TREASURY LAWS AMENDMENT (MODERNISING BUSINESS COMMUNICATIONS AND OTHER MEASURES) BILL 2022 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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TREASURY LAWS AMENDMENT (MODERNISING BUSINESS COMMUNICATIONS AND OTHER MEASURES) BILL 2022

2022 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES TREASURY LAWS AMENDMENT (MODERNISING BUSINESS COMMUNICATIONS AND OTHER MEASURES) BILL 2022 EXPLANATORY MEMORANDUM (Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)

Table of Contents Glossary................................................................................................. iii General outline and financial impact ...................................................... 1 Documents and meetings under the Corporations Act 2001 ...................................................................... 7 Virtual hearings and examinations ............................. 19 Payment methods ...................................................... 29 Publication requirements and other amendments ..... 31 ALRC Financial Services Interim Report ................... 43 Rationalisation of ending ASIC instruments ............... 55 Miscellaneous and technical amendments ................ 71 Statement of Compatibility with Human Rights .......... 89 Attachment 1: Updated preface to the regulation impact statement for modernising business communications ................... 101

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Glossary This Explanatory Memorandum uses the following abbreviations and acronyms. Abbreviation Definition ACCC Australian Competition and Consumer Commission AER Australian Energy Regulator ALRC Australian Law Reform Commission ALRC Review Review of the Legislative Framework for Corporations and Financial Services Regulation APRA Australian Prudential Regulation Authority APRA Act Australian Prudential Regulation Authority Act 1998 ASIC Australian Securities and Investments Commission ASIC Act Australian Securities and Investments Commission Act 2001 ASX Australian Securities Exchange ATO Australian Taxation Office BAS agent Business Activity Statement agent Bill Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 CADB Companies Auditors Disciplinary Board CCA Competition and Consumer Act 2010 CCIV Corporate Collective Investment Vehicle

Glossary Abbreviation Definition Corporations (Review Fees) Act Corporations (Review Fees) Act 2003 Corporations Act Corporations Act 2001 Corporations Regulations Corporations Regulations 2001 Crimes Act Crimes Act 1914 Criminal Code Schedule to the Criminal Code Act 1995 Criminal Law Guide A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (Attorney General's Department, September 2011) Excise Act Excise Act 1901 FSCP Financial Services and Credit Panels GST Goods and services tax ICCPR International Covenant on Civil and Political Rights Insurance Act Insurance Act 1973 Interim Report A Interim Report A of the ALRC Review (ALRC Report 137) Interim Report B Interim Report B of the ALRC Review (ALRC Report 139) ITAA 1936 Income Tax Assessment Act 1936 ITAA 1997 Income Tax Assessment Act 1997 Life Insurance Act Life Insurance Act 1995 Life Insurance Regulations Life Insurance Regulations 1995 Meetings and Documents Act Corporations Amendment (Meetings and Documents) Act 2022 MIS Managed Investment Scheme

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Abbreviation Definition National Credit Code Schedule 1 to the National Consumer Credit Protection Act 2009 NCCPA National Consumer Credit Protection Act 2009 PDS Product Disclosure Statement PHIPS Act Private Health Insurance (Prudential Supervision) Act 2015 RIS Regulation Impact Statement SIS Act Superannuation Industry (Supervision) Act 1993 SSAA Small Superannuation Accounts Act 1995 TASA Tax Agent Services Act 2009 TPB Tax Practitioners Board

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 General outline and financial impact Law Improvement Program The Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 implements measures that have been developed through the Law Improvement Program (LIP). The LIP is an ongoing program of work that supports the regulatory stewardship of Treasury portfolio laws. The Program of work is designed to ensure that Treasury laws remain current and fit-for-purpose. The Bill implements law improvement measures across four streams: technology neutral communications in Schedule 1, recommendations of the ALRC Review in Schedule 2, the rationalisation of ASIC instruments in Schedule 3 and minor and technical amendments in Schedule 4, MTAs. The amendments in Schedules 2 to 4 are largely made within existing policy parameters. Measures in the LIP incrementally improve and maintain Treasury's portfolio legislation and contribute to ensuring the long-term structural functionality, usability and quality of Treasury portfolio legislation. Schedule 1 - Modernising business communications Outline Schedule 1 to the Bill amends the Corporations Act and other Commonwealth Acts to modernise communication methods available to consumers, businesses and regulators when interacting with each other by: • extending the global communications regime, allowing members of certain entities to elect to receive documents in either hard copy or electronic form, and providing relief to entities that are unable to contact members under the Corporations Act (Part 1); • ensuring that regulatory bodies in the Treasury portfolio can hold hearings and examinations using technology (Part 2); • updating payment provisions in Treasury laws to allow electronic payments to be used (Part 3); and 1

General outline and financial impact • replacing requirements in Treasury laws to publish notices in newspapers with a requirement that notices be published in an accessible and reasonably prominent manner (Part 4). Date of effect Parts 1, 2 and 3 of Schedule 1 to the Bill commence on the day after Royal Assent. Part 4 of Schedule 1 to the Bill commences on a single day to be fixed by Proclamation. If this Part does not commence within the period of 6 months beginning on the day the Bill receives Royal Assent, it commences on the day after the end of that period. Proposal announced Schedule 1 to the Bill partially implements the Commonwealth's Deregulation Agenda measure from the 2021-22 Budget. Financial impact Schedule 1 to the Bill has no financial implications. Regulation Impact Statement The amendments in Schedule 1 to the Bill will benefit companies, registered funds, foreign passport funds, and other registered entities, their members, officers and service providers, and bidders and holders of securities in takeover targets. A Preface update to the RIS is included in Attachment 1, which provides updates to the RIS methodology and outcomes based on stakeholder feedback and expanded scope of clarification amendments compared to the original published version of the RIS. The link to the previously tabled RIS included in the lapsed Treasury Laws Amendment (Modernising Business Communications) Bill 2022 can be accessed at the Australian Parliament House website.1: Human rights implications Schedule 1 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights -- Chapter 8. Compliance cost impact The average regulatory cost reductions of the measures in Schedule 1 to the Bill are $59.3 million per year. 1 https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Resul t?bId=r6852. 2

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Schedule 2 - ALRC Financial Services Interim Report Outline In Interim Report A, the ALRC found that Australia's financial services legislation is challenging to navigate and complex for individuals and businesses, who may have obligations under the law. Schedule 2 to the Bill implements recommendations and other suggested improvements identified by the ALRC in Interim Report A to simplify and improve the navigability of Australia's financial services laws. Date of effect Schedule 2 to the Bill commences on the day after Royal Assent. Proposal announced Schedule 2 to the Bill implements the amendments announced on 24 August 2022 in relation to reducing complexity and improving navigability of Australia's corporations and financial services law. Financial impact Schedule 2 to the Bill has no financial implications. Human rights implications Schedule 2 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights -- Chapter 8. Compliance cost impact Schedule 2 to the Bill has no ongoing additional compliance cost impact or additional impact on regulatory burden. 3

General outline and financial impact Schedule 3 - Rationalisation of Ending ASIC Instruments Outline Schedule 3 to the Bill amends the Corporations Act and the NCCPA to transfer longstanding and accepted matters currently contained in ASIC legislative instruments into the primary law. The amendments will improve navigability of the law and provide industry and consumers with greater certainty and clarity when interacting with Treasury laws. Date of effect Schedule 3 to the Bill commences on the day after Royal Assent. Proposal announced Schedule 3 to the Bill implements the amendments announced on 24 August 2022 in relation to reducing complexity and improving navigability of Australia's corporations and financial services law. Financial impact Schedule 3 to the Bill has no financial implications. Human rights implications Schedule 3 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights -- Chapter 8. Compliance cost impact Schedule 3 to the Bill is unlikely to have more than a minor impact on compliance costs. 4

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Schedule 4 - Miscellaneous and Technical Amendments Outline Schedule 4 to the Bill makes a number of miscellaneous and technical amendments to Treasury portfolio legislation. The amendments reflect the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation. The amendments correct drafting errors, repeal inoperative provisions, address unintended outcomes and make other technical changes. Date of effect Sections 1 to 3 of the Bill commence on the day the Bill receives Royal Assent. Part 1 of Schedule 4 to the Bill commences on the day after Royal Assent. Part 2 of Schedule 4 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Royal Assent. Proposal announced Schedule 4 to the Bill fully implements the miscellaneous amendments measure announced on 2 September 2022. Financial impact The amendments in Schedule 4 to the Bill are estimated to have a small but unquantifiable impact on receipts over the forward estimates period. Human rights implications Schedule 4 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights -- Chapter 8. Compliance cost impact Schedule 4 to the Bill is unlikely to have more than a minor impact on compliance costs. 5

Documents and meetings under the Corporations Act 2001 Table of Contents: Outline of chapter .................................................................................. 7 Context of amendments ......................................................................... 8 Summary of new law.............................................................................. 8 Comparison of key features of new law and current law ........................ 9 Detailed explanation of new law .......................................................... 10 Technology neutral signing and execution of documents .............. 10 Technology neutral requirements for sending documents ............. 11 Lost members ............................................................................... 15 Consequential amendments ................................................................ 16 Commencement, application, and transitional provisions .................... 18 Outline of chapter 1.1 Part 1 of Schedule 1 to the Bill amends the Corporations Act in relation to: • signing and executing documents electronically; • sending certain documents electronically; and • the introduction of relief for companies from sending documents where the member' contacts details are known to be incorrect. 1.2 All references in this Chapter refer to the Corporations Act unless otherwise stated. 7

Documents and meetings under the Corporations Act 2001 Context of amendments 1.3 There are a range of provisions across Treasury laws that currently prescribe particular methods of communication. The COVID-19 pandemic shows that Commonwealth legislation has not kept pace with the way that Australian businesses engage with digital communication and that these prescriptive provisions are limiting flexibility and innovation. 1.4 Following the Meetings and Documents Act, which received Royal Assent on 22 February 2022, the Corporations Act allows: • companies to sign and execute documents electronically or using wet- ink; and • companies, responsible entities of registered schemes and disclosing entities to send meetings-related documents electronically or in hard copy. 1.5 Part 1 of Schedule 1 to the Bill expands the scope of these technology neutral reforms so that all documents under the Corporations Act can be signed electronically and certain additional categories of documents can be sent electronically and in hard copy. 1.6 The ASIC Corporations (Uncontactable Members) Instrument 2016/187 provides relief to entities who would otherwise need to comply with subsections 314(1) or 314A(1) of the Corporations Act in certain circumstances. Subsections 314(1) and 314A(1) require a relevant entity to send a hard copy of the entity's annual report to members who have elected to receive the report in this form. 1.7 Part 1 of Schedule 1 to the Bill amends the Corporations Act so that the Act incorporates and expands the scope of relief in this instrument to encompass a larger number of documents. Summary of new law 1.8 Part 1 of Schedule 1 to the Bill amends the Corporations Act to provide that: • all documents which are required or permitted to be signed under the Corporations Act can be signed electronically or in wet-ink; • documents sent under Chapters 2A to 2M, 5 to 5D, 6 to 6C, 8A, 8B and 9 or Schedule 2 to the Corporations Act can be sent in either hard copy or electronic form; and • companies are not required to send documents to a member where the contact details for that member are known to be incorrect. 8

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Comparison of key features of new law and current law Table 1.1 Comparison of new law and current law New law Current law All documents under the Corporations Act Only certain documents can be signed or can be signed or executed electronically. executed electronically under the new global provisions in the Meetings and Documents Act. All documents in Chapters 2A to 2M, 5 to Only meetings related documents sent by 5D, 6 to 6C, 8A, 8B and 9 and Schedule 2 companies, registered schemes, CCIVs or to the Corporations Act, other than those disclosing entities can be sent either which are lodged with ASIC, the Registrar, electronically or in hard copy under the new or the Takeovers Panel, can be sent either global provisions in the Meetings and electronically or in hard copy. Documents Act. Most other documents must be sent in hard copy. The following entities may elect to receive A member of a company, registered scheme, documents in either hard copy or electronic CCIV or disclosing entity may elect to form: receive meetings related documents in either hard copy or electronic form. • member of a company; • member of a registered scheme; • member of a CCIV; • member of a disclosing entity; • Australian member of a notified passport fund; • holder of securities in the target for a takeover bid. The target of a takeover bid is required to The target is required to provide the bidder provide the bidder with the electronic and with the postal addresses of relevant security postal addresses of relevant security holders. holders, where known to the target. A bidder can only use information about No equivalent. security holders which is provided by the target to the bidder for purposes related to the takeover or compulsory acquisition. 9

Documents and meetings under the Corporations Act 2001 New law Current law A person may object to a compulsory A person objecting to a compulsory acquisition by signing the objection form acquisition is required to sign and return the and either returning it to the 90% holder or objection form to the 90% holder in hard sending it to them in an electronic copy. communication or in hard copy. Entities do not have to send any documents Entities do not have to send annual reports in in specified chapters to members if the hard copy to members if the entity knows entity knows that the members' postal and that the members' postal address is incorrect. electronic addresses are incorrect. An entity must attempt to contact a member An entity must send a notice to the address to whom it is no longer sending documents they possess in relation to the shareholder at due to an incorrect address in the period least once a year for 6 years after they have from 6 to 18 months following the point at fulfilled the conditions for the relief to apply. which they stop sending that member After that 6 year period the entity has no documents. obligation to send further notices in relation After the end of that period the entity has to annual reports to that member. no obligation to attempt to contact the member, provided the conditions for the relief continue to apply. Detailed explanation of new law Technology neutral signing and execution of documents 1.9 Part 1 of Schedule 1 to the Bill amends Part 1.2AA of the Corporations Act to provide that any document, including deeds, which are required or permitted to be signed by a person under the Corporations Act can be signed in wet-ink or electronically, or by witnessing the fixing of a common seal in person or using electronic means. This includes documents signed by an agent on behalf of a company in accordance with section 126 of the Corporations Act and documents executed by a company in accordance with section 127 of the Corporations Act. [Schedule 1, item 4, subsections 110(1) and (2) of the Corporations Act] 1.10 The rules for signing and executing documents, which apply to documents covered by the Meetings and Documents Act, now apply to all documents that are required or permitted to be signed by a person under the Corporations Act. 1.11 Extending the application of the rules means that: 10

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 • a document will be validly signed if it identifies the person signing the document, indicates their intention to be bound by the document and the method of signing is appropriate in all the circumstances; • a person may sign or execute the document in one or more capacities by signing the document only once if that person's signature block states each capacity in which they are signing; and • a document does not need to be signed on paper, parchment or vellum or meet common law delivery requirements to be validly executed. 1.12 ASIC or the Registrar cannot refuse to receive or register a document on the sole basis that it was signed or executed electronically. However, Part 1 of Schedule 1 to the Bill does not restrict the ability of ASIC or the Registrar to refuse to receive or register documents for other reasons, including where the document does not meet the prescribed lodgement requirements (such as the requirements under Chapter 2P). [Schedule 1, items 5-7, paragraphs 110B(c) and (d) and section 110B (note) of the Corporations Act] Technology neutral requirements for sending documents 1.13 Specifically, the amendments provide that any document that is required or permitted to be sent under Chapters 2A to 2M, 5 to 5D, 6 to 6C, 8A, 8B or 9 or Schedule 2 to the Corporations Act may be sent in any of the following ways: • hard copy; • electronically to an electronic address; • by sending, in hard copy, details sufficient to enable the recipient to access the document electronically; • by sending, in electronic form, details sufficient to enable the recipient to access the document electronically. [Schedule 1, item 9, subsections 110C(1)-(3) of the Corporations Act] 1.14 The new rules apply to a requirement or permission to send a document, whether the expression 'send, 'give', 'serve' or 'dispatch' or any other expression is used. The new rules also apply to a class of documents specified in the Regulations. [Schedule 1, item 9, subsections 110C(4) and (6) of the Corporations Act] 1.15 The new rules do not apply to a document that is required or permitted under the Corporations Act to be sent to ASIC, the Registrar or the Takeovers Panel, or a document covered by sections 109X, 601CX or 1200R of the Corporations Act merely because those sections provide for the document to be served in a 11

Documents and meetings under the Corporations Act 2001 particular way. [Schedule 1, item 9, subsections 110C(5) and (7) of the Corporations Act] 1.16 For a document, or details to enable the recipient to access a document, to be validly sent by electronic means, the sender must have sent it to the recipient's nominated electronic address or an address which the sender knows because of the recipient's membership or interest in the company, registered scheme, CCIV, disclosing entity or notified foreign passport fund. This means that a sender cannot send a document to an address for the recipient which it knows because of another relationship, such as an address that the recipient provided as a customer of the sender. [Schedule 1, item 11, subsections 110D(5)-(7) of the Corporations Act] 1.17 Companies, registered schemes, CCIVs, disclosing entities and notified foreign passport funds will continue to meet their obligations to send annual reports to members if they make them readily accessible on a website. The Regulations may be used to extend this rule to other documents or class of documents (as applicable). [Schedule 1, items 10 and 15, paragraphs 110D(3)(a) and 110E(5)(a) of the Corporations Act] Elections to receive documents in a particular form 1.18 Part 1 of Schedule 1 to the Bill also provides that, in addition to members of companies, registered schemes, CCIVs and disclosing entities, Australian members of a notified foreign passport fund, holders of securities in the target for a takeover bid and any other person specified in the Regulations may elect to be sent documents in either hard copy or electronic form. This election can apply to all documents or a class of documents. [Schedule 1, items 13 and 18, subsections 110E(1) and 110J(3) of the Corporations Act] 1.19 To make an election, the recipient must notify the sender that they wish to be sent one or more documents in either physical or electronic form. Unless the recipient making the election specifies otherwise, an election will take effect on the first business day after it is received by the sender and will continue to be in effect until it is withdrawn by the recipient. 1.20 If a member of a company elects to be sent all documents in a particular form, then that election will also apply to any takeover related documents which are sent to the member by a bidder. [Schedule 1, items 14 and 42, subsection 110E(3)(note) and section 648CB of the Corporations Act] 1.21 The amendments also provide that a sender does not fail to comply with an election to receive a document in electronic form if they give the recipient the document by way of personal service. [Schedule 1, item 16, paragraph 110F(1)(b) of the Corporations Act] 12

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Notification of right to make an election 1.22 A public company, responsible entity of a registered scheme, CCIV, disclosing entity and operator of a notified foreign passport fund must notify members of their rights to make an election each financial year. A failure to comply with this obligation is a strict liability offence subject to 30 penalty units. [Schedule 1, items 20-22 and 58, paragraph 110K(3)(a), subsections 110K(3A) and (3B), paragraph 110K(4)(d) and Schedule 3 to the Corporations Act] 1.23 A strict liability offence is appropriate in this circumstance as it is necessary to deter entities from failing to advise members of their right to elect to receive documents in a physical form. The imposition of a strict liability offence reduces non-compliance by ensuring that ASIC can efficiently and expeditiously deal with low-level offending, thereby bolstering the integrity of the regime. 1.24 This strict liability offence meets all the conditions listed in the Criminal Law Guide. It does not exceed 300 penalty units for a body corporate and preserves the defence of honest and reasonable mistake of fact to be proved by the defendant on the balance of probabilities. Documents which relate to takeovers 1.25 For documents that are required or permitted to be sent under Chapters 6 or 6A of the Corporations Act, Part 1 of Schedule 1 to the Bill includes amendments to those chapters to facilitate the provision of documents to security holders by electronic means. [Schedule 1, item 9, subsection 110C(3) of the Corporations Act] 1.26 The existing law requires a company which is the target of a takeover bid under Chapter 6 to provide the bidder with the names and addresses of any person with a security interest in the bid class. Part 1 of Schedule 1 to the Bill amends the existing law to provide that a target must also provide the bidder with any electronic addresses of security holders which are known to the target because the person holds securities in the target. The target must also provide the bidder the details of any elections made by security holders to receive a document in a particular form which are in force. The target does not need to provide electronic addresses if they do not reasonably believe that they are current. [Schedule 1, items 38 and 39, paragraphs 641(aa) and (ab) and subsection 641(1C) of the Corporations Act] 1.27 To provide safeguards against the misuse of the personal information by the bidder, Part 1 of Schedule 1 to the Bill introduces a civil penalty provision which applies if the use or disclosure of information is not for the purpose of sending a document, or otherwise complying with an obligation under the 13

Documents and meetings under the Corporations Act 2001 Corporations Act in relation to the takeover bid or a compulsory acquisition of securities under Part 6A.1 relating to the takeover bid. A contravention of the civil penalty provision is punishable by 2,000 penalty units for an individual, or 10,000 penalty units for a body corporate. The civil penalty provision does not apply if the use or disclosure of the information is required or permitted by a law of the Commonwealth or a prescribed law of a State or internal Territory. [Schedule 1, items 40 and 60, section 641A and subsection 1317E(3) (table) of the Corporations Act] 1.28 The use of a civil penalty provision in these circumstances is consistent with penalties for the disclosure of personal information in other Commonwealth laws. The penalty is in accordance with the Criminal Law Guide. The introduction of a civil penalty provision provides a strong disincentive to the misuse of personal information, which may cause significant harm to the individuals to whom the information relates. It also provides a strong disincentive for bidders to use a target security holder's contact details to advertise other services or products to target security holders. 1.29 The existing law specifies that documents required or permitted to be sent under Chapter 6 must be sent to a holder of securities at the address shown for that person in the information provided to the bidder under section 641. The amendments clarify that this does not preclude the use of an electronic address to provide documents to a holder of securities under Chapter 6. [Schedule 1, item 41, section 648B of the Corporations Act] 1.30 The amendments also establish two new general provisions with the requirements for sending documents under Chapters 6 and 6A (including the rules relating to when a document is taken to have been sent). These provisions consolidate the existing requirements relating to when a physical document has been sent under Chapters 6 or 6A. The provision also includes a rule which states that an electronic communication is taken to have been sent when the sender sends it, rather than when it is delivered to the recipient. This preserves the existing way that the concept of 'sent' is understood to operate for takeovers. It ensures that the time of sending is not affected by the definition of 'sent' in section 105A of the Corporations Act. [Schedule 1, items 1-3, 42 and 56, section 9 (definition of 'sent'), subsection 105A(2) and sections 648C and 669A of the Corporations Act] 1.31 The amendments do not allow for the provision of the electronic addresses of holders of securities in the target company to any individual who may wish to object to a compulsory acquisition being conducted under Chapter 6A. The current settings, which allow the subject of a compulsory acquisition notice to obtain the names and postal addresses of all other security holders who have received the same notice, are sufficient for the purposes of allowing such security holders to contact security holders in a similar position. [Schedule 1, item 45, subsection 661D(1) of the Corporations Act] 1.32 It is necessary to clarify when a document is taken to have been sent under Chapter 6 due to the nature of the takeover process, which imposes strict 14

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 deadlines on participants. The amendments also repeal the existing rules for when a document is taken to have been sent under Chapter 6A. These provisions are no longer needed as the rules are set out in the new general provision. [Schedule 1, items 43, 44, 46-51, 54 and 55, subsections 661B(3), 661B(4), 662B(3) 662B(4), 663B(3), 663B(4), 664C(4), 664C(5), 665B(3) and 665B(4) of the Corporations Act] 1.33 The amendments remove references to the phrase 'returning' and 'returned' from Chapter 6A, substituting this phrase with 'giving' or 'given'. This improves the consistency of the terminology used in the compulsory acquisitions regime. [Schedule 1, items 52 and 53, subsections 664E(1) and (2) of the Corporations Act] 1.34 Part 1 of Schedule 1 to the Bill repeals section 600G of the Corporations Act, on the basis the effect of the section is preserved and applied more broadly to the global communications regime. [Schedule 1, item 37, section 600G of the Corporations Act] Lost members 1.35 Part 1 of Schedule 1 to the Bill provides relief from the obligation to send certain types of documents under the Corporations Act, provided certain conditions are met. The relief is only available where the person required to send the document (the sender) is a company, responsible entity of a registered scheme, corporate director of a CCIV or disclosing entity, and the recipient is a member of the sender. [Schedule 1, item 19, subsections 110JA(1) and (2) of the Corporations Act] 1.36 The following conditions must be met before the relief is available: • the sender has received notification, in relation to each of the addresses for the recipient that are known to the sender because of the recipient's membership of, or interest in, a company, registered scheme, CCIV or disclosing entity, that indicates the address is not current; • the sender reasonably believes that none of those addresses are current; • the sender is unable, after exercising reasonable diligence, to ascertain a current address for the recipient. [Schedule 1, item 19, subsections 110JA(3) and (4) of the Corporations Act] 1.37 In order to demonstrate that due diligence has been conducted in attempting to ascertain a current address for the member, the sender must have attempted to communicate with the recipient using all contact details for the recipient that are known to the sender because of the recipient's membership of the entity. As a general rule, a sender is not expected to use other contact details which it 15

Documents and meetings under the Corporations Act 2001 knows because of another relationship between the entity and the recipient, such as details provided by the member in their capacity as a customer of the entity's business. [Schedule 1, item 19, subsection 110JA(4) of the Corporations Act] 1.38 The sender must attempt to contact the recipient at any time in the period from 6 to 18 months after the conditions for relief are first met. If the sender does not attempt to contact the recipient in this timeframe, the relief is no longer effective. [Schedule 1, item 19, subsections 110JA(5) and (6) of the Corporations Act] 1.39 When attempting to contact the recipient in the timeframe referred to above, the sender must take reasonable steps to advise the recipient that the sending of documents to which the relief applies has been suspended, but sending of the documents will be resumed if the recipient provides a current address (which may be electronic) to which the documents may be sent. [Schedule 1, item 19, subsection 110JA(6) of the Corporations Act] 1.40 To facilitate attempts by the sender to ascertain the current address of the member, a sender is exempted from the obligation to adhere to a member's election if they reasonably believe that the address nominated by the member for the purposes of that election is not current. [Schedule 1, item 17, subsections 110F(4A) and (4B) of the Corporations Act] 1.41 Although a sender may attempt to contact a member in a manner inconsistent with their election to receive documents in a certain form under section 110E, the sender will bear the evidential burden of establishing that they reasonably believed that the address for the member was not current. 1.42 Reversing the evidential onus in these circumstances is proportional, necessary, reasonable and in pursuit of a legitimate objective. The sender will have peculiar knowledge of whether they reasonably believed the address to no longer be current. For example, proof that an attempt was made to contact the member at their nominated address would be readily available to the sender. By reversing the onus of proof in these circumstances, Part 1 of Schedule 1 to the Bill clarifies that the relief is only available in exceptional circumstances, and that a member's election must be complied with unless there is a reasonable belief that the address is not current. Consequential amendments 1.43 Consequential amendments: • update the heading to Division 2 of Part 1.2AA of the reflect the Part's expanded scope; [Schedule 1, item 8, Division 2 of Part 1.2AA (heading) of the Corporations Act] 16

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 • update the heading to section 110E to recognise that persons other than members may make elections; [Schedule 1, item 12, section 110E (heading) of the Corporations Act] • allow members of companies, registered schemes and disclosing entities to elect not to receive an annual report; [Schedule 1, item 10, paragraph 110D(3)(a) of the Corporations Act] • preserve rules for notified foreign passport funds in relation to the provision of annual reports in English or the official language of the home economy of the fund and the right to make an election not to receive an annual report; [Schedule 1, items 13 and 28, subsections 110E(1) and 314A(2)-(5) of the Corporations Act] • enable members of companies limited by guarantee and notified foreign passport funds to make elections to receive an annual report in a particular form; [Schedule 1, items 32 and 33, subsections 316A(1), (3) and (4) of the Corporations Act] • repeal redundant rules for notified foreign passport funds, which have been replaced by the new provisions for election to receive documents in a particular reform; [Schedule 1, items 30 and 31, subsections 315(6) and 316AA of the Corporations Act] • update references to penalties relating to annual financial reporting by notified foreign passport funds; [Schedule 1, items 29 and 59, subsection 314A(9) and Schedule 3 to the Corporations Act] • ensure that directors meetings can be held using any technology so long as it is reasonable; [Schedule 1, item 23, section 248D of the Corporations Act] • ensure that rules for giving notice in relation to calls on shares and meetings of debenture holders use technology neutral expressions; and [Schedule 1, items 24-27, subsection 254P(2), paragraphs 283EA(3)(b) and (c), subsection 283EA(4) (heading) and paragraph 283EA(4)(b) of the Corporations Act] • apply the technology neutral sending rules to all insolvency documents. [Schedule 1, item 34-37, subsection 414(2), paragraph 414(9)(a), subsection 414(10) and section 600G of the Corporations Act] 17

Documents and meetings under the Corporations Act 2001 Commencement, application, and transitional provisions 1.44 The rules for signing documents apply to documents signed on or after the commencement day. Similarly, the rules for sending documents apply to documents which are sent on or after the commencement day and the rules relating to directors meetings apply to meetings which are called on or after the commencement day. [Schedule 1, item 57, sections 1694-1694B and 1694D of the Corporations Act] 1.45 The lost member rules only apply to documents that: • are required to be sent after commencement (even if they are sent before commencement); and • where the sender receives a notice that the person's address is not a current address after commencement. [Schedule 1, item 57, section 1694C of the Corporations Act] 1.46 These application provisions ensure that the new rules do not operate retrospectively. 1.47 Elections in relation to documents sent by Australian foreign passport funds and companies limited by guarantee, which are in force immediately before the commencement day, continue to be in force after commencement until withdrawn by the member. [Schedule 1, item 57, sections 1694E and 1694F of the Corporations Act] 18

Virtual hearings and examinations Table of Contents: Outline of chapter ................................................................................ 19 Context of amendments ....................................................................... 19 Summary of new law............................................................................ 20 Detailed explanation of new law .......................................................... 20 Definition of 'virtual enquiry technology' ........................................ 20 Hearings and examinations may be physical, hybrid or virtual ...... 21 Place and time of a hearing or examination .................................. 23 Use of technology must be reasonable ......................................... 25 Reasonable opportunity to observe public hearings ...................... 27 Application provisions.................................................................... 27 Outline of chapter 2.1 Part 2 of Schedule 1 to the Bill amends the APRA Act, ASIC Act, CCA, NCCPA and TASA to ensure that bodies established under these Acts (the regulator) can use technology for hearings and examinations. The amendments are technology neutral and ensure regulators can continue to conduct hearings and examinations in an efficient and expeditious manner. Context of amendments 2.2 Regulators are empowered under the APRA Act, ASIC Act, CCA, NCCPA and TASA to hold hearings or examinations. These Acts, however, are largely silent on whether the regulator can use technology for all or part of a hearing or examination. 2.3 This issue was highlighted during the COVID-19 pandemic, when regulators were unable to hold in-person hearings or examinations due to public health 19

Virtual hearings and examinations orders and restrictions. While regulators were able to make some adjustments to their practices during the pandemic, the rules for statutory hearings and examinations did not provide sufficient flexibility for regulators to conduct hearings and examinations in an efficient and expeditious manner. 2.4 For Acts with no express provisions allowing for the use of technology at hearings and examinations, some regulators adopted the approach of first seeking consent from participants before holding them virtually. In these cases, obtaining consent from participants often resulted in delays to the conduct of hearings and examinations. In other cases, hearings and examinations were simply delayed until they could occur face-to-face. 2.5 The amendments in Part 2 of Schedule 1 to the Bill build upon the flexible regulatory practices adopted by regulators before and during the pandemic by removing unnecessary barriers to the use of technology at hearings and examinations. These changes ensure that regulators can hold hearings and examinations in an efficient and expeditious manner for the benefit of all parties. Summary of new law 2.6 Part 2 of Schedule 1 to the Bill inserts express provisions in the amended Acts to ensure that regulators can use virtual enquiry technology at hearings and examinations. 2.7 The regulator has the discretion whether to hold a hearing or examination in a physical, hybrid or virtual form, but if they hold a hearing or examination using virtual enquiry technology, they must ensure that the use of the technology is objectively reasonable. This obligation is designed to protect the person's rights, while also giving the regulator the necessary flexibility to hold hearings or examinations efficiently. 2.8 If a hearing is to take place in public using the technology, the regulator must ensure that members of the public have a reasonable opportunity to observe the hearing using technology. Detailed explanation of new law Definition of 'virtual enquiry technology' 2.9 The definition of 'virtual enquiry technology' is not prescriptive and does not limit the regulator to using a single type of technology. The technology must be capable of allowing a person to appear at all or part of a hearing, examination or other enquiry without being physically present at the hearing, 20

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 examination or other enquiry. [Schedule 1, item 61, subsection 3(1) of the APRA Act; item 63, subsection 5(1) of the ASIC Act; item 69, subsection 4(1) of the CCA, item 73, subsection 5(1) of the NCCPA; item 77, subsection 90-1(1) of the TASA] Hearings and examinations may be physical, hybrid or virtual 2.10 Part 2 of Schedule 1 to the Bill amends the APRA Act, ASIC Act, CCA, NCCPA and TASA by inserting express provisions to ensure that the regulator can hold a hearing or examination: • at one or more physical venues (a physical hearing or examination); or • at one or more physical venues and using virtual enquiry technology (a hybrid hearing or examination); or • using virtual enquiry technology only (a virtual hearing or examination). [Schedule 1, item 62, subsection 58A(3) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(1), 59A(1), 159A(1) and 218A(1) of the ASIC Act; item 71, subsections 158A(2) and 158B(2) of the CCA; items 74 and 75, subsections 256A(1) and 285A(1) of the NCCPA; item 76, subsection 60- 105(4) of the TASA] 2.11 The relevant regulators are APRA, ASIC, FSCP, CADB, ACCC, AER and TPB, which hold hearings or examinations under the relevant legislation. The types of hearings and examinations covered by the new regime are listed in the table below. [Schedule 1, item 62, subsections 58A(1)-(3) and (7) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(1), 22A(5), 59A(1), 59A(6), 159A(1), 159A(6), 218A(1) and 218A(6) of the ASIC Act; item 71, subsections 158A(1), 158A(2), 158A(7), 158B(1), 158B(2) and 158B(7) of the CCA; items 74 and 75, subsections 256A(1), 256A(5), 285A(1) and 285A(6) of the NCCPA; item 76, subsections 60-105(4) and (8) of the TASA] Table 2.1 Hearings and examinations covered by the new regime Act Hearing or examination APRA Act The following examinations: • an examination under Division 2 of Part VIII of the Banking Act 1959 by an investigator appointed by APRA; 21

Virtual hearings and examinations Act Hearing or examination • an examination under subsections 55(1), 62C(1), 62C(2) or 81(2) of the Insurance Act by APRA or an inspector appointed by APRA; • an investigation under Division 3 of Part 7 of the Life Insurance Act by APRA; • an examination under Division 3 of Part 6 of the PHIPS Act by an inspector appointed by APRA; • an examination under Division 5 of Part 25 of the SIS Act by APRA or an inspector appointed by APRA; • an examination under Division 4 of Part 10 of the Retirement Savings Accounts Act 1997 by an inspector appointed by APRA. ASIC Act Hearings and examinations conducted by ASIC, FSCP or CADB (as applicable). For the purposes of an examination under Division 2 of Part 3 of the ASIC Act, the examinee appears before an inspector, who is a specified member or staff member of ASIC (see sections 19 and 20 of the ASIC Act). CCA The following proceedings: • an arbitration of an access dispute under Part IIIA by the ACCC as constituted by members of the ACCC under section 44Z of the CCA; • an inquiry under Part VIIA of the CCA by an inquiry body before an inquiry Chair; • a conference convened under subsection 151AZ(1) of the CCA by the ACCC; • an appearance to give evidence or produce documents under section 44AAFA of the CCA before the AER or a person assisting the AER; • a conference held under subsection 90A(6) of the CCA by the ACCC as represented by a member or members of the ACCC under paragraph 90A(7)(a) of the CCA; • a conference held under subsection 93A(5) of the CCA by the ACCC as represented by a member or members of the ACCC under paragraph 93A(6)(a) of the CCA; 22

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Act Hearing or examination • a conference held under Subdivision A or B of Division 3 of Part XI by the ACCC as represented by a member or members of the ACCC under paragraph 132H(1)(a) of the CCA; • an appearance to give evidence or produce documents under section 133D before the Commonwealth Minister or an inspector; • an appearance to give evidence or produce documents under paragraph 155(1)(c) of the CCA before the ACCC, an associate member of the ACCC who is an AER member or a member of the staff assisting the ACCC. NCCPA Hearings and examinations conducted by ASIC. For the purposes of an examination under Part 6-2 of the NCCPA, the examinee appears before an inspector, who is a specified ASIC member or ASIC staff member (see sections 253 and 254 of the NCCPA). TASA A proceeding at which a person is to appear before the TPB. 2.12 For Acts that permit the use of certain technology at hearings and examinations, Part 2 of Schedule 1 to the Bill repeals those provisions so that consistent rules apply across Treasury laws to the greatest extent practicable. [Schedule 1, item 66, subsections 159(3) and 159(4) of the ASIC Act; item 70, subsection 44ZF(4) of the CCA]] Place and time of a hearing or examination 2.13 If the hearing or examination is held: • at more than one physical venue; or • at one or more physical venues and using virtual enquiry technology; or • using virtual enquiry technology only; the regulator or authorised person (as applicable) may appoint a single place and time for the hearing or examination. This ensures that a single place and time for the hearing or examination can be determined for legal purposes, such as dispute resolution, even if participants are attending from multiple locations in different time zones. 2.14 Under the APRA Act, ASIC Act, NCCPA and TASA, the regulator may appoint a single place and time for the hearing or examination after the hearing or examination has been held. This avoids interaction with any notice 23

Virtual hearings and examinations provisions that operate before the hearing or examination is held. The rules to determine the single place and time for hearings and examinations under these Acts are summarised in the table below. [Schedule 1, item 62, subsection 58A(6) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(4), 59A(5), 159A(5) and 218A(5) of the ASIC Act; items 74 and 75, subsections 256A(4) and 285A(5) of the NCCPA; item 76, subsection 60-105(7) of the TASA] Table 2.2 Place and time of different types of hearings and examinations Type of hearing or Place of hearing or Time of hearing or examination examination examination Physical hearing or Physical venue for the Time at the physical examination (one hearing or examination venue location) Physical hearing or examination (more than one location) Hybrid hearing or examination (one location at which to physically Time at the place attend) Place appointed by the appointed by the regulator Hybrid hearing or regulator examination (more than one location at which to physically attend) Wholly virtual hearing or examination 2.15 Specific rules are needed to determine the single place and time for proceedings under the CCA because some proceedings are initiated by notice and the single place and time must be set out in the notice. The rules are summarised in the table below. [Schedule 1, item 71, subsections 158A(1), 158A(6), 158B(1) and 158B(3) of the CCA] Table 2.3 Place and time of proceedings under the CCA Type of proceeding Place of proceeding Time of proceeding Time at the place Proceeding without Place appointed by the appointed by the initiation notice regulator regulator 24

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Type of proceeding Place of proceeding Time of proceeding Time at the place Proceeding with initiation Place specified in the specified in the notice for notice notice for the proceeding the proceeding 2.16 When appointing a single place for a wholly virtual hearing or examination, the regulator should appoint one of its offices (whether the virtual enquiry technology is being used at that office or another location, such as a home address). Use of technology must be reasonable 2.17 If the regulator decides to use virtual enquiry technology at a hearing or examination, the regulator must ensure that the use of the technology is objectively reasonable. This obligation is designed to protect a person's rights (including their existing rights to procedural fairness) if they appear at a hearing or examination using virtual enquiry technology, while also giving regulators the necessary flexibility to hold hearings or examinations efficiently. The obligation ensures that persons are not unfairly disadvantaged if the hearing or examination occurs virtually. It also ensures that regulators only hold virtual hearings or examinations if they permit genuine, realistic and proper consideration of all relevant issues, and do not interfere with the person's existing rights to respond to adverse information. [Schedule 1, item 62, subsections 58A(4) and (5) of the APRA Act; items 64, 65, 67 and 68, subsections 22A(2), 22A(3), 59A(2), 59A(3), 159A(2), 159A(3), 218A(2) and 218A(3) of the ASIC Act; item 71, subsections 158A(3), 158A(4), 158B(4) and 158B(5) of the CCA; items 74 and 75, subsections 256A(2), 256A(3), 285A(2) and 285A(3) of the NCCPA; item 76, subsections 60-105(5) and (6) of the TASA] 2.18 The regulator's use of virtual enquiry technology does not limit or expand the person's existing rights to procedural fairness under statute or common law in relation to a particular hearing or examination. All of the person's existing rights to procedural fairness continue to apply, whether they appear at a physical, hybrid or virtual hearing or examination. 2.19 In some cases, it may be preferable for both the regulator and the person who is appearing to use virtual enquiry technology due to the person's individual circumstances, such as where the person lives in a regional or remote area and a virtual hearing or examination is preferrable due to reduced costs associated with travel and accommodation. 2.20 The following examples provide guidance on what is reasonable when using virtual enquiry technology. They are not intended to prescribe specific steps that a regulator must take in similar circumstances, or provide guidance to 25

Virtual hearings and examinations regulators on selecting the most appropriate method for holding a hearing or examination. Example 2.1 Taking steps to ensure using technology is reasonable The Chair of the committee lives in Sydney, New South Wales. The person required to appear before the committee lives in Adelaide, South Australia. The person speaks limited English and requires the use of an interpreter to be able to appear before the committee. Due to the distance between the Chair and the person, a physical hearing would not be practicable. The Chair decides to hold the hearing using virtual enquiry technology only. The technology is a video conferencing platform. To ensure that the use of virtual enquiry technology is reasonable, the Chair arranges for an interpreter to be available at the hearing, who also uses the technology. The Chair provides instructions to both the person and interpreter on how to use the technology before the hearing. The Chair also gives the person and the interpreter an opportunity to test the technology before the hearing. There are no connection issues during the test and the Chair, the person and the interpreter can communicate with each other using the technology. The Chair proceeds to hold the hearing using the technology. Example 2.2 Technical issues when using technology The regulator requires a person (the examinee) to appear before an authorised officer to be examined. The authorised officer decides to hold the examination using virtual enquiry technology only. The technology is a video conferencing platform. During the examination, there is a temporary, one-off network problem that affects the virtual enquiry technology. This causes a temporary disruption to the examination while the examinee was responding to a question asked by the authorised officer. The examinee and authorised officer are unable to hear each other clearly for a short period of time during the disruption. The connection restores quickly, and all parties are able to hear and see each other perfectly. To ensure that the use of the virtual enquiry technology continues to be reasonable, the authorised officer checks that both parties can hear and see each other before proceeding further with the examination. The authorised officer repeats the question and the portion of the examinee's response to that question before the disruption occurred. The authorised officer gives the examinee another opportunity to respond to the question. The examinee states that the response repeated by the authorised officer is correct and completes their response to the question. The authorised officer 26

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 continues to carefully monitor the network connection and notes that no further network problems occur. Reasonable opportunity to observe public hearings 2.21 If the regulator holds hearings in public and uses virtual enquiry technology for such hearings, the regulator must ensure that the technology provides the public with a reasonable opportunity to observe the hearing. The regulator must also ensure that information sufficient to allow the public to observe the hearing using the technology is made publicly available in a reasonable way. [Schedule 1, items 65, 67 and 68, subsections 59A(2), 59A(4), 159A(2), 159A(4), 218A(2) and 218A(4) of the ASIC Act; item 71, subsections 158A(3), 158A(5), 158B(4) and 158B(6) of the CCA; item 75, subsections 285A(2) and (4) of the NCCPA] Application provisions 2.22 For proceedings with an initiation notice under the CCA, the amendments apply in relation to proceedings for which notice has been given on or after the commencement of Part 2 of Schedule 1 to the Bill. [Schedule 1, item 72, section 158B of the CCA] 2.23 For all other hearings and examinations, the new rules commence and apply on the day after Royal Assent. [Section 2, table item 2] 27

Payment methods Table of Contents: Outline of chapter ................................................................................ 29 Context of amendments ....................................................................... 29 Summary of new law............................................................................ 29 Comparison of key features of new law and current law ...................... 30 Detailed explanation of new law .......................................................... 30 Outline of chapter 3.1 Part 3 of Schedule 1 to the Bill facilitates the greater use of electronic payments by removing outdated restrictions that preserve where or how a payment may be made. Context of amendments 3.2 There are provisions scattered across Treasury laws which require payments to be made at a particular place or otherwise restrict the method of payment. 3.3 These rules limited flexibility for both consumers and credit licensees when updating contact details such as advising of nominated addresses for communication. They may also have limited the use of electronic payments. Summary of new law 3.4 The amendments in Part 3 of Schedule 1 to the Bill are made to ensure that digital payments are supported by Treasury laws. 29

Payment methods Comparison of key features of new law and current law Table 3.1 Comparison of new law and current law New law Current law For a call on shares in a no liability For a call on shares in a no liability company company to be payable, the company is to be payable, the company is required to give required to give notice to the shareholders notice to shareholders of the amount of the of the amount of the call, when it is call, when it is payable and the place for payable and the details for payment. payment. The notice must be sent by post. The penalty imposed by an infringement The penalty imposed by an infringement notice under the Excise Act may be paid in notice under the Excise Act may be paid by any way stated in the notice. delivery or postage to the place of payment stated in the notice, or in any other way stated in the notice. There is no requirement for a deposit form. The deposit form accompanying the deposit paid to the Commissioner of Taxation under Part 4 of the SSAA must include certain specifications as to the method of payment. Detailed explanation of new law 3.5 Part 3 of Schedule 1 to the Bill removes technologically prescriptive requirements relating to payments. 3.6 Part 3 of Schedule 1 to the Bill removes the requirement for a no liability company to notify shareholders of the place of payment. This removes any uncertainty that companies can provide for any method of payment, including digital methods. The previous requirement to send the notice by post is also omitted. [Schedule 1, items 78 and 79, paragraph 254P(2)(c) and subsection 254P(2) of the Corporations Act ] 3.7 Part 3 of Schedule 1 to the Bill amends the Excise Act to allow penalties imposed by an infringement notice issued under that Act to be paid in any way specified in the notice. [Schedule 1, item 80, paragraph 129C(2)(a) of the Excise Act] 3.8 Finally, Part 3 of Schedule 1 to the Bill repeals section 32 of the SSAA. This section requires the deposit form accompanying the deposit paid to the Commissioner of Taxation under Part 4 of the SSAA to include certain specifications as to the method of payment. [Schedule 1, item 81, section 32 of the SSAA] 30

Publication requirements and other amendments Table of Contents: Outline of chapter ................................................................................ 31 Context of amendments ....................................................................... 32 Summary of new law............................................................................ 32 Comparison of key features of new law and current law ...................... 33 Detailed explanation of new law .......................................................... 33 Competition and Consumer Act 2010............................................ 34 Corporations Act 2001................................................................... 35 Income Tax Assessment Act 1936 ................................................ 37 Income Tax Assessment Act 1997 ................................................ 37 Insurance Act 1973 ....................................................................... 37 Life Insurance Act 1995................................................................. 38 National Consumer Credit Protection Act 2009 ............................. 38 Private Health Insurance (Prudential Supervision) Act 2015 ......... 39 Productivity Commission Act 1998 ................................................ 40 Superannuation Industry (Supervision) Act 1993 .......................... 40 Taxation Administration Act 1953 .................................................. 40 Commencement, application and savings provisions .......................... 41 Outline of chapter 4.1 Part 4 of Schedule 1 to the Bill amends various Treasury laws to modernise existing requirements that require notices to be published in newspapers. 31

Publication requirements and other amendments Context of amendments 4.2 Several Treasury laws require or permit notices to be published in newspapers, reflecting the historical role of newspapers as places of record. To reflect advances in technology and the development of new platforms for disseminating information of record to the public, the new law intends to expand and provide additional flexibility to the ways in which these publication requirements can be met. The new requirements are designed to be adaptive to developments in methods of information-sharing to allow for effective communication of notices to the intended audience. Summary of new law 4.3 Part 4 of Schedule 1 to the Bill replaces provisions that require or permit notices to be published in newspapers with technology neutral rules. The amendments ensure the relevant notices are published in manner which result in them being publicly available and reasonably prominent. 4.4 Generally, where a Commonwealth entity is required or permitted to publish a notice in a newspaper, the new law now permits the Commonwealth entity to publish the relevant notice in a manner that results in the notice being accessible to the public and reasonably prominent. 4.5 Generally, where a non-Commonwealth entity is required or permitted to publish a notice in a newspaper, the non-Commonwealth entity may now publish the relevant notice: • in a manner that results in the notice being accessible to the public and reasonably prominent; and • where required, in a manner determined by the relevant regulator 4.6 Part 4 of Schedule 1 to the Bill also repeals a number of newspaper publication provisions, and associated provisions, which no longer serve any purpose. 32

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Comparison of key features of new law and current law Table 4.1 Comparison of new law and current law New law Current law Notices which are required or permitted to Certain notices are required or permitted to be published in newspapers can now be be published in newspapers. published in technology neutral manners. Generally, the notices must be published in a manner which results in them being accessible to the public and reasonably prominent. In certain instances, notices may need to be published in accordance with a manner determined by the relevant regulator. The regulator can only determine manners of publication which the regulator considers will result in the notices being accessible to the public and reasonably prominent. Detailed explanation of new law 4.7 Part 4 of Schedule 1 to the Bill replaces newspaper publication requirements and permissions across Treasury laws with technology neutral publication requirements and permissions. 4.8 Generally, the amendments ensure the relevant notices are published in a manner that allows the notices to be: • accessible to the public and reasonably prominent; and • if a regulator determination concerning the publication of the notice is in force, published according to the determination. 4.9 The intention is that the regulator would only make a determination if there were differences of opinion or uncertainty as to what was required for the notice to be reasonably prominent. Example 4.1 Notice that is accessible to the public and reasonably prominent A share in a no liability company is forfeited and will be offered for sale by public auction in 2 weeks. Section 254Q of the Corporations Act requires the company to advertise the sale of the 33

Publication requirements and other amendments share in a manner which is accessible to the public and reasonably prominent. The company advertises its sale of the share by putting a notice on its company website, which has broad public reach. The notice is placed on the website in a manner that makes it easily noticeable and can be accessed from the company website. The notice contains a description of the sale which can be easily understood. The notice also includes a link to another webpage that provides further details relating to the sale of the share and the public auction. Example 4.2 Where notice is not considered accessible to the public and reasonably prominent A general insurance company changes its name. Section 29 of the Insurance Act requires the company to publish notice of its change of name in a manner which is accessible to the public and reasonably prominent. The company arranges for a note to be put on the ASX platform containing information about the old and new names of the company and the date of that change. In these circumstances, the company has not published notice of its change of name in a manner that is accessible to the public and reasonably prominent. The notice is not reasonably prominent to members of the public likely to be interested in the information, as persons generally do not access the ASX platform for information on the company. The general insurance company could have published notice of its change of name on its company website or in a newspaper in a manner that is reasonably noticeable and can be accessed by members of the public who would be interested in this information or the company. Competition and Consumer Act 2010 4.10 Several provisions in the CCA require the ACCC to publish certain notices in national newspapers. The new law requires the regulator to publish the notices in a manner that results in the notices being accessible to the public and reasonably prominent. [Schedule 1, items 82-86, paragraph 28(2)(a), subsections 44GA(10), 44LD(10), 44NC(10), 44ZZOA(10) of the CCA] 34

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Corporations Act 2001 Notices 4.11 Section 254Q of the Corporations Act concerns the forfeiture and sale of shares for a failure to meet a call on the shares. Notice of the sale of forfeited shares is required to be advertised in a national newspaper. Notice of the sale of forfeited shares, or the postponement of the sale of forfeited shares, must now meet the technology neutral publication requirements. [Schedule 1, items 90 and 91, subsections 254Q(3), (4) and (5A)-(5C) of the Corporations Act] 4.12 Paragraph 601WBH(1)(b) of the Corporations Act contains the rules for ASIC to publish notice of the issue of a certificate of transfer in a manner prescribed by the Corporations Regulations. ASIC is required to publish such a notice in the Gazette and on their website. The amendments require ASIC to make a notifiable instrument setting out notice of the issue of the certificate and publish notice on their website. [Schedule 1, items 96-98, section 601WBH, paragraphs 601WBH(1)(b) and (c) and subsection 601WBH(2) of the Corporations Act] 4.13 Subsections 601WDA(1) and (3) of the Corporations Act contain rules about the cancellation of the Australian Financial Services Licence of a trustee company and voluntary transfer determinations under section 601WBA of the Corporations Act. The companies covered by these sections are required to publish certain notices in a national newspaper and on their website. The amendments require the covered companies to publish the notices on their website (if any) and according to the technology neutral publication requirements. [Schedule 1, items 99-101, paragraph 601WDA(1)(b) and subsections 601WDA(3)-(6) of the Corporations Act] 4.14 Sections 601CC and 601CL of the Corporations Act contain rules about the cessation of business of a registered Australian body and a registered foreign body, respectively. Liquidators of these bodies are required to publish notices in newspapers before making any distribution of the bodies' property. The amendments require liquidators to publish the notices in accordance with the technology neutral publication requirements. However, ASIC may determine that the notices must be published in the prescribed manner. [Schedule 1, items 92-95, paragraph 601CC(14)(a), section 601CCA, paragraph 601CL(15)(a) and section 601CLA of the Corporations Act] Miscellaneous provisions 4.15 Section 103 of the Corporations Act concerns the effect of certain contraventions of the Corporations Act. As notices may now be published in 35

Publication requirements and other amendments more than one way, references to specific manners of publication in the section are repealed. [Schedule 1, item 89, paragraph 103(2)(b) of the Corporations Act] 4.16 The definitions of 'daily newspaper' and 'national newspaper' are repealed as newspaper references throughout the Corporations Act are repealed. [Schedule 1, item 87 to 88, section 9 (definition of 'daily newspaper') and (definition of 'national newspaper') of the Corporations Act] 4.17 Section 1070D of the Corporations Act contains rules about the loss or destruction of title documents for certain securities. The owner of lost or destroyed title documents may apply to the relevant company for a duplicate title document. The directors of the company can, before accepting the application, require the applicant to place an advertisement in a daily newspaper stating the title documents had been lost destroyed and the owner intended to apply for duplicate certificates. Part 4 of Schedule 1 to the Bill amends the Corporations Act so that the directors can now specify the manner in which the notice is published. [Schedule 1, item 102, paragraph 1070D(6)(a) of the Corporations Act] 4.18 Section 1071D of the Corporations Act contains rules about the registration of the transfer of a security of a company at the request of transferor. Under the section, lists of certain documents can be advertised in such newspapers as the company thinks fit. Part 4 of Schedule 1 to the Bill amends the section so that a list of documents can now be published in a manner specified by the directors of the company, in addition to being published in the Gazette. [Schedule 1, item 103, paragraph 1071D(6)(b) of the Corporations Act] 4.19 Clause 38 of Schedule 4 to the Corporations Act allows the regulations to modify the operation of that Act in relation to the giving of notice of a meeting of a company's members. A new subclause is inserted into clause 38 to ensure that regulations may be made providing for ASIC to determine by legislative instrument the manner in which notices may be published. [Schedule 1, item 104, subclause 38(2A) of Schedule 4 to the Corporations Act] 4.20 This regulation-making power is limited. Any regulations made under this provision can only stipulate that ASIC has the power to determine how notices of meetings of a company's members may be given. The regulations would only apply to a small class of companies (mainly building societies, credit unions and friendly societies). This ensures that any additional requirements for publishing notices, where a manner for publication has not been prescribed, can be prescribed by ASIC. If ASIC makes a determination under the regulations, it must take the form of a legislative instrument and be published on the Federal Register of Legislation. Legislative instruments that ASIC publishes under this clause are subject to the usual safeguards, including sunsetting and disallowance by Parliament. 36

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Income Tax Assessment Act 1936 Serving notices 4.21 Section 45D of the ITAA 1936 concerns determinations made under sections 45A, 45B and 45C of that Act. The Commissioner of Taxation can serve a notice of a determination under section 45A by publishing the notice in certain daily newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1936 so that the Commissioner can now serve the notice by publishing the notice in a manner that accords with the technology neutral publication requirements. [Schedule 1, items 105 and 106, subsection 45D(2) of the ITAA 1936] 4.22 Section 177EA of the ITAA 1936 concerns the creation of franking debits and the cancellation of franking credits. If the Commissioner makes a determination under paragraph 177EA(5)(b) of that Act, the Commissioner can serve notice of the determination on each relevant taxpayer if the determination was published in certain daily newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1936 so that the Commissioner is now taken to have served the notice if it is published according to the technology neutral publication requirements. [Schedule 1, items 107 and 108, subsection 177EA(7) of the ITAA 1936] Income Tax Assessment Act 1997 4.23 Under subsection 204-50(3) of the ITAA 1997, if the Commissioner makes a determination denying an imputation benefit, the Commissioner was previously taken to have served notice of the determination if they published the notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the ITAA 1997 so that the Commissioner is now taken to have served the notice if it is published according to the technology neutral publication requirements. [Schedule 1, item 109, subsection 204-50(3) of the ITAA 1997] Insurance Act 1973 4.24 Section 29 of the Insurance Act contains rules about the change of name of general insurers. A general insurer that changes its name must place a notice of that fact in certain newspapers. Part 4 of Schedule 1 to the Bill amends the Life Insurance Act so that the general insurer must publish the notice in accordance with the technology neutral publication requirements. [Schedule 1, items 110-112, subsections 29(1), (2A), (2B) and (3) of the Insurance Act] 37

Publication requirements and other amendments Life Insurance Act 1995 4.25 Section 191 of the Life Insurance Act requires notice of an intention to make an application for confirmation of a scheme to be published in certain newspapers and elsewhere. This newspaper publication requirement is replaced with the technology neutral publication requirements. However, consistent with the publication rules in regulation 9.02 of the Life Insurance Regulations, APRA can approve the form of the notice. [Schedule 1, items 113-115, paragraph 191(2)(b) and subsections 191(2A)- (2D) and (3) of the Life Insurance Act] 4.26 Section 223 of the Life Insurance Act previously required notice to be given of a company's intention to issue certain replacement policy documents. Repealing the notification requirements simplifies the process for re-issuing replacement policy documents to consumers. [Schedule 1, items 116 to 117, section 223 (heading) and subsections 223(3) and (4) of the Life Insurance Act] 4.27 Section 224 of the Life Insurance Act requires notice to be given in relation to certain policy documents which were lost or destroyed. Repealing the notification requirements simplifies the process for re-issuing replacement policy documents to consumers. The amendment is intended to allow insurers to be able to issue a copy of the life insurance policy either electronically or through post and reduce costs to both the insurer and consumer. [Schedule 1, items 118-121, subsection 224(1), subparagraphs 224(1)(b)(i) and (ii) and subsections 224(2) and (3) of the Life Insurance Act] National Consumer Credit Protection Act 2009 4.28 Section 64 of the National Credit Code concerns notification of interest rate changes by credit licensees. Credit licensees are required to give notice of interest rate changes that increase the obligations of consumers by publishing a notice in certain newspapers (if they elect not to notify the debtor directly). Part 4 of Schedule 1 to the Bill amends the section so that credit licensees are now required to publish such notice of interest rate changes in accordance with technology neutral publication requirements in a manner that allows the notices to be accessible to debtors and reasonably prominent. Additionally, if a regulator determination is made concerning the publication of the notice, it must be published according to the determination. [Schedule 1, items 125-127, subsections 64(2), (3) and (8)-(10) of the National Credit Code] 4.29 Section 66 of the National Credit Code concerns notification of credit fees and charges. Credit licensees are required to give notice of changes that increase the obligations of consumers by publishing a notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that credit licensees are 38

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 now required to publish such notice of the changes in accordance with the technology neutral publication requirements in a manner that allows the notices to be accessible to debtors and reasonably prominent. Additionally, if a regulator determination is made concerning the publication of the notice, it must be published according to the determination. [Schedule 1, items 128 and 129, subsections 66(2) and (6)-(8) of the National Credit Code] 4.30 Section 119 of the National Credit Code contains provisions relating to an application by credit licensees or ASIC for court orders. The court can require notice of any such application to be published in a form approved by the court and in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that the court can now require the application to be published by notice in a form approved by the court and in a manner determined by the court. [Schedule 1, item 130, subsection 119(2) of the National Credit Code] Private Health Insurance (Prudential Supervision) Act 2015 4.31 Section 20 of the PHIPS Act contains rules relating to private health insurers' applications to APRA for approval to convert to being registered as for-profit insurers. Under this section, APRA can publish notices of the applications in certain newspapers. Part 4 of Schedule 1 to the Bill amends this section so that APRA can now publish notices of the applications in a manner which results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 131, paragraph 20(4)(a) of the PHIPS Act] 4.32 Section 40 of the PHIPS Act contains rules relating to the conduct of funds during the 'termination process'. Under this section, a private health insurer had to publish a notice in certain newspapers. Part 4 of Schedule 1 to the Bill amends the PHIPS Act so that private health insurers are now required to publish the notice in accordance with the technology neutral publication requirements. [Schedule 1, items 132 and 133, paragraph 40(2)(b) and subsections 40(2A) and (2B) of the PHIPS Act] 4.33 Section 75 of the PHIPS Act contains rules relating to the dealing of property of health benefits funds under management. Under this section, a manager of the fund could provide notice of an appointment in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that the manager of the fund is now simply required to provide notice of the appointment to the relevant entity. [Schedule 1, item 134, paragraph 75(2)(b) of the PHIPS Act] 39

Publication requirements and other amendments Productivity Commission Act 1998 4.34 Section 13 and 14 of the Productivity Commission Act 1998 require the Productivity Commissioner to provide notice of certain hearings and inquiries in newspapers. Part 4 of Schedule 1 to the Bill amends the sections so that the Productivity Commissioner is now required to provide the notices in a manner that results in the notices being accessible to public and reasonably prominent. [Schedule 1, item 135, sections 13 and 14 of the Productivity Commission Act 1998] Superannuation Industry (Supervision) Act 1993 4.35 Part 4 of Schedule 1 to the Bill amends the SIS Act to remove references to the licensing transition period. Provisions concerning the licensing transition period have been spent for several years and are no longer needed. [Schedule 1, items 136-141, subsection 10(1) (definition of 'licensing transition period'), sections 29CB and 29CC (heading), subsections 29CC(1) and (2) and paragraph 29D(1)(h) of the SIS Act] 4.36 Section 142 of the SIS Act contains rules relating to the winding-up or dissolution of superannuation entities. Under this section, APRA is required to advertise the making of legislative instruments under subsection 142(1) in certain newspapers. Part 4 of Schedule 1 to the Bill amends the section so that APRA is now required to publish notice of the making of the instruments in a manner that results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 142, subsections 142(7) and (9) of the SIS Act] Taxation Administration Act 1953 4.37 Section 260-145 of Schedule 1 to the Taxation Administration Act 1953 requires the Commissioner of Taxation to publish notice of certain determinations in newspapers. Part 4 of Schedule 1 to the Bill amends the section to that the Commissioner of Taxation is now required to publish the notice in a manner that results in the notice being accessible to the public and reasonably prominent. [Schedule 1, item 143, subsection 260-145(3) of Schedule 1 to the Tax Administration Act 1953] 40

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Commencement, application and savings provisions 4.38 The amendments to section 191 apply to the publishing of a notice of intention on or after the commencement of Part 4 of Schedule 1 to the Bill. This is to ensure that notices published in accordance with the regulations prior to commencement of Part 4 are valid. [Schedule 1, item 122, section 191 of the Life Insurance Act] 4.39 The operation of any forms approved by APRA under the regulation 9.02 of the Life Insurance Regulations is preserved. Additionally, despite the amendments to paragraph 91(2)(b) of the Life Insurance Act, the operation of regulations made for the purposes of that paragraph are preserved. [Schedule 1, items 123 and 124, subsection 191 of the Life Insurance Act] 41

ALRC Financial Services Interim Report Table of Contents: Table of Contents: ............................................................................... 43 Outline of chapter ................................................................................ 43 Context of amendments ....................................................................... 43 Comparison of key features of new law and current law ...................... 44 Detailed explanation of new law .......................................................... 45 Removing erroneous references and redundant definitions .......... 46 Using consistent headings for definitions sections ........................ 47 Other amendments........................................................................ 48 Commencement, application, and transitional provisions .................... 53 Outline of chapter 5.1 This chapter outlines how Schedule 2 to the Bill simplifies and improves the navigability of Australia's corporations and financial services laws. Context of amendments 5.2 Schedule 2 to the Bill enacts recommendations and other suggested improvements identified by the ALRC in Interim Report A to simplify and improve the navigability of Australia's financial services laws. 5.3 In September 2020, the Attorney-General referred to the ALRC for inquiry and report, under subsection 20(1) of the Australian Law Reform Commission Act 1996, a consideration of whether, and if so what, changes to the Corporations Act and Corporations Regulations could be made to simplify and rationalise the law. 43

ALRC Financial Services Interim Report 5.4 The ALRC Review forms part of the response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which found that the law needs to be simplified to ensure that its intent is met. 5.5 Interim Report A deals with the use of definitions in corporations and financial services legislation. Interim Report B was handed down on 30 September 2022 and deals with the hierarchy of laws. Interim Report C is due to be handed down in August 2023 and will focus on the structure of Chapter 7 of the Corporations Act. The Final Report is due on 30 November 2023. 5.6 The Government is progressing these amendments at this time because the ALRC found that there was support for these recommendations in Interim Report A and they should be implemented prior to the conclusion of the ALRC Review. These amendments improve the use of definitions in the ASIC Act, Corporations Act and Corporations Regulations. 5.7 The recommendations primarily address unwarranted complexity in the law. By removing erroneous references and redundant definitions, using consistent headings to definitions sections, as well as other simplifications, Schedule 2 to the Bill improves the navigability and clarity of the corporations and financial services law. Comparison of key features of new law and current law Table 5.1 Comparison of new law and current law New law Current law Terms that are defined in the Corporations Certain terms that are defined in the Act are subsequently used in the Act. Corporations Act are: • not subsequently used in the Act or the Corporations Regulations; or • only used in the Corporations Regulations. Terms that are only used in one provision Some defined terms found in section 9 of the of the Corporations Act have been repealed Corporations Act are only used in one where they are unnecessary, or are defined provision of the Act. in the section in which they appear. Defined terms are only used if they affect Several basic defined terms are defined in a the ordinary meaning of a word. way that does not alter the ordinary meaning of the word. The headings of provisions containing Some provisions containing definitions in definitions appear in a consistent form the Corporations Act are not clearly or across the Corporations Act. 44

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 New law Current law consistently identified by their headings and may be difficult to locate. The definitions 'extraordinary resolution' Provisions that define 'extraordinary and 'special resolution' do not impart resolution' and 'special resolution' impart substantive obligations. substantive obligations. The definition of 'review fee' is repealed The definition of 'review fee' cross- and signposted to the correct definition in references the incorrect section of the the Corporations (Review Fees) Act. Corporations (Review Fees) Act. Sections that refer to 'review fees' are The phrases 'review fee' and 'fees imposed substituted so a consistent expression is under the Corporations (Review Fees) Act' used. are inconsistently used throughout the Corporations Act. The Corporations Act includes a definition The Corporations Act includes a definition of 'rules of court' and the term 'rules' is of 'rules' that is applied in some, but not all, not defined. Provisions which previously instances where the phrase 'rules' is used in used the term 'rules' as a defined phrase the Corporations Act. now use the phrase 'rules of court'. Detailed explanation of new law 5.8 Schedule 2 to the Bill makes technical amendments to Australia's corporations and financial services laws to facilitate a more adaptive, efficient and navigable legislative framework. The amendments do this by making the following changes: • removing erroneous references; • removing redundant definitions; • improving the use of definitions, including: - clarifying the meaning of defined terms; and - using consistent headings for definition sections; and - removing substantive obligations from definitions; • repealing redundant regulations; • making other minor and technical amendments to simplify and improve the readability and navigability of the ASIC Act and Corporations Act. 5.9 Schedule 2 to the Bill only implements the recommendations from Interim Report A. The report's recommendations, as opposed to its proposals and questions, were designed for immediate implementation, address technical 45

ALRC Financial Services Interim Report aspects of the legislation, do not raise significant policy issues and had overwhelming support from stakeholders. Removing erroneous references and redundant definitions 5.10 Schedule 2 to the Bill removes the erroneous reference in the ASIC Act to Part 1.3 of the Corporations Act. There is no Part 1.3 of the Corporations Act. This implements recommendation 1 from Interim Report A. [Schedule 2, item 1, subsection 5(3) of the ASIC Act] 5.11 Schedule 2 to the Bill repeals the following defined terms in section 9 of the Corporations Act: • 'arbitrage transaction'; • 'Australian bank'; • 'Australian register'; • 'cash management trust interest'; • 'chargeable matter'; • 'court of summary jurisdiction'; • 'deal'; • 'emoluments'; • 'exempt foreign company'; • 'financial corporation'; • 'Full Court'; • 'non-voting share'; • 'quarter day'; • 'renounceable option'. 5.12 These terms are not used in the Corporations Act or the Corporations Regulations, or are only used in the Corporations Regulations. For defined terms that are used in the Corporations Regulations, it is more appropriate for the definition to be located in the Corporations Regulations. [Schedule 2, item 2, section 9 of the Corporations Act] 5.13 The amendments also repeal the defined term 'financial product advice law' from section 761A of the Corporations Act. The term is not used in the Corporations Act or the Corporations Regulations. [Schedule 2, item 3, section 761A of the Corporations Act] 46

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 5.14 These amendments implement recommendation 2 from Interim Report A. Using consistent headings for definitions sections 5.15 The words used in headings in the Corporations Act for provisions containing definitions are not consistent. Some provisions have headings indicating they contain one or more definitions, however, the words used are inconsistent. Headings include 'dictionary', 'meaning of ... ' and 'what is a ... '. This makes it difficult for a reader to identify the location of defined terms in the Act and use computer assisted search tools to easily find definition sections. 5.16 In recommendation 9 of Interim Report A, the ALRC recommended that the headings of provisions containing definitions should appear in a consistent form across the Corporations Act. 5.17 Schedule 2 to the Bill gives effect to this recommendation. It amends the headings of provisions in the Corporations Act that contain definitions and no substantive content. Schedule 2 to the Bill replaces existing headings with the phrase 'Meaning of [defined term]' to consistently identify those provisions containing definitions. This assists readers to more easily identify the location of definitions in the Act. [Schedule 2, items 4-80, 144, 146, 148 and 154, Division 2 of Part 1.2 (heading) and sections 45A (heading), 45B (heading), 46 (heading), 50 (heading), 50AAA (heading), 50AA (heading), 51M (heading), 64A (heading), 66A (heading), 88A (heading), 88B (heading), 89 (heading), 91 (heading), 92 (heading), 95A (heading), 102B (heading), 102C (heading), 111AC (heading), 111AD (heading), 111AL (heading), 111AM (heading), 323D (heading), 323DAA (heading), 324AE (heading), 324AF (heading), 345A (heading), 453A (heading), 458E (heading), 588FA (heading), 588FB (heading), 588FC (heading), 588FD (heading), 588FDA (heading), 588FDB (heading), 602A (heading), 738N (heading),738U (heading), 761G (heading), Division 3 of Part 7.1 (heading), sections 763A (heading), 763B (heading), 763C (heading), 763D (heading), Division 4 of Part 7.1 (heading), sections 766A (heading), 766B (heading), 766D (heading), 766E (heading), 766F (heading), 766H (heading), Division 5 of Part 7.1 (heading), section 767A (heading), Division 6 of Part 7.1 (heading), sections 768A (heading), 850B (heading), 908AB (heading), 908AC (heading), 912D (heading), 961C (heading), 961D (heading), 961F (heading), 961P (heading), 962A (heading), 962B (heading), 962C (heading), 962L (heading), Subdivision B of Division 4 of Part .7A (heading), sections 963A (heading), 964F (heading), 964H (heading), 994AA (heading), 1014A (heading), 1014H (heading), 1200B (heading), 1272B (heading), 1311D (heading), 1317AAA (heading), 1317AAB (heading), 1317AAC (heading) and 1317GAD (heading) of the Corporations Act] 47

ALRC Financial Services Interim Report Other amendments Single use definitions 5.18 Words and phrases should be defined in legislation only if the definition significantly reduces the need to repeat text. Definitions that are only used in one section do not reduce the need to repeat text. They also impede navigability when the reader is required to consult the main dictionary in section 9 of the Corporations Act to find the meaning of a term. 5.19 Schedule 2 to the Bill removes the following terms from section 9 of the Corporations Act: • 'aggregated turnover'; • 'ancillary offence'; • 'chargee'; • 'close associate'; • 'connected entity'; • 'current market bid price'; • 'deductible gift recipient'; • 'group executives'; • 'machine-copy'; • 'old Division 11 of Part 11.2 transitionals'; • 'Part 7.7A civil penalty provision'; and • 'State or Territory authority'. 5.20 These terms are only used in one section. [Schedule 2, items 83, 85, 87 and 90, section 9 of the Corporations Act] 5.21 For relatively simple definitions, Schedule 2 to the Bill locates the substance of the definition where the defined term is currently placed. If the definition is longer and more complex, the amendments place the definition in a separate subsection of the section in which the defined term is used. This avoids making the provision more difficult to read. [Schedule 2, items 86, 89, 91-96, 98 and 106-109, section 9 (paragraph (c) of the definition of 'examinable affairs') and (definition of 'reproduction'), paragraph 45B(1)(b), section 51B (paragraph (b) of the definition of 'secured party'), paragraph 300A(4)(b), section 300A, subparagraphs 588FDA(1)(b)(ii) and (iii), paragraph 601QA(5)(c), section 649B, paragraphs 1274(2AA)(b), 1317AAE(3)(b) and 1317G(1)(c) and subsection 1317G(1) of the Corporations Act] 48

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 5.22 Schedule 2 to the Bill inserts a signpost in section 9 to the definition of 'connected' with a corporation. 'Connected' with a corporation is a term that is used throughout the Act, so it should be included in section 9 as a signpost to make its meaning easy to find. That meaning is in section 64B of the Corporations Act. [Schedule 2, item 84, section 9 of the Corporations Act] 5.23 Rather than replacing the term 'current market bid price' in s 649B with the current meaning of that term, Schedule 2 to the Bill replaces the term with a phrase which is of the same meaning but is easier to read and understand. [Schedule 2, items 97-98, subsection 621(2)(note) and section 649B of the Corporations Act] 5.24 The definition of 'recognised affiliate' in section 761 of the Corporations Act is only used in the definition of 'participant'. Schedule 2 to the Bill repeals the definition of 'recognised affiliate' incorporates its substance into the meaning of 'participant'. [Schedule 2, items 100, 102 and 103, sections 761A, 767A and 768A of the Corporations Act] 5.25 The definition of 'funeral expenses facility' in section 761A of the Corporations Act is only used in the definition of 'funeral benefit'. Accordingly, Schedule 2 to the Bill repeals the definition of 'funeral expenses facility' and incorporates its substance into the definition of 'funeral benefit'. Schedule 2 to the Bill also repeals section 765B, which states that a funeral expenses facility is not a funeral benefit, because it is now redundant. [Schedule 2, items 99, 100 and 101, sections 761A and 765B of the Corporations Act] 5.26 Schedule 2 to the Bill also repeals the definition of 'ancillary offence' in section 9 because it refers to provisions of the Crimes Act which no longer exist. Schedule 2 to the Bill amends the only provisions which rely on the definition, being section 5 of the ASIC Act and paragraph 916G(5)(c) of the Corporations Act, to refer directly to the meaning of 'ancillary offence' in the Criminal Code and section 6 of the Crimes Act. [Schedule 2, item 81, subsection 5(1) (paragraph (a) of the definition of 'contravention') of the ASIC Act; item 104, paragraph 916G(5)(c) of the Corporations Act] Definitions about resolutions 5.27 The function of definitions should be to convey or enhance meaning. Including substantive obligations within definitions should be avoided where possible as it conceals the substantive obligation. This makes it harder for regulated entities to understand their rights and obligations. 5.28 Schedule 2 to the Bill repeals the definitions of 'extraordinary resolution' and 'special resolution' in section 9 and replaces them with new definitions that 49

ALRC Financial Services Interim Report signpost to new substantive provisions. These provisions are located in the part of the Act which contain the operative laws about these types of resolutions. [Schedule 2, items 110 and 111, section 9 (definition of 'extraordinary resolution') and (definition of 'special resolution') of the Corporations Act] 5.29 The new substantive provisions establish that in order for a special resolution or extraordinary resolution to have effect, the following three requirements must be met: • notice of the meeting, required under sections 249J and 252G, must contain certain content; • the resolution must be passed by the specified percentage of votes; and • the resolution must be otherwise valid. 5.30 The new definitions and substantive provisions do not alter the effect of the current definitions. The first requirement is an existing requirement, and the new law simply sets it out in the operative section to assist readers in understanding how the different components of these types of resolutions fit together. The reference to resolutions being 'otherwise valid' recognises that the Act or the scheme or company's constitution may impose other requirements that must be complied with for a resolution to be valid. 5.31 The new provisions are subject to the operation of section 1322 of the Act. Section 1322 states that proceedings and meetings are not automatically invalidated because of procedural irregularities or accidental omissions to give, or failures to receive, notices about a meeting. [Schedule 2, items 112 and 113, sections 250MA and 253LA of the Corporations Act] 5.32 The amendments also maintain ASIC's existing power to exempt a person from, or modify, the obligations associated with establishing a special resolution or extraordinary resolution for a registered scheme, as they apply in relation to the operation of Chapter 5C or regulations made for the purposes of Chapter 5C. This does not insert any new powers for ASIC. ASIC currently uses its power under section 601QA to grant relief in situations where compliance with the strict notice requirements is not reasonable and it is anticipated that ASIC will continue to use its power for that purpose. [Schedule 2, item 114, paragraph 601QA(5)(ba) of the Corporations Act] Certain inclusive and relational definitions 5.33 Inclusive definitions can be used to clarify ambiguity or expand the meaning of a term. However, these definitions can also add complexity by requiring the reader to consider whether the term is being used in its defined, inclusive sense or not. 5.34 Schedule 2 to the Bill repeals the following definitions: 50

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 • 'have'; • 'hold'; • 'information'; • 'statement'. 5.35 The definitions of 'have', 'hold' and 'statement' do not add anything to the ordinary meaning of these words. 'Information' is defined to include 'complaint'. This usage is not in the Corporations Act. Relying on the ordinary meaning of 'statement' does not change the operation of the law in any way. [Schedule 2, items 115 and 117, section 9 of the Corporations Act] 5.36 The amendments replace the definition of 'on' in section 9, which only applies in relation to a financial market, with a signpost to the provision that provides the meaning of a financial market. Schedule 2 to the Bill inserts a new subsection in that provision to confirm that something which is done through or by means of the facility that constitutes a financial market is done 'on' the financial market. [Schedule 2, items 116 and 118, section 9 and subsection 767A(2) of the Corporations Act] Review fee 5.37 The definition of 'review fee' erroneously refers readers to section 5 of the Corporations (Review Fees) Act instead of section 4 of that Act. The Corporations Act is also inconsistent in whether it uses the term 'review fee' or refers to 'fees imposed under the Corporations (Review Fees) Act' . 5.38 Schedule 2 to the Bill replaces the definition of 'review fee' with a signpost to the definition in the Corporations (Review Fees) Act. Schedule 2 to the Bill also updates references to review fees so that the Corporations Act uses a consistent expression. [Schedule 2, items 119-123, section 9 (definition of 'review fee'), section 1242G, subsections 1351(2), 1351(3) and 1351(4) and paragraph 1364(2)(n) of the Corporations Act] Court rules 5.39 Section 9 defines 'rules' to mean the rules of the Federal Court or rules of a State or Territory Supreme Court. However, the Corporations Act frequently uses the word 'rules' in its ordinary sense. This can confuse readers, who are required to consider whether the word is used in its defined or ordinary sense. 5.40 Schedule 2 to the Bill replaces the defined term 'rules' with the term 'rules of court'. The substance of the definition is unchanged. Schedule 2 to the Bill updates references to 'rules' (in their defined sense to 'rules of court' to match 51

ALRC Financial Services Interim Report the new definition. [Schedule 2, items 124-137, section 9 (definition of 'rules'), section 9 (definition of 'rules of court') subparagraph 423(1)(a)(iv), paragraph 459E(3)(b), subparagraph 459Q(c)(ii), section 465C, paragraph 467(3)(b), subsections 475(8), 488(1), 488(2), 596C(1), 597(14) and 597(15), subparagraphs 1337S(1)(b)(i), 1337S(1)(b)(ii), 1337T(1)(b)(i), 1337T(1)(b)(ii), 1337U(1)(b)(i) and 1337U(1)(b)(ii) of the Corporations Act] Other minor and technical amendments to simplify and improve the readability and navigability of Australia's financial services law 5.41 The Corporations Act is inconsistent in the label for the defined term 'professional member of an audit team' and the manner in which the term is used (usually expressed as a plural). Schedule 2 to the Bill fixes this inconsistency. It repeals the definition and substitutes it with a simpler term which is used consistently . Schedule 2 to the Bill does not change the substance of the meaning of the term. [Schedule 2, items 140, 141 and 148, sections 9 (definition of 'professional member of an audit team') (definition of 'professional member') and 324AE of the Corporations Act] 5.42 The Corporations Act defines 'participant' in sections 9 and 761A in relation to a clearing and settlement facility and in relation to a financial market. Schedule 2 to the Bill repeals this definition and replaces it with a simpler definition in section 9 which signposts to sections 767A--Meaning of financial market and section and 768A--Meaning of clearing and settlement facility. These sections contain the substance of the definition. The substance of the definition is unchanged. [Schedule 2, items 88, 102 and 103, sections 9 (definition of 'participant'), 761A, 767A and 768A of the Corporations Act] 5.43 Moving the term 'participant' to section 9 of the Act is consistent with the ALRC's recommendation to create a single definition section with all key words. Schedule 2 to the Bill updates references to 'participant' in other legislation to reflect that the term is now a defined term in section 9. [Schedule 2, item 82, subsection 243F(5) of the ASIC Act; item 105, subsection 1241A(5) of the Corporations Act; items 158-159, section 7 (subparagraphs (d)(i) and (d)(ii) of the definition of 'market infrastructure entity') of the ASIC Supervisory Cost Recovery Levy Act 2017; item 160, section 396-55 of Schedule 1 (table item 5) to the Taxation Administration Act 1953] 5.44 Section 9 of the Corporations Act defines 'exempt body' by signposting to section 66A of the Corporations Act. That section provides that a 'body corporate' is an 'exempt body' if it satisfies certain conditions. There is inconsistency between the use of the word 'body' and 'body corporate'. 52

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Schedule 2 to the Bill rectifies this by replacing the term 'exempt body' with the term 'exempt body corporate' throughout the Corporations Act. [Schedule 2, items 138, 139, 145 and 149-155, sections 9 (definition of 'exempt body') and 66A, subsections 708(20) and 708(20) (note), paragraph 994B(3)(e), subsection 1012D(8) (heading), paragraph 1012D(8)(b), subsection 1012D(8) (Note 1) and section 1023B (paragraph (a) of the definition of 'financial product') of the Corporations Act] 5.45 The definition of 'public document' in section 9 of the Corporations Act includes the term 'body corporate' with a signpost to section 88A of the Act. However, section 88A of the Act provides the meaning of 'public document' in relation to a 'body'. Schedule 2 to the Bill rectifies this inconsistency by replacing the term 'body corporate' with 'body' in the definition of 'public document' in section 9 of the Corporations Act. [Schedule 2, item 142, section 9 (definition of 'public document') of the Corporations Act] 5.46 In the definition of 'related body corporate' in section 9 of the Corporations Act, Schedule 2 to the Bill replaces the words 'by virtue of section 50' with 'as determined in accordance with section 50'. This has the same meaning but is clearer. [Schedule 2, item 143, section 9 (definition of 'related body corporate') of the Corporations Act] 5.47 Subsection 102B(1) of the Corporations Act bolds and italicises the phrase 'in Australia or elsewhere'. Schedule 2 to the Bill removes this formatting. The phrase does not need to be bolded or italicised as the phrase takes on its ordinary meaning. It is not a defined term. This is consistent with the ALRC's recommendation about consistently identifying when defined terms are used. [Schedule 2, item 147, subsection 102B(1) of the Corporations Act] Commencement, application, and transitional provisions 5.48 Schedule 2 to the Bill inserts application and transitional provisions. These ensure that the repeal of certain definitions in the ASIC Act and Corporations Act has the intended effect for instruments made under either of those Acts prior to the commencement of the Schedule. 5.49 The transitional rules provide that if an instrument made under the Corporations Act or ASIC Act references a provision repealed by this Schedule, that reference is taken to be in relation to the corresponding provision inserted by this Schedule. For instance, if a definition is moved by this Bill from Chapter 7 to section 9, a reference to the term as defined in Chapter 7 in an existing instrument is to be read as a reference to the term as defined in section 9. While consequential amendments update references in 53

ALRC Financial Services Interim Report instruments to the greatest extent practicable, this transitional provision preserves the effect of any ASIC or other instruments that may now have incorrect section references. [Schedule 2, item 156, sections 344 and 344A of the ASIC Act; item 157, sections 1698 and 1698A of the Corporations Act] 5.50 If an instrument refers to a provision that is repealed, and this Schedule does not insert a corresponding provision, the repealed provision continues to have effect in relation to the instrument as if it had not been repealed. [Schedule 2, item 156, sections 344 and 344A of the ASIC Act; item 157, sections 1698 and 1698A of the Corporations Act] 54

Rationalisation of ending ASIC instruments Table of Contents: Outline of chapter ................................................................................ 56 Context of amendments ....................................................................... 56 Voting control limits for proposed licensed trustee companies (ASIC Class Order [CO 12/340]) .................................................................... 57 Context of amendments ................................................................ 57 Comparison of key features of new law and current law ............... 58 Detailed explanation of new law .................................................... 59 Consequential amendments .......................................................... 60 Commencement, application, and transitional provisions.............. 60 ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 ............................................................ 60 Context of amendments ................................................................ 60 Comparison of key features of new law and current law ............... 61 Detailed explanation of new law .................................................... 61 Consequential amendments .......................................................... 62 Commencement, application, and transitional provisions.............. 62 ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 .............................................................................. 62 Context of amendments ................................................................ 62 Comparison of key features of new law and current law ............... 63 Detailed explanation of new law .................................................... 63 Consequential amendments .......................................................... 64 Commencement, application, and transitional provisions.............. 65 ASIC Corporations (Describing Debentures--Secured Notes) Instrument 2022/61 ................................................................................................ 65 55

Rationalisation of ending ASIC instruments Context of amendments ................................................................ 65 Comparison of new law and current law........................................ 66 Detailed explanation of new law .................................................... 66 Consequential amendments .......................................................... 67 Commencement, application, and transitional provisions.............. 67 ASIC Class Order [CO 14/41] Extension of transitional credit hardship provisions............................................................................................. 67 Context of amendments ................................................................ 67 Comparison of key features of new law and current law ............... 68 Detailed explanation of new law .................................................... 69 Consequential amendments .......................................................... 70 Commencement, application, and transitional provisions.............. 70 Outline of chapter 6.1 Schedule 3 to the Bill makes amendments to laws in the Treasury portfolio to move matters currently in ASIC legislative instruments into the primary law. Amendments to the Corporations Act incorporate the following instruments: • ASIC Class Order [CO 12/340] (proposed licensed trustee companies) (Part 1) • ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 (Part 2) • ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 (Part 3) • ASIC Corporations (Describing Debentures--Secured Notes) Instrument 2022/61 (Part 4). 6.2 Amendments to the NCCPA incorporate matters currently found in ASIC Class Order [CO 14/41] (Part 5). Context of amendments 6.3 These amendments incorporate longstanding and accepted matters currently contained in ASIC-made legislation into the primary law. This is part of the 56

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 care and maintenance of Treasury portfolio legislation and provides industry and consumers with greater certainty and clarity when interacting with Treasury laws. 6.4 Class orders and legislative instruments that notionally amend the primary law or regulations cause complexity in the law and undermine accessibility. This makes it difficult for entities to identify and understand the law as it applies to them. Moving notional amendments and other matters out of ASIC-made legislation through this package goes towards addressing these concerns. 6.5 Approximately 200 ASIC legislative instruments will sunset or cease to operate before 2028. As these instruments approach their end dates, Treasury and ASIC will progressively review the instruments to determine whether the structure and navigability of the law would be improved if the matters in the instruments were instead contained in the primary law or regulations. Voting control limits for proposed licensed trustee companies (ASIC Class Order [CO 12/340]) Context of amendments 6.6 The Corporations Act includes certain conditions that must be satisfied before a company can become a listed trustee company, including voting control limits. Part 5D.1 of the Corporations Act establishes the conditions and mechanism for a company to be approved to be listed as a trustee company, which includes a requirement that the company is listed in the Corporations Regulations. Before the Governor-General makes a regulation listing a company, the company must satisfy the Minister of a number of conditions, including that an unacceptable control situation (as defined by section 601VAA of the Corporations Act) does not exist. 6.7 Part 5D.5 of the Corporations Act sets limits on voting control in licensed trustee companies, including a 15 per cent voting control limit per person, and a framework to obtain approval from the Minister to exceed that limit where the Minister believes that would be in the interests of that company and its clients. 6.8 The interaction between Part 5D.5 and Part 5D.1 of the Corporations Act prevents a company that wishes to be listed as a trustee company but has an unacceptable control situation (that is, a person has greater than 15 per cent voting control), from applying to the Minister to exceed that voting control limit. This would prevent them from becoming a listed trustee company in circumstances that may be deemed acceptable if they were already a licensed 57

Rationalisation of ending ASIC instruments trustee company. ASIC Class Order [CO 12/340] ensures that the Minister can properly consider and approve an increased voting control limit for companies that propose to become listed trustee companies. The amendments in Schedule 3 to the Bill have the same effect as ASIC Class Order [CO 12/340]. Comparison of key features of new law and current law Table 6.1 Comparison of new law and current law New law Current law Part 5D.1 of the Corporations Act includes Part 5D.1 of the Corporations Act, a definition of 'proposed licensed trustee establishes the conditions and mechanism for company', to allow companies that propose a company to be approved to be listed as a to become a licensed trustee company but trustee company, which includes a have an unacceptable voting control requirement that the company is listed in the situation to apply to exceed the voting Corporation Regulations 2001. Before the control limits and be listed as a trustee Governor-General makes a regulation doing company. so, the company must satisfy the Minister of a number of conditions, including that an unacceptable control situation (as defined by section 601VAA) does not exist. This part is modified by ASIC Class Order [CO 12/340] to insert definitions of proposed trustee company and proposed licensed trustee company into section 601RAA. Part 5D.5 of the Corporations Act, with the Part 5D.5 of the Corporations Act sets limits exception of sections 601VAB, 601VAC, on voting control in licensed trustee 601VAD and 601VCC, includes references companies, including a 15 per cent voting to proposed licensed trustee companies control limit per person, and a framework to where a reference to a licensed trustee obtain approval from the Minister to exceed company exists, as well as amending that limit, where the Minister believes that references to 'trustee companies' to would be in the interests of that company and 'companies' where appropriate. its clients. Part 5D.5 provides that in order for the This part is modified by ASIC Class Order Minister to exercise their powers to approve [CO 12/340] so that references to licensed exceeding the voting control limit, or to trustee company include references to a amend or revoke that approval, they must proposed licensed trustee company. That be satisfied that doing so is in the interests reference does not extend to of the company and their clients were they a sections 601VAB, 601VAC, 601VAD and licensed trustee company. 601VCC. This part is also modified so that where a Minister is exercising their powers, for a proposed licensed trustee company the Minister must be satisfied that doing so is in 58

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 New law Current law the interests of the company and its clients were they a licensed trustee company. Detailed explanation of new law 6.9 The amendments amend Part 5D.1 and Part 5D.5 of the Corporations Act to allow a proposed licensed trustee company to apply to the Minister for approval to exceed the 15 per cent voting control limit, for the purposes of satisfying the condition to be listed as a trustee company in the Corporations Regulations. 6.10 Item 2 of Schedule 3 inserts a definition of proposed licensed trustee company into section 601RAA to ensure that the corresponding amendments correctly apply to the intended company types, which are companies that would other than the identified voting control issue: • meet the conditions for being a trustee company; • propose to become a trustee company; and • propose to apply for an Australian financial services licence for the provision of one or more traditional trustee company services. 6.11 This definition allows the relevant provisions to apply to proposed licensed trustee companies, while also ensuring that the overall framework continues to apply as intended to licensed trustee companies. [Schedule 3, item 2, section 601RAA of the Corporations Act] 6.12 Item 3 of Schedule 3 replaces section 601VAA of the Corporations Act to apply the meaning of an 'unacceptable control situation' to proposed licensed trustee companies, so that any approval of a higher percentage voting control limit is considered when determining if an 'unacceptable control situation' does not exist in relation to a proposed licensed trustee company. [Schedule 3, item 3, section 601VAA of the Corporations Act] 6.13 Items 4, 5, 7, 9 to 11, 14, 15, and 17 to 23 of Schedule 3 amend the provisions within Part 5D.5 so that they apply to proposed licensed trustee companies in addition to licensed trustee companies. This ensures that a person may apply for approval to have voting power in a proposed licensed trustee companies that exceeds the 15 per cent voting power limit, and also allows for the Minister to alter the approved limit, duration of the approval, or revoke the approval. [Schedule 3, items 4, 5, 7, 9-11, 14, 15, 17-23, sections 601VBA, 601VBB, 601VBC, 601VBE, 601VBF, 601VBH, 601VBI and 601VCB of the Corporations Act] 59

Rationalisation of ending ASIC instruments 6.14 Sections 601VAB, 601VAC, 601VAD and 601VCC do not apply to proposed licensed trustee companies. These provisions deal with offences and the power of courts to make remedial orders or injunctions where an unacceptable control situation exists and intended to enforce the voting control limits for licensed trustee companies. 6.15 Items 6, 8, 12, 13, ad 16 of Schedule 3 amend the sections relating to a Minister's power to approve an application to exceed the voting control limit, approve an application to extend the duration of an approval to exceed the voting control limit, alter the percentage specified in the approval (either by application or by the Minister's own initiative), or revoke an approval, to ensure that, where the power is being exercised in relation to a proposed licensed trustee company, the Minister exercises that power when it would be in the interests of that company and its clients were that company a licensed trustee company. [Schedule 3, item 6, 8, 12, 13 and 16, sections 601VBB, 601VBC, 601VBE and 601VBF of the Corporations Act] Consequential amendments 6.16 ASIC Class Order [CO 12/340] is repealed as it is no longer required. As the instrument will remain in force until the commencement of the amendments, there will be continuity of law for entities relying on the modification in the instrument. [Schedule 3, item 24] Commencement, application, and transitional provisions 6.17 The amendments commence on the day after Royal Assent. [Subsection 2(1), table item 4] ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 Context of amendments 6.18 Section 941E of the Corporations Act requires the information in a Financial Services Guide be up to date as at the time it is given to the client, which is generally at the same time as the financial service is provided. However, in a 60

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 time critical situation, a statement of key information can be given and the Financial Services Guide can be provided up to five days after the financial service was provided. 6.19 As a result, if changes have been made to the Financial Services Guide in the time between the provision of the financial service and the provision of the Financial Services Guide, the Financial Services Guide provided would not reflect the guide in place at the time the service was provided. 6.20 ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 allows a Financial Services Guide given after the financial service was provided to be up to date as at the time the information statement was provided. The amendments in Schedule 3 to the Bill have the same effect as ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498. Comparison of key features of new law and current law Table 6.2 Comparison of new law and current law New law Current law Section 941E requires the information in a ASIC Corporations (Financial Services Financial Services Guide to be up to date as Guide Given in a Time Critical Situation) at the time it is given to the client, or in the Instrument 2022/498 modifies section 941E case of a time critical case, up to date as at of the Corporations Act to require that the the time the 'time critical information information in a Financial Services Guide be statement' as required by subsection up to date as at the time it is given to the 941D(3) was given to the client. client, or in the case of a time critical case, up to date as at the time the 'time critical information statement' as required by subsection 941D(3) was given to the client. Detailed explanation of new law 6.21 Section 941E is amended so that for services provided in a time critical case, as outlined by section 941D, the information may be up to date either as at the time the Financial Services Guide is given to the client or as at the time the statement is given to the client. [Schedule 3, item 25, section 941E of the Corporations Act] 61

Rationalisation of ending ASIC instruments Consequential amendments 6.22 ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 is repealed as it is no longer required. As the instrument will remain in force until the commencement of the amendments, there will be continuity of law for entities relying on the modification in the instrument. [Schedule 3, item 26] Commencement, application, and transitional provisions 6.23 The amendments commence on the day after Royal Assent. [Subsection 2(1), table item 4] ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 Context of amendments 6.24 General insurance products are a kind of financial product that includes many kinds of domestic insurance, such as car insurance, or home and contents insurance. Generally, a PDS must be provided to a retail client in relation to the issue of a general insurance product, including when a regulated person offers to issue a general insurance product. 6.25 The Corporations Act does not include an exemption from the requirement to provide a PDS where a quote is provided to a retail client and the person does not make an immediate decision to accept or decline the offer. It is common for consumers to seek quotes for general insurance products by telephone, but there are practical difficulties in providing a PDS to the consumer as part of that process. 6.26 To account for the difficulties in providing a PDS in a quote situation, ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 modifies some provisions of Part 7.9 of the Corporations Act and inserts new section 1012GA, which sets out the circumstances where a regulated person does not have to provide a PDS to a retail client in relation to an offer to issue, or arrange the issue of, a general insurance product. 62

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 6.27 The amendments in Division 1, Part 3 of Schedule 3 to the Bill incorporate the exemption provided for by ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 into the Corporations Act. Comparison of key features of new law and current law Table 6.3 Comparison of new law and current law New law Current law Section 1012GA of the Corporations Act A regulated person does not have to provide sets out the circumstances in which a PDS a PDS to a client when a quote for a general for a quote for a general insurance product insurance product is given that would is not required to be given to a client. otherwise constitute an "offer to issue" the product, as long as the criteria in ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 are met. Detailed explanation of new law 6.28 New section 1012GA sets out the circumstances when a regulated person does not have to provide a PDS to a retail client in relation to an offer to issue, or arrange the issue of, a general insurance product. [Schedule 3, item 30, section 1012GA of the Corporations Act] 6.29 To take advantage of the exemption in new section 1012GA a regulated person must meet conditions associated with the issuing of the quote and provide the retail client with specified information. However, if a retail client requests a PDS in relation to the quote, the regulated person must provide them with the PDS. [Schedule 3, item 30, paragraph 1012GA(2)(a) of the Corporations Act] 6.30 For the purposes of new section 1012GA, "quote" means a statement of the actual cost of the general insurance product based on specific information provided by the client. [Schedule 3, item 30, subsection 1012GA(3) of the Corporations Act] 6.31 The exemption in new section 1012GA applies only when a regulated person offers to issue a general insurance product to a client and: • the offer is made during or because of a telephone call; 63

Rationalisation of ending ASIC instruments • if applicable, the client is told that there are exclusions or limitations that apply to the product, and that details of the exclusions or limitations can be found in the PDS; • that the insurance cover provided may be different to other general insurance products; and • the client is asked if they would like a PDS. [Schedule 3, item 30, subsection 1012GA(1) of the Corporations Act] 6.32 These criteria ensure that the client understands that more information about the insurance product is available in the PDS and that they have a right to request a PDS, but also enables a simplified process for providing quotes to potential customers without the provision of a PDS. 6.33 The telephone call in which the client requests a quote must also not be unsolicited conduct, as defined in section 992A of the Corporations Act. This means that the client must have genuinely and voluntarily consented to the telephone call for the purposes of the regulated person making an offer for the general insurance product no more than six weeks before the call. [Schedule 3, item 30, paragraph 1012GA(1)(a) of the Corporations Act] 6.34 If the client requests a PDS during the course of the telephone call (whether in response to being asked or not), then a PDS must be provided to them. [Schedule 3, item 30, subsection 1012GA(2) of the Corporations Act] 6.35 Existing requirements relating to the provision of a PDS when a general insurance product is issued are unchanged. This means that when a client chooses to purchase insurance as a result of the quote, the regulated person will generally be required to provide a PDS in line with section 1012B of the Corporations Act. Consequential amendments 6.36 ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 is repealed as it is no longer required. As the instrument will remain in force until the commencement of the amendments, there will be continuity of law for regulated persons relying on the exemption. [Schedule 3, item 31] 6.37 Consequential amendments are also made to sections 1012A, 1012B, and 1012C. These amendments update the drafting to clarify the interaction between the requirement for a regulated person to provide a PDS and the potential exemptions or conditions that could apply. These amendments are made to enhance the readability of the sections. [Schedule 3, items 27, 28 and 29, sections 1012A(4), 1012B(5) and 1012C(10) of the Corporations Act] 64

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Commencement, application, and transitional provisions 6.38 The amendments commence on the day after Royal Assent. [Subsection 2(1), table item 4] ASIC Corporations (Describing Debentures-- Secured Notes) Instrument 2022/61 Context of amendments 6.39 A debenture is defined in section 9 of the Corporations Act. A debenture involves a body providing a chose in action that includes an undertaking by the body to repay as a debt money deposited with or lent to the body. 6.40 Under the Corporations Act, there are three permitted categories for describing debentures - 'mortgage debenture', 'debenture' and 'unsecured note' (sometimes called an 'unsecured deposit note'). Only tangible property, such as goods and lands, is considered when determining whether a debenture is secured. Debentures that are secured by intangible property, such as loans receivable, must be referred to as 'unsecured notes'. 6.41 As such, an issuer of a debenture is not able to delineate between an unsecured deposit note that is truly unsecured and a similar deposit note that is secured by intangible property, such as loans receivable. 6.42 ASIC Corporations (Describing Debentures - Secured Notes) Instrument 2022/61 modifies section 283BH of the Corporations Act to add a new category of debenture called 'secured note', which applies to debentures with sufficient first ranking security that do not satisfy the higher 'debenture' or 'mortgage debenture' tests. 6.43 The new category of debenture, 'secured note', assists issuers of debentures to avoid a label implying that their product is unsecured where there is sufficient security in place, while ensuring that investors understand the nature of the underlying security. 6.44 The amendments in Division 1, Part 4 of Schedule 3 to the Bill incorporate the effect of the instrument into the Corporations Act. 65

Rationalisation of ending ASIC instruments Comparison of new law and current law Table 6.4 Comparison of new law and current law New law Current law A borrower may refer to a debenture as a A borrower may refer to a debenture as a 'secured note' where they meet the 'secured note' where they meet the circumstances set out in circumstances set out in ASIC Corporations subsection 283BH(4) and the requirements (Describing Debentures - Secured Notes) set out in subsections 283BHA(1), (2) or Instrument 2022/61. (3) of the Corporations Act. Detailed explanation of new law 6.45 Section 283BH of the Corporations Act sets out rules on how debentures may be described in a document relating to an offer. Subsection 283BH(1) includes a table that lists the categories for describing a debenture. Item 32 of Schedule 3 introduces the new category of a 'secured note' to this table. [Schedule 3, item 32, subsection 283BH(1) of the Corporations Act] 6.46 Item 33 of Schedule 3 amends section 283BH of the Corporations Act by adding subsection 283BH(4), which details the circumstances in which a debenture may be described as a secured note. To be a secured note, a debenture must include a first ranking security interest over intangible property of the borrower or of any of the guarantors. [Schedule 3, item 33, subsection 283BH(4) of the Corporations Act] 6.47 Paragraph 283BH(4)(b) requires that the security interest be sufficient (and be reasonably likely to be sufficient) to repay the whole of the borrowing, as well as all other liabilities that have been or may be incurred, and rank in priority or equally with that liability. This ensures that an investor knows that the intangible property has sufficient value to serve as a full collateral against the debt. [Schedule 3, item 33, subsection 283BH(4) of the Corporations Act] 6.48 Advertisements and publications that describe or refer to debentures as secured notes must include a statement that a secured note is not a bank deposit and has a risk that investors could lose some or all of their money. [Schedule 3, item 33, subsection 283BHA(1) of the Corporations Act] 6.49 Disclosure documents and quarterly reports must explain details of the security interest relevant to how the security is secured, as well as statements that in the borrower's assessment, the property that constitutes the security is sufficient and is reasonably likely to be sufficient to meet the liabilities referred to in paragraph 283BH(4)(b). [Schedule 3, item 33, subsection 283BHA(2) of the Corporations Act] 66

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 6.50 Additionally, disclosure documents and quarterly reports by the borrower must include a statement that the value of any property secured by the security interest may be affected by the financial position or performance of a related body corporate or related party of the borrower, if that is the case. [Schedule 3, item 33, subsection 283BHA(2) of the Corporations Act] 6.51 Where a borrower's website refers to the secured notes, the website must include on their website their most recent quarterly report, offer document and continuous disclosure notices that are required by ASIC. [Schedule 3, item 33, subsection 283BHA(3) of the Corporations Act] Consequential amendments 6.52 ASIC Corporations (Describing Debentures - Secured Notes) Instrument 2022/61 is repealed as it is no longer required. As the instrument will remain in force until the commencement of the amendments, there will be continuity of law. [Schedule 3, item 34] Commencement, application, and transitional provisions 6.53 The amendments commence on the day after Royal Assent. [Subsection 2(1), table item 4] ASIC Class Order [CO 14/41] Extension of transitional credit hardship provisions Context of amendments 6.54 The National Credit Code sets out the notice requirements that apply to the process of making changes to credit obligations on the grounds of hardship in relation to credit contracts (Division 3, Part 4) and consumer lease contracts (Division 7, Part 11). 6.55 Sections 72 and 177B of the National Credit Code require a credit provider or consumer lease provider to advise a consumer that they have either: • agreed to change the contract in response to a hardship notice; or • not agreed to change the contract in response to a hardship notice and the reasons why they have not agreed. 67

Rationalisation of ending ASIC instruments 6.56 If a change to a contract is agreed to, sections 73 and 177C of the National Credit Code provide that the debtor or lessee must be provided with a written notice setting out the details of the change in the terms of the credit contract. A failure to provide this notice is a strict liability offence. 6.57 ASIC Class Order [CO 14/41] exempts a credit provider or consumer lease provider from the requirement to provide a written notice where they, as a result of a hardship notice, have agreed to defer or reduce the obligations of a debtor. ASIC Class Order [CO 14/41] also exempts credit providers and consumer lease providers from the requirement to give a consumer written notice advising that they have agreed to change the contract for a period of no more than 90 days. To align the exemption with the current practice of credit providers and consumer lease providers, Schedule 3 to the Bill incorporates these exemptions into the National Credit Code only in relation to contract variations of no more than 90 days. Comparison of key features of new law and current law Table 6.5 Comparison of new law and current law New law Current law No change. Sections 72, 73, 177B and 177C of the National Credit Code set out the notice requirements in relation to the process of making changes to credit obligations on the grounds of hardship. Sections 72, 73, 177B and 177C of the Credit providers or consumer lease providers National Credit Code include exemptions to are not required to comply with the notice the notice requirements for arrangements of requirements in sections 72, 73, 177B and under 90 days. 177C of the National Credit Code for arrangements of under 90 days if they comply with the conditions in ASIC Class Order [CO 14/41]. No exemption is provided from the notice ASIC Class Order [CO 14/41] provides an requirements in sections 72 and 177B of the exemption for credit providers or consumer National Credit Code for arrangements of lease providers to not provide a written over 90 days. notice that a change to a credit contract or consumer lease had been agreed to regardless of the duration of the change. 68

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Detailed explanation of new law 6.58 The amendments exempt credit providers and consumer lease providers from providing either: • a notice agreeing to change a contract in response to a hardship notice; or • a notice setting out the particulars of the change in circumstances 6.59 where the parties have agreed to a change to the credit contract or consumer lease that defers or reduces the obligations of the debtor or lessee for a period not exceeding 90 days. These exemptions from the notice requirements are currently in ASIC Class Order [14/41]. [Schedule 3, items 35-38, sections 72, 73, 177B and 177C of the National Credit Code] 6.60 As a failure to provide a notice setting out the details of a change of contract terms is an offence, the amendments reverse the evidential burden of proof in relation to whether a relevant contract variation was for not more than 90 days. As a result, the credit provider or consumer lease provider will be required to raise evidence that suggests that the contract variation was for a period of less than 90 days. Subsection 13.3(3) of the Criminal Code provides that if a defendant wishes to rely on any exemption provided by the law creating an offence then they will bear an evidential burden in relation to that matter. [Schedule 3, items 36 and 38, sections 73 and 177C of the National Credit Code] 6.61 The Criminal Law Guide provides that a matter should only be included in an offence-specific defence where it is peculiarly within the knowledge of the defendant, and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter. 6.62 The reversals of the evidential burden of proof are appropriate in this instance as the matter will be peculiarly within the knowledge of the credit provider or consumer lease provider and it would also be significantly more difficult and costly for the prosecution to disprove the matter. In most circumstances, the credit provider or consumer lease provider would have records of any variation of a credit contract or consumer lease, including whether the period of any variation was for under 90 days. As no notice is required to be sent to the debtor or lessor in circumstances where the period of an agreement is less than 90 days, it would also be significantly more difficult for the prosecution to disprove the matter. 6.63 The National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 is also amended to provide the same exemption from the notice requirements as outlined above in relation to credit contracts or consumer leases entered into prior to 1 March 2013. As this amendment 69

Rationalisation of ending ASIC instruments replicates the position from ASIC Class Order [CO 14/41], this does not impose new requirements in relation to credit contracts or consumer leases entered into prior to 1 March 2013. [Schedule 3, item 39, item 5A of Schedule 5 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009] Consequential amendments 6.64 ASIC Class Order [CO 14/41] is repealed as it is no longer required. As the Class Order will remain in force until the commencement of the amendments, there will be continuity of law for credit providers or consumer lease providers relying on the exemption. [Schedule 3, item 40] Commencement, application, and transitional provisions 6.65 The amendments commence on the day after Royal Assent. [Subsection 2(1), table item 4] 70

Miscellaneous and technical amendments Table of Contents: Outline of chapter ................................................................................ 71 Context of amendments ....................................................................... 71 Summary of new law............................................................................ 72 Detailed explanation of new law .......................................................... 72 Part 1 - Amendments commencing the day after Royal Assent ... 72 Part 2 - Amendments commencing first day of next quarter ......... 85 Part 3 - Amendments with other commencementsError! Bookmark not defined. Outline of chapter 7.1 Schedule 4 to the Bill makes a number of miscellaneous and technical amendments to Treasury portfolio legislation. 7.2 The amendments correct drafting errors, repeal inoperative provisions, address unintended outcomes and make other technical changes. Context of amendments 7.3 Miscellaneous and technical amendments are periodically made to Treasury portfolio legislation to correct drafting errors, repeal inoperative provisions, address unintended outcomes and make other technical changes. The amendments are part of the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation. 7.4 The miscellaneous and technical amendments process was first supported by a recommendation of the 2008 Tax Design Review Panel, which was appointed to examine how to reduce delays in the enactment of tax legislation and improve the quality of tax legislation. The miscellaneous and technical 71

Miscellaneous and technical amendments amendments process has since been expanded to all Treasury portfolio legislation. Summary of new law 7.5 The miscellaneous and technical amendments maintain and improve the quality of Treasury legislation by: • correcting typographical and numbering errors; • fixing incorrect legislative references; • reducing unnecessary red tape; • addressing unintended outcomes; • adopting modern drafting practices; • enhancing readability and administrative efficiency; • repealing redundant and inoperative provisions; and • making other technical changes. Detailed explanation of new law Part 1 - Amendments commencing the day after Royal Assent Division 1 - Foreign ownership register notices 7.6 Various provisions in Part 7A of the Foreign Acquisitions and Takeovers Act 1975 inappropriately refer to 'notice' instead of 'register notice'. 'Register notice' is defined in section 4 of the Foreign Acquisitions and Takeovers Act 1975 as a notice given under a provision of Division 3 of Part 7A of that Act. 7.7 Relevant provisions in Part 7A of the Foreign Acquisitions and Takeovers Act 1975 are amended to ensure they correctly refer to 'register notice'. [Schedule 4, items 1 to 9, sections 130ZI, 130ZO, 130ZP, 130ZR, 130ZS and 130ZT of the Foreign Acquisitions and Takeovers Act 1975] 7.8 Section 130ZU of the Foreign Acquisitions and Takeovers Act 1975 allows for regulations to be made prescribing circumstances in which register notices must be given to the Registrar. Paragraph 130ZU(1)(c) of the Foreign Acquisitions and Takeovers Act 1975 inappropriately refers to circumstances 72

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 relating to 'a foreign person'. The policy intention is that there should be sufficient flexibility for regulations to be made in relation to all persons and not only foreign persons. 7.9 The word 'foreign' from the paragraph is omitted from paragraph 130ZU(1)(c) of the Foreign Acquisitions and Takeovers Act 1975. The amendment ensures that there is no ambiguity that regulations made under section 130ZU can apply to all relevant persons. [Schedule 4, item 10, section 130ZU of the Foreign Acquisitions and Takeovers Act 1975] Division 2 - Infringement notices 7.10 Under the Corporations Act, a person may make a request to ASIC to remove an infringement notice. ASIC must consider the request, make a decision, and inform the applicant of the decision within 14 days. 7.11 Paragraph 1317DAT(5)(a) of the Corporations Act inadvertently replicates paragraph 1317DAS(4)(a) of that Act and incorrectly deals with ASIC refusing to allow the amount payable under an infringement notice to be paid in instalments. It is intended that subsection 1317DAT(5) of the Corporations Act provides that if ASIC does not make a decision within 14 days, then it is taken to have refused the request to withdraw an infringement notice. 7.12 Paragraph 1317DAT(5)(a) of the Corporations Act is amended to provide that where no decision is made by ASIC regarding a request to withdraw an infringement notice, then it is taken to have refused the request. [Schedule 4, item 11, section 1317DAT of the Corporations Act] 7.13 The amendment applies in relation to representations made to ASIC on or after the commencement of the amendment, whether the related infringement notice was given before, on or after that commencement. [Schedule 4, item 12, section 1693 of the Corporations Act] Division 3 - Motor vehicle service and repair information scheme adviser 7.14 Part IVE of the CCA establishes the motor vehicles service and repair information sharing scheme. The scheme mandates that all service and repair information provided to car dealership networks and manufacturer preferred repairers be made available for independent repairer and registered training organisations. 7.15 The scheme also establishes the role of a scheme adviser, whose functions include facilitating dispute resolution, the sharing of information about the scheme and reporting to the ACCC and the Minister about the operation of the 73

Miscellaneous and technical amendments scheme. Section 57FA of the CCA provides for the establishment and appointment of the scheme adviser. 7.16 The amendments clarify that the appointment of a scheme adviser is not limited to a natural person and may extend to a body corporate. The amendments also clarify that the appointed scheme adviser is not entitled to receive payment of any kind in relation to their appointment. [Schedule 4, items 13 and 14, section 57FA of the CCA] 7.17 The amendments apply in relation to appointments that take effect on or after 1 July 2022. Practically, this means that the amendments apply retrospectively. However, the clarificatory nature of the amendments means that they do not have an adverse effect on the rights or liabilities of any person. The amendments merely clarify that the appointment of a body corporate as a scheme adviser is a valid appointment. [Schedule 4, item 15] Division 4 - Fringe Benefits technical amendment 7.18 Section 37 of the Fringe Benefits Tax Assessment Act 1986 sets out the 'otherwise deductible' rule for employers who provide board fringe benefits, where the recipient of the benefit is an employee of the employer. 7.19 In paragraphs 37(b) and (c) of the Fringe Benefits Tax Assessment Act 1986, the word 'under' is inadvertently omitted. In both places, the text should read ' ... would ... have been allowable to the recipient under section 8-1 of the Income Tax Assessment Act 1997 ... '. 7.20 The amendment corrects these errors by inserting the word 'under' before 'section 8-1 of the Income Tax Assessment Act 1997' in both locations. [Schedule 4, item 16, section 37 of the Fringe Benefits Tax Assessment Act 1986] Division 5 - Disclosure of protected information 7.21 The Commonwealth Registers Act 2020 was introduced to create a new Commonwealth business registry regime. Amendments were also made to the Business Names Registration Act 2011, Corporations Act and NCCPA to facilitate the regime. 7.22 The regime provides that it is an offence for a person to disclose protected information obtained by the person in the course of their official employment. However, the Commonwealth Registers Act 2020 does not specify that the offence is only intended to apply to the disclosure of protected information. 7.23 The amendment clarifies that the offence only applies to the disclosure of protected information, ensuring consistency with similar provisions in the 74

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Commonwealth business registry regime legislative framework. [Schedule 4, item 17, section 17 of the Commonwealth Registers Act 2020] Division 6 - Giving Tax File Numbers under corporations legislation 7.24 The director identification number initiative is part of the Modernising Business Registers program under the Digital Business Plan. The initiative requires directors of companies to apply for and hold an identification number provided by the Registrar. 7.25 Currently, when a person applies for a director identification number, the Registrar may request, but not compel, that person to provide their tax file number. If the person consents, the tax file number must be provided in writing. 7.26 The amendment removes the requirement to provide tax file numbers in writing to the Registrar. This allows this information to be collected through non-written means such as electronic communication. This change increases regulator flexibility and helps modernise the relevant legislation. [Schedule 4, items 18 and 19, section 308-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006; Schedule 1, items 20 and 21, section 1272 of the Corporations Act] 7.27 An application for a director identification number must meet any requirements of a data standard made by the Registrar under section 1270G of the Corporations Act (or section 13 of the Commonwealth Registers Act 2020 for the purposes of the Corporations (Aboriginal and Torres Strait Islander) Act 2006). Division 7 - Consumers 7.28 Amendments to section 4B of the CCA made by the Treasury Laws Amendment (2020 Measures No .6) Act 2020 inadvertently removed a presumption provided in that section. 7.29 The presumption provides that for any proceeding under, or in respect of a matter arising under the CCA, a person is presumed to be a consumer in relation to particular goods or services, unless the contrary is established. 7.30 The amendments reinstate the presumption and align the definition of consumer under section 3 of the CCA with that in the Australian Consumer Law in Schedule 2 to that Act. [Schedule 4, items 22 and 23, sections 4B and 56AI of the CCA] 75

Miscellaneous and technical amendments Division 8 - Giving notices under the Superannuation Industry (Supervision) Act 1993 7.31 The SIS Act originally required regulators to publish a notice in the Gazette when they make decisions in relation to the disqualification, confirmation, revocation or variation of a person acting in certain capacities. 7.32 The SIS Act also allowed the regulator, by notice published in the Gazette, to extend the lodgement period for a specified class of filled-up survey forms. 7.33 The amendments update the SIS Act to ensure that notices of relevant decisions are published by notifiable instrument instead by notice in the Gazette. This change is consistent with modern drafting practice to use notifiable instruments to issue notices of decisions. [Schedule 4, items 24 to 41, sections 126A, 126H, 130D, 130F, 131 and 347A of the SIS Act] Division 9 - Declarations for fringe benefits tax assessment 7.34 Persons who are recipients of certain fringe benefits under the Fringe Benefits Tax Assessment Act 1986 are required to give their employer a declaration. The declaration must purport to set out 'particulars of the car' (among other things). The declaration supports a reduction of the taxable value of: • fringe benefits in respect of overseas employment holiday transport (see section 61A of the Fringe Benefits Tax Assessment Act 1986); • certain expense payment fringe benefits in respect of relocation transport (see section 61B of the Fringe Benefits Tax Assessment Act 1986); • certain expense payment fringe benefits in respect of employment interviews or selection tests (see section 61E of the Fringe Benefits Tax Assessment Act 1986); or • certain expense payment fringe benefits associated with work-related medical examinations, medical screenings, preventative health care or counselling or migrant language training (see section 61F of the Fringe Benefits Tax Assessment Act 1986). 7.35 The amendments remove the reference to 'particulars of the car' as a requirement to be set out in a declaration. It is no longer necessary for the Commissioner of Taxation to obtain this information to administer the relevant provisions. [Schedule 4, item 42 to 47, sections 61A, 61B, 61E and 61F of the Fringe Benefits Tax Assessment Act 1986] 76

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Division 10 - Cross reference update 7.36 Table item 24 of the table in subsection 6(1) of the SIS Act references regulators who are responsible for the administration of section 64A of that Act. 7.37 The Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Act 2018 repealed section 64A of that Act, meaning table item 24 is now redundant. Accordingly, table item 24 is repealed. [Schedule 4, item 48, table item 24 of the table in subsection 6(1) of the SIS Act] Division 11 - Exempt core Part 3 actions 7.38 Section 4 of the Foreign Acquisitions and Takeovers Act 1975, defines 'core Part 3 action' as an action taken by a foreign person which is: • a significant action; • a notifiable national security action; • an action where the Treasurer has given the person a notice that the action may pose a national security concern; or • a reviewable national security action that is notified to the Treasurer. 7.39 These actions are further defined under Divisions 2, 4A and 4B of Part 2 of that Act. 7.40 Foreign persons may apply to the Treasurer for various types of exemption certificates under Division 5 of Part 2 of the Foreign Acquisitions and Takeovers Act 1975. An exemption certificate specifies an interest of a kind that, if acquired by the foreign person, does not give rise to a significant action, notifiable action, notifiable national security action, or reviewable national security action. 7.41 Paragraphs 3.84 to 3.97 of the explanatory memorandum to the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020 makes clear that the policy intent is for foreign persons to be required to notify the Treasurer of certain events and be liable for penalty provisions, even if they have been issued with an exemption certificate. 7.42 The amendments clarify that core Part 3 actions taken under an exemption certificate are still captured by the relevant penalty provisions. The amendments insert a new definition of an exempt core Part 3 action into section 4 of the Foreign Acquisitions and Takeovers Act 1975 and amend the civil penalties at sections 98B, 98D, 98E and 101AA of that Act to expressly include exempt core Part 3 actions where applicable. 77

Miscellaneous and technical amendments [Schedule 4, items 49 to 58, sections 4, 98B, 98D, 98E and 101AA of the Foreign Acquisitions and Takeovers Act 1975] Division 12 - Application provisions relating to financial advisers 7.43 Transitional provisions inserted by the Financial Sector Reform (Hayne Royal Commission Response--Better Advice) Act 2021 were intended to more clearly set out, but not modify, the timeframes in which an existing provider must meet the education and training standards, or the courses approved by the Minister. 7.44 Existing providers who have passed the financial adviser exam by the exam cut-off date (1 January 2022, or 1 October 2022 for existing providers eligible for the exam extension) have until 1 January 2026 to meet the education and training standards or the courses approved by the Minister while remaining authorised to provide personal advice to retail clients in relation to relevant financial products. 7.45 Additionally, consistent with previous transitional provisions, it was intended that existing providers who ceased to be relevant providers before the relevant exam cut-off date would also have until 1 January 2026 to meet the education and training standards or the courses approved by the Minister. To be reauthorised before this date, a person would need to pass the financial adviser exam. 7.46 However, the transitional provisions did not achieve this outcome. 7.47 Section 1684D of the Corporations Act is amended to make clear that existing providers who do not pass the financial adviser exam by the relevant exam cut- off date and who ceased to be a relevant provider before the relevant exam cut- off date: • are eligible to be re-authorised to provide personal advice once they pass the exam; and • have until 1 January 2026 to meet the education requirements or courses approved by the Minister. [Schedule 4, items 59 to 61, section 1684D of the Corporations Act] 7.48 From 1 January 2026, these advisers (existing providers who ceased to be relevant providers before the relevant exam cut-off date) will need to pass the exam and meet the education requirements or courses approved by the Minister before they can be authorised to provide personal advice to retail clients in relation to relevant financial products. If the existing provider was not a relevant provider on 1 January 2026, they will not need to meet the work and training related standards to be able to be authorised. 78

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 7.49 From 1 January 2026, all existing providers will need to have passed the exam and met the education requirements to be authorised to provide personal advice to retail clients in relation to relevant financial products. Division 13 - Renumbering 7.50 The Australian Securities and Investment Commission Act 2001 contains numbering errors that incorrectly duplicate references to Part 29 and section 325 of that Act. The duplicate Part and section were inserted into that Act by Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response - Protecting Consumers (2019 Measures) Act 2020. 7.51 Amendments correct the referencing errors by renumbering Part 29 and section 325 and updating a reference to Part 29 in item 10 of Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response--Protecting Consumers (2019 Measures)) Act 2020. [Schedule 4, items 62 to 64, Part 29 and section 325 of the ASIC Act] Division 14 - Virtual registrable superannuation entity annual members' meetings 7.52 The SIS Act is amended to clarify that the licensee of a registrable superannuation entity can use technology to hold annual members' meetings. 7.53 The amendments allow the licensee to hold an annual members' meeting: • at one or more physical venues (a physical meeting); • at one or more physical venues using virtual meeting technology (a hybrid meeting); or • using virtual meeting technology only (a wholly virtual meeting). [Schedule 4, item 66, section 29P of the SIS Act] 7.54 The amendments provide that virtual meeting technology has the same meaning as in the Corporations Act, which is defined as any technology that allows a person to participate in a meeting without being physically present at the meeting. [Schedule 4, item 65, section 10 of the SIS Act] 7.55 The amendments provide that all persons who attend the annual members' meeting (whether at a physical venue or by using virtual meeting technology) are taken to be present at the meeting. [Schedule 4, item 67, section 29P of the SIS Act] 7.56 The amendments also set out: • the place and deemed time for different types of annual members' meetings; and 79

Miscellaneous and technical amendments • changes to notice requirements for different types of annual members' meetings. [Schedule 4, item 67, section 29P of the SIS Act] 7.57 These rules are summarised in Table 7.1 and Table 7.2 below. Table 7.1 Place and deemed time of different types of meetings Type of meeting Place of meeting Time of meeting Physical meeting or hybrid Physical venue for the Time at the physical venue or meeting meeting or, if there is more main physical venue than one physical venue, the main venue as set out in the meeting notice Wholly virtual meeting Registered address of, or Time at the registered address for service of notices address of, or address for on, the registrable service of notices on, the superannuation entity entity Table 7.2 Notice requirements for different types of meetings Type of meeting Notice requirements Physical meeting (one location at which to The date, time and place of the meeting physically attend) Physical meeting (more than one location at The date and time for the meeting at each which to physically attend) location, and the main location for the meeting Hybrid meeting (one location at which to The date, time and place of the meeting physically attend) Sufficient information to allow persons to participate in the meeting by means of the technology Hybrid meeting (more than one location at The date and time for the meeting at each which to physically attend) location, and the main location for the meeting Sufficient information to allow persons to participate in the meeting by means of the technology Wholly virtual meeting Sufficient information to allow persons to participate in the meeting by means of the technology 7.58 The amendments provide that a wholly virtual annual members' meeting is taken to be held at the registered address of, or an address for services of notices on, the registrable superannuation entity. This address is recorded in a register kept by APRA under regulations made for the purposes of subsection 80

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 353(2) of the SIS Act. Under Part 11A of the Superannuation Industry (Supervision) Regulations 1994, a registrable superannuation entity must provide APRA with either the registered address of the entity or an address for service of notices on the entity (i.e., a single address). The address should not be a P.O. Box. [Schedule 4, item 67, section 29P of the SIS Act] 7.59 The amendments to the SIS Act apply in relation to an annual members' meeting of a registrable superannuation entity that ends on or after the day that Schedule 1 commences. [Schedule 4, item 68] Division 15 - Repeal of redundant appropriation 7.60 Schedule 3 to the Treasury Laws Amendment (North Queensland Flood Relief) Act 2019 provided an appropriation from the Consolidated Revenue Fund to provide urgent assistance to north Queensland after flooding in 2019. The power to provide this appropriation comes from Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997. 7.61 The appropriation for the 2019 floods was never used. This appropriation cannot now be drawn upon, as Schedule 1AB does not support any new funding (it can only provide legislative authority for "urgent" and "immediate" assistance). Therefore, the appropriation is now redundant. 7.62 The amendment updates the Treasury Laws Amendment (North Queensland Flood Relief) Act 2019 by repealing the redundant special appropriation contained in Schedule 3 to that Act. [Schedule 4, item 69, Schedule 3 to the Treasury Laws Amendment (North Queensland Flood Recovery) Act 2019] Division 16 - CCIV technical amendments 7.63 The CCIV regime commenced 1 July 2022. The CCIV regime (see Chapter 8B of the Corporations Act) provides a new corporate structure alternative for funds management in Australia, in addition to the existing trust-based MIS regime (see Chapter 5C of the Corporations Act). 7.64 A CCIV is a new type of company limited by shares. It is an umbrella vehicle that is comprised of one or more sub-funds. Different sub-funds within a CCIV may offer investors a different investment strategy. The CCIV is a legal entity; its sub-funds are not separate legal entities. 7.65 The CCIV regime allows a retail CCIV with only one sub-fund to be listed on a prescribed market and allows individual CCIVs to choose whether to list the CCIV itself, or to list the sub-fund on that market. If a retail CCIV has multiple sub-funds, neither the CCIV itself nor any of its sub-funds may be listed on a prescribed market (see section 1222N of the Corporations Act). 81

Miscellaneous and technical amendments 7.66 The Corporations Act imposes enhanced disclosure obligations on listed entities, to support market integrity and protect investors - and therefore boost consumer confidence. The existing listing-related obligations also apply to the new CCIV regime, consistent with those obligations currently applying to listed companies and listed management investment schemes. This includes the continuous disclosure requirements under Chapter 6CA of the Corporations Act. 7.67 Amendments ensure that the current listing-related obligations apply appropriately to the new CCIV regime. This ensures that the same disclosure obligations apply, irrespective of whether the CCIV itself or the sub-fund is listed. The CCIV (as the legal entity) remains responsible for complying with all legislative requirements, including the continuous disclosure requirements, irrespective of whether the CCIV itself or the sub-fund is listed. [Schedule 4, items 70 to 72, sections 9, 111AE and 793C of the Corporations Act] 7.68 The amendments commence the day after Royal Assent. They apply to all listed sub-funds, irrespective of whether the sub-fund was listed before, on or after that commencement. [Schedule 4, item 73, section 1694 of the Corporations Act] Division 17 - Recognised tax advisers 7.69 The Financial Sector Reform (Hayne Royal Commission Response - Better Advice) Act 2021 repealed the definition of 'a registered tax agent, BAS agent or tax (financial) adviser' in subsection 90-1(1) of the Tax Agent Services Act 2009, effective from 1 January 2022. This term is also defined in section 995-1 of the Income Tax Assessment Act 1997 (as having the meaning given by subsection 90-1(1) of the Tax Agent Services Act 2009). 7.70 'A registered tax agent, BAS agent or tax (financial) adviser' currently forms part of the broader term 'recognised tax adviser' in section 995-1 of the Income Tax Assessment Act 1997. 'Recognised tax adviser' is also referenced in both paragraph 25-5(2)(e) and subsection 110-35(2) of the Income Tax Assessment Act 1997. 7.71 Paragraph 25-5(2)(e) of the Income Tax Assessment Act 1997 denies a deduction for fees or commission paid for advice about the operation of a Commonwealth law relating to taxation, unless that advice is provided by a 'recognised tax adviser'. Subsection 110-35(2) of the Income Tax Assessment Act 1997 excludes from CGT cost base calculations remuneration paid for particular services, other than professional advice about the operation of a taxation law that is provided by a 'recognised tax adviser'. 7.72 As a result of the definition in subsection 90-1(1) of the Tax Agent Services Act 2009 being repealed, amounts incurred by taxpayers from 1 January 2022 for the purposes of obtaining certain taxation advice may not be deductible under 82

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 paragraph 25-5(2)(e) or included in cost base calculations under section 110- 35(2) of the Income Tax Assessment Act 1997. 7.73 The Schedule amends relevant definitions in section 995-1 of the Income Tax Assessment Act 1997 to address the referencing issues and ensure the deductions and cost base calculations operate as intended. [Schedule 4, items 74 and 75, section 995-1 of the Income Tax Assessment Act 1997] 7.74 To ensure continuity in the operation of paragraph 25-5(2)(e) and subsection 110-35(2) of the Income Tax Assessment Act 1997, the amendments apply retrospectively in relation to advice provided on or after 1 January 2022. This retrospective application is justified as it is wholly beneficial to taxpayers. [Schedule 4, item 76] Division 18 - Reference Checking and Information Sharing Protocol 7.75 Division 18 amends the NCCPA and the Corporations Act to ensure the Reference Checking and Information Sharing Protocol operates as intended. 7.76 Australian financial services licensees and Australian credit licensees are required to comply with a Reference Checking and Information Sharing Protocol made by ASIC in the form of a legislative instrument. Australian financial services licensees and Australian credit licensees are required to conduct reference checking and information sharing in relation to individuals to whom the protocol applies, that is a licensee, or former or current authorised representative - either by requesting information about the individual or providing information about the individual, as the case may be. 7.77 Contrary to the policy intention, mortgage intermediaries such as aggregators, who are also Australian credit licensees, may not have been required to comply with the Reference Checking and Information Sharing Protocol in certain circumstances under the previous legislative framework. In practice, aggregators often work closely with other Australian credit licensees under service agreements. Accordingly, aggregators often hold information about activities of other Australian credit licensees and their authorised credit representatives that would be relevant for information sharing under the Protocol. 7.78 The amendments ensure aggregators are appropriately subject to the Reference Checking and Information Sharing Protocol, in the same way Australian credit licensees and Australian financial service licensees will continue to be subject to the Protocol. The amendments also ensure there is consistent practice throughout the mortgage brokering industry, and that employment information will be available about financial advisers and mortgage brokers where appropriate and in line with the policy intention. As part of the ongoing stewardship of Treasury portfolio legislation, the amendments ensure the 83

Miscellaneous and technical amendments relevant legislation is well structured and achieves its policy intention. [Schedule 4, items 77 to 93, sections 910A, 912A and 1695 of the Corporations Act, sections 5 and 47 of the NCCPA, and the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009] 7.79 The Reference Checking and Information Sharing Protocol currently made under the NCCPA and the Corporations Act continues to be in force. Division 19 - Disclosure documents for offers in a MIS 7.80 Following the Financial Services Reform Act 2001, disclosures of interests in certain kinds of MIS are now made under PDSs in accordance with Chapter 7 (rather than a disclosure document under Chapter 6) of the Corporations Act. Where appropriate, Chapter 7 also provides exemptions from PDSs requirements in relation to MIS. 7.81 The amendments remove several redundant references to MIS in Chapter 6D to the Corporations Act. [Schedule 4, items 94 to 101, sections 708, 710, 711 and 720 of the Corporations Act] Division 20 - Elections under section 110E of the Corporations Act 7.82 The amendments update paragraphs 110H(1)(a) and 110J(1)(b) of the Corporations Act to omit the references to 'Part' and replace with references to 'Division'. [Schedule 4, item 102, sections 110H and 110J of the Corporations Act] 7.83 Part 1.2AA of the Corporations Act provides for the technology neutral signing and sending of certain documents. Section 110H and 110J apply if the sender is required or permitted to send a document to which Part 1.2AA applies. This is a typographical error, as Division 1 and Division 2 of Part 1.2AA apply to different sets of documents. The amendments ensure that sections 110H and 110J only apply to documents to which Division 2 applies as intended. 7.84 The amendments commence the day after Royal Assent. Division 21 - Continuing credit contracts exemption 7.85 Division 21 amends regulation 51 of the National Consumer Credit Protection Regulations 2010 to ensure that the process for determining whether a continuing credit contract is exempt from the National Credit Code operates as intended. 84

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 7.86 Subsection 6(5) of the National Credit Code provides that the National Credit Code does not apply to the provision of credit under a continuing credit contract if the only charge that is or may be made for providing the credit is a periodic or other fixed charge that does not vary according to the amount of credit provided. However, the National Credit Code will apply if the charge exceeds the maximum charge prescribed in regulation 51 of the National Consumer Credit Protection Regulations 2010. 7.87 The policy intention is that the maximum charge be calculated only by reference to continuing credit contracts which already fall within the exception in subsection 6(5) of the National Credit Code. 7.88 The amendment repeals and replaces regulation 51 to ensure the maximum charge is only calculated by reference to 'eligible contracts', being continuing credit contracts under which the consumer is a debtor and that are already exempt from the application of the Code under subsection 6(5). This ensures the operation of subsection 6(5) is in line with the policy intention. [Schedule 4, item 103, regulation 51 of the National Consumer Credit Protection Regulations 2010, subsection 6(5) of the National Credit Code] 7.89 The amendment applies retrospectively in relation to contracts entered into on or after 13 June 2014, being the date when regulation 51 came into effect. The retrospective application is appropriate because it clarifies the operation of the law and ensures the law aligns with the policy intention, and past industry and administrative practice. [Schedule 4, item 104, Part 7-11 of the National Consumer Credit Protection Regulations 2010] Part 2 - Amendments commencing first day of next quarter Division 1 - Asterisking 7.90 In common with other Acts, the A New Tax System (Goods and Services Tax) Act 1999 uses asterisking to identify defined terms. Division 3 in Part 1-2 of that Act explains that most defined terms in that Act are identified by an asterisk appearing at the start of the term (e.g., '*enterprise'). 7.91 The amendments insert missing asterisks before three instances of the word 'registration' and one instance of the word 'register'. This change is consistent with the following rules in the Office of Parliamentary Counsel's drafting directions, in this case applied to the defined term 'registered': • the first occurrence of each defined term in each subsection should be asterisked; and 85

Miscellaneous and technical amendments • different grammatical forms of a defined term have a corresponding meaning to the defined term (see section 18A of the Acts Interpretation Act 1901) and should be asterisked accordingly. [Schedule 4, items 105 to 108, sections 25-5, 25-55, 25-57 and 63-35 of the A New Tax System (Goods and Services Tax) Act 1999] 7.92 The amendments also remove asterisks from the definitions of 'decreasing adjustment' and 'increasing adjustment' in the guide material in the A New Tax System (Goods and Services Tax) Act 1999. This change is consistent with the rule in the Office of Parliamentary Counsel's drafting directions that asterisks are not used in non-operative or guide material. The third column in the table within the definitions of decreasing and increasing adjustment is a guide in helping the reader know the subject matter of the listed provision. The listing of the provision in the second column of the table is the operative part within each definition. [Schedule 4, items 109 and 11008, section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999] Division 2 - Equal representation rules 7.93 Section 117 of the SIS Act sets out the circumstances in which a trustee of a standard employer-sponsored fund may pay an amount to a standard employer- sponsor. Prior to the amendments, this generally involved the trustee passing a resolution and the group of trustees or board of directors (as the case may be) had to consist of an equal split between employer representatives and member representatives. 7.94 The former prescriptive drafting in section 117 SIS Act inadvertently did not account for all governance structures permitted under Part 9 of that Act (Part 9 sets out the equal representation rules). 7.95 Section 117 of SIS Act is amended to ensure it captures all governance structures permitted under Part 9 of that Act. [Schedule 4, items 111-113, section 117 of the SIS Act] Division 3 - Registration requirements for GST 7.96 Under the A New Tax System (Goods and Services Tax) Act 1999, the supplier of goods or services is ordinarily liable to pay the relevant GST on that supply. There are some exceptions to this general rule. 7.97 For certain supplies made through an electronic distribution platform, the operator of that platform (rather than the supplier) is liable to pay GST on that supply (see section 84-55 of the A New Tax System (Goods and Services Tax) Act 1999). This rule applies to electronic supplies referred to as 'inbound intangible consumer supply' (see 84-65 of the A New Tax System (Goods and 86

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Services Tax) Act 1999) and other supplies referred to as 'offshore supply of low value goods' (see sections 84-77 and 84-81 of the GST Act). 7.98 Where such supplies are made through multiple platforms, the operators of those platforms can enter a written agreement to specify which operator is to be treated as the supplier and hence liable to pay the GST on that supply (see paragraph 84-55(2)(a) of the A New Tax System (Goods and Services Tax) Act 1999). 7.99 These items amend the A New Tax System (Goods and Services Tax) Act 1999 to ensure that the platform operator chosen to be treated as the supplier under these circumstances must be registered for GST purposes. That is, platform operators which are not registered, but are required to be registered, cannot enter an agreement to be treated as the supplier under 84-55(2)(a) of the A New Tax System (Goods and Services Tax) Act 1999. This amendment supports the integrity of the GST system, ensuring that platform operators cannot avoid paying GST by shifting the GST liability to an entity that is not registered for GST purposes. [Schedule 4, items 114 and 115, section 84-55 of the A New Tax System (Goods and Services Tax) Act 1999] 7.100 The amendments are consistent with an existing (separate) rule, which allows a platform operator and a supplier to enter a written agreement specifying that the platform operator is to be treated as the supplier and hence liable to pay the GST on other certain supplies made through the platform. Under that rule, such arrangements are only permitted where the platform operator is registered for GST purposes (see section 84-60 of the A New Tax System (Goods and Services Tax) Act 1999). 7.101 The amendments commence on the first 1 January, 1 April, 1 July or 1 October to occur after Royal Assent. They apply to supplies made through an electronic distribution platform on or after the commencement of these amendments. [Schedule 4, item 116] 87

Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Table of Contents: Schedule 1 - Modernising Business Communications ........................ 90 Overview ....................................................................................... 90 Human rights implications ............................................................. 90 Conclusion .................................................................................... 92 Schedule 2 - Law Improvement Program ............................................ 92 Overview ....................................................................................... 92 Human rights implications ............................................................. 92 Conclusion .................................................................................... 92 Schedule 3 - Rationalisation of Ending ASIC Instruments .................. 93 Overview ....................................................................................... 93 Human rights implications ............................................................. 94 Conclusion .................................................................................... 94 Schedule 4 - Miscellaneous and Technical Amendments ................... 94 Overview ....................................................................................... 94 Human rights implications ............................................................. 94 Conclusion .................................................................................. 100 89

Statement of Compatibility with Human Rights Schedule 1 - Modernising Business Communications Overview 8.1 Schedule 1 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. 8.2 Schedule 1 to the Bill amends the Corporations Act and other Commonwealth Acts to modernise communication methods available to consumers, businesses and regulators when interacting with each other by: • extending the global communications regime, allowing members of certain entities to elect to receive documents in either hard copy or electronic form, and providing relief to entities that are unable to contact members under the Corporations Act (Part 1); • ensuring that regulatory bodies in the Treasury portfolio can hold hearings and examinations using technology (Part 2); • updating payment provisions in Treasury laws to allow electronic payments to be used (Part 3); and • replacing requirements in Treasury laws to publish notices in newspapers with a requirement that notices be published in an accessible and reasonably prominent manner (Part 4). Human rights implications 8.3 The amendments in Parts 1, 3 and 4 of Schedule 1 to the Bill relate to the activities of a company, responsible entity of a registered scheme, CCIV, disclosing entity or notified foreign passport fund under the Corporations Act. These amendments do not engage any of the applicable human rights or freedoms. 8.4 The amendments in Part 2 of Schedule 1 to the Bill may engage the following human rights contained in the ICCPR: • the right to a fair hearing under article 14(1); • the prohibition on interference with privacy under article 17. 90

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Right to a fair hearing 8.5 Article 14(1) of the ICCPR protects the right to a fair and public criminal trial, and public hearing in civil proceedings. It provides that all persons shall be equal before the courts and tribunals, and, in the determination of criminal changes, or any suit at law, the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law. 8.6 Part 2 of Schedule 1 to the Bill would promote and protect the right to a fair hearing by ensuring that statutory hearings and examinations can be conducted in an efficient and expeditious manner best suited to the circumstances. The amendments do this by removing unnecessary barriers to the use of technology at hearings and examinations. 8.7 Part 2 provides regulators with the discretion to select the most appropriate method for holding the hearing or examination (physical, hybrid or virtual) on a case-by-case basis. For instance, a virtual or hybrid hearing or examination may be more appropriate if a person is unable to physically attend a hearing or examination. The benefits of the amendments, therefore, include reduced delay, increased participation and greater access to justice. 8.8 The amendments ensure that a person's right to procedural fairness, to the extent that it is already provided under statute or common law, is not affected whether the person physically attends the hearing or examination or uses virtual enquiry technology. 8.9 If the regulator decides to hold a virtual or hybrid hearing or examination, the amendments place an additional obligation on the regulator to ensure that the use of the virtual enquiry technology is reasonable. 8.10 For hearings and examinations that are held in public, the amendments promote and protect the right to a public hearing by requiring the regulator to provide members of the public with a reasonable opportunity to observe the hearing. The regulator must also ensure that information sufficient to allow the public to observe the hearing using the technology is made publicly available in a reasonable way. Right to privacy 8.11 Article 17 of the ICCPR prohibits unlawful or arbitrary interference with a person's privacy, family, home and correspondence, and prohibits unlawful attacks on a person's reputation. The United Nations Human Rights Committee has interpreted the right to privacy as comprising freedom from unwarranted and unreasonable intrusions into activities that society recognises as falling within the sphere of individual autonomy. 8.12 Part 2 of Schedule 1 to the Bill amends Acts that provide for hearings and examinations to be held in private. The amendments do not affect those 91

Statement of Compatibility with Human Rights provisions and the existing rights to privacy of the participants at those hearings and examinations continue to be maintained. Conclusion 8.13 To the extent that Schedule 1 to the Bill engages rights under articles 14(1) and 17 of the ICCPR, it is compatible with the applicable human rights and freedoms. Schedule 2 - Law Improvement Program Overview 8.14 Schedule 2 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. 8.15 The purpose of Schedule 2 to the Bill is to enact recommendations and other suggested improvements identified by the ALRC in Interim Report A to simplify and improve the navigability of Australia's financial services laws. This includes removing erroneous references and redundant definitions and using consistent headings for definitions sections. These changes facilitate a more adaptive, efficient, and navigable legislative framework which ensures that the legislative intent is met. 8.16 The amendments in Schedule 2 to the Bill are minor and technical in nature, and do not engage policy considerations. Human rights implications 8.17 Schedule 2 to the Bill does not engage any of the applicable rights or freedoms. Conclusion 8.18 Schedule 2 to the Bill is compatible with human rights as it does not raise any human rights issues. 92

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Schedule 3 - Rationalisation of Ending ASIC Instruments Overview 8.19 Schedule 3 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. 8.20 Schedule 3 amends the Corporations Act and the NCCPA to provide for longstanding and accepted matters that are currently contained in ASIC legislative instruments. 8.21 When ASIC-made legislative instruments notionally amend the primary law it causes complexity in navigating and understanding the operation of the law, and therefore undermines accessibility. By moving these matters into primary law the amendments provide industry and consumers with greater certainty and clarity when interacting with Treasury laws. 8.22 The amendments incorporating ASIC Class Order [CO 12/340] amend Part 5D.1 and Part 5D.5 of the Corporations Act to allow a proposed licensed trustee company to apply to the Minister for approval to exceed the 15 per cent voting control limit, for the purposes of satisfying the condition to be listed as a trustee company in the Corporations Regulations. 8.23 The amendments incorporating ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 modify section 941E of the Corporations Act to require that the information in a Financial Services Guide be up to date as at the time it is given to the client, or in the case of a time critical case, up to date as at the time a subsection 941D(3) statement is given to the client. 8.24 The amendments incorporating ASIC Corporations (PDS Requirements for General Insurance Quotes) Instrument 2022/66 add a new section 1012GA to the Corporations Act. The new provision sets out the circumstances when a regulated person does not have to provide a PDS to a retail client in relation to an offer to issue, or arrange the issue of, a general insurance product. 8.25 The amendments incorporating ASIC Corporations (Describing Debentures-- Secured Notes) Instrument 2022/61 add a new subsection 283BH(4) to section 283BH of the Corporations Act. The new provision creates a new category of debenture called a 'secured note', which applies to debentures with sufficient first ranking security that do not satisfy the higher 'debenture' or 'mortgage debenture' tests. 93

Statement of Compatibility with Human Rights 8.26 The amendments incorporating ASIC Class Order [CO 14/41] amend the NCCPA to provide exemptions for credit providers or consumer lease providers to not provide a written notice that a change to a credit contract or consumer lease had been agreed to if the change is for less than 90 days. Human rights implications 8.27 Schedule 3 to the Bill does not engage any of the applicable rights or freedoms. Conclusion 8.28 Schedule 3 to the Bill is compatible with human rights as it does not raise any human rights issues. Schedule 4 - Miscellaneous and Technical Amendments Overview 8.29 Schedule 4 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. 8.30 Schedule 4 to the Bill makes a number of miscellaneous and technical amendments to various laws in the Treasury portfolio. The amendments demonstrate the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation. 8.31 The amendments correct drafting errors, repeal inoperative provisions, address unintended outcomes, and ensure that the law gives effect to the original policy intent. Human rights implications 8.32 Schedule 4 to the Bill engages the following human rights and freedoms: • The right to privacy and reputation. • The right to work. • The right to justice. 94

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Right to privacy and reputation 8.33 Schedule 4 to the Bill engages the right to privacy and reputation under Article 17 of the ICCPR. Article 17 requires parties to the ICCPR to uphold the individual right not to have one's private, family and home life or correspondence unlawfully or arbitrarily interfered with. It also includes the right to protection by law of one's reputation. According to the Parliamentary Joint Committee on Human Rights' Guide to Human Rights, the right to privacy includes: • the right to respect for confidential and private information, particularly the storing, use and sharing of such information; and • the right to control dissemination of information about one's private life. 8.34 The Parliamentary Joint Committee on Human Rights' Guide to Human Rights states the right to reputation requires legislative protection, including the right to a remedy, against unlawful attacks against a person's reputation, including attacks by private individuals as well as by the state. 8.35 The right to privacy and reputation is not an absolute right and is subject to permissible limits. The right can be limited as long as it can be demonstrated that the limitation meets the limitation criteria. Overview of provisions that interact with the right to privacy and reputation Protected information 8.36 Schedule 4 to the Bill makes changes to the Commonwealth Registers Act 2020 that positively engages the right to privacy. The Commonwealth Registers Act 2020 was introduced to create a new Commonwealth business registry regime. 8.37 Consistent with other registry Acts, section 17 of the Commonwealth Registers Act 2020 is intended to specify that it is an offence for a person to disclose protected information obtained in the course of their official employment. 8.38 However, other registry Acts specify that the information concerned is 'protected information' while the Commonwealth Registers Act 2020 only specifies 'information'. The application of the law is too broad in scope and beyond the intent of the Commonwealth Registers Act 2020. 8.39 Schedule 4 to the Bill clarifies that it is only an offence to disclose protected information obtained in the course of a person's employment. The amendments ensure that persons covered under the Commonwealth Registers Act 2020 would be provided with the confidence that their private information is not subject to disclosure under the Act. This is consistent with the right under 95

Statement of Compatibility with Human Rights Article 17 of the ICCPR and the following principles of the Guide to Human Rights: • preserving notions of personal autonomy and human integrity, • respect for private life, • respect for the home, • respect for family life, • respect for correspondence, and • right to reputation. Reference Checking and Information Sharing Protocol for Australian credit licensees 8.40 Schedule 4 to the Bill enhances the operation of ASIC's Reference Checking and Information Sharing Protocol and in doing so, engages with the right to privacy and reputation. 8.41 Under the Protocol, Australian financial services licensees and Australian credit licensees are required to conduct reference checking and information sharing in relation to individuals to whom the protocol applies, being a licensee, or former or current authorised representative. This may be done either by requesting information about the individual or providing information about the individual, as the case may be. 8.42 The amendments in Schedule 4 ensure that aggregators are appropriately subject to the Protocol, in the same way Australian credit licensees and Australian financial service licensees continue to be subject to the Protocol. 8.43 Subjecting aggregators to the Protocol's requirements means that aggregators may request, share, maintain and store information related to Australian credit licensees. Consistent with the existing protections provided to Australian credit licensees and Australian financial service licensees, aggregators would be provided with qualified privilege protections relating to the information they share. 8.44 The amendments present privacy implications for individual Australian credit licensees such as mortgage brokers, whose personal information may be requested, stored and shared by aggregators. By providing qualified privilege to aggregators, the amendments also limit individual Australian credit licensees' right to a remedy against unlawful attacks to their reputation. Justification for limitations on right to privacy and reputation 8.45 To the extent the amendments limit the right to privacy and reputation, those limitations are justified. The limitations are in pursuit of the legitimate objective of enhancing the application of the Protocol to ensure that 96

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 employment information about all financial advisers and mortgage brokers are readily available across the financial advising and mortgage brokering industry. The objective improves reference checking measures for Australian credit licensees and ensures consistent practice across the sector. 8.46 There is a rational connection between the limitations on the right to privacy and reputation and the legitimate objective described above. The limitations are likely to be effective in achieving the objective because encouraged information sharing of Australian credit licensees by aggregators ensure that: • employment information about all financial advisers and mortgage brokers are readily available, and • reference checking protocols of Australian credit licensees are enhanced, helping to remove 'bad apples' from the industry. 8.47 The amendments are reasonable and necessary in pursuit of the legitimate objective. Australian financial services licensees and Australian credit licensees are required to comply with the Protocol made by ASIC in the form of a legislative instrument. Requirements of the Protocol are provided under section 912 A of the Corporations Act and section 47 of the NCCPA. The amendments in Schedule 4 to the Bill clarify obligations for aggregators under the Protocol. 8.48 Aggregators often work closely with other Australian credit licensees under service agreements and often hold information about activities of other Australian credit licensees and their authorised credit representatives that would be relevant for information sharing under the Protocol. The amendments ensure that mortgage intermediaries such as aggregators, who are Australian credit licensees, are appropriately subject to the Protocol, in the same way other Australian credit licensees and Australian financial service licensees continue to be subject to the Protocol. 8.49 To the extent the amendments limit the right to privacy, they are proportionate to the legitimate objective they seek to give effect to. The amendments are sufficiently precise to ensure that the Protocol captures aggregators and operates as intended to ensure consistent practice across the financial advising and mortgage brokering sector. The limitations do not impose further restrictions to individual Australian credit licensees under the Protocol. Right to work 8.50 Schedule 4 to the Bill positively engages the right to work under the International Covenant on Economic, Social and Cultural Rights (ICESCR). Article 6(1) of the ICESCR provides for the right for all to gain a living by work which is freely chosen or accepted, and that steps must be taken to safeguard this right. Article 6(2) of the ICESCR provides for parties to the 97

Statement of Compatibility with Human Rights Convention to take steps to achieve the full realisation of this right, including technical and vocational guidance. 8.51 Schedule 4 to the Bill promotes this right by clarifying provisions related to education requirements for 'providers', a term encompassing financial advisers. Section 1684D of the Corporations Act sets out qualification requirements for providers. 8.52 Transitional provisions inserted by the Financial Sector Reform (Hayne Royal Commission Response--Better Advice) Act 2021 were intended to more clearly set out, but not modify, the timeframes in which an existing provider must meet the education and training standards, or the courses approved by the Minister. 8.53 Existing providers who have passed the financial adviser exam by the exam cut-off date (1 January 2022, or 1 October 2022 for existing providers eligible for the exam extension) have until 1 January 2026 to meet the education and training standards or the courses approved by the Minister while remaining authorised to provide personal advice to retail clients in relation to relevant financial products. 8.54 Additionally, consistent with previous transitional provisions, it was intended that existing providers who ceased to be relevant providers before the relevant exam cut-off date would also have until 1 January 2026 to meet the education and training standards or the courses approved by the Minister. To be reauthorised before this date, a person would need to pass the financial adviser exam. However, the transitional provisions did not achieve this outcome. 8.55 Schedule 4 to the Bill makes clear that existing providers who do not pass the financial adviser exam by the relevant exam cut-off date and who ceased to be a relevant provider before the relevant exam cut off date: • are eligible to be re-authorised to provide personal advice once they pass the exam; and • have until 1 January 2026 to meet the education requirements or courses approved by the Minister. 8.56 The amendments positively engage the right to work by resolving an ambiguity related to qualification requirements for financial advisers. Right to justice 8.57 Article 14 of the ICCPR ensures that everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. The Parliamentary Joint Committee on Human Rights' Guidance note 2: Offence provisions, civil penalties and human rights states that offence provisions need to be considered and assessed in the context of Article 14 protections. 98

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 8.58 Schedule 4 to the Bill may be considered to interact with Article 14 as it widens the scope of relevant penalty provisions in the Foreign Acquisitions and Takeovers Act 1975 to capture certain actions of foreign persons. 8.59 Consistent with the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020's policy intention, the amendments make clear that foreign persons are liable under relevant penalty provisions, even if they have been issued with an exemption certificate. 8.60 Section 4 of the Foreign Acquisitions and Takeovers Act 1975, defines 'core Part 3 action' as an action taken by a foreign person which is: • a significant action; • a notifiable national security action; • an action where the Treasurer has given the person a notice that the action may pose a national security concern; or • a reviewable national security action that is notified to the Treasurer. These actions are further defined under Divisions 2, 4A and 4B of Part 2 of that Act. 8.61 Foreign persons may apply to the Treasurer for various types of exemption certificates under Division 5 of Part 2 of the Foreign Acquisitions and Takeovers Act 1975. An exemption certificate specifies an interest of a kind that, if acquired by the foreign person, does not give rise to a significant action, notifiable action, notifiable national security action, or reviewable national security action. 8.62 Paragraphs 3.84 to 3.97 of the explanatory memorandum to the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020 makes clear that the policy intent is for foreign persons to be required to notify the Treasurer of certain events and be liable for penalty provisions, even if they have been issued with an exemption certificate. 8.63 However, certain existing civil penalty provisions in the Foreign Acquisitions and Takeovers Act 1975 do not capture instances where persons have been issued exemption certificates. 8.64 The objective of Schedule 4 is to clarify that core Part 3 actions taken under an exemption certificate are captured by the relevant penalty provisions. Schedule 4 does not increase impose new penalties or increase penalty amounts. 8.65 Foreign persons who engage in a core Part 3 action and have been issued with an exemption certificate, are liable to the same penalties introduced in the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020. 99

Statement of Compatibility with Human Rights 8.66 The Human Rights Statement of Compatibility of the Foreign Investment Reform (Protecting Australia's National Security) Bill 2020 assessed relevant penalties as appropriate, giving consideration to the following factors: • the potential benefits and profits that may be derived from non- compliance with the Act • the need to create a sufficient deterrent to protect the national interest • the increase in penalties reflecting the seriousness of potential non- compliance and aligning with community standards and expectations • consistency with the penalties imposed with the intent of deterring illegal behaviour under the Corporations Act • the fact that the penalties do not amend any of the criminal process or procedural rights that currently exist and are upheld in accordance with Article 14 of the ICCPR 8.67 To the extent the financial penalties apply to bodies corporate, they do not engage any human rights. 8.68 Article 15 of the ICCPR prohibits retrospective criminal laws. The Foreign Investment Reform (Protecting Australia's National Security) Bill 2020 assessed relevant penalties as not being 'criminal' for the purposes of human rights law, based on their nature and severity. 8.69 Consistent with this assessment, Schedule 4 engages but does not limit the right not to be convicted of something that was not a crime when the activity took place in Article 15 of the ICCPR. Conclusion 8.70 Schedule 4 to the Bill is compatible with human rights as it positively engages the right to work and does not unnecessarily, unreasonably, or disproportionately limit the right to privacy and reputation and the right to justice. 100

Attachment 1: Updated preface to the regulation impact statement for modernising business communications Introduction The Australian Government is committed to lowering costs and ensuring efficiencies for consumers, businesses, and regulators by ensuring Treasury portfolio legislation is technology neutral and provides for modern business communication methods. The initial Regulation Impact Statement (RIS) for the Modernising Business Communications - improving technology neutrality measure was released on 9 June 2021. The RIS examined proposals dealing with key areas raised by stakeholders, including: • expanding the range of documents that can be validly signed electronically; • increasing the range of documents that can be sent electronically to shareholders and amending requirements to contact lost shareholders; • improving flexibility for customers when changing address and consenting to electronic communication with credit providers; • removing prescriptive requirements for notices to be published in newspapers, where suitable alternatives have been identified; and • addressing provisions in Treasury legislation where only non- electronic payment options are in place. The link to the previously tabled RIS included in the lapsed Bill can be found here: https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legis lation%2Fbillhome%2Fr6852%22. The Government subsequently revised the measure based on stakeholder feedback. Substantive amendments since the initial RIS that are included in the amended measure are as follows: • the credit reforms identified in the initial RIS will now be considered in a subsequent phase of reforms to allow for further consultation on proposed amendments; • the measure now includes provisions to make it clear that Treasury portfolio regulators can hold hearings and examinations virtually; and • amendments to extend the ability for a sole director of a proprietary company (without a company secretary) to execute documents 101

Updated preface to the regulation impact statement for modernising business communications electronically under the Corporations Act (the Corporations Act) were implemented by the Meetings and Documents Act. Treasury has updated its estimates of the regulatory savings of the current phasing of reforms to reflect the updated policy design and receipt of new information during consultation. In aggregate, these changes have resulted in the overall estimate of deregulatory savings rising from approximately $48.1 million per year to around $59.3 million per year. The next section details the changes that affect the estimate of regulatory savings. This is followed by a table summarising the updated regulatory savings estimates. Updates to regulatory saving estimates 1. Publishing notices newspapers The current law requires businesses to publish selected information in newspapers. As technology has evolved, many of these requirements have become outdated and are no longer fit-for-purpose because businesses can reach their customers and disseminate information publicly in more cost-effective ways. The Government has identified further opportunities to remove selected requirements to publish notices in newspapers in addition to those outlined in the initial RIS for this measure. Currently, insurance companies are required to publish notices in a newspaper where a policy is lost or destroyed. In addition, life insurers are required to publish a notice prior to replacing or considering a claim on a lost or destroyed policy. These requirements can be removed due to advances in technology since these provisions were put in place. Instead of publishing in newspapers, life insurers can publish in any manner that is accessible to the public and reasonably prominent, for example, the company website. The estimated regulatory savings have been amended to reflect this as described below. Update to estimate The estimated cost of publishing notices for replacement life insurance policies in newspapers has been updated based on revised data. Updated data indicates that around 7,000 notices are published each year for replacement life insurance policies at an average cost of $125 per notice. In addition, an adjustment was made to account for the number of insolvencies during 2020-21. The revised estimate of regulatory savings is $3.5 million per year. 102

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 2. Communication of documents In late 2020, temporary laws were made to permit meeting related documents to be sent to members electronically by companies, registered schemes and disclosing entities. The initial RIS considered extending these laws to non-meeting materials where they are required to be sent to members of companies, registered schemes or disclosing entities under the Corporations Act. Since then, the Government passed legislation that implemented a new global communications regime for the Corporations Act implemented through the Meetings and Documents Act. This measure now extends the new global communications regime to non-meeting materials. In addition to the person-to-entity (member) communications, changes are made to expand the policy settings included in the initial RIS to cover entity-to-entity communications, such as companies' communications with their auditors and prospective director communications with the company, not only member communications. The estimate of regulatory savings has been modified accordingly. It includes all communications required to be sent under Chapters 2A to 2M, 5 to 5D, 6 to 6C, 8A, 9 and Schedule 2 to the Corporations Act, excluding those lodged with ASIC, the Registrar or the Takeovers Panel. Update to estimate The assumption of the average number of non-meeting related notices that an entity may send and receive has been increased from four to ten per year to account for the expanded scope of the proposed legislative change as described above. All other assumptions and calculations remain the same. The revised estimate of regulatory savings is approximately $46.0 million per year. 3. Takeover notices The current law requires the target of a takeover bid to provide the bidder with the postal addresses of relevant security holders. This measure will now allow the target of a takeover bid to provide the bidder with electronic addresses in addition to postal addresses. The estimate has been updated to reflected updated data that has become available since the initial RIS. No policy changes have been made that impact the costing for this element as compared to the initial RIS. 103

Updated preface to the regulation impact statement for modernising business communications Update to estimate The average number of takeovers each year has been updated to reflect 2020-21 data. This reduces the level of activity slightly from 26 takeovers per year to 25 takeovers per year. The number of shareholders per company has also changed slightly, increasing the savings due to increased use of electronic communications. The revised estimate of regulatory savings is approximately $6.5 million per year. 4. Sending documents to lost members The current law requires that an entity must send a notice to the address they possess in relation to the shareholder at least once a year for six years after they have fulfilled the conditions for lost member relief. The measure will give companies and registered schemes relief from having to send documents that are otherwise required under the Corporations Act to lost members. The measure in the initial RIS was limited to annual reports and meeting materials as covered by the existing ASIC relief and only allowed cessation after two years and two attempts to contact the member. The measure will allow companies and registered schemes to regard a shareholder as a lost member after the following conditions are met: • the sender has received notification, in relation to each of the address for the receipt that are known to the sender because of the recipient's membership of, or interest in, a company, registered scheme or disclosing entity, that indicates the address is not current; • the sender reasonably believes that none of those addresses are current; and • the sender is unable, after exercising reasonable diligence, to ascertain a current address for the recipient. The measure will now also expand the number of document types that would not be sent by companies to members that fulfil the criteria for being regarded as 'lost'. Update to estimate The estimate of regulatory savings has been revised to include an additional 10 documents per year that will no longer need to be produced and sent by businesses. This recognises there are other types of documents that are required to be sent to lost members in addition to annual reports. The cost of sending these non-meeting documents is estimated to be $5 per document. The average cost of sending meeting materials by entities has been increased following stakeholder feedback to include the cost of preparing the annual report and other material - it is now based on company costs assumed to be $24 for each copy of the materials sent to a shareholder. 104

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 For the purposes of the regulatory impact assessment, it is assumed that the initial contact used to establish that a member is lost under the proposed arrangements will be made when the meeting materials are sent. It is assumed that: • half of the follow-up communications prior to stopping communication occur in the same year as the initial contact with the other half in the following year; • half of the follow-up communication is made in hard copy and the remainder electronically; • only one follow-up communication attempt is made; and • 0.1 per cent of all shareholdings become lost each year. • The revised estimate of regulatory savings is $3.3 million per year. 5. National Consumer Credit Protection Act 2009, Regulations 2010 and National Credit Code This element is no longer included in this measure. The regulatory savings are no longer included in this update. 6. Sole director companies with no company secretary can execute documents electronically This element was included in the Meetings and Documents Act and has not been included in the updated estimates. 7. Signatures and witnessing Under current law only certain documents can be signed or executed electronically, implemented in the Meetings and Documents Act. This measure will allow all documents under the Corporations Act to be signed or executed electronically. This element remains unquantifiable in the RIS. 8. Payment methods - cheques, money orders and cash Under current law certain Treasury portfolio legislation prescribes non-electronic payment requirements in certain circumstances. 105

Updated preface to the regulation impact statement for modernising business communications These amendments will provide consumers with an electronic payment option where the law currently prescribes non-electronic methods only. No changes have been made to this element that affect the initial RIS estimate. 9. Virtual hearings and examinations The laws administered by Treasury portfolio regulators that empower them to hold hearings and examinations are proposed to be clarified to provide certainty that hearings and examinations can be held virtually. Regulators can already hold hearings and examinations virtually and the amendments aim to provide consistency for hearings and examinations regardless of whether they are being held in physical, virtual or hybrid form. There is no expected change in the regulatory burden on businesses and individuals as the clarification will not alter current requirements to comply with these hearings and examinations. As this element is a clarification of existing regulatory actions, no regulatory cost impact is identified. Summary of updated estimated regulatory savings Table 1.1 Original estimate of Revised estimate of regulatory savings regulatory savings Element ($m/year) ($m/year) 1. Publishing notices in 1.1 3.5 newspapers 2. Communication of 27.7 46.0 documents 3. Takeover notices 6.2 6.5 4. Sending documents to lost 2.8 3.3 members 5. NCCPA, Regulations Removed for later 2010 and National Credit 1.7 consideration Code 6. Sole director companies with no company secretary Removed since progressed 8.6 can execute documents via other legislation electronically 7. Signatures and witnessing * * 106

Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 Original estimate of Revised estimate of regulatory savings regulatory savings Element ($m/year) ($m/year) 8. Payment methods - cheques, money orders and 0.0 0.0 cash 9. Virtual hearings and 0.0 0.0 examinations Total estimated savings 48.1 59.3 * Unquantifiable 107

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