Overview | Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022

Key takeouts

Overview

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 was introduced into the House of Representatives on 23 November 2022.

Broadly, the Bill proposes to further 'modernise' 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'.

The Bill builds on some aspects of a separate Bill introduced by the former government (summarised) which lapsed with the dissolution of the last parliament.

We provide a high level overview of some of the key changes below.

Key Changes

Further 'modernisation' of Corporations Act requirements

Broadly, Schedule 1 of the Bill includes proposed changes that would mean that:

  • all documents (including deeds) which are required or permitted to be signed under the Corporations Act could 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) could be sent in either hard copy or electronic form
  • companies would not be 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.

The proposed reforms in Schedule 1 would also make clear that Treasury portfolio regulators could hold hearings and examinations virtually, and separately allow more payments to be made electronically by 'removing outdated restrictions that preserve where or how a payment may be made'.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, it's proposed that the changes in Schedule 1 would commence the day after the Bill receives Assent.

Treasury laws clean up

The proposed changes in Schedule 2 would implement 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'.

Transposing certain ASIC legislative instruments into primary legislation

The proposed changes in Schedule 3 propose to 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, it's proposed that the following instruments would 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

It's also proposed that ASIC Class Order [CO 14/41] would 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 proposed changes in Schedule 3 would commence the day after Assent.

'Miscellaneous' amendments to Treasury laws

The proposed changes in Schedule 4 would 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 proposes to (among other things) repeal and replace 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'.

It's proposed that this amendment would apply retrospectively to contracts entered into on or after 13 June 2014 (the date at which regulation 51 came into effect).

Separately, the proposed changes in Schedule 4 would also clarify that a licensee of a registrable superannuation entity could use technology to hold annual members’ meetings – that is, the proposed amendments would 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 (proposed) changes around meeting requirements would apply 'in relation to an annual members’ meeting of a registrable superannuation entity that ends on or after the day that Schedule 1 commences'.

Next steps

[Source: Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022]