Welcome to Edition 33 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.


Insolvency director safe harbour reforms. The Treasury Laws Amendment (2017 Enterprise Incentives No 2) Bill 2017 (Bill) was passed by the Senate on 11 September 2017 and is now awaiting Royal Assent. The Bill amends the Corporations Act 2001 to create a safe harbour for company directors from personal liability for insolvent trading if the company is undertaking a restructure outside formal insolvency. It also amends the Corporations Act 2001 and Payment Systems and Netting Act 1998 (Cth) to make certain contractual rights unenforceable while a company is restructuring under certain formal insolvency processes. Directors will be aware that viable but financially stressed businesses under external administration or schemes of arrangement may find it difficult to trade following contract cancellations. These reforms will create breathing space for a company to continue to trade through insolvency and improve its changes of being turned around. See the Parliament of Australia website for more information. See also Minister for Revenue and Financial Services, The Hon Kelly O’Dwyer MP’s media release.

Extension of CSF regime to proprietary companies. The second reading of the Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 (CSF Bill) was moved in the House of Representatives on 14 September 2017. The Bill will extend the CSF regime to proprietary companies and make a new funding source available for small businesses, while maintaining investor protections through additional obligations on companies. The obligations are likely to impose compliance costs on proprietary companies that use CSF, but these costs will be lower for CSF proprietary companies than if the company transitioned to a public company under the current regime. Extending the crowdfunding framework builds on the Government’s support for the start-up and FinTech sector including the enhancements to the ASIC regulatory sandbox and tax incentives for investors in innovative start-ups. See Treasurer of Commonwealth of Australia, the Hon Scott Morrison’s media release. We will be commenting further on the potential of the CSF provisions in future Boardroom Briefs.

Report on whistleblower protections in the corporate, public and not-for-profit sector.  On 13 September 2017, the Joint Parliamentary Committee on Corporations and Financial Services (Committee) released a report on its inquiry into whistleblower protections in the corporate, public and not-for-profit sectors. The report’s recommendations include financial rewards for whistleblowers, consistency of whistleblower protections across both public and private sectors and the establishment of a Whistleblower Protection Authority to support whistleblowers and to oversee the implementation of the whistleblower regime. See the Parliament of Australia website for more information.

Announcement of Government reforms to address phoenixing activity.  On 12 September 2017, the Hon Kelly O'Dwyer MP, Minister for Revenue and Financial Services announced the Government's plans to stamp out illegal phoenix activity and ensure that tougher penalties are imposed on those involved. The Government's package of reforms includes the introduction of a Director Identification Number (DIN) to enable the tracking of directors and the mapping of their relationships with other individuals and companies. The Government will also consult on the implementation of a number of other measures to deter the behaviour of phoenix operators, and the best ways to identify high risk individuals who will be subject to early intervention and preventative tools. The Australian Chamber of Commerce and Industry has welcomed the reforms and has expressed support for laws that ‘deter illegal behaviour while encouraging healthy risk taking and innovation’. See Minister for Revenue and Financial Services, The Hon Kelly O’Dwyer MP’s media release.

ASIC releases market integrity report. ASIC has released its latest report on market integrity for the period 1 January to 30 June 2017. Report 542 Market integrity report: January to June 2017 covers ASIC’s work to help ensure Australia’s financial markets operate fairly and efficiently. The report looks at ASIC’s focus on cyber resilience, sell-side research and listing standards. It also looks at some of ASIC’s key activities over the last six months in areas such as insider trading and the management of spot foreign exchange businesses. Directors should be aware that ASIC will be focusing on technology & cyber resilience, conduct and effective capital markets as areas of existing and emerging risks over 2017. See ASIC’s media release.

G+T client publication Africa Down Under: Investing in Africa - The Legal and Social Complexity When the Rules Change - the insight outlines the critical importance of building genuine relationships in order to successfully navigate the complex social, political and cultural contexts of international markets and protecting investment, in light of the recent changes to investment laws in Africa.


Applications from eligible public companies for crowd-funding licences. From 29 September 2017, the new crowd-sourced funding (CSF) regime will come into effect and ASIC will begin accepting licence applications from CSF intermediaries. Under the CSF regime, eligible public companies will be able to make offers of fully paid ordinary shares to a large number of investors via the online platform of a licensed intermediary. Generally, the CSF regime reduces the regulatory requirements for public fundraising and the intermediaries will play an important oversight role in this process. ASIC has released further details of its approach to the assessment of CSF intermediaries, and the information required for both new licence and variation applications seeking crowd-funding service authorisation. The new information on applying to be a CSF intermediary can be found on the ASIC website. See ASIC’s media release.

Treasury consults on Consolidation Integrity Measures. Treasury has released draft tax consolidation legislation and an explanatory memorandum for public consultation. Submissions are due by 6 October 2017. The tax consolidation rules allow wholly owned groups to choose to form a ‘consolidated group’ for tax purposes, which is treated as a single entity for tax purposes. The Bill contains six measures designed to address concerns raised in the Board of Taxation’s post-implementation review of the consolidation rules. See Treasury’s media release. See also Minister for Revenue and Financial Services, The Hon Kelly O’Dwyer MP’s media release.

Expertise Area