The overall object of the Trustee Companies Amendment Bill 2009 is to give effect to a new legislative scheme whereby the Commonwealth will assume responsibility for the regulation of trustee companies. The new arrangements arise as a result of an agreement reached by the Council of Australian Governments in July 2008. The Opposition, for which I lead in debate on this bill, does not oppose its passage. Pursuant to the proposed scheme, the Commonwealth will have exclusive responsibility for the licensing of trustee companies and the regulation of their fees. The Trustee Companies Act 1964, as well as common law and equity, will otherwise continue to govern the functions and powers of trustee companies. Specifically, the object of the bill is to amend the Trustee Companies Act 1964, consequentially on the enactment and commencement of the Commonwealth's Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 so as to remove the State approval mechanism for trustee companies and define trustee companies as licensed trustee companies under the Corporations Act 2001 of the Commonwealth.
The bill facilitates the transfer of a trustee company's business to another licensed trustee company when its licence is cancelled under the Corporations Act, and provides for the making of transitional provisions to facilitate the transition to the new regime. In particular, the bill replaces the definition of "trustee company" with "a licensed trustee company within the meaning of Chapter 5D of the Corporations Act 2001 of the Commonwealth". The bill also repeals various provisions relating to advances, commissions and fees, and other mandatory provisions relating to accounts and winding up; sections pertaining to borrowing, loans and related liabilities of a trustee company; those sections that concern the personal liability of a managing director of a trustee company; and provisions that pertain to shareholdings in trustee companies and those concerning indemnities and any variations of any unpaid capital of Trust Company Fiduciary Services Ltd.
The bill adds a new section to the Trustee Companies Act 1964 concerning compulsory transfer determination and applies to situations where the Australian Securities and Investment Commission exercises its powers to cancel a licence of the trustee company under the relevant Commonwealth laws and makes a transfer determination in relation to the company's estate assets and liabilities to a receiving company. A further addition to the Trustee Companies Act 1964 stipulates that State tax is not payable in relation to an exempt matter, and exempt matters are defined as the transfer of estate assets to a receiving company under Commonwealth law.
The bill stipulates that various existing provisions that this legislation proposes to repeal will have continuing effect in the event that action has been commenced under them before the passage of this bill. These provisions include: section 18 (3), which concerns applications for review of commissions before the repeal of the section by this bill; section 17A, which relates to sums advanced under that section before the repeal of the section by this bill; section 20A to section 22, which concern applications before a court for the filing of an account, an order for an account or an audit before the repeal of this section bill; and section 29D, which concerns any financial statements that are required to be forwarded under the section before the repeal of the section by this bill. A number of other Acts are also amended to give effect to the new scheme.
Both the Conveyancing Act 1911 and the Probate and Administration Act 1898 are amended to change the definition of "trustee company" to a licensed trustee company within the meaning of chapter 5D of the Commonwealth Corporations Act authorised by an Act of New South Wales to act as trustee. In line with these changes, the Duties Act 1997 changes the definition of "special trustee" to provide a similar definition. The Conveyancing Act is also amended to stipulate that any action taken by a trustee company before the enactment of the present scheme continues to have effect. The Trustee Companies Regulation 2005 is amended to give a trustee company power to elect to administer an estate if its gross value is less than $10,000, and outlines the processes for the election to be made.
The changes proposed by the Trustee Companies Amendment Bill 2009 will result in a single licensing and reporting system for trustee companies administered by the Australian Securities and Investments Commission and will eliminate an unnecessary regulatory burden from multiple State and Territory jurisdictions and help to improve competition between trustee companies. Requiring trustee companies to be licensed will increase accountability within the industry. It will also result in consumer protection arrangements applying to the financial services industry under the Commonwealth's Corporations Act as well as an improved alternative dispute resolution mechanism. It is for these reasons that the Opposition does not oppose this bill.