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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