Securities Exchanges Fidelity Funds Levy Act 1989

Overview

The Securities Exchanges Fidelity Funds Levy Act 1989 was enacted to provide a legal framework for the imposition of a levy on members of specified securities exchanges, aligning with the broader regulatory scheme set forth in the Corporations Act 1989. This Act was introduced to address a gap in the regulatory system by ensuring that securities exchanges could maintain fidelity funds to protect investors, and it formalises the process by which these levies are imposed and regulated. The Act was enacted by the Parliament of Australia, with the objective of supplementing the Corporations Act by incorporating the levy provisions into Part 7.9, thereby ensuring a cohesive regulatory approach. The Securities Exchanges Fidelity Funds Levy Act 1989 effectively integrates with the Corporations Act 1989, treating the provisions of this Act as part of the larger statutory framework. The Act allows for the imposition of a levy by securities exchanges, with the specific amounts determined by each exchange, subject to prescribed maximum limits that can be set through regulations made by the Governor-General. This legislative approach ensures that the financial obligations on securities exchange members are both transparent and adequately regulated to support the integrity and stability of the securities market.

Scope and Application

The Securities Exchanges Fidelity Funds Levy Act 1989 applies to members of certain securities exchanges, as specified in subsection 904(1) of the Corporations Act 1989, which is incorporated with this Act. The Act imposes a levy on these members to contribute to a securities exchange fidelity fund, the amount of which is determined by the relevant securities exchange, up to a prescribed limit. This Act operates at the Commonwealth level, ensuring a unified approach to the levy across the country. The Governor-General has the authority to make regulations that prescribe the maximum amounts for the levy, which can vary between different securities exchanges. This legislative framework is designed to provide a structured and consistent method for raising funds through the fidelity fund levy, supporting the operations and integrity of securities exchanges within Australia.

Key Provisions

The Securities Exchanges Fidelity Funds Levy Act 1989 (Act) imposes a levy on members of certain securities exchanges as stipulated in section 4. This levy, known as the securities exchange fidelity fund levy, is to be paid by members of the exchanges as outlined in subsection 904(1) of the Corporations Act 1989. The amount of this levy, which cannot exceed a prescribed amount, is determined by the relevant securities exchange itself, as stated in section 5. The Governor-General has the authority to create regulations under section 6, which may prescribe maximum amounts for the levy, potentially differing among various securities exchanges. The Act imposes certain obligations on the parties it governs. Primarily, it requires members of specified securities exchanges to pay the fidelity fund levy as determined by their respective exchanges. Additionally, the exchanges must ensure that the levy amounts do not surpass the prescribed limits. The Act also mandates the Governor-General to make regulations that detail these maximum levy amounts, with the flexibility to set different amounts for different exchanges, as provided in section 6. Failure to comply with the provisions of the Securities Exchanges Fidelity Funds Levy Act 1989 may result in various consequences. Although the Act does not explicitly detail specific offences, penalties, or consequences for non-compliance, breaches of related provisions in the Corporations Act 1989 could lead to legal actions. For instance, under the Corporations Act, non-compliance might attract penalties such as fines, which could be substantial depending on the severity of the breach. The exact penalties would depend on the specific breach and the applicable sections of the Corporations Act, rather than the Securities Exchanges Fidelity Funds Levy Act itself.