House of Representatives

Explanatory Memorandum

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

Chapter 6 - Review of decisions

Outline of chapter

6.1 This chapter explains the method and process for reviewing decisions made by the PDF Board relating to the registration of VCLPs and AFOFs.

Summary of new law

6.2 A person affected by a decision made by the PDF Board has the right to seek an internal review of the decision and, if dissatisfied with that review, may apply to the AAT for a review of the confirmed or varied decision. [Part 5 of the VC Bill]

Detailed explanation of new law

Reviewable decisions

6.3 The following decisions are reviewable:

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a decision made under subsection 5-10(3) to allow a period longer than 6 months for the repayment of a short-term loan permitted under paragraph 5-10(1)(b) [Part 5, paragraph 29-1(a) of the VC Bill] ;

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a decision made under section 9-1 to refuse to register a limited partnership as a VCLP or an AFOF [Part 5, paragraph 29-1(b) of the VC Bill] ;

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a decision made under section 9-5 to refuse to register conditionally a limited partnership as a VCLP or an AFOF [Part 5, paragraph 29-1(c) of the VC Bill] ;

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a decision made under section 13-1, 13-5 or 13-10 to revoke a registration for not meeting investment registration requirements or other registration requirements, for failing to comply with requirements to lodge returns and provide certain information, or for consistent breaches of investment requirements [Part 5, paragraph 29-1(d) of the VC Bill] ;

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a decision made under subsection 13-1(2) to determine a period within which an investment registration requirement must be met [Part 5, paragraph 29-1(e) of the VC Bill] ;

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a decision made under section 17-1 to refuse to register an entity as an eligible venture capital investor [Part 5, paragraph 29-1(f) of the VC Bill] ;

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a decision made under section 17-20 to revoke an entity's registration for failing to lodge an annual return [Part 5, paragraph 29-1(g) of the VC Bill] ;

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a decision made under section 19-1 to determine a period shorter than 12 months during which residency, employee and asset requirements for a venture capital investee company are to be met, or a decision refusing to make a determination [Part 5, paragraph 29-1(h) of the VC Bill] ; and

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a decision made under section 19-5 refusing to waive a requirement that a venture capital investee company locate its employees and assets in Australia [Part 5, paragraph 29-1(i) of the VC Bill] .

Notification of right of review

6.4 When notifying a person of a reviewable decision, the PDF Board must include a statement advising the person who made the relevant application of their right to request a review of the decision. However, a failure to provide the statement does not affect the validity of the decision. [Part 5, section 29-5 of the VC Bill]

Internal review of decisions

6.5 A person who is dissatisfied with a reviewable decision may request the PDF Board to reconsider the decision. The request must be made within 21 days of receiving the decision, although the PDF Board may extend the period. The request must set out the person's reasons for seeking a review. [Part 5, subsections 29-10(1) to (3) of the VC Bill]

6.6 On receipt of the request, the PDF Board must reconsider the decision and confirm, revoke or vary the decision. The PDF Board has 60 days to review the decision after receiving the request. If the PDF Board fails to confirm, revoke or vary the decision then it will be taken to have confirmed the decision. [Part 5, subsections 29-10(4) and (5) of the VC Bill]

6.7 Upon reviewing the decision, the PDF Board must give the person a written notice that advises:

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the confirmation, variation or revocation of the decision;

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the reasons for the confirmation, variation or revocation; and

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the person of their right to apply to the AAT for a review of the decision if the decision is confirmed or varied.

6.8 Failure to advise the person of the matters in paragraph 6.7 does not affect the validity of the decision. [Part 5, subsections 29-10(6) and (7) of the VC Bill]

6.9 If in conducting an internal review of a decision the PDF Board revokes a decision and replaces it with a new decision, the PDF Board is taken to have varied but not revoked the decision under review. [Part 5, subsection 29-10(8) of the VC Bill]

Review of decisions by AAT

6.10 A person who is affected by a reviewable decision of the PDF Board may apply to the AAT for a review of that decision which the PDF Board has confirmed or varied. The application can only be made by the person affected by the decision. [Part 5, section 29-15 of the VC Bill]