Corporations (Securities Exchanges Levies) Bill 2001


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Bills Digest No. 157  2000-01
Corporations (Securities Exchanges Levies) Bill 2001

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 (Securities Exchanges 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.

 

Background

To impose levies for securities exchange fidelity funds. 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 Digests for the Corporations (Fees) Bill 2001 and the Corporations Bill 2001(1).

Australia currently has three operational stock exchanges: the Australian Stock Exchange (ASX), the Stock Exchange of Newcastle Limited (NSX) and BSX Limited (located in Bendigo). At present, the ASX is the only 'participating exchange'. It is a member of the Securities Exchange Guarantee Corporation (SEGC) and is involved in the National Guarantee Fund scheme(2).

Part 7.9 of the existing Corporations Law and the prospective Corporations Act 2001 provide that non-participating exchanges must establish and maintain a fidelity fund. The legislation provides for initial membership, annual and additional levies to be paid to a securities exchange as a fidelity fund contribution.

 

Main Provisions

Clause 4 imposes initial membership, annual and additional levies. The Explanatory Memorandum notes that these levies are equivalent to those payable under section 902 of the Corporations Law(3).

The relevant securities exchange is empowered to determine the levy amounts. The limits on these levies are the same as currently apply under the Corporations Law (clause 5). Liability to pay the annual membership fidelity fund contribution will cease if the fund exceeds $2 000 000 or a lower amount prescribed by regulation (clause 6).

Where a person has a liability to pay an annual fidelity fund contribution or an additional contribution under section 902 of the Corporations Law at the time of the commencement of the proposed Corporations Act 2001, then subclauses 8(3) and (4) impose 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 8(5).

 

Endnotes

  1. http://www.aph.gov.au/library/pubs/bd/2000-01/01BD140.htm

     

  2. The 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. For more information see: http://www.segc.com.au.

     

  3. p. 3.

 

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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