Bills Digest No. 155  2000-01 Corporations (National Guarantee Fund Levies) Bill 2001


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WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details

Passage History

Corporations (National Guarantee Fund Levies) Bill 2001

Date Introduced: 24 May 2001

House: House of Representatives

Portfolio: Treasury

Commencement: At the same time as the Corporations Act 2001. It is intended that Act will commence on July 1 2001.

Purpose

To provide for the imposition of levies for the National Guarantee Fund. This Bill, in substance, re-enacts the corresponding existing provisions of the Corporations Law national scheme as a single piece of Commonwealth legislation.

Background

The principal Background to the issues giving rise to this Bill can be found in the Bills Digest for the Corporations (Fees) Bill 2001 and the Corporations Bill 2001(1).

What is the National Guarantee Fund?

The National Guarantee Fund (NGF) is a compensation fund that is available to meet claims arising from dealings with stockbrokers including where: a stockbroker transfers securities without authority; or where the stockbroker becomes insolvent and fails to meet its obligations to a person who had previously entrusted property to it(2). The Fund is administered by the Securities Exchange Guarantee Corporation (SEGC). The NGF may be funded by levies on securities transactions, the ASX and ASX members.

Main Provisions

Clause 4 imposes levies in relation to transactions involving securities by a person or partnership; participating securities exchanges(3); and members of an exchange. The Explanatory Memorandum notes that these levies are equivalent to those payable under sections 938, 940 and 941 of the Corporations Law(4).

The levy rates are determined by the SEGC (clause 5). Where a person has a liability to pay a levy under section 938, 940 or 941 of the Corporations Law at the time of the commencement of the proposed Corporations Act 2001, then clause 6 imposes a new liability to pay the levy. Determinations setting levy rates made prior to the commencement of the proposed Corporations Act 2001 are preserved by subclause 6(4).

There will be no double collection of levies. Liability to pay under the provisions of the corporations law will be extinguished by the relevant Commonwealth, State or Territory legislation(5).

Endnotes

  1. http://www.aph.gov.au/library/pubs/bd/2000-01/01BD140.htm
  2. More information on the NGF can be found the NGF information booklet which is at the following link: http://www.segc.com.au
  3. The ASX is currently the only participating exchange.
  4. p. 3.
  5. See for example, Corporations (Repeals, Consequentials and Transitionals) Bill 2001.

Contact Officer and Copyright Details

Mark Tapley
15 June 2001
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 2000

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 2000.

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