Notice from the Legal Practice Board regarding Deposit and Wholesale Funding Guarantees

Resulting from recent financial institution problems and the subsequent government plans for the introduction of funding guarantees, the Board is aware that practitioners may have concerns regarding funds, especially trust accounts, which total over $1 million. The Commonwealth Government’s policy is being refined and the administrative procedures of the eligible ADI are as yet unknown. The Board has been advised that the Law Institute of Victoria is researching the issue on behalf of all law societies and the Law Council of Australia and the LIV is in contact with all relevant government departments and regulatory authorities. Please note that the guarantee scheme is scheduled to commence on 28 November 2008. The Government has advised that up until that date deposits and wholesale funding eligible for the guarantee arrangements will be guaranteed without charge. It is the Board’s understanding that after that date deposits over the $1 million threshold and wholesale funding will only be guaranteed if an application has been made to the RBA by eligible ADI and the relevant fee has been paid.

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