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TRUSTEE COMPANIES LEGISLATION AMENDMENT BILL 2010 Explanatory Memoranda

TRUSTEE COMPANIES LEGISLATION AMENDMENT BILL 2010

             Trustee Companies Legislation
                 Amendment Bill 2010

                          Introduction Print

                EXPLANATORY MEMORANDUM


                                   General
The Trustee Companies Legislation Amendment Bill complements the
passage by the Commonwealth Parliament of legislation that will implement
regulation of trustee companies by Commonwealth agencies.
The Bill repeals sections of the Trustee Companies Act 1994 that
implement regulation of trustee companies by Victorian agencies, while
retaining those sections that relate to general powers and obligations of
trustee companies.
Second, the Bill makes consequential amendments to the Administration
and Probate Act 1958 and the Guardianship and Administration Act
1986 to preserve certain powers under those Acts of the Supreme Court and
the Victorian Civil and Administrative Tribunal, as they apply to trustee
companies, subject to certain provisions of the Commonwealth legislation.
Third, the Bill amends the State Trustees (State Owned Company) Act
1994 to provide that State Trustees Limited, a trustee company wholly owned
by the State of Victoria, will continue to be regulated under Victorian law.
The Bill proceeds as follows--
         ·     Part 1 deals with the purposes of the Bill and its
               commencement date following enactment;
         ·     Part 2 amends the Trustee Companies Act 1994 as set out in
               the detailed clause notes below;
         ·     Part 3 amends the Administration and Probate Act 1958 to
               provide for the exercise of certain powers of the Supreme
               Court in respect of trustee companies, subject to limits imposed
               by the Commonwealth legislation;




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· Part 4 amends the Guardianship and Administration Act 1986 to provide for the exercise of certain powers of the Victorian Civil and Administrative Tribunal in respect of trustee companies, subject to limits imposed by the Commonwealth legislation; · Part 5 amends the State Trustees (State Owned Company) Act 1994 to provide that, despite amendment of the Trustee Companies Act 1994 on enactment of this Bill, that Act continues to apply in respect of State Trustees Limited as though it had not been amended; and · Part 6 provides for the repeal of the amending Bill. Clause Notes PART 1--PRELIMINARY Clause 1 states the purpose of the Bill. Clause 2 is the commencement provision. This provides that the Bill commences on proclamation or on 1 January 2011 if not proclaimed earlier. PART 2--TRUSTEE COMPANIES ACT 1994 Part 2 repeals or amends numerous provisions of the Trustee Companies Act 1994 relating to the regulation of matters that will be undertaken by the Commonwealth on commencement of the Commonwealth legislation. Clause 3 amends the Trustee Companies Act 1994-- · to repeal the terms authorised deposit-taking institution, Commissioner, corporation, financial institution, insurance company, nominee corporation, reserve fund, related corporation, subordinated loan and voting shares. These terms will be redundant as they relate to the regulation of trustee companies by the State, a function that will on commencement of the Commonwealth legislation be undertaken by the Commonwealth; and · the clause also defines State Trustees as having the same meaning as in the State Trustees (State Owned Company) Act 1994. The clause subsequently defines a trustee company as being a body within the meaning 2

 


 

of section 601RAA of the Corporations Act of the Commonwealth; and · the clause repeals three sections of the Trustee Companies Act 1994 relating to shares, associated companies and financial institutions. Clause 4 repeals section 5 of the Trustee Companies Act 1994 relating to share transactions. Clause 5 repeals Part II of the Trustee Companies Act 1994 relating to authorization of trustee companies. Clause 6 amends section 13(1) and repeals section 13(2) of the Trustee Companies Act 1994 relating to appointment of a trustee company as a trustee. Clause 7 repeals sections 19 and 20 of the Trustee Companies Act 1994 relating to the managing director of a trustee company and the exercise of voting rights. Clause 8 repeals Part IV of the Trustee Companies Act 1994 relating to commissions and charges. Clause 9 inserts two new sections into the Trustee Companies Act 1994 relating to compulsory transfers between trustee companies by the Australian Securities and Investment Commission. These sections facilitate the smooth transfer of estate assets and liabilities between trustee companies under Victorian law and also exempt such obligatory transfers from Victorian taxation. Clause 10 repeals sections 27 to 35 of the Trustee Companies Act 1994 relating to the provision of accounts and information, the borrowing and lending of money, and liability under guarantees. Clause 11 repeals Part VI of the Trustee Companies Act 1994 relating to reserve liabilities and reserve funds of trustee companies. Clause 12 repeals Part VII of the Trustee Companies Act 1994 relating to common funds of trustee companies. Clause 13 repeals Part IX of the Trustee Companies Act 1994 relating to the acquisition of shares in trustee companies. Clause 14 repeals sections 50 to 53 and 54A of the Trustee Companies Act 1994 relating to convening of meetings, reduction of share capital, declarations, ability of other companies to apply for powers, and offences by directors. 3

 


 

Clause 15 inserts a new Part XI in the Trustee Companies Act 1994 relating to transitional provisions covering the making of regulations, court review of commission rates, orders for accounts and audits of estates, orders restraining disposal of shares, winding-up orders and other general matters. Clause 16 repeals Schedule 2 of the Trustee Companies Act 1994 listing trustee companies authorised under Victorian law. PART 3--ADMINISTRATION AND PROBATE ACT 1958 Clause 17 amends section 5(1) of the Administration and Probate Act 1958 to define a trustee company as being either a licensed trustee company within the meaning of section 601RAA of the Corporations Act of the Commonwealth or State Trustees Limited. Clause 18 amends section 65 of the Administration and Probate Act 1958 to provide for continued court supervision of commissions or percentages charged by trustee companies, within the limits established by Commonwealth legislation. PART 4--GUARDIANSHIP AND ADMINISTRATION ACT 1986 Clause 19 amends section 47A of the Guardianship and Administration Act 1986 to provide for continued approval by the Victorian Civil and Administrative Tribunal of remuneration charged by trustee companies, within the limits established by Commonwealth legislation. PART 5--STATE TRUSTEES (STATE OWNED COMPANY) ACT 1994 Clause 20 inserts a new section in the State Trustees (State Owned Company) Act 1994 providing for the continuing application of the Trustee Companies Act 1984 to State Trustees Limited as the latter Act applied before commencement of the provisions of this Bill. Clause 21 repeals spent provisions of the State Trustees (State Owned Company) Act 1994, in accordance with normal statute law revision practice. 4

 


 

PART 6--REPEAL OF AMENDING ACT Clause 22 provides that this amending legislation is repealed on 1 January 2012, one year after the latest date on which it can commence, as specified by the terms of clause 2. As specified by the Interpretation of Legislation Act 1984, this repeal does not affect the continuing application of the amendments made to other Acts by the terms of this Bill after enactment and commencement. 5