Overview | Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023
- The changes introduced by the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) (summarised) to electronic execution requirements as well as changes to requirements around the use of technology in meetings are now in effect.
- A new Bill - Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023 (Cth) – passed both Houses on 4 September 2023, and which has now received Assent, further expands on these changes.
Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 (now referred to as Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023) was introduced into the House of Representatives on 23 November 2022.
Broadly, the Bill further 'modernises' existing requirements in Treasury laws including the Corporations Act 2001 (Cth) (Corporations Act) to improve their technology neutrality and ensure they remain 'fit for purpose'.
We provide a high level overview of some of the key changes below.
Further 'modernisation' of Corporations Act requirements
Broadly, the changes in Schedule 1 mean that:
- all documents (including deeds) which are required or permitted to be signed under the Corporations Act can be signed electronically or 'in wet-ink'
- documents sent under Chapters 2A to 2M, 5 to 5D, 6-6C, 8A and 9 or Schedule 2 to the Corporations Act (other than those which are lodged with ASIC, the Registrar or the Takeovers Panel) can be sent in either hard copy or electronic form
- companies are no longer required to send documents to a member where they do not have the correct contact details for that person/the details they have are known to be incorrect
- requirements in Treasury laws to publish notices in newspapers (publication requirements) are set to be replaced with a requirement that notices be published in a manner that is 'accessible to the public and reasonably prominent'.
The reforms in Schedule 1 also make clear that Treasury portfolio regulators are able to hold hearings and examinations virtually, and separately, allow more payments to be made electronically by 'removing outdated restrictions that preserve where or how a payment may be made'.
Generally, the changes in Schedule 1 commenced the day after the Bill received Assent.
Changes to publication requirements will commence on a date to be fixed by Proclamation (or if this does not occur within six months after Assent, the day after the end of that period).
Treasury laws clean up
The changes in Schedule 2 implement the government's initial response to the recommendations of the Australian Law Reform Commission's Interim Report A and are aimed at addressing what the explanatory memorandum describes as 'unwarranted complexity in the law'. The explanatory memorandum states that:
'By removing erroneous references and redundant definitions, using consistent headings to definitions sections, as well as other simplifications, Schedule 2 to the Bill improves the navigability and clarity of the corporations and financial services law'.
Amendments to Schedule 2
The Bill passed the House of Representatives on 6 February 2023 with two government amendments to address drafting errors in Schedule 2. The Supplementary Explanatory Memorandum states that the changes are necessary to:
'preserve existing policy settings and ensure the Bill does not alter the threshold for when a special resolution has effect. The parliamentary amendments ensure that the threshold for passing a special resolution remains as 75 per cent of the votes cast by members (rather than 75 per cent of the votes that may be cast)'.
Transposing certain ASIC legislative instruments into primary legislation
The changes in Schedule 3 transfer what the explanatory memorandum describes as 'longstanding and accepted matters' currently contained in ASIC legislative instruments to primary legislation (the Corporations Act and the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act)).
Specifically, the following instruments will be incorporated into the Corporations Act:
- ASIC Class Order [CO 12/340] (proposed licensed trustee companies)
- ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498
- ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66
- ASIC Corporations (Describing Debentures—Secured Notes) Instrument 2022/61
ASIC Class Order [CO 14/41] will also be incorporated into the NCCP Act.
The aim is to improve clarity and certainty around these requirements and to make it simpler for regulated entities and consumers to understand their rights and obligations.
The changes in Schedule 3 commenced the day after Assent.
'Miscellaneous' amendments to Treasury laws
The changes in Schedule 4 make a number of what the explanatory memorandum describes as 'miscellaneous and technical amendments' to Treasury portfolio legislation including 'correcting typographical and numbering errors', 'repealing redundant and inoperative provisions' and 'fixing incorrect legislative references' as well as 'reducing unnecessary red tape' and 'addressing unintended outcomes'.
On this last point, Schedule 4 (among other things) repeals and replaces Regulation 51 of the National Consumer Credit Protection Regulations 2010 (Cth) to ensure that in order to be able to rely on the continuing credit contract exemption, the maximum charge (ie the cap above which the National Credit Code would apply) will need to be 'calculated only by reference to continuing credit contracts which already fall within the exception in subsection 6(5) of the National Credit Code'.
This amendment applies retrospectively to contracts entered into on or after 13 June 2014 (the date at which regulation 51 came into effect).
Separately, the changes in Schedule 4 also clarify that a licensee of a registrable superannuation entity can use technology to hold annual members’ meetings – that is, the proposed amendments allow the licensee to hold an annual members' meeting as a physical meeting, as a hybrid meeting or as a wholly virtual meeting.
The explanatory memorandum, states that these changes around meeting requirements apply 'in relation to an annual members’ meeting of a registrable superannuation entity that ends on or after the day that Schedule 1 commences'.