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CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS    View history reference

PART 7.5 - COMPENSATION REGIMES FOR FINANCIAL MARKETS    View history reference

Division 3 - Approved compensation arrangements    View history reference

Subdivision D - Are compensation arrangements adequate?    View history reference

SECTION 885E  THE AMOUNT OF COMPENSATION  

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885E(1)  [Amount of compensation]  


Subject to this section, the compensation rules must provide that the amount of compensation to be paid 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)  [Set-off]  


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)  [Upper limit]  


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)  [Determination of upper limit]  


That upper limit may be specified in the compensation rules or determined by a method specified in the rules.

885E(5)  [Interest]  


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)  [Shortfall of funds]  


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)  [``compensation in respect of a Division 3 loss'']  


In other provisions of this Division a reference to compensation in respect of a Division 3 loss includes (unless the contrary intention appears) a reference to interest referred to in subsection (5).


 



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