Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 (F2021L01801)

Schedule 1   Amendments

Corporations Regulations 2001

2   After regulation 7.1.28AA

Insert:

7.1.28AB Proxy advice

(1) This regulation applies to a service ( voting advice ) that consists of providing a recommendation, or a statement of opinion, or a report of either of those things, that is intended to influence, or could reasonably be regarded as intended to influence, a person or persons in making a decision in relation to the exercise of:

(a) voting rights attaching to a security; or

(b) voting rights attaching to an interest in a managed investment scheme.

(2) Voting advice is proxy advice if:

(a) it relates to the exercise of voting rights attaching to a security, or an interest in a managed investment scheme; and

(b) one of the following entities holds the security or interest, or holds a beneficial interest in the security or interest:

(i) a body regulated by APRA, other than a trustee of a superannuation entity that has no more than 6 members;

(ii) the responsible entity for a managed investment scheme, other than a scheme that has net assets of less than $10 million;

(iii) a company of a kind referred to in paragraph 994B(4)(b) of the Act, other than a company that has net assets of less than $10 million; and

(c) it is voting advice on how to vote on a particular resolution; and

(d) a fee, charge or other amount is paid or payable by theentity or another entity in connection with the provision of the voting advice.

Note: Paragraph 994B(4)(b) of the Act refers to certain companies that invest funds subscribed after an offer or invitation to the public.

Additional circumstance in which proxy advice is a financial service

(3) For the purposes of paragraph 766A(1)(f) of the Act, the provision of proxy advice that is not financial product advice is prescribed.

Note: Generally proxy advice is financial product advice and thus a financial service under paragraph 766A(1)(a) of the Act. Under this subregulation proxy advice that is not financial product advice is also prescribed as a financial service under paragraph 766A(1)(f) of the Act.

When providing proxy advice is not a financial service

(4) For the purposes of paragraph 766A(2)(b) of the Act, a person is taken not to provide a financial service in either of the following circumstances:

(a) the service consists of voting advice that is not proxy advice;

(b) the service consists of proxy advice and the provision of proxy advice is not a significant part of a business carried on by the person.

Certain Parts of the Act apply as if proxy advice were not financial product advice

(5) For the purposes of a provision of the Act set out in column 1 of an item in the following table, the Part of the Act specified in column 2 of that item applies as if the provisions of that Part that are expressed to apply in relation to financial product advice were varied so as not to apply in relation to financial product advice that is voting advice.