AGY-1074 | New South Wales Financial Institutions Commission (FINCOM)

Full description

The Financial Institutions Commission was established on 30 June 1992 under the Financial Institutions Commission Act 1992 (Act No.47, 1992) as a body Corporate. (1) The use of the acronym FINCOM was authorised by the Act. (2) In creating FINCOM the New South Wales government was co-operating with the other Australian States and Territories to form a scheme for monitoring financial institutions nationally. (3)

FINCOM assumed the functions of the Registrar in relation to co-operative housing societies under the Co-operation Act 1923 (Act No.1, 1924) and of the Registrar under the Friendly Societies Act 1989 (Act No.232, 1989). (4)

The purpose of the Commission was to
* register and supervise financial bodies
* undertake the administration and enforcement of the Financial Institutions Scheme except so far as it related to special services providers;
* assist the Australian Financial Institutions Commission to monitor the compliance of financial institutions with the requirements of, and standards relating to, industry funded liquidity support arrangements for societies; and
* protect the interests of depositors and members of societies. (5)

The Commission was managed by a Board consisting of the Chief Executive and three part-time members appointed by the Governor. (6) The functions of the Board were to determine the policies and strategic plans and to oversee the management of the Commission. (7)

The Co-operative Housing and Starr-Bowkett Societies Act 1998 (Act No.11, 1998) repealed the Co-operation Act 1923 and related Acts. The functions of FINCOM under the 1998 Act were:
(a) to register, supervise and regulate co-operative housing bodies, and
(b) to supervise and enforce compliance by co-operative housing bodies with the Act and with standards, and
(c) to ensure that an effective and efficient system of prudential supervision was applied to societies, and
(d) to facilitate or direct the transfer of engagements of, or the conversion or merger of, co-operative housing bodfies, and
(e) to advise, and make recommendations to, the Standards Committee, and
(f) to carry out such other functions as were conferred on it by or under the Act or any other Act. (8)

The Financial Sector Reform (New South Wales) Act 1999 (Act No.11, 1999) was assented to on 31 May 1999. The Act's main purposes were:
(a) to facilitate the registration of building societies, credit unions and friendly societies and related bodies as companies under the Corporations Law in accordance with amendments made by the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 of the Commonwealth, and
(b) to facilitate the transfer of business under the Financial Sector (Transfers of Business) Act 1999 of the Commonwealth, and
(c) to wind up the New South Wales Financial Institutions Commission, and
(d) to enact transitional and ancillary provisions. (9)

The Act conferred functions and powers to do acts in New South Wales on the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). (10)

The New South Wales Financial Institutions Commission (FINCOM) was dissolved on 26 November 1999 when section 28 (1) of the Financial Sector Reform (New South Wales) Act 1999 commenced. (11) The Minister could enter into transfer agreements under the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 of the Commonwealth connected with the transfer of FINCOM's assets or liabilities to APRA or ASIC. (12)

Endnotes
1. Financial Institutions Commission Act 1992 (Act No.47,1992), s.5 (1); NSW Government Gazette No.80, 30 June 1992, p.4482.
2. Ibid. s.5 (2).
3. FINCOM Annual Report for the year ended 30 June, 1993, p. 6.
4. Financial Institutions Commission Act, 1992 . Schedule 2.
5. From the FINCOM Charter reproduced in FINCOM Annual Report, op. cit., p.15.
6. Financial Institutions Commission Act 1992, s.13.
7. Ibid, s.15.
8. Co-operative Housing and Starr-Bowkett Societies Act 1998, ss.19, 226.
9. Financial Reform (New South Wales) Act 1999, s.1 (2).
10. Ibid., ss.6-7.
11. Ibid., s.28 (1); NSW Government Gazette No.133, 26 November 1999, p.10860 commencing section 17 (2) and Subdivision 1 of Division 3 of Part 5 of the Act.
12. Ibid., s.36 and s.3.