Explanatory Statement

Issued by the authority of the Parliamentary Secretary to the Treasurer

Corporations Act 2001

Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.

Subsection 213(1) of the Corporations Act, as recently amended by the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (the Amendment Act), allows public companies to give a small financial benefit to a related party which, aggregated over a financial year, is at or below a prescribed amount without seeking member approval.

The Regulations amend the Corporations Regulations 2001 (the Principal Regulations) to prescribe an amount of $5,000 for the purposes of subsection 213(1) of the Act.

In addition, the section 1274A of the Act and the Principal Regulations require the Australian Securities and Investments Commission (ASIC) to maintain certain prescribed registers of prescribed information about companies, bodies and schemes that themselves register with ASIC, and to permit people to search this prescribed information. This company information includes such identifying details as the entities' names, officers and registered offices.

Section 146A of the Act, inserted by the Amendment Act, allows for a company to provide ASIC with a 'contact address' to which ASIC may address correspondence relating to a company. Further, subsection 117(2) of the Act requires a company to inform ASIC of its principal place of business. Currently, ASIC is not required to include this company information on its register.

The Regulations also amend the Principal Regulations to include a company's contact address and principal place of business as prescribed information, allowing people searching the company's details on an ASIC register to ascertain this information.

Details of the regulations are set out in the Attachment.

Under the Corporations Agreement 2002, the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 506(1) and 507(2) of the Corporations Agreement, the Commonwealth is required to consult with and receive the approval of at least three State and Territory Ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Commonwealth has received approval of the Council for the Regulations.

Under subclause 511(3), the Commonwealth is required to consult with the Council as to whether proposed regulations should be exposed for public comment for between one and three months. The Commonwealth has received the approval of the Council to waive the public disclosure period for the Regulations.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations relating to related party transactions commence on 1 July 2007 and the Regulations relating to company addresses commence on the commencement of the Amendment Act.

ATTACHMENT

Details of the Corporations Amendment Regulations 2007 (No. 7)

Regulation 1 - Name of Regulations

This regulation provides that the title of the Regulations is the Corporations Amendment Regulations 2007 (No. 7).

Regulation 2 - Commencement

This regulation provides that the Regulations relating to related party transactions commence on 1 July 2007 and the Regulations relating to company addresses commence on the commencement of the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007.

Regulation 3 - Amendment of Corporations Regulations 2001

This regulation provides that the Principal Regulations are amended as set out in Schedule 1.

Regulation 4 - Amendment of Corporations Regulations 2001

This regulation provides that the Principal Regulations are amended as set out in Schedule 2.

Schedule 1 - Amendment commencing on 1 July 2007

Regulation [1] - Regulation 2E.1.01

Regulation [1] of Schedule 1 to the Regulations prescribes the amount of $5,000 for the purposes of subsection 213(1) of the Corporations Act, as amended by the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007.

Schedule 2 - Amendment commencing on commencement of Corporations Legislation Amendment (Simpler Regulatory System) Act 2007

Regulation [1]

Regulation 1 of Schedule 2 to the Regulations amends regulation 9.1.02 of the Principal Regulations to include the contact address and principal place of business as prescribed information for the register for companies registered under section 118 or 601BD or the registration which is continued by section 1378 of the Corporations Act.

Regulation [2]

Regulation 2 of Schedule 2 to the Regulations amends regulation 9.1.02 of the Principal Regulations to include the contact address and principal place of business as prescribed information for the register for registered Australian bodies.

Regulation [3]

Regulation 3 of Schedule 2 to the Regulations amends regulation 9.1.02 of the Principal Regulations to include the contact address and principal place of business as prescribed information for the register for foreign companies.

Regulation [4]

Regulation 4 of Schedule 2 to the Regulations amends regulation 9.1.02 of the Principal Regulations to include the contact address and principal place of business as prescribed information for the register for registered schemes.