ASIC has released a consultation paper seeking public comment about its proposals on administering the transfer determination provisions of Chapter 5D of the Corporations Act 2001 (Corporations Act) for trustee companies providing traditional trustee company services (traditional services).
The power to make a transfer determination is a new power for ASIC and is part of the amendments to the Corporations Act enacted in November 2009 to regulate traditional services provided by trustee companies previously authorised under state and territory legislation.
ASIC’s Consultation Paper 173 Trustee companies: Transfer determinations by ASIC (CP 173) sets out proposals on what information it will require to properly consider a transfer determination. ASIC plans guidance in this area in order to assist trustee companies to efficiently prepare and supply relevant material to ASIC with their applications for a transfer determination.
CP 173 deals with the three types of transfer determination applications it anticipates receiving from trustee companies performing traditional services such as an estate management function. These are:
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voluntary transfers between trustee companies belonging to the same corporate group
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voluntary transfers between unrelated trustee companies, and
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compulsory transfers from one unrelated trustee company to another.
CP 173 sets out proposals on the information a trustee company will be required to supply to ASIC in connection with an application for a transfer determination in each of the three situations. The information is required in order for ASIC to properly consider and assess the applications in accordance with the provisions of Pt 5D.6 of the Corporations Act and to satisfy us that any transfer is in the best interests of both the clients of the transferring company and those of the receiving company (when viewed as a group).
ASIC encourages all interested parties including industry members, their clients and legal advisers and industry associations, to comment on our proposals.
ASIC is seeking comments on the proposals by 6 March 2012.
Background
Part 5D.6 of the Corporations Act provides for the transfer of estate assets and liabilities associated with the performance by a trustee company of an estate management function, such as acting as a trustee, executor or under a power of attorney. The transfer may be made from one trustee company to another licensed trustee company, and in particular circumstances, to a state or territory Public Trustee.