Welcome to Issue No. 5 of Corporate Reporter, Bell Gully's regular round-up of corporate and general commercial matters, designed to keep you informed on regulatory developments, legislation and cases of interest.


Items in this issue include:



Regulatory developments Top

Update on the new Anti-Money Laundering and Countering Financing of Terrorism regime

The border cash reporting provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act) came into effect on 16 October 2010. They replace the provisions of the Financial Transactions Reporting Act 1996 from that date.

The threshold value ($9,999.99) and details of the new "cash report" requirements for the border cash reporting provisions under the AML/CFT Act are prescribed by the new Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Regulations 2010 (AML Regulations) which also came into force on 16 October. Previously, the threshold values for the border cash provisions under the Financial Transactions Reporting Act 1996 were specified in the Financial Transactions Reporting (Prescribed Amount) Regulations 1996. These 1996 regulations have now been revoked and replaced by the AML Regulations and the Financial Transactions Reporting (Prescribed Amount) Regulations 2010 (FTR Regulations).

The FTR Regulations re-enact the 1996 regulations unchanged in respect of the amount prescribed for Part 2 of the Financial Transactions Reporting Act 1996 (which requires financial institutions to verify the identity of the person conducting a financial transaction in certain circumstances).

Although the AML/CFT Act is in force, the key requirements of the Act will not come into effect until around November/December 2012 to give industry the opportunity to prepare for compliance with the Act. In addition to the border cash reporting provisions, the other provisions in effect under the AML/CFT Act are:

  • the financial intelligence functions of the police;
  • the definition, functions and powers of AML/CFT supervisors;
  • the establishment and operation of an inter-agency AML/CFT coordination committee to ensure the consistent, effective and efficient operation of the regulatory system; and
  • the activation of regulation and exemption-making powers.

Click here for further details on the implementation of the new regime

Qualifying company reforms announced

Minister of Revenue, Peter Dunne has announced that the Government will introduce new rules preventing loss attributing qualifying companies (LAQCs) from passing losses on to their shareholders. The move follows public consultation on proposals for reforms to the tax rules announced in Budget 2010 for qualifying companies and LAQCs. In response to feedback from small businesses, the Government has also decided to review the tax rules for dividends, with a view to simplifying them for closely held companies. The legislation for the new rules is expected to be enacted before the end of this year and will come into effect from 1 April 2011.

Click here for the press release
Click here for questions and answers on the reform proposal



Regulatory Developments Top

Securities Trustees and Statutory Supervisors Bill

The Securities Trustees and Statutory Supervisors Bill has been reported back by the Commerce Select Committee and has passed its second reading.

The Bill removes the automatic statutory approval for the six trustee corporations and requires all trustees, statutory supervisors, and unit trustees to be licensed by the Securities Commission. The new regime will replace the existing systems of approval under the Securities Act (for trustees and statutory supervisors), the Unit Trusts Act (for unit trustees) and the Retirement Villages Act (for statutory supervisors of retirement villages).

The Bill provides that before granting a licence, the Commission must assess trustees and statutory supervisors against matters including the trustee's or statutory supervisor's monitoring systems and processes, experience and infrastructure, and financial strength. It also provides for the Commission to monitor trustees and statutory supervisors' ongoing compliance with the terms of their licence. The Securities Commission may seek pecuniary penalty and compensatory orders against those who fail to comply.

Amendments made to the Bill, on the recommendation of the Commerce Select Committee, include:

  • Increasing the maximum licence period from five years to eight years;

  • Removing the requirement that a licensee report to the Securities Commission where it believes it is "likely to breach" an obligation and, instead, empowering the Commission to investigate a breach or likely breach, or a material change of circumstances or likely material change of circumstances, on the part of a licensee, and to have them submit an action plan to remedy or avoid such breach;

  • Providing for regulations to be made to set out the matters that the Commission must take into account in making good character assessments of an applicant's directors and senior managers;

  • Changing some of the requirements around the appointment (and terms of appointment) of the Commission's temporary trustee appointee where a licence application is rejected in relation to an existing security (or retirement village).

Although the Bill refers to the Securities Commission as the regulatory body for the new regime, the Committee notes in its report that it is envisaged that the regime will be administered by the new Financial Markets Authority (FMA) once the FMA has begun operating.

The new regime is expected to be in place by mid-2011.

Discussion document released on Securities Trustees and Statutory Supervisors Regulations

The regime established under the Securities Trustees and Statutory Supervisors Bill requires certain regulations being made before the regime can come into effect. Following the second reading of the Bill, Cabinet has now released a discussion document proposing regulations which specify:

  • how the Securities Commission must assess applicants against the licensing criteria set out in the Bill;

  • the contents of the reports that trustees will provide to the Securities Commission every six months;

  • the fees and levies to ensure the regime is operated on a full cost-recovery basis; and

  • certain additional terms for trust deeds for debt issuers.

Mr Power is encouraging stakeholders to comment on the proposals in the discussion document, and notes that industry "input and feedback will be invaluable in ensuring the regulations we put in place are sound and robust."

Closing date for submissions is 17 November 2010

Click here for more details

RBNZ consultation on covered bonds

The Reserve Bank has released a consultation paper on the introduction of a regulatory framework for the development of covered bond programmes by New Zealand banks.

At present, there is nothing in the Reserve Bank's prudential requirements or New Zealand law which prohibits or limits the issue of covered bonds. However, the Reserve Bank is of the view that some minor legislative changes would support the development of the covered bond market, which is already operating under informal guidelines.

Covered bonds are debt securities backed by the cash flows from a specific pool of mortgages or other loans. The development of a covered bond market for New Zealand banks could have benefits in terms of lowering the cost of long-term funding.

The Reserve Bank also intends to introduce new disclosure requirements to ensure that the impact of covered bond issuance is transparent. It will do this in the context of the wider bank disclosure review currently underway.

Submissions for the consultation paper close on 19 November 2010.

Click here for further details

Non-bank deposit taker (NBDT) developments Top

Consultation to complete legislative framework for NBDTs

The Reserve Bank has decided to undertake a further round of consultation before implementing the second stage of the new regulatory regime for NBDTs with the release of its NBDT Consultation Document: Remaining NBDT regulatory requirements.

The first stage of the new regime (the Reserve Bank of New Zealand Amendment Act 2008) introduced Part 5D into the Reserve Bank of New Zealand Act (RBNZ Act), and implemented the credit rating and prudential requirements, including those relating to capital, related party lending, liquidity, risk management, and corporate governance. It also introduced associated offences, penalties and enforcement powers for the Reserve Bank.

This consultation paper proposes the remaining amendments to the RBNZ Act that the Bank believes are required to fully implement the NBDT regime. In summary, these remaining elements are:

  • licensing of NBDTs;

  • fit and proper requirements for directors and senior officer holders of NBDTs;

  • controls on changes of ownership;

  • distress and failure management powers for the Reserve Bank; and,

  • refinements to Part 5D of the RBNZ Act.

The consultation period closes on 5 November 2010. The intention is that the legislation to give effect to these changes will come into force in 2011.

New liquidity requirements for NBDTs

The Deposit Takers (Liquidity Requirements) Regulations 2010 were gazetted on 7 October 2010 and will commence on 1 December 2010. This is the date on which the governance requirements in the Reserve Bank of New Zealand Act 1989 relating to deposit takers, and the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010, come into force.

The regulations require quantitative liquidity requirements to be included in trust deeds. Quantitative liquidity requirements must take into account the liquidity of both the deposit taker and any borrowing group of which it is part, and be appropriate to the deposit taker's business and the business of any borrowing group of which it is part.

The Reserve Bank has indicated that it will release guidelines on quantitative liquidity requirements to assist NBDTs and trustees to meet the liquidity requirements.

Securities Commission Top

Securities Markets (Insider Trading Exemption–Futures Contracts) Regulations 2010

These regulations, which came into force on 8 October 2010, provide that certain conduct by traders in futures contracts, and their advisers, is not insider conduct for the purposes of the Securities Markets Act 1988.

The regulations relate to a trader's knowledge of the trader's own past, current, or proposed business activities, transactions, and agreements that relate to futures contracts, the underlying commodities or assets, and the underlying variables or indices.

The regulations are intended to clarify that traders in futures contracts have protection that is similar to that provided to traders of securities and their advisers by section 9C(1) and (2) of the Securities Markets Act 1988.

Minister welcomes appointment of CEO for super regulator

Commerce Minister Hon Simon Power has welcomed the appointment of Sean Hughes as chief executive-designate of the new market conduct regulator for the financial sector, the Financial Markets Authority. The FMA is expected to be up and running early next year, following the passage of the Financial Markets (Regulators and KiwiSaver) Bill 2010 which is currently before the Commerce Select Committee.

Click here for the press release

Securities Commission completes Cycle 12 of its Financial Reporting Surveillance Programme

The Securities Commission has released its report on Cycle 12 of the Commission's ongoing Financial Reporting Surveillance Programme. The report covers 21 issuers with balance dates ranging from 30 June 2009 to 31 January 2010.

A number of matters relating to financial instrument disclosures and measurement were raised by the Commission with the issuers, reflecting the large proportion of financial institutions included in Cycle 12. These included:

  • inadequate or incorrect disclosure of concentrations of credit risk by security type and fair value assumptions;

  • the incorrect classification of financial assets and accounting policies for impairment that were inconsistent with NZ IFRS;

  • inadequate disclosure of significant assumptions underlying valuations of property, plant and equipment.

However, in comparison with previous cycles, the Securities Commission found improved disclosures in key management personnel disclosure and in the statements of compliance with NZ IFRS.

Financial adviser regime developments Top

Adviser regulation ready to 'go-live' on 1 December

The last formal step required for the introduction of the new financial advisers' regulatory regime has been taken, with publication in the Gazette that 1 December 2010 will be the date on which the Code of Professional Conduct for Authorised Financial Advisers (AFAs) comes into effect. The Code of Professional Conduct establishes 18 standards to ensure all authorised financial advisers meet the minimum standards for ethical behaviour, client care, knowledge, skills and competence, and continuing professional development.

This means that from 1 December all financial advisers, whether authorised or not, must comply with the care, diligence and skill provisions of the Financial Advisers Act.

If a financial adviser wants to provide any services that are reserved for AFAs under the Financial Advisers Act the adviser will have to be authorised to do so by 1 July 2011 (unless the adviser works for a qualified financial entity). After that date it will be an offence to provide advice on category 1 products, or provide discretionary investment management services or investment planning services, unless the adviser is authorised.

Previously, the Securities Commission has stated that provided advisers apply for authorisation by 31 March 2011, the Commission should be able to complete the authorisation process for AFAs by the critical date of 1 July 2011. However, the Commissioner for Financial Advisers, David Mayhew, says that this was based on the assumption that significant numbers would be already processed before 31 March. Unless there is more engagement now, Mr Mayhew warns that "there may be insufficient capacity in the system to cope with the volume of applications to be processed in the last three months before the regime is fully in force".

Click here to read the full press release

The Code is available at http://www.financialadvisercode.govt.nz/

Commission consults on standard conditions for QFE's disclosure obligations

The Securities Commission has released a consultation paper and invited submissions on proposed disclosure obligations to be included in standard conditions for businesses granted Qualifying Financial Entity (QFE) status under the Financial Advisers Act. The paper supplements an earlier consultation document on standard conditions for QFEs published by the Commission in September.

The Financial Advisers Act requires disclosure so that retail customers can make informed decisions about whether to use an adviser or follow the advice received. Disclosure requirements for QFEs will be set out in the Act, Regulations and terms and conditions. The consultation paper sets out the proposed conditions and includes some examples of disclosure information.

Submissions close on 12 November 2010.

NZX developments Top

Proposed Continuous Disclosure Guidance Note

NZX Market Supervision (NZXMS) is seeking comment on the policy proposals embodied in a draft revised Continuous Disclosure Guidance Note.

NZXMS's current practices and procedures in relation to the application of the continuous disclosure rules are contained in "Guidance Note - Continuous Disclosure" issued in March 2005.

Submissions close on 26 November 2010.

Click here for further details

Company fined and censured for breaching NZ director Listing Rule

The NZ Markets Disciplinary Tribunal has found that Insured Group Limited (formerly Lombard Group Limited) breached Rule 3.3.1(b) of the NZSX Listing Rules between 11 June and 11 July this year, when it failed to have at least two directors who were ordinarily resident in New Zealand.

The penalties imposed by the Tribunal in respect of the breach include:

  • public censure;

  • the sum of $7,500 by way of penalty; and

  • an order that the company pay the actual costs and expenses incurred by:

    • the Tribunal in considering this matter; and

    • NZX in relation to this matter (up to $4,000 plus GST (if any)).

The Tribunal accepted that the breach was not deliberate and was due to the company being mistaken as to the date that a waiver granted by NZXMS in February 2010 (which provided the company with temporary relief from Rule 3.3.1(b)) ceased to apply. However, the Tribunal rejected the implication that NZX was in any way responsible for not drawing the terms and conditions of the waiver to the company's attention. The Tribunal found that it was the company's responsibility to:

  • ensure that it reviews and understands the relief granted by NZX in its waiver determinations and to ensure any such waiver is suitable for its requirements; and

  • comply with the terms of any such relief.

Click here to read the full decision

Reserve Bank and NZX reach agreement

The Reserve Bank and NZX run New Zealand's two principal securities settlement systems: NZClear and New Zealand Clearing Limited, respectively. The Reserve Bank and NZX have announced that, following an extensive review of alternative options, the Bank and NZX have agreed to maintain separate competing systems but with full interoperability between them. The agreement is formalised in a Memorandum of Understanding, which sets out joint objectives for the Bank and NZX with regard to the clearing and settlements infrastructure.

Click here for further details



Electricity sector developments Top

Electricity Authority will succeed Electricity Commission from 1 November

Under the Electricity Industry Act 2010, the Electricity Authority will oversee the electricity sector from 1 November.

The Authority, which has been established as an independent Crown entity under the Crown Entities Act 2004, will be responsible for promoting competition, reliable supply and efficient operation of the electricity market for the long-term benefit of all electricity consumers.

The establishment of the Electricity Authority is one of 29 measures designed to improve the electricity market's performance, arising from the 2009 review of the electricity sector. Others include:

  • streamlining the sector by transferring some functions from the Electricity Authority to other bodies, namely:

    • Transpower will become responsible for emergency management and provision of information and forecasting on security of supply, subject to rules set by the Electricity Authority;

    • the Commerce Commission will undertake approval of grid upgrade plans by Transpower; and

    • the Energy Efficiency and Conservation Authority will take over the Electricity Commission's energy efficiency programmes;

  • a new Electricity Industry Participation Code comes into effect on 1 November.

On 13 October 2010, Energy and Resources Minister Hon Gerry Brownlee announced that five members had been appointed to the Electricity Authority. Dr Brent Layton (Chair), Susan Paterson and Elena Trout have been appointed for five year terms. David Bull and Roger Sowry, both current members of the Electricity Commission, have been appointed for eighteen months.

As a result of these changes, the Electricity Commission's website will close on 31 October, and a new Electricity Authority website will be launched on 1 November at www.ea.govt.nz.



Regulatory developments Top

Media releases

The NZCC has issued the following media releases:

Industry regulation and regulatory control

Next step underway for the determination of mobile termination rates
The NZCC has issued a notice to Vodafone New Zealand Limited to prepare a standard terms proposal for terminating mobile calls and text messages. This proposal will specify the non-price terms and conditions on which mobile termination services should be made available to both mobile and fixed line operators. The price of the mobile termination access services will be specified by the NZCC.
Click here for more

Revised draft information disclosure determination for airport services released
The NZCC has released a revised draft information disclosure determination for specified airports services, for technical consultation. This is expected to be the final consultation step before the information disclosure requirements for specified airport services are finalised.
Click here for more

Final consultation on input methodologies for electricity distribution services
The NZCC has released its revised draft input methodologies determination for electricity distribution services for technical consultation. This is expected to be the last consultation step before the input methodologies for electricity distribution services are finalised.
Click here for more

Mergers and acquisitions

Statement of preliminary issues available for Sanford's clearance application
The NZCC has published a statement of preliminary issues relating to an application received from Sanford Limited on 29 September 2010 seeking clearance to acquire the Pacifica Seafoods Group of companies.
Click here for more

AsureQuality and Proficiency Services apply for clearance to form a joint venture
The NZCC has received an application from AsureQuality Limited and Proficiency Services Limited seeking clearance to form a new joint venture company. The joint venture company would acquire all of the proficiency testing business assets of AsureQuality and Proficiency Services Limited.
Click here for more

Pact Group subsidiary applies for clearance to acquire Tecpak Industries Limited
The NZCC has received an application from TEC Projects Limited seeking clearance to acquire the plastic packaging business and assets of Tecpak Industries Limited.
Click here for more

Statement of preliminary issues available for AsureQuality Limited's and Proficiency Services Limited's clearance application
The NZCC has published a statement of preliminary issues relating to an application received from AsureQuality Limited and Proficiency Services Limited seeking clearance to form a new joint venture company.
Click here for more

Market behaviour

Commission ends plans to draft enforcement guidelines on misuse of market power
The NZCC will no longer develop guidelines on section 36 of the Commerce Act. Section 36 is aimed at preventing companies with substantial market power from using or taking advantage of that market power to deter competition. "In light of the Supreme Court's decision in the 0867 case, there is limited value that the Commission can currently provide by developing section 36 guidelines" said Dr Mark Berry, NZCC Chair.
Click here for more

Commerce Commission appoints new CEO
The NZCC is pleased to announce the appointment of Brent Alderton as the new CEO from 1 January 2011. He replaces Nicholas Hill who is leaving the NZCC at the end of this year.
Click here for more

Commerce Commission focuses on construction sector
Research conducted on behalf of the NZCC indicates that some construction businesses are not aware of competition law and this may be affecting competition for non-residential building projects. "Our research indicates a low level of understanding of competition issues by those in the construction sector. In particular, the research indicates that a practice known as cover pricing is occurring" said Kate Morrison, General Manager of Enforcement, NZCC.
Click here for more


Commerce Commission opens investigation into Telecom's compliance with Separation Undertakings
The NZCC has launched an investigation into an alleged breach of Separation Undertakings by Telecom Corporation of New Zealand. The investigation will assess whether Telecom Wholesale is likely to have discriminated against telecommunications providers in favour of Telecom Retail.
Click here for more

Consumer issues

Methven pleads guilty to misleading consumers over shower water and energy savings
Methven Limited, a company that manufactures and supplies bathroom fittings, has pleaded guilty to nine breaches of the Fair Trading Act for misleading consumers about the potential savings gained when using the Satinjet shower product range. Methven has been fined $50,000 and ordered to pay court costs in the Waitakere District Court.
Click here for more

Businesses reminded not to mislead over GST pricing increases
The NZCC is reminding businesses that they risk breaching the Fair Trading Act if price increases are misleadingly represented as being due to the GST increase. This follows a warning issued to the owners of Wellington's daily paper, The Dominion Post, which represented that a price increase was ‘forced' by the GST change, when this was not the case.
Click here for more

Company director and car dealership fined for misleading about damaged vehicles
The charges related to failures to comply with Consumer Information Standards (Used Motor Vehicles) Regulations 2008 and false claims made by Mr Kumar and Sunrise regarding damaged vehicles sold to consumers.
Click here for more

Businesses reminded not to mislead over public holiday surcharge
The NZCC reminded those businesses who choose to apply a surcharge on public holidays that they must not mislead consumers. This follows a warning to a company that is a major provider of food and alcohol at Wellington's Westpac Stadium. Spotless Services (NZ) Limited has been warned by the NZCC that signs displayed on Waitangi Day 2009 and 2010 at the New Zealand International Sevens tournament were at risk of breaching the Fair Trading Act.
Click here for more

Australian Competition and Consumer Commission (ACCC) Top

Selected ACCC media releases

The ACCC has issued the following media releases:

Mergers and acquisitions

ACCC not to oppose tobacco acquisition after proposed sale of cigar assets
The ACCC will not oppose the proposed acquisition of Swedish Match AB by Scandinavian Tobacco Group A/S after competition concerns were resolved by a court enforceable undertaking. The undertaking proposed by Scandinavian Tobacco Group offers to sell certain Australian cigar assets, including the Wee Willem and Willem II cigar brands, to an independent purchaser.
Click here for more

ACCC calls for comment on proposed acquisition of Centrel by BP Australia
The ACCC has issued a Statement of Issues on the proposed acquisition of Centrel Pty Ltd by BP Australia Pty Ltd.
Click here for more

Market behaviour

Draft decision to deny authorisation for exclusive pilotage agreement
The ACCC has issued a draft determination proposing to deny authorisation for an exclusive pilotage services agreement at the Port of Brisbane.
Click here for more

ACCC authorises Queensland liquor accord
The ACCC has granted conditional authorisation for a pro-forma liquor accord arrangement in Queensland for three years. The pro-forma liquor accord arrangement proposed by the Queensland Office of Liquor and Gaming Regulation includes a range of measures such as some limited restrictions on discounting and on the supply of certain drinks.
Click here for more

Consumer issues

ACCC action results in corrective steps by 3D TV retailer
The ACCC raised concerns with a number of retailers after the Australian Communications and Media Authority alerted it to advertisements which promoted the sale of 3D TVs to watch the 2010 AFL and NRL grand finals in places where the 3D broadcast would not be available.
Click here for more

GreenPower retailer breached undertaking
The Federal Court in Sydney has declared that Global Green Plan Ltd breached a court enforceable undertaking given to the ACCC in December 2009. Global Green Plan accepted payments from customers on the proviso that the money would be used to buy the Renewable Energy Certificates (RECS). However, not all of the money provided to Global Green Plan by customers was used to purchase the RECS.
Click here for more

Trader pays infringement notice over alleged false building association membership claims
ACA Constructions Pty Ltd, trading as Roll Away Shutters, has paid an infringement notice issued by the ACCC. On 26 July 2010 the ACCC issued the notice because it had reasonable grounds to believe the trader was falsely claiming on its website that it was a member of the Master Builders Association and the Housing Industry Association.
Click here for more

Telstra takes steps to strengthen warranties
Telstra has strengthened its handset warranties with a recent announcement that it is rolling out 24 month warranties for mobile handsets supplied with 24 month service contracts (excluding Apple products). This decision follows discussions with the ACCC.
Click here for more

ACCC institutes proceedings for alleged 'blowing' by Adepto Publications Pty Ltd
The ACCC has instituted proceedings in the Federal Court, Sydney against Adepto Publications Pty Ltd. The ACCC has alleged that between 2007 and 2010, Adepto demanded payment from Australian businesses for unsolicited advertisements in its publications, in breach of the Trade Practices Act 1974.
Click here for more

ACCC institutes proceedings against mobile premium service providers for alleged misleading, deceptive conduct
The ACCC has instituted proceedings in the Federal Court, Sydney against 6G Pty Ltd and Global One Mobile Entertainment Ltd. The ACCC has alleged that from February 2010, 6G and Global One made false or misleading representations, while advertising mobile premium services on television, in breach of the Trade Practices Act 1974.
Click here for more



News from the Government Top

Reintroduction of legislation to target market misconduct and unsolicited share offers

The Government has reintroduced the Corporations Amendment (No. 1) Bill 2010, which addresses the practice of unsolicited off-market share offers that are below value to vulnerable investors. The legislation also substantially increases the penalties for persons or businesses that breach the market manipulation and insider trading provisions.

Click here for further details

Legislation reversing Sons of Gwalia reintroduced into Parliament

The Government has reintroduced the Corporations Amendment (Sons of Gwalia) Bill 2010 into Parliament to give effect to the Government's decision to reverse the High Court's decision in Sons of Gwalia v Margaretic.

The Sons of Gwalia decision determined that, in a corporate insolvency, certain shareholder claims against a company ranked equally with the claims of other unsecured creditors. This decision went against the commonly understood order of claims in a corporate winding-up. The Bill returns the order of claims to that which existed prior to the Sons of Gwalia judgment.

Click here for further details

News from Australian Securities and Investments Commission (ASIC) Top

ASIC seeks comment on proposed guidance for independent experts' reports and related party transactions

As part of its initiatives to raise standards of corporate disclosure in the market, ASIC has released two consultation papers outlining proposals for guidance on independent experts' reports and governance and disclosure for related party transactions.

The consultation papers are:

ASIC is seeking comments on the proposals by 17 December 2010 and (subject to issues arising from the consultation process) plans to publish revised guidance to the market in March 2011.

Click here for further details

Preventing insolvent trading: the focus of new ASIC report

ASIC has released a report that sets out the key messages and outcomes of its national insolvent trading program (NITP). The report, National Insolvent Trading Program Report (REP 213) will be beneficial to directors of companies, company advisers (including accountants and lawyers) and other interested stakeholders to assist them in understanding and complying with their duty under the Corporations Act 2001 to prevent insolvent trading.

There are four key messages from the NITP that directors should take into account in carrying out their role. Directors must:

  • maintain appropriate books and records;

  • identify insolvency concerns and assess available options;

  • seek professional advice; and

  • act in a timely manner.

Click here for further details

ASIC releases proposals to strengthen disclosure by unlisted mortgage schemes

ASIC has released Consultation Paper 141 Mortgage schemes: Strengthening the disclosure benchmarks which outlines proposals to further improve disclosure for retail investors considering investing in unlisted mortgage schemes.

ASIC is seeking comments on the proposals in the consultation paper by 26 November 2010.

Click here for further details

ASIC issues consultation paper on financial requirements for managed investment scheme responsible entities

ASIC has released a consultation paper, setting out issues for consultation regarding the financial requirements for responsible entities (REs) of managed investment schemes (MISs).

As Australia aims to become a leading financial centre, ASIC has reviewed the financial requirements of REs. The review aims to ensure that REs have adequate resources to meet operating costs and there is appropriate alignment with the interests of investors.

The consultation paper requests feedback about the following issues:

  • restricting guarantees and indemnities granted by REs;

  • requiring REs to create rolling 12-month cash flow projections;

  • increasing the net tangible asset capital (NTA) requirements for REs; and

  • specifying the net tangible asset (NTA) liquidity requirements for REs.

Submissions close on 15 November 2010.

Click here for further details



Further commentary Top

In addition to the Corporate Reporter, Bell Gully also produces one-off client updates on corporate matters of particular significance. During the period covered by this issue of the Corporate Reporter we have published the following client updates:



Contact us Top

For more information on any of the items in the Corporate Reporter, please contact your usual Bell Gully adviser or any member of Bell Gully's Corporate or M&A teams. Alternatively, you can contact the editor Diane Graham by email or call her on 64 9 916 8849.


This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

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