Gilbert + tobin - Gilbert and Tobin

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8. Banking 8.1 Australia’s banking system The key lending institutions in the Australian financial system consist of commercial banks, retail banks and investment banks (including branches and subsidiaries of foreign banks). Non-bank financial institutions also operate within the system. The key regulator of the banking system is the Australian Prudential Regulation Authority (APRA) which ensures that organisations in the Australian financial services industry manage their risk appropriately and that the stability of the financial system is not jeopardised. APRA is also the body which determines whether to authorise an entity to conduct banking business and grants authorities under the Banking Act 1959 (Cth) for authorised deposit-taking institutions. Once authorised, it is possible for a foreign bank to conduct business in Australia either through an authorised branch or an authorised locally incorporated subsidiary which can engage in the full spectrum of banking activities. However, authorised foreign bank branches in Australia are prohibited from engaging in retail banking (taking deposits of less than $250,000 from the public). 8.2 Direct lending in Australia There are a number of issues that may impact on a foreign company engaged in direct lending in Australia. (a) Australian financial services licences (AFSLs) As noted in section 7, all persons who carry on a financial services business in Australia are required to have an AFSL or have the benefit of an exemption from this requirement. Lenders are, generally speaking, not covered by this licensing regime, but most other types of financial services are covered. (b) Financial Sector (Collection of Data) Act 2001 (Cth) This act requires a corporation to register and provide periodic reports if, among other things, 50% or more of its assets in Australia consist of debts owed to the corporation as a result of transactions entered into in the course of providing finance. A debt owed by an Australian borrower is likely to be regarded as situated in Australia. (c) Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) As noted in section 17, this act regulates designated services carried on through a permanent establishment in Australia, which includes a place in Australia where the entity carries on business through an agent. (d) Foreign investments As outlined in section 2, foreign investment in Australia is regulated. The restrictions extend to the acquisition of “interests” in shares, assets of a business or urban land and so can be triggered by the grant of a security interest. There are limited exemptions in the case of interests which are held by persons whose ordinary business includes the lending of money if the interest is held solely by way of security for the purposes of a money lending agreement. (e) Business conduct The Australian Securities Commission Act 1989 (Cth) sets out prohibitions on misleading and deceptive conduct in respect of a broad range of financial services and unconscionable conduct in respect of business transactions. There is also specific legislation in each state and territory which deals with the review of unjust contracts. A range of legislation exists in respect of lending to consumers and this is discussed in section 11. (f) Security Security can be taken over most assets such as land, shares, bank accounts, receivables, insurances, goods and equipment. Most securities over property (other than land) are required to be registered under the Corporations Act 2001 (Cth) (Corporations Act), which currently contains the principal registration regime for securities granted by Australian companies. Registration of a registrable charge is mandatory and an unregistered registrable charge will be void as against a liquidator or administrator. In addition to (or, in some cases, instead of) registration under the Corporations Act, a number of other state and territory-based registers may be applicable (such as the registration of interests in land, statutory liens and bills of sale). A new personal property securities regime commenced PAGE 18
operation throughout Australia on 1 February 2012. The Personal Property Securities Act 2009 (Cth) (PPSA) establishes a national system for the registration of security interests in personal property, together with new rules for the creation, priority and enforcement of security interests in personal property, and will make significant changes to the law regarding security interests, laws relating to insolvency and other aspects of Australian commercial law. The PPSA has a retrospective effect on security interests and security agreements arising before that time by operation of the transitional provisions. PAGE 19
Page 1 and 2: 2013 Gilbert + Tobin Doing business
Page 3 and 4: about gilbert + Tobin Gilbert + Tob
Page 5 and 6: 1. Overview of Australia’s govern
Page 7 and 8: 2. Foreign investment review Austra
Page 9 and 10: 3. Establishing a business presence
Page 11 and 12: 4. Acquisitions As part of its entr
Page 13 and 14: Issue Takeover bid Scheme of arrang
Page 15 and 16: 5.2 Protection of minority sharehol
Page 17 and 18: 6. Raising capital Under the Corpor
Page 19: In some cases, FFSPs are able to re
Page 23 and 24: the DTA to revise down the domestic
Page 25 and 26: 10. Competition law The Competition
Page 27 and 28: (e) Third line forcing (sections 47
Page 29 and 30: 11. Fair dealing and consumer prote
Page 31 and 32: Services Due care and skill: guaran
Page 33 and 34: 12. Employment law Australia’s na
Page 35 and 36: 13. Intellectual property In Austra
Page 37 and 38: 14. environmental law Each Australi
Page 39 and 40: 16. native title and indigenous her
Page 41 and 42: 18. Privacy, spam and the Do Not Ca
Page 43 and 44: The DNCR Act prohibits “telemarke
Page 45 and 46: The legal profession in Australia i
Page 47 and 48: Glossary Regulatory authorities, tr

Gilbert + tobin - Gilbert and Tobin

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