Senator JOYCE—Can I clarify that? I am sure Senator Bushby understands it perfectly, but I do not. The reason we are not asking for reciprocity is that basically there is no interest in Australia having it? There is no interest in Australia investing in the market? There is only interest in them investing in ours?

Talk
Mr Cooper—That is not quite correct. I think we are now having a dialogue with Singapore and we will, I believe, get the mutual recognition, but I am just making the point that commercially, as far as we understand—

Talk
Senator JOYCE—It may not result in a stampede?

Talk
Mr Cooper—It may not, and it is up to the market, which I guess is the really important point. It is not up to ASIC to direct Australian funds over to Singapore.

Talk
Mr D’Aloisio—But the reason we did not seek reciprocity in relation to Singapore in the first instance was not because of that fact. It was because we were applying an existing policy that allowed us to unilaterally recognise a jurisdiction coming in. It was not to do with the fact that we did not think anyone would want to invest in Singapore.

Talk
Senator JOYCE—What stage are our negotiations with Singapore at? I imagine it will not have huge problems with offering us reciprocity. At what stage are our negotiations with them?

Talk
Mr Cooper—If I had to call it, I would say we were halfway through.

Senator Sherry—It is within Attorney-General’s. Coincidentally, I actually went for a three- or four-hour briefing with them in Melbourne two weeks ago. They obviously have high relevance to activities of the financial sector. I was just interested in terms of the performance and the impact on the financial services sector. It is actually a financial services regulatory agency, but it is not within the Treasury portfolio.

Talk
Senator JOYCE—So, how do you do it?

Talk
Senator Sherry—How do you do what?

Talk
Senator JOYCE—Money launder?

Talk
Senator Sherry—They are a fascinating organisation. If you want to go and get a briefing as to how they pick them up, catch it et cetera—and they are a fascinating agency in terms of the work they do—I am happy to organise a briefing for you, if you like.

Talk
Senator JOYCE—Thank you.

Senator JOYCE—Just from their title, ‘unincorporated bodies’, I know they probably do not involve you. As to the merging of unincorporated bodies, especially where there is multiple membership and they do not have perfect knowledge of what is going on in their structures—and obviously they involve assets—does ASIC have any oversight whatsoever?

Talk
Mr D’Aloisio—It would be state jurisdiction, I guess. It would not fall, as you say, under our jurisdiction. Can I take it on notice, have a look at it and give you a more considered answer as to where the responsibility lies?

Talk
Senator JOYCE—Certainly, and I will make it a bit more detailed. If an unincorporated body is used as a vehicle, and under which hangs certain incorporated bodies, such as trust companies et cetera—

Talk
Mr D’Aloisio—Yes, it would have to have other vehicles to act through.

Talk
Senator JOYCE—does that mean that they can say that it is a state legislation and ‘it has nothing to do with us’? Can you say: ‘Hang on. Just your management vehicle is an unincorporated body. Underneath you is a whole heap of incorporated bodies’? Can I leave that with you.

Talk
Mr D’Aloisio—Unincorporated bodies can take various forms. Partnerships, associations, clubs—there is a whole range of unincorporated bodies. I think we get the gist of what you are asking. Let us have a look at it and give you a considered answer on how it works at a state level and how that interacts with the Corporations Act.

Talk
Senator JOYCE—And what authority you have, if something goes wrong, to go to someone and say, ‘You have misled the membership.’

Talk
Ms Gibson—To the extent that it obviously relates to some of the companies that sit underneath it we regulate those companies. To the extent that those companies have change of control elements and disclosures in there, we regulate that. But at the next level it is not ours.

Talk
Senator JOYCE—You have those companies just controlling assets. As wealth is made they are held in assets, but the unincorporated membership does not—

Talk
Ms Gibson—They would be directors of those companies and those directors would have duties to the creditors.

Mr D’Aloisio—As well. You can have a no liability company.

Talk
Senator JOYCE—That is incorporated.

Talk
Mr D’Aloisio—That is incorporated.

Talk
Senator BUSHBY—Exactly; that is right. That gives them special—

Talk
Mr D’Aloisio—But, typically, two companies could come together as a joint venture for the development of a mine, for example, and you see that quite often. The joint venture is an unincorporated vehicle through which each party takes the proceeds of whatever it is that they are mining and sells it off, and they have an operating company that actually develops the mine.

Talk
Senator JOYCE—And then the disclosure mechanisms if there is a merger—

Talk
Mr D’Aloisio—But those unincorporated joint ventures in the mining area are clearly regulated because the corporations that are running them are regulated by ASIC, and the tax legislation regulates joint ventures as well. They are not unregulated. They are regulated in a different way.

Talk
Senator JOYCE—Underregulated, I would say.