National Guarantee Fund (Participating Exchanges) Levy Act 1989

Overview

The National Guarantee Fund (Participating Exchanges) Levy Act 1989 was enacted to establish a levy on certain securities exchanges, as part of the financial regulatory framework of Australia. This Act was introduced to ensure a consistent and structured method for the collection of levies from participating exchanges, which contribute to the National Guarantee Fund. The Act was enacted by the Parliament of Australia, with assent granted on 14 July 1989, and its primary policy objective is to support the effective functioning of the securities market by providing a reliable funding mechanism through the imposed levies. The levy is incorporated into the Corporations Act 1989, facilitating a seamless integration of the regulatory provisions and ensuring uniformity in the application of financial regulations across participating exchanges.

Scope and Application

The National Guarantee Fund (Participating Exchanges) Levy Act 1989 applies to participating securities exchanges as defined under section 940 of the Corporations Act 1989. The levy is imposed on these exchanges, and the amount is determined by the Securities Exchanges and Clearing Houses (SEGC) in relation to each participating exchange, with the maximum amounts prescribed by regulations made under the Act. The Act is incorporated with the Corporations Act 1989, and its provisions are read as if they were part of Division 4 of Part 7.10 of that Act. The Act applies nationally, in alignment with the jurisdictional reach of the Corporations Act, and the Governor-General may make regulations to prescribe the maximum amounts for the levy. These regulations may differ for various participating exchanges, providing flexibility in application across different markets. The Act does not explicitly state exclusions or thresholds, but the determination of the levy amount and the ability to set different maximum amounts for different exchanges suggest a tailored approach to regulation.

Key Provisions

The primary sections of the National Guarantee Fund (Participating Exchanges) Levy Act 1989 (sections 4 and 5) establish the imposition and rate of a levy on certain securities exchanges. Section 4 declares that the levy payable under section 940 of the Corporations Act 1989 is imposed by this Act, thereby clarifying the legislative basis for the levy. Section 5 specifies that the levy for a participating exchange is determined by the Securities Exchanges and Clearing Houses Commission (SEGC) in writing and must not exceed the prescribed amount. These sections together ensure that the levy is both legally grounded and subject to specific limits. The Act imposes several obligations on participating exchanges and the SEGC. Participating exchanges must pay the levy as determined by SEGC under section 5. The SEGC, in turn, has the responsibility to determine the amount of the levy, ensuring it does not exceed the prescribed amount. Additionally, the Governor-General is empowered under section 6 to make regulations that prescribe maximum amounts for the levy, which may vary among different participating exchanges. This framework mandates that the exchanges comply with the determined levy amounts and that the SEGC and the Governor-General effectively regulate these amounts. Breaches of the provisions in this Act can lead to various consequences. While the Act does not explicitly detail specific offences or penalties, non-compliance with the imposed levy could potentially be treated under the Corporations Act 1989, which may include fines or other penalties. For instance, failure to pay the levy as required could be viewed as a contravention of the Corporations Act, which might incur financial penalties or other legal repercussions as prescribed under that Act. The maximum penalties would depend on the specific breach and the relevant provisions of the Corporations Act.