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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).
Welcome to Edition 59 of Boardroom Brief.
This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
Treasury publishes Australian law reforms to penalties for corporate and financial sector misconduct. The Treasury has confirmed reforms to overhaul the penalty regime for offences committed under the Corporations Act 2001; the key driver having been the public perception that the existing regime administered by ASIC fails to reflect the seriousness of certain forms of misconduct. Directors should note that both the range of civil penalty provisions as well as the maximum penalty amounts for individuals and corporations have been significantly increased. It is yet to be confirmed when these reforms will take effect. Also on the horizon are plans to extend ASIC’s powers relating to individual bans, revocation of financial services and credit licences and warrant powers. Please see G+T article “A black letter approach to white collar crime” for more information.
Treasury proposes to relax legislative 15% ownership cap to reduce barriers for innovative new entrants into the banking sector. On 16 April 2018, the Treasury published its exposure draft of the Financial Sector (Shareholdings) Amendment (Relaxing Ownership Restrictions) Bill 2018 and related explanatory statement for consultation. The Bill will increase the ownership cap from 15% to 20% and introduce a streamlined approval path for new and recent entrants, where assets are under a specified amount. The purpose of the Bill is to allow new and recent entrants the time for testing and growing their business before they need to consider diversifying ownership. Submissions are due by 4 May 2018. See Treasury’s website.
Treasury consults on Ipso Facto Insolvency Regulations. On 16 April 2018, the Australian Government launched a public consultation on proposed exceptions to the recently enacted stay on ipso facto clauses. The ipso facto reforms will affect contracts in all industries and segments of the market. The exceptions, which will be contained in a forthcoming declaration and regulations, will be critical to the operation of the new ipso facto regime, and its impact on stakeholders. The ipso facto stay is likely to come into operation on 1 July 2018. Unless excluded, the stay provisions will apply to all contracts, agreements or arrangements entered into on or after that date. The ipso facto stay will affect the ability of counterparties to exercise termination rights or other contractual rights under affected contracts once a company enters one of a number of specified insolvency or restructuring procedures. Directors should review the company’s contracts to see how it will be impacted by the reforms and consider participating in the consultation process. Submissions can be made until 11 May 2018. See Treasury’s website and Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer’s media release.
US President tweet on oil producers’ prices rattles the markets. Last week, President Donald Trump attacked the OPEC oil producers' group of applying "artificially very high" prices. Despite main crude oil benchmark prices hitting their highest levels since November 2014 last Thursday, Brent Crude and WTI fell around 1% after the tweet. We’re reminded of the inherent uncertainty over the long term global ramifications generally of the Trump administration’s policies and announcements.