National Code Part D, Standard 15

Changes to registered providers’ ownership or management

 

Explanatory guide for Standard 15

 

On this page:

 

Registered providers proactively inform the designated authority of prospective ownership and/or management changes.

This standard outlines the requirements and responsibilities of registered providers when changes occur to their ownership or management.

Key requirements for all sectors

 

  • Providers advise the designated authority in writing of any prospective changes to the ownership of the provider and any prospective or actual changes to the high managerial agents within specified time limits.
  • Providers give the designated authority information on the new owner or high managerial agent(s).
  • Providers must advise the designated authority of any prospective or actual changes to high managerial agents. This is in addition to changes to ownership or management.
  • The application of the ‘fit and proper’ test has been extended to include ‘high managerial agents’ of a provider.

 

Terminology

 

  • Section 5 of the ESOS Act defines a high managerial agent of a provider as being an employee, agent or officer of the provider with duties of such responsibility that his or her conduct may fairly be assumed to represent the provider in relation to the business of providing courses. See Question 1 for further details. 

 

What this standard involves:

 

15.1

The registered provider must advise the designated authority in writing of:

a.

any prospective changes to the ownership of the registered provider as soon as practicable prior to the change taking effect; and

b.

any prospective or actual change to the high managerial agents (as defined in Section 5 of the ESOS Act) of the registered provider as soon as practicable prior to the change taking effect or within 10 working days of the change taking effect where the change cannot be determined until it takes effect.

 

  • Providers are required to inform the designated authority of any prospective or actual changes to the high managerial agents of the provider.
  • ‘As soon as practicable’ means as soon as the registered provider is aware that changes to ownership will take place.

 

15.2  

The registered provider must provide the designated authority with information on the new owner or high managerial agent for the purpose of making an assessment under Section 9(6) of the ESOS Act.

 

  • Where the change of ownership does not result in a new legal entity, any new owners or managers will be subject to the ‘fit and proper’ test required under Section 9(6) of the ESOS Act.
  • The ‘fit and proper’ test is designed to identify any past behaviour of a provider or its associates which may impact on its suitability to be registered to provide education and training to overseas students. The ESOS Act has been amended to allow for the State Authority to apply the ‘fit and proper’ test at any point in a provider’s registration.
  • Recent amendments to the ESOS Act:
    • extend the application of the ‘fit and proper’ test to ‘high managerial agents’ of a provider
    • allow for the Minister to impose sanctions on a provider’s registration, or for the State to automatically suspend a provider’s registration where the provider is no longer found to be ‘fit and proper’; and
    • allow the Minister to impose sanctions against a provider where a high managerial agent is breaching, or has breached, the ESOS Act, its National Code, or a condition on the provider’s registration.
  • For further information about the legislative changes relating to the ‘fit and proper’ test, please read the Fact Sheet – Fit and proper provisions. 

Note

  • This standard deals with changes to the ownership or high managerial agents within a legal entity. If changes to the structure of the provider result in a new legal entity, the new entity must seek a new CRICOS registration.
  • Any change to the legal entity, regardless of how simple or straightforward the change may appear, constitutes provider default. While the course may continue to be offered at the same venue, with the same curriculum and teachers, the change in legal entity and corresponding change in CRICOS registration have the same effect as the provider ceasing to provide the course.

 

Compliance tips

For a provider to show it is complying with Standard 15, it may need some of the following as evidence:

  • copies of the written notification to the designated authorities about changes to ownership or high managerial agents;
  • a process for obtaining information to assist the designated authority in assessing whether a high managerial agent of the provider passes the ‘fit and proper’ test; and
  • Evidence that an offer of refund has been made (and of a student's response to the offer) where a student has been offered a refund because there has been a change to a provider’s legal entity.

 

Common questions and answers

Please note: The principles in the examples below can be applied to all sectors.

High managerial agent

 

Q

Who is covered by the term ‘high managerial agent’?

A

Organisational structures vary greatly both within and across sectors, so it is not helpful to describe high managerial agents in terms of job titles. In determining the high managerial agents of a provider, it may help to think about the functions or duties performed by high managerial agents. The check list below may be of assistance:

High managerial agents may be responsible for:

  • the operations of the institution at a senior level
  • determining, approving and overseeing the implementation of high level policies in relation to international students
  • making business decisions relating to the international student programme
  • representing the institution, with the authority to speak on behalf of the institution and to sign high level agreements on the institution’s behalf
  • setting the direction of the institution in relation to international education activities.

If a provider is uncertain about who would be considered high managerial agents, they should contact their designated authority for further assistance. The Department of Education will be working with designated authorities to address any issues of interpretation.


Registration information

 

Q

Where can I get information about registration on CRICOS?

A

See Part C of the National Code, the ESOS website, or contact the designated authority in your state or territory (contact details available on the CRICOS website).

 

Fit and proper

 

Q

Where can I get more information about the ‘fit and proper person’ test?

A

For further information about the ‘fit and proper person’ test, please see Section 9 of the ESOS Act and Fact Sheet – Fit and proper provisions

Q

Certain types of providers* are exempt from the requirement to satisfy the designated authority that they, their associates and their high managerial agents are ‘fit and proper’. Does this mean they are exempt from the requirements of Standard 15?

A

All CRICOS registered providers must meet the requirements of Standard 15.1.

However, Standard 15.2 does not apply to Providers which are exempt from having to satisfy the designated authority that they are fit and proper for registration.

* Section 9(5) of the ESOS Act exempts the following kinds of providers from having to satisfy the designated authority that they are fit and proper for registration:

a.  

a provider that is administered by a State education authority

b.

any other provider that is entitled to receive funds under a law of the Commonwealth for recurrent expenditure for the provision of education or training, other than one excluded by the regulations from the scope of paragraph 9(5)

c.

any other provider specified in the regulations.

 

Connections

 

Standard

National Code

ESOS Act

Other

15

Part C

Section 55

Section 99

Section 17

Section 27

Section 29

Section 31

 

Information

For further information about this Standard, please visit the Australian Education International and the Department of Immigration and Border Protection websites.