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Management Corporation) Bill 1996
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
This Bill is cognate with the Superannuation Administration Bill 1996.
(a)
establish the Axiom Funds Management Corporation (AFMC) to
provide superannuation investment management services to State
public sector superannuation schemes and other superannuation
schemes, and
(b)
provide for the conversion of that body to a company and provide for
its sale.
* Amended in committee--see table at end of volume.
Preliminary
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 sets out the objects of the proposed Act, which are to establish the
AFMC to provide superannuation investment management services for State
public sector superannuation schemes and other schemes and to provide for
the conversion of that corporation to a company and to provide for its sale.
Clause 4 defines words and expressions used in the proposed Act.
Clause 5 provides that introductory notes to Parts or Divisions and other
notes in the text do not form part of the proposed Act.
Part 2
Axiom Funds Management Corporation (AFMC)
Division 1
Establishment and principal functions of AFMC
Clause 6 constitutes AFMC.
Clause '7 sets out the principal functions of AFMC, including the provision
of superannuation investment management services for State public sector
superannuation schemes and other approved schemes, providing for the
custody of assets and securities of superannuation schemes and entering into
contracts or arrangements for those purposes and other related businesses.
Clause 8 sets out what is comprised in superannuation investment
management services, including acting as investment manager and advising
on investments and other related strategies.
Clause 9 requires AFMC to enter into contracts or arrangements with the
SAS Trustee Corporation (STC) to provide superannuation investment
management services for the STC schemes for a fixed period from a date to
be specified by the Minister. The period and date are to be determined under
the proposed Superannuation Administration Act 1996. STC is to be the
trustee for the primarily defined benefits style State public sector
superannuation schemes. Further contracts or arrangements may be entered
into after the first contract or arrangement ends.
Explanatory note page 2
Clause 10 confers on AFMC power to enter into a contract or arrangement
with the FSS Trustee Corporation (FTC), the trustee for the accumulation
style State public sector superannuation schemes, to provide superannuation
investment management services for the FTC funds or part of them.
Clause l1 enables AFMC to enter into contracts or arrangements for the
purpose of providing custodial services for superannuation schemes.
Clause 12 enables AFMC to enter into contracts or arrangements for the
purposes of administering or managing businesses related to its principal
functions.
Clause 13 requires AFMC to charge on a commercial basis for services
provided.
Clause 14 requires AFMC to have regard to written Government policy
statements when exercising its functions.
Clause 15 sets out a procedure for laying Government policy statements
given under proposed section 14 before each House of Parliament.
Clause 16 confers on AFMC powers to do all things necessary or
convenient for, or in connection with, the exercise of its functions and also
gives it the same legal capacity, powers and authority as a company under the
Corporations Law.
Division 2
Management of AFMC
Clause 17 establishes the AFMC Board. It is to have 6 part-time members
appointed by the Minister, and the chief executive officer of AFMC as a
member. Members must have specified relevant experience and the Minister
may not appoint a part-time member without consulting the Labor Council of
New South Wales.
Clause 18 gives the AFMC Board the functions of determining the policies
of AFMC and managing and controlling the affairs of AFMC.
Clause 19 provides for the appointment of a chief executive officer of
AFMC and confers on the chief executive officer the function of exercising
the day-to-day management of AFMC. The chief executive officer will be
subject to the control and direction of the AFMC Board.
Clause 20 provides for the employment of AFMC staff.
Clause 21 enables AFMC to appoint agents.
Clause 22 gives AFMC the power to delegate its functions.
Clause 23 enables the AFMC Board to establish committees to give advice
and assistance to the Board in connection with any particular matter or
function of the Board.
Explanatory note page 3
Clause 24 requires AFMC to prepare a statement of corporate intent for
each financial year and sets out the matters it is to contain.
Clause 25 requires the annual report of AFMC to include departures from
performance targets' in the statement of corporate intent and the reasons for
the departures.
Clause 26 exempts an AFMC Board member, or a person acting under the
direction of AFMC or the Board, from liability for an act or omission done or
omitted in good faith for the purpose of executing the proposed Act or any
other Act.
Division 3
Financial provisions
Clause 27 requires AFMC to maintain an AFMC Account.
Clause 28 enables AFMC to obtain financial accommodation, effect
financial adjustments and make investments under the Public Authorities
(Financial Arrangements) Act 1987.
Clause 29 makes the year commencing 1 July the financial year of AFMC.
Division 4
Miscellaneous provisions relating to AFMC
Clause 30 enables the Minister to request information from time to time
from AFMC.
Clause 31 provides for the manner and form of accounts and other records
relating to AFMC.
Clause 32 provides for the manner in which documents may be served on
AFMC.
Clause 33 removes the need to prove (unless evidence to the contrary is
given) matters relating to the constitution and resolutions of AFMC and
appointments of AFMC Board members and their meetings.
Clause 34 enables AFMC to recover money owed to it as a debt in a court
of competent jurisdiction.
Clause 35 requires the proceeds of any sale of the business undertaking of
AFMC to be paid to STC in its capacity as trustee of the STC funds for
payment into employer reserves.
Clause 36 enables AFMC to publish procedures or guidelines with respect
to disclosure of conflicts of interest and arrangements with consultants.
Clause 37 provides for the keeping and use of the seal of AFMC.
Explanatory note page 4
Part 3
Conversion of AFMC to company (AFML)
Division 1
Preliminary
Clause 38 sets out the object of the Part, which is to convert AFMC from a
statutory body to a company under the Corporations Law.
Clause 39 defines AFMC for the purposes of the Part.
Division 2
Creation of capital structure and other steps prior
to conversion to public company
Clause 40 gives AFMC a share capital divided into shares of $1 each and
provides that it may be divided into classes of shares and that shares may
have rights attached to them.
Clause 41 requires AFMC to pay up its shares to the amount determined by
the Treasurer by order in writing.
Clause 42 sets out the steps AFMC must take to prepare for conversion to a
company, including applying for registration under the Corporations Law
and lodging its proposed memorandum and articles of association specifying
the State as the sole subscriber to the memorandum.
Clause 43 requires the memorandum and articles of association to contain
certain provisions applicable to those of statutory State owned corporations
under the State Owned Corporations Act 1989.
Clause 44 reserves the name ``Axiom Funds Management Limited" under
the Corporations Law.
Division 3
Conversion of AFMC to AFML
Clause 45 provides that AFMC is taken to be registered under the
Corporations Law under the name "Axiom Funds Management Limited" as
a public company limited by shares as from the commencement of the
proposed Division.
Clause 46 provides for the change of name of AFMC.
Clause 47 gives effect to the memorandum and articles of Axiom Funds
Management Limited (AFML) as if they had been registered under the
Corporations Law.
Clause 48 makes the State of New South Wales a member of AFML as at its
conversion.
Explanatory note page 5
Clause 49 empowers the Treasurer to act for or on behalf of the State of
New South Wales in the State's capacity as shareholder.
Clause 50 provides that AFML is a continuation of, and the same legal
entity as, AFMC and provides that references to AFMC are to be read as
references to AFML.
Clause 51 continues existing contracts or arrangements entered into by
AFMC.
Clause 52 gives effect to amendments of Acts consequential on the
conversion of AFMC to AFML and repeals Part 2 (which establishes
AFMC).
Division 4
Management of AFML after conversion and before
sale
Clause 53 applies the proposed Division to any period after the conversion
of AFMC when the shares in AFML are held by the State of New South
Wales.
Clause 54 makes the board of directors of AFML subject to the direction
and control of the Treasurer and removes liability for actions done under the
direction of the Treasurer.
Clause 55 makes AFML a public authority of the State but provides that it
is not, and does not, represent the State of New South Wales and is not
exempt from any rate, tax, duty or other impost. AFML cannot render the
State liable for any debts, liabilities or obligations.
Clause 56 applies certain provisions of the State Owned Corporations Act
1989 to AFML.
Part 4
Sale of AFML to private sector
Division 1
Sale process
Clause 57 authorises AFML to be sold to an approved buyer in accordance
with the proposed Part.
Clause 58 provides for the approval of a person by the Governor-in-Council
as an approved buyer.
Explanatory note page 6
Clause 59 authorises the Premier and the Treasurer to negotiate, enter into
and carry out an agreement for the sale of shares in AFML. The proposed
section also authorises the Treasurer to transfer shares in AFML to an
approved buyer. The sale agreement is to provide for the repayment to
Treasury Corporation of any money loaned by that Corporation to AFML.
Clause 60 provides that proposed Division 4 of Part 3 (which relates to the
interim period after conversion and before the sale of AFML) does not apply
to AFML as from a day to be appointed by proclamation and gives effect to
Schedule 2, which contains amendments to other Acts consequential on the
sale.
Clause 61 enables the Treasurer to make necessary amendments to the
memorandum and articles of association of AFML before the sale takes
effect.
Clause 62 provides that the obligations of AFML are not guaranteed by the
State of New South Wales.
Division 2
Results of sale
Clause 63 requires the proceeds of the sale of AFML to be paid to STC as
trustee for the STC schemes for payment into STC funds. Amounts to meet
the expenses of the sale are to be deducted from the proceeds.
Clause 64 provides that the staff of AFML are to be continued to be
employed by AFML, on the same terms and conditions, after the sale.
Clause 65 provides that the validity and the enforceability of a sale
agreement are not affected by any law relating to the enforceability of
property or restraint of trade.
Part 5
Miscellaneous
Clause 66 provides that the proposed Act binds the Crown.
Clause 67 provides that offences under the proposed Act are to be dealt with
summarily by a Local Court.
Clause 68 sets out the power to make regulations under the proposed Act.
Clause 69 is a formal provision giving effect to Schedule 4 which contains
savings and transitional provisions.
Clause 70 provides that matters relating to the sale of AFMC, including the
operation of the proposed Act, the sale, associated agreements and documents
and disclosures of information, are not to be regarded as civil wrongs, as
giving rise to other actions, as breaches of contract, or as events of default, as
giving rise to any right or remedy or as a contravention of section 205 of the
Corporations Law.
Explanatory note page 7
Clause 71 exempts from State tax the issue of shares in AFML, applications
for registration as a company under the proposed Act and any other matter
related to the conversion of AFMC to a company.
Clause 72 provides for the review of the proposed Act by the Minister 5
years after the date of assent to the proposed Act.
Schedule 1
Provisions relating to AFMC Board
Part 1
Definitions
Part 1 defines expressions used in the Schedule.
Part 2
Members
Part 2 contains provisions relating to the appointment and conditions and
vacation of office of members.
Part 3
Procedure
Part 3 contains provisions relating to the procedure of the Board.
Part 4
Chief executive officer of AFMC
Part 4 contains provisions relating to the conditions of employment of the
chief executive officer.
Schedule 2
Consequential amendments to other Acts
The Schedule contains amendments to other Acts consequential on the
conversion of AFMC. Other amendments consequential on the enactment of
the proposed Act are also contained in the proposed Superannuation
Administration Act 1996.
Schedule 3
Further consequential amendments to other
Acts
The Schedule contains further amendments to other Acts consequential on
the sale of AFML.
Schedule 4
Savings and transitional provisions
The Schedule contains savings and transitional provisions consequent on the
enactment of the proposed Act.
Explanatory note page 8