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Corporations Amendment Regulations 2011 (No. 2)

Authoritative Version
  • - F2011L01368
  • No longer in force
SLI 2011 No. 128 Regulations as made
These Regulations amend the Corporations Regulations 2001 to support changes made by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011. This instrument prescribes types of arrangements that would, and would not, be considered a ‘hedge’ for the purposes of limiting the key management personnel’s exposure to risk relating to incentive remuneration. This instrument also prescribes a recommendation, or advice or information that would not be a remuneration recommendation.
Administered by: Treasury
Made 30 Jun 2011
Registered 30 Jun 2011
Tabled HR 05 Jul 2011
Tabled Senate 05 Jul 2011
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013

Commonwealth Coat of Arms

Corporations Amendment Regulations 2011 (No. 2)1

Select Legislative Instrument 2011 No. 128

I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Corporations Act 2001.

Dated 30 June 2011

QUENTIN BRYCE

Governor-General

By Her Excellency’s Command

DAVID BRADBURY


1              Name of Regulations

                These Regulations are the Corporations Amendment Regulations 2011 (No. 2).

2              Commencement

                These Regulations commence on 1 July 2011.

3              Amendment of Corporations Regulations 2001

                Schedule 1 amends the Corporations Regulations 2001.


Schedule 1        Amendments

(regulation 3)

 

[1]           After Part 1.1

insert

Part 1.2              Interpretation

Division 1              General

1.2.01     Remuneration recommendations (Act s 9B)

                For paragraph 9B (2) (f) of the Act, a recommendation, or advice or information, provided in relation to one or more members of the key management personnel for a company by an employee of a company within the same consolidated entity, is not a remuneration recommendation.

[2]           After Part 2D.6

insert

Part 2D.7            Ban on hedging remuneration of key management personnel

  

2D.7.01  Hedging arrangements (Act s 206J (3))

         (1)   For subsection 206J (3) of the Act, an arrangement in the following table is to be treated as an arrangement that has the effect of limiting the exposure of a member mentioned in subsection 206J (1) of the Act to the risk mentioned in that subsection.

Item

Arrangement

1

A put option on incentive remuneration

2

A short position on shares that forms part of incentive remuneration

3

An income protection insurance contract in which the insurable risk event affects the financial value of remuneration or equity or an equity‑related instrument for the key management personnel

         (2)   For subsection 206J (3) of the Act, an arrangement in the following table is not to be treated as an arrangement that has the effect of limiting the exposure of a member mentioned in subsection 206J (1) of the Act to the risk mentioned in that subsection.

Item

Arrangement

1

An income protection insurance contract in which the insurable risk event is the death, incapacity or illness of any of the key management personnel

2

A foreign currency risk arrangement

         (3)   In this regulation, a short position is a position in relation to shares in a listed entity where the quantity of the shares that a person has is less than the quantity of the shares that the person has an obligation to deliver.

         (4)   In subregulation (3), the person has the shares if:

                (a)    the person is holding the shares on the person’s own behalf; or

               (b)    another person is holding the shares on the person’s behalf; or

                (c)    the person has entered into an agreement to buy the shares but has not received the shares; or

               (d)    the person has vested title in the shares in a borrower, or in an entity nominated by the borrower, under a securities lending arrangement.

         (5)   In subregulation (3), the shares that the person has an obligation to deliver are the shares that the person:

                (a)    has an obligation to deliver under a sale agreement where the shares have not been delivered; or

               (b)    has an obligation to vest title in a lender under a securities lending arrangement; or

                (c)    has any other non-contingent legal obligation to deliver.


Note

1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.