{"id":"nsw:act-1931-063","name":"Conversions of Securities Adjustment Act 1931","slug":"conversions-of-securities-adjustment-act-1931","collection":"act","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"63 of 1931","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":111753,"registerId":"nsw-act-1931-063-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name of Act","content":"#### 1 Name of Act\n\n1 Name of Act\n\n> This Act may be cited as the [Conversions of Securities Adjustment Act 1931](/view/html/inforce/current/act-1931-063).","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Act shall commence upon a date to be appointed by the Governor and notified by proclamation published in the Gazette.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Construction of Act","content":"#### 3 Construction of Act\n\n3 Construction of Act\n\n> This Act shall be read and construed so as not to exceed the legislative power of the State to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n4 Definitions\n\n> In this Act, unless the context requires another meaning:\n> \n> Existing security means an existing security as defined by the [Commonwealth Debt Conversion Act 1931](http://www.legislation.gov.au/), which has been converted into a new security as defined by the said Act.\n> \n> New security means a new security as defined by the said Act which has been issued by way of conversion of an existing security as defined by the said Act.\n> \n> Court means the Supreme Court in its equitable jurisdiction.\n> \n> Person includes the executors, administrators, and assigns of an individual and the assigns of a corporation.\n> \n> Trustee means trustee as defined by the [Trustee Act 1925](/view/html/inforce/current/act-1925-014).","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Operation of Act","content":"#### 5 Operation of Act\n\n5 Operation of Act\n\n> References in this Act to conversions and to existing securities and to new securities shall include conversions under the [Commonwealth Debt Conversion Act 1931](http://www.legislation.gov.au/), by reason of the Agreement between the Commonwealth and the States contained in the Schedule to the [Debt Conversion Agreement (No 2) Act 1931](/view/pdf/asmade/act-1931-60), and by reason of that Act, and shall include existing securities so converted and new securities issued on such conversion.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Adjustments necessary","content":"#### 6 Adjustments necessary\n\n6 Adjustments necessary\n\n> Where immediately prior to the first day of August, one thousand nine hundred and thirty-one, the beneficial interest in the income of an existing security was not vested in the same person and to the same extent as the beneficial interest in the capital thereof, then as between such of the persons as are for the time being interested in the income of the new security into which such existing security has been converted and such of the persons as are for the time being interested in the capital of the new security respectively the following provisions shall apply:\n> \n> > (1) Where a conversion is for a new security without any cash in addition thereto, if the face value of the new security is equal to the face value of the existing security no adjustment as between income and capital shall be made by reason of the conversion.\n> \n> > (2) Where a conversion is for a new security and in addition thereto cash is receivable on the conversion, if the face value of the new security is equal to the face value of the existing security the amount of the cash so receivable shall be deemed to be income and be applicable accordingly to augment from day to day the interest on the new security for the period commencing on the first day of August, one thousand nine hundred and thirty-one, so as to make it (so far as such cash will extend) as nearly as may be equal to an amount that is twenty-two and one-half per centum less than the interest that was payable on the existing security on the thirty-first day of July, one thousand nine hundred and thirty-one.\n> \n> > (3) Where the face value of the new security is greater than the face value of the existing security a sum equal to the amount of such excess together with the amount of any cash receivable in addition to the new security on the conversion of the existing security shall be deemed to be income and be applicable out of the capital of the new security accordingly to augment from day to day the interest on the new security for the period commencing on the first day of August, one thousand nine hundred and thirty-one, so as to make it (so far as such excess will extend) as nearly as may be equal to an amount that is twenty-two and one-half per centum less than the interest that was payable on the existing security on the thirty-first day of July, one thousand nine hundred and thirty-one.\n> \n> > (4) Where the face value of the new security is less than the face value of the existing security, and if no cash is receivable in addition to the new security on the conversion of the existing security, or if the cash so receivable is an amount which when added to the face value of the new security amounts to less than the face value of the existing security, then, as nearly as may be, so much of the interest on the new security in the period commencing on the first day of August, one thousand nine hundred and thirty-one, as exceeds an amount that is twenty-two and one-half per centum less than the interest that was payable on the existing security on the thirty-first day of July, one thousand nine hundred and thirty-one, shall be deductible from day to day from the income and shall together with any cash receivable as aforesaid on the conversion be deemed to be capital and applicable accordingly until the sum so deducted, together with any cash receivable as aforesaid on the conversion equals the difference between the face values of the existing security and the new security.\n> \n> > (5) Where the face value of the new security is less than the face value of the existing security if there is receivable in addition to the new security on the conversion of the existing security cash of an amount which when added to the face value of the new security equals the face value of the existing security, the amount of the cash shall be deemed to be capital and applicable accordingly.\n> \n> > (6) Where the face value of the new security is less than the face value of the existing security, if there is receivable in addition to the new security on the conversion of the existing security cash of an amount, which when added to the face value of the new security, is greater than the face value of the existing security, the part of the cash which is equal to such excess shall be deemed to be income and be applicable accordingly to augment from day to day (so far as the same will extend) the interest on the new security for the period commencing on the first day of August, one thousand nine hundred and thirty-one, so as to make it as nearly as may be equal to an amount that is twenty-two and one-half per centum less than the interest that was payable on the existing security on the thirty-first day of July, one thousand nine hundred and thirty-one, and the remainder of the cash receivable as aforesaid shall be deemed to be capital.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Certain small adjustments need not be made","content":"#### 7 Certain small adjustments need not be made\n\n7 Certain small adjustments need not be made\n\n> > (1) Where:\n> > \n> > > (a) the cash receivable on conversion deemed to be income by paragraph two of section six, or\n> > \n> > > (b) the excess of the face value of the new security over the face value of the existing security together with the amount of the cash (if any) receivable on conversion deemed to be income by paragraph three of section six, or\n> > \n> > > (c) the excess of the cash receivable on conversion together with the face value of the new security over the face value of the existing security deemed to be income by paragraph six of section six,\n> > \n> > amounts in the case of any one trust, in all, to a sum that is less than ten pounds, the whole of such sum, notwithstanding the provisions of the said respective paragraphs, may, without adjustment or apportionment, be at once treated as income and paid to the person entitled to the income or applied by such person as income accordingly.\n> \n> > (2) Where the face value of the new security together with the cash (if any) receivable on conversion is less than the face value of the existing security by an amount that in the case of any one trust does not in all exceed ten pounds, notwithstanding paragraph four of section six, no deductions need be made from the interest on the new securities, but the whole of such interest may, without deduction or apportionment, be paid to the person entitled to the income or applied by such person as income accordingly.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Raising of money out of capital in certain cases","content":"#### 8 Raising of money out of capital in certain cases\n\n8 Raising of money out of capital in certain cases\n\n> When in pursuance of paragraph three of section six any person is in respect to his interest in the income of a new security entitled to receive or to cause to be applied any money which is deemed to be income by virtue of that paragraph such money may be raised out of the capital of the new security, and such capital may be applied for that purpose to any necessary extent.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Trustees powers in certain cases","content":"#### 9 Trustees powers in certain cases\n\n9 Trustees powers in certain cases\n\n> Where a new security referred to in paragraph three of section six is vested in a trustee such trustee shall have power:\n> \n> > (1) at any time and from time to time to raise out of the capital of the new security, by selling, mortgaging, or charging the same or any part thereof, such sum as may be required to provide any money by the said paragraph deemed to be income which has not been paid or applied,\n> \n> > (2) to raise in manner aforesaid a sum of money equal to the amount of the excess of the face value of the new security over the face value of the existing security or to so much of the amount of such excess as shall not have been already raised, and to appropriate the sum so raised for the purpose of future payments or applications, and\n> \n> > (3) at any time and from time to time to provide any money which is so deemed to be income out of any capital moneys forming part of any property held subject to the same beneficial trusts as the new security.","sortOrder":8},{"sectionNumber":"10","sectionType":"section","heading":"Application to court by certain persons","content":"#### 10 Application to court by certain persons\n\n10 Application to court by certain persons\n\n> Any person who is for the time being entitled to receive or cause to be applied money which is by paragraph three of section six deemed to be income or any person who is for the time being interested in the capital of the new security from the income of which deductions of money are to be made under paragraph four of the same section may apply to the court by summons according to the procedure provided by section ninety-one of the [Trustee Act 1925](/view/html/inforce/current/act-1925-014), for an order that such money may be raised, set aside, paid, or applied as the court may direct, and the court may make such order as in the circumstances it thinks fit including an order for the payment by any party of the costs of the other parties where justified by the circumstances.","sortOrder":9},{"sectionNumber":"11","sectionType":"section","heading":"Application to new securities of trusts, powers etc affecting former securities","content":"#### 11 Application to new securities of trusts, powers etc affecting former securities\n\n11 Application to new securities of trusts, powers etc affecting former securities\n\n> > (1) Where any existing securities are converted into new securities, the new securities and the interest thereon shall, subject to the provisions of this Act, be subject to the same trusts, powers, rights, testamentary and other dispositions, provisions, and incumbrances as affect the securities so converted and the interest thereon respectively.\n> \n> > (2) In any Act passed or instrument executed before the first day of August, one thousand nine hundred and thirty-one, references to any existing security may be construed as references to new securities, and in the case of a testamentary instrument executed before the conversion of an existing security into a new security, any disposition which but for such conversion would have operated as a specific bequest of an existing security or of any interest therein, shall be operative with respect to the new security issued on the conversion as if it were the existing security.","sortOrder":10}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose: adjusting trust interests following the 1931 Commonwealth debt conversion. It has not expanded beyond this specific historical circumstance. The Act is essentially a one-time fix for a discrete problem (the 22.5% interest rate reduction on government bonds) and contains no provisions suggesting broader application to future debt conversions or financial restructurings."},"complexity_factors":["Heavy reliance on external legislation: The Act is essentially unreadable without reference to the Commonwealth Debt Conversion Act 1931 and Debt Conversion Agreement (No 2) Act 1931, plus the Trustee Act 1925","Nested conditional logic: Section 6 contains six distinct scenarios with multiple variables (face value comparisons, cash additions, percentage calculations) that must be evaluated in sequence","Arbitrary numerical thresholds: The 22.5% reduction figure and £10 de minimis threshold appear without explanation within the Act itself","Temporal specificity: Multiple fixed dates (1 August 1931, 31 July 1931) create time-bound conditional triggers","Cross-cutting definitions: Terms like 'existing security' and 'new security' are defined by reference to external Commonwealth legislation, creating circular definition risks","Dual characterisation problem: The core complexity is determining whether money is 'income' or 'capital'—a distinction that affects different beneficiaries oppositely"],"plain_english_summary":"This 1931 law deals with a very specific financial situation from the Great Depression era. Here's what it does:\n\n**The context:** During the Great Depression, the Australian government converted old government bonds ('existing securities') into new bonds ('new securities') with lower interest rates to help manage national debt. This created a legal headache for people who held these bonds in trusts—where one person owns the income (interest payments) and another owns the capital (the bond itself).\n\n**What the law fixes:** When bonds were converted, sometimes the new bond had a different face value than the old one, or cash was paid as part of the deal. This law sets rules for how to treat these differences—whether as **income** (going to the income beneficiary) or **capital** (going to the capital owner).\n\n**Key rules:**\n- **If values match:** No adjustment needed—everything stays with whoever owned it before.\n- **If cash is paid or new bond is worth more:** That extra amount generally counts as income to make up for the 22.5% interest rate cut.\n- **If new bond is worth less:** The income beneficiary gets less interest until the capital 'catches up' to what was lost.\n- **Small amounts:** If the difference is under £10, trustees can skip the complex calculations and just treat it as income.\n\n**Who it affects:** Trustees managing estates, beneficiaries of trusts holding government bonds, and anyone with split interests in these converted securities.\n\n**Why it matters:** Without this law, trustees wouldn't know whether to give extra cash from bond conversions to the person living off the interest or the person who eventually gets the bond's value. It prevents disputes and gives trustees clear powers to sell or mortgage bonds if needed to make these adjustments."},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"The Act both narrows and broadens practical scope. Section 3 requires provisions to be read only to the extent within State legislative power, limiting potential reach. Conversely, section 5 expressly extends application to conversions made under the Commonwealth Debt Conversion Act and related Agreements, broadening the set of conversions covered. Section 11 preserves prior trusts and dispositions, maintaining continuity of obligations on converted securities."},"complexity_factors":["Detailed, scenario-based allocation rules between income and capital on conversion (section 6) create multiple calculation branches.","Small‑amount exceptions that alter application of the main rules (section 7).","Trustee operational powers to raise and appropriate capital (sections 8–9) introduce administrative and fiduciary choices.","Right to seek court directions under the Trustee Act procedure adds litigation and discretionary adjudication (section 10).","Cross‑references to external Acts and instruments (Commonwealth Debt Conversion Act 1931; Debt Conversion Agreement; Trustee Act 1925) widen legal interactions (sections 4, 5).","Temporal cut‑off and retrospective reference point (1 August 1931) makes valuation and historical fact‑finding necessary (section 6).","Preservation of pre‑existing trusts, dispositions and incumbrances on converted securities requires legal mapping of prior instruments (section 11).","Construction provision limiting enactments to State legislative power creates interpretive constraint (section 3)."],"plain_english_summary":"This Act fixes how converted government securities are treated for income and capital entitlements. It applies to holders, beneficiaries, and trustees when an existing security is converted into a new security.\n\nIt prescribes when cash or differences in face value are treated as income or capital, gives trustees power to raise capital to meet those adjustments, and allows parties to apply to the court."},"issue_detection":{"absurdities":[],"contradictions":[]},"summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"Based on available metadata, the Act has never been amended since its enactment on 10 December 1931, strongly suggesting its scope has remained exactly as originally intended — a targeted, one-off adjustment mechanism for Depression-era securities conversions. No expansion or contraction of scope is evident."},"complexity_factors":["The actual text of the legislation was not provided — only metadata and website navigation elements are available, making substantive analysis impossible","Depression-era financial legislation involving government securities and debt conversion can involve complex financial and legal concepts (e.g., the mechanics of bond conversion, creditor rights, interest adjustments)","The historical legal context of 1930s securities law differs significantly from modern financial regulation, requiring specialist knowledge to interpret","Despite age, the Act remains nominally in force, creating uncertainty about any residual legal effects","Low complexity offset by the fact that the Act appears narrow in scope, addressing a specific historical event rather than an ongoing regulatory regime"],"plain_english_summary":"This 1931 New South Wales Act authorises the conversion of government securities — i.e., restructuring state debt by swapping old bonds for new terms — a measure taken during the Depression to lower borrowing costs. It historically affected bondholders and financial institutions; today it is effectively a dormant relic on the statute book with no practical impact."}},"importantCases":[],"_links":{"self":"/api/acts/conversions-of-securities-adjustment-act-1931","history":"/api/acts/conversions-of-securities-adjustment-act-1931/history","analysis":"/api/acts/conversions-of-securities-adjustment-act-1931/analysis","conflicts":"/api/acts/conversions-of-securities-adjustment-act-1931/conflicts","importantCases":"/api/acts/conversions-of-securities-adjustment-act-1931/important-cases","documents":"/api/acts/conversions-of-securities-adjustment-act-1931/documents"}}