June « 2010 « Australian Regulatory Compliance Review from Langes+ Lawyers

June 15, 2010

Franchising disclosure changes

The Trade Practices (Industry Codes – Franchising) Amendment Regulations 2010 (No. 1) amend the Trade Practices (Industry Codes – Franchising) Regulations 1998 .

The changes increase franchisor disclosure on a number of different matters including:

liability for significant capital expenditure,
the right of a franchisor to unilaterally vary the agreement,
the right of a franchisor to change the agreement when a franchisee transfers it and
notice required for non-renewal of a franchise.

The changes also provide guidance to franchisees and franchisors on the conduct expected of them during dispute resolution processes.

The changes apply to franchise agreements entered from 1 July 2010.

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Posted 15th June 2010 by David Jacobson in Business Planning, Trade Practices

Regulation of lending to super funds

Treasury has released an exposure draft of Corporations Regulations designed to give effect to the Government proposal to provide that certain borrowing arrangements by superannuation fund trustees permitted by the Superannuation Industry (Supervision) Act 1993 (the SIS Act) are financial products under the Corporations Act 2001 (Principal Act).

Existing Australian Financial Services licensees would need to review their licence authorisations to ensure they are authorised to provide or give advice on such products.

Generally, superannuation funds are not permitted to borrow funds except in limited circumstances. Superannuation funds are regulated under the SIS Act. Limited recourse borrowing arrangements, such as instalment warrants, are one of the exceptions permitted under the SIS Act, under subsection 67(4A).

The proposed Corporations Amendment Regulations 2010 (No.)(proposed Regulations) would make limited recourse borrowing arrangements financial products under the Principal Act when entered into by regulated superannuation funds.

The proposed Regulations amend the Corporations Regulations 2001 to provide that:

limited recourse borrowing arrangements are financial products under the Principal Act when acquired by superannuation funds;
limited recourse borrowing arrangements are not a credit facility under the Principal Act when acquired by superannuation funds; and
an Australian Financial Services Licence covering derivatives is taken to also cover limited recourse borrowing arrangements.

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Posted 15th June 2010 by David Jacobson in Corporations Act, Financial Services, Superannuation

June 7, 2010

National Credit Code registrations closing date

ASIC has issued a reminder that anyone who is currently engaged in credit activities (as defined by the National Consumer Credit Protection Act) who is yet to register must do so before 30 June 2010, and ideally, by 18 June 2010, to ensure they can continue offering credit activities after 1 July 2010.

Since registration opened on 1 April, up to 1 June, over 10,200 entities and individuals intending to engage in credit activities after 1 July 2010 have applied.

ASIC has warned that if you wait until after 18 June 2010 to apply, there is a risk that it won’t be able to make a decision on your application by the end of the registration period on 30 June.

ASIC will not accept registration applications after 30 June 2010. If you are not registered with ASIC by 30 June 2010 or acting as the authorised credit representative of someone who is registered, you must stop engaging in credit activities until you either become registered or have an Australian credit licence.

Registered persons’, and prospective licensees who are yet to register, must apply for a credit licence between 1 July 2010 and 31 December 2010, or become a representative of a registered person or a credit licensee if they wish to continue engaging in credit activities beyond 31 December 2010.

Visit our National Consumer Credit Reform site

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Posted 7th June 2010 by David Jacobson in National Credit Code

June 3, 2010

Insolvent trading law reform: Sons of Gwalia reversed

The Corporations Amendment (Sons of Gwalia) Bill 2010 has been introduced into Parliament.

The Bill, if passed, will give effect to the Government’s decision to reverse the High Court decision in Sons of Gwalia v Margaretic.

The Sons of Gwalia decision determined that, in a corporate winding up, certain compensation claims by shareholders against the company ranked equally with the claims of other creditors.

The Bill removes the right of persons bringing claims regarding shareholdings to:

•vote as creditors in a voluntary administration or a winding-up, unless they receive permission from the Court; or
•receive reports to creditors, unless they make a request in writing to the external administrator.

The Bill also introduces reforms relating to notices to creditors, shareholder voting and clarifies the position of shareholders bringing claims for damages against companies.

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Posted 3rd June 2010 by David Jacobson in Corporations Act

National business names registration exposure draft bill

The Australian Business Number (ABN) Business Names Registration Project has released a public exposure draft of the Business Name Registration Bill and its related fees bill for consultation until 27 June.

Background

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Posted 3rd June 2010 by David Jacobson in Business names

June 1, 2010

ACCC guide to unfair contract terms

The ACCC has issued a booklet Australian Consumer Law: A guide to unfair contract terms which provides information on the types of contracts and contract terms which may be affected by the new Australian Consumer Law’s unfair contract terms (UCT) provisions.

The ACCC expects that the UCT provisions will commence on 1 July 2010.

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Posted 1st June 2010 by David Jacobson in Trade Practices