House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Parliamentary Secretary to the Treasurer, the Hon Chris Pearce, MP)

Chapter 5

Notes on individual clauses

Clause 1 - Short title

5.1 Upon enactment, the Bill will be known as the Corporations (NZ Closer Economic Relations) and Other Legislation Amendment Act 2007.

Clause 2 - Commencement

5.2 This clause sets out when the amendments contained in the Bill come into operation, which include:

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Sections 1 to 3 (and any provision not listed in clause 2) will commence on the day the Act receives Royal Assent.

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Schedule 1 (items 1 to 18) will commence on a day to be fixed by proclamation. Items 21 and 22 of Schedule 1 will also commence at the same time as items 1 to 18 of Schedule 1.

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Schedule 2 will commence on a day to be fixed by proclamation.

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Schedule 3 will commence on the 28th day after the Act receives Royal Assent.

5.3 Certain provisions in Schedule 1 relate to the commencement of Schedule 2 provisions. For this reason, there are alternative commencement provisions for Schedule 1, items 19 and 20.

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Schedule 1, item 19 - if items 1 to 18 in Schedule 1 commence before Schedule 2, the amendments in Schedule 1, item 19 does not commence at all.

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Schedule 1, item 20 - if Schedule 2 commences before or at the same time as items 1 to 18 in Schedule 1, the amendments in Schedule 1, item 20 does not commence at all.

Clause 3 - Schedule(s)

5.4 The Act is amended as set out in the applicable items in Schedules 1 to 3.

Schedule 1 - Mutual recognition of securities offerings

Item 18 - Mutual recognition of securities offerings

5.5 Item 18 inserts new Chapter 8 to regulate the mutual recognition of securities offerings.

Part 8.1 - Preliminary

Definitions

5.6 The Bill contains a number of new definitions which form part of new Chapter 8. The key definitions for the purposes of the regime for the mutual recognition of securities offers are:

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'recognised jurisdiction' - the foreign country to which the mutual recognition provisions apply;

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'foreign recognition scheme' - the laws of that foreign country to which the mutual recognition provisions apply; and

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'recognised offer' - an offer, that at the time it opens, meets the requirements imposed by section 1200B.

5.7 While the amendments are a direct response to the Treaty between Australia and New Zealand, the Act is drafted in general terms. For this reason the term 'recognised jurisdiction' (defined in subsection 1200A(1)) refers to a foreign country, rather than specifically to New Zealand. The details of these definitions will be filled out in regulations. This means that if comparable arrangements are reached in the future with other countries they will be able to be implemented through these provisions, possibly with amendment only of the regulations.

5.8 The other significant definition is 'securities'. This term is defined in subsection 1200A(1) to include shares, debentures and interests in managed investment schemes, and certain derivatives over these financial products. It includes 'securities' as defined in section 761A of the Corporations Act and 'managed investment schemes' as defined in section 9 of the same Act.

5.9 The regime will not apply to:

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'excluded security' as defined in section 9 of the Corporations Act; or

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other financial products such as life insurance, superannuation products, or derivatives (other than the derivatives over securities referred to above).

Part 8.2 - Foreign offers that are recognised in this jurisdiction

5.10 New Part 8.2, Division 1 sets the eligibility and entry requirements for the offer and offeror under the scheme.

Division 1 - Recognised offers

Entry requirements

5.11 The entry requirements for the scheme relate to:

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the offeror (subsections 1200C(2) and (3));

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the kind of offer (subsection 1200C(4)); and

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lodging a notice of intention to use the scheme, and lodging the required documents and information with ASIC (subsection 1200C(5), (6) and section 1200D).

5.12 If an offeror does not meet these requirements, then the offer will be considered under the usual Australian fundraising and managed investment scheme requirements.

The offeror

5.13 A person proposing to offer securities in Australia must be:

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incorporated by or under the law of the recognised jurisdiction; or

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a natural person residing in the recognised jurisdiction; or

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a legal person who is established by, or under, the laws of the recognised jurisdiction (subsection 1200C(2)).

5.14 The third class listed in the paragraph above is intended as a residual clause to cover circumstances not described in the first two instances. This takes into account situations under foreign laws which do not necessarily equate to Australian provisions. For example, in relation to New Zealand it encompasses the structure of New Zealand 'participatory securities'. ^[F1]

5.15 The result of the limitations on who can be an offeror under the regime is that companies incorporated in third countries will not initially be able to use this regime to issue securities in Australia when they have complied with New Zealand fundraising law. The regulation-making power in paragraph 1200C(2)(d) could allow this in future if considered appropriate.

5.16 The definition of 'offeror' in subsection 1200A(1) also includes the power to prescribe the kind of person who is the offeror. This relates to the possibility, in relation to collective investment vehicles, that the trustee will be caught by the concept of 'offeror' but the obligations should instead be imposed on the promoter.

5.17 ASIC is empowered to ban a person who has contravened the mutual recognition provisions from using the regime again (section 1200P). Such a person will not meet the entry requirements (subsection 1200C(3)).

5.18 In addition, one of the offering conditions (subsection 1200G(6) in division 3) requires that there must be no person concerned in the management of the offeror who:

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has been disqualified from managing corporations under Part 2D.6 of the Corporations Act;

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is disqualified from being concerned in the management of the offeror under the law of the recognised jurisdiction;

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has been banned under section 920A of the Corporations Act; or

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has been banned by the court under subsection 921A(2)(a) of the Corporations Act.

The kind of offer

5.19 The offer must be an offer of a kind prescribed by the regulations in relation to the recognised jurisdiction (subsection 1200C(4)).

Notice and documentation to ASIC

5.20 For an offer to be recognised under the mutual recognition scheme, the offeror must file a notice with ASIC stating that it proposes to make an offer under the regime (paragraph 1200C(5)(a)).

5.21 The offeror must also lodge a number of documents and information (required by paragraph 1200C(5)(b) and listed in section 1200D), including:

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the offer documents required by the law of the recognised jurisdiction;

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for shares, the company's constitution;

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for other issuers, the relevant scheme constituent document;

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the warning statement that will accompany offers in Australia (discussed further below at paragraph 5.25);

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details of any exemption granted by the recognised jurisdiction which is relevant to the offer or the offeror;

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an address for service in Australia; and

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notice of documents or information not being lodged because the offeror is relying on an exemption (see paragraph 5.23).

5.22 These documents must be lodged with ASIC at least 14 days prior to the date the offer first opens for acceptance (subsection 1200C(5)).

5.23 The only exceptions are:

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where the information has already been lodged with ASIC in relation to registration as a foreign company or registered body under Division 2 or 3 of Part 5B.2; or

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because the information or document is covered by the provisions in Schedule 2 of the Bill which reduce the filing requirements for foreign companies.

5.24 The offeror is obliged (see subsection 1200C(6)) to notify ASIC of changes to documents and information (referred to in paragraph 1200C(5)(b) and listed in section 1200D) before the offer opens, if an event listed in subsection 1200G(9) occurs, or if the address for service in Australia changes. These obligations continue during the offer period and during certain other periods (see further paragraph 5.45).

5.25 The warning statement, referred to above and in section 1200E, is intended as notice to potential investors that the security offering is subject to foreign laws. The warning statement, set in the regulations, will state that the offer is regulated under the home jurisdiction's securities laws and that the standard host jurisdiction securities law requirements that apply to domestic offers do not generally apply to the offer. Other specified warnings may also be included, for example, in relation to tax differences and currency risk.

When is an offer a recognised offer?

5.26 An offer is a recognised offer from a recognised jurisdiction if, when it is first made here, it meets all of the conditions in section 1200C (see subsection 1200B(1)).

5.27 However, it is possible that there has been a minor or technical failure to meet these requirements which only becomes apparent at some later time.

5.28 To address this possibility, subsection 1200B(3) provides that ASIC may declare in writing that such an offer is a recognised offer. Subsection 1200B(5) provides that such a declaration is not a legislative instrument. This subsection is included only to inform readers that the notice is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

5.29 An offer that is a recognised offer continues to be such after the first day the offer is made in this jurisdiction, even if a condition in section 1200C ceases to be met after that day (subsection 1200B(2)).

Division 2 - Effect of a recognised offer and Division 4 - Modifications of provisions of this Act

5.30 Division 2 of new Part 8.2 sets out the effect of a recognised offer. Division 4 is also related and deals with modifications to the Corporations Act for recognised offers.

Provisions which are ' turned off'

5.31 Provisions of the Corporations Act in respect of which there will be exemptions for recognised offers are set out in the table at subsection 1200F(1). They are:

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In relation to shares, options to acquire securities and equitable interests in securities:

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Chapter 6D (fundraising) except the securities hawking provision and associated remedy for breach of the securities hawking provision (sections 736 and 738).

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In relation to debentures:

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Chapter 2L (debentures);

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Chapter 6D (fundraising) except the securities hawking provision and associated remedy for breach of the securities hawking provision (sections 736 and 738).

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In relation to managed investment schemes:

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Chapter 5C (managed investment schemes);

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Also:

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Part 7.6 (licensing of providers of financial services);

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Part 7.7 (financial services disclosure);

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Part 7.8 (other provisions relating to conduct etc connected with financial products and financial services, other than financial product disclosure except the hawking provision (section 992AA)); and

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Part 7.9 (financial product disclosure and other provisions relating to issue and sale of financial products, except the hawking provisions (sections 1020B and 1020C)).

Provisions which are not 'turned off'

5.32 Not all of Part 7.9 of the Corporations Act will be 'turned off':

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The short selling and hawking provisions will continue to apply (see Items 3, 4 and 5 of the table at subsection 1200F(1));

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Further, it is intended to use the regulation power of section 1020G to make regulations to continue the effect of sections 1012A-1012C but provide that the document required would be the offer document required under the recognised offer;

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The requirement for the issuer of units in a managed investment scheme, for an internal dispute resolution procedure and membership of an external dispute resolution scheme is retained through section 1200J in Division 3, unless an exemption is granted by ASIC (see paragraph 5.45).

5.33 Division 4 continues the operation of existing Corporations Act pre-offer advertising provisions, and also continuous disclosure obligations.

5.34 The continuation of pre-offer advertising provisions clarify that advertising before an offer becomes a recognised offer is permitted in accordance with existing pre-offer advertising provisions of the Corporations Act, with modifications to recognise that the relevant offer document is the document of the recognised jurisdiction.

5.35 In relation to continuous disclosure obligations, - see 'Ongoing Requirements' at paragraph 5.46.

Flexibility

5.36 As the Bill is drafted in general terms, there is potential for the mutual recognition scheme to be extended to other countries if comparable arrangements are reached with them.

5.37 This has resulted in some flexibility in terms of the inclusion of regulation making powers.

5.38 Subsection 1200F(2) provides that the Regulations may apply the provisions, previously excluded in subsection 1200F(1) to certain offers. This includes the power to omit or modify requirements applied.

5.39 In addition section 1200M provides that the Regulations may modify provisions of the Corporations Act (including existing modifications in Division 4 for recognised offers) in relation to recognised offers or proposed recognised offers.

5.40 This regulation making power is included principally to address the possible application of the regime to foreign countries other than New Zealand. The fundraising requirements in another country may be largely comparable with those of Australia but may need supplementation in particular minor respects.

5.41 These respects could be addressed through regulations - which would have the effect of enlivening some of the provisions 'turned off' by subsection 1200F(1) or otherwise modifying provisions of the Corporations Act. The most significant and obvious circumstances are anticipated in the legislation, and the powers contained in subsection 1200F(2) and 1200M are only intended for minor alterations to make a good fit with the requirements of any potential recognised jurisdiction.

Division 3 - Ongoing conditions for recognised offers

5.42 Division 3 of new Part 8.2 specifies the ongoing conditions that must be complied with for recognised offers.

Ongoing requirements Chapter 8 specific

5.43 The offer must comply with certain ongoing requirements. These are referred to as:

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offering conditions (section 1200G);

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supplementary lodgement conditions (subsection 1200G(9));

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address for service condition (section 1200H); and

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dispute resolution condition (section 1200J) -see paragraph 5.45.

5.44 These provisions, among other things, impose obligations where there has been an amendment to the initial offer documents, or the circumstances of the offeror. The reason for separating the various obligations is that they are triggered for various periods during the offer process and thereafter.

5.45 In combination, the requirements they impose include the following:

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the offeror must comply with the law of the recognised jurisdiction;

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the offer must be open to acceptance by persons in the recognised jurisdiction at all times at which it is open for acceptance by persons in Australia;

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the offeror must file information concerning certain changes to the offer with ASIC, including any amendments to the regulated offer documents or the warning statement;

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the offeror must notify ASIC of any exercise of statutory power by the recognised jurisdiction in relation to the offer;

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the offeror must lodge written notice of any change of address for service; and

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an offeror of interests in managed investment schemes must comply with the dispute resolution provisions of the Corporations Act, unless an exemption is granted by ASIC.

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ASIC is able to exempt the issuer from maintaining the dispute resolution process under subsection 1200(J)(3). The exemption is intended for use in circumstances where a technical requirement to maintain the dispute resolution procedure exists but in practice the scheme is not required. One such circumstance includes where records of the issuer indicate that holders of securities are resident in Australia (subsection 1200J(1)) but those holders are unable to be found despite attempts by the issuer.

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ASIC are able to set conditions in relation to the exemption (subsection 1200J(5)) - for example requiring the reinstitution of the dispute resolution scheme if holders are subsequently found.

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The regulations may set additional ongoing conditions for recognised offers (subsection 1200G(12)).

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Failure to comply with these requirements is addressed at paragraph 5.61.

Continuous disclosure

5.46 Schedule 1 contains amendments to Part 1.2A of the Corporations Act. These amendments expand the definition of 'ED securities' to securities issued under a recognised offer (as defined in section 1200B). Consequently, the continuous disclosure provisions of Chapter 6CA of the Corporations Act will apply should 100 or more people hold securities or managed investment products in the class.

5.47 The accounting requirements which are triggered by being a disclosing entity (section 111AO) will have no application because the foreign offerors will not be 'companies' as defined for this purpose, registered schemes or the set of disclosing entities referred to in subsection 285(2).

5.48 The continuous disclosure obligations which apply to unlisted disclosing entities are modified by section 1200K.

Division 5 - ASIC's power in relation to recognised offers

5.49 Division 5 of new Part 8.2 sets out ASIC's powers in relation to the recognised offer, including the power to issue stop orders, prohibit advertising in Australia and ban offerors from the future use of the scheme.

Role of the regulators

Australian and New Zealand responsibility

5.50 ASIC will have primary responsibility for taking action against foreign issuers into Australia for failure to comply with the ongoing requirements, other than the requirement to comply with the foreign jurisdiction law. The foreign jurisdiction regulator (the ASIC equivalent as prescribed under subsection 1200G(13) ^[F2] ) will have lead responsibility for taking action in respect of breaches of the substantive requirements of foreign jurisdiction laws.

5.51 A breach of a foreign jurisdiction's substantive requirements in the course of making an offer to investors in Australia will also constitute a breach of Australia's ongoing requirements, and thus could be the subject of enforcement action by ASIC in appropriate cases (subsection 1200Q(1)).

5.52 As a consequence of the inclusion of compliance with the home jurisdiction requirements as an ongoing requirement in the host jurisdiction, ASIC will have a wide interest in the conduct of the issuer in Australia, as a host jurisdiction. This will enable it to use the powers in Part 3 of the Australian Securities and Investments Commission Act 2001 (ASIC Act) in relation to investigations of the issuer's conduct in the host jurisdiction.

5.53 Information gained in this way can be disclosed to the foreign jurisdiction regulator in accordance with section 127, particularly paragraph 127(4)(c) of the ASIC Act.

5.54 Further, ASIC has signed Memoranda of Understanding with the New Zealand Companies Office and the New Zealand Securities Commission which reflect an ongoing interest in aligning the regulatory functions of the respective agencies and provide for cooperation and the exchange of information to assist each regulator, particularly on operational and enforcement matters.

ASIC's powers

5.55 ASIC may exercise 'stop orders' against recognised offerors in a variety of circumstances (section 1200N). This includes circumstances where ASIC is satisfied that there is a misleading or deceptive statement or a material omission from the offer document.

5.56 These 'stop orders' relate to, among other things, breaches of sections 1200D and 1200G and may take the form of:

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prevention of the offer while the order is in force; or

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prevention of specified conduct in respect of the securities while the order is in force.

5.57 The procedure for issuing 'stop orders' is set out in section 1200N. This includes a hearing and reasonable opportunity for submissions to be made by interested parties (see subsection 1200N(3)). The method and form of orders issued by ASIC are prescribed in later subsections. ASIC is also empowered to make an interim order.

5.58 ASIC also has the power to ban persons from making any subsequent recognised offers if, for example, that person has been convicted of an offence or a court has made a civil penalty order against the person in relation to a recognised offer (section 1200P).

5.59 Before making a declaration to ban a person, ASIC must provide the person with hearing and reasonable opportunities for submissions. However, this does not apply where a person does not maintain a relevant contact point (an address for service) in Australia. In those circumstances, ASIC will publish the notification of the ban in the ASIC Gazette. ASIC can review the declaration under subsection 1200P(3) if ASIC is satisfied circumstances have changed. As with a number of ASIC decisions under the Corporations Act, review by the Administrative Appeals Tribunal is available (see existing section 1317B of the Corporations Act). Subsection 1200P(8) provides that such a declaration is not a legislative instrument. This subsection is included only to inform readers that the notice is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

5.60 A New Zealand offer into Australia that does not meet the entry requirements at the time of the first offer will fall outside the regime. Such an offer will be treated as an ordinary domestic offer in Australia and, therefore, will be unlawful if domestic regulatory requirements are not met, with consequences prescribed by Australian law.

5.61 Failure to comply with the ongoing requirements will result in a breach of Australia's laws. The consequences of non-compliance include criminal sanctions and/or stop orders issued by ASIC. Sections 1200Q create offences for breaches of the ongoing requirements (supplementary lodgement conditions, address for service, offering conditions, and dispute resolution condition).

5.62 Amendments to Schedule 3 of the Corporations Act provide the maximum penalties for these offences at Item 22 of Schedule 1 of the Bill. In the longer term, the penalties may be affected by the current review of penalties in general terms by the Commonwealth Attorney-General's Department.

Division 6 - Miscellaneous

5.63 Division 6 of new Part 8.2 deals with the service of documents to offerors of recognised offers.

Service

5.64 Section 1200R provides for the manner in which documents may be served on a person. Notwithstanding existing provisions in the Corporations Act, including sections 109X and 601CX, a document may also be served on a person at the address lodged under paragraph 1200D(1)(g).

5.65 The reason for this is to accommodate offerors which are not companies, as defined in the Corporations Act for the purpose of section 109X, or registered bodies.

Part 8.3 - Offers made under foreign recognition scheme

Australian offers recognised in foreign jurisdictions

5.66 New Part 8.3 sets the requirements for an Australian offer of securities into a recognised jurisdiction under the mutual recognition scheme.

5.67 In accordance with existing provisions of the Corporations Act, any offeror that intends to make an offer in Australia (and have an offer recognised in a foreign jurisdiction) must first satisfy the Australian requirements set out in Chapter 6D or Part 7.9.

Requirements of the offer

5.68 If an offeror wishes to opt into the mutual recognition scheme, then it will need to lodge a notice that it is opting into the regime with ASIC (section 1200S).

5.69 Subsection 1200T(1) extends the operation of the Corporations Act to conduct under the mutual recognition scheme in a recognised foreign jurisdiction. This extends the ambit of the Corporations Act for regulated offers in Australia to foreign jurisdictions, in this specific instance New Zealand. This does not mean that ASIC officers will visit New Zealand, or other countries, and exercise the Commission's powers there.

5.70 Subsection 1200T(2) provide that the Regulations may exempt from, or modify the provisions of the Corporations Act, as it applies to recognised jurisdictions.

5.71 This regulation making power is included principally to address the potential scope of the legislation. At present the scheme relates only to New Zealand, however it is drafted in such a way that it can be extended to offers in other foreign jurisdictions if a comparable agreement is reached with them. It is difficult to foresee all likely scenarios involved in foreign laws and legislate for each of them. Therefore the regulation making power is essential to the flexibility of this regime and its possible expanded operation. The authority contained in subsection 1200T(2) is intended to be used for necessary minor alterations to make a good fit with the requirements of any potential recognised jurisdiction.

Australian and New Zealand regulators

5.72 ASIC will have lead responsibility for taking action in respect of breaches of the substantive requirements of Australian law, which extends to the foreign jurisdiction by virtue of section 1200T.

5.73 The foreign jurisdiction regulator will have primary responsibility for taking action against Australian issuers into their jurisdiction for failure to comply with the ongoing requirements imposed by that jurisdiction, other than the requirement to comply with the Australian law.

ASIC's powers

5.74 ASIC will have its ordinary powers relating to a securities offer in Australia (see Chapter 6D and Part 7.9 of the Corporations Act; Part 2 of the ASIC Act).

Other consequential changes (Schedule 1)

Items 1 to 17

5.75 The amendments in items 1 to 17 of Schedule 1 include a number of consequential changes to the Corporations Act as a result of new Chapter 8 dealing with mutual recognition of securities offerings. This includes:

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Item 4 inserts a signpost definition of 'recognised offer' in section 9;

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Item 5 amends an existing heading in section 111AF to better reflect the purpose of the section;

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various explanatory notes are included to signpost the extended operation of existing Corporations Act definitions and the extended operation of certain provisions of the Corporations Act relating to the mutual recognition scheme; and

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the changes to 'ED securities' are described at paragraph 5.46.

Schedule 2 - Recognition of companies

Background

5.76 Schedule 2 to the Bill amends Divisions 2 and 3 of Part 5B.2 of the Corporations Act to exempt those companies, incorporated in a country that is prescribed in regulations (prescribed foreign country companies), from the requirement to lodge information or a copy of a document with ASIC that is already lodged with an authority of the prescribed foreign country whose functions include functions equivalent to any of those of ASIC.

5.77 New Zealand will be prescribed in the Regulations. It is possible that other countries could be prescribed in future if comparable arrangements were reached with them.

5.78 The exemptions do not remove the requirement for prescribed foreign country companies to register with ASIC if they wish to operate in Australia. However, the aim is to reduce the administrative burden of registration and the ongoing filing requirements by decreasing the information or copies of documents required to be lodged with ASIC.

5.79 The ASIC Act and agreements between ASIC and the New Zealand Registrar of Companies already allow ASIC to share information on New Zealand companies operating in Australia and Australian companies operating in New Zealand.

Item 1

5.80 Item 1 in Schedule 2 to the Bill amends Division 2 of Part 5B.2 of the Corporations Act to exempt foreign companies, whose place of origin is prescribed, from lodging with ASIC information or copies of documents required pursuant to the Division that they have already lodged with a foreign authority whose functions include functions equivalent to any of those of ASIC.

5.81 The functions of the foreign authority do not have to align with all of ASIC's functions; however, the functions of the foreign authority must be equivalent to any of those that ASIC perform. This allows for circumstances where foreign countries arrange their regulation of corporations and financial services differently to Australia. The amendment captures foreign authorities that perform regulation, compliance and enforcement functions as well as those authorities that collect information and maintain company registers.

Item 2

5.82 Item 2 in Schedule 2 to the Bill amends Division 3 of Part 5B.2 of the Corporations Act to extend the amendment in Item 1 to foreign bodies registered with ASIC.

Item 3

5.83 Item 3 in Schedule 2 to the Bill amends Part 9.1 of the Corporations Act. This amendment deems information or a copy of a document lodged with the foreign authority to be lodged with ASIC if the foreign authority has given the information or the document to ASIC.

5.84 The amendment covers both electronic transfers of information and copies of documents, as well as paper transfers of information and copies of documents.

Schedule 3 - Protection of information obtained by the Australian Competition and Consumer Commission

Item 3 - New section 155AAA

5.85 Item 3 in Schedule 3 to the Bill inserts a new section 155AAA. Section 155AAA prohibits the disclosure of protected information by a Commission official, except in circumstances set out in that section. The term 'protected information' is defined in subsection 155AAA(21).

Protection of certain information

5.86 New subsection 155AAA(1) provides that a Commission official must not disclose any protected information to any person except in particular circumstances. Those circumstances are when the Commission official is performing duties or functions as a Commission official or when the Commission official or the Commission is required or permitted by the TP Act or by any other law of the Commonwealth, or a prescribed law of a State or internal Territory, to disclose the information.

5.87 Subsection 155AAA(2) provides that subsection 155AAA(1) does not allow a Commission official to disclose protected information when performing a function of the Commission described in section 28. Section 28 of the TP Act confers on the Commission functions in relation to dissemination of information, law reform and research.

Disclosure to Ministers

5.88 Subsection 155AAA(3) provides that a Commission official may disclose protected information to the designated Minister. The term 'designated Minister' is defined in subsection 155AAA(21).

5.89 Subsection 155AAA(4) provides that if protected information relates to a matter arising under a provision of the TP Act, or a provision of another Act, that is administered by a Minister other than the designated Minister, a Commission official may disclose the protected information to the other Minister.

5.90 Subsection 155AAA(5) provides that subsection 155AAA(4) does not limit subsection 155AAA(3).

Disclosure to Secretaries etc

5.91 Subsection 155AAA(6) provides that a Commission official may disclose protected information to the Secretary of the designated Department or an officer of the designated Department who is authorised by the Secretary of that Department, in writing, for the purposes of subsection 155AAA(6), for the purpose of advising the designated Minister. The term 'designated Department' is defined in subsection 155AAA(21).

5.92 Subsection 155AAA(7) states that if protected information relates to a matter arising under a provision of the TP Act or a provision of another Act that is administered by a Minister other than the designated Minister, a Commission official may disclose the protected information to the Secretary of the Department that is administered by the other Minister, for the purpose of advising the other Minister. This subsection also provides that the Commission official may disclose the information to an officer of the Department who is authorised by the Secretary of that Department, in writing, for the purposes of subsection 155AAA(7), for the purpose of advising the other Minister.

5.93 Subsection 155AAA(8) provides that subsection 155AAA(7) does not limit subsection 155AAA(6).

Disclosure to a Royal Commission

5.94 Subsection 155AAA(9) provides that a Commission official may disclose protected information to a Royal Commission.

5.95 Subsection 155AAA(10) provides that the Commission Chairperson may, by writing, impose conditions to be complied with in relation to protected information disclosed under subsection 155AAA(9).

5.96 Subsection 155AAA(11) specifies that an instrument under subsection 155AAA(10) is not a legislative instrument. This subsection is included only to inform readers that the notice is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

Disclosure to certain agencies, bodies and persons

5.97 Subsection 155AAA(12) provides for the disclosure of protected information to specified agencies, bodies or persons if the provision of the information will enable or assist them to perform or exercise any of their functions or powers. The protected information may, in this situation, be disclosed by an authorised Commission official. The agencies, bodies and persons specified in subsection 155AAA(12) include those to who the Commission is most likely to disclose protected information, such as other regulators.

5.98 Subsection 155AAA(13) provides that the Chairperson may, by writing, impose conditions to be complied with in relation to protected information disclosed under subsection 155AAA(12).

5.99 Subsection 155AAA(14) specifies that an instrument under subsection 155AAA(13) is not a legislative instrument. This subsection is included only to inform readers that the notice is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

Disclosure with consent

5.100 Subsection 155AAA(15) provides that a Commission official may disclose protected information that relates to the affairs of a person if the person has consented to the disclosure and the disclosure is in accordance with that consent.

Disclosure of publicly available information

5.101 Subsection 155AAA(16) provides that a Commission official may disclose protected information if it is already publicly available.

Disclosure of summaries or statistics

5.102 Subsection 155AAA(17) provides that a Commission official may disclose summaries of protected information or statistics derived from protected information if those summaries or statistics, as the case may be, are not likely to enable the identification of a person.

Disclosure authorised by regulations

5.103 Subsection 155AAA(18) provides that the regulations may authorise a Commission official to disclose protected information in specified circumstances and that the Chairperson may, by writing, impose conditions to be complied with in relation to the disclosure of protected information in those circumstances.

5.104 This provision will be important in situations where the Government may wish to provide for disclosure of information or documents on a case by case basis to, for example, certain inquiries or bodies not covered by the existing provisions.

5.105 Subsection 155AAA(19) specifies that an instrument under regulations made for the purposes of subsection 155AAA(18)(b) is not a legislative instrument. This subsection is included only to inform readers that the notice is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

Delegation

5.106 Subsection 155AAA(20) provides that the Chairperson may, by writing, delegate any or all of his or her functions and powers under: (a) this section; or (b) regulations made for the purposes of subsection 155AAA(18); to a member of the Commission.

Definitions

5.107 The definitions in Subsection 155AAA(21) are:

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authorised Commission official means a Commission official authorised by the Chairperson of the Commission, in writing, for the purposes of section 155AAA.

•

Commission official means a member, or associate member of the Commission; a person referred to in subsection 27(1); or a person engaged under section 27A.

•

core statutory provision means a provision of Part IV, IVA, V, VA, VII, VIII, XIB or XIC; the remaining provisions of the TP Act so far as they relate to those parts; or a provision of the regulations so far as it relates to either a provision of those parts or the remaining provisions of the TP Act so far as they relate to those parts. The definition of core statutory provision expressly excludes the provisions of Division 1AA of Part V.

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designated Department means the Department that is responsible for the administration of section 155AAA (other than subsections (4) and (7)).

•

designated Minister means the Minister who is responsible for the administration of section 155AAA (other than subsections (4) and (7)). The identity of the Minister is determined by the Administrative Arrangements Order.

•

disclose means divulge or communicate.

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foreign country includes a region where: the region is a colony, territory or protectorate of a foreign country; the region is part of a foreign country; the region is under the protection of a foreign country; a foreign country exercises jurisdiction or control over the region; or a foreign country is responsible for the region's international relations.

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foreign government body means: the government of a foreign country; an agency or authority of a foreign country; the government of part of a foreign country; or an agency or authority of part of a foreign country. The definition envisages that there may be more then one government that governs part of a foreign country. This will be most common in federated foreign countries, such as the United States of America and Canada, where the responsibilities of government are shared between multiple levels of government. Each of these governments, and each of their agencies and authorities, would be a foreign government body for the purposes of section 155AAA.

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Information includes information in a document and information given in evidence. Subsection (4)(1) provides that a document includes a book, plan, paper, parchment or other material on which there is writing or printing, or on which there are marks, symbols or perforations having a meaning for persons qualified to interpret them; and a disc, tape, paper or other device from which sounds or messages are capable of being reproduced. The term evidence includes evidence provided pursuant to section 155.

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Protected information means:

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Information that was given in confidence to the Commission and that relates to a matter arising under a core statutory provision.

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Information that was obtained by the Commission under Part XID or section 155 where that information relates to a matter arising under a core statutory provision.

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Information that was obtained by the Commission under section 151AU, 152AU, 152BT, 152BZ, 152CBB, or 152CBH or rules in force under section 151BU, and that relates to a matter arising under Part XIB or XIC;

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Information that was obtained by the Commission under section 118C or 118G of the Radiocommunications Act 1992 (the Radiocommunications Act). Sections 118C and 118G of the Radiocommunications Act relate to further information requested by the Commission about access undertakings, and variations of access undertakings, respectively. This information was previously deemed to be protected part XIB or XIC information for the purposes of section 155AB; and

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Information that was given in confidence to the Commission by a foreign government body and that relates to a matter arising under a provision of a law of a foreign country or of a part of a foreign country.

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For the purposes of this definition, it is immaterial whether the information was given to or obtained by the Commission before, at or after the commencement of section 155AAA.

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Royal Commission has the same meaning as in the Royal Commissions Act 1902 (RC Act). Subsection 1B(1) of the RC Act defines Royal Commission to mean any Commission of inquiry issued by the Governor-General by Letters Patent in pursuance of the RC Act or of any other power, and includes the members of the Commission, or a quorum thereof, or the sole Commissioner, sitting for the purposes of the inquiry. The definition has the effect of limiting the meaning of Royal Commission for the purposes of subsection 155AAA(9). In particular, the term does not extend to a commission of inquiry issued by the Governor of a state by letters patent or other inquiries.

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State/Territory government body means the government of a State or Territory; or an agency or authority of a State or Territory. Subsection 4(1) defines the terms Territory and authority, in relation to a State or Territory (including an external Territory), for the purposes of the TP Act. The term Territory is defined as meaning an internal Territory, the Territory of Christmas Island; or the territory of Cocos (Keeling) Islands. The term authority, in relation to a state or Territory (including an external Territory) is defined as meaning a body corporate established for a purpose of the State or the Territory by or under a law of the State or Territory; or an incorporated company in which such a body corporate, or the State or the Territory, has a controlling interest.

Items [1] to [2] and [9] - Consequential amendments to the Radiocommunications Act 1992 and the Trade Practices Act 1974

5.108 The Bill contains consequential amendments to section 155AB of the TP Act and subsections 118C(6) and 188G(6) of the Radiocommunications Act. The consequential amendments avoid duplication in the protection of information which would otherwise be protected by both sections 155AB and 155AAA.

Item [1] - Subsection 118C(6)

5.109 Item [1] repeals subsection 118C(6) of the Radiocommunications Act. That subsection deemed information obtained by the Commission under section 118C of the Radiocommunications Act to be protected part XIB or XIC information for the purposes of section 155AB. The subsection is redundant following the repeal of section 155AB and the enactment of section 155AAA which protects information obtained by the Commission pursuant to section 118C.

Item [2] - Subsection 118G(6)

5.110 Item [2] repeals subsection 118G(6) of the Radiocommunications Act. That subsection deemed information obtained by the Commission under section 118G of the Radiocommunications Act to be protected part XIB or XIC information for the purposes of section 155AB. The subsection is redundant following the repeal of section 155AB and the enactment of section 155AAA which protects information obtained by the Commission pursuant to section 118G.

Item [9] - Section 155AB

5.111 Item [9] repeals section 155AB. That section governed protected telecommunications and radiocommunications information gathered by the Commission. The section is repealed in order to avoid duplication in the protection of what was pursuant to section 155AB 'protected Parts XIB or XIC information'. That information is now protected pursuant to section 155AAA.

Items [4] to [8] - Section 155AA

5.112 The Schedule also contains consequential amendments to section 155AA. These amendments avoid duplication, and ensure consistency, between section 155AAA and section 155AA.

Item [4] - Subsection 155AA(1)

5.113 Item [4] removes 'protected Part IV information' from the prohibition on disclosure contained in section 155AA(1) to avoid duplication. That information is now subject to section 155AAA.

Item [5] - Paragraph 155AA(1)(b)

5.114 Item [5] inserts the words 'or permitted' after the word 'required' in paragraph 155AA(1)(b). This amendments ensures consistency between the language used in paragraph 155AA(1)(b) and the language used in new paragraph 155AAA(1)(b).

Item [6] - Subsection 155AA(2)

5.115 Item [6] replaces the reference to 'paragraph 1(a)' in subsection 155AA(2) with a reference to 'Subsection (1)'. This amendment is related to the amendment made by item [5]. It ensures, among other things, that a Commission official cannot rely upon section 28 as permitting them to disclose protected part VB information pursuant to subsection 155AA(1)(b).

Item [7] - Subsection 155AA(2)

5.116 Item [7] removes 'protected Part IV information' from subsection 155AA(2). The term is no longer required as 'protected IV information' is no longer protected by section 155AA.

Item [8] - Subsection 155AA(3) (definition of protected Part IV information)

5.117 Item [8] repeals the definition of 'protected Part IV information' contained in subsection 155AA(3). That definition is no longer required as protected part IV information is no longer protected by section 155AA.