Commonwealth of Australia Explanatory Memoranda

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GOVERNANCE REVIEW IMPLEMENTATION (TREASURY PORTFOLIO AGENCIES) BILL 2007

                             2004-2005-2006-2007
    THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
                                    SENATE

     GOVERNANCE REVIEW IMPLEMENTATION (TREASURY
            PORTFOLIO AGENCIES) BILL 2007
          SUPPLEMENTARY EXPLANATORY MEMORANDUM

            Amendment to be Moved on Behalf of the Government

                   (Circulated by authority of the Treasurer,
                         the Hon Peter Costello, MP)



Explanation of amendment

1.1 The amendment clarifies the Commonwealth's obligations under the
Corporations Act 2001 (Corporations Act) in relation to managing property that
a company held on trust immediately prior to its deregistration.

1.2 Under the current law, all property that a company held on trust
immediately before deregistration vests in the Australian Securities and
Investments Commission (ASIC). ASIC may either continue to act as trustee or
apply to the court for the appointment of a new trustee.

1.3 The Governance Review Implementation (Treasury Portfolio Agencies)
Bill 2007 (the Bill) will transfer ASIC to the Financial Management and
Accountability Act 1997. As a result, ASIC will no longer be able to hold
property on trust in its own name, rather, this obligation will be transferred to
the Commonwealth. This change is not intended to affect the nature of the
obligations owed by the trustee.

1.4 However, on one interpretation of the Bill, the Commonwealth would be
subject to a new operational obligation -- to sell or dispose of trust property as
it thinks fit and subject to the Commonwealth's obligations as trustee.

1.5 The amendment to subsection 601AE(1) of the Corporations Act ensures
that the Commonwealth is not subject to additional operational obligations and
that the current level of flexibility in managing trust property is preserved.