Chris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I move:

That the amendment be agreed to.

The proposed amendment to the Governance Review Implementation (Treasury Portfolio Agencies) Bill 2007 is technical and minor in nature. The amendment clarifies the Commonwealth’s obligations under the Corporations Act in relation to managing property that a company held on trust immediately prior to its deregistration. Under the current law, all property that a company held on trust immediately before deregistration vests in ASIC. ASIC may either continue to act as trustee or apply to the court for the appointment of a new trustee. Under the bill, ASIC will be subject to the FMA Act and as such will no longer be able to hold property on trust in its own name. Rather, this obligation will be transferred to the Commonwealth. ASIC will still have the authority to perform all of the duties and exercise all the powers of the Commonwealth as trustee in relation to any real or personal property or money held on trust by the Commonwealth.

On one interpretation of the original bill, the Commonwealth would be subject to a new non-discretionary operational obligation—that is, to sell or dispose of all property that a company held on trust immediately prior to its deregistration in a manner the Commonwealth thinks fit and subject to its obligations as trustee. ASIC would act on the Commonwealth’s behalf as the trustee but would face undue inflexibility and cost in complying with the new obligation to always divest itself of the subject property. Amending the bill so that the Commonwealth will have discretion as to whether to sell the trust property or not is more consistent with preserving the current operating arrangements than requiring the Commonwealth to sell the property. It was always envisaged that moving ASIC to the FMA Act would not affect the nature of the obligations owed by the trustee. Consequently, it is proposed to amend the bill to ensure the current framework continues as intended. This will preserve the current level of flexibility in ASIC’s management of trust property, for which, of course, it acts on behalf of the Commonwealth. As a result, I commend the amendment to the House.

Question agreed to.

See this speech in context