Financial Services Compensation Scheme of Last Resort Levy (First Levy Period) Determination 2024
I, Stephen Jones, Assistant Treasurer and Minister for Financial Services, make the following determination.
Dated 31 January 2024
Stephen Jones
Assistant Treasurer
Minister for Financial Services
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—First levy period
5 Day that the first levy period starts
Part 1—Preliminary
1 Name
This instrument is the Financial Services Compensation Scheme of Last Resort Levy (First Levy Period) Determination 2024.
2 Commencement
(1) Each provision of this 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Note: This table relates only to the provisions of this instrument as originally made.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 Financial Services Compensation Scheme of Last Resort Levy Act 2023.
4 Definitions
Note: Expressions have the same meaning in this instrument as in the Financial Services Compensation Scheme of Last Resort Levy Act 2023 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.
In this instrument:
the Act means the Financial Services Compensation Scheme of Last Resort Levy Act 2023.
Part 2—First levy period
5 Day that the first levy period starts
Under subsection 7(2) of the Act, the first levy period is specified to start on 2 April 2024.
Note: The first levy period ends on 30 June 2024see subsection 7(1) of the Act.
Overview
The Financial Services Compensation Scheme of Last Resort Levy (First Levy Period) Determination 2024 was introduced to provide a structured approach for the levy required under the Financial Services Compensation Scheme of Last Resort Levy Act 2023. Enacted by Stephen Jones, the Assistant Treasurer and Minister for Financial Services, this notifiable instrument addresses the need for a consistent and transparent process for collecting the levy aimed at ensuring financial stability within the sector. The policy objective underpinning this legislation is to provide a reliable compensation mechanism for consumers and businesses affected by the failure of financial service providers, thereby reinforcing trust in the financial system.
The determination specifies that the first levy period will commence on 2 April 2024, with the levy continuing until 30 June 2024. This timeframe is designed to facilitate orderly implementation and compliance, ensuring that the levy is applied effectively to support the broader objectives of the Financial Services Compensation Scheme of Last Resort. This instrument operates under the authority conferred by the Financial Services Compensation Scheme of Last Resort Levy Act 2023, aligning with the definitions and provisions set forth in that act to ensure uniformity and clarity in its application.
Scope and Application
The Financial Services Compensation Scheme of Last Resort Levy (First Levy Period) Determination 2024 applies to financial services entities covered under the Financial Services Compensation Scheme of Last Resort Levy Act 2023. This includes entities involved in financial services such as banks, credit unions, insurers, and other financial institutions within Australia. The scope of the Act is geographically limited to the Commonwealth of Australia, extending its jurisdiction across all states and territories. The Act specifies the commencement of the first levy period on 2 April 2024, with the period ending on 30 June 2024. This determination is made under the authority of the Financial Services Compensation Scheme of Last Resort Levy Act 2023, which defines the terms and conditions for the levy. Notably, the Act does not specify any exclusions, exemptions, or thresholds within the determination itself, although these may be addressed in subordinate instruments or further legislative acts.
Key Provisions
The Financial Services Compensation Scheme of Last Resort Levy (First Levy Period) Determination 2024 (the 'Determination') specifies the commencement of the first levy period under the Financial Services Compensation Scheme of Last Resort Levy Act 2023. This legislative instrument sets out that the first levy period starts on 2 April 2024 and ends on 30 June 2024, as stated in section 5 of the Determination (section 5). This period is critical as it defines the timeframe during which the levy on financial services providers will be applicable and collected.
The Determination imposes obligations on financial services providers to comply with the levy requirements as specified in the Act. These entities must calculate their respective contributions based on their financial services activities during the first levy period and remit these contributions to the designated authority within the stipulated timeframe (sections 2 to 7 of the Act). The levy is intended to fund the Financial Services Compensation Scheme of Last Resort, ensuring that consumers have a safety net in case of financial service failures.
Failure to comply with the levy requirements may result in civil and criminal consequences. Under the Act, financial services providers who fail to remit the levy contributions may face penalties, including fines up to a specified maximum amount, as stipulated in section 21 of the Act. Additionally, persistent non-compliance could lead to more severe penalties, including potential prosecution and further financial penalties. It is imperative for financial services providers to adhere to the levy requirements to avoid these adverse consequences.