Futures Organisations (Application For Membership) Fidelity Funds Contribution Act 1989

Overview

The Futures Organisations (Application for Membership) Fidelity Funds Contribution Act 1989 was enacted to address the need for financial contributions from applicants seeking membership in certain futures organisations. This legislation was introduced to complement Part 8.6 of the Corporations Act 1989, thereby ensuring a cohesive regulatory framework for the financial services sector in Australia. The Act imposes a tax on applicants for admission to membership of specified futures organisations, with the amount of the tax being determined by the futures organisation itself within prescribed limits. The primary objective of the Act, as outlined in the Minister’s second reading speeches in both the House of Representatives and the Senate, is to enhance the financial stability and accountability of futures organisations by requiring contributions from prospective members. This Act was passed by the Queen, with the assent of the Senate and the House of Representatives of the Commonwealth of Australia.

Scope and Application

The Futures Organisations (Application for Membership) Fidelity Funds Contribution Act 1989 applies to individuals or entities seeking membership in specified futures organisations, as defined under section 1234(1) of the Corporations Act 1989. This Act imposes a tax on these applicants to establish a fidelity fund, with the tax amount determined by the futures organisation, ranging between $500 and a prescribed maximum. The Act is incorporated with the Corporations Act 1989 and is read as part of Part 8.6 of that Act. The tax is levied to support the operational integrity and security of futures trading within Australia, ensuring that potential members contribute to a fund that safeguards against fraudulent activities. The geographic reach of this legislation is national, applying across all jurisdictions in Australia. There are no explicit exclusions or exemptions stated within the text of the Act, although the Governor-General has the authority to make regulations prescribing maximum amounts for the tax, allowing for flexibility across different futures organisations. This provision enables the application of the Act to be tailored and extended through subordinate instruments, ensuring its relevance and effectiveness across various futures trading entities.

Key Provisions

The main operative sections of the Futures Organisations (Application for Membership) Fidelity Funds Contribution Act 1989 (sections 1-6) establish the framework for imposing a tax on applicants for membership of certain futures organisations. The Act specifies that the tax is to be called the futures organisation (application for membership) fidelity fund contribution, and it is payable by a person who wishes to be admitted to membership of a futures organisation (section 4). The amount of this tax is determined by the futures organisation concerned, within a range set by the Act (section 5). The Governor-General is authorised to make regulations prescribing the maximum amounts for the tax (section 6). The Act incorporates the Corporations Act 1989 and commences on the same day as Part 8.6 of that Act (sections 2 and 3). The obligations and requirements imposed by the Act primarily fall on futures organisations and applicants for membership. Futures organisations must determine the amount of the tax to be paid by applicants, ensuring it falls within the prescribed range (section 4). The Governor-General, through regulations, is tasked with setting the maximum amounts for the tax, which can vary between different futures organisations (section 6). Applicants for membership must pay the tax as determined by the futures organisation, ensuring compliance with the requirements set out in the Act and any relevant regulations. Breaches of the provisions in the Futures Organisations (Application for Membership) Fidelity Funds Contribution Act 1989 can lead to various civil or criminal consequences. While the Act does not explicitly detail specific offences, penalties, or consequences for breach, it can be inferred that non-compliance with the tax imposition or payment requirements could be subject to the broader legal and regulatory frameworks of the Corporations Act 1989 and other applicable laws. The specific penalties for such breaches would depend on the nature and severity of the non-compliance, and could include fines or other sanctions as outlined in the Corporations Act or relevant regulatory guidelines.