Corporations (Financial Services Compensation Scheme of Last Resort) (Operator) Authorisation 2023
I, Stephen Jones, Assistant Treasurer and Minister for Financial Services, being satisfied the mandatory requirements under section 1062 of the Corporations Act 2001 have been met, make the following authorisation.
Dated 13 September 2023
Stephen Jones
Assistant Treasurer
Minister for Financial Services
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—Operator of the financial services compensation scheme of last resort
5 Authorised operator of the scheme
Part 1—Preliminary
1 Name
This instrument is the Corporations (Financial Services Compensation Scheme of Last Resort) (Operator) Authorisation 2023.
2 Commencement
(1) Each provision of instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this instrument | The day after this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the Corporations Act 2001.
4 Definitions
Note: Expressions have the same meaning in this instrument as in the Corporations Act 2001 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.
In this instrument:
ABN has the meaning given by the A New Tax System (Australian Business Number) Act 1999.
CSLR Limited means the Compensation Scheme of Last Resort Limited (ABN 17 669 477 052).
the Act means the Corporations Act 2001.
Part 2—Operator of the financial services compensation scheme of last resort
5 Authorised operator of the scheme
(1) Under subsection 1060(1) of the Act, the CSLR Limited is authorised to operate the financial services compensation scheme of last resort.
(2) Subsection (1) is subject to any conditions set out in this instrument as in effect from time to time.
Overview
The Corporations (Financial Services Compensation Scheme of Last Resort) (Operator) Authorisation 2023, made under the authority of the Corporations Act 2001, addresses the need for a robust mechanism to protect consumers in the financial services sector in the event of the insolvency of an authorised financial services entity. This authorisation was introduced to fill a critical gap in consumer protection, ensuring that there is a last resort compensation scheme to safeguard consumers' interests. The enacting body for this instrument is the Commonwealth of Australia, specifically Stephen Jones, the Assistant Treasurer and Minister for Financial Services, who authorised the operation of the scheme by CSLR Limited, subject to any conditions stipulated in the authorisation. The overarching policy objective is to provide a safety net for consumers, thereby maintaining confidence in the financial services sector and ensuring that consumers are adequately protected in the event of financial service provider insolvencies.
Scope and Application
The Corporations (Financial Services Compensation Scheme of Last Resort) (Operator) Authorisation 2023 is an instrument made under the Corporations Act 2001, which authorises CSLR Limited to operate the financial services compensation scheme of last resort. This authorisation is given by Stephen Jones, the Assistant Treasurer and Minister for Financial Services, following satisfaction that the mandatory requirements under section 1062 of the Corporations Act 2001 have been met. The instrument came into effect the day after its registration. The definitions in this authorisation align with those in the Corporations Act 2001, and additional expressions are defined according to other applicable acts such as the A New Tax System (Australian Business Number) Act 1999. This authorisation extends to any conditions that may be set out in the instrument from time to time, thereby governing the operation of the compensation scheme.
Key Provisions
The main operative section of the Corporations (Financial Services Compensation Scheme of Last Resort) (Operator) Authorisation 2023 is section 5 (Authorised operator of the scheme), which authorises CSLR Limited to operate the financial services compensation scheme of last resort under subsection 1060(1) of the Corporations Act 2001 (the Act). This authorisation is subject to any conditions that may be set out in this instrument (section 5(2)).
The obligations imposed by this authorisation on CSLR Limited include operating the financial services compensation scheme of last resort in accordance with the Act and any conditions set out in this instrument. CSLR Limited must ensure compliance with all relevant laws and regulations governing the operation of the compensation scheme. Additionally, the authorisation mandates that CSLR Limited must adhere to any reporting or disclosure requirements specified by the Assistant Treasurer and Minister for Financial Services.
Failure to comply with the requirements set out in this authorisation or the Act may result in various consequences. Under the Act, breaches can lead to civil or criminal penalties. Specifically, for offences under the Act, penalties can include substantial fines for individuals and corporations. The maximum penalties can vary depending on the nature and severity of the breach, with specific amounts detailed in the relevant sections of the Act. It is essential for CSLR Limited to maintain strict adherence to the provisions to avoid these penalties and ensure the effective operation of the compensation scheme.