Commonwealth Securities and Investment Legislation Amendment Act 2008

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Legislation au C2008A00078 In force Act

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Commonwealth Securities and Investment Legislation Amendment Act 2008

 

No. 78, 2008

 

 

 

 

 

An Act to amend the law in relation to Commonwealth borrowing, and Commonwealth securities and investments, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Commonwealth borrowing, and Commonwealth securities and investments

Part 1—Amendments

Commonwealth Inscribed Stock Act 1911

Financial Management and Accountability Act 1997

Loans Securities Act 1919

Part 2—Application

 

 

 

Commonwealth Securities and Investment Legislation Amendment Act 2008

No. 78, 2008

 

 

 

An Act to amend the law in relation to Commonwealth borrowing, and Commonwealth securities and investments, and for related purposes

[Assented to 12 July 2008]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Commonwealth Securities and Investment Legislation Amendment Act 2008.

2  Commencement

  This Act commences on the day after it receives the Royal Assent.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


Schedule 1—Commonwealth borrowing, and Commonwealth securities and investments

Part 1—Amendments

Commonwealth Inscribed Stock Act 1911

1  Before section 4

Insert:

3A  Authority to borrow

 (1) The Treasurer may, from time to time, borrow money on behalf of the Commonwealth by issuing stock denominated in Australian currency.

 (2) Nothing in this section affects the power of the Treasurer under any other Act to borrow money on behalf of the Commonwealth, or to issue stock or securities under this or any other Act in relation to those borrowings.

2  At the end of subsection 4(1)

Add:

 ; or (d) lending by the Treasurer under securities lending arrangements under section 5BA of the Loans Securities Act 1919.

3  Paragraph 4(2)(a)

Omit “by an Act”, substitute “by section 3A of this Act or by any other Act”.

4  After section 4

Insert:

5  Limit on stock and securities on issue

 (1) The total face value of stock and securities on issue under this Act and the Loans Securities Act 1919 at any time must not exceed $75 billion.

 (2) In working out the total face value of that stock and securities, disregard:

 (a) stock and securities issued in relation to money borrowed under the Loan (Temporary Revenue Deficits) Act 1953; and

 (b) stock and securities loaned by the Treasurer under a securities lending arrangement under section 5BA of the Loans Securities Act 1919, or held by or on behalf of the Treasurer for the purpose of such an arrangement; and

 (c) stock and securities invested under subsection 39(2) of the Financial Management and Accountability Act 1997; and

 (d) stock and securities on issue on the commencement of this section, other than Treasury Fixed Coupon Bonds.

 (3) For the purposes of this section:

 (a) the face value of a Treasury Indexed Bond is taken to be its face value at the time it was issued; and

 (b) the loan of stock or a security is taken to include an arrangement under which it is sold and repurchased.

5  After section 51J

Insert:

51JA  Delegation by Treasurer of powers under section 3A

 (1) The Treasurer may, by signed instrument, delegate all or any of the Treasurer’s powers under section 3A to:

 (a) an SES employee in the Department; or

 (b) an APS employee who holds or performs the duties of an Executive Level 2, or equivalent, position in the Department; or

 (c) a person appointed as a staff member of the Reserve Bank Service under section 67 of the Reserve Bank Act 1959 who occupies an office or position at an equivalent level to that of an SES employee, or an Executive Level 2, in the Department.

 (2) The Treasurer must, by signed instrument, give a direction as to the maximum total face value of stock and securities that may be on issue under this Act and the Loans Securities Act 1919, disregarding stock and securities of the kind mentioned in subsection 5(2), in relation to borrowings under section 3A of this Act and section 4 of the Loans Redemption and Conversion Act 1921 while the direction is in force.

 (3) In exercising the Treasurer’s powers under section 3A, a delegate must comply with:

 (a) a direction in force under subsection (2); and

 (b) any other direction given, by signed instrument, to the delegate by the Treasurer.

 (4) The Treasurer must table a direction given under subsection (2) or paragraph (3)(b) in each House of the Parliament no later than 15 sitting days of that House after it is given.

Note: The heading to section 51K is altered by adding at the end “of powers under sections 14 and 29”.

Financial Management and Accountability Act 1997

6  Section 5

Insert:

Department of the Treasury means the Department administered by the Treasurer and includes:

 (a) persons who are allocated to the Department (for the purposes of this Act) by regulations made for the purposes of subparagraph (a)(i) of the definition of Agency in this section; or

 (b) any part of the Department that is a prescribed Agency.

7  Subsection 39(2)

Repeal the subsection, substitute:

 (2) The Treasurer may invest public money in any authorised investment.

8  Subsection 39(10) (subparagraph (b)(iv) of the definition of authorised investment)

Repeal the subparagraph, substitute:

 (iv) debt instruments issued or guaranteed by the government of a foreign country being debt instruments with an investment grade credit rating;

 (iva) debt instruments issued or guaranteed by a financial institution whose members consist of foreign countries, or of Australia and foreign countries, being debt instruments with an investment grade credit rating;

 (ivb) debt instruments denominated in Australian currency with an investment grade credit rating;

9  Section 62A

Repeal the section, substitute:

62A  Treasurer may delegate powers

 (1) The Treasurer may, by signed instrument, delegate to any of the following officials of the Department of the Treasury any of the Treasurer’s powers or functions under this Act:

 (a) an official who is an SES employee;

 (b) an official who is an APS employee who holds or performs the duties of an Executive Level 2, or equivalent, position;

 (c) an official who occupies an office or position at an equivalent level to that of an SES employee, or an Executive Level 2.

 (2) The Treasurer may, by signed instrument, give directions in relation to either or both of the following:

 (a) the class or classes of authorised investment in which public money may be invested;

 (b) matters of risk and return.

 (3) The Treasurer must not give a direction under subsection (2) that has the purpose, or has or is likely to have the effect, of directly or indirectly requiring a delegate or delegates to allocate financial assets to a particular company, partnership, trust, body politic or business.

 (4) If, at any time, a delegation is in force under subsection (1), there must be at least one direction in force under subsection (2).

 (5) In exercising powers or functions under a delegation, a delegate must comply with:

 (a) a direction in force under subsection (2); and

 (b) any other direction given, by signed instrument, to the delegate by the Treasurer.

 (6) The Treasurer must table a direction given under subsection (2) or paragraph (5)(b) in each House of the Parliament no later than 15 sitting days of that House after it is given.

 (7) In this section:

authorised investment has the same meaning as in paragraph (b) of the definition of authorised investment in subsection 39(10).

Loans Securities Act 1919

10  After section 5B

Insert:

5BA  Power to enter into securities lending arrangements

 (1) The Treasurer may, from time to time, enter into securities lending arrangements, on behalf of the Commonwealth, by lending stock and securities issued under the Commonwealth Inscribed Stock Act 1911, and denominated in Australian currency.

 (2) The total face value of stock and securities on loan by the Treasurer at any time under securities lending arrangements entered into under subsection (1) must not exceed $5 billion.

 (3) The Treasurer must not lend stock or securities under securities lending arrangements entered into under subsection (1) unless the Treasurer receives collateral of one or more of the following kinds:

 (a) cash;

 (b) debt instruments denominated in Australian currency with an investment grade credit rating;

 (c) collateral of the kind mentioned in paragraph (b), where the instrument is in electronic form;

 (d) a deposit with a bank, including a deposit evidenced by a certificate of deposit;

 (e) any other collateral prescribed by the regulations.

 (4) The Treasurer must take sufficient collateral of one or more of the kinds mentioned in subsection (3) to cover the market value of the security on loan at all times.

 (5) Lending stock or a security is taken to include an arrangement under which it is sold and repurchased.

 (6) The Consolidated Revenue Fund is appropriated as necessary for the purposes of this section.

 (7) Nothing in this section affects the power to make investments under section 39 of the Financial Management and Accountability Act 1997.

11  After section 5D

Insert:

5E  Delegation of powers and functions under section 5BA

 (1) The Treasurer may, by signed instrument, delegate all or any of the Treasurer’s powers and functions under section 5BA to:

 (a) an SES employee in the Department; or

 (b) an APS employee who holds or performs the duties of an Executive Level 2, or equivalent, position in the Department; or

 (c) a person appointed as a staff member of the Reserve Bank Service under section 67 of the Reserve Bank Act 1959 who occupies an office or position at an equivalent level to that of an SES employee, or an Executive Level 2, in the Department.

 (2) The Treasurer must, by signed instrument, give a direction as to the kinds of collateral that must be received in relation to securities lending arrangements entered into under subsection 5BA(1).

 (3) In exercising the Treasurer’s powers and functions under section 5BA, a delegate must comply with:

 (a) a direction in force under subsection (2); and

 (b) any other direction given, by signed instrument, to the delegate by the Treasurer.

 (4) The Treasurer must table a direction given under subsection (2) or paragraph (3)(b) in each House of the Parliament no later than 15 sitting days of that House after it is given.

Note: The heading to section 5D is altered by adding at the end “under sections 3, 5A, 5B and 5C”.


Part 2—Application

12  Application of items 1 and 5

The amendments made by items 1 and 5 of this Schedule apply to money borrowed on or after the commencement of those items.

13  Application of items 2 and 3

The amendments made by items 2 and 3 of this Schedule apply to stock and securities issued on or after the commencement of those items.

14  Application of item 4

The amendment made by item 4 of this Schedule applies on or after the commencement of that item, regardless of whether the stock and securities were issued before, on or after the commencement of that item.

15  Application of items 6 to 9

The amendments made by items 6 to 9 of this Schedule apply in relation to public money invested on or after the commencement of those items.

16  Application of items 10 and 11

The amendments made by items 10 and 11 of this Schedule apply to securities lending arrangements entered into on or after the commencement of those items.

 

 

[Minister’s second reading speech made in—

House of Representatives on 4 June 2008

Senate on 18 June 2008]

(126/08)

 

Overview

The Commonwealth Securities and Investment Legislation Amendment Act 2008 was enacted to address gaps in the law concerning Commonwealth borrowing and the management of Commonwealth securities and investments. This Act, which received Royal Assent on 12 July 2008, was introduced by the Parliament of Australia to provide a more comprehensive framework for the Commonwealth's financial activities. The primary policy objective behind this legislation was to ensure that the borrowing and investment practices of the Commonwealth are both efficient and compliant with modern financial management standards. The Act introduces amendments to existing laws, including the Commonwealth Inscribed Stock Act 1911, the Financial Management and Accountability Act 1997, and the Loans Securities Act 1919, to enhance the flexibility and oversight of Commonwealth financial operations. The Commonwealth Securities and Investment Legislation Amendment Act 2008 aims to streamline the process of Commonwealth borrowing by granting the Treasurer more authority to issue stock denominated in Australian currency, while also setting a cap on the total face value of stock and securities that can be on issue at any given time. Additionally, the Act allows for the delegation of specific borrowing and securities lending powers to authorised officials within the Department of the Treasury and the Reserve Bank of Australia, ensuring that these functions can be carried out efficiently. The Act also introduces measures to regulate securities lending arrangements, ensuring that they are conducted with appropriate collateral and within specified limits. These amendments collectively aim to modernise the legal framework governing Commonwealth financial activities, thereby improving the overall management of public funds.

Scope and Application

The Commonwealth Securities and Investment Legislation Amendment Act 2008 amends existing legislation concerning Commonwealth borrowing and securities and investments. It applies to the Commonwealth of Australia and affects the authority of the Treasurer to borrow money and issue stock. The Act allows the Treasurer to borrow money by issuing stock denominated in Australian currency, with a limit on the total face value of stock and securities on issue at any time. The Act also allows the Treasurer to enter into securities lending arrangements and places a cap of $5 billion on the total face value of stock and securities that can be on loan at any time. The Act applies to borrowings and securities issued on or after the commencement of the Act. Subordinate instruments may extend or restrict the application of the Act, but none are specified in the text. The Act also allows for delegation of powers by the Treasurer to certain officials within the Department of the Treasury and requires the Treasurer to provide directions and table them in Parliament.

Key Provisions

The Commonwealth Securities and Investment Legislation Amendment Act 2008 (C2008A00078) amends several key pieces of legislation concerning Commonwealth borrowing and securities. Section 1 of the Act introduces a new subsection (3A) in the Commonwealth Inscribed Stock Act 1911, allowing the Treasurer to borrow money by issuing stock in Australian currency, while ensuring this does not affect existing borrowing powers under other Acts. The Act also modifies the definition of borrowing to include lending under securities lending arrangements under the Loans Securities Act 1919. A new subsection (5) is introduced to impose a limit on the total face value of stock and securities on issue, setting a cap at $75 billion, with specific exclusions such as stock related to temporary revenue deficits and certain investments. In terms of obligations, the Act requires the Treasurer to delegate powers under section 3A to specified officials and to issue directions regarding the maximum total face value of stock and securities. These directions must be tabled in Parliament within 15 sitting days. The Financial Management and Accountability Act 1997 is amended to expand the definition of the Department of the Treasury and to allow the Treasurer to invest public money in authorised investments, with updated criteria for authorised investments, including foreign debt instruments with investment-grade credit ratings. The Act also modifies delegation provisions, stipulating that directions regarding authorised investments and risk and return must be tabled in Parliament. The Act imposes penalties and consequences for breaches primarily through the legislative framework it amends. For instance, exceeding the stock and securities limit could result in non-compliance with the Act, potentially leading to financial or administrative repercussions. Failure to adhere to the Treasurer's directions or to table required documents in Parliament could also result in legal or administrative consequences. The specific penalties are not detailed in the Act but would be governed by the respective Acts it amends, such as the Financial Management and Accountability Act 1997.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.