Who Can Claim

For information on who can claim, download the National Guarantee Fund Information Booklet.

Please note new caps on claims have been introduced.

For further information on the caps please click here.

 

Securities Exchanges Guarantee Corporation Limited (SEGC) is the trustee of the Fund and administers the Fund. Payments from the Fund may only be made in the circumstances specified in the Corporations Regulations. The Corporations Regulations govern the types of claims which can made and set out the criteria which must be met before SEGC can allow a claim.

 

Subdivision 4.3 claims

In general terms, subdivision 4.3 of Part 7.5 of the Corporations Regulations provides for the completion of sales and purchases (and cash compensation for purchases in certain circumstances) of securities transactions on member market's equities and debt markets. Claims should be served on SEGC within 6 months after the day on which the claimant became entitled to make the claim (or within the timeframe set out in any notice published by SEGC in accordance with the Corporations Regulations). Claims lodged after that 6 month period will be barred unless the Board of SEGC otherwise determines.

 

Subdivision 4.7 claims

In general terms, subdivision 4.7 of Part 7.5 of the Corporations Regulations provides compensation for a loss that results from an unauthorised transfer of securities. Claims should be served on SEGC within 6 months after the day on which the claimant first became aware that the claimant had suffered a loss as a result of the unauthorised execution (or within the timeframe set out in any notice published by SEGC in accordance with the Corporations Regulations). Claims lodged after that period will be barred unless the Board of SEGC otherwise determines.

 

Subdivision 4.9 claims

In general terms, subdivision 4.9 of Part 7.5 the Corporations Regulations provides for compensation for loss that results if a market participant of a member market becomes insolvent and fails to meet its obligations to a person who had previously entrusted property to it. 

Claims should be served on SEGC within 6 months after the claimant becomes aware of the dealer having become insolvent (or within the timeframe in any notice published by SEGC in accordance with the Corporations Regulations). Claims lodged after that period will be barred unless the Board of SEGC otherwise determines.

 

Caps on Claims

The Corporations Amendment (National Guarantee Fund Payments) Regulations 2019 (the Regulation) was made and registered in November 2019. The Regulation commenced on 19 November 2019 and amended the Corporations Regulations 2001 (Cth).

 

The effect of the Regulation is to extend the existing cap on subdivision 4.9, Property Entrusted Claims, to all heads of claim and to introduce caps per claimant. The caps are important, both for the sustainability of the NGF and to reduce the risk that one or more large claims could severely deplete the NGF making it less likely to be available to retail clients of ASX and Cboe Participants.

 

Participant related cap

Before the Regulation there was only one cap on claims on the NGF. This was a cap on the amount paid in respect of any one insolvent participant for claims made in respect of property entrusted to it under subdivision 4.9 of Part 7.5 of the Corporations Regulations 2001 (Cth). The cap was 15% of the minimum amount, at the time of introduction of the participant related cap, was $15 million. Following the commencement of the Regulation and the April 2022 increase in the minimum amount, the amount of compensation payable in respect of any one insolvent participant across all heads of claim is $16.5 million in total.

 

Claimant related cap

Following commencement of the Regulation, the amount that a claimant may receive for claims relating to the same event and the same participant is $1 million. The cash component of such claim is capped at $250,000.

 

For the full text of the Regulation see Corporations Amendment (National Guarantee Fund Payments) Regulations 2019 and the Explanatory Statement. 

 

Obtaining legal advice in relation to claims

Subject to the statutory cap, which applies to all payments from the Fund claims (including any costs or interest payable on those claims), SEGC will pay the reasonable costs of lawyers if a claim is made and SEGC either:

  1. allows the claim; or
  2. disallows the claim because the market participant compensated the claimant before the claim was determined (and the claim would otherwise have been allowed if the market participant had not compensated the claimant).

However, claimants will otherwise be liable for those legal costs.

 

Where are the claim forms?

It is important that you submit the claim form/s you think apply to your circumstances. You can make a claim under one or more of the categories covered by the NGF compensation regime. SEGC will consider your claim/s on the basis of the category specified in your claim form/s.

Claim forms can be downloaded here:

Please return to SEGC your completed claim form/s, Full Co-operation Deed Poll and any other additional documents you would like SEGC to consider.

 

Transitional provisions

Corporations Regulation 7.5.85A sets out when a claim may be made under the NGF regulations in relation to a joining market, ie Cboe, formerly Chi-X.

The provisions are quite technical and have been included for certainty. Below is a summary of the Regulation.

Where a loss is connected only with Cboe and not ASX (eg if relevant securities are quoted only on the Cboe market) a claim may be made on the NGF in relation to:

  1. Subdivision 4.3 Contract Guarantee (which broadly provides for the completion of sales and purchase of securities transactions on member market equities and debt markets) – if the date for settlement of the relevant reportable transaction is on or after 26 October 2020.
  2. Subdivision 4.7 Unauthorised transfers (which broadly provides for compensation for loss that results from an unauthorised transfer of securities) – if the date of the unauthorised execution occurred on or after 26 October 2020.
  3. Subdivision 4.9 Insolvent participants (which provides for compensation for loss that results if a market participant of a member market becomes insolvent and fails to meet its obligations to a person who had previously entrusted property to it) – if the time at which the dealer becomes insolvent is on or after 26 October 2020.

 

Who can you contact for further information?

For further information, please contact SEGC by email at: segc@segc.com.au or by phone: (02) 8216 0231.