Ministerial Determination overseas listed companies and their subsidiaries
An issue has emerged in recent years about the extent to which overseas listed companies and their subsidiaries are excluded from the operation of the Retail Leases Act 2003 (Vic) (RLA 2003).
Sub-section 4(1) of the RLA 2003 defines ‘retail premises’ for the purposes of that Act. Sub-section 4(2) then contains a number of exceptions to that definition, including sub-section 4(2)(d), which excludes from the definition of retail premises:
(d) premises the tenant of which is –
(i) a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges; or
(ii) a subsidiary (as defined in section 9 of the Corporations Act) of such a body corporate;
A number of problems with that exclusion have emerged.
First, a number of significant international stock exchanges are not members of the World Federation of Exchanges.
Secondly, it appears that membership of the World Federation of Exchanges is not fixed and that some significant exchanges have been members at some times and not at others.
Thirdly, it appears that there are different levels of membership. For example, the website for the World Federation Exchange currently lists 63 members, 3 associates, 26 affiliates and 1 correspondent exchange.
These issues have lead to confusion over whether and when the exclusion applies.
To address the confusion caused by this definition, the Minister of Small Business, Innovation and Trade has published a new determination under sub s 5(i)(d) of the RLA 2003 excluding the following tenants from the definition of “retail premises” in the RLA 2003:
bodies corporate or companies or corporations whose securities are listed on a stock exchange outside Australia or the subsidiaries (including subsidiaries as defined in section 9 of the Corporations Act 2001) of such bodies corporate, companies or corporations.
The determination is prospective in operation and takes effect from 12 August 2016. It does not appear to have retrospective effect.
The new determination also revokes the determination signed 20 December 2011 and Gazetted on 5 January 2012, which applied to the New Zealand Stock Exchange only.
When considering leases to overseas companies, practitioners should be aware of both the determination and its start date of 12 August 2016.
A copy of the new determination is available here.