Consultation on the remaking of Telstra Corporation (Ownership—Interests in Shares) Regulations

The Telstra Corporation (Ownership – Interests in Shares) Regulations 1997 are due to sunset in April 2019. The Australian Government is seeking comments on remaking the Regulations.

The Telstra Corporation (Ownership – Interests in Shares) Regulations 1997 provide exemptions from the foreign ownership provisions under the Telstra Corporation Act 1991(Telstra Act). The Telstra Act specifies that a group of foreign persons cannot hold a particular type of stake in Telstra of more than 35 per cent, and that an individual foreign person cannot hold more than 5 per cent of a particular stake in Telstra. However, the Telstra Act also provides that an interest of a prescribed kind in a share is to be disregarded in determining whether Telstra is complying with those foreign ownership restrictions.

The Telstra Corporation (Ownership – Interests in Shares) Regulations help to specify when an interest is prescribed for the purposes of the Telstra Act. From this perspective, the Telstra Corporation (Ownership – Interests in Shares) Regulations stand as an exemption from the Telstra Foreign Ownership provisions to ensure that Australian citizens are not unintentionally caught by them.

The Government's view, subject to consultation, is that the regulations should be remade. Given the continuation of restrictions on Telstra's foreign ownership, the Telstra Corporation (Ownership – Interests in Shares) Regulations provide clarity about the sorts of interests in shares that can be discounted by Telstra when it monitors its foreign shareholdings.

We have prepared a draft for the proposed remade regulations. The draft removes redundant clauses, such as those relating to the Telstra sale scheme, and updates drafting in line with current practices. 

We welcome your comments on whether the regulations should be remade and on the draft remade regulations, including whether the drafting approach adopted will meet the objective of providing clarity about exceptions to the foreign ownership provisions in the Telstra Act.