Lawlink NSW: 1. Introduction

Proposed uniform scheme for the regulation of trustee corporations

1. Introduction

1.1. OBLIGATION TO REVIEW LEGISLATION

1.1.1. This consultation discussion paper accompanies the release of a draft model Bill for the regulation of the trustee corporations industry. The paper discusses the terms of the Bill, and other options for the future regulation or deregulation of the industry, as required by national competition policy. The paper does not recommend that Governments implement the Bill, but presents the Bill as one option for consideration.

1.1.2. The Competition Principles Agreement requires Governments to review legislation, including that proposed by the model Bill, which imposes restrictions on the conduct of businesses and individuals and to assess whether those restrictions are in the public interest.

1.1.3. The review follows the Terms of Reference which are attached as Appendix I. The guiding principle in competition review is that the model Bill should not restrict competition unless:

1.1.4. the benefits of the restriction to the community as a whole outweigh the costs; and
1.1.5. the objectives of the legislation can only be achieved by restricting competition.

1.2. BACKGROUND TO DEVELOPMENT AND REVIEW OF MODEL LEGISLATION

1.2.1. Following the Financial System Inquiry Report dealing with financial sector reform (known as the ‘Wallis Report’), Commonwealth, State and Territory governments implemented the Corporate Law Economic Reform Program. Among the projects in this program is the review of the regulation of trustee companies, with a view to considering the future regulation of the industry, and replacing the current state-by-state regulation with a national scheme of complementary laws.

1.2.2. The draft model Bill has been drafted in the context of the need to ensure that the regulatory burden imposed by a scheme to license trustee corporations is commensurate with the nature of the industry and the risks posed to consumers by defaults of trustee corporations. The consultation paper discusses the key features of the industry, undertakes a competition analysis of the proposed provisions and proposes alternative options for the future regulation of the industry. Comment is sought on the issues raised by the consultation paper and Bill. The Standing Committee of Attorneys General will consider further the future regulation of the industry once submissions have been received.

1.2.3. Submissions should be in writing and will be publicly available, on application, subject to a photocopy charge. If information is to be submitted which is intended to remain confidential (such as commercially sensitive information), it should be clearly marked. This claim will be assessed in terms of freedom of information legislation.

1.2.4. Comments should be made to:

Mr Laurie Glanfield

Secretary

Standing Committee of Attorneys General

GPO Box 6

SYDNEY 2001

by email to: catherine_morgan@agd.nsw.gov.au

1.2.5. Electronic copies of the paper and draft Bill are available at: lawlink.nsw.gov.au

1.3. COMPETITION ANALYSIS

1.3.1. The competition analysis process followed by the review is detailed in the Terms of Reference (Appendix 1). The review must:

Identify any restrictions on competition which arise from the legislation. These can include restrictions such as constraints on who may enter the market, limitations on business structures which may be used, monopolies and the like;
Assess the magnitude of each identified restriction;
Identify the public benefits, if any, conferred by significant restrictions, and weigh up the costs against these benefits to form a view as to whether the restriction is justifiable;
Consider whether the legislative restriction is necessary to achieve these benefits, or whether they could be achieved by a less regulatory structure, including partial and total deregulation; and
Identify any administrative burdens encompassed in the legislation and consider alternatives.

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The information contained on this page is not legal advice. If you have a legal problem you should talk to a lawyer before making a decision about what to do. The information on this page is written for people resident in , or affected by, the laws of New South Wales, Australia only.

most recently updated 15 June 2001