To add a new company to an existing deed of cross guarantee for
the purposes of the benefit of the ASIC financial reporting relief
for wholly-owned companies, the existing deed of cross guarantee
will need to varied, or a new deed of cross guarantee entered into,
to reflect the new ASIC Pro Forma.
On 28 September 2016, the Australian Securities and Investments
Commission remade its financial reporting relief for wholly-owned
companies - ASIC Corporations (Wholly-owned Companies) Instrument
2016/785. The new ASIC instrument replaced ASIC Class Order [CO
The new ASIC Instrument applies in relation to a financial year
ending on or after 1 January 2017. The old ASIC Class Order
continues to apply, despite its repeal, in relation to a financial
year ending before 1 January 2017.
ASIC has continued the substance of the financial reporting
relief except that it no longer provides relief to bodies regulated
by the Australian Prudential Regulation Authority.
Effect on existing deeds of cross guarantee
One of the conditions of the ASIC relief is that before the end
of the relevant financial year the company seeking relief must be a
party to a deed of cross guarantee (as an original party or
pursuant to an assumption deed) which has been lodged with
A consequence of the remaking of the ASIC relief is that in
order to join a company to a deed of cross guarantee executed
before 28 September 2016, a new deed of cross guarantee will need
to be executed or the pre-existing deed of cross guarantee varied
to reflect the revised ASIC Pro Forma deed of cross guarantee (ASIC
Pro Forma 24). The pre-existing deed may be varied if it has a
variation power in it.
The obligations of a party to the deed of cross guarantee under
group finance documents may require that party to obtain the
consent or approval of its financier to such a variation of the
pre-existing deed of cross guarantee or the entry into of a new
deed of cross guarantee.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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