54DFidelity certificate

54D Fidelity certificate (1) A fidelity certificate is a certificate in the approved form, issued under an approved scheme, relating to the prescribed residential building work specified in the certificate. (2) A fidelity certificate relates to financial loss incurred in relation to the specified prescribed residential building work because: (a) a residential builder has failed to complete the work or has contravened a consumer guarantee; and (b) any of the following events has occurred: (i) the builder has died, disappeared or become bankrupt or insolvent; (ii) the builder's registration has ceased for a reason specified by regulation. 54DA Application for approval of fidelity fund scheme (1) The trustees of a fidelity fund scheme may apply to the Minister for approval of the scheme to provide fidelity certificates. Building Act 1993 63 (2) The application must: (a) be signed by all the trustees of the fidelity fund scheme; and (b) be accompanied by a copy of the trust deed for the scheme, certified as prescribed by regulation; and (c) include all the information required to satisfy the Minister that the scheme complies with the approval criteria. (3) The approval criteria for a fidelity fund scheme are the requirements, prescribed by regulation, with which the scheme must comply to be an approved scheme. (4) The approval criteria must include requirements for the following: (a) the management of the fidelity fund scheme in accordance with the scheme's trust deed; (b) qualifications or suitability for appointment as a trustee of the (c) the powers and duties of the trustees of the scheme; (d) the financial management of the scheme; (e) the prescribed residential building work for which a fidelity certificate may be issued; (f) the people who are entitled to make claims under a fidelity certificate; (g) applications for claims under a fidelity certificate; (h) dealing with claims under the scheme; (i) compliance with prudential standards. (5) A regulation prescribing a requirement for the approval criteria may apply, adopt or incorporate (with or without changes) the whole or part of a law in force in the Territory, or the whole or part of a document, as in force or existing at a particular time or from time to time. Building Act 1993 64 54DB Deciding application (1) Before considering whether to approve a fidelity fund scheme, the Minister may, by written notice, require the trustees of the scheme to do either or both of the following: (a) give specified additional information or documents necessary to enable the Minister to make a decision about approval; (b) give a statutory declaration about the information included in the application or any additional information or documents given to the Minister. (2) Before approving a fidelity fund scheme, the Minister may require the scheme to be amended to ensure it complies with this Act. (3) The Minister may: (a) if satisfied a fidelity fund scheme complies with the approval criteria – approve the scheme to provide fidelity certificates; or (b) otherwise – refuse to approve the scheme. (4) A condition may be expressed to have effect despite anything in the prudential standards. (5) If the Minister approves a fidelity fund scheme under subsection (3)(a), each trustee named in the application under section 54DA is taken to have been approved by the Minister under section 54DBA(2)(a). Note for subsection (5) The Minister's approval under section 54DBA(2)(a) is required for the appointment of subsequent trustees of an approved scheme. 54DBA Approval of trustees (1) The trustees of an approved scheme must, as soon as practicable after appointing a trustee of the scheme, apply in writing to the Minister to approve the appointment. (2) The Minister must, by written notice to the trustees: (a) if satisfied the person meets the eligibility criteria for the appointment as specified by regulation – approve the appointment; or (b) otherwise – refuse to approve the appointment. Building Act 1993 65 (3) The appointment of the person as a trustee of the scheme takes effect only after the appointment has been approved under this section. (4) A regulation may prescribe matters relating to the appointment of a person as a trustee of an approved scheme, including any of the (a) the application for approval of the person; (b) the approval or refusal to approve; (c) the revocation of approval; (d) a person ceasing to be a trustee; (e) giving notices relevant to the appointment. 54DC Prudential standards for approved scheme (1) A regulation may prescribe standards (the prudential standards) relating to prudential matters that must be complied with under an approved scheme. (2) Without limiting subsection (1), the prudential standards may provide for the following matters in relation to an approved scheme: (a) the continuing eligibility of a person to be a trustee of the (b) the capital adequacy of the scheme; (c) the valuation of liabilities; (d) the effectiveness of risk management strategies and techniques; (e) requirements for giving information to a specified person or entity about the trustee's decisions to pay or refuse to pay claims. (3) A regulation prescribing prudential standards may: (a) provide for the exercise of discretions under the standards, including discretions to approve, impose, adjust or exclude particular matters in relation to an approved scheme; and (b) apply, adopt or incorporate (with or without changes) the whole or part of a law in force in the Territory, or the whole or part of a document, as in force or existing at a particular time or from time to time. Building Act 1993 66 prudential matters, for an approved scheme, means matters relating to the trustees conducting the scheme's affairs: (a) in a way that keeps the scheme's affairs in a sound financial position; and (b) with integrity, prudence and professional skill. 54DD Compliance with conditions and prudential standards (1) Each trustee of an approved scheme must ensure the scheme complies with: (a) the conditions of the scheme's approval; and (b) the prudential standards. (2) An offence against subsection (1)(a) or (b) is a regulatory offence. 54DE Powers of Minister (1) The Minister may, in accordance with a regulation, take any of the following actions in relation to an approved scheme: (a) require the trustees of the scheme to comply with a provision of the prudential standards; (b) require the trustees of the scheme to give the Minister information relevant to the operation and management of the (c) suspend the approval of the scheme; (d) cancel the approval of the scheme. (2) A regulation may deal with the procedures for subsection (1) and the consequences of a failure by the trustees to comply with a requirement of the Minister. 54DF Orders consequential on suspension or cancellation of approval (1) If the Minister suspends or cancels the approval of a fidelity fund scheme under section 54DE(1)(c) or (d), the Minister may apply to the Supreme Court for orders to give effect to, or consequential on, the suspension or cancellation. Building Act 1993 67 (2) On application under subsection (1), the Supreme Court may make the orders it considers just, including: (a) orders for the winding-up of the scheme; and (b) orders in relation to the assets and liabilities of the scheme. 54DFA Minister's observer (1) The Minister may, in writing, appoint a public sector employee to be the Minister’s observer for an approved scheme. (2) The Minister's observer has the function of providing advice to the Minister on all matters relevant to the scheme's compliance with this Act, the Regulations and any conditions of approval of the scheme. (3) The trustees of an approved scheme must allow the Minister's observer: (a) to be present at each meeting of the trustees; and (b) to have access to all documents and information as to allow the observer to perform the function mentioned in subsection (2).