The Minister for Financial Services, Superannuation and Corporate law has announced the release of a proposals paper, Access to Company Registers and Related Issues.

The paper outlines four proposals which would amend the Corporations Act 2001 (Corporations Act). These proposals are to:

• require a proper purpose for accessing a register to be demonstrated before a company is required to provide access;
• set down a three-tiered fee structure for obtaining access to a register, with the fee chargeable to be based on the number of members a company has;
• require a company to provide an electronic copy of its register in a format compatible with the requestor’s software; and
• require a requestor who seeks access to a company’s register which is kept electronically to view that register on computer.

Proper purpose test

Under the Government’s proposals, companies will be authorised to refuse requests for copies of their share registers unless the request is made for a “proper purpose”.

The test would require a person to state, in writing, the purpose for which they are seeking to access the company’s register. If the company considers that purpose to be improper, the applicant will have the right to have the decision reviewed by a court.

A non-exhaustive list of improper purposes would be specified in the Corporations Regulations. Four purposes that have already been identified as improper uses of the register are:
• the solicitation of donations from shareholders by specific groups in the community, such as charities;
• the solicitation of clients by brokers;
• the gathering of information regarding the personal wealth of shareholders; and
• the making of an off-market offer to purchase securities in a listed company, other than for a takeover

The Australian Securities and Investments Commission (ASIC) will also produce guidance material on what purposes can generally be considered proper.

New offences will be established that relate to issues such as improper use of register information and false or misleading applications.

The proper purpose test will not apply to applications to view a share register.

Fees

A base fee of $250 would be payable for a copy of a company register with under 5,000 members. For a company with between 5,000 and 20,000 members, an additional $0.05 would be paid per member. For companies with over 20,000 members a fee of $1,000 plus $0.01 for each additional member would be payable.

Submissions close on 24 February 2010.

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