ASIC today released a regulatory guide to explain what information licensed trustee companies need to provide to ASIC when they seek approval to transfer the assets and liabilities of the estates they manage to another licensed trustee company.
ASIC will only grant approval when it is satisfied that a transfer will be in the interests of the clients (when viewed as a group) of the transferring company and those of the receiving company. This is a precondition to the transfer going ahead under the provisions of the Corporations Act 2001. The information required by Regulatory Guide 237 Trustee companies: Transfer determinations by ASIC (RG 237) is to ensure that ASIC has sufficient information to properly consider the transfer applications.
Licensed trustee companies provide trustee services which include acting as an executor of a will, trustee or under a power of attorney. The assets and liabilities of the trust estates they manage in providing these services are those that they may seek approval from ASIC to transfer using this process.
ASIC was given the power to approve these transfers on the commencement of the national regulatory regime for trustee companies in May 2010. Prior to the new regime, trustee companies had to be authorised in each state or territory in which they operated. It is anticipated trustee company groups will use the transfer process to rationalise their trustee services business and transfer the trust estate management part of their business to a single Australian financial services licence holder within their group.
RG 237 deals with the three types of applications ASIC anticipates receiving from trustee companies managing trust estates. 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.
Background
In January 2012, ASIC released Consultation Paper 173 Trustee companies: Transfer determinations by ASIC (CP 173) seeking public comment on the information it will require to properly assess a transfer application by a trustee company. The limited feedback received was supportive of the proposals.
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