As part of its broader deregulation agenda, and building on the reforms in the Corporations Amendment (Meetings and Documents) Bill 2021 (M&D Bill), the government has introduced a new Bill - Treasury Laws Amendment (Modernising Business Communications) Bill 2022 (Bill) - proposing to 'modernise' existing business communication requirements in three key areas.
- The proposed changes in Schedule 1 of the Bill would build on recently passed changes to Corporations Act 2001 (Cth) (Corporations Act) requirements around the use of technology to distribute meeting related materials and execute documents.
- The proposed changes in Schedule 2 would amend the National Consumer Credit Protection Act 2009 (NCCP Act) and the National Credit Code to make it easier for credit licensees to provide documents to recipients electronically and facilitate the use of electronic payments
- The proposed changes in Schedule 3 would 'modernise publication requirements' across various Treasury portfolio laws.
Schedule 1: A new 'global communications regime for documents sent under the Corporations Act'
Broadly, Schedule 1 of the Bill would amend the Corporations Act to permanently enable:
- all documents required or permitted to be signed under the Corporations Act to be signed electronically (in accordance with the rules for doing so introduced by the M&D Bill). This includes documents signed by an agent on behalf of a company in accordance with section 126 of the Corporations Act and documents executed by a company in accordance with section 127 of the Corporations Act.
- documents sent under Chapters 2A to 2M, 5 to 5D, 6-6C, 8A and 9 or Schedule 2 of the Corporations Act to be sent electronically.
The Bill would also provide relief from the obligation for entities to send certain documents to members, if the entity knows that the members' postal and electronic addresses are incorrect (providing that certain conditions are met) (s110JA).
Schedule 1 also includes amendments to ensure that the new technology neutral rules for signing and sending documents would apply to corporate collective investment vehicles (CCIVs).
Broadly, it's proposed that the changes in Schedule 1 would commence on the later of the day after the Bill receives Assent, or 1 April 2022 (ie after the commencement of Schedule 2 to the Corporations (Meetings and Documents) Act 2022).
Schedule 2: Making it easier for credit licensees to use technology to distribute documents
The changes in Schedule 2 of the Bill would allow for 'technology neutral provision of documents' under the National Credit Code. This would enable documents to be provided to recipients: in physical form, in electronic form, or by 'electronic postcard', provided that it would be 'reasonable to expect that the document would be readily accessible so as to be useable for subsequent reference' (s195A)
Importantly, licensees would not need to obtain an individual’s consent in order to provide documents to them electronically (though recipients would have the right to 'opt out' of electronic communication).
The Explanatory Memorandum states that the intention is that this will enable licensees 'to switch from providing documents physically to providing them electronically, provided the customer does not opt against this'.
The proposed new rules for technology neutral giving of documents would not apply if the recipient is a credit licensee acting in their capacity as a licensee. According to the Explanatory Memorandum, 'this ensures that debtors, who are often individuals, do not need to establish systems for recording the nominated address for a credit licensee'.
The Bill also proposes to introduce a regulation making power enabling regulations to be made to prohibit certain documents from being given by using an electronic postcard. According to the Explanatory Memorandum, this is intended to 'ensure that if the provision of certain documents by electronic postcard has unintended negative consequences, those documents can be excluded from the electronic postcard method'.
It's proposed that the changes in Part 1 of Schedule 2 to the Bill (giving of documents) would take effect 18 months after the Bill receives Assent.
Facilitating technology neutral payments
The Bill would also remove certain existing 'technologically prescriptive requirements' relating to payments to make clear that payments may be made electronically.
Among other things, the changes would remove the requirement for a no liability company to notify shareholders of the place of payment and remove the requirement to send the notice by post. According to the Explanatory Memorandum, this is intended to remove 'any uncertainty that companies can provide for any method of payment, including digital methods'.
It's proposed that these changes (technology neutral payments) would commence the day after the Bill receives Assent.
Schedule 3 to the Bill proposes to modernise publication requirements in various Treasury portfolio laws.
Currently, various Treasury portfolio laws require or permit notices to be published in newspapers. Schedule 3 would replace provisions requiring/permitting notices to be published in newspapers with technology neutral rules.
Contingent amendments would also replace references to the Australian Securities and Investments Commission (AISC) with the Registrar after the commencement of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (this Act transfers the registry functions from ASIC to the Registrar).
The proposed changes to publication requirements would commence on a day to be fixed by Proclamation or, if this does not occur within six months of the Bill receiving Assent, on the day after the end of that period.
The contingent amendments would commence at the later of a day fixed by proclamation, or 1 July 2024.
[Source: Treasury Laws Amendment (Modernising Business Communications) Bill 2022]