Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.10B - FINANCIAL SERVICES COMPENSATION SCHEME OF LAST RESORT  

Division 1 - Establishment of the scheme  

SECTION 1062   MANDATORY REQUIREMENTS  

1062(1)    
The mandatory requirements for a person (the operator ) to operate the financial services compensation scheme of last resort are:

(a)    the organisational requirement under subsection (2) ; and

(b)    the operator requirements under subsection (3) ; and

(c)    the operational requirements under subsection (4) ; and

(d)    the compliance requirements under subsection (5) .

Organisational requirement

1062(2)    
The organisational requirement is that the operator does not require a person applying for compensation to pay any fee or charge to the operator, or to any other entity, in relation to the application.

Operator requirements

1062(3)    
The operator requirements are that:

(a)    the operator is a company limited by guarantee; and

(b)    the operator ' s constitution provides that the operator must not be operated for profit; and

(c)    the operator ' s constitution provides that amounts paid to the operator by the Commonwealth must be maintained for the purposes of the financial services compensation scheme of last resort; and

(d)    the operator ' s constitution provides that the Chair of the board of the operator must be an independent person appointed by the Minister as a member of the board; and

(e)    the operator ' s constitution provides that, within 6 months after the operator is authorised under section 1060 , the following must be appointed as members of the board:

(i) a person who is a director of AFCA, or who is the Chair of the board of AFCA;

(ii) a person who is a Fellow of the Institute of Actuaries of Australia and has at least 5 years ' experience in actuarial analysis.

Operational requirements

1062(4)    
The operational requirements are that:

(a)    the operator operates in accordance with the operator ' s constitution; and

(b)    the operator administers the financial services compensation scheme of last resort in accordance with this Part and regulations made for the purposes of this Part; and

(c)    the operator manages money of the operator in a manner that is efficient, effective and economical; and

(d)    the operator has appropriate expertise available to deal with applications for compensation; and

(e)    the operator has appropriate expertise available to undertake actuarial analysis and modelling to estimate the value of claims to be made against the financial services compensation scheme of last resort.

Compliance requirements

1062(5)    
The compliance requirements are that:

(a)    the operator is to ensure that any conditions of the authorisation of the operator (see paragraph 1060(4)(b) ) are complied with; and

(b)    the operator is to ensure that regulatory requirements issued under section 1069K are complied with.