Financial Services Reform Act 2001 (122 of 2001)

Schedule 1   Financial Services and Markets

Part 1   Main amendments

Corporations Act 2001

1   Chapter 7 - Part 7.11 - Division 1

Part 7.11 - Title and transfer

Division 1 - Title to certain securities

1070A Nature of shares and certain other interests in a company or registered scheme

(1) A share, other interest of a member in a company or interest of a person in a registered scheme:

(a) is personal property; and

(b) is transferable or transmissible as provided by:

(i) the company’s, or scheme’s, constitution; or

(ii) the operating rules of a prescribed CS facility if they are applicable; and

(c) is capable of devolution by will or by operation of law.

(2) Paragraph (1)(c) has effect subject to:

(a) in the case of a company:

(i) the company’s constitution (if any); and

(ii) any replaceable rules that apply to the company; and

(iii) the operating rules of a prescribed CS facility if they apply to the share or interest; and

(b) in the case of a scheme:

(i) the scheme’s constitution; and

(ii) the operating rules of a prescribed CS facility if they apply to the interest.

(3) Subject to subsection (1):

(a) the laws applicable to ownership of, and dealing with, personal property apply to a share, other interest of a member in a company or interest of a person in a registered scheme as they apply to other property; and

(b) equitable interests in respect of a share, interest of a member in a company or other interest of a person in a registered scheme may be created, dealt with and enforced as in the case of other personal property.

(4) For the purposes of any law, a share, other interest of a member in a company or interest of a person in a registered scheme is taken to be situated:

(a) if the share, interest in a company, or interest in a registered scheme is entered on the register kept under section 169 - in the State or Territory where that register is kept; or

(b) if the share or interest in the company is entered on an overseas branch register kept under section 178 - in the foreign country where that register is kept.

1070B Numbering of shares

(1) Except as provided in subsection (2), a company must ensure that each share in the company is distinguished by an appropriate number.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(2) Despite subsection (1):

(a) if at any time all the issued shares in a company, or all the issued shares in a company of a particular class:

(i) are fully paid up; and

(ii) rank equally for all purposes;

none of those shares is required to have a distinguishing number so long as each of those shares remains fully paid up, and ranks equally for all purposes with all shares of the same class for the time being issued and fully paid up; and

(b) if:

(i) all the issued shares in a company are evidenced by certificates in accordance with section 1070C; and

(ii) each certificate is distinguished by an appropriate number; and

(iii) that number is recorded in the register of members;

none of those shares is required to have a distinguishing number; and

(c) a share need not have a distinguishing number if the operating rules of a prescribed CS facility through which it is able to be transferred provide that the share need not have a distinguishing number.

Note: A defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of theCriminal Code.

1070C Matters to be specified in share certificate

(1) A company must ensure that a certificate it issues specifying the shares held by a member of the company states:

(a) the name of the company and the fact that it is registered under this Act; and

(b) the class of the shares; and

(c) the amount (if any) unpaid on the shares.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(2) A certificate issued in accordance with subsection (1) specifying shares held by a member of a company is prima facieevidence of the title of the member to the shares.

(3) A failure to comply with subsection (1) does not affect the rights of a holder of shares.

1070D Loss or destruction of title documents for certain securities

(1) This section applies to the following securities:

(a) shares in a company;

(b) debentures of a company;

(c) interests in a registered scheme.

(2) This section applies to an interest in a registered scheme as if:

(a) references to a company were instead references to the responsible entity of the registered scheme; and

(b) references to the directors of a company were instead references to the directors of the responsible entity of the registered scheme.

(3) A company must, in accordance with subsection (4), issue a duplicate certificate or other title document for securities if:

(a) the certificate or document is lost or destroyed; and

(b) the owner of the securities applies to the company for the duplicate in accordance with subsection (5); and

(c) the owner complies with any requirements made in accordance with subsection (6).

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(4) The company must issue the duplicate:

(a) if the company requires the payment of an amount not exceeding the amount prescribed by regulations made for the purposes of this paragraph - within 21 days after the payment is received by the company or within such longer period as ASIC approves; or

(b) in a case to which paragraph (a) does not apply - within 21 days after the application is made or within such longer period as ASIC approves.

(5) The application must be accompanied by:

(a) a statement in writing that the certificate or other document:

(i) has been lost or destroyed; and

(ii) has not been pledged, sold or otherwise disposed of; and

(b) if the certificate or other document has been lost - a statement in writing that proper searches have been made; and

(c) an undertaking in writing that if the certificate or other document is found or received by the owner it will be returned to the company.

(6) The directors of the company may, before accepting an application for the issue of a duplicate certificate, require the applicant to do either or both of the following:

(a) place an advertisement in a daily newspaper circulating in a place specified by the directors stating that:

(i) the certificate or other document has been lost or destroyed; and

(ii) the owner intends, after the end of 14 days after the publication of the advertisement, to apply to the company for a duplicate certificate;

(b) give a bond for an amount equal to at least the current market value of the securities indemnifying the company against loss following the production of the original certificate or other document.

(7) If:

(a) a certificate or other title document for securities is cancelled in reliance on the operating rules of a prescribed CS facility; and

(b) having regard to those provisions, the certificate or other document should not have been cancelled;

this section applies to the certificate or other document as though it were destroyed on its cancellation.