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Regulation of Business Foreign Investment Review Board (FIRB) The FIRB is a non-statutory organisation formed in 1976 within the Federal Treasury to provide foreign investment policy advice to the Treasurer and the Australian Federal Government. The FIRB’s advisory only function includes assessing investment proposals submitted by foreign interests and making recommendations to the Treasurer on the compatibility of those proposals with Government policy and the Foreign Acquisitions and Takeovers Act 1975 (Cth). FIRB also provides information on the Government’s policies to prospective foreign investors and potential investors alike. More information on foreign acquisitions is contained in Chapter 5, Foreign Investment in Australia ‒ Australian Government support. 11 | Doing Business in Australia The Australian Competition and Consumer Commission (ACCC) The Australian Prudential Regulation Authority (APRA) The ACCC’s primary role is to administer the Competition and Consumer Act 2010 (which incorporates the Australian Consumer Law; see Chapter 15 for more information) as well as a range of other legislation. In broad terms, the objectives of the Act are to promote competition, fair trading, and provide for consumer protection. APRA is the independent Australian statutory authority which was formed in 1998 to promote the prudent management of financial institutions, in terms of ensuring stability, efficiency and competitive financial systems. Its regulatory function extends to the supervision of banks, life insurers, private health insurers, general and reinsurance companies, building societies, credit unions, friendly societies and superannuation funds. The ACCC is an independent Australian statutory authority established in 1995 (following the merger of the then Trade Practices Commission and the Prices Surveillance Authority). As such, the ACCC has a role in enforcing anticompetitive and unfair market practices, preventing anticompetitive mergers and acquisitions, enforcing provisions regarding product safety and product liability, and regulating third party access to facilities of national significance (where applicable). APRA has the power to require financial organisations to observe prudential standards, and may intervene, where necessary, to protect the interests of depositors, policy-holders or members. In addition, APRA has far-reaching powers of investigation, intervention and administration. Australian Securities and Investments Commission (ASIC) ASIC is the independent Australian statutory regulator of Australian registered companies and one of three Federal Government bodies that regulate financial services. ASIC’s primary role is to administer the Corporations Act 2001 (Cth) which is the law regulating the incorporation, operations and management of companies. ASIC is also responsible for supporting the integrity of fairness in company affairs and financial markets. ASIC has a consumer protection function to promote confident and informed participation by investors, which extends to the financial system by regulating the advice, sale and disclosure of financial products and financial services to consumers. ASIC also has the role of ensuring some information about companies and bodies is made available to the public. ASIC has far-reaching powers including to create conduct rules for financial markets, stop the issue of financial products, investigate suspected breaches of the Corporations Act, issue infringement notices and to ban individuals from providing financial services. Australian Securities Exchange Limited (ASX) The ASX was formed in 1987 and is one of the world’s leading financial market exchanges. The ASX offers a range of services, including listings, trading, clearing and settlement across a variety of markets trading in equities, derivatives and future and fixed interest securities. There are branches of the ASX in Sydney, Melbourne, Perth, Chicago, Hong Kong and London. The ASX creates, monitors and enforces its own rules for ASX listed entities, in relation to listings, operating and settlement, through the ASX Compliance group, which also has delegated authority to make certain compliance and enforcement decisions. ASIC and the Reserve Bank of Australia have other powers to oversee and to enforce the laws and regulations that generally govern financial markets in Australia. The ASX has also created the ASX Corporate Governance Council which brings together various business, shareholder and industry groups to recommend best corporate governance practices to be adopted by ASX listed entities. Australian Taxation Office (ATO) The Commissioner of Taxation has the overall responsibility for administering the Australian income tax system. The ATO, under the Commissioner of Taxation, is the statutory authority responsible for administering Australia’s Federal taxation system and is also the primary collection agency for the Australian Government. 12 | Doing Business in Australia Australia’s income tax law consists primarily of the Income Tax Act 1986 (Cth), the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) and the Taxation Administration Act 1953 (Cth), as well as ATO administrative taxation rulings and court decisions. Fringe benefits provided to employees are subject to a separate taxation regime under the Fringe Benefits Tax Act 1986 (Cth) and the Fringe Benefits Tax Assessment Act 1986 (Cth). Australia’s goods and services taxation law consists primarily of A New Tax System (Goods and Services Tax) Act 1999 (Cth). The current income tax system involves taxation of income and capital gains of individuals and businesses. The ATO administers the process of annual taxation self-assessment and conducts random audits to verify individual and company assessments. The ATO also collects excise on tobacco, fuel and petroleum products and alcohol, administers the Higher Education Loan Programme and the Private Health Insurance rebate, and has responsibility for the fiscal regulation of Australia’s superannuation system. Reserve Bank of Australia (RBA) The RBA is a statutory authority performing Australia’s central banking functions. The RBA has responsibility for the following principal functions: • Monetary Policy – The RBA sets the cash rate (the interest rate on overnight loans in the money market) which influences other interest rates more generally in the economy (ie. mortgage and corporate lending interest rates). The RBA has a duty to maintain price stability, full employment and economic prosperity. It seeks to achieve this by setting monetary policy so as to maintain inflation in the economy at between 2-3 % over the medium term. • Market Operations – As part of its monetary policy function, the RBA sets a target for the cash rate and through its open market operations, it seeks to keep the cash rate as close as possible to that target. The RBA also regularly undertakes transactions in foreign exchange markets, foreign asset markets as well as managing Australia’s foreign currency reserves which are sometimes deployed to effect policy operations in the foreign exchange and domestic cash markets. • Financial Stability – A longstanding responsibility of the RBA is maintain the stability of the financial system. The RBA has a role both in mitigating the risk of financial disturbances that may have systemic consequences as well as responding to any financial system disturbance. • Payments & Infrastructure – The RBA, through the Payments System Board of the Reserve Bank, has a mandate to contribute to promoting efficiency and competition in the payments system and the overall stability of the financial system. The RBA has a formal regulatory role in ensuring that the infrastructure which supports the clearing and settlement of transactions in financial markets is operated so as to promote financial stability. • Financial Services – The RBA provides a range of banking services to the Australian Government, its agencies, overseas central banks and official institutions. As Australia’s central bank, the RBA manages the Government’s core accounts and provides transactional banking services to the Government and its agencies. IP Australia IP Australia is the Federal Government agency that administers registration of intellectual property rights and legislation in relation to patents, trademarks and designs and plant breeder rights in Australia. IP Australia is a division of the Department of Industry, Innovation and Science but operates independently of the department on financial matters. It incorporates the Patent, Designs and Trade Marks Offices. IP Australia also has the responsibility of working with the World Intellectual Property Organisation to help strengthen IP rights systems through the creation of multilateral treaties. .au Domain Administration (auDA) The .au Domain Administration is an Australian non-profit company formed in 1999 as the policy authority and industry self-regulatory body for the .au domain space. Although the Australia Government holds reserve powers in relation to domain names under the Telecommunications Act 1997 (Cth), in 2000 the Government endorsed auDA as the appropriate body to administer the .au domain space. auDA’s key role is the management of the .au zone file, ensuring it is up to date and always available. It also develops and administers domain name policy, provides licences, implements consumer safeguards and facilitates dispute resolution in the space. GET IN TOUCH Linda Evans Partner T +61 2 9353 4217 [email protected] Sydney Level 15 1 Bligh Street Sydney NSW 2000 +61 2 9353 4000 Melbourne Level 18 333 Collins Street Melbourne VIC 3000 +61 3 9286 6000 Brisbane Kirsten Webb National Practice Group Leader Competition T +61 2 9353 4608 [email protected] Level 28 Riparian Plaza 71 Eagle Street Brisbane QLD 4000 +61 7 3292 7000 Perth Level 27 QV.1 Building 250 St Georges Terrace Perth WA 6000 +61 8 9426 8000 Canberra Level 10 NewActon Nishi 2 Phillip Law Street Canberra ACT 2601 +61 2 6279 4000 Darwin 17–19 Lindsay Street Darwin NT 0800 +61 8 8943 2555 www.claytonutz.com 13 | Doing Business in Australia