Compensation Scheme of Last Resort

On 22 June 2023 the Australian Parliament passed legislation establishing the Financial Services Compensation Scheme of Last Resort (CSLR).

The CSLR will provide compensation of up to $150,000 to consumers who have an unpaid determination from the Australian Financial Complaints Authority relating to personal financial advice, credit intermediation, securities dealing or credit provision, and other eligibility criteria are met. A determination may be unpaid because the financial institution subject to the determination has become insolvent. 

A not-for-profit company (known as the ‘CSLR operator’) will be authorised by the Minister to operate the scheme. The Federal Government has said it intends the CSLR operator to commence operations in April 2024. The CSLR will be funded by levies imposed on parts of the financial services industry.

The CSLR operator will be responsible for determining the amount of levy payable by parts of the financial services industry. ASIC is responsible for issuing levy notices and collecting levy payments on behalf of the Commonwealth. There is further information available on the CSLR here.

The information collected from the Industry Funding annual return will be used for the calculations of the CSLR levies. This instrument relates to ASIC’s metric collection:

Updated information on the levy arrangements will be available in due course.

ASIC also has regulatory oversight powers to ensure the CSLR operator’s compliance with the legislative framework.

The relevant legislation can be found here:

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Last updated: 27/07/2023 11:46