House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, The Hon Peter Costello, MP)

5 - Schedule 2 Application and transitional provisions

5.1 The transitional provisions are designed to ensure a smooth transition for ASIC, CAMAC and APRA to the FMA Act. In particular, the provisions ensure that property, and especially trust property, is transferred over in a manner which will minimise any impact on the daily operations of ASIC, CAMAC and APRA. Arrangements for the transfer of money also ensure that the agencies receive an appropriation for amounts held prior to commencement time.

Part 1 - Definitions

Item 1: Definitions

5.2 Several terms are defined in item 1.

Part 2 - Application and transitional provisions for ASIC and CAMAC

Division 1 - Application provision for ASIC and CAMAC

Item 2: Pre - existing property, money and financial liabilities

5.3 This item provides that any real or personal property or money that is held by ASIC or CAMAC immediately before the commencement time is taken, immediately after that time, to be held by ASIC or CAMAC for and on behalf of the Commonwealth. This item is subject to items 3, 4 and 5 in this Schedule which deal with property held on trust.

5.4 Item 2 also provides that any financial liabilities of ASIC or CAMAC that exist immediately before the commencement time are taken, immediately after that time, to be liabilities of the Commonwealth.

5.5 Money that was held by ASIC or CAMAC immediately before the commencement of this Act (the original amount), will be held by ASIC or CAMAC for and on behalf of the Commonwealth after the commencement time. An amount equal to the original amount may be paid out of the Consolidated Revenue Fund, which is appropriated accordingly, for the purposes of ASIC or CAMAC.

Division 2 - Transitional provisions for ASIC

Item 3: Trust property held under Part 9.7 of the Corporations Act

5.6 Previously, ASIC held unclaimed property on trust under Part 9.7 of the Corporations Act. Any unclaimed property held before the commencement time will be taken, immediately after commencement, to be held by ASIC on behalf of the Commonwealth, to be dealt with in accordance with the amended Part 9.7 of the Corporations Act.

Item 4: Vesting of other assets held on trust by ASIC

5.7 At the commencement time, any other assets held on trust by ASIC (those not dealt with under Part 9.7 of the Corporations Act), will cease to be assets held on trust by ASIC, and will become assets held on trust by the Commonwealth. The item will take effect without any conveyance, transfer or assignment. The Commonwealth will become the successor in law in relation to these assets. ASIC may, for and on behalf of the Commonwealth, perform all the duties and exercise all the powers of the Commonwealth as trustee in relation to assets held on trust by the Commonwealth.

Item 5: Vesting of liabilities relating to assets held on trust

5.8 At the commencement time, any liabilities attaching to the assets mentioned in item 4 of this Schedule, will transfer from ASIC to the Commonwealth. The item will take effect without any conveyance, transfer or assignment. The Commonwealth will become the successor in law in relation to these liabilities.

Item 6: Certificates relating to vesting of land

5.9 If land vests in the Commonwealth under this Schedule, and a certificate is lodged with the land registration official that meets certain conditions set out in paragraph 6(1)(b), then the land registration official may register the matter and deal with, and give effect to, the certificate.

Item 7: Certificates relating to vesting of assets other than land

5.10 If assets other than land vest in the Commonwealth under this Schedule, and a certificate is lodged with the assets official that meets certain conditions set out in paragraph 7(1)(b), then the assets official may deal with, and give effect to, the certificate and make entries in the register as are necessary.

Item 8: Substitution of Commonwealth as a party to pending proceedings

5.11 If there any court or tribunal proceedings pending immediately before commencement time that relate to property held on trust, to which ASIC was a party, then at the commencement time, the Commonwealth will be substituted for ASIC as a party to the proceedings.

Item 9: Certificates taken to be authentic

5.12 Any document that appears to be a certificate made or issued under a provision of this Schedule is taken to be authentic, and to have been properly given, unless the contrary is established.

Division 3 - Transitional provision for CAMAC

Item 10: Access to records

5.13 In certain circumstances, directors of a Commonwealth authority have, under subsection 27L(2) of the CAC Act, the ability to access the Authority's books for up to seven years after ceasing to be a director. Directors will continue to have access to the books for the period remaining after CAMAC transfers to the FMA Act. Subsection 27L(4) of the CAC Act provides that a Commonwealth authority must allow a person to exercise his or her rights to inspect or take copies of the books under this section. In relation to the books of CAMAC, the reference to a Commonwealth authority is to be read, after the commencement time, as a reference to the Convenor of CAMAC.

Part 3 - Application and transitional provisions for APRA

Item 11: Pre - existing property, money and financial liabilities

5.14 This item provides that any real or personal property or money that is held by APRA immediately before the commencement time is taken, immediately after that time, to be held by APRA for and on behalf of the Commonwealth.

5.15 Item 11 also provides that any financial liabilities of APRA that exist immediately before the commencement time are taken, immediately after that time, to be liabilities of the Commonwealth.

5.16 Money held by APRA immediately before commencement (including any reserves built up by APRA) will be held on behalf of the Commonwealth and form part of the Consolidated Revenue Fund. On commencement an amount equal to this will be credited to the APRA Special Account, ensuring that APRA has the appropriation authority to spend such amounts on the purpose of the Account.

Item 12: Appointment and engagement of staff and consultants

5.17 Amendments to sections 45 and 47 of the APRA Act in items 53 to 56 of schedule 1, provide that staff and consultants are to be engaged by the Chair following commencement. This provision provides that staff appointed by APRA or consultants engaged by APRA prior to the commencement date will be taken to have been appointed by the Chair, on behalf of APRA, immediately following commencement. Instruments entered into by APRA under these sections have effect from commencement time so far as the context permits as if the reference to APRA were a reference to the Chair of APRA.

5.18 The provision also confirms, for the avoidance of doubt, that the amendments in items 53 to 56 of schedule 1 do not constitute a transmission of business for the purposes of the Workplace Relations Act 1996 , hence employment agreements entered into prior to commencement will not have to be renegotiated.

Item 13: Access to records

5.19 As discussed above at paragraph 2.130. In relation to the books of APRA, the reference to a Commonwealth authority is to be read, after the commencement time, as a reference to the Chair of APRA.

Part 4 - Transitional provisions for ASIC, CAMAC and APRA

Item 14: Financial statements and other reporting requirements

5.20 On commencement, many reporting requirements will change. This transitional provision ensures that, following commencement, the agencies continue to have an obligation to complete their pre-commencement reporting obligations for pre-commencement time parts of reporting periods. If the Agency head is required to provide a similar report under new reporting arrangements for the remainder of a period following commencement time, the Agency head may meet the requirements in a single report.

5.21 The Agency head must provide the report as required by law for a period that ended before the commencement time, if the report has not been provided by the commencement time. This provision is intended to capture any offence provisions that may apply for failure to provide a report.

Item 15: New annual report requirements to apply from 2007 - 2008 and later financial years

5.22 This item provides that new annual report requirements apply to the 2007-08 financial year and later financial years. See 2.138 for earlier financial years.

Item 16: Continuing obligation to keep records

5.23 If immediately before this item commences, the Agency has kept accounting records under subsection 20(1) of the CAC Act, then subsection 20 of the CAC Act will continue to apply to those records after this item commences.

Item 17: Constitutional safety net - acquisition of property

5.24 If property is acquired under this Schedule otherwise than on just terms, the Commonwealth will be liable to pay a reasonable amount of compensation to the person. If agreement cannot be reached, proceedings can be instituted in a court to determine a reasonable amount of compensation.

Item 18: Exemption from stamp duty and other State or Territory taxes

5.25 If an asset or liability under this Schedule is transferred, then no stamp duty or any other tax is payable under a law of a State or Territory in respect of it, nor in relation to the operation of this Schedule in any other respect.

Item 19: Delegation by Minister

5.26 This item provides that the Minister may, by writing, delegate all or any of his or her powers and functions under this Schedule, in relation to an Agency, to the Agency head. The delegate must comply with any directions of the Minister when exercising or performing powers or functions under a delegation.

Item 20: Regulations

5.27 Regulations may be made by the Governor-General prescribing matters required or permitted by this Schedule to be prescribed, or necessary or convenient to be prescribed to give effect to this Schedule. In particular, regulations may be made prescribing matters of a transitional nature relating to the amendments or repeals made by Schedule 1 to the Act.