Nobody will need to pay investor compensation levies for securities or futures contracts from December 19, the Securities & Futures Commission says.

An exemption notice declaring the payment suspension was gazetted today. The suspension will remain in force until the commission publishes a termination notice in the Government gazette when the net asset value of the Investor Compensation Fund falls below $1 billion.

Under Parts 2 & 3 of the Securities & Futures (Investor Compensation - Levy) Rules, investors are required to pay investor compensation levies at 0.002% on each side of securities transactions executed on the Stock Exchange and 50 cents (one cent for smaller size contracts) per side of a contract on futures transactions executed on the Futures Exchange.

The Securities & Futures (Investor Compensation - Levy) (Amendment) Rules 2005, which came into effect October 28, provide for a levy suspension and re-instatement mechanism whereby the levies can be suspended when the fund's net asset value exceeds $1.4 billion, and subsequently reinstated when the value falls below $1 billion.

The mechanism helps to reduce the transaction costs borne by investors while ensuring the fund's assets are at a prudent level.