In brief: On 12 August 2016, a new Ministerial
Determination declared that companies whose securities are listed
on a stock exchange outside Australia, or the subsidiaries of such
companies, are not covered by the Retail Leases Act 2003
What you need to know
If a tenant company is a listed company overseas, or a
subsidiary of such a company, the lease will not be governed by the
Up until the Ministerial Determination, the previous position
was that a listed company, or a subsidiary of a listed company,
could be excluded from the operation of the Act, if the company was
listed on a stock exchange that was a member of the World
Federation of Exchanges. Apparently, a number of companies are
listed on stock exchanges but many of those stock exchanges are not
members, or no longer members of the World Federation of Exchanges.
For example, the New York Stock Exchange is no longer a member of
the World Federation of Exchanges.
When undertaking a market rent review, or assisting a party in a
lease negotiation, it is important to ascertain whether the tenant
is a company listed on a stock exchange overseas, or a subsidiary
of such a company. We have recently been required to advise as to
whether a lease is governed by the Act in circumstances where the
tenant is a subsidiary of a company listed on the New York Stock
Exchange. The difficulty is that the parent company is listed on
the New York Stock Exchange, which ceased some years ago to be a
member of the World Federation of Exchanges.
Whether a lease is or is not governed by the Act can have a
significant impact on a market rent review. Accordingly, we
recommend that you seek advice as to whether the lease is governed
by the Act, if any question is raised as to whether the tenant is
listed on a foreign stock exchange, or as a subsidiary of such a
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.Madgwicks is a member
of Meritas, one of the world's largest law firm
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