AUSTRALIA INC.
ABN 52 057 832 827
Incorporated in Victoria under the Associations Incorporations Act 1981.
The liability of the Association’s members is limited.
Registration Number A0026236D
Postal address: Telephone (02) 9943 0554
P O Box R488 Facsimile: (02) 9943 0554
Royal Exchange Sydney NSW 1225 Mobile: 0414 685 214
Website: www.sraa.asn.au Email:
Newsletter No. 238
1 February 2016
Contents in this issue include:
- Agenda - Joint Meeting – 1 February 2016
- News from Divisions - Joint NSW, SA, VIC and QLD meeting – 16 November 2015
- State Division Meeting Dates - 2016
Meeting Chairman: Martin Jones
Secretary: John Steel
Disclaimer: This periodical Newsletter is designed to keep readers abreast with current developments. It is not intended to be comprehensive. Readers are therefore advised that before acting on any matter arising herein, they should discuss the same with their advisers.
/ SECURITIES REGISTRARS ASSOCIATION OFAUSTRALIA INC.
ABN 52 057 832 827
Incorporated in Victoria under the Associations Incorporations Act 1981.
The liability of the Association’s members is limited.
Registration Number A0026236D
Postal address: Telephone: (02) 9943 0554
P O Box R488 Facsimile: (02) 9943 0554
Royal Exchange, Sydney NSW 1225 Mobile: 0414 685 214
Web site: www.sraa.asn.au Email:
NOTICE OF MEETING
(Venues)
Victoria New South Wales South Australia
National Australia Bank ASX Limited
Hobart Room
Level 1
20 Bridge Street
Sydney
(Please register at concierge desk on ground floor)
Dial in teleconference number for all parties : (02) 8298 8202 (wait till
answer) then dial passcode 2350
Date : Monday, 1 February 2016
Time : 12.30pm to 2.00pm
Meeting Chairman : Martin Jones
AGENDA
This is to be a joint Victoria, New South Wales and South Australian meeting
- 1. Notes from previous Division meeting
- 2. ATO Third Party Reporting and Data Matching
- 3. Australian Government’s consultation on the Serious Data Breach Notification Bill
- 4. Other Business
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1. Notes from previous Division Meeting
2.1 ATO Third Party Reporting and Data Matching - update
This was discussed at length and issues raised are covered in item 2.1 below.
n 7 October 2015, the Commissioner of Taxation
published a Commonwealth Gazette notice
advising that the ATO will acquire online selling
data relating to registrants who sold goods and
services to a value of $10,000 or more during the
4.2 Access to Share Registry Records
To comply with its obligations under the Corporations Act, a company must be satisfied that the request for a copy of the register is not for an improper purpose. An application may contain a statement of purpose that is vague. It is within the company’s rights to seek further information as to the purpose for which the information contained on the register will be used if it is unclear from the application. A statement from the applicant that the request is for a proper purposeis insufficient in this respect.
There is a common misconception as to who has to provide access to the register. The application should be addressed to the company but is more often made to the relevant share registry who then passes the request to the company.
2. Agenda Items
2.1 ATO Third Party Reporting and Data Matching - update
On 7 October 2015, the Commissioner of Taxation
published a Commonwealth Gazette notice
advising that the ATO will acquire online selling
data relating to registrants who sold goods and
services to a value of $10,000 or more during the
On 25 November 2015, the Tax and Superannuation Laws Amendment (2015 Measures No. 5) Bill 2015 passed both houses without amendment.
Schedule 4 of the Bill amends the Taxation Administration Act 1953 to create a new reporting regime which requires third parties to report to the commissioner of taxation on certain transactions which could reasonably be expected to have tax consequences for other entities.
On 30 November 2015, Division 396 of Schedule 1 of the Taxation Administration Act 1953 (TAA 1953) was amended to include Subdivision396-B. Under this law the Commissioner can require certain entities to give information about transactions that could reasonably be expected to have tax consequences for other entities.
The new law will improve taxpayer compliance by increasing the information reported to the Commissioner of Taxation by a range of third parties. The Schedule creates a new reporting regime requiring third parties to report on:
· payments of government grants;
· consideration provided for services to government entities;
· transfers of real property;
· transfers of shares;
· transfers of units in unit trusts; and
· business transactions made through payment systems.
Your organisation may be impacted by the requirement to provide information on the transfer of shares and units in a unit trust. Information will be provided by ASIC, brokers, listed entities, fund managers, and trustees to capture the transaction details and identity information of the investor.
The ATO has been working with stakeholders to develop reporting specifications that balance the need to achieve the policy intent with the desire of leveraging off existing natural business systems. Draft data specifications were published on the Let’s Talk website on 18 December 2015, together with a draft copy of the Legislative Instrument and Explanatory Statement.
The data specifications provide reporters with a clear understanding of the data fields to be reported while the Legislative Instruments will provider reporters with additional classes of transactions and entities to be exempted.
The Legislative Instruments and data specifications are available for consultation until 15 February 2016.
Once consultation closes, all feedback will be considered and where appropriate, the Legislative Instrument and data specifications may be updated accordingly. In March 2016, the final versions will be published to allow as long as possible for any system builds or changes that may be required.
The start date for reporting is 1 July 2016 for ASIC. Managed Funds and Trustees reporting through the Annual Investment Income Report will need to report by 31 October 2018. All other reporters will need to commence collecting the required data from 1 July 2017 with the first annual report due for submission by 31 July 2018.
On 7 October 2015, the Commissioner of Taxation
published a Commonwealth Gazette notice
advising that the ATO will acquire online selling
data relating to registrants who sold goods and
services to a value of $10,000 or more during the
2.2 Shortening the Settlement Cycle in Australia – T+2
The sixth meeting of the Market Implementation Group (MIG) is to be held at 2.00pm (Sydney time) on Thursday 18 February 2016,
The Agenda for the meeting will focus on Readiness check-in and attestation results and go-live arrangements in preparation for for the proposed start date on 7 March 2016. The final sign-off for the start date won’t officially happen until after 18 February to allow for meetings of the industry business committee and markets implementation group.
Members wishing to register for the MIG webinar may do so by accessing the relevant link on the T+2 website.
www.asx.com.au/t2
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2.3 Australia Post – Mail Delivery changes
Following the recent Australia Post price increases and changes to delivery standards, concerns have been raised by industry participants, regarding the despatch and return of Corporate Action documentation – particularly in respect of small retail shareholders – pursuant to the pending introduction of T+2 on 7 March 2016.
Representatives from share registries and the ASA are meeting with ASX to discuss the implementation of T+2 and the likely effect the new Australia Post changes will have on retail shareholders.
The ASA has suggested that the need to increase the use of electronic means to inform and transact share trades is likely to cause severe problems to some shareholders, in particular the more elderly who do not have and/or are not prepared to go on line. Many do not use electronic means to pay bills or transfer funds and in some cases there is also a lack trust in the security of the systems.
For example accountants/auditors will probably still require hard copies of distribution statements. If an investor opts for electronic transmission of the statements it will be necessary for a hard copy to be made by the recipient. It would be ideal if electronic versions of the notifications could, in addition to being sent prior to payment, be accumulated, stored and made available to the accountants/auditors for year-end tax purposes. This may well require some legislative/regulatory changes.
FOR DISCUSSION
2.4 FATCA update
Although FATCA has been a topic for discussion in numerous Newsletters since late 2012/early 2013, there appear to be a number of organisations that are still grappling with the complexities of the new requirements.
The following links may provide some assistance to members.
FATCA Information for Foreign Financial Institutions and Entities
www.irs.gov/Businesses/Corporations/Information-for-Foreign-Financial-Institutions
Updated list of FATCA Forms and Instructions
www.irs.gov/Businesses/Corporations/FATCA-Related-Forms
Updated IRS FATCA Foreign Financial Institutions (FFI ) List
www.irs.gov/Businesses/Corporations/FATCA-Foreign-Financial-Institution-List-Search-and-Download-Tool
FATCA Registration System Updates
www.irs.gov/Businesses/Corporations/FATCA-Registration-System-Updates
FATCA Frequently Asked Questions (FAQs)
www.irs.gov/Businesses/Corporations/FATCAFAQs
Foreign Account Tax Compliance Act
www.ato.gov.au/General/New-legislation/In-detail/Other-topics/International/Foreign-Account-Tax-Compliance-Act/
A broad range of Australian Financial Institutions (AFIs) including banks, some building societies, some credit unions, specified life insurance companies, private equity funds, managed funds, exchange traded funds and some brokers are subject to FATCA.
FATCA data needs to be lodged with the ATO in theIRS FATCA XML Schema formatExternal Link.
Details about reporting FATCA data to the ATO can be obtained via software developers' homepageExternal Link.
Reporting AFIs should familiarise themselves with the due dates and process for registration with the IRSIRS FATCA Registration Resources & Support Information
3.1 Shortening the Settlement Cycle in the US - update
The T+2 Industry Steering Committee (T+2 ISC) published an Implementation Playbook on Monday, December 21, 2015, developed with Deloitte Advisory. The Playbook provides a detailed timeline, milestones and dependencies that impacted market participants should consider in order to migrate to a two-day settlement cycle (T+2) from the current three-day settlement cycle for U.S. equities, corporate and municipal bonds, and unit investment trust (UIT) trades by the end of Q3 2017. The Playbook is available at www.ust2.com.
3.2 Anti-Money Laundering - Lodgement of AML/CTF Compliance Report for 2015
All reporting entities who offered designated services during any part of the reporting period 1 January 2015 to 31 December 2015, are required to submit an online AML/CTF compliance report to AUSTRAC between 4 January 2016 – 31 March 2016.
An instruction guide is available at: http://www.austrac.gov.au/amlctf-compliance-report-instruction-guide.
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3.3 OAIC Australian Government’s consultation on the Serious Data Breach Notification Bill
Following the OAIC release of a draftGuide to developing a data breach response plan (refer November 2015 Newsletter), the Australian Government has released draft mandatory data breach notification laws for public consultation.
The Bill would require Government agencies and businesses subject to thePrivacy Act 1988to notify the national privacy regulator and affected individuals following a serious data breach.
The Bill is intended to improve the privacy of Australians without placing an unreasonable regulatory burden on business.
The Discussion Paper – Mandatory data breach notification, exposure draft, explanatory memorandum and draft early assessment regulatory impact statement are available for viewing via the following link:
www.ag.gov.au/Consultations/Pages/serious-data-breach-notification.aspx
Submissions close on 4 March 2016.
3.4 International Tax updates
On 13 November 2015, the Commonwealth Treasurer announced a new Tax Treaty had been signed with Germany.
It replaced a previous Double Tax Agreement between Australia and Germany signed in 1972. The new treaty entered into force in Australia on 1 January 2016 for withholding taxes – 15% for dividends and 10% for interest.
New tax treaty with Germany
On 13 November 2015, the Commonwealth
Treasurer announced that a new Tax Treaty
(Treaty) had been signed with Germany, aimed at
reducing tax impediments to increased bilateral
trade and investment, and improving the integrity
of the tax system. It replaces a previous Double
Taxation Agreement between Australia and
Germany signed in 1972
4. Other Business
4.1 CHESS Participant and Registry Bulletins
1428.15.11and 0030.16.01 Transition to T+2 Settlement – Creation of Corporate Action events for T+2 in the CHESS Release Test Environment (RTE)
ASX will create a number of corporate action events in CHESS RTE from November 2015 through to February 2016 to assist participants and vendors with their testing for T+2 Settlement.Four corporate action events were created in November, with a 2 day ex period and fourteen have been created in January.
Members wishing to test their trade files against any of the corporate action events, are requested to send these files by email to before the ex-period commences for the relevant corporate action event.
4.2 Game over for CHESS?
As reported in our November 2015 Newsletter, ASX advised it was considering blockchain and other similar decentralised ledgers that use computers with advanced encryption to track transactions, bypassing traditional banks or clearing houses.
On 22 January 2016, ASX announced that it had acquired a 5% equity interest in US-based blockchain firm, Digital Asset.
ASX will work with Digital Asset to design a new post-trade solution for the Australian equity market, which will replace or upgrade all of its main trading and post-trade platforms.
Phase 1 of the program runs to the end of 2016 and will replace ASX’s existing trading and risk management systems.
Phase 2 focuses on ASX’s post-trade services, including clearing and settlement of the cash equities market (CHESS).ASX announced that it will work with Digital Asset to design a new post-trade solution for the Australian equity market.
Within the first six to12 months, Digital Asset will develop a solution that will demonstrate the benefits that distributed ledger technology (ie, the blockchain) could bring to investors, companies and intermediaries, said the ASX.
“The development will take place alongside CHESS, which will continue to operate as normal. This will allow all stakeholders to assess the benefits and implications before a final decision is made on Australia's post-trade technology in 2017," said the statement.
The technology developed for the ASX will differ from the publicly available blockchain, said the statement.