The Government has introduced the Australian Business Securitisation Fund Bill 2019 into the House of Representatives. Background.
UPDATE: the Senate has referred the Bill to the Economics Legislation Committee for inquiry and report by 26 March 2019.
UPDATE: Bill passed on 3 April and Royal Assent given on 5 April. Commenced on 6 April.
If passed, the Bill will establish the Australian Business Securitisation Fund. The Fund consists of the Australian Business Securitisation Fund Special Account and the investments of the Fund.
The investments of the Fund must be authorised debt securities that meet certain requirements.
The Minister is responsible for making investment decisions for the Fund, however, the Minister may delegate the power to make these decisions. Investment decisions must be made in accordance with any directions given by the Minister.
The Bill requires that a total of $2 billion must be credited to the Account, with an initial amount of $250 million credited on 1 July 2019 and additional amounts credited on each 1 July for the following 4 years. The Minister may also, with the agreement of the Finance Minister, determine that additional amounts be credited to the Fund.
Amounts may be debited from the Account for the purposes of the Account, which include paying the costs of making investments. The Minister may also determine that the balance of the Account be reduced.
An authorised debt security is a debt security that:
(a) is issued by:
(i) a trustee of a trust; or
(ii) a body corporate that is a special purpose vehicle; and
(b) is expressed in Australian dollars; and
(c) relates to one or more amounts of credit provided (whether secured or unsecured) to one or more debtors where each such amount of credit:
(i) is provided wholly or predominantly for business purposes; and
(ii) is less than $5 million or, if the rules prescribe another amount of money, is less than that amount; and
(iii) complies with any other requirements or restrictions prescribed by the rules; and
(d) complies with any other requirements or restrictions prescribed by the rules.
