Corporations (National Guarantee Fund Levies) Amendment Act 2001

Overview

The Corporations (National Guarantee Fund Levies) Amendment Act 2001 (No. 108, 2001) was enacted by the Parliament of Australia to address the need for amendments to the Corporations (National Guarantee Fund Levies) Act 2001. This amendment was introduced to align the original Act with the implementation of the Financial Services Reform Act 2001, ensuring that the transition to the new regulatory framework was seamless and that existing levies and related provisions continued to operate effectively under the new regime. The policy objective behind this amendment was to provide a smooth and orderly transition of financial market regulation, maintaining the integrity and effectiveness of the levy system during this period of reform. The Act's provisions ensure that any determinations made under the previous Act continue to have effect post-reform, facilitating a consistent application of levies during the transition phase.

Scope and Application

The Corporations (National Guarantee Fund Levies) Amendment Act 2001 applies to corporations and other entities that are subject to levies under the Corporations Act 2001. This includes companies, registered schemes, and operators of financial markets who may be liable for levies related to the implementation of the National Guarantee Fund. The Act applies on a national level across Australia as it is a Commonwealth Act. There are no explicit exclusions or exemptions stated in the Act, though the specific application of levies may be influenced by the determinations made under the relevant sections of the Corporations Act 2001. The Act amends the Corporations (National Guarantee Fund Levies) Act 2001 to align with changes made by the Financial Services Reform Act 2001, and it provides for the continuation of certain determinations made under the former Act to ensure a smooth transition to the new legislative framework. The Act's provisions may also be extended or further detailed through subordinate instruments or regulations made under the authority of the Corporations Act 2001.

Key Provisions

The Corporations (National Guarantee Fund Levies) Amendment Act 2001 (Act) makes several amendments to the Corporations (National Guarantee Fund Levies) Act 2001. These amendments primarily affect the types of levies that are subject to the Act, the method for determining the amount of these levies, and the entities responsible for paying them. Specifically, section 1 of the Act changes the reference from "Division 4 of Part 7.10" to "Division 4 of Part 7.5" in section 3 of the principal Act. Section 2 removes and replaces paragraphs 4(a), (b) and (c) to specify the levies subject to the Act as those payable under sections 889J and 889K of the Corporations Act 2001. Section 3 replaces the reference to "section 936" with "section 889I" in section 4 of the principal Act. Section 4 completely replaces section 5 with a new provision that mandates the method for determining the amount of the levy, allowing for different amounts or methods to be specified for different classes of matters or things. Additionally, section 5 alters the reference from "securities exchange as agent for the Commonwealth" to "operator of the financial market that was that securities exchange as agent for the Commonwealth" in subsections 6(1) and (3) and repeals subsection 6(4). A new transitional provision is added at the end of the Act to ensure that determinations made under the previous Act continue to have effect after the commencement of the Financial Services Reform Act 2001. The Act imposes specific obligations on the entities subject to the levies. Firstly, these entities must ensure that any levies payable under sections 889J and 889K of the Corporations Act 2001 are correctly identified and calculated according to the methods specified in the relevant determinations. The Act mandates that the amount of the levy must be specified or a method for determining the amount must be included in the determination. These entities are also required to make payments in accordance with the amounts specified or calculated as per the determinations. The replacement of the term "securities exchange" with "operator of the financial market" signifies an expansion of the entities potentially responsible for these levies, ensuring that the correct market operator is identified and liable for the levy. The Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach within its own text. However, it is reasonable to infer that non-compliance with the requirements to correctly identify and pay the specified levies could result in legal repercussions under the broader legislative framework of the Corporations Act 2001. Penalties for non-compliance with the Corporations Act 2001 can be severe, including substantial fines and, in some cases, imprisonment. For example, under section 1317E of the Corporations Act 2001, individuals found guilty of dishonestly causing a loss to a corporation can face a penalty of up to 10 years imprisonment, while corporations can be fined significant amounts, sometimes reaching into the millions of dollars, depending on the severity and impact of the offence.