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2001
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CORPORATIONS (SECURITIES EXCHANGES LEVIES) BILL 2001
EXPLANATORY MEMORANDUM
(Circulated by authority of
the Minister for Financial
Services and Regulation, the Honourable J.B. Hockey MP
and the
Attorney-General, the Honourable Daryl Williams AM QC MP)
1.1. The Corporations (Securities Exchanges Levies) Bill 2001 is one of a package of bills responding to the High Court’s decisions in Re Wakim; ex parte McNally (1999) 198 CLR 511 and The Queen v Hughes (2000) 74 ALJR 802; 171 ALR 155.
1.2. The other bills are:
• Corporations Bill 2001;
• Australian Securities and Investments Commission Bill 2001;
• Corporations (Fees) Bill 2001;
• Corporations (Futures Organisations Levies) Bill 2001;
• Corporations (National Guarantee Fund Levies) Bill 2001; and
• Corporations (Repeals, Consequentials and Transitionals) Bill 2001.
1.3. The object of these seven Bills is to establish a replacement legislative foundation for the Corporations Law scheme. This Bill will, in effect, re-enact the provisions of the corporations legislation concerning levies and contributions payable to securities exchanges in the form of taxation legislation that complies with Commonwealth constitutional requirements. It also establishes certain transitional arrangements.
1.4. Further information about the background to these Bills may be found in the explanatory memorandum for the Corporations Bill 2001.
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2.1. The Bill is part of a package of legislation which will for practical purposes restore the regulatory environment which existed before the High Court’s decisions in Hughes and Wakim.
2.2. On that basis, the Office of Regulation Review has advised that a Regulation Impact Statement is not required for the Bill.
2.3. The Bill does not have any financial impact.
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3.1. The short title of the Act will be the Corporations (Securities Exchanges Levies) Act 2001.
3.2. The Bill commences at the same time as the Corporations Act 2001.
3.3. Part 10.1 of the Corporations Act 2001 defines the expression ‘old Corporations Law’ to mean, in relation to a particular State or Territory, the Corporations Law of that State or Territory within the meaning of the Corporations (Name of State) Act for that State or Territory, as in force from time to time before commencement of the Corporations Act 2001. When used generally, it is taken to mean the Corporations Law as set out in section 82 of the Corporations Act 1989.
3.4. Other expressions used in the Bill that are defined in a provision of the Corporations Bill 2001 that apply for the purposes of Part 7.9 of that Bill have the same meaning in this Bill.
3.5. The Bill provides for the imposition of the following levies:
(a) the ‘securities exchange (application for membership) fidelity fund contribution’ that will be payable under subclause 902(1) of the Corporations Bill 2001 by a person seeking admission to either membership of a securities exchange or to a partnership in a member firm recognised by a securities exchange, as mentioned in subclause 902(1);
(b) the ‘securities exchange (annual membership) fidelity fund contribution’ that will be payable under subclause 902(2) of the Corporations Bill 2001 by a member of a securities exchange referred to in subclause 902(2);
(c) any ‘securities exchange additional fidelity fund contribution’ that will be payable under subclause 904(1) of the Corporations Bill 2001 by a member of a securities exchange referred to subclause 904(1).
3.6. These levies are equivalent to those presently payable under subsections 902(1), 902(2) and 902(4) of the Corporations Law respectively.
3.7. Clause 5 effectively reproduces the arrangements under the Corporations Law in relation to the determination and total amount of securities exchange levies payable. A securities exchange will be able to determine the amount (not being less than $500) of the ‘securities exchange (application for membership) fidelity fund contribution’ levy payable by a person or class of person (subclause 5(1)). It will also be able to determine the amount (of not less than $100) of the ‘securities exchange (annual membership) fidelity fund contribution’ levy payable by a person or class of person (subclause 5(2)).
3.8. Further, a securities exchange will be able to determine the amount of any ‘securities exchange additional fidelity fund contribution’ levy payable by a person or class of person (subclause 5(3)). A person will not be liable to pay more than a maximum of $5,000 in relation to such amounts, with a ceiling of $1,000 payable in any 12 month period (subclauses 5(3) and (4)). To facilitate a smooth transition between the Corporations Law and the Corporations Act 2001, amounts paid under corresponding levies established under the Corporations Law will count towards the limits established under clause 5 (subclause 5(5)).
3.9. Clause 6 effectively reproduces the effect of section 903 of the Corporations Law. A person will not have to pay a ‘securities exchange (annual membership) fidelity fund contribution’ levy under the Bill if the amount in the relevant fidelity fund exceeds $2,000,000 (or a lower amount prescribed by the regulations). However, the person will again be liable for the levy if the amount in the relevant fidelity fund falls below $1,000,000 (or a lower amount prescribed in the regulations) and the relevant securities exchange determines that the person should again be obliged to pay the levy.
3.10. Clause 7 will allow the Governor-General to make the regulations contemplated by clause 6.
3.11. The regulations made for the purposes of subsections 903(2) and (8) of the Corporations Law that are in force immediately before the commencement of the Bill will continue to have effect. They may be amended or repealed, as if they were made under clause 7 of the Bill for the purposes of the definition of high point and low point in subclause 6(1) of the Bill (subclauses 8(1) and (2)).
3.12. Subclauses 8(3) and (4) of the Bill will impose as a tax any fee will that is payable under subsections 902(2) or 902(4) of the Corporations Law immediately before the Bill commences. Such fees will thereafter be covered by levies imposed under clause 4.
3.13. It is expected that the pre-existing liability under the Corporations Law of the States and the Northern Territory will be extinguished by State and Northern Territory legislation. Liabilities to pay fees under the Corporations Law of the ACT will be extinguished by the Corporations (Repeals, Consequentials and Transitionals) Bill 2001.
3.14. To aid with the transition from the Corporations Law to the Corporations Act 2001, subclause 8(5) provides that a determination made under subsections 902(1), 902(2) or 904(1) of the Corporations Law will have effect as a determination made for the purposes of subclauses 5(1), 5(2) or 5(3) respectively.