Welcome to our April edition of ‘Legal and regulatory developments in Australia’. Since our last update there have been a number of significant developments in Australia including the commencement of the sweeping new personal property security regime and further reforms affecting executive remuneration. We summarise these and other developments below.
Also since our last update Mallesons Stephen Jaques merged with the leading Chinese law firm King & Wood to create a new legal powerhouse, King & Wood Mallesons, with a uniquely Asian view of the world. I hope that future updates will include a summary of key regulatory developments taking place in China and other parts of Asia.
Please contact me in London if we can provide more details about the developments referred to below or if we can assist you with any other Australian or Asian legal or regulatory issues.
Robert Hanley, Partner
In a world where the ‘executive bonus’ is increasingly under scrutiny if not attack, the Australian Government is to tighten up its laws on executive remuneration. First the changes will require improved disclosure of termination or “golden handshake” payments and require remuneration reports to make a “clearer categorisation of pay” to allow shareholders to better understand the company’s remuneration arrangements. The second reform will require a listed company to reveal in its remuneration report what steps it has taken to recover bonuses and other remuneration where a company has made a serious financial misstatement. The reforms don’t actually require the company to clawback amounts paid, but to disclose to shareholders what action it has, or hasn’t taken. Read more.
Part IVA is a general anti-avoidance income tax regime originally brought in to counter blatant, artificial or contrived tax avoidance schemes. The Australian Government has announced changes to that regime to take effect for any schemes entered into after 1 March 2012. However, no details of the changes are available because they will only be finalised and enacted in September 2012 after a public consultation. Remarkably, this means that Australian businesses may find their transactions characterised as unlawful under legislation which has not yet been formulated. Read more.
Since our last update, the far-reaching Personal Property Securities Act has come into force and registration must now be made with the Personal Property Securities Register. Now that the system is live, businesses are grappling with the new register and the impact of the new law. Read more here, and further background can be read here.
The first part of proposed reforms to laws imposing personal liability for corporate offences has been announced. The amendments relate to derivative liability on directors and secretaries for offences committed by their company. Read more.
The Future of Financial Advice (FoFA) reforms represent an “overhaul” of the Australian regulation of financial advisory services for consumers. The key changes include:
King & Wood Mallesons has produced a FoFA toolkit to assist financial services businesses to determine how the FoFA reforms affect their businesses. For more details and to find out how to obtain the toolkit, read more here. After the linked article was published it was announced that although FoFA comes into force in July 2012, it will not be obligatory until July 2013.