Bills Digest No. 27 2001-02
Corporations (National Guarantee Fund Levies) Amendment 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
Contact Officer & Copyright Details
Corporations (National Guarantee Fund
Levies) Amendment Bill 2001
Date Introduced: 7 June 2001
House: House of Representatives
Portfolio: Treasury
Commencement: On the commencement of item 1 of
Schedule 1 of the proposed Financial Services Reform Act 2001.
Subject to certain exceptions, the Financial Services Reform Bill
will commence on a day to be fixed by Proclamation on or after the
commencement of the Corporations Act 2001. The Government
has stated its intention that the Financial Services Reform Bill
2001 will commence on 1 October 2001.
The amendments
proposed by the Bill are consequential on amendments proposed by
the Financial Services Reform Bill 2001. The major amendments amend
cross-references to relevant National Guarantee Fund provisions in
the Corporations Act 2001, and insert a new section 5
providing for the amount of the levy. The later amendment takes
account of changes in the levy provisions included in the Financial
Services Reform Bill 2001.
The principal Background to the issues giving
rise to this Bill can be found in the Bills Digest for the
Financial Services Reform Bill 2001.
What is the National Guarantee
Fund?
The Corporations (National Guarantee Fund
Levies) Act 2001 provides for the imposition of levies for 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. 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.
Section 4 of the Corporations (National
Guarantee Fund Levies) Act 2001 imposes levies in relation to
transactions involving securities by a person or partnership;
participating securities exchanges; and members of an exchange.
The
Financial Services Reform Bill 2001
The Financial Services Reform Bill 2001 will
repeal Chapter 7 of the Corporations Act 2001, which includes
provisions governing the NGF (Part 7.1), and replace Part 7.10 with
Division 4 of Part 7.5.
Consequently, the amendments proposed by this
Bill amend cross-references to relevant NGF provisions in the
Corporations Act 2001, as amended by the Financial
Services Reform Bill 2001, and insert a new section 5 providing for
the amount of the levy. The later amendment takes account of
changes in the levy provisions included in the Financial Services
Reform Bill 2001.
Readers may note that the amendments proposed by
this Bill are contained in a Bill separate to the Financial
Services Reform Bill 2001. The need for this is the requirements of
section 55 of the Constitution.
Section 55 of the Constitution provides in part
that:
Laws imposing taxation shall deal only with the
imposition of taxation, and any provision therein dealing with any
other matter shall be of no effect.
Items 1-3 of Schedule
1 of the Bill amend cross-references to relevant NGF
provisions in the Corporations Act 2001, as amended by the
Financial Services Reform Bill 2001.
Item 4 of Schedule
1 of the Bill substitutes a new section 5
in the Corporations (National Guarantee Fund Levies) Act
2001. The text of the existing section 5 is:
- The levy imposed by paragraph 4(a) is payable at such rate or
rates as are determined by SEGC in writing. SEGC may determine
different rates of levy in respect of:
(a) transactions in different kinds of
securities; or
(b) transactions by dealers included in
different classes of dealers.
- The amount of levy imposed by paragraph 4(b) is such amount as
is determined in writing by SEGC in relation to the participating
exchange concerned.
- The levy imposed by paragraph 4(c) is payable at such rate or
rates as are determined in writing by the participating exchange
concerned. The participating exchange may determine different rates
of levy in respect of different classes of members, or different
classes of member organisations, of the participating
exchange.
Proposed section 5 is a
reflection of changes in terminology and the levy provisions
included in the Financial Services Reform Bill 2001. The reader is
referred in particularly to proposed subsections 889J(1) and
889K(1) of the Corporations Act 2001, as amended by the
Financial Services Reform Bill 2001.
Ian Ireland
21 August 2001
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 2000
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Published by the Department of the Parliamentary Library,
2001.
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