The FCS can only be activated by the Australian Government, and this will only be done in the unlikely event that a bank, building society or credit union has failed and can no longer meet its financial obligations. Once activated by the Australian Government, the FCS is administered by the Australian Prudential Regulation Authority (APRA).
The FCS limit of $250,000 applies to the sum of an account holder's deposits under the one banking licence. Some banking institutions operate multiple banking businesses with different trading names under the same banking license. Since the FCS applies to deposits per licensed banking institution, if you have the type of deposit accounts that FCS applies with a licenced bank, building society or credit union as well as deposits with any other banking businesses that institution operates under a different trading name, the FCS limit of $250,000 will apply to the total funds in all of these accounts under the one banking licence.