An Act to establish a Management and Investment Companies Licensing Board, to provide for the licensing of certain companies by the Board and to regulate the investment activities of licensed companies
Part I—Preliminary
1 Short title [see Note 1]
This Act may be cited as the Management and Investment Companies Act 1983.
2 Commencement [see Note 1]
This Act shall come into operation on a date to be fixed by Proclamation.
3 Interpretation
(1) In this Act, unless the contrary intention appears:
acting Chairman means a member who is acting as the Chairman.
acting member means a person, not being a member, who is acting as a member referred to in paragraph 7(1)(c).
ADI (authorised deposit‑taking institution) means:
(a) a body corporate that is an ADI for the purposes of the Banking Act 1959; or
(b) the Reserve Bank of Australia; or
(c) any other bank constituted by a law of a State or internal Territory.
appoint includes re‑appoint.
appointed member means the Chairman or a member referred to in paragraph 7(1)(c).
Australian company means a company that:
(a) is:
(i) a financial corporation or a trading corporation within the meaning of paragraph 51(xx) of the Constitution formed within the limits of a State; or
(ii) a company incorporated in an internal Territory; and
(b) has an authorised share capital of not less than $5,000,000 or, if some other amount is prescribed for the purposes of subsection 20 (3), that other amount.
Board means the Management and Investment Companies Licensing Board established by section 5.
business day, in relation to an act or thing, means a day that is not:
(a) a Saturday or a Sunday; or
(b) a public holiday or bank holiday in the place in which the act or thing is to be, or may be, done.
business entity means:
(a) a company;
(b) a partnership;
(c) a unit trust; or
(d) a sole trader, being a natural person.
Chairman means Chairman of the Board.
company means any body corporate, whether formed or incorporated within or outside Australia.
debenture includes debenture stock, bonds, notes and any other document evidencing or acknowledging indebtedness of a company in respect of money that is or may be deposited with or lent to the company, whether constituting a charge on property of the company or not.
document includes any record of information, however compiled, recorded or stored.
eligible business entity, in relation to a licensee, means a business entity certified under section 29 as an eligible business entity in relation to the licensee.
financial year means a period of 12 months commencing on any 1 July.
licence means a management and investment company licence in force under Part III.
member means member of the Board and includes the Chairman.
prescribed business entity means a business entity that has, or proposes to have, in relation to the business activity or business activities in which the business entity is, or proposes to become, primarily engaged, at least 3 of the following features to a significant extent:
(a) the use of innovative technology;
(b) an export orientation;
(c) international competitiveness;
(d) the potential for rapid growth;
(e) the potential for creating skilled employment in Australia.
share means a share in the share capital of a company and includes stock into which all or any of the share capital of the company has been converted.
year means any period of 12 months.
(2) A reference in this Act to an officer, in relation to a business entity, is a reference to:
(a) in the case of a business entity that is a company—a director or secretary of the company or any other person, by whatever name called, who is concerned, or takes part, in the management of the company;
(b) in the case of a business entity that is a natural person—that person or any other person who is concerned, or takes part, in the management of any business engaged in by the first‑mentioned person; and
(c) in the case of a business entity that is not a company or a natural person—any person, by whatever name called, who is concerned, or takes part, in the management of the business entity.
(2A) For the purposes of subsection (2):
(a) a person who is engaged, other than permanently, by a business entity as an auditor, accountant, consultant or other expert for the purpose of providing expert advice or other services to the business entity shall not be taken to be concerned, or to be taking part, in the management of that business entity; and
(b) a person shall not be taken to be concerned, or to be taking part, in the management of a business entity merely because that person assists the business entity to meet the requirements for certification under section 29.
(3) A reference in this Act to the approved capital of a licensee is a reference to the amount specified by the Board under subsection 21(1) or 38(2) as approved capital of the licensee for the purposes of this Act.
(4) A reference in this Act to shareholders’ funds, in relation to a company, is a reference to the aggregate of:
(a) the amount of the paid‑up share capital of the company;
(b) any amount held in any share premium account of the company;
(c) any amount held in any capital redemption reserve of the company;
(d) any amount held in any other capital reserve of the company;
(e) any amount held in any revenue reserve of the company; and
(f) the amount of any undistributed profits of the company.
(5) A reference in this Act to an amount paid on shares, in the case of shares being stock, is a reference to the amount of the stock.
4 Prescribed interests
(1) For the purposes of this Act, a person holds a prescribed interest in a business entity if he holds an ownership interest, a loan interest or a guarantor interest in the business entity.
(2) For the purposes of this Act:
(a) a person holds an ownership interest in a business entity that is a company if he holds an interest in any shares in the company; and
(b) the amount of the ownership interest is an amount equal to the aggregate of the amounts paid on those shares.
(3) For the purposes of this Act:
(a) a person holds an ownership interest in a business entity that is a partnership if he is a partner; and
(b) the amount of the ownership interest of that person, as at a particular time, is the amount of capital subscribed by that person to the partnership up to that time.
(4) For the purposes of this Act:
(a) a person holds an ownership interest in a business entity that is a unit trust if he is the holder of a unit or units in the trust; and
(b) the amount of the ownership interest is the amount of moneys paid to acquire the unit or units or the value, at the time of transfer, of property transferred to the trustee of the unit trust for the purpose of acquiring the unit or units.
(5) For the purposes of this Act:
(a) a person holds a loan interest in a business entity that is a company if he is beneficially entitled:
(i) to moneys, other than interest, that are or will become payable under, or that are secured by, debentures of the company; or
(ii) to any other moneys that are or will become payable by the company by way of repayment of moneys lent to or deposited with the company by any person; and
(b) the amount of the loan interest is an amount equal to the aggregate of the amounts of the moneys that are so secured or that are or will become payable.
(6) For the purposes of this Act:
(a) a person holds a loan interest in a business entity that is not a company if he is beneficially entitled to moneys that are or will become payable by the business entity by way of repayment of moneys lent to or deposited with the business entity by any person; and
(b) the amount of the loan interest is an amount equal to the amount of the moneys that are or will become payable.
(7) For the purposes of this Act:
(a) a person holds a guarantor interest in a business entity that is a company if he is a guarantor of the repayment of:
(i) any moneys, other than interest, that are or will become payable under, or that are secured by, debentures of the company; or
(ii) any other moneys that are or will become payable by the company by way or repayment of moneys lent to or deposited with the company by any person; and
(b) the amount of the guarantor interest is an amount equal to the amount of the moneys that are so secured or that are or will become payable.
(8) For the purposes of this Act:
(a) a person holds a guarantor interest in a business entity that is not a company if he is a guarantor of the repayment of any moneys that are or will become payable by the business entity by way of repayment of moneys lent to or deposited with the business entity by any person; and
(b) the amount of the guarantor interest is an amount equal to the amount of the moneys that are or will become payable.
(9) For the purposes of this Act:
(a) a person holds a substantial ownership interest in a business entity that is a company if the aggregate of the amounts paid on shares in which he holds interests in the company is not less than 15% of the total of the amounts paid on all shares in the company; and
(b) a person holds a substantial ownership interest in a business entity that is not a company if the amount of that ownership interest is not less than 15% of the aggregate of the amounts of all ownership interests in the business entity.
(10) For the purposes of this Act, where 2 or more persons hold a prescribed interest jointly in a business entity, each of those persons shall be deemed to hold the whole of that interest, but nothing in this subsection shall be taken to affect the amount of that interest.
(11) For the purposes of this Act:
(a) a person holds an interest in a share if he has any legal or equitable interest in the share; and
(b) without limiting the generality of paragraph (a), where a person is entitled (otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a company or of a class of its members) to exercise or control the exercise of a right attached to a share, not being a share of which he is the registered holder, that person shall be deemed to hold an interest in that share.
4A Application of the Criminal Code
Chapter 2 of the Criminal Code applies to all offences created by this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Part II—Management and Investment Companies Licensing Board
5 Establishment and constitution of Board
There is established by this Act a Board by the name of the Management and Investment Companies Licensing Board.
6 Functions and powers of Board
(1) In addition to the other functions conferred on the Board by this Act, the Board has the following functions:
(a) to establish effective communication between the Board and the management of licensees so as to encourage the formation and development of prescribed business entities;
(b) to advise the Minister on matters relating to the operation of this Act.
(2) The Board has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.
7 Membership of Board
(1) The Board shall consist of:
(a) the Chairman;
(b) the officer who is for the time being holding or performing the duties of an office in the Department, being an office designated by the Minister, by notice published in the Gazette, for the purposes of this paragraph; and
(c) not less than 4 nor more than 6 other members.
(2) The Chairman and the members referred to in paragraph (1)(c) shall be appointed by the Governor‑General and shall be so appointed as part‑time members.
(3) A person shall not be appointed by the Governor‑General as a member unless he appears to the Governor‑General to be qualified for appointment by virtue of his knowledge of, or experience in, industry, commerce, finance, economics, marketing, management, public administration or a field of technology, but the Board shall not at any time include more than one person appointed by virtue of his knowledge of, or experience in, public administration.
(4) An appointed member holds office for such period, not exceeding 3 years, as is specified in the instrument of his appointment, but is eligible for re‑appointment.
(5) An appointed member holds office on such terms and conditions (if any) in respect of matters not provided for by this Act as are determined by the Governor‑General.
8 Remuneration and allowances
(1) An appointed member shall be paid such remuneration as is determined by the Remuneration Tribunal.
(2) An appointed member shall be paid such allowances as are prescribed.
(3) This section has effect subject to the Remuneration Tribunal Act 1973.
9 Leave of absence
The Minister may grant to a member leave of absence from a meeting or meetings of the Board.
10 Resignation
An appointed member may resign his office by writing signed by him and delivered to the Governor‑General.
11 Termination of appointment
(1) The Governor‑General may terminate the appointment of an appointed member by reason of misbehaviour or physical or mental incapacity.
(2) If an appointed member:
(a) becomes bankrupt or applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his creditors or makes an assignment of his remuneration for their benefit;
(b) is absent, except on leave granted by the Minister in accordance with section 9, from 3 consecutive meetings of the Board; or
(c) without reasonable excuse, fails to comply with his obligations under section 12;
the Governor‑General shall terminate his appointment.
12 Pecuniary interests
(1) A member or acting member who has a direct or an indirect pecuniary interest in a matter being considered or about to be considered by the Board shall, as soon as possible after the relevant facts have come to his knowledge, disclose the nature of his interest at a meeting of the Board.
(2) A disclosure under subsection (1) shall be recorded in the minutes of the meeting of the Board and the member or acting member shall not, unless the Minister or the Board otherwise determines:
(a) be present during any deliberation of the Board with respect to that matter; or
(b) take part in any decision of the Board with respect to that matter.
(3) For the purposes of the making of a determination by the Board under subsection (2) in relation to a member or acting member who has made a disclosure under subsection (1), a member or acting member who has a direct or an indirect pecuniary interest in the matter to which the disclosure relates shall not:
(a) be present during any deliberation of the Board for the purpose of making the determination; or
(b) take part in the making by the Board of the determination.
13 Acting members
(1) The Minister may appoint a member referred to in paragraph 7(1)(c) to act as the Chairman:
(a) during a vacancy in the office of Chairman, whether or not an appointment has previously been made to the office; or
(b) during any period, or during all periods, when the Chairman is absent from duty or from Australia or is, for any other reason, unable to perform the functions of his office.
(2) The Minister may appoint a person qualified to be appointed as a member to act as a member:
(a) during a vacancy in the office of a member, whether or not an appointment has previously been made to the office;
(b) during any period, or during all periods, when a member is acting as the Chairman by reason of an appointment under subsection (1); or
(c) during any period, or during all periods, when a member is absent from duty or from Australia or, for any other reason, is unable to perform the functions of his office.
(3) An appointment of a person under this section may be expressed to have effect only in such circumstances as are specified in the instrument of his appointment.
(4) A person appointed to act during a vacancy shall not continue so to act for more than 12 months.
(5) The Minister may:
(a) determine the terms and conditions of appointment, including remuneration and allowances, of a person appointed under this section; and
(b) at any time terminate such an appointment.
(6) Where a person is acting in an office in accordance with paragraph (1)(b) or (2)(c), and the office becomes vacant while that person is so acting, that member may continue so to act until the Minister otherwise directs, the vacancy is filled or a period of 12 months from the date on which the vacancy occurred expires, whichever first happens.
(7) The appointment of a person under this section ceases to have effect if he resigns the appointment by writing signed by him and delivered to the Minister.
(8) While the appointment of a person under this section remains in force, he has, and may exercise, all the powers and shall perform all the functions of the person in whose office he is acting.
(9) The validity of anything done by or in relation to a member appointed under this section shall not be called in question on the ground that the occasion for his appointment had not arisen, that there is a defect or irregularity in or in connection with his appointment, that his apppointment had ceased to have effect or that the occasion for him to act had not arisen or had ceased.
14 Meetings
(1) The Board shall hold such meetings as are necessary for the performance of its functions.
(2) The Chairman may at any time, and, if so directed by the Minister, shall, convene a meeting of the Board.
(3) The Chairman shall preside at all meetings of the Board at which he is present.
(4) If the Chairman is not present at a meeting of the Board, the members present shall elect one of their number to preside at the meeting.
(5) At a meeting of the Board:
(a) 3 members form a quorum;
(b) all questions shall be decided by a majority of votes of the members present and voting; and
(c) the member presiding has a deliberative vote and, in the event of an equality of votes, also has a casting vote.
(6) The Board may regulate the conduct of proceedings at its meetings as it thinks fit and shall cause minutes of those proceedings to be kept.
(7) In this section:
Chairman includes an acting Chairman.
member includes an acting member.
15 Delegation
(1) The Board may, by resolution, either generally or as otherwise provided by the resolution, delegate to a member or an acting member all or any of its powers under this Act, other than this power of delegation and the powers:
(a) to grant a licence under section 21;
(b) to revoke a licence under section 23;
(ba) to refuse to approve the surrender of a licence under section 23A;
(c) to refuse to renew a licence under section 25; and
(d) to certify a business entity that is a business entity to which not all of paragraphs 29(6)(a) to (e) (inclusive) apply as an eligible business entity under section 29.
(2) A power so delegated, when exercised by the delegate, shall, for the purposes of this Act, be deemed to have been exercised by the Board.
(3) A delegation of a power under this section:
(a) may be revoked by a resolution of the Board (whether or not constituted by the persons constituting the Board at the time the power was delegated);
(b) does not prevent the exercise of the power by the Board; and
(c) continues in force notwithstanding a change in the membership of the Board.
(4) Section 34A of the Acts Interpretation Act 1901 applies in relation to a delegation under this section as if the Board were a person.
(5) A certificate signed by the Chairman or acting Chairman stating any matter with respect to a delegation of a power under this section is prima facie evidence of that matter.
(6) A document purporting to be a certificate mentioned in subsection (5) shall, unless the contrary is established, be deemed to be such a certificate and to have been duly given.
16 Staff
The staff necessary to assist the Board shall be persons engaged under the Public Service Act 1999.
17 Policies and practices of Board
(1) The Minister may, by notice in writing delivered to the Chairman or acting Chairman and expressed to be given under this section, give directions to the Board with respect to the policies and practices to be followed by the Board in the performance of its functions and exercise of its powers under this Act, and the Board shall comply with any such direction that is in force.
(2) The Minister shall cause to be published in the Gazette particulars of any direction given under subsection (1) and of any revocation of any such direction.
(3) Nothing in this section authorizes the Minister to give a direction to the Board in relation to a particular business entity.
18 Total approved capital of licensees
(1) The Minister may, by notice in writing to the Chairman or acting Chairman, specify the total amount that the Board may approve under subsections 21(1) and 38(2) as approved capital of licensees in any financial year.
(2) The Minister may, after giving a notice under subsection (1), by another notice or other notices in writing to the Chairman or acting Chairman, specify an additional amount or amounts that the Board may approve under subsections 21(1) and 38(2) as approved capital of licensees in the financial year to which the first‑mentioned notice relates.
(3) In any financial year the aggregate of:
(a) any amounts approved by the Board under subsection 21(1) as approved capital of licensees; and
(b) any amounts by which such capital is increased by the Board under subsection 38(2);
shall not exceed the aggregate of the amount specified by the Minister in any notice under subsection (1) in relation to that financial year and the additional amount or amounts specified by the Minister in any notice or notices under subsection (2) in relation to that financial year.
(4) If this Act comes into operation on a day other than the first day of a financial year, a reference in this section to a financial year, in relation to the financial year in which this Act comes into operation, is a reference to that part of that financial year during which this Act is in force.
19 Disclosure of information
(1) A person who is or has been a member or acting member of the Board or a member of the staff assisting the Board shall not, directly or indirectly, except for the purposes of this Act or as otherwise authorized or required by law, make a record of, or divulge or communicate to any person, any prescribed information acquired by him by reason of, or in the course of, the performance of his duties and functions under this Act.
(2) Nothing in subsection (1) precludes a person from divulging or communicating information:
(a) to the Commissioner of Taxation; or
(b) to the Administrative Appeals Tribunal in connection with proceedings under an Act of which the Commissioner has the general administration.
(3) Section 38 of the Freedom of Information Act 1982 does not apply in relation to a document containing prescribed information.
(4) In this section:
prescribed information means:
(a) information supplied to the Board in confidence; or
(b) any other information the disclosure of which may, or may reasonably be expected to, affect a business entity or a natural person adversely in respect of the lawful business, commercial or financial affairs of the business entity or person.
Part III—Management and investment companies
Division 1—Management and investment company licences
20 Application for grant of licence
(1) Before granting a management and investment company licence under this Part, the Board shall publish, in the Gazette and in such newspapers as the Board thinks appropriate, a notice stating that any Australian company may, not later than the date specified in the notice (not being earlier than 28 days after publication of the notice in the Gazette), lodge with the Board an application for the grant of a management and investment company licence, together with a declaration referred to in subsection (3), if required.
(2) There shall be specified in an application for a licence under subsection (1):
(a) the names, addresses and occupations of the officers of the applicant;
(b) the qualifications and previous experience of the officers of the applicant relevant to the effective management of the applicant if granted the licence;
(c) the amounts of the authorised and paid‑up share capital of the applicant;
(d) the amount for which the approval of the Board is sought by the applicant as approved capital of the applicant for the purposes of this Act;
(e) the full name and address of any person who holds a substantial ownership interest in the applicant;
(f) the investment plans proposed to be implemented by the applicant if granted the licence, including the name and address of any business entity in which the applicant proposes to acquire prescribed interests and particulars of those interests;
(g) the address of the registered office of the applicant; and
(j) such other matters, if any, as are prescribed or as the applicant considers relevant to the application.
(4) The Board may require an applicant under subsection (1) to furnish to the Board such further information, including further information with respect to the matters set out in subsection (2), as the Board considers necessary for the purpose of deciding the application, and the Board may refuse to consider the application further until the information is furnished.
21 Grant of licence
(1) Subject to subsections (2) and (2A), the Board may grant or refuse to grant a licence to an applicant and where the Board grants a licence it shall specify in the licence the amount of approved capital of the licensee for the purposes of this Act.
(1A) For the purposes of subsection (1), the approved capital of the licensee is an amount equal to or exceeding the amount of the applicant’s paid‑up share capital on the day on which the licence is granted.
(2) The Board shall not grant a licence to an applicant under section 20 if:
(a) the amount of the paid‑up share capital of the applicant is less than $200,000 or such other amount, if any, as is prescribed;
(b) an order under Part II of the Foreign Acquisitions and Takeovers Act 1975 is in force in relation to the applicant and has not been complied with; or
(c) the applicant is not an Australian company.
(2A) Where an applicant’s paid‑up share capital is less than the relevant amount, then, even if the applicant’s authorised share capital is not less than that amount, the Board shall not grant a licence to the applicant unless the applicant provides the Board with a declaration under subsection (2B).
(2B) A declaration shall be signed by the secretary of the applicant and shall state that undertakings in writing by persons to subscribe, if the applicant is granted the licence, to shares in the applicant such that the applicant’s paid‑up share capital will not be less than the relevant amount have been made and will be made available for inspection by the Board at a place determined by the Board.
(3) Where the Board is of the opinion that, by reason of the amount of approved capital of licensees specified in relation to a financial year by the Minister under section 18, fewer licences may be granted than there are satisfactory applicants, the Board shall grant the licences to those applicants that it considers are likely if licensed to assist most effectively the formation and development of prescribed business entities.
(4) A licence granted under this section expires, if not sooner revoked, on:
(a) in the case of a licence granted in December in any year—31 December in the next following year; or
(b) in any other case—31 December next following the date on which the licence was granted.
(4A) A licence granted under this section that is in force on the date of commencement of this subsection expires, if not sooner revoked, on 31 December 1986.
(5) The Board may:
(a) impose conditions when granting a licence under this section or, by notice in writing served on the licensee, at any time when the licence is in force; and
(b) at any time when the licence is in force, by notice in writing served on the licensee, vary or revoke any of the conditions of the licence or impose further conditions.
(6) In this section, relevant amount means the amount of $5,000,000 or, where the regulations prescribe another amount for the purpose of this section, that other amount.
22 Furnishing of information to Board
The Board may, from time to time, direct a licensee, or a business entity that manages a licensee, to furnish to the Board, within such time as is specified in the direction or such further time as the board allows, such information as the Board requires for the purpose of performing its duties and functions under this Act, being information relating to the licensee or its operations.
23 Revocation of licence
(1) Subject to this section, the Board may, by notice served on a licensee, revoke the licence if the Board is satisfied that:
(a) a provision of this Act or the regulations has been contravened by, or in relation to, the licensee;
(b) the licensee has failed to comply with a condition of the licence;
(c) the licensee has failed to comply with a direction by the Board under section 22 or 26;
(d) the licensee has failed to make adequate use of the licence for the purpose of assisting the formation and development of prescribed business entities; or
(e) the officers of the licensee do not have appropriate qualifications and experience to manage the licensee effectively.
(2) Where a licensee requests the Board to revoke the licence, the Board shall, by notice served on the licensee, revoke the licence.
(3) The Board shall not revoke a licence under subsection (1) unless the Board:
(a) by notice served on the licensee, allows the licensee not less than 14 days after service of the notice in which to make written submissions to the Board with respect to the matters specified in the notice that, in the opinion of the Board, may constitute grounds for revoking the licence; and
(b) considers any such submissions.
(4) A notice under subsection (1) revoking a licence shall:
(a) set out the Board’s findings on material questions of fact, refer to the evidence or other material on which those findings were based and give the reasons for the Board’s decision to revoke the licence; and
(b) contain the statement referred to in subsection 48(1) and such other matters as the Board thinks fit.
23A Surrender of licence
(1) A licensee may, by notice in writing served on the Board, request the Board to approve the surrender by the licensee of its licence.
(2) A request shall contain such information as the Board determines.
(3) The Board shall, within 28 days after receipt of a request, by notice in writing served on the licensee:
(a) where the Board is satisfied that paragraph 23(1)(a), (b), (c) or (d) applies to the licensee:
(i) inform the licensee that the Board is so satisfied and intends to refuse to approve the surrender;
(ii) specify in the notice the reasons why the Board is so satisfied; and
(iii) invite the licensee to make written submissions to the Board, within 14 days after the licensee receives the notice, in relation to those reasons; or
(b) in any other case—approve the surrender of the licence.
(4) The Board shall consider any submissions made to the Board under a notice referred to in paragraph (3)(a) and, not later than 14 days after the expiration of the period referred to in that paragraph, by notice in writing served on the licensee:
(a) approve the surrender of the licence; or
(b) refuse to do so.
(5) Where the Board does not, within 28 days after receipt of a request, serve a notice on the licensee under subsection (3), the Board shall be deemed to have approved the surrender of the licence on the expiration of that period.
(6) Where the Board serves a notice on a licensee under paragraph (3)(a), but does not serve a notice on that licensee under subsection (4) within the period specified in that subsection, the Board shall be deemed to have approved the surrender of the licence on the expiration of that period.
24 Suspension of licence
(1) By notice in writing served on a licensee, the Board may suspend the licence for a period not exceeding 2 months on any ground referred to in subsection 23(1) on which the Board may revoke the licence, and, in addition, may suspend the licence where the Board is satisfied that the licensee is likely to contravene this Act or the regulations, but the Board shall not suspend a licence on any other ground.
(2) A notice under subsection (1) shall state the reasons of the Board for the suspension.
(3) The Board may at any time remove a suspension under subsection (1).
25 Renewal of licence
(1) An application for the renewal of a licence shall be lodged with the Board not less than 28 days before the day on which the licence expires.
(2) There shall be included in an application under subsection (1) for the renewal of a licence:
(a) particulars of the activities of the licensee during the period during which the licence has been in force;
(b) such other matters, if any, as the licensee considers relevant to the application; and
(c) such other particulars, if any, as the Board considers necessary.
(3) The Board may refuse to renew a licence on any ground referred to in subsection 23(1) on which the Board may revoke the licence, but not on any other ground.
(4) The Board shall not refuse to renew a licence unless the Board:
(a) by notice served on the licensee, allows the licensee not less than 14 days after service of the notice in which to make written submissions to the Board with respect to the matters specified in the notice that, in the opinion of the Board, may constitute grounds for refusing to renew the licence; and
(b) considers any such submissions.
(5) The Board shall, by notice in writing served on a licensee, inform the licensee of its decision whether or not to refuse to renew the licence, and, where the Board decides to refuse to renew the licence, the notice shall:
(a) set out the Board’s findings on material questions of fact, refer to the evidence or other material on which those findings were based and give the reasons for the decision; and
(b) contain the statement referred to in subsection 48(1) and such other matters as the Board thinks fit.
(6) A licence renewed under this section expires, if not sooner revoked, on 31 December next following the date on which the licence was renewed.
(7) A licence that was renewed under this section after 31 October 1985 and before 1 January 1986 expires, if not sooner revoked, on 31 December 1986.
26 Alternative to revocation etc.
Where the Board is satisfied that a licensee has contravened this Act or the regulations, the Board may, before revoking, suspending or refusing to renew the licence under this Part, direct the licensee, by notice in writing served on the licensee, to take such action in relation to the contravention as is specified in the notice within such period as is so specified, and, if the licensee takes that action within the period specified, the Board shall not revoke, suspend or refuse to renew the licence on the ground of that contravention.
27 Publication of Board’s decisions
The Board shall, as soon as practicable after approving, or refusing to approve, the surrender of a licence or revoking, suspending or refusing to renew a licence under this Part, publish a notice in the Gazette stating that the Board has approved or refused to approve the surrender of the licence or that the licence has been revoked, suspended or not renewed, as the case may be, on the date specified in the notice.
28 Calls paid during suspension
(1) A licensee shall not, while the licence is suspended:
(a) issue any shares;
(b) call up any share capital; or
(c) accept from a member of the licensee the whole or a part of the amount remaining unpaid on any shares, whether or not that amount has been called up, unless that amount was called up, and the time fixed for payment of the call occurred, before the suspension.
(2) Where:
(a) a licence is suspended;
(b) a call for payment of the whole or a part of the amount remaining unpaid on any shares forming part of the approved capital of the licensee was made before the suspension and the time fixed for payment of the call occurs during the period of the suspension; and
(c) before the licence was suspended the licensee had received payment of the call from any member of the licensee;
the licensee shall forthwith after the licence is suspended repay the amount of the payment to that member.
Division 2—Certification of eligible business entities
29 Certification
(1) Where a licensee proposes to acquire a prescribed interest in a business entity that is not an eligible business entity in relation to the licensee, the licensee shall apply to the Board for the Board to certify the business entity as an eligible business entity in relation to the licensee.
(2) An application under subsection (1) shall be made in the manner and form approved by the Board.
(3) On receipt of an application by a licensee under subsection (1), the Board shall, as soon as practicable, but, in any case, where the application relates to a business entity to which all of paragraphs (6)(a) to (e) (inclusive) apply, not later than 10 business days after the day of receipt of the application, serve notice on the licensee:
(a) certifying the business entity to which the application relates as an eligible business entity in relation to the licensee;
(b) refusing to do so; or
(c) requesting the licensee to furnish to the Board such further information as is specified in the notice, being information that the Board considers necessary for the purpose of deciding the application.
(4) Where the Board requests a licensee under subsection (3) to furnish further information to the Board, the Board may refuse to consider the application further until the information is furnished.
(5) On receipt of information requested by the Board under subsection (3) in relation to an application by a licensee under subsection (1), the Board shall, as soon as practicable, but, in any case, where the application relates to a business entity to which all of paragraphs (6)(a) to (e) (inclusive) apply, not later than 10 business days after the day of receipt of the information, serve notice on the licensee:
(a) certifying the business entity to which the application relates as an eligible business entity in relation to the licensee; or
(b) refusing to do so.
(5A) The Board may:
(a) impose conditions when certifying a business entity as an eligible business entity in relation to a licensee or, by notice in writing served on the licensee, at any time while the certification remains in force; and
(b) at any time while the certification remains in force, by notice in writing served on the licensee, vary or revoke any of the conditions so imposed, or impose further conditions.
(6) Subject to this section, the Board may certify a business entity to which an application by a licensee under subsection (1) relates as an eligible business entity in relation to the licensee if:
(a) the business entity is, or proposes to become, engaged primarily in one or more of the following business activities:
(i) manufacturing;
(ii) prescribed agricultural, forestry or fishing activities;
(iii) postal, telegraphic, telephonic or teleprinter communication services or such other communication services as are prescribed;
(iv) architectural services;
(v) surveying services;
(vi) the production or supply of software for computers or for similar equipment;
(vii) consultant engineering services;
(viii) scientific and technical services;
(ix) data processing services;
(x) prescribed services relating to education or training;
(b) the business entity carries on, or proposes to carry on, its principal business activities, or research and development operations, or both, in Australia;
(c) the business entity has, at the date of the application, not more than 100 employees or a net worth of not more than $6,000,000 or such other amount, if any, as is prescribed;
(d) the Board is satisfied, on the basis of an assessment furnished to the Board by the licensee and any other relevant information in the possession of the Board, that the average growth in the nominal value of sales of the business entity projected for a year specified in the application commencing not more than 6 months before nor more than 6 months after the date of the application and for each of the two succeeding years is more than 20%;
(e) where the business entity is engaged primarily in a business activity or business activities referred to in paragraph (a) at the date of the application—that business activity was, or those business activities were, commenced (whether by the business entity or by any other person) not more than 10 years before that date; and
(f) the Board is satisfied that the business entity is a prescribed business entity.
(7) The Board may certify as an eligible business entity a business entity in relation to which any or all of paragraphs (6)(a) to (e) (inclusive) do not apply, but the Board shall not certify as an eligible business entity a business entity to which paragraph (6)(f) does not apply.
(8) The Board shall not certify a business entity as an eligible business entity in relation to a licensee if any person who was an officer of the licensee on the date of the application under subsection (1) for certification was also, at any time during the 12 months ending on that date, an officer of the business entity.
(8A) Subsection (8) does not apply in relation to a person who has been an officer of the business entity if the Board is satisfied that there is no actual conflict of interest as a result of the person having been such an officer.
(9) Subject to subsections (9A) and (9B), the certification of a business entity as an eligible business entity in relation to a licensee continues in force for such period as is specified in the notice of certification referred to in subsection (3) or (5), as the case may be.
(9A) The Board may, on the request of a licensee made before the expiration of the period specified in a notice of certification referred to in subsection (3) or (5), as the case may be, extend the period of certification for such further period as the Board thinks fit.
(9B) The Board may extend the period of a certification under subsection (9A) in spite of the fact that the period has expired and, where the Board does so, the period of extension shall be taken to have commenced on the expiration of the first‑mentioned period.
(10) A reference in subsection (6) to the net worth of a business entity, as at a particular date, is a reference to the amount by which the total amount of the assets of the business entity exceeds the total amount of its liabilities, not being ownership interests in the business entity, as those amounts were shown in the last balance‑sheet of the business entity that was prepared and audited before that date or, if no balance‑sheet of the business entity was prepared and audited before that date, in the accounting records of the business entity on that date.
30 Cancellation of certification
(1) The Board may, by notice in writing served on a licensee, cancel the certification under section 29 of a business entity as an eligible business entity in relation to the licensee if:
(a) the business entity is engaged primarily in a business activity other than a business activity referred to in paragraph 29(6)(a);
(aa) the business entity fails to comply with a condition imposed by the Board under subsection 29(5A);
(b) the business entity does not carry on its principal business activities, or research and development operations, in Australia; or
(c) the Board is satisfied that an officer of the business entity or licensee has furnished information, or has authorized information to be furnished, to the Board in relation to the business entity that to the knowledge of the officer is, whether by reason of the inclusion or omission of any matter or thing, misleading in a material particular.
(2) Where the Board is satisfied that a business entity certified under section 29 as an eligible business entity in relation to a licensee is not a prescribed business entity, the Board, shall, by notice in writing served on the licensee, cancel the certification.
(3) A certification in force under section 29 of a business entity as an eligible business entity in relation to a licensee ceases to be in force upon the revocation or expiration of the licence under this Part.
Division 3—Financial matters
31 Prohibition
(1) A licensee shall not, except as authorized by or under this Part, acquire or hold prescribed interests in business entities or otherwise invest assets of the licensee.
(2) A licensee shall not acquire or hold interests in any shares in an eligible business entity that is a company if those shares have been issued or allotted previously to any other person.
(3) Subsection (2) does not apply in relation to shares in the eligible business entity that have been, or are to be, acquired by the licensee if the Board is satisfied that the money spent in acquiring those shares has increased, or will increase, the value of the eligible business entity.
32 Prescribed interests in an eligible business entity
A licensee may hold prescribed interests in a particular eligible business entity not exceeding in the aggregate an amount equal to 20% of whichever amount is the greater of:
(a) the approved capital of the licensee; or
(b) the shareholders’ funds of the licensee.
33 Ownership interests in an eligible business entity
(1) A licensee may hold ownership interests in a particular eligible business entity not exceeding in the aggregate an amount equal to 50%, or such higher percentage as the Board has approved in writing, of the total of the amounts of all ownership interests in the business entity.
(2) Where a licensee holds ownership interests in a particular business entity in excess of those permitted by subsection (1) by reason of the failure of other persons holding partly paid shares to pay the amounts of calls upon those shares when those amounts became payable, the licensee shall notify the Board forthwith of the aggregate amount of the ownership interests held by the licensee in the business entity and submit to the Board for its approval a plan for reducing that aggregate amount to the amount permitted by subsection (1).
(3) As soon as practicable after a licensee submits a plan to the Board under subsection (2), the Board shall, by notice in writing served on the licensee, inform the licensee of its decision whether or not to approve the plan, and, where the Board approves such a plan:
(a) the Board shall specify in the notice the date by which the amount of the ownership interests held by the licensee in excess of the amount permitted by subsection (1) must be disposed of; and
(b) from the date on which the licensee began to hold an amount of ownership interests in excess of the amount permitted by subsection (1) until the date specified in the notice, or such later date as the Board allows, subsection (1) shall be taken, for the purposes of this Act, to have had, and to have, effect, in relation to the aggregate amount of ownership interests held by the licensee in the business entity, as if there were substituted for the amount permitted by subsection (1) such higher amount as the Board specifies in the notice.
(4) Notwithstanding subsection (1), where:
(a) a licensee proposes to acquire an ownership interest in an eligible business entity (whether or not the licensee already holds an ownership interest in the business entity); and
(b) immediately before the proposed acquisition, a person who holds a substantial ownership interest in the licensee also holds a substantial ownership interest in the business entity;
the licensee shall not make the proposed acquisition if the proposed acquisition:
(c) is to be made on terms other than ordinary commercial terms;
(d) would have the result that the total of the amounts of the ownership interests held in the business entity by the licensee and by every person to whom paragraph (b) applies would exceed 50%, or such higher percentage as the Board has approved in writing, of the total of the amounts of all ownership interests in the business entity; or
(e) would have the result that the total of the amounts of all ownership interests held by the licensee in eligible business entities in which persons who hold substantial ownership interests in the licensee also hold substantial ownership interests would exceed an amount equal to 20% of whichever amount is the greater of:
(i) the approved capital of the licensee; or
(ii) the shareholders’ funds of the licensee.
(5) Notwithstanding subsection (1), a licensee, together with associates of the licensee, shall not, at any time within 10 years after the licensee first acquires an ownership interest in an eligible business entity, hold ownership interests in the business entity amounting to or exceeding 90% of the total of the amounts of all ownership interests in the business entity unless, at that time, one or more of the persons who held ownership interests in the business entity at the time when the licensee first acquired an ownership interest holds or hold an option to acquire, or options to acquire an aggregate of, 10% or more of the ownership interests in the business entity, being an option or options that may be exercised at any time before the expiration of that period of 10 years.
(6) For the purposes of subsection (4), where:
(a) a person holds a substantial ownership interest in a licensee; and
(b) an associate of the person holds an ownership interest in an eligible business entity in relation to the licensee;
the person shall be deemed to hold (but not to the exclusion of any other person) the ownership interest in the eligible business entity held by the associate.
(7) In this section, associate, in relation to a person, means:
(a) a parent or remoter lineal ancestor, a child or remoter issue, or a brother or sister, of the person (including a person who is such a relation by adoption) or the spouse of the person;
(b) a partner of the person;
(c) where the person is a company:
(i) an officer of the company;
(ii) an officer of a company that is related to the first mentioned company; or
(iii) a person who holds a substantial ownership interest in the company;
(d) an officer of a company of which the person is an officer; or
(e) any person who is, by virtue of this subsection, an associate of any other person who is an associate of the person (including a person who is an associate of the person by another application or other applications of this paragraph).
(8) For the purposes of subsection (7), the question whether companies are related to each other shall be determined in the same manner as the question whether corporations within the meaning of the Corporations Act 2001 are related to each other is determined under that Act.
34 Loan interests in eligible business entities
A licensee may hold loan interests in eligible business entities not exceeding in the aggregate an amount equal to 20% of the shareholders’ funds of the licensee.
35 Guarantor interests in eligible business entities
(1) A licensee may hold guarantor interests in eligible business entities not exceeding in the aggregate an amount equal to the shareholders’ funds of the licensee.
36 Prescribed interests in business entities that cease to be eligible
(1) Where the certification of a business entity as an eligible business entity in relation to a licensee is cancelled by the Board under section 30 or expires, the Board may:
(a) approve the continued holding by the licensee of any or all prescribed interests held by the licensee in the business entity at the time of the cancellation or expiry, as the case may be; and
(b) approve the acquisition by the licensee of additional prescribed interests in the business entity if:
(i) the Board is satisfied that it is desirable for the licensee to acquire those additional interests in order to protect the prescribed interests already held by it in the business entity and that no other finance is available on reasonable terms to the business entity; and
(ii) an application for the Board’s approval of the acquisition is lodged with the Board at least 28 days before the acquisition.
(2) Where the Board approves under subsection (1) the continued holding, or the acquisition, of prescribed interests in a business entity by a licensee, the Board shall specify in the approval a date by which all prescribed interests held by the licensee in the business entity must be disposed of.
(2A) The Board may, on the request of the licensee made before the expiration of the date specified by the Board in an approval, vary the approval by specifying a later date in place of the date originally specified and the approval shall have effect accordingly.
(2B) Where, under subsection (2) as in force immediately before the commencement of this subsection, the Board has approved the continued holding, or the acquisition, of prescribed interests in a business entity by a licensee without specifying a date by which all prescribed interests held by the licensee in the business entity must be disposed of, the Board shall, as soon as practicable after the commencement of this subsection, by notice in writing served on the licensee, specify such a date and that date shall be deemed to have been specified by the Board when that approval was given.
(3) For the purposes of this Part, where a licensee continues to hold, or acquires, prescribed interests in a business entity with the approval of the Board under subsection (1), the business entity shall be deemed to be an eligible business entity in relation to the licensee until the date specified by the Board under subsection (2).
37 Other investments approved by Board
(1) The Board may, by notice published in the Gazette, approve the investing by licensees of moneys, being assets of the licensee:
(a) in debentures of, or otherwise by way of loan to or deposit with, an ADI specified in the notice;
(b) by way of loan to or deposit with dealers in the short‑term money market who are specified in the notice; or
(c) in prescribed instruments specified in the notice.
(2) A licensee may invest moneys, being assets of the licensee, in any manner not otherwise authorized by or under this Part, with the approval of the Board given in writing before that investment is made, but the Board shall not approve any investment under this subsection in:
(a) any other licensee;
(b) any business entity that is engaged primarily in the business of lending money;
(c) any business entity that is engaged primarily in the business of investing in debentures, stocks, shares or bonds of any government, local government authority, company, association or society; or
(d) any business entity that is engaged primarily in the business of acquiring and disposing of interests in real property.
(3) The aggregate amount of the assets (not being ownership interests in eligible business entities) of a licensee (in this subsection referred to as prescribed assets) shall not, on any day occurring more than 18 months after the day on which the licence was granted to the licensee, exceed 30% of the total amount of assets of the licensee on that day if, on each of the immediately preceding 180 days, the aggregate amount of the prescribed assets exceeded 30% of the total amount of assets of the licensee.
(3A) Notwithstanding subsection (3), the Board may, having regard to business cycles or fluctuations in the market place, extend the period of 18 months referred to in that subsection in relation to any particular licensee.
(4) For the purposes of subsection (3), the amount of an asset of a licensee, as at a particular day, is the amount shown as the value of the asset on that day in the accounting records of the licensee.
38 Share capital
(1) The Board may from time to time, by notice in writing served on each licensee, invite each licensee to lodge with the Board, not later than the date specified in the notice, an application for an increase in the approved capital of the licensee.
(2) On application by a licensee under subsection (1), the Board may, if it thinks fit after considering all applications under that subsection and, if any applications under subsection 20(1) are pending, those applications, increase the amount of the approved capital specified in the licence under subsection 21(1), or last specified in the licence under this section, as the case may be, by specifying in the licence a greater amount as approved capital of the licensee for the purposes of this Act.
(3) A licensee shall not reduce its authorised share capital below $5,000,000 or the amount, if any, prescribed for the purposes of subsection 20(3) or, if the approved capital of the licensee exceeds $5,000,000 or that other amount, as the case may be, below the approved capital.
(4) A licensee shall inform the Board in writing forthwith after calling up any share capital of the licensee.
Division 4—Administrative matters
41 Annual return
A licensee shall, within 4 months after the expiration of each financial year, lodge with the Board a return relating to the operations of the licensee during that year or, where the licence was granted under section 21 during that year, relating to the operations of the licensee during that part of the year in which it was licensed, including:
(a) particulars of all prescribed interests in any business entity acquired, held or disposed of by the licensee during that year or that part of the year, as the case may be, and of any other investments made by the licensee during that year or that part of the year; and
(b) such other matters, if any, as are prescribed.
42 Share register
(1) A licensee shall, not later than 10 business days after the licence is granted, furnish to the Board a copy of the register of members of the licensee required to be kept under:
(a) the Corporations Act 2001; or
(b) subsection (2).
(2) If a licensee is not required by the Corporations Act 2001 to keep a register of its members, the licensee shall keep a register in which it shall enter the matters that it would be required to enter in a register of members if the licensee were a company as defined by the Corporations Act 2001.
(3) A licensee shall, not later than 10 business days after any change to a matter entered in a register referred to in subsection (1), notify the Board in writing of the change.
(5) If a licensee fails to comply with subsection (1) or (3), the licensee and any officer of the licensee who is in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the failure are each guilty of an offence punishable on conviction:
(a) in the case of the licensee—by a fine not exceeding $2,500; or
(b) in the case of an officer of the licensee—by a fine not exceeding $500.
43 Changes to be notified
(1) Where a person becomes an officer of a licensee, the licensee shall notify the Board in writing forthwith of the full name, address and occupation of the person and of his qualifications and previous experience relevant to the effective management of the licensee.
(2) Where a person ceases to be an officer of a licensee, the licensee shall notify the Board in writing forthwith.
44 Acquisition of substantial ownership interest to be approved
A person shall not acquire any interests in shares in a licensee, without the approval of the Board given to the person in writing before the acquisition, if the acquisition would result in the person acquiring a substantial ownership interest in the licensee.
45 Cross ownership to be notified
(1) Where:
(a) a person who holds or acquires a substantial ownership interest in a licensee acquires a substantial ownership interest in an eligible business entity in relation to the licensee; or
(b) a person who holds or acquires a substantial ownership interest in an eligible business entity in relation to a licensee acquires a substantial ownership interest in the licensee;
that person shall inform the licensee forthwith in writing and shall include particulars of all prescribed interests held by that person in the licensee and in the business entity.
(2) A licensee shall forthwith notify the Board in writing of any information given to the licensee under subsection (1).
Part IV—Miscellaneous
46 Annual report
(1) The Board shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the operation of this Act, with particular reference to its operation during that year.
(2) A report for a year under subsection (1) shall include:
(a) the names of all companies that were, at any time during that year, licensees and the names of all business entities that were, at any time during that year, certified under section 29 as eligible business entities; and
(b) particulars of any directions given by the Minister to the Board during the year to which the report relates.
(3) The Minister shall cause a copy of a report furnished to him under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which he receives the report.
47 Review of certain decisions of the Board
Applications may be made to the Administrative Appeals Tribunal for review of any decision of the Board to refuse to approve the surrender of a licence or to revoke or to refuse to renew a licence.
48 Statement to accompany notice of reviewable decisions
(1) Where the Board makes a decision to revoke a licence, to refuse to approve the surrender of a licence or to refuse to renew a licence, the Board shall, in the notice under subsection 23(1), 23A(3) or 25(5), as the case may be, informing the licensee of its decision, include a statement to the effect that the licensee, or any other person whose interests are affected by the decision, may, subject to the Administrative Appeals Tribunal Act 1975, if the licensee or other person is dissatisfied with the decision, make application to the Administrative Appeals Tribunal for review of the decision.
(2) Any failure to comply with the requirements of subsection (1) in relation to a decision does not affect the validity of the decision.
49 False or misleading statements
A person who, in a document lodged with or otherwise provided to the Board under this Act, makes or authorizes the making of a statement that to his knowledge is false or misleading in a material particular, or omits or authorizes the omission of any matter or thing without which the document is to his knowledge misleading in a material respect, is guilty of an offence punishable on summary conviction:
(a) in the case of a natural person—by a fine not exceeding $5,000 or imprisonment for a period not exceeding 2 years, or both; or
(b) in the case of a person being a company—by a fine not exceeding $25,000.
50 Validity of acts done in contravention of Act or regulations
An act is not invalidated by reason only of the fact that it constitutes a contravention of this Act or the regulations.
51 Service
For the purposes of this Act, a notice may be served:
(a) on a natural person—by delivering it to the person personally or by leaving it at, or by sending it by post to, the address of the place of residence or business last known to the person serving the document or, where the Board is serving the document, last known to the Board;
(b) on a company—by leaving it at, or by sending it by post to, the registered office of the company; or
(c) on a business entity that is not a company—by leaving it at, or by sending it by post to, the address of any office of the business entity or of any owner or officer of the business entity or by delivering it personally to such an owner or officer.
52 Regulations
The Governor‑General may make regulations, not inconsistent with this Act, prescribing all matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.