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CHEQUES AND PAYMENT ORDERS REGULATIONS (AMENDMENT) 1998 NO. 238EXPLANATORY STATEMENT
STATUTORY RULES 1998 No. 238
Issued by the authority of the Treasurer
Cheques and Payment Orders Act 1986
Cheques and Payment Orders Regulations (Amendment)
Section 119 of Cheques and Payment Orders Act 1986 (the Principal Act) provides that the GovernorGeneral may make regulations prescribing matters which are required or permitted by the Act to be prescribed.
The purpose of the proposed Cheques and Payment Orders Regulations (Amendment) is to amend the Cheques and Payment Orders Regulations as a consequence of amendments made to the Principal Act by the Cheques and Payment Orders Amendment Act 1998 (the Act) extending the right to issue cheques (currently drawn on banks only) to building societies and credit unions.
The Act received the Royal Assent on 2 July 1998 and was proclaimed to commence on 1 December 1998. The period between Royal Assent and Proclamation allowed building societies and credit unions issuing payment orders (an instrument similar to a cheque) time to change over to issuing cheques before the provisions in the Principal Act relating to payment orders were repealed by the Act consequent upon the extension of cheque issuing rights. The regulations repeal existing regulations and forms which refer to payment orders (regulations 7 and 10).
Financial corporations, which are prescribed for the purposes of the Principal Act, will retain the right to issue agency cheques to their customers. The Act contains a saving provision (section 133) to preserve existing regulations in force before the commencement of the Act under which corporations have been prescribed as "non-bank financial institutions" for the purposes of the Principal Act. By virtue of the Act, financial corporations prescribed for the purposes of the Principal Act will be known as "FCA institutions". The regulations substitute the term "FCA institution" for "non-bank financial institution" where appropriate (regulation 5).
The regulations amend existing regulations and forms relating to the gazettal of notices of "designated places" and the keeping of a register of "notified places" for the purposes of the presentment of cheques and payment orders, by omitting references to payment orders and the term "non-bank financial institutions" and by replacing references to the word "bank" with references to "financial institution" (the new definition in the Act encompassing the extended range of institutions, in addition to banks, on which cheques will be able to be drawn) (regulations 6, 8, 9 and 10).
Details of the regulations are set out in the Attachment.
The regulations commenced on 1 December 1998.
Regulation 1 (Commencement)
Subregulation 1. 1 provides that the regulations commence on 1 December 1998.
Subregulation 2.1 provides that the regulations amend the Cheques and Payment Orders Regulations.
Subregulation 3.1 omits existing Regulation 1 (Citation) and substitutes new Regulation 1, which provides that the Regulations are named the Cheques Regulations.
Subregulation 4.1 omits existing Regulation 2 (Interpretation) and substitutes new Regulation 2, which provides under a new heading Definition, that Act in the Regulations means the Cheques Act 1986.
Subregulation 5.1 omits from existing Regulation 2A the term "non-bank financial institution" and substitutes the term "FCA institution". The heading to Regulation 2A is impliedly amended to the same effect.
Regulation 6 replaces the term "bank" in the heading to Regulation 3 with the term "financial institution" by adding a Note to that effect, as the heading is not part of the Regulation.
Subregulation 7.1 omits existing Regulation 5 as a consequence of the repeal by the Act of Part VIII of the Principal Act relating to payment orders (including subsection 109(1), which is referred to in existing Regulation 5).
Subregulation 8.1 substitutes the term "financial institution" for the term "bank" in paragraph (1)(a) of existing Regulation 6, which relates to the keeping of a register of notices pertaining to the internal presentment by banks of cheques under section 65A of the Principal Act.
Subregulation 8.2 omits paragraphs (1)(c) and (d) of existing Regulation 6, which relate to the keeping of a register of notices pertaining to the internal presentment by non-bank financial institutions of payment orders under subsection 109A of the Principal Act.
The Notes following Regulation 6 are replaced by a new Note.
Regulation 9 amends existing Regulation 7 by omitting references the term "non-bank financial institution" and replacing the term "bank" with the term "financial institution".
Regulation 10 amends Form 1 in the Schedule to Regulation 3 by omitting the term "bank" wherever occurring and substituting the term "financial institution", and also by omitting the words "and Payment Orders".
Regulation 10 omits Form 2 in the Schedule to existing Regulation 5, which is itself omitted by subregulation 7.1 as a consequence of the repeal by the Act of Part VIII of the Principal Act relating to payment orders.