EXPLANATORY STATEMENT
STATUTORY RULES 1983 NO 71
ISSUED BY THE AUTHORITY OF THE TREASURER
COMMONWEALTH INSCRIBED STOCK REGULATIONS (AMENDMENT)
Section 58 of the Commonwealth Inscribed Stock Act 1911 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing the fees payable under the Act and all matters and forms required or necessary or convenient to be prescribed for carrying out or for giving effect to the Act or for the conduct of any business at or in connection with any Registry.
The regulations make provision for the administrative procedures relating to Commonwealth securities. The Statutory Rules amend the regulations to:
(i) allow the crediting of interest on Commonwealth securities to financial institutions other than banks and
(ii) increase the limits up to which transfers of Stock may be made without having to obtain Probate and the amount of bearer securities which may be delivered by a Registrar on behalf of a deceased person.
The Statutory Rules also make further minor amendments of an administrative nature which will bring the procedures under the regulations into line with current business practice and monetary values.
Regulations 1 and 5 of the Statutory Rules amend regulations 8 and 52 respectively to make it clear that the Registrar need not issue receipts or securities in respect of applications to purchase Commonwealth securities which have been rejected by the Treasurer.
Regulation 2 of the Statutory Rules amends regulation 10 to simplify procedures relating to changes of addresses of stock holders.
Regulation 3 of the Statutory Rules amends regulation 25A to increase from $5,000 to $10,000 the maximum value of Inscribed Stock that may be transmitted from the name of a deceased person to the name of another person (usually the executor of a deceased estate) without the requirement to seek a Grant of Probate.
Regulation 4 of the Statutory Rules amends sub-regulation 32(3) to allow the crediting of interest on Commonwealth securities to a holder’s account with a financial institution approved by the Treasurer. (Under existing sub-regulation 32(3), the crediting of interest payments can only be made to bank accounts ).
Regulation 6 of the Statutory Rules amends sub-regulation 54(1) to increase from $1,200 to $10,000 the amount of bearer securities which may be delivered to another person by a Registrar in the event of death of the person who was to have received the bearer securities.
Regulation 7 of the Statutory Rules amends the schedule to the regulations by deleting the existing Form 24 and substituting a revised form authorising payments of interest to investors’ accounts with a bank or approved financial institution consequent on the amendment contained in regulation 4.
Overview
The Commonwealth Inscribed Stock Regulations (Amendment) Statutory Rules 1983 were introduced to address administrative inefficiencies and outdated practices within the Commonwealth Inscribed Stock Act 1911. These regulations, issued under the authority of the Treasurer, aim to modernise the procedures governing Commonwealth securities by making them more aligned with current business practices and monetary values. Key changes include allowing interest on Commonwealth securities to be credited to accounts at financial institutions other than banks, increasing the threshold for transferring stock without requiring Probate, and simplifying procedures for updating stock holder addresses. These amendments seek to enhance the efficiency and flexibility of the administrative processes surrounding Commonwealth securities, thereby facilitating smoother transactions and reducing bureaucratic burdens.
The regulations also address specific gaps such as the need for more flexible interest crediting options and the outdated limits on certain transfers and deliveries of securities. By amending certain sub-regulations and updating forms, the Statutory Rules aim to streamline the operations of the Registrar and ensure that the regulatory framework remains effective and relevant. The overarching policy objective is to maintain the integrity and efficiency of the Commonwealth securities system while adapting to modern financial practices and technological advancements.
Scope and Application
The Commonwealth Inscribed Stock Regulations (Amendment) Statutory Rules 1983 pertain to the administrative procedures relating to Commonwealth securities, as governed by the Commonwealth Inscribed Stock Act 1911. These regulations apply to any entity or person involved in the purchase, transfer, or management of Commonwealth securities, including financial institutions, stock holders, and executors of deceased estates. The amendment extends to all Commonwealth securities and encompasses both Commonwealth debt securities and equity securities, ensuring that the regulations are consistent with contemporary business practices and monetary values. The amendment allows for the crediting of interest on Commonwealth securities to financial institutions other than banks and increases the limits for transfers of Stock without the need for Probate as well as the amount of bearer securities that may be delivered by a Registrar on behalf of a deceased person. The scope of these regulations is national, applying across all jurisdictions within Australia. No specific exclusions or exemptions are stated in the regulations; however, they do provide for the extension of their application through subordinate instruments to further align with current practices and values.
Key Provisions
The primary provisions of the Statutory Rules 1983 No. 71 focus on updating the Commonwealth Inscribed Stock Regulations to modernise administrative procedures for Commonwealth securities. Specifically, Regulation 4 amends sub-regulation 32(3) of the existing regulations to allow interest on Commonwealth securities to be credited not only to bank accounts but also to accounts with financial institutions approved by the Treasurer (section 4). This change expands the flexibility for holders of Commonwealth securities to receive their interest payments. Furthermore, Regulation 6 adjusts sub-regulation 54(1) to increase the limit of bearer securities that can be delivered by a Registrar from $1,200 to $10,000 in cases where the original recipient has passed away (section 6). Additionally, Regulation 3 updates regulation 25A to raise the threshold from $5,000 to $10,000 for transfers of Inscribed Stock from a deceased person's name to another individual's name without needing to obtain a Grant of Probate (section 3).
These amendments impose certain obligations on parties involved in the administration and transfer of Commonwealth securities. For instance, the Registrar is now obligated to credit interest payments to approved financial institutions in addition to banks, as specified by the Treasurer (section 4). Moreover, the increased thresholds for transfers of Inscribed Stock and bearer securities without requiring a Grant of Probate streamline the process for executors and beneficiaries of deceased estates (sections 3 and 6). The regulations also clarify that no receipts or securities need to be issued for rejected applications to purchase Commonwealth securities, thus easing administrative burdens on the Registrar (sections 1 and 5).
The Statutory Rules do not explicitly detail offences or penalties for non-compliance with the amended regulations. However, breaches of the Commonwealth Inscribed Stock Act 1911 or related regulations could potentially result in legal actions under the general provisions of the Act, which may include fines or other civil consequences. The specific penalties for any breaches would depend on the nature and severity of the non-compliance, as well as any relevant case law or additional legislative provisions that might apply.