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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CORPORATIONS AMENDMENT (ASIA REGION FUNDS PASSPORT) BILL
2018
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by authority of the
Minister for Revenue and Financial Services, Minister for Women and Minister
Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)
Table of contents
Glossary ................................................................................................. 1
General outline and financial impact....................................................... 3
Chapter 1: Amendments to the Corporations Amendment (Asia
Region Funds Passport) Bill 2018 ................................ 5
Chapter 2: Statement of Compatibility with Human Rights ..................... 7
Glossary
The following abbreviations and acronyms are used throughout this
supplementary explanatory memorandum.
Abbreviation Definition
APRA Australian Prudential Regulation Authority
Bill Corporations Amendment (Asia Region
Funds Passport) Bill 2018
Corporations Act Corporations Act 2001
ITAA 1936 Income Tax Assessment Act 1936
RSE Registrable Superannuation Entity
1
General outline and financial impact
Amendments to the Corporations Amendment (Asia Region
Funds Passport) Bill 2018
The amendments to the Corporations Amendment (Asia Region Funds
Passport) Bill 2018 (the Bill) make additional minor consequential
amendments to various Acts to ensure that the provisions in the Bill
operate effectively.
Date of effect: To be set by proclamation
Proposal announced: The amendments implement the Government's
commitment to the Asia Region Funds Passport Memorandum of
Cooperation, which the Government signed on 28 April 2016.
Financial impact: The amendments do not alter the financial impact
outlined in the explanatory memorandum to the Bill.
Compliance cost impact: The amendments have no additional compliance
cost impact.
3
Chapter 1: Amendments to the
Corporations Amendment (Asia Region
Funds Passport) Bill 2018
Outline of chapter
1.1 The amendments to the Corporations Amendment Asia Region
Funds Passport Bill 2018 (the Bill) make additional minor consequential
amendments to various Acts to ensure that the provisions in the Bill
operate effectively.
Detailed explanation of new law
Amendments to the Corporations Amendment Asia Region Funds
Passport Bill 2018
1.1 Amendment 1 updates the commencement information in
column 1 of the table to ensure that the Schedule with the consequential
amendments to other Acts commences at the same time as the other
Schedules. This commencement date is a date fixed by Proclamation.
[Amendment 1, item 2 of commencement table in clause 2]
1.2 Amendment 2 rectifies a typographical error in section 1216L of
the Bill. This section provides that regulations may continue the
application of the Corporations legislation but mistakenly refers to a
'declaration' (rather than 'regulations') in the final sentence. [Amendment 3,
Schedule 2, section 1216L of the Corporations Act 2001]
1.3 Amendment 3 makes an additional consequential amendment to
the Corporations Act 2001 (Corporations Act) so that review fees imposed
on notified foreign passport funds are due two months after the review
date. It also sets out the circumstances in which a review fee is not
payable. These are the same as the circumstances which apply to a
company, registered scheme or registered Australian body. [Amendment 2,
Schedule 2, subsection 1351(3), table item 2A and paragraph 1351(4)(b) of the
Corporations Act 2001]
1.4 Amendment 4 inserts an additional Schedule which contains
consequential amendments to other Acts. It amends the notes to various
sections of the Competition and Consumer Act 2010 which cross-
reference the prohibitions on hawking in the Corporations Act and list the
5
Amendments to the Corporations Amendment (Asia Region Funds Passport) Bill 2018
types of products that are covered by the prohibitions. The amendments
extend this list to include interests in notified foreign passport funds. This
is consistent with the amendments made by the Bill to the prohibitions on
hawking. [Amendment 4, Schedule 2A, items 1 and 2, notes to sections 95 and 187 of
Schedule 2 to the Competition and Consumer Act 2010]
1.5 An amendment to the Financial Sector (Collection of Data) Act
2001 is also made to give the Australian Prudential Regulation Authority
(APRA) the power to set reporting standards relating to the financial
products and other property in which a notified foreign passport fund has
invested. This mirrors APRA's existing powers to set reporting standards
for managed investment schemes. [Amendment 4, Schedule 2A, item 3, paragraph
13(4A)(c) of the Financial Sector (Collection of Data) Act 2001]
1.6 The amendments to the Foreign Acquisitions and Takeovers Act
1975 amend the definition of 'associate' so that it excludes the situation
where one person holds a substantial interest in a notified foreign passport
fund and the other person is the operator of the fund. The amendments
also clarify that the exception relating to persons with a substantial
interest in a scheme and the responsible entity of the scheme refers to
registered schemes and adopts the meaning of 'responsible entity' in the
Corporations Act. [Amendment 4, Schedule 2A, items 4-6, paragraphs 6(3)(f) and
(fa) of the Foreign Acquisitions and Takeovers Act 1975]
1.7 Amendment 4 also ensures that the meaning of 'securities' in
section 128AE of the Income Tax Assessment Act 1936 (ITAA 1936) and
section 5 of the Payment Systems and Netting Act 1998 are not affected by
the Bill. The Bill amends the definition of 'security' by creating new
definitions which apply only for the purposes of Part 1.2A and Chapter 6C
respectively. Amendments are made to ensure that these new definitions
do not affect section 128AE of the ITAA 1936 (which uses the definition
that applies generally in Chapters 6 to 6CA) or section 5 of the Payment
Systems and Netting Act 1998 (which uses the definition that applies
outside Chapters 6 to 6CA and 7). [Amendment 4, Schedule 2A, item 7,
subparagraph 128AE(2)(e)(iii) of the ITAA 1936 and Amendment 3, Schedule 2A,
item 9, section 5, paragraph (a) of the definition of 'financial property']
1.8 An amendment is also made to preserve the existing definition
of 'financial year' in section 3 of the Insurance Act 1973. The definition
that applies generally in the Corporations Act, outside Schedule 2, should
continue to apply. [Amendment 4, Schedule 2A, section 8, subsection 3(1) of the
Insurance Act 1973, definition of 'financial year']
1.9 Amendment 4 also restricts pooled development funds from
issuing or making available an interest in a notified foreign passport fund.
[Amendment 4, Schedule 2A, paragraph 30(1)(e) of the Pooled Development Funds Act
1992]
6
Chapter 2: Statement of Compatibility with
Human Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Parliamentary Amendments to the Corporations Amendment (Asia
Region Funds Passport) Bill 2018
1.1 These Parliamentary Amendments are compatible with the
human rights and freedoms recognised or declared in the international
instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview
1.2 The Parliamentary Amendments to the Corporations
Amendment (Asia Region Funds Passport) Bill 2018 (the Bill) make
miscellaneous amendments to the Foreign Acquisitions and Takeovers Act
1975, Income Tax Assessment Act 1936, Payment Systems and Netting Act
1998, Financial Sector (Collection of Data) Act 2001, Insurance Act 1973
and the Competition and Consumer Act 2001. The parliamentary
amendments ensure that various sections and notes in these other acts are
consistent with the changes proposed in the Bill, for example, by updating
cross-references to sections in the Corporations Act.
1.3 The Parliamentary Amendments also correct a typographical
error and another minor error in the Bill.
Human rights implications
1.4 These Parliamentary Amendments do not engage any of the
applicable rights or freedoms. They make minor miscellaneous
amendments which are consequential to the amendments made in the Bill.
1.5 Some of the amendments proposed in the Bill engage human
rights. For a discussion of the human rights implications of the Bill, refer
to the Statement of Compatibility with Human Rights attached to that Bill.
7
Amendments to the Corporations Amendment (Asia Region Funds Passport) Bill 2018
Conclusion
1.6 These Parliamentary Amendments are compatible with human
rights as they do not raise any human rights issues.
8
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