Friday, May 26, 2006
Australia's Refinements to Financial Services Regulations
In April, the Autralian Governanment released a Corporate and Financial Services Regulation Review Consultation Paper proposing further revisions of Australia's Financial Services Regulations. The 59-page consulation paper is here. Included in the proposal are reporting, auditor independence and corporate governance changes to the Corporations Act 2001. Comments are sought on the proposals.
In the area of corporate governance, topics covered in the Consulation Paper include:
1. Amounts that can be paid to related parties without member approval: Is there a de minimis amount (e.g., $5,000) below which approval should not be required? If a de minimis standard were adopted, presumably, there would be aggregation of these amounts so that corporations could not skirt the rules by simply breaking transactions into smaller bits;
2. Amounts that can be given to a director or spouse without member approval;
3. Whether single-director companies can opt out of certain duties under the Corporations Act: The company would still be required to comply with all criminal laws and could not opt out of obligations to third parties;
4. Extension of the business judgment rule, excluding directors from liability in certain circumstances; and
5. Allowing greater flexibility regarding shareholder meetings: The proposals would allow companies to opt out of some of the detailed notice, technology and proxy rules.