Futures Organisations Fidelity Funds Levy Act 1989

Overview

The Futures Organisations Fidelity Funds Levy Act 1989 was enacted to address the need for a structured financial mechanism within the framework of futures organisations, ensuring that these entities maintain sufficient fidelity funds to safeguard the interests of their clients and maintain market integrity. This Act was enacted by the Queen, with the assent of both the Senate and the House of Representatives of the Commonwealth of Australia. The primary policy objective of the Act is to impose a levy on contributing members of certain futures organisations, as outlined in the Corporations Act 1989. The Act aims to ensure that futures organisations can maintain adequate fidelity funds, thereby protecting the interests of their clients and maintaining the stability and integrity of the financial markets.

Scope and Application

The Futures Organisations Fidelity Funds Levy Act 1989 applies to contributing members of certain futures organisations as defined under the Corporations Act 1989. Specifically, the Act imposes a levy on these contributing members, the amount of which is determined by the futures organisation itself, not exceeding the prescribed amount set by regulation. This Act is designed to integrate seamlessly with the Corporations Act 1989, with its provisions read as if they were part of Part 8.6 of that Act. The Act has a national reach, operating under Commonwealth law, and it commenced on the same day as Part 8.6 of the Corporations Act 1989. The Governor-General has the authority to make regulations that may prescribe different maximum amounts for the levy in relation to different futures organisations, thereby extending or restricting the application of the levy as necessary.

Key Provisions

The Futures Organisations Fidelity Funds Levy Act 1989 (the "Act") imposes a levy on contributing members of certain futures organisations. This levy, referred to as the futures organisation fidelity fund levy, is outlined in section 4 of the Act and is payable under subsection 1235(1) of the Corporations Act 1989. The amount of the levy, which cannot exceed the prescribed amount, is determined by the futures organisation itself, as stipulated in section 5. Section 6 of the Act allows the Governor-General to make regulations that prescribe the maximum amounts for the levy, with the flexibility to set different maximums for different futures organisations. The Act imposes specific obligations on futures organisations and their contributing members. Primarily, contributing members must pay the futures organisation fidelity fund levy, as determined by the organisation in accordance with the limits set by regulations. Additionally, futures organisations are tasked with determining the levy amount and ensuring compliance with the Act's provisions. The Act also integrates seamlessly with the Corporations Act 1989, as indicated in section 3, treating the two as one cohesive piece of legislation. Breach of the obligations imposed by the Futures Organisations Fidelity Funds Levy Act 1989 can lead to various civil and criminal consequences. While the Act does not explicitly outline specific offences or penalties, it is integrated with the Corporations Act 1989, which provides a framework for enforcement. Under the Corporations Act, penalties for non-compliance can include fines and, in severe cases, imprisonment. The exact penalties depend on the nature and severity of the breach, as well as any additional provisions or regulations that may be in place. It is important for futures organisations and their members to adhere strictly to the Act’s requirements to avoid potential legal repercussions.