Part C - Corporations (Schedule 5)

Schedule 5 of the Bill amends the current regime that applies to unclaimed moneys that arise under the Corporations Act, and closes the Companies and Unclaimed Moneys Special Account (CUMSA) established under the ASIC Act.

The amendments also provide for the payment of interest on these unclaimed moneys, accruing and payable from 1 July 2013. See Payment of interest on unclaimed moneys below for further information on interest.

Current operation of the corporations unclaimed money regime

CUMSA is a longstanding feature of the corporations legislation. It pre-dates the current legislative and regulatory regime that is established under Commonwealth legislation, specifically the Corporations Act supported by referrals of power by the States. Currently, once company money is classified as ‘unclaimed’ (or results from the sale of property which is classified as unclaimed), it is credited to CUMSA. If an amount is not reclaimed from CUMSA within six years after it was originally credited to CUMSA, the amount is debited from CUMSA and transferred to ASIC. ASIC must pay the claimant their money if satisfied they are entitled to the amount, either out of CUMSA or out of money appropriated by Parliament for that purpose if it has already been debited from CUMSA.

At present, the ASIC Act provides that CUMSA is also to be credited with interest received by ASIC from the investment of the CUMSA balance. Interest accrued on the balance in CUMSA may be used to fund proposals determined by the Minister to reduce business costs and improve regulation. There is currently no scope to pay that interest to the owners of the unclaimed moneys.

Classification of money and property as ‘unclaimed’ under the corporations legislation

Unclaimed company moneys can arise in a number of ways under the Corporations Act. The Bill does not change the current law relating to when company money or property is classified as being ’unclaimed’, or the time periods that currently determine when moneys become ‘unclaimed’ under the Corporations Act.

Examples of unclaimed moneys under the Corporations Act include:

moneys arising after a compulsory acquisition of securities, where the person cannot be found for 12 months;
where a company cannot contact a shareholder for more than six years; or
where there is money that is the property of a deregistered company, or unclaimed money after the liquidation of a company.

The existing provisions of the Corporations Act set out the processes to be followed in relation to the money or property (where relevant), and are not changed by this Bill.

Treatment of company unclaimed moneys under the Bill

As a result of the closure of CUMSA, once money is classified as ‘unclaimed’ under the Corporations Act, it will be immediately transferred to ASIC, rather being credited to CUMSA. The amendments in Schedule 5 do not affect peoples’ entitlement to receive their unclaimed money. Claimants of unclaimed money will continue to be able to follow the existing procedure to reclaim their money (for example, through ASIC’s MoneySmart website). Payments to claimants will be made out of money appropriated by Parliament for that purpose. For the first time, interest will also be paid on these unclaimed moneys, at the rate of CPI inflation.

Next: Part D - Payment of interest on unclaimed moneys
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