Corporations Act 2001
CHAPTER 7
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FINANCIAL SERVICES AND MARKETS
PART 7.5
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COMPENSATION REGIMES FOR FINANCIAL MARKETS
Division 3
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Approved compensation arrangements
Subdivision D
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Are compensation arrangements adequate?
SECTION 885E
THE AMOUNT OF COMPENSATION
885E(1)
Subject to this section, the compensation rules must provide that the amount of compensation to be paid, or the value of compensation to be provided in a form other than money in respect of a Division 3 loss is to be not less than the sum of: (a) the actual pecuniary loss suffered by the claimant, calculated by reference to the market value of any relevant assets or liabilities as at the date on which the loss was suffered; and (b) the claimant's reasonable costs of, and disbursements incidental to, the making and proof of the claim.
885E(2)
The compensation rules may provide for the amount of compensation payable in respect of a Division 3 loss to be reduced by reference to a right of set-off available to the claimant.
885E(3)
The compensation rules may impose an upper limit on the amount of compensation to which a person is entitled in respect of a claim in particular circumstances, or an upper limit on the total amount of compensation to which persons are entitled in respect of claims referable to a particular event or circumstance.
885E(4)
That upper limit may be specified in the compensation rules or determined by a method specified in the rules.
885E(5)
The compensation rules must also provide for the payment to the claimant of interest at the rate applicable under the regulations on the amount of the actual pecuniary loss, or so much of that loss as from time to time has not been compensated by an instalment or instalments of compensation, in respect of the period starting on the day when the loss was suffered and ending on the day when the compensation, or the last instalment of compensation, is paid.
885E(6)
The compensation rules may provide for what is to happen if there are insufficient funds to meet claims in respect of Division 3 losses and in respect of any other losses covered by the arrangements. For example, they may provide for the prioritisation of claims, or the apportionment of available funds between claims.
885E(7)
(Repealed by No 76 of 2023, s 3, Sch 1 [ 396] (effective 20 October 2023).)
Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .
View history note
Hide history noteSubject to this section, the compensation rules must provide that the amount of compensation to be paid, or the value of compensation to be provided in a form other than money in respect of a Division 3 loss is to be not less than the sum of: (a) the actual pecuniary loss suffered by the claimant, calculated by reference to the market value of any relevant assets or liabilities as at the date on which the loss was suffered; and (b) the claimant's reasonable costs of, and disbursements incidental to, the making and proof of the claim.
885E(2)
The compensation rules may provide for the amount of compensation payable in respect of a Division 3 loss to be reduced by reference to a right of set-off available to the claimant.
885E(3)
The compensation rules may impose an upper limit on the amount of compensation to which a person is entitled in respect of a claim in particular circumstances, or an upper limit on the total amount of compensation to which persons are entitled in respect of claims referable to a particular event or circumstance.
885E(4)
That upper limit may be specified in the compensation rules or determined by a method specified in the rules.
885E(5)
The compensation rules must also provide for the payment to the claimant of interest at the rate applicable under the regulations on the amount of the actual pecuniary loss, or so much of that loss as from time to time has not been compensated by an instalment or instalments of compensation, in respect of the period starting on the day when the loss was suffered and ending on the day when the compensation, or the last instalment of compensation, is paid.
885E(6)
The compensation rules may provide for what is to happen if there are insufficient funds to meet claims in respect of Division 3 losses and in respect of any other losses covered by the arrangements. For example, they may provide for the prioritisation of claims, or the apportionment of available funds between claims.
885E(7)
(Repealed by No 76 of 2023, s 3, Sch 1 [ 396] (effective 20 October 2023).)
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