National Innovation and Science Agenda – Exclusions from stay of enforcement of ipso facto clauses

The exposure draft of the Corporations Amendment (Stay on Enforcing Certain Rights) Regulations 2018 (the regulations) and the Corporations (Stay on Enforcing Certain Rights) Declaration 2018 (the declaration) support the reforms in the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (the Act) which received Royal Assent on 18 September 2017.

The draft regulations exclude certain contracts from the stay on the enforcement of ipso facto clauses outlined in the Act and the draft declaration similarly excludes certain types of contractual rights.

The exemptions outlined in both the regulations and the declaration recognise that in some circumstances it is necessary or desirable for ipso facto clauses to continue to operate, for example, where there is an established market mechanism already in place or where it would be a commercial nonsense for an ipso facto clause to be stayed.

The community’s views are sought on the proposed Corporations Amendment (stay on Enforcing Certain Rights) Regulations 2018 and Corporations (Stay on Enforcing Certain Rights) Declaration 2018.