The next chapter in the Modernising Business Registers program
02 Aug 2021 9:02 am
Senior Legal Writer, Practical Guidance – Corporations Module
The implementation of the Modernising Business Registers (MBR) program is picking up its pace, after a slow start. The MBR program originated in the 2016 National Business Simplification Initiative, which had the aim of reducing the burden of unnecessary regulation and improving, centralising and streamlining access to government information and services. Following extensive consultation, the Government rolled out the MBR program in 2019 with a suite of 5 pieces of legislation, the operative one being the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (MBR Act).
There are two parts to it:
- a sweeping registry overhaul that consolidates the numerous, separate Commonwealth registers into a single “super-registry” – the Australian Business Registry Services (ABRS); and
- a new Director Identification Number (DIN) regime.
The explanatory memorandum to the Bill sums up the objective of the overhaul as facilitating “…a modern government registry regime that is flexible, technology neutral and governance neutral, and that facilitates timely and efficient access to information … by regulators and other users of the information.”
The new ABRS will be administered by a Registrar and will house ASIC’s 34 registers and the Australian Business Register. A single register will allow users to update their details in one place, instead of navigating different registers and systems. It is also hoped that having a single register with a consistent set of rules for its management and use will remove the constraints on Government and regulators from using registry data effectively, which arise from inconsistent rules and systems across the different registries.
Key to the integrity and success of the ABRS will be the legal framework around the collection, holding, use and disclosure of registry data. The MBR Act:
- empowers the Registrar to make data standards on matters relating to the performance of their functions and exercise of their powers, including the collection, maintenance and disclosure of information;
- empowers the Registrar to make a disclosure framework for “protected information” (ie information obtained by an official in the course of their employment and obtained or disclosed in relation to the new registry regime); and
- allows protected information to be disclosed to government entities to ensure agencies, such as ASIC, have access to real-time the registry information it needs to exercise its functions;
- makes the Registrar’s decisions subject to review by the Administrative Appeals Tribunal.
The registry provisions (Sch 1 of the MBR Act) received Royal Assent on 22 June 2020 but have not commenced until a day is fixed by Proclamation. The latest possible commencement date under the legislation is 22 June 2022, which is only about a year away. With this deadline looming, the program is picking up speed, with the Government’s announcing the appointment of the Commissioner of Taxation as the ABRS Registrar on 4 April 2021, and ASIC registry staff moving into the ATO offices on 15 April 2021 (as the ABRS will be administered as a separate statutory function of the ATO).
The new DIN regime is another tool in the growing armament against illegal phoenixing. It will be the first new function of the ABRS. All directors, including alternate directors, directors of registered foreign companies, and directors of companies governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act), must apply for a unique DIN and keep it forever. The regime will enable traceability of a director’s relationships across companies (and thus better tracking of directors of failed companies) and prevent fictitious identities from being used as directors.
The DIN provisions (Sch 2 of the MBR Act) commenced on 4 April 2021, but directors need not apply for a DIN yet, as the new system must still be tested in a private beta phase. Meanwhile:
- data standards and a disclosure framework for the regime have been made, following consultation by Treasury; and
- legislative instruments provide that new Corporations Act 2001 (Cth) directors appointed in the testing period have until 30 November 2022 to obtain a DIN, and new CATSI Act directors get an extra year (ie, 30 November 2023). These instruments confirm the transitional periods proposed in Treasury consultation.
Once the transitional periods are over, for the first 12 months, directors have 28 days from appointment to obtain a DIN. Once those 12 months are over, all prospective directors must obtain a DIN before their appointment.
While the MBR program is rolled out, no action need be taken. Any relevant developments will be shared by the ATO. Implementing such a large project will clearly take time, with the ATO indicating that the ABRS will “progressively roll out” between 2021-2024.
As for the DIN regime, the confirmation of the transitional periods for directors is a welcome development that will give businesses more certainty. While we await to see what Treasury will address in the next round of public consultation, directors and businesses should continue to monitor developments and familiarise themselves with the regime, so they are ready to go when it kicks in.
For more information contact your Relationship Manager about our Practical Guidance Corporations module or visit our Practical Guidance website.