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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).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 77 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.
G+T releases practical guide to new ipso facto laws. As reported in previous editions of Boardroom Brief, the ipso facto reforms, which introduce automatic stays on the enforcement of certain ipso facto provisions, came into effect on 1 July 2018. This ipso facto stay affects 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. On 22 August 2018, G+T published its practical guide for drafting and managing contracts affected by these reforms. Directors of companies who are heavily reliant on customer contracts should ensure their company has a strategy to protect their position under the new regime. In particular, G+T recommends retaining all potential ipso facto clauses in contracts, since their validity is not affected and an administrator or receiver may consent to the enforcement of those clauses. Further, parties who are unable to rely on insolvency events for comfort should consider a bank guarantee or a parent company guarantee as an alternative.
ASX releases Compliance Update for August 2018. On 20 August 2018, ASX released its Compliance Update for August 2018. This Update reminds listed entities that: (i) annual listing fees for FY2019 were due by 31 July 2018; (ii) AGMs must be held within five months of the company’s financial year end (which will be by 30 November for most), draft Notices of Meeting must be submitted to ASX for review and new voting exclusions apply (such that excluded persons are only precluded from voting in favour of a resolution); and (iii) any declared dividends or distributions for the period ending 30 September 2018 must be announced, using the ASX Online form, by 24 September 2018.
ASIC continues collation of data for setting industry funding levies. As part of the new industry funding arrangements that came into effect on 1 July 2017, ASIC-regulated organisations should have recently received a letter from ASIC requesting submission of pre-populated business activity metric data on the operation of their business from the previous financial year. The data must be provided by 27 September 2018 via the new online ASIC regulatory portal. ASIC will then use this information to calculate the industry levies to apply (with individual levies to vary according to sector, entity size and business activity levels). Directors should note that entities which fail to complete the process by the specified deadline may incur penalties. See ASIC’s media release.
New ministers. Following the political turmoil of last week, the new Prime Minister Scott Morrison has moved quickly to swear in his new cabinet. Details can be found here. Other than the high profile departure of Hon. Julie Bishop, and the elevation of Hon. Josh Frydenberg to the position of Treasurer, the new Prime Minister has opted to maintain continuity where possible. However, policy areas of key interest to Directors, including energy policy and tax reform, are likely to continue to evolve in coming weeks (although it seems very unlikely that the mooted company tax reductions will see the light of day any time soon).
Government’s consultation on changes to ABN system closes this Friday. As previously reported in Boardroom Brief, the reforms are intended to enhance confidence in the identity and legitimacy of Australian businesses. Directors should note that the proposals envisage adjustments to ABN entitlement rules, imposition of conditions on ABN holders and introduction of new verification procedures (including also a renewal process and renewal fee).