation of franking credits. If the Commissioner makes a determination under paragraph 177EA(5)(b) of that Act, the Commissioner can serve notice of the determination on each relevant taxpayer if the determination was published in certain daily newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1936 so that the Commissioner is now taken to have served the notice if it is published according to the technology neutral publication requirements. [Schedule 1, items 107 and 108, subsection 177EA(7) of the ITAA 1936]

Income Tax Assessment Act 1997

4.23 Under subsection 204-50(3) of the ITAA 1997, if the Commissioner makes a determination denying an imputation benefit, the Commissioner was previously taken to have served notice of the determination if they published the notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1997 so that the Commissioner is now taken to have served the notice if it is published according to the technology neutral publication requirements. [Schedule 1, item 109, subsection 204-50(3) of the ITAA 1997]

Insurance Act 1973

4.24 Section 29 of the Insurance Act contains rules about the change of name of general insurers. A general insurer that changes its name must place a notice of that fact in certain newspapers. Part 4 of Schedule 1 to the Bill amends the Life Insurance Act so that the general insurer must publish the notice in accordance with the technology neutral publication requirements. [Schedule 1, items 110-112, subsections 29(1), (2A), (2B) and (3) of the Insurance Act]

Life Insurance Act 1995

4.25 Section 191 of the Life Insurance Act requires notice of an intention to make an application for confirmation of a scheme to be published in certain newspapers and elsewhere. This newspaper publication requirement is replaced with the technology neutral publication requirements. However, consistent with the publication rules in regulation 9.02 of the Life Insurance Regulations, APRA can approve the form of the notice. [Schedule 1, items 113-115, paragraph 191(2)(b) and subsections 191(2A)-(2D) and (3) of the Life Insurance Act]

4.26 Section 223 of the Life Insurance Act previously required notice to be given of a company's intention to issue certain replacement policy documents. Repealing the notification requirements simplifies the process for re-issuing replacement policy documents to consumers. [Schedule 1, items 116 to 117, section 223 (heading) and subsections 223(3) and (4) of the Life Insurance Act]

4.27 Section 224 of the Life Insurance Act requires notice to be given in relation to certain policy documents which were lost or destroyed. Repealing the notification requirements simplifies the process for re-issuing replacement policy documents to consumers. The amendment is intended to allow insurers to be able to issue a copy of the life insurance policy either electronically or through post and reduce costs to both the insurer and consumer. [Schedule 1, items 118-121, subsection 224(1), subparagraphs 224(1)(b)(i) and (ii) and subsections 224(2) and (3) of the Life Insurance Act]

National Consumer Credit Protection Act 2009

4.28 Section 64 of the National Credit Code concerns notification of interest rate changes by credit licensees. Credit licensees are required to give notice of interest rate changes that increase the obligations of consumers by publishing a notice in certain newspapers (if they elect not to notify the debtor directly). Part 4 of Schedule 1 to the Bill amends the section so that credit licensees are now required to publish such notice of interest rate changes in accordance with technology neutral publication requirements in a manner that allows the notices to be accessible to debtors and reasonably prominent. Additionally, if a regulator determination is made concerning the publication of the notice, it must be published according to the determination. [Schedule 1, items 125-127, subsections 64(2), (3) and (8)-(10) of the National Credit Code]

4.29 Section 66 of the National Credit Code concerns notification of credit fees and charges. Credit licensees are required to give notice of changes that increase the obligations of consumers by publishing a notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that credit licensees are now required to publish such notice of the changes in accordance with the technology neutral publication requirements in a manner that allows the notices to be accessible to debtors and reasonably prominent. Additionally, if a regulator determination is made concerning the publication of the notice, it must be published according to the determination. [Schedule 1, items 128 and 129, subsections 66(2) and (6)-(8) of the National Credit Code]

4.30 Section 119 of the National Credit Code contains provisions relating to an application by credit licensees or ASIC for court orders. The court can require notice of any such application to be published in a form approved by the court and in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that the court can now require the application to be published by notice in a form approved by the court and in a manner determined by the court. [Schedule 1, item 130, subsection 119(2) of the National Credit Code]

Private Health Insurance (Prudential Supervision) Act 2015

4.31 Section 20 of the PHIPS Act contains rules relating to private health insurers' applications to APRA for approval to convert to being registered as for-profit insurers. Under this section, APRA can publish notices of the applications in certain newspapers. Part 4 of Schedule 1 to the Bill amends this section so that APRA can now publish notices of the applications in a manner which results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 131, paragraph 20(4)(a) of the PHIPS Act]

4.32 Section 40 of the PHIPS Act contains rules relating to the conduct of funds during the 'termination process'. Under this section, a private health insurer had to publish a notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the PHIPS Act so that private health insurers are now required to publish the notice in accordance with the technology neutral publication requirements. [Schedule 1, items 132 and 133, paragraph 40(2)(b) and subsections 40(2A) and (2B) of the PHIPS Act]

4.33 Section 75 of the PHIPS Act contains rules relating to the dealing of property of health benefits funds under management. Under this section, a manager of the fund could provide notice of an appointment in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that the manager of the fund is now simply required to provide notice of the appointment to the relevant entity. [Schedule 1, item 134, paragraph 75(2)(b) of the PHIPS Act]

Productivity Commission Act 1998

4.34 Section 13 and 14 of the Productivity Commission Act 1998 require the Productivity Commissioner to provide notice of certain hearings and inquiries in newspapers. Part 4 of Schedule 1 to the Bill amends the sections so that the Productivity Commissioner is now required to provide the notices in a manner that results in the notices being accessible to public and reasonably prominent. [Schedule 1, item 135, sections 13 and 14 of the Productivity Commission Act 1998]

Superannuation Industry (Supervision) Act 1993

4.35 Part 4 of Schedule 1 to the Bill amends the SIS Act to remove references to the licensing transition period. Provisions concerning the licensing transition period have been spent for several years and are no longer needed. [Schedule 1, items 136-141, subsection 10(1) (definition of 'licensing transition period'), sections 29CB and 29CC (heading), subsections 29CC(1) and (2) and paragraph 29D(1)(h) of the SIS Act]

4.36 Section 142 of the SIS Act contains rules relating to the winding-up or dissolution of superannuation entities. Under this section, APRA is required to advertise the making of legislative instruments under subsection 142(1) in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that APRA is now required to publish notice of the making of the instruments in a manner that results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 142, subsections 142(7) and (9) of the SIS Act]

Taxation Administration Act 1953

4.37 Section 260-145 of Schedule 1 to the Taxation Administration Act 1953 requires the Commissioner of Taxation to publish notice of certain determinations in newspapers. Part 4 of Schedule 1 to the Bill amends the section to that the Commissioner of Taxation is now required to publish the notice in a manner that results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 143, subsection 260-145(3) of Schedule 1 to the Tax Administration Act 1953]

Commencement, application and savings provisions

4.38 The amendments to section 191 apply to the publishing of a notice of intention on or after the commencement of Part 4 of Schedule 1 to the Bill. This is to ensure that notices published in accordance with the regulations prior to commencement of Part 4 are valid. [Schedule 1, item 122, section 191 of the Life Insurance Act]

4.39 The operation of any forms approved by APRA under the regulation 9.02 of the Life Insurance Regulations is preserved. Additionally, despite the amendments to paragraph 91(2)(b) of the Life Insurance Act, the operation of regulations made for the purposes of that paragraph are preserved. [Schedule 1, items 123 and 124, subsection 191 of the Life Insurance Act]