Subection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.

The Financial Services Reform Act 2001 (FSRA) commenced on 11 March 2002. It amended the Act to introduce a uniform licensing, conduct and disclosure regime for financial service providers. Under the FSRA, a two-year transition period was established to allow time for existing industry participants to enter the new regime.

The purpose of the Regulations is to make amendments to:

•       correct a numbering error for a regulation made earlier this year. The regulation was given the number of a regulation already in existence.

•       make a minor drafting correction to another regulation made earlier this year by omitting one phrase.

Details of the Regulations are set out in the Attachment.

The regulations commence on gazettal.

ATTACHMENT

DETAILS OF THE CORPORATIONS AMENDMENT REGULATIONS 2004 (NO. 4)

Regulation 1 provides that the name of the Regulations is the Corporations Amendment Regulations 2004 (No. 4).

Regulation 2 provides that regulations 1 to 3 and Schedule 1 commence on gazettal.

Regulation 3 provides that Schedule 1 of the Regulations amend the Corporations Regulations 2001 (the Principal Regulations).

Schedule 1 - amendments commencing on gazettal

Item 1       Meaning of class of financial services - renumbering of Regulation 7.1.04E.

Regulation 7.1.04E was made as part of Corporations Amendment Regulations 2004 (No. 2). The regulation number allocated to this regulation is already in existence. Therefore, it is necessary to amend the regulation by renumbering it as 7.1.04F

Item 2       Meaning of excluded person - amendment to Regulation 7.5.04(1)

Prior to the making of Corporations Amendment Regulations 2004 (No. 3):

•       subregulation 7.5.04(1A) provided a definition of the term 'excluded person' for the purpose of Subdivision 4.9; and

•       subregulation 7.5.04(1) provided a definition of the same term for other purposes in Part 7.5 of the Regulations.

Prior to the making of the Corporations Amendment Regulations 2004 (No. 3):

•       subregulation 7.5.04(1A) provided a definition of the term 'excluded person' for the purpose of Subdivision 4.9; and

•       subregulation 7.5.04(1) provided a definition of the same term for other purposes in Part 7.5 of the Regulations.

'Excluded person' includes spouses, business partners and officers of a company which is a participant on the Australian Stock Exchange. The definition is used in determining who may claim on the National Guarantee Fund (NGF). The NGF provides investor protection and clearing support for transactions executed on the Australian Stock Exchange. For example, a person may claim compensation from the NGF in the event of an unauthorised transfer of uncertificated securities. The definition of 'excluded person' ensures that a person close to the party in breach is not entitled to make a claim on the NGF, as that person is assumed to have known about the breach.

The Corporations Amendment Regulations 2004 (No. 3) omitted subregulation 7.5.04(1A) because this subregulation and 7.5.04(1) had been aligned. However, the amended Regulations did not omit the phrase '(other than Subdivision 4.9)' in subregulation 7.5.04(1). The result is that there was no current definition of 'excluded person' for the purpose of Subdivision 4.9. This is rectified by omitting the phrase '(other than subdivision 4.9)' from subregulation 7.5.04(1)