Futures Organisations (Membership) Fidelity Funds Contribution Act 1989

Overview

The Futures Organisations (Membership) Fidelity Funds Contribution Act 1989 was enacted to address a specific gap in the financial regulation of futures organisations by imposing a tax on contributing members of certain futures organisations. This Act, assented to on 14 July 1989, was passed by the Queen, the Senate, and the House of Representatives of the Commonwealth of Australia. It serves to complement Part 8.6 of the Corporations Act 1989, integrating itself as if it were part of that Act. The policy objective behind this legislation is to ensure a stable financial environment for futures organisations by mandating a fidelity fund contribution from their members, which is intended to protect investors and maintain market integrity. The amount of the tax is determined by the futures organisation itself, within the limits set by the Act, and can be adjusted through regulations made by the Governor-General.

Scope and Application

The Futures Organisations (Membership) Fidelity Funds Contribution Act 1989 applies to contributing members of certain futures organisations, imposing a tax on them. This Act is incorporated and read as part of the Corporations Act 1989, specifically as Part 8.6 of that Act. The tax, referred to as the futures organisation (membership) fidelity fund contribution, is levied on members of futures organisations as stipulated in the Corporations Act. The amount of this tax is determined by the futures organisation itself, within the prescribed range of not less than $100 and not more than an amount specified by regulation. The Governor-General has the authority to make regulations prescribing these maximum amounts, which may vary between different futures organisations. This Act applies nationally across Australia, governed under Commonwealth law, and its scope is extended and specified through subordinate regulations.

Key Provisions

The Futures Organisations (Membership) Fidelity Funds Contribution Act 1989 (section 1) imposes a tax known as the futures organisation (membership) fidelity fund contribution on members of certain futures organisations. This tax is levied in accordance with subsection 1234(2) of the Corporations Act 1989 (section 4). The amount of this tax is determined by the futures organisation itself, but it must fall within a range set by the organisation, which cannot be less than $100 and must not exceed the amount prescribed by the regulations made under section 6 of this Act (section 5). The Governor-General has the authority to make regulations that set the maximum amounts for the tax, with the flexibility to prescribe different maximums for different futures organisations (section 6). This Act imposes several obligations on the parties it governs. Primarily, it requires futures organisations to determine the tax amount to be paid by their members, ensuring that the amount falls within the prescribed limits (section 5). Additionally, the Act mandates that the Corporations Act 1989 be read as one with this Act, integrating the provisions of both to ensure a cohesive regulatory framework (section 3). The Governor-General’s role in making regulations under this Act further solidifies the governance structure, ensuring that the tax imposition is consistent and fair across different futures organisations (section 6). Breaches of the provisions in this Act can result in legal consequences. Although specific offences are not detailed within the Act itself, the nature of the tax imposition implies that failure to comply with the tax requirements or regulatory stipulations could lead to penalties under the Corporations Act 1989. Given the integration of this Act with the Corporations Act, penalties for non-compliance could include fines or other sanctions as prescribed by the Corporations Act. The exact penalties would depend on the specific breach and the corresponding provisions of the Corporations Act, but they could potentially include substantial monetary fines and, in severe cases, criminal charges.