Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1998-1999-2000-2001
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
CORPORATIONS (NATIONAL GUARANTEE FUND LEVIES) AMENDMENT BILL 2001
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Financial
Services & Regulation,
the Hon J.B. Hockey, MP)
ISBN: 0642 457751
Table of Contents
Contents Page
1. Outline 1
2. Regulation and Financial Impact Statement 2
3. Explanatory notes 3
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1.1 The Corporations (National Guarantee Fund Levies) Amendment Bill 2001 is one of a package of bills, which will complement the Financial Services Reform Bill 2001. The other bills are:
• the Financial Services Reform (Consequential Provisions) Bill 2001;
• the Corporations (Fees) Amendment Bill 2001;
• the Corporations (Compensation Arrangements Levies) Bill 2001.
1.2 The object of this package is to put in place a competitively neutral regulatory system for the financial services industry. The new regime provides for licensing, conduct and disclosure in the financial services industry. It will replace Chapters 7 and 8 of the proposed Corporations Act 2001 and certain insurance and superannuation legislation.
1.3 Further background on these reforms is included in the explanatory memorandum to the Financial Services Reform Bill 2001.
1.4 This Bill amends the proposed Corporations (National Guarantee Fund Levies) Act 2001, which was introduced on 24 May 2001, to accommodate the changes to the levy arrangements in connection with the National Guarantee Fund for which the Financial Services Reform Bill 2001 provides.
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2.1 The amendments to the proposed Corporations (National Guarantee Fund Levies) Act 2001 are consequential on amendments included in the Financial Services Reform Bill.
2.2 On that basis, the Office of Regulation Review has advised that a Regulation Impact Statement is not required for this Bill.
2.3 There is no financial impact to the Commonwealth as a result of these measures.
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3.1 In brief, claims can be made on the National Guarantee Fund:
• by investors who have lost funds or securities through the conduct of participants (formerly 'members') of the Australian Stock Exchange in defined circumstances; and
• in relation to clearing house support for the Australian Stock Exchange.
3.2 Levies can be initiated by the administrator of the Fund, the Securities Exchanges Guarantee Corporation (SEGC), when the Fund falls below the specified minimum amount (currently $80 million).
3.3 The National Guarantee Fund is currently governed by Part 7.10 of the Corporations Law (and the proposed Corporations Act 2001).
3.4 The Financial Services Reform Bill 2001 will, when enacted:
• repeal Chapter 7 (including Part 7.10); and
• replace Part 7.10 with Division 4 of Part 7.5.
3.5 While the heads of claim against the National Guarantee Fund are not expected to change significantly in the immediate future and the SEGC will continue to have the capacity to initiate levies, Part 7.5 revises the relevant provisions necessitating changes to the proposed Corporations (National Guarantee Fund Levies) Act 2001.
3.6 The amendments to the proposed Corporations (National Guarantee Fund Levies) Act 2001 will therefore:
• amend the cross-references to the relevant provisions in the proposed Corporations Act 2001 (in sections 3 and 4 of the principal Act) (Schedule 1, Items 1 to 3);
• substitute a new section 5 which provides for the amount of the levy (Schedule1, Item 4);
− the new provision takes account the changes in terminology and the changes to the levy provisions included in the Financial Services Reform Bill 2001 (for example, the omission of 'exchange');
• amend the transitional arrangements in section 6 (in the light of the changed terminology, and to omit a subsection which will have performed its function) and add a further transitional provision (proposed section 7) (Schedule 1, Items 5 to 7).
3.7 The amendments are therefore of a technical nature, and are designed to accommodate the changes to the National Guarantee Fund levy provisions included in the Financial Services Reform Bill 2001.
3.8 The relevant provisions are included in a separate Bill to meet the requirements of section 55 of the Constitution.
3.9 The proposed Corporations (National Guarantee Fund Levies) Amendment Act 2001 will commence at the same time as Part 1 of Schedule 1 to the proposed Financial Services Reform Act 2001 (clause 2).