Securities lending arrangements - addressing insolvency issues


On 14 December 2013 the then Assistant Treasurer announced that the ‘Securities lending arrangement – addressing insolvency issues’ measure will not be proceeding.

The government also announced its intention to provide protection for taxpayers who under-assessed their taxable income on the basis of announced changes that will no longer proceed. This protection became law on 30 June 2014.

End of attention

In the 2011-12 Budget, the former government announced that it will amend the tax rules for securities lending arrangements to ensure that the lender under a securities lending arrangement is treated as not having disposed of the lent securities where:

  • the borrower does not return the securities, or identical securities, within 12 months due to the borrower's insolvency, and
  • no later than 30 days after the resulting default (or within such longer period that the Commissioner of Taxation allows), the lender restores their original position prior to the securities lending arrangement by using the collateral received under the arrangement to purchase identical securities.

The amendments were to apply to securities lending arrangements in existence at 1 July 2008 and those arrangements entered on or after that date.

Protection for taxpayers

Parliament has enacted legislation to provide protection for taxpayers who under assessed their tax position on the basis of announced changes that will no longer proceed. Taxpayers who paid additional tax following announced changes that will no longer proceed will be entitled to a refund.

Information on how the protection works and which previous announcements are protected is available at Protection for anticipation of certain discontinued announcements.

Media release

For more information, refer to:

Legislation and supporting material

The following legislation received royal assent on 30 June 2014:

    Last modified: 01 Oct 2014QC 24340