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| The Corporate Law Economic Reform Program (CLERP) |
| The Corporate Law Economic Reform Program Act 1999, gives legislative force to the main elements of the Government’s Corporate Law Economic Reform Program (CLERP) Bill, which received Royal Assent on 24 November 1999. Whilst a number of provisions came into force on 1 January 2000, the major provisions did not become law until 13 March 2000. |
Accounting Standards |
Among those CLERP provisions which came into force in January 2000 is a revised Part 12 of the Australian Securities and Investments Act. The new Part 12 establishes a Financial Reporting Council (FRC) responsible for providing broad strategic direction to the Australian Accounting Standards Board (AASB) in setting accounting standards. |
The following major CLERP amendments commenced on 13 March 2000. |
Director's Duties and Corporate Governance |
- Amendment of Chapter 2D of the Corporations Law to Include a Business Judgment Rule
Directors, who make honest, informed and rational business judgments will escape personal liability.
- Clarification of the Director's Duty of Care and Diligence
Dishonest or reckless acts of directors are defined as criminal offences.
- Insertion of Part 2F.1A: Statutory Derivative Action
Permits a third party to commence proceedings on a company’s behalf if the company cannot or refuses to act on its own behalf.
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| Fundraising |
Fundraising provisions in Divisions 2, 3,6 and 7 of Pt 7.12 of the Corporations Law are substituted with Chapter 6D. |
As a result, prospectus disclosure requirements are less rigid and the nature of the information to be supplied is determined by the needs of the investor. Fundraising using a profile statement is now permitted in certain industries. The new provisions also allow for disclosure documents to be supplied electronically. |
Section 708 reduces the disclosure obligations for “sophisticated investors”, who are not required to disclose an offer of a body's securities to
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