Division 26A SCH-regulated transfers

Subdivision 1 Duty on certain SCH-regulated transfers

94B   Definitions

In this Division:

error transaction means each of the following transfers:

(a)  an SCH-regulated transfer made to reverse an SCH-regulated transfer that was made mistakenly not more than 7 days earlier,

(b)  the SCH-regulated transfer so reversed.

identification code, in relation to an SCH participant, means a code that, for the purposes of the SCH business rules, is the SCH participant’s identification code, or one of the SCH participant’s identification codes, as the case may be.

marketable security includes a right or interest (whether described as a unit or sub-unit or otherwise) of a beneficiary under a unit trust scheme.

proper SCH transfer has the same meaning as in section 9 of the Corporations Law.

relevant company means:

(a)  a NSW company, or

(b)  a foreign company (within the meaning of section 9 of the Corporations Law) with a registered office under the Corporations Law that is situated in New South Wales.

relevant SCH participant, in relation to an SCH-regulated transfer, means the participant who is liable under this Division to pay duty chargeable in respect of the transfer, or, if no duty is chargeable, the SCH participant who would be so liable if duty were chargeable.

SCH means the securities clearing house registered by the Chief Commissioner under this Division.

SCH business rules has the same meaning as in section 9 of the Corporations Law.

SCH participant has the same meaning as in section 9 of the Corporations Law.

SCH-regulated transfer has the same meaning as in section 9 of the Corporations Law.

transfer document has the same meaning as in section 1097 of the Corporations Law.

transfer identifier, in relation to an SCH-regulated transfer, means the distinctive number allocated to the transfer by SCH.

transfer value, in relation to an SCH-regulated transfer of a marketable security, means:

(a)  in the case of a transfer on sale—the consideration for the sale or the unencumbered value of the security at the date of the sale, whichever is the greater, or

(b)  in any other case—the unencumbered value of the security at the date of the transfer.

94C   Application of Division (Duty on certain SCH-regulated transfers)

(1)  This Division applies to an SCH-regulated transfer of a marketable security only where:

(a)  the transfer is a proper SCH transfer, and

(b)  the transfer is made otherwise than on a sale or purchase of the security to which Division 27 or 28A applies, and

(c)  the security is:

(i)  a share or a right to a share in (or a CUFS or IR in respect of) the stock or funds of a relevant company, or

(ii)  a unit in a unit trust scheme the principal register of which is situated in New South Wales, and

(d)  there is a change in the beneficial ownership of the marketable security, and

(e)  the body approved as the securities clearing house under section 779B of the Corporations Law is registered by the Chief Commissioner under this Division.

(2)  This Division does not require the payment of duty in respect of the following:

(a)  a transfer of shares referred to in paragraph (6), (7) or (8) under the heading “Transfer of shares” in the Second Schedule,

(b)  a transfer referred to in paragraph (a), (b), (d), (e) or (h) of the exemptions under the heading “Transfer of shares” in the Second Schedule or in paragraph (52) under the heading “GENERAL EXEMPTIONS FROM STAMP DUTY UNDER PART 3” in that Schedule,

(c)  an issue or transfer referred to in paragraph (42) of the General Exemptions from Stamp Duty under Part 3 in the Second Schedule,

(d)  an error transaction,

(e)  a transfer by way of mortgage or discharge of mortgage, if an instrument evidencing the mortgage has been duly stamped as a loan security or is exempt from stamp duty of a like nature under the law of another State or Territory.

94D   Liability to duty of SCH-regulated transfers

(1)  An SCH-regulated transfer of a marketable security to which this Division applies is chargeable with duty at the rate of 30 cents per $100, or part, of the transfer value of the marketable security.

(2)  If the SCH-regulated transfer of the marketable security is made within 2 months after an instrument of transfer of the marketable security to or for the benefit of the same transferee is first executed, the instrument is not chargeable with duty under this Act.

94E   SCH participant liable to pay duty

(1)  If duty is chargeable in respect of an SCH-regulated transfer of a marketable security, the SCH participant who is a party to the transfer, or, if there is more than one, the SCH participant who acts for the transferee under the transfer, is liable to pay the duty.

(2)  If the SCH participant liable to pay duty in respect of an SCH-regulated transfer is not the transferee under the transfer, the participant may recover from the transferee the amount of the duty paid as a debt by action in a court of competent jurisdiction and may, in reimbursement of that amount, retain any money in the participant’s hands belonging to the transferee.

94F   Record of SCH-regulated transfers

(1)  A record must be made in accordance with this section immediately on the making of an SCH-regulated transfer of marketable securities to which this Division applies.

(2)  The record must be made by the relevant SCH participant.

(3)  The record must show the following particulars:

(a)  the date of the transfer,

(b)  the transfer identifier of the transfer,

(c)  the name of the transferee and, unless another SCH participant controls the transferor’s holding, the name of the transferor,

(d)  the identification code of the SCH participant making the record and the identification code of the other SCH participant (if any) who is a party to the transfer,

(e)  the quantity and full description of the marketable security transferred,

(f)  the transfer value of the marketable securities,

(g)  the consideration payable in respect of the transfer,

(h)  the amount of duty chargeable in respect of the transfer,

(i)  if ad valorem duty is not chargeable in respect of the transfer, the duty-type category for the transfer,

(j)  in the case of an error transaction to reverse an earlier transfer that was made mistakenly, the transfer identifier of that earlier transfer.

(4)  An SCH participant may, in any record made in accordance with this section, incorporate additional information for the participant’s own use.

(5)  The record must be kept in an accessible form for a period of not less than 5 years from the date of the transfer.

(6)  An SCH participant who fails to make or keep a record as required by this section is guilty of an offence.

Penalty: 20 penalty units.

94G   Particulars to be included by relevant SCH participant in transfer document

The relevant SCH participant must include in the transfer document for an SCH-regulated transfer to which this Division applies the particulars required by the Chief Commissioner under the conditions of registration of SCH.

Penalty: 20 penalty units.

94H   Relevant SCH participant’s identification code equivalent to stamping

When the relevant SCH participant includes the participant’s identification code in the transfer document for an SCH-regulated transfer to which this Division applies, the transfer document is taken to be duly stamped but without affecting the participant’s liability to pay any duty payable under section 94I.

94I   Returns to be lodged and duty paid

(1)  The relevant SCH participant must, not more than 7 days after the end of a month in which the participant has been party to an SCH-regulated transfer to which this Division applies:

(a)  lodge with SCH a return in respect of the transfer in the form and containing the details required by the Chief Commissioner under the conditions of registration of SCH, and

(b)  if duty is payable in respect of the transfer, pay the duty to SCH.

(2)  Sections 127B and 127C apply in respect of a return required to be lodged with SCH and duty required to be paid to SCH in the same way as they apply in respect of a return required to be lodged with the Chief Commissioner and duty required to be paid to the Chief Commissioner.

Subdivision 2 The securities clearing house

94J   Registration as the securities clearing house

(1)  The Chief Commissioner must, on application (in a form approved by the Chief Commissioner) by the body approved as the securities clearing house under section 779B of the Corporations Law, register the body under this Division.

(2)  The registration is subject to conditions determined by the Chief Commissioner from time to time and notified to SCH by writing.

(3)  The registration continues in force:

(a)  until cancelled on the application of the body registered, and

(b)  subject to an order of suspension made by the Chief Commissioner for a specified period for contravention of this Division or a condition of the registration.

94K   Monthly return

(1)  SCH must, on or before the fifteenth day of each month:

(a)  lodge with the Chief Commissioner a return in the form and containing the particulars required by the Chief Commissioner under the conditions of registration of SCH, and

(b)  pay to the Chief Commissioner any duty paid to SCH under this Act in respect of an SCH-regulated transfer made in the preceding month.

(2)  SCH is liable to pay a penalty to the Chief Commissioner of 10% per annum on the amount of any duty payable under this section that remains unpaid.

94L   Returns to be kept by SCH

SCH must keep a return lodged with it by an SCH participant under this Division in an accessible form for a period of not less than 5 years from the date on which it was so lodged.

94M   Disclosure to SCH of information

Nothing in this Act prevents the disclosure to SCH of information acquired in, or in connection with, the administration of this Division.