The Commonwealth Treasury


COMPENSATION FOR LOSS IN THE FINANCIAL SERVICES SECTOR ISSUES AND OPTIONS September 2002

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Secondary issues

If a statutory scheme were warranted

12 Who should operate the scheme? (page 70)

13 What special governance and accounting requirements would be appropriate? (page 71)

14 Could the one scheme cover financial services in relation to all financial products and sectors of the industry? (page 72)

15 If market licensees no longer had to make compensation arrangements, what should happen to the funds in the National Guarantee Fund and the exchange fidelity funds? (page 73)

16 How should it be funded initially and in the longer run? (page 75)

17 What would be the appropriate powers of the operator? (page 76)

Other issues

18 Should special provision be made for financial services licensees which are regulated by APRA, have high financial requirements or high market capitalisation, or have the requisite connection with such a body? (page 78)

19 How should the loss be measured and should consequential loss be covered? (page 80)

20 Capping:

(a) Should there be capping of the amounts paid in response to claims? (page 81)

(b) If capping is accepted, what form would be appropriate? (page 82)

21 What is the appropriate connection with Australia? (page 84)

22 What is the appropriate relationship between compensation arrangements and external dispute resolution schemes? (page 87)

23 Should excess funds in a statutory scheme be available for financial industry development purposes, or should there be mechanisms to discourage the build up of such excess funds? (page 88)

24 Should there be time limits for claiming and, if so, how should they be set? (page 89)

25 What is the appropriate level of detail in the legislation? (page 89)