Corporations Regulations 2001
Authorised Version F2019C00362 registered 18/04/2019
Statutory Rules No. 193, 2001
made under the
Corporations Act 2001
Compilation No. 147
Compilation date: 6 April 2019
Includes amendments up to: F2019L00539
Registered: 18 April 2019
This compilation is in 7 volumes
Volume 1: regulations 1.0.01–6D.5.03
Volume 2: regulations 7.1.02–7.6.08E
Volume 3: regulations 7.7.01–8A.7.20
Volume 4: regulations 9.1.01–12.9.03
Volume 5: Schedules 1, 2 and 2A
Volume 6: Schedules 3–13
Volume 7: Endnotes
Each volume has its own contents
Prepared by the Office of Parliamentary Counsel, Canberra
About this compilation
This compilation
This is a compilation of the Corporations Regulations 2001 that shows the text of the law as
amended and in force on 6 April 2019 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending
laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any
uncommenced amendments affecting the law are accessible on the Legislation Register
(www.legislation.gov.au). The details of amendments made up to, but not commenced at, the
compilation date are underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an
application, saving or transitional provision that is not included in this compilation, details are
included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the
modification does not amend the text of the law. Accordingly, this compilation does not show
the text of the compiled law as modified. For more information on any modifications, see the
series page on the Legislation Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the
law, details are included in the endnotes.
Authorised Version F2019C00362 registered 18/04/2019
Authorised Version F2019C00362 registered 18/04/2019
Contents
Chapter 7—Financial services and markets 1
Part 7.7—Financial service disclosure 1
Division 1—Preliminary 1
7.7.01 How documents, information and statements are to
be given ............................................................................ 1
Division 2—Financial Services Guide 2
7.7.02 Situations in which Financial Services Guide is not
required............................................................................. 2
7.7.02A Situations when Financial Services Guide is not
required............................................................................. 5
7.7.03 Financial Services Guide given by financial
services licensee: description of documents...................... 6
7.7.03A Financial Services Guide given by financial
services licensee: compensation arrangements ................. 7
7.7.04 Financial Services Guide given by financial
services licensee: remuneration, commission and
benefits ............................................................................. 7
7.7.04A Financial services guide given by financial
services licensee: more detailed information about
remuneration etc ............................................................... 9
7.7.04AA Financial Services Guide given by financial
services licensee: non-monetary benefit that is not
conflicted remuneration .................................................... 9
7.7.04AB Financial Services Guide given by authorised
representative: non-monetary benefit that is not
conflicted remuneration .................................................... 9
7.7.05 Record of advice given by financial services
licensee ........................................................................... 10
7.7.05A Financial Services Guide given by authorised
representative of financial services licensee:
authorised representative number ................................... 10
7.7.05B Personalised Financial Services Guide ........................... 10
7.7.05C Exemption from providing certain information in a
Financial Services Guide ................................................ 11
7.7.06 Financial Services Guide given by authorised
representative of financial services licensee:
description of documents ................................................ 12
7.7.06A Financial Services Guide given by authorised
representative of financial services licensee—
licence number................................................................ 13
7.7.06B Financial Services Guide given by authorised
representative of financial services licensee:
compensation arrangements............................................ 13
7.7.07 Financial Services Guide given by authorised
representative of financial services licensee:
remuneration, commission and benefits.......................... 13
7.7.07A Financial services guide given by authorised
representative: more detailed information about
remuneration etc ............................................................. 15
7.7.08 Record of advice given by authorised
representative of financial services licensee ................... 16
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Division 2A—Combined Financial Services Guide and Product
Disclosure Statement 17
7.7.08A Combined Financial Services Guide and Product
Disclosure Statement ...................................................... 17
Division 2AA—Combined Financial Services Guide and credit
guide 19
7.7.08B Modification of section 942DA of the Act...................... 19
Division 2B—Record of small investment advice 20
7.7.08C Record of small investment advice—content
requirements ................................................................... 20
Division 3—Statement of Advice 21
7.7.09 Situations in which statement of advice is not
required: further advice................................................... 21
7.7.09A Situations in which Statement of Advice is not
required: small investments threshold............................. 21
7.7.09AA Statement of Advice from financial services
licensee ........................................................................... 24
7.7.09AB Modification of subsection 947B(4) of the Act .............. 24
7.7.09B Statement of Advice from providing entity—
information not included in the Statement ...................... 24
7.7.09BA Statement of Advice from authorised
representative.................................................................. 25
7.7.09BB Modification of subsection 947C(4) of the Act .............. 26
7.7.09BC Statement of Advice given by financial services
licensee: non-monetary benefit that is not
conflicted remuneration .................................................. 26
7.7.09BD Statement of Advice given by authorised
representative: non-monetary benefit that is not
conflicted remuneration .................................................. 26
7.7.09C Requirement to keep Statement of Advice and
other documents.............................................................. 27
7.7.10 Products for which a Statement of Advice is not
required........................................................................... 27
7.7.10AA Obligation on authorised representative to give a
financial services guide................................................... 27
7.7.10AAA Record of advice without a recommendation to
purchase or sell—content requirements .......................... 27
7.7.10AB Financial services guide—contents of guide................... 28
7.7.10AC Financial services guide.................................................. 29
7.7.10AD Financial services guide.................................................. 29
7.7.10AE Situations in which Statement of Advice not
required........................................................................... 30
7.7.10AF Various consequential amendments to Division 7
of Part 7.7 concerning situations where Financial
Services Guides do not have to be given ........................ 32
7.7.10AG Various consequential amendments to Division 7
of Part 7.7 ....................................................................... 33
7.7.10AH Business days.................................................................. 35
7.7.10AI Obligation to warn client that advice does not take
account of client’s objectives, financial situation or
needs—carbon units, Australian carbon credit
units and eligible international emissions units............... 35
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7.7.10A Statements of Advice—requirement to state
information as amounts in dollars................................... 36
7.7.10B Insertion of definition—further advice ........................... 36
7.7.10C Omission of definition—further market-related
advice.............................................................................. 37
7.7.10D Additional information in Statement of Advice .............. 37
7.7.10E Additional information in Statement of Advice .............. 37
7.7.11 Statement of Advice given by financial services
licensee ........................................................................... 37
7.7.11A Statement of Advice given by authorised
representative of financial services licensee—
licence number................................................................ 38
7.7.11B Statement of Advice—disclosure of dollar
amounts........................................................................... 38
7.7.12 Statement of Advice given by authorised
representative of financial services licensee ................... 38
7.7.13 Statement of Advice provided by authorised
representative—disclosure of dollar amounts ................. 39
7.7.13A Additional information about charges or
benefits—disclosure of dollar amounts........................... 40
7.7.13B Additional information about charges or
benefits—disclosure of dollar amounts........................... 40
Division 4—General advice provided to a retail client 42
7.7.14 Product Disclosure Statement not required..................... 42
Division 5—Other disclosure requirements 43
7.7.20 General advice to retail client—no obligation to
warn client ...................................................................... 43
7.7.20A Extension of disclosure requirements to wholesale
clients dealing with certain unauthorised insurers .......... 43
Division 6—Exemptions from application of Part 7.7 of the Act 45
7.7.21 Exemption from application of Part 7.7 of the Act ......... 45
Part 7.7A—Best interests obligations and remuneration 46
Division 2—Best interests obligations 46
7.7A.05 Best interests duty—basic banking products etc. ............ 46
7.7A.06 Best interests duty—general insurance products............. 46
7.7A.07 Best interests duty—basic banking products .................. 46
Division 3—Charging ongoing fees to clients 47
7.7A.10 Arrangements that are not ongoing fee
arrangements................................................................... 47
7.7A.11 Fee disclosure statements: product fee............................ 47
Division 4—Conflicted remuneration 48
Subdivision 1—Benefits in relation to life risk insurance products
that are conflicted remuneration 48
7.7A.11A What this Subdivision is about ....................................... 48
7.7A.11B Circumstances in which benefits in relation to life
risk insurance products are conflicted
remuneration................................................................... 48
7.7A.11C Circumstances in which benefits in relation to
information about life risk insurance products are
not conflicted remuneration ............................................ 49
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7.7A.11D Circumstances in which benefits in relation to
dealings in life risk insurance products are not
conflicted remuneration .................................................. 51
Subdivision 2—Monetary benefits that are not conflicted
remuneration 52
7.7A.12 What subdivision is about............................................... 52
7.7A.12B Stamping fees ................................................................. 53
7.7A.12C Time-sharing schemes .................................................... 53
7.7A.12D Brokerage fees ................................................................ 53
7.7A.12E Fees paid by clients for dealing services......................... 55
7.7A.12EA Application of ban on conflicted remuneration—
purchase or sale of financial advice business.................. 55
Subdivision 3—Monetary benefits that relate to life risk insurance
products 56
7.7A.12EB Life risk insurance products—clawback
requirements related to cancellation etc. ......................... 56
7.7A.12EC Life risk insurance products—clawback
requirements related to reduction of policy cost ............. 56
Subdivision 4—Other monetary and non-monetary benefits that
are not conflicted remuneration 56
7.7A.12F What subdivision is about............................................... 56
7.7A.12G General insurance ........................................................... 57
7.7A.12H Basic banking and general insurance products ............... 57
7.7A.12I Mixed benefits ................................................................ 57
7.7A.13 Non-monetary benefit given in certain
circumstances not conflicted remuneration:
prescribed amount........................................................... 58
7.7A.14 Non-monetary benefit given in certain
circumstances not conflicted remuneration:
education or training course............................................ 58
7.7A.15 Non-monetary benefit given in certain
circumstances not conflicted remuneration: other
education and training benefit......................................... 59
7.7A.15A Non-monetary benefit given in certain
circumstances not conflicted remuneration—
education and training in conducting a financial
services business............................................................. 59
Subdivision 5—Application provisions relating to the
Corporations Amendment (Further Future of
Financial Advice Measures) Act 2012 59
7.7A.15B Application of ban on conflicted remuneration—
non-platform operator (Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply) .............................. 59
7.7A.16 Application of ban on conflicted remuneration—
platform operator (Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply) .............................. 60
7.7A.16A Application of ban on conflicted remuneration—
platform operator (Division 4 of Part 7.7A of
Chapter 7 of the Act applies) .......................................... 60
7.7A.16B Application of ban on conflicted remuneration—
person other than platform operator (Division 4 of
Part 7.7A of Chapter 7 of the Act applies)...................... 61
7.7A.16BA Sale of business............................................................... 63
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7.7A.16C Application of ban on conflicted remuneration—
employer and employee (Division 4 of Part 7.7A
of Chapter 7 of the Act does not apply) .......................... 63
7.7A.16D Application of ban on conflicted remuneration—
new arrangement entered into on or after
application day (Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply) .............................. 64
7.7A.16E Application of ban on conflicted remuneration—
change of party to an arrangement (Division 4 of
Part 7.7A of Chapter 7 of the Act does not apply) .......... 65
7.7A.16F Application of ban on conflicted remuneration—
benefit is a pass through of a grandfathered benefit
(benefit is not conflicted remuneration) .......................... 65
Subdivision 6—Application provisions relating to the
Corporations Amendment (Life Insurance
Remuneration Arrangements) Act 2017 66
7.7A.16G Definitions ...................................................................... 66
7.7A.16H Life risk insurance products substantially related
to existing products......................................................... 66
Subdivision 7—Asset-based fees on borrowed amounts 67
7.7A.17 Financial services licensees ............................................ 67
7.7A.18 Authorised representatives.............................................. 67
Division 6—Exemptions from application of Part 7.7A of the Act 68
7.7A.40 Exemption from application of Part 7.7A of the
Act .................................................................................. 68
Part 7.8—Other provisions relating to conduct etc connected
with financial products and financial services, other
than financial product disclosure 69
Division 2—Dealing with clients’ money 69
Subdivision A—Money other than loans 69
7.8.01A Wholesale client money.................................................. 69
7.8.01 Obligation to pay money into an account ....................... 69
7.8.02 Accounts maintained for section 981B of the Act .......... 72
7.8.02A Accounts maintained for the purposes of
section 981B of the Act—special rules for retail
clients.............................................................................. 75
7.8.03 How money to be dealt with if licensee ceases to
be licensed etc................................................................. 75
7.8.04 Money to which Subdivision A of Division 2 of
Part 7.8 of the Act applies taken to be held in trust:
breach of financial services law...................................... 76
7.8.05 Money to which Subdivision A of Division 2 of
Part 7.8 of the Act applies taken to be held in trust:
risk accepted by insurer .................................................. 77
Subdivision AA—Client money reporting rules 77
7.8.05A Definitions for Subdivision AA of Division 2 ................ 77
7.8.05B Enforceable undertakings................................................ 78
7.8.05C Client money reporting infringement notices.................. 78
7.8.05D Effect of client money reporting infringement
notice provisions............................................................. 79
7.8.05E Statement of reasons must be given ................................ 79
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7.8.05F Contents of client money reporting infringement
notice .............................................................................. 80
7.8.05G Amount of penalty payable to the Commonwealth ......... 81
7.8.05H Compliance with client money reporting
infringement notice......................................................... 81
7.8.05J Extension of client money reporting infringement
notice period ................................................................... 82
7.8.05K Effect of compliance with client money reporting
infringement notice......................................................... 82
7.8.05L Application to withdraw client money reporting
infringement notice......................................................... 83
7.8.05M Withdrawal of client money reporting
infringement notice by ASIC .......................................... 84
7.8.05N Notice of withdrawal of client money reporting
infringement notice......................................................... 84
7.8.05P Withdrawal of notice after compliance ........................... 84
7.8.05Q Publication of details of client money reporting
infringement notice......................................................... 85
Subdivision B—Loan money 86
7.8.06 Statement setting out terms of loan etc ........................... 86
Division 3—Dealing with other property of clients 87
7.8.06A Property exempt from Division 3 of Part 7.8 of the
Act .................................................................................. 87
7.8.06B Wholesale client property ............................................... 87
7.8.07 How property to which Division 3 of Part 7.8 of
the Act to be dealt with ................................................... 87
Division 4—Special provisions relating to insurance 90
7.8.08 Debts of financial services licensee in relation to
premiums etc................................................................... 90
Division 4A—Special provisions relating to margin lending
facilities 94
Subdivision A—Responsible lending conduct for margin lending
facilities 94
7.8.08A Limit of margin lending facility taken to be
increased ......................................................................... 94
7.8.08B Exemption from requirement to make unsuitability
assessment ...................................................................... 95
7.8.09 Reasonable inquiries etc about retail client:
inquiries .......................................................................... 96
7.8.09A Modification of section 985G of the Act ........................ 97
7.8.10 Circumstances in which margin lending facility is
unsuitable........................................................................ 97
7.8.10A Margin lending facility taken not to be unsuitable.......... 97
Division 6—Financial records, statements and audit 98
Subdivision B—Financial records of financial services licensees 98
7.8.11 Particular categories of information to be shown in
records ............................................................................ 98
7.8.11A Particular categories of information to be shown in
records: records of non-monetary benefit that is
not conflicted remuneration ............................................ 98
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7.8.12 Requirements in relation to financial records of
financial services licensees ............................................. 99
Subdivision C—Financial statements of financial services licensees 100
7.8.12A Modification of section 989B of the Act....................... 100
7.8.13 Auditor’s report with annual profit and loss
statement and balance sheet .......................................... 101
7.8.13A Compliance certificate with profit and loss
statement and balance sheet .......................................... 102
7.8.14 Contents of annual profit and loss statement and
balance sheet and applicable accounting
procedures..................................................................... 102
7.8.14A Lodgement of annual profit and loss statement and
balance sheet................................................................. 102
Subdivision D—Appointment etc. of auditors 103
7.8.14B Modification of section 990B of the Act....................... 103
7.8.15 Appointment of auditor by financial services
licensee ......................................................................... 104
7.8.16 When person is ineligible to act as auditor of
financial services licensee............................................. 106
Division 7—Other rules about conduct 108
7.8.17 Priority to clients’ orders .............................................. 108
7.8.18 Instructions to deal through licensed markets ............... 108
7.8.19 Records of instructions to deal on licensed markets
and foreign markets ...................................................... 109
7.8.20 Dealings with non-licensees ......................................... 110
7.8.20A Dealings involving employees of financial service
licensees—risk insurance products ............................... 113
7.8.21 Dealings involving employees of financial services
licensees........................................................................ 113
Division 8—Miscellaneous 115
7.8.21A Anti-hawking provisions if no Product Disclosure
Statement is required .................................................... 115
7.8.21B Anti-hawking provisions if no Product Disclosure
Statement is required—carbon units, Australian
carbon credit units and eligible international
emissions units.............................................................. 115
7.8.22 Hours for hawking certain financial products ............... 115
7.8.22A Modification of Part 7.8................................................ 116
7.8.23 Return of financial product: transfer between
superannuation entities or RSAs ................................... 116
7.8.24 Right of return not to apply........................................... 117
7.8.25 Variation of amount to be repaid .................................. 117
7.8.26 Exemption from application of section 992A of the
Act ................................................................................ 117
Part 7.9—Financial product disclosure and other provisions
relating to issue and sale of financial products 118
Division 1—Preliminary 118
7.9.01 Interpretation ................................................................ 118
7.9.02 Sub-plans ...................................................................... 120
7.9.02A Alternative ways of giving Statement ........................... 121
7.9.02B Product Disclosure Statement in electronic form.......... 121
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Division 2—Arrangements for Product Disclosure Statements in
relation to superannuation products and RSA
products 123
Subdivision 2.1—Preliminary 123
7.9.03 Application of Division 2 ............................................. 123
Subdivision 2.2—Late provision of Product Disclosure Statement
for certain members of regulated superannuation
fund, public offer superannuation fund or
successor fund 123
7.9.04 Product Disclosure Statement to be provided later ....... 123
Subdivision 2.3—Product Disclosure Statement for retirement
savings account 124
7.9.05 Situation in which Product Disclosure Statement is
not required................................................................... 124
Subdivision 2.4—Additional obligations for eligible rollover funds 124
7.9.06A Relevant superannuation entities .................................. 124
7.9.06B Application forms ......................................................... 124
Subdivision 2.5—Product Disclosure Statement for insurance
options 124
7.9.07 Modification of Act: Product Disclosure Statement
in relation to insurance options ..................................... 124
Division 2A—Product Disclosure Statement for warrants 125
7.9.07A Warrants ....................................................................... 125
Division 2B—Product Disclosure Statement for market-traded
derivatives 127
7.9.07B Product Disclosure Statements for certain
market-traded derivatives.............................................. 127
7.9.07C Remedies for Product Disclosure Statements for
certain market-traded derivatives.................................. 128
Division 2BA—Product Disclosure Statement for discretionary
mutual funds 129
7.9.07CA Extension of Product Disclosure Statement
requirements to wholesale clients ................................. 129
Division 2C—Situations where a Product Disclosure Statement
is not required 130
7.9.07D Product Disclosure Statement not required for
offers of bundled contracts of insurance ....................... 130
7.9.07E Product Disclosure Statement not required if offer
of financial product is declined..................................... 130
7.9.07F Product Disclosure Statement not required if the
client is not contactable................................................. 130
7.9.07FA Product Disclosure Statement not required for
certain specified products ............................................. 131
7.9.07FB Product Disclosure Statement not required if client
not in this jurisdiction ................................................... 132
7.9.07FC Product Disclosure Statement not required general
insurance situation ........................................................ 132
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Division 2D—Preparation and content of Product Disclosure
Statements 134
7.9.07J Only 1 responsible person for a Product Disclosure
Statement ...................................................................... 134
7.9.07K Definition of defective: Product Disclosure
Statement, Short-Form PDS or Replacement
Product Disclosure Statement ....................................... 134
Division 2E—Obligation to make information publicly available:
registrable superannuation entities 135
Subdivision 2E.1—Obligation to make product dashboard
publicly available 135
7.9.07L Modification of Act ...................................................... 135
7.9.07M Source of power for this Subdivision............................ 135
7.9.07N Definitions .................................................................... 135
7.9.07P Meaning of MySuper product dashboard reporting
standards ...................................................................... 136
7.9.07Q Product dashboard—how information must be set
out................................................................................. 136
7.9.07R Product dashboard—return target ................................. 136
7.9.07S Product dashboard—return ........................................... 137
7.9.07T Product dashboard—comparison between return
target and return............................................................ 137
7.9.07U Comparison to be set out as a graph ............................. 138
7.9.07V Product dashboard—level of investment risk ............... 139
7.9.07W Product dashboard—statement of fees and other
costs .............................................................................. 139
Division 3—Dealing with money received for financial product
before the product is issued 140
7.9.08 Accounts ....................................................................... 140
7.9.08A Dealing with interest ..................................................... 140
7.9.08B Crediting of payments before money is received .......... 141
7.9.08C Money held in trust for a superannuation product
or RSA product ............................................................. 141
7.9.08D Statutory funds under the Life Insurance Act 1995 ....... 142
Division 4—Content of Product Disclosure Statements 143
Subdivision 4.1—Preliminary 143
7.9.09 Application of Division 4 ............................................. 143
Subdivision 4.1A—No Product Disclosure Statement for carbon
units, Australian carbon credit units and eligible
international emissions units 143
7.9.09A Application of Subdivision ........................................... 143
7.9.09B Provisions of Part 7.9 of Act that do not apply in
relation to carbon units, Australian carbon credit
units and eligible international emissions units............. 143
7.9.09C Modification of Act ...................................................... 144
Subdivision 4.2A—Form and content of Product Disclosure
Statement for margin loan 144
7.9.11 Application of Subdivision 4.2A .................................. 144
7.9.11A Provisions of Part 7.7 of Act that do not apply in
relation to margin loan.................................................. 144
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7.9.11B Definitions for Subdivision 4.2A.................................. 144
7.9.11C Modification of Act—margin loan ............................... 145
7.9.11D Form and content of Product Disclosure Statement
for margin loan ............................................................. 145
7.9.11E Requirements for references to incorporated
information for margin loan.......................................... 145
7.9.11F Retention of copies of Product Disclosure
Statement for margin loan............................................. 146
7.9.11G Requirement to provide copy of Product
Disclosure Statement for margin loan free of
charge ........................................................................... 147
7.9.11H Notification about change to Approved Securities
List or current interest rate for margin loan .................. 147
Subdivision 4.2B—Content of Product Disclosure Statement for
superannuation product 147
7.9.11K Application of Subdivision 4.2B................................... 147
7.9.11L Provisions of Part 7.7 of Act that do not apply in
relation to superannuation product................................ 148
7.9.11LA Attribution of accrued default amount to MySuper
product—exemption from significant event notice
requirements ................................................................. 148
7.9.11LB Attribution of accrued default amount to MySuper
product—modification of significant event notice
requirements ................................................................. 148
7.9.11M Provisions of Part 7.9 of Act that do not apply in
relation to superannuation product................................ 149
7.9.11N Modification of Act—superannuation product ............. 149
7.9.11O Form and content of Product Disclosure Statement
for superannuation product ........................................... 149
7.9.11P Requirements for references to incorporated
information for superannuation product........................ 150
7.9.11Q Retention of copies of Product Disclosure
Statement for superannuation product .......................... 151
7.9.11R Requirement to provide copy of Product
Disclosure Statement for superannuation product
free of charge ................................................................ 152
Subdivision 4.2C—Content of Product Disclosure Statement for
simple managed investment scheme 152
7.9.11S Application of Subdivision 4.2C................................... 152
7.9.11T Provisions of Part 7.7 of Act that do not apply in
relation to simple managed investment scheme ............ 153
7.9.11U Provisions of Part 7.9 of Act that do not apply in
relation to simple managed investment scheme ............ 153
7.9.11V Modification of Act—simple managed investment
scheme .......................................................................... 153
7.9.11W Form and content of Product Disclosure Statement
for simple managed investment scheme ....................... 154
7.9.11X Requirements for references to incorporated
information for simple managed investment
scheme .......................................................................... 154
7.9.11Y Retention of copies of Product Disclosure
Statement for simple managed investment scheme....... 155
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7.9.11Z Requirement to provide copy of Product
Disclosure Statement for simple managed
investment scheme free of charge ................................. 156
Subdivision 4.3—Other arrangements for Product Disclosure
Statements and application forms 156
7.9.12 Modification of Act: Product Disclosure
Statements and application forms for standard
employer-sponsors and successor funds ....................... 156
7.9.13 Offer of superannuation interest without
application or eligible application................................. 156
7.9.14 Remedies for person acquiring financial product
under defective Product Disclosure Statement:
superannuation and RSAs ............................................. 157
7.9.14A Treatment of arrangements under which a person
can instruct another person to acquire a financial
product.......................................................................... 158
Subdivision 4.4—Product information for certain insurance
products 158
7.9.14B Product information ...................................................... 158
Division 4A—General 160
7.9.14C Labour standards and environmental, social and
ethical considerations.................................................... 160
7.9.14D Further statements required in Product Disclosure
Statement—financial claims scheme ............................ 160
7.9.15 More detailed information in Product Disclosure
Statement: unauthorised foreign insurer ....................... 161
7.9.15A Product Disclosure Statements—requirement to
state information as amounts in dollars......................... 162
7.9.15B Product Disclosure Statements—disclosure of
dollar amounts .............................................................. 162
7.9.15C Product Disclosure Statements—disclosure of
dollar amounts .............................................................. 163
7.9.15CA Less information in Product Disclosure
Statement—financial claims scheme ............................ 164
7.9.15D Less information in product disclosure statement:
general insurance product ............................................. 164
7.9.15DA Statement or information not included in a Product
Disclosure Statement .................................................... 164
7.9.15DB Requirement to keep record of Product Disclosure
Statement and other documents .................................... 165
7.9.15DC Requirement to lodge documents mentioned in a
Product Disclosure Statement with ASIC ..................... 166
7.9.15E More detailed information in product disclosure
statement: general insurance product ............................ 166
7.9.15F Product disclosure statement: general insurance
product.......................................................................... 166
7.9.15FA Transitional arrangements for regulations 7.9.15D,
7.9.15E and 7.9.15F...................................................... 166
7.9.15G Business days................................................................ 167
7.9.15H New section 1012G: product disclosure statement
may sometimes be provided later.................................. 167
7.9.15I Modification of section 1012IA.................................... 169
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7.9.16 More detailed information in Product Disclosure
Statement: consumer credit insurance product.............. 169
7.9.16A Small scale offerings of managed investment and
other prescribed financial products (20 issues or
sales in 12 months) ....................................................... 170
Division 4B—Ongoing disclosure 171
7.9.16G Ongoing disclosure of material changes and
significant events .......................................................... 171
Division 4C—Fee Disclosure for certain financial products 172
Subdivision 4C.1—Application 172
7.9.16J Application of Division 4C to financial products ......... 172
7.9.16JA Application of Division 4C to financial products—
temporary arrangements ............................................... 172
7.9.16K Application of Division 4C to periodic statements
and Product Disclosure Statements............................... 172
Subdivision 4C.2—Product Disclosure Statements 173
7.9.16L More detailed information about fees and costs............ 173
7.9.16M Modification of section 1015C of the Act..................... 173
7.9.16N Presentation, structure and format of fees and costs
in Product Disclosure Statements ................................. 173
Subdivision 4C.3—Periodic statements 173
7.9.16O Presentation, structure and format of fees and
charges in periodic statements ...................................... 173
Division 4D—Other requirements relating to Product Disclosure
Statements and Supplementary Product Disclosure
Statements 175
Subdivision 4D.1—Requirement to lodge a notice with ASIC 175
7.9.16T Variation of paragraph 1015D(2)(b) of the Act ............ 175
Division 5—Ongoing requirements for product disclosure after
person becomes a member 176
Subdivision 5.1—Preliminary 176
7.9.17 Application of Division 5 ............................................. 176
Subdivision 5.2—Periodic statements for retail clients for
financial products that have an investment
component: regulated superannuation funds,
ADFs and RSAs 176
7.9.18 Application of Subdivision 5.2 ..................................... 176
7.9.19 Specific requirements for periodic statements:
superannuation funds (other than self managed
superannuation funds) and RSAs.................................. 176
7.9.19A Withdrawal benefit—fees, charges or expenses............ 177
7.9.19B Withdrawal benefit—fees, charges and expenses ......... 178
7.9.20 Specific requirements for certain periodic
statements: superannuation funds (other than self
managed superannuation funds).................................... 178
7.9.20AA Specific requirements for certain periodic
statements: superannuation funds (other than self
managed superannuation funds)—long-term
returns ........................................................................... 180
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7.9.20A Details of other significant benefits—disclosure of
fees, charges or expenses .............................................. 182
7.9.20B Other significant benefits—disclosure of fees,
charges or expenses ...................................................... 183
7.9.21 Specific requirements in particular cases: member
(other than capital guaranteed member) of fund
other than a self managed superannuation fund ............ 184
7.9.22 Specific requirements: capital guaranteed funds
and RSAs ...................................................................... 184
7.9.23 Information for capital guaranteed fund: benefits
reach $10 000................................................................ 185
7.9.24 Modification of Act: pensioners, members subject
to compulsory protection of small amounts and
members with small amounts that are expected to
grow quickly ................................................................. 185
Subdivision 5.3—Periodic statements for retail clients for
financial products that have an investment
component: information for RSAs 185
7.9.25 Application of Subdivision 5.3 ..................................... 185
7.9.26 Specific requirements where applicable: RSAs ............ 186
7.9.27 Modification of Act: periodic statements for RSA
holders .......................................................................... 187
7.9.28 Information for RSA: amount reaches $10 000 ............ 187
Subdivision 5.4—Periodic statements for retail clients for
financial products that have an investment
component: additional information for
superannuation entities and RSA providers 187
7.9.29 Application of Subdivision 5.4 ..................................... 187
7.9.30 Additional information for change to choices............... 187
Subdivision 5.4A—Periodic statements for retail clients for
financial products that have an investment
component: additional information for margin
lending facilities 188
7.9.30A Application of Subdivision 5.4A .................................. 188
7.9.30B Details to be included in periodic statements for
margin lending facilities ............................................... 188
Subdivision 5.5—Fund information for retail clients for financial
products that have an investment component:
superannuation 189
7.9.31 Application of Subdivision 5.5 ..................................... 189
7.9.32 Reporting periods: general ............................................ 189
7.9.33 Use of more than 1 document ....................................... 190
Subdivision 5.6—Fund information for retail clients for financial
products that have an investment component:
fund information for regulated superannuation
funds and ADFs 190
7.9.34 Application of Subdivision 5.6 ..................................... 190
7.9.35 General requirement ..................................................... 190
7.9.36 Specific requirements in all cases ................................. 190
7.9.37 Specific requirements in particular cases ...................... 190
7.9.38 Specific information in particular case: self
managed superannuation fund ...................................... 193
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7.9.39 Benefits determined by life insurance products ............ 193
Subdivision 5.7—Fund information for retail clients for financial
products that have an investment component:
fund information for pooled superannuation trusts 194
7.9.40 Application of Subdivision 5.7 ..................................... 194
7.9.41 Specific requirements in all cases ................................. 194
7.9.42 Specific requirements in particular cases ...................... 194
Subdivision 5.8—Ongoing disclosure of material changes and
significant events 195
7.9.43 Modification of Act: disclosure of material
changes and significant events in relation to
superannuation products and RSA products ................. 195
7.9.44 Benefits to be paid to eligible rollover fund.................. 196
Subdivision 5.8A—Information in relation to inactive
superannuation accounts 197
7.9.44A Meaning of inactive ...................................................... 197
7.9.44B Notices about insurance—inactivity ............................. 197
7.9.44C Notices about insurance—right to cease insurance
cover ............................................................................. 199
Subdivision 5.9—Information on request: members 200
7.9.45 Regulated superannuation funds, ADFs and pooled
superannuation trusts .................................................... 200
7.9.46 RSAs............................................................................. 201
Subdivision 5.10—Information on request: payments 201
7.9.47 Modification of Act: charges for information
requested....................................................................... 201
Subdivision 5.12—Periodic report when product holder ceases to
hold product: superannuation products and RSA
products 201
7.9.49 Application of Subdivision 5.12 ................................... 201
7.9.50 Exit reporting period..................................................... 201
7.9.51 Time for compliance..................................................... 201
7.9.52 General requirement ..................................................... 201
7.9.53 Information on death of product holder ........................ 202
7.9.54 Specific requirements in all cases ................................. 202
7.9.55 Specific requirements in particular cases ...................... 202
7.9.56 Exceptions to exit reporting period provisions:
superannuation products and RSA products ................. 203
7.9.57 Exception—members subject to compulsory
protection of small amounts.......................................... 203
7.9.58 Information to be given in cases other than death
of RSA holder ............................................................... 203
7.9.59 Information to be given where applicable..................... 204
7.9.60 Modification of Act: exceptions to exit reporting
period provisions .......................................................... 204
Division 5AA—General requirements for financial disclosure 205
7.9.60A Modification of Act: disclosure .................................... 205
7.9.60B Disclosure of transactions in periodic statements ......... 205
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Division 5AB—Short-Form Product Disclosure Statements 207
7.9.61AA Modification of the Act: Short-Form Product
Disclosure Statements................................................... 207
Division 5A—Dealing with money received for financial product
before the product is issued 209
7.9.61A Lost application money................................................. 209
7.9.61B Issue of substitute insurance product ............................ 209
7.9.61C Cheques ........................................................................ 210
Division 5B—Confirming transactions 211
7.9.61D Transactions involving superannuation products .......... 211
Division 5C—CGS depository interests 212
7.9.61E CGS depository interest information website ............... 212
Division 6—Confirmation of transactions 213
7.9.62 Confirmation of transactions not required .................... 213
7.9.63 Confirmation of transactions: precise costs of
transaction not known................................................... 215
7.9.63A Persons who must confirm transactions........................ 215
7.9.63B Content of confirmation of transactions—general ........ 216
7.9.63C Confirmation of transaction—multiple transactions ..... 217
7.9.63D Confirmation of transaction—information about
cooling-off period ......................................................... 218
7.9.63E Confirmation of transaction—facility that provides
written confirmation ..................................................... 219
7.9.63F Confirmation of transaction—acquisition of
financial product ........................................................... 219
7.9.63G Confirmation of transaction—disposal of financial
product.......................................................................... 219
7.9.63H Certain product issuers and regulated persons must
meet appropriate dispute resolution
requirements—self managed superannuation funds...... 220
7.9.63I Confirmation of transaction in electronic form............. 220
Division 7—Cooling-off periods 221
7.9.64 Cooling-off periods not to apply................................... 221
7.9.64A Notification of exercise of right of return—risk
insurance products ........................................................ 222
7.9.65 Return of financial product: general ............................. 222
7.9.66 Return of financial product: superannuation and
RSAs............................................................................. 223
7.9.67 Variation of amount to be repaid .................................. 223
7.9.68 Modification of section 1019B of the Act: client
includes standard employer-sponsor ............................. 225
7.9.69 Modification of provisions of Division 5 of
Part 7.9 of the Act: terms of contract ............................ 227
7.9.70 Modification of provisions of Division 5 of
Part 7.9 of the Act: distributions ................................... 227
Division 8—Other requirements 228
7.9.71 Modification of section 1017D of the Act: use of
more than 1 document................................................... 228
7.9.71A Periodic statements—exemption for passbook
accounts ........................................................................ 228
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7.9.72 Modification of section 1017D of the Act:
information already given ............................................. 228
7.9.73 Reporting periods: general ............................................ 228
7.9.74 Form of application....................................................... 228
7.9.74A Periodic statements—requirement to state
information as amounts in dollars................................. 229
7.9.75 Content of periodic statements: costs of
transactions ................................................................... 230
7.9.75A Ways of giving information .......................................... 232
7.9.75B Information in electronic form...................................... 232
7.9.75BA Fund information made available on a website............. 233
7.9.75C Periodic statements—disclosure of amounts................. 233
7.9.75D Periodic statements—disclosure of amounts................. 234
7.9.76 Consents to certain statements ...................................... 235
7.9.77 Alternative dispute resolution requirements—
product issuer that is not a financial services
licensee ......................................................................... 235
7.9.77A Dispute resolution requirement—obligation to
cooperate with AFCA ................................................... 235
7.9.78 Additional statement: trustee required to provide
benefits ......................................................................... 236
7.9.80B Short selling of certain warrants ................................... 236
Division 9—Additional requirements for transfer of lost
members and lost RSA holders 238
7.9.81 Lost members ............................................................... 238
7.9.82 Lost RSA holders.......................................................... 238
Division 11—Superannuation to which arrangements apply
under the Family Law Act 1975 239
7.9.84 Definitions for Division 11 ........................................... 239
7.9.85 Application of Division 11............................................ 240
7.9.86 Acquisition of financial product ................................... 240
7.9.87 Modification of Act: Product Disclosure Statement
in relation to superannuation interest under Family
Law Act ........................................................................ 240
7.9.88 Statement content in relation to superannuation
interest under Family Law Act: superannuation
fund............................................................................... 241
7.9.89 Statement content in relation to superannuation
interest under Family Law Act: RSA............................ 242
7.9.90 Information for existing holders of superannuation
products and RSA products in relation to
superannuation interest ................................................. 242
7.9.91 Periodic statements for retail clients for financial
products that have an investment component—
general .......................................................................... 242
7.9.92 Periodic statements for retail clients for financial
products that have an investment component—
superannuation interest other than percentage-only
interest .......................................................................... 243
7.9.93 Trustees of superannuation entities—additional
obligation to provide information in relation to
superannuation interest ................................................. 244
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7.9.94 Division 5 of Part 7.9 of the Act not to apply in
relation to non-member spouse ..................................... 244
Division 12—Medical indemnity insurance 245
7.9.95 Medical indemnity insurance—exemption from
product disclosure provisions ....................................... 245
Division 13—Unsolicited offers to purchase financial products
off market 246
Subdivision A—Modifying provisions of Part 7.9 of the Act: offers
to purchase securities in certain proprietary
companies 246
7.9.95A Offers to which this Subdivision applies ...................... 246
7.9.95B Duration and withdrawal of the offer............................ 246
7.9.95C Varying the terms of the offer....................................... 246
7.9.95D Rights if requirements not complied with ..................... 247
Subdivision B—Other matters 247
7.9.96 Percentage increase or decrease in the market
value of a product ......................................................... 247
7.9.97 Off-market trading by professional investors etc .......... 247
7.9.97A Information in offer document if payment is to be
made in instalments ...................................................... 248
Division 14—Exemptions from Parts 7.7, 7.8 and 7.9 of the Act 250
7.9.98 Certain providers of financial services exempted
from the requirements of Parts 7.7, 7.8 and 7.9 of
the Act .......................................................................... 250
7.9.98A Exemption from application of Part 7.9 of the Act ....... 250
Division 15—Disclosure in relation to short sales covered by
securities lending arrangement of listed
section 1020B products 251
7.9.99 Interpretation ................................................................ 251
7.9.100 Seller disclosure............................................................ 251
7.9.100A Seller disclosure of existing short position ................... 253
7.9.101 Licensee disclosure....................................................... 253
7.9.102 Public disclosure of information ................................... 253
Part 7.10—Market misconduct and other prohibited conduct
relating to financial products and financial services 255 7.10.01 Division 3 financial products ........................................ 255
7.10.02 Professional standards schemes .................................... 255
7.10.03 Exemption for market participants of qualifying
gas trading exchange..................................................... 258
Part 7.11—Title and transfer 259
Division 1—Preliminary 259
7.11.01 Definitions .................................................................... 259
7.11.03 Arrangements about Division 4 financial products ....... 260
7.11.04 Arrangements for forms................................................ 261
7.11.05 Document duly completed in accordance with a
particular form .............................................................. 261
7.11.06 Stamping of documents ................................................ 262
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7.11.07 Application of Division 3 of Part 7.11 of the Act to
certain bodies................................................................ 263
7.11.08 Interests in registered schemes...................................... 263
Division 2—Application of Part 7.11 264
7.11.09 Application ................................................................... 264
Division 3—Transfer of Division 3 securities effected otherwise
than through a prescribed CS facility 265
7.11.10 Application of Division 3 ............................................. 265
7.11.11 Sufficient transfer: general............................................ 265
7.11.12 Sufficient transfer of Division 3 assets: licensed
trustee company or Public Trustee of a State or
Territory........................................................................ 265
7.11.13 Sufficient transfer of Division 3 rights: licensed
trustee company or Public Trustee of a State or
Territory........................................................................ 266
7.11.14 Sufficient transfer ......................................................... 266
7.11.15 Transferee’s execution of transfer of Division 3
assets............................................................................. 266
7.11.16 Transferee’s execution of transfer of Division 3
rights ............................................................................. 266
7.11.17 Transfer document that purports to bear stamp of
transferor's broker ......................................................... 267
7.11.18 Warranties by market licensee if transfer
document purports to bear its stamp ............................. 268
7.11.19 Indemnities by market licensee and broker if
transfer document purports to bear their stamps ........... 269
7.11.20 Joint and several warranties and liabilities.................... 269
7.11.21 Registration of certain instruments ............................... 270
7.11.22 Details to be included in instrument of transfer ............ 270
Division 4—Transfer of Division 4 financial products effected
through prescribed CS facility 271
7.11.23 Application of Division 4 ............................................. 271
7.11.24 Application of ASTC operating rules ........................... 271
7.11.25 Participant’s authority to enter into transaction
continues despite client’s death..................................... 271
7.11.26 Authority to enter into transaction gives authority
to transfer...................................................................... 271
7.11.27 Effect of proper ASTC transfer on transferee:
Division 4 financial products other than rights ............. 272
7.11.28 Effect of proper ASTC transfer on transferee:
rights ............................................................................. 273
7.11.29 Warranties by participant if identification code is
included in transfer document....................................... 274
7.11.30 Indemnities in respect of warranted matters:
transfer not effected by the participant.......................... 275
7.11.31 Indemnities in respect of warranted matters:
transferor not legally entitled or authorised to
transfer Division 4 financial products ........................... 275
7.11.32 Indemnities in respect of warranted matters:
participant not authorised to effect transfer................... 276
7.11.33 Joint and several warranties and liabilities.................... 277
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7.11.34 ASTC entitled to assume its operating rules
complied with ............................................................... 277
7.11.35 ASTC-regulated transfer not to be registered
unless proper ASTC transfer......................................... 277
7.11.36 Issuer not to refuse to register proper ASTC
transfer .......................................................................... 277
7.11.37 Determination of who holds Division 4 financial
products for the purposes of meeting ............................ 278
7.11.38 Determination of who holds Division 4 financial
products in class of Division 4 financial products
for the purposes of meeting........................................... 278
7.11.39 Determination of who holds Division 4 financial
products for the purposes of conferring security
benefits ......................................................................... 279
Division 5—Offences 280
7.11.40 Stamping of broker’s stamp on sufficient transfer ........ 280
7.11.41 Inclusion of identification codes in proper ASTC
transfers ........................................................................ 281
7.11.42 Contravention by participant of the ASTC
certificate cancellation provisions relating to use
of cancellation stamps................................................... 281
Division 6—Civil liability 282
7.11.43 Contravention by participant of the ASTC
certificate cancellation provisions................................. 282
Part 7.12—Miscellaneous 283 7.12.01 Destruction of records by ASIC.................................... 283
Chapter 8—Mutual recognition of securities offers 284
Part 8.1—Preliminary 284 8.1.01 Prescribed foreign recognition scheme (Act s
1200A(1)) ..................................................................... 284
8.1.02 Prescribed offeror (Act s 1200A(1)) ............................. 284
8.1.03 Prescribed recognised jurisdiction (Act s
1200A(1)) ..................................................................... 284
Part 8.2—Foreign offers that are recognised in this jurisdiction 285
Division 1—Recognised offers 285
8.2.01 Prescribed offer (Act s 1200C(4))................................. 285
8.2.02 Prescribed warning statements (Act s 1200E)............... 285
8.2.03 Prescribed details to be given in warning
statements (Act s 1200E(b)).......................................... 286
8.2.04 Prescribed home regulators (Act s 1200G(13) and
(14)) .............................................................................. 287
Division 4—Modification of the Act in relation to its application
to recognised offers for interests in New Zealand
managed investment schemes (Act s 1020G, 1200M) 288
8.4.01 Modification of Part 7.9 of the Act—New Zealand
offer documents replace Product Disclosure
Statements..................................................................... 288
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8.4.02 Modification of Part 6D.2 of the Act and Part 7.9
of the Act—certain disclosure obligations not to
apply ............................................................................. 288
Chapter 8A—Asia Region Funds Passport 289
Part 8A.4—Notified foreign passport funds 289
Division 1—Becoming a notified foreign passport fund 289
8A.4.10 Rejecting a notice of intention—name of fund
identical to another or unacceptable.............................. 289
Division 4—Providing key information in relation to notified
foreign passport funds 290
8A.4.40 Register of members—purposes for which a
person may obtain and use a copy ................................ 290
8A.4.45 Destruction of records by ASIC—period before
documents may be destroyed ........................................ 290
Part 8A.5—Register of passport funds 291 8A.5.10 Prescribed details for the Register of Passport
Funds ............................................................................ 291
Part 8A.7—Deregistration and denotification 294 8A.7.10 Authority....................................................................... 294
8A.7.15 Continued application of Corporations legislation
to deregistered Australian passport funds ..................... 294
8A.7.20 Continued application of Corporations legislation
to funds that have been removed as notified
foreign passport funds................................................... 295
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Financial services and markets Chapter 7
Financial service disclosure Part 7.7
Preliminary Division 1
Regulation 7.7.01
Chapter 7—Financial services and markets
Part 7.7—Financial service disclosure
Division 1—Preliminary
7.7.01 How documents, information and statements are to be given
(1) For subsection 940C(3) of the Act:
(a) if general advice is given orally in a public forum, information that
subsection 941C(5) of the Act requires to be given must be given orally;
and
(b) if general advice is given in electronic form in a public forum, information
that subsection 941C(5) of the Act requires to be given must be given in
electronic form; and
(c) if general advice is given in writing (otherwise than in electronic form) in a
public forum, information that subsection 941C(5) of the Act requires to be
given must be given in writing; and
(d) if general advice is given in any other manner in a public forum,
information that subsection 941C(5) of the Act requires to be given must
be given in the same manner.
(2) For paragraph 940C(7)(a) of the Act, a Financial Services Guide and a Statement
of Advice may be given to a person in either of the following ways:
(a) making the Guide or Statement available to the person in any way that:
(i) is agreed to by the person; and
(ii) allows the regulated person to be satisfied, on reasonable grounds,
that the person has received the Guide or Statement;
(b) making the Guide or Statement available to the person’s agent in any way
that:
(i) is agreed to by the agent; and
(ii) allows the regulated person to be satisfied, on reasonable grounds,
that the agent has received the Guide or Statement.
(3) For paragraph 940C(7)(b) of the Act, a document, information or statement that
is to be given in electronic form must, as far as practicable, be presented in a way
that will allow the person to whom it is given to keep a copy of it so that the
person can have ready access to it in the future.
(4) A document or statement that is to be given in electronic form must be presented
in a way that clearly identifies the information that is part of the document or
statement.
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Chapter 7 Financial services and markets
Part 7.7 Financial service disclosure
Division 2 Financial Services Guide
Regulation 7.7.02
Division 2—Financial Services Guide
7.7.02 Situations in which Financial Services Guide is not required
(1) For paragraph 941C(6)(c) of the Act, the following are prescribed:
(a) a deposit product that is a facility in relation to which:
(i) there is no minimum period before which funds cannot be withdrawn
or transferred from the facility without a reduction in the return
generated for the depositor; or
(ii) if there is such a period, it expires on or before the end of the period
of 2 years starting on the day on which funds were first deposited in
the facility;
(b) travellers’ cheques;
(c) a cash management trust interest.
(2) For subsection 941C(4) of the Act:
(a) providing general advice to the public, or a section of the public, at an
event organised by or for financial services licensees to which retail clients
are invited is prescribed; and
(b) a broadcast of general advice to the public, or a section of the public, that
may be viewed or heard by any person is prescribed; and
(c) distributing or displaying promotional material that:
(i) provides general advice to the public, or a section of the public; and
(ii) is available in a place that is accessible to the public is prescribed.
Examples:
1 Television or radio broadcasts.
2 Distributing promotional material contained in newspapers and magazines.
3 Sending a broadcast via an Internet website or webcast.
4 Giving a public lecture or seminar for retail clients, including employees of a
workplace.
Note: If general advice is given to the public, or a section of the public, the requirements of
subsection 941C(5) of the Act must be complied with. Additionally, if general advice is
provided to 1 or more retail clients, the providing entity must comply with
section 949A of the Act.
(3) For subsection 941C(8) of the Act, a Financial Services Guide does not have to
be given to a client in the following circumstances:
(a) a person (person 1) makes an inquiry by telephone in relation to the rental
of a vehicle from another person (person 2);
(b) as a result of that inquiry, it becomes apparent to person 2 that a financial
service will be, or is likely to be, provided to person 1;
(c) the financial service is the issue of an insurance product that relates to
either or both of:
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(i) the accidental death of, or bodily injury to, a person caused by an
accident in connection with the use of the rented vehicle during the
rental period; and
(ii) the loss or destruction of, or damage to, either or both of baggage and
personal effects belonging to a person in the rented vehicle caused by
an insured event during the rental period;
(d) person 2 makes arrangements for a document that is the equivalent of a
Financial Services Guide to be given to person 1 no later than the start of
the use to which the insurance product relates.
Example: The commencement of a journey of the rental vehicle is a use to which the insurance
product relates.
(3A) For subsection 941C(8) of the Act, a Financial Services Guide does not have to
be given to a client for a financial service provided in the circumstances specified
in paragraph 7.6.01(1)(la).
(4) For subsection 941C(8) of the Act, a Financial Services Guide does not have to
be given to a client in respect of advice that:
(a) is provided by a providing entity that is:
(i) a product issuer; or
(ii) a related body corporate of a product issuer; or
(iii) a product distributor; or
(iv) an authorised representative of an entity mentioned in
subparagraph (i), (ii) or (iii); and
(b) is only general advice in relation to a financial product that is, or a class of
financial products that includes, a financial product that is:
(i) issued by the providing entity or a related body corporate of the
providing entity; or
(ii) offered by the providing entity; and
(c) is not provided during a meeting; and
(d) is not provided during a telephone call, unless:
(i) the advice:
(A) concerns a class of financial products that includes a financial
product already held by the client; and
(B) is provided by the providing entity for that financial product;
or
(ii) there is no issue or sale of any financial product during the telephone
call.
Note: The providing entity must meet obligations under the Act in relation to the telephone
call such as the prohibition of hawking in sections 992A and 992AA of the Act and the
requirements for Product Disclosure Statements in Part 7.9 of the Act.
(4A) If general advice is provided during a telephone call in accordance with
paragraph (4)(d), the providing entity must tell the client that:
(a) a Financial Services Guide exists; and
(b) the provider will send out a Financial Services Guide on request.
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(5) If subregulation (4) applies and the providing entity does not give a Financial
Services Guide to the client when the advice is provided, the providing entity
must give to the client:
(a) the information that would be required to be in the Financial Services
Guide by paragraphs 942B(2)(a), (e) and (f) of the Act; or
(b) the information that would be required to be in the Financial Services
Guide by paragraphs 942C(2)(a), (c), (f) and (g) of the Act;
as the case requires.
Note: If general advice is provided to 1 or more retail clients, the providing entity must
comply with section 949A of the Act.
(5A) For subsection 941C(8) of the Act, a Financial Services Guide does not have to
be given to a client in the following circumstances:
(a) the advice is provided in circumstances in which section 1018A of the Act
applies or will apply at the end of the transition period;
(b) the advice is only general advice in relation to a financial product that is, or
a class of financial products that includes, a financial product issued by the
product issuer;
(c) the advice is in the form of advertising the financial product:
(i) on a billboard or a poster; or
(ii) in the media within the meaning of subregulation 7.6.01(7);
(d) the advertisement indicates that a person should consider whether or not
the product is appropriate for the person.
(5B) For subsection 941C(8) of the Act, a Financial Services Guide does not have to
be given to a client in the following circumstances:
(a) the providing entity is an issuer of derivatives that are able to be traded on
a financial market;
(b) the financial service is a dealing (within the meaning of section 766C of the
Act) in a derivative by the providing entity;
(c) at the time of the dealing, the providing entity is not a participant in the
financial market on which the particular derivative may be traded;
(d) the only financial service that the providing entity provides to the client is
the issuing of the derivative.
(6) In this regulation:
product distributor means a licensee that offers a financial product for sale.
(7) If:
(a) a financial service is provided by a person (the secondary service provider)
to a client by causing or authorising another person (the intermediary) to
provide or pass on the service; and
(b) but for the operation of section 52 of the Act, the secondary service
provider would not be taken to be providing the financial service to the
client; and
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(c) the intermediary does not act on behalf of the secondary service provider in
providing or passing on the service for the secondary service provider (see
section 911B of the Act); and
(d) the intermediary is a financial services licensee or an authorised
representative of a financial services licensee; and
(e) the secondary service provider has a written agreement with the
intermediary under which the intermediary agrees to either:
(i) give the secondary service provider’s Financial Services Guide
relating to the financial service provided by the secondary service
provider to the client; or
(ii) inform the client how to obtain the secondary service provider’s
Financial Services Guide relating to the financial service provided by
the secondary service provider;
then, for subsection 941C(8) of the Act, the secondary service provider does not
have to give the client a Financial Services Guide for the financial service.
7.7.02A Situations when Financial Services Guide is not required
(1) For paragraph 951C(1)(c) of the Act, section 941C of the Act is modified by
inserting after subsection 941C(1) the following subsection:
“(1A) The providing entity does not have to give the client a Financial Services Guide
if the client has already received the documents referred to in paragraphs (7A)(b)
and (c), in the circumstances set out in that subsection, that together contain all
of the information that the new Financial Services Guide is required to contain.”
(2) For paragraph 951C(1)(c) of the Act, section 941C of the Act is modified by
inserting after subsection 941C(7) the following subsections:
“(7A) The providing entity does not have to give the client a Financial Services Guide
in the following circumstances:
(a) if the providing entity will, or is likely to, provide a financial service to the
client in a recommendation situation (see section 1012A), an issue situation
(see section 1012B) or a sale situation (see section 1012C);
(b) the providing entity gives to the client a Product Disclosure Statement;
(c) the providing entity gives to the client a statement that:
(i) contains so much of the information required by section 942B or
942C (as the case may be), and any regulations made for the purposes
of the appropriate section, as is not already set out in the Product
Disclosure Statement; and
(ii) complies with the requirements set out in subsection (7B);
(d) the statements mentioned in paragraphs (b) and (c) are given at the same
time.
(7B) The statement referred to in paragraph (7A)(c) must:
(a) be up to date as at the time it is given to the client; and
(b) may contain information apart from that referred to in
subparagraph (7A)(c)(i); and
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(c) meet the requirements of subsections 942B(3) and (6A) or
subsections 942C(3) and (6A) (as the case may be).”
7.7.03 Financial Services Guide given by financial services licensee: description
of documents
(1) For paragraph 942B(2)(k) of the Act, the Financial Services Guide given by a
financial services licensee must include a statement that:
(a) describes the purpose and content of the Financial Services Guide; and
(b) if appropriate:
(i) informs the client that the client may also receive either or both of a
Statement of Advice and a Product Disclosure Statement; and
(ii) describes the purpose and content of those documents.
(2) In describing the purpose and content of the Financial Services Guide as
mentioned in subregulation (1), the client’s attention must be drawn to the
following matters:
(a) the Guide is designed to assist the client in deciding whether to use any of
the services offered in the Guide;
(b) the Guide contains information about remuneration that may be paid to the
financial services licensee and other relevant persons in relation to the
services offered;
(c) the Guide contains information on how complaints against the financial
services licensee are dealt with.
(3) In describing the purpose and content of a Statement of Advice or Product
Disclosure Statement, the client’s attention must be drawn to a description of the
circumstances in which the Statement of Advice or Product Disclosure Statement
will be given.
(4) Subregulations (2) and (3) do not prevent the statement required under
subregulation (1) from drawing attention to other matters relating to the purpose
and content of the Financial Services Guide, the Statement of Advice or the
Product Disclosure Statement.
(5) The statement required under subregulation (1) must be:
(a) presented in a manner that is easy for the client to understand; and
(b) displayed prominently in the Financial Services Guide.
(6) A statement is displayed prominently if it:
(a) appears at, or close to, the front of the Financial Services Guide; and
(b) stands out from the other information contained in the Guide.
Note: Ideally, the statement should be placed:
(a) on the inside cover or inside facing page of a paper-based Financial Services Guide form; or
(b) in an equivalent position of a Financial Services Guide that is not provided in a paper-based form.
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7.7.03A Financial Services Guide given by financial services licensee:
compensation arrangements
(1) For paragraph 942B(2)(k) of the Act, the Financial Services Guide given by a
financial services licensee must include a statement about:
(a) the kind of compensation arrangements that the licensee has in place; and
(b) whether those arrangements satisfy the requirements for compensation
arrangements under section 912B of the Act.
(2) This regulation commences, for a particular financial services licensee, on the
date that subregulations 7.6.02AAA(1), (2) and (3) take effect for that licensee.
7.7.04 Financial Services Guide given by financial services licensee:
remuneration, commission and benefits
(1) For paragraph 942B(2)(k) of the Act, the Financial Services Guide given by a
financial services licensee must include information, to the extent that the
information is able to be ascertained at the time the Financial Services Guide is
given to the client, about all remuneration (including commission) and other
benefits that a person (person 1) has received, or is to receive, for referring
another person to the financial services licensee.
Overview of regulation
(2) For paragraph 942B(4)(c) of the Act, the information required in particular
situations by paragraph 942B(2)(e) in relation to persons mentioned in
paragraph 942B(2)(e) or person 1 (see subregulation (1)) is as set out in
subregulations (3), (4) and (5).
If remuneration is ascertainable at the time FSG is given
(3) The following information is required if the remuneration, commission or other
benefits are able to be worked out at the time the Financial Services Guide is
given to the client:
(a) in a case where the remuneration, commission or other benefits are to be
received by a person who is a licensed trustee company, either:
(i) the remuneration, commission or other benefits; or
(ii) the remuneration, commission or other benefits stated as a percentage
of the income from the estate or as a percentage of the capital value of
the estate;
(b) in any other case—the remuneration, commission or other benefits.
If remuneration is not ascertainable at the time FSG is given and personal
advice will be given
(4) If:
(a) the remuneration (including commission) or other benefits are not able to
be ascertained at the time the Financial Services Guide is given to the
client; and
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(b) the providing entity reasonably believes that personal advice will be given
to the client;
the following information is required:
(c) either:
(i) particulars of the remuneration (including commission) or other
benefits, including, to the extent relevant, a statement of the range of
amounts or rates of remuneration (including commission) or other
benefits; or
(ii) general information about the remuneration (including commission)
or other benefits and the manner in which the remuneration (including
commission) or other benefits are to be calculated;
(d) a statement that:
(i) if the remuneration (including commission) or other benefits are
calculable at the time the personal advice is given, the remuneration
(including commission) or other benefits the person receives on
specific financial products to which the personal advice relates will be
disclosed at the time the personal advice is given or as soon as
practicable after that time; or
(ii) if the remuneration (including commission) or other benefits are not
calculable at the time the personal advice is given, the manner in
which the remuneration (including commission) or other benefits are
to be calculated will be disclosed at the time the personal advice is
given or as soon as practicable after that time.
If remuneration is not ascertainable at the time FSG is given and personal
advice will not be given
(5) If:
(a) the remuneration (including commission) or other benefits are not able to
be ascertained at the time the Financial Services Guide is given to the
client; and
(b) the providing entity reasonably believes that personal advice will not be
given to the client;
the following information is required:
(c) particulars of the remuneration (including commission) or other benefits,
including, to the extent relevant, a statement of the range of amounts or
rates of remuneration (including commission) or other benefits; or
(d) both of the following:
(i) general information about the remuneration (including commission)
or other benefits and the manner in which the remuneration (including
commission) or other benefits are to be calculated;
(ii) a statement that the client may request particulars of the remuneration
(including commission) or other benefits but that the request must be
made within a reasonable time after the client is given the Financial
Services Guide and before any financial service identified in the
Guide is provided to the client.
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7.7.04A Financial services guide given by financial services licensee: more
detailed information about remuneration etc
(1) For subsection 942B(7) of the Act, if:
(a) the remuneration (including commission) or other benefits that a person
mentioned in paragraph 942B(2)(e) or person 1 in subregulation 7.7.04(1)
has received, or is to receive, are not able to be ascertained at the time the
Financial Services Guide is given to the client; and
(b) the providing entity reasonably believes that personal advice will not be
given to the client; and
(c) the Financial Services Guide does not contain particulars of the
remuneration (including commission) or other benefits;
the client may request, from the financial services licensee, particulars of the
remuneration (including commission) or other benefits.
(2) A request under subregulation (1) must be made within a reasonable time after
the client is given the Financial Services Guide and before any financial service
identified in the Guide is provided to the client.
(3) For subregulation (1), the particulars must, to the extent relevant, include a
statement of the range of amounts or rates of remuneration (including
commission) or other benefits.
Examples:
1 Remuneration is paid within the range of $X to $Y.
2 Commission is paid at rates between X% and Y%.
(4) The particulars mentioned in subregulation (3) must be presented in a manner
that is easy for the client to understand.
7.7.04AA Financial Services Guide given by financial services licensee:
non-monetary benefit that is not conflicted remuneration
(1) This regulation is made for paragraph 942B(4)(b) of the Act.
(2) Information about a non-monetary benefit that, in accordance with
paragraph 963C(b) of the Act, is not conflicted remuneration is not required by
paragraph 942B(2)(e) of the Act.
Note: Under paragraph 963C(b) of the Act, if a non-monetary benefit is given to a financial
services licensee, or a representative of a financial services licensee, who provides
financial advice, is less than the prescribed amount and identical or similar benefits are
not given on a frequent or regular basis, the benefit is not conflicted remuneration.
7.7.04AB Financial Services Guide given by authorised representative:
non-monetary benefit that is not conflicted remuneration
(1) This regulation is made for paragraph 942C(4)(b) of the Act.
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(2) Information about a non-monetary benefit that, in accordance with
paragraph 963C(b) of the Act, is not conflicted remuneration is not required by
paragraph 942C(2)(f) of the Act.
Note: Under paragraph 963C(b) of the Act, if a non-monetary benefit is given to a financial
services licensee, or a representative of a financial services licensee, who provides
financial advice, is less than the prescribed amount and identical or similar benefits are
not given on a frequent or regular basis, the benefit is not conflicted remuneration.
7.7.05 Record of advice given by financial services licensee
For subparagraph 942B(2)(g)(iii) of the Act, the period within which a client
may request a record of the advice to which that subparagraph relates is 7 years
after the day on which the advice is provided.
7.7.05A Financial Services Guide given by authorised representative of financial
services licensee: authorised representative number
(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an
authorised representative must include the authorised representative number
allocated by ASIC to the authorised representative.
(2) Subregulation (1) does not apply to a Financial Services Guide to which
regulation 7.7.05B applies.
7.7.05B Personalised Financial Services Guide
(1) This regulation applies if:
(a) a financial services licensee; or
(b) an authorised representative (the authoriser) of a financial services
licensee;
authorises an individual to provide financial services on behalf of the licensee.
(2) For paragraph 942C(4)(b) of the Act, the Financial Services Guide in relation to
a financial service does not have to include the information in
paragraph 942C(2)(a) of the Act, in respect of the individual, if:
(a) the financial service is dealing in a financial product or the provision of
general advice or both; and
(b) the individual provides the financial service in accordance with the
authorisation; and
(c) the licensee has reasonable grounds to believe that the identity or
remuneration of the individual would not be material to a decision by a
retail client whether or not to obtain the financial service; and
(d) the Financial Services Guide includes:
(i) the contact details and licence number of the licensee; and
(ii) a statement setting out, in general terms, the individual’s role and
capacity in providing the financial service.
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(2A) For paragraph 942C(4)(b) of the Act, the Financial Services Guide in relation to
a financial service does not have to include a statement setting out the name and
contact details of a person if:
(a) the person is:
(i) a franchisee of the holder of an Australian financial services licence
(the franchisor) and a corporate authorised representative of the
franchisor; or
(ii) an employee of a franchisee of the holder of an Australian financial
services licence; and
(b) the franchisor is an authorised deposit-taking institution (within the
meaning of the Banking Act 1959) and regulated by APRA; and
(c) the franchise agreement:
(i) subjects the person to the policies of the franchisor; and
(ii) requires compliance by the person with the policies of the franchisor
that were made to give effect to the franchisor’s obligations under the
Australian financial services licence; and
(d) the Financial Services Guide produced by the franchisor explains that the
franchisor takes responsibility for the services provided by the person.
(3) For paragraph 942C(4)(b) of the Act, the Financial Service Guide in relation to a
financial service does not have to include the information in
paragraph 942C(2)(a) of the Act, in respect of an authoriser, if:
(a) the financial service is dealing in a financial product or the provision of
general advice or both; and
(b) the authoriser provides the financial service in accordance with the
authorisation; and
(c) the licensee has reasonable grounds to believe that the identity or
remuneration of the authoriser would not be material to a decision by a
retail client whether or not to obtain the financial service; and
(d) the Financial Services Guide includes:
(i) the contact details and licence number of the licensee; and
(ii) a statement setting out, in general terms, the authoriser’s role and
capacity in providing the financial service.
Note: The Financial Services Guide will contain all information otherwise required by
section 942C of the Act.
7.7.05C Exemption from providing certain information in a Financial Services
Guide
(1) For paragraph 942B(4)(b) of the Act, for a Financial Services Guide:
(a) information is not required by paragraph 942B(2)(c) of the Act about a
financial service to which subsection 941C(6) of the Act applies; and
(b) information is not required by paragraph 942B(2)(e) of the Act in relation
to remuneration (including commission) or other benefits that are received
only in respect of, or that are only attributable to, a financial service to
which subsection 941C(6) of the Act applies.
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(2) For paragraph 942C(4)(b) of the Act, for a Financial Services Guide:
(a) information is not required by paragraph 942C(2)(d) of the Act, about a
financial service to which subsection 941C(6) of the Act applies; and
(b) information is not required by paragraph 942C(2)(f) of the Act, in relation
to remuneration (including commission) or other benefits that are received
only in respect of, or that are only attributable to, a financial service to
which subsection 941C(6) of the Act applies.
7.7.06 Financial Services Guide given by authorised representative of financial
services licensee: description of documents
(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an
authorised representative must include a statement that:
(a) describes the purpose and content of the Financial Services Guide; and
(b) if appropriate:
(i) informs the client that the client may also receive either or both of a
Statement of Advice and a Product Disclosure Statement; and
(ii) describes the purpose and content of those documents.
(2) In describing the purpose and content of the Financial Services Guide as
mentioned in subregulation (1), the client’s attention must be drawn to the
following matters:
(a) the Guide is designed to assist the client in deciding whether to use any of
the services offered in the Guide;
(b) the Guide contains information about remuneration that may be paid to the
authorised representative and other relevant persons in relation to the
services offered;
(c) the Guide contains information on how complaints against the authorised
representative are dealt with.
(3) In describing the purpose and content of a Statement of Advice or Product
Disclosure Statement, the client’s attention must be drawn to a description of the
circumstances in which the Statement of Advice or Product Disclosure Statement
will be given.
(4) Subregulations (2) and (3) do not prevent the statement required under
subregulation (1) from drawing attention to other matters relating to the purpose
and content of the Financial Services Guide, the Statement of Advice or the
Product Disclosure Statement.
(5) The statement required under subregulation (1) must be:
(a) presented in a manner that is easy for the client to understand; and
(b) displayed prominently in the Financial Services Guide.
(6) A statement is displayed prominently if it:
(a) appears at, or close to, the front of the Financial Services Guide; and
(b) stands out from the other information contained in the Guide.
Note: Ideally, the statement should be placed:
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(a) on the inside cover or inside facing page of a paper-based Financial Services Guide form; or
(b) in an equivalent position of a Financial Services Guide that is not provided in a paper-based form.
7.7.06A Financial Services Guide given by authorised representative of financial
services licensee—licence number
For paragraph 942C(2)(m) of the Act, a providing entity that is an authorised
representative of a financial services licensee must include the licensee’s licence
number in a Financial Services Guide given to a client.
7.7.06B Financial Services Guide given by authorised representative of financial
services licensee: compensation arrangements
(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by the
authorised representative of a financial services licensee must include a
statement about:
(a) the kind of compensation arrangements that the licensee has in place; and
(b) whether those arrangements satisfy the requirements for compensation
arrangements under section 912B of the Act.
(2) This regulation commences, for a particular authorised representative, on the
date that subregulations 7.6.02AAA(1), (2) and (3) take effect for the financial
services licensee for whom he or she is a representative.
7.7.07 Financial Services Guide given by authorised representative of financial
services licensee: remuneration, commission and benefits
(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an
authorised representative of a financial services licensee must include
information, to the extent that the information is able to be ascertained at the time
the Financial Services Guide is given to the client, about all remuneration
(including commission) and other benefits that a person (person 1) has received,
or is to receive, for referring another person to:
(a) the authorised representative; or
(b) the financial services licensee.
Overview of regulation
(2) For paragraph 942C(4)(c) of the Act, the information required in particular
situations by paragraph 942C(2)(f) in relation to persons mentioned in
paragraph 942C(2)(f) or person 1 (see subregulation (1)) is as set out in
subregulations (3), (4) and (5).
If remuneration is ascertainable at the time FSG is given
(3) The following information is required if the remuneration, commission or other
benefits are able to be worked out at the time the Financial Services Guide is
given to the client:
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(a) in a case where the remuneration, commission or other benefits are to be
received by a person who is a licensed trustee company, either:
(i) the remuneration, commission or other benefits; or
(ii) the remuneration, commission or other benefits stated as a percentage
of the income from the estate or as a percentage of the capital value of
the estate;
(b) in any other case—the remuneration, commission or other benefits.
If remuneration is not ascertainable at the time FSG is given and personal
advice will be given
(4) If:
(a) the remuneration (including commission) or other benefits are not able to
be ascertained at the time the Financial Services Guide is given to the
client; and
(b) the providing entity reasonably believes that personal advice will be given
to the client;
the following information is required:
(c) either:
(i) particulars of the remuneration (including commission) or other
benefits, including, to the extent relevant, a statement of the range of
amounts or rates of remuneration (including commission) or other
benefits; or
(ii) general information about the remuneration (including commission)
or other benefits and the manner in which the remuneration (including
commission) or other benefits are to be calculated;
(d) a statement that:
(i) if the remuneration (including commission) or other benefits are
calculable at the time the personal advice is given, the remuneration
(including commission) or other benefits the person receives on
specified financial products to which the personal advice relates will
be disclosed at the time the personal advice is given or as soon as
practicable after that time; or
(ii) if the remuneration (including commission) or other benefits are not
calculable at the time the personal advice is given, the manner in
which the remuneration (including commission) or other benefits are
to be calculated will be disclosed at the time the personal advice is
given or as soon as practicable after that time.
If remuneration is not ascertainable at the time FSG is given and personal
advice will not be given
(5) If:
(a) the remuneration (including commission) or other benefits are not able to
be ascertained at the time the Financial Services Guide is given to the
client; and
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Financial Services Guide Division 2
Regulation 7.7.07A
(b) the providing entity reasonably believes that personal advice will not be
given to the client;
the following information is required:
(c) particulars of the remuneration (including commission) or other benefits,
including, to the extent relevant, a statement of the range of amounts or
rates of remuneration (including commission) or other benefits; or
(d) both of the following:
(i) general information about the remuneration (including commission)
or other benefits and the manner in which the remuneration (including
commission) or other benefits are to be calculated;
(ii) a statement that the client may request particulars of the remuneration
(including commission) or other benefits but that the request must be
made within a reasonable time after the client is given the Financial
Services Guide and before any financial service identified in the
Guide is provided to the client.
7.7.07A Financial services guide given by authorised representative: more
detailed information about remuneration etc
(1) For subsection 942C(7) of the Act, if:
(a) the remuneration (including commission) or other benefits that a person
mentioned in paragraph 942C(2)(f) or person 1 in subregulation 7.7.07(1)
has received, or is to receive, are not able to be ascertained at the time the
Financial Services Guide is given to the client; and
(b) the providing entity reasonably believes that personal advice will not be
given to the client; and
(c) the Financial Services Guide does not contain particulars of the
remuneration (including commission) or other benefits;
the client may request, from the authorised representative, particulars of the
remuneration (including commission) or other benefits.
(2) A request under subregulation (1) must be made within a reasonable time after
the client is given the Financial Services Guide and before any financial service
identified in the Guide is provided to the client.
(3) For subregulation (1), the particulars must, to the extent relevant, include a
statement of the range of amounts or rates of remuneration (including
commission) or other benefits.
Examples:
1 Remuneration is paid within the range of $X to $Y.
2 Commission is paid at rates between X% and Y%.
(4) The particulars mentioned in subregulation (3) must be presented in a manner
that is easy for the client to understand.
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Division 2 Financial Services Guide
Regulation 7.7.08
7.7.08 Record of advice given by authorised representative of financial services
licensee
For subparagraph 942C(2)(h)(iii) of the Act, the period within which a client
may request a record of the advice to which that subparagraph relates is 7 years
after the day on which the advice is provided.
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Combined Financial Services Guide and Product Disclosure Statement Division 2A
Regulation 7.7.08A
Division 2A—Combined Financial Services Guide and Product
Disclosure Statement
7.7.08A Combined Financial Services Guide and Product Disclosure Statement
(1) For subsection 942DA(1) of the Act, this regulation specifies the circumstances
in which a Financial Services Guide and a Product Disclosure Statement may be
combined in a single document.
(1B) This regulation does not apply if the Product Disclosure Statement is for a
margin loan.
(1C) This regulation does not apply if the Product Disclosure Statement is for a
superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9
applies.
(1D) This regulation does not apply if the Product Disclosure Statement is for a simple
managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9
applies.
(2) A combined Financial Services Guide and Product Disclosure Statement may be
issued as a single document if:
(a) the providing entity for the financial service and the product issuer for a
product issued in relation to that financial service are the same person; and
(b) the document is divided into 2 separate parts:
(i) a part identifiable as a Financial Services Guide that satisfies the
requirements under the Act for a Financial Services Guide; and
(ii) a part identifiable as a Product Disclosure Statement that satisfies the
requirements for a Product Disclosure Statement; and
(c) the title ‘Combined Financial Services Guide and Product Disclosure
Statement’ is marked on or near the front of the document; and
(d) the document is provided to a client at the earlier of the time at which a
Financial Services Guide must be provided and the time at which a Product
Disclosure Statement must be provided.
(3) A combined Financial Services Guide and Product Disclosure Statement may be
issued as a single document if:
(a) the providing entity for the financial service is a representative or a related
body corporate of the product issuer; and
(b) the product is only a basic deposit product, a non-cash payment facility that
is related to a basic deposit product, a general insurance product or a life
risk insurance product; and
(c) the document is divided into 2 separate parts:
(i) a part identifiable as a Financial Services Guide that satisfies the
requirements under the Act for a Financial Services Guide; and
(ii) a part identifiable as a Product Disclosure Statement that satisfies the
requirements for a product Disclosure Statement; and
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Division 2A Combined Financial Services Guide and Product Disclosure Statement
Regulation 7.7.08A
(d) the title ‘Combined Financial Services Guide and Product Disclosure
Statement’ is marked on or near the front of the document; and
(e) the document clearly and prominently discloses:
(i) the identity of the providing entity and the product issuer; and
(ii) the nature of the relationship between the providing entity and the
product issuer; and
(iii) the liability of the providing entity and the product issuer in relation to
the document; and
(f) the document is provided to a client at the earlier of the time at which a
Financial Services Guide must be provided and the time at which a Product
Disclosure Statement must be provided.
(4) For the single document:
(a) the Financial Services Guide and the Product Disclosure Statement may
provide for matters by the use of cross-references to each other rather than
by fully setting out material; and
(b) if the document includes cross-references:
(i) the document as a whole must include all of the information required
by subsections 942B(6A) and 1013C(3) of the Act; and
(ii) the use of the cross-references must not have the effect that the
document is misleading or deceptive.
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Financial service disclosure Part 7.7
Combined Financial Services Guide and credit guide Division 2AA
Regulation 7.7.08B
Division 2AA—Combined Financial Services Guide and credit guide
7.7.08B Modification of section 942DA of the Act
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
section 942DA of the Act were modified by substituting the heading of the
section with the following section heading and subsection heading:
‘942DA Combining a Financial Services Guide and another instrument
Financial Services Guide and a Product Disclosure Statement’.
(2) Part 7.7 of the Act applies as if section 942DA of the Act were also modified by
inserting after subsection (3) the following subsection heading and subsections:
‘Financial Services Guide and a credit guide
(4) If:
(a) a person:
(i) is:
(A) a financial services licensee; or
(B) an authorised representative of a financial services licensee;
and
(ii) is required to give a Financial Services Guide to a client under this
Act; and
(b) the person:
(i) either:
(A) holds an Australian credit licence under the National
Consumer Credit Protection Act 2009; or
(B) is a credit representative (within the same meaning as in the
National Consumer Credit Protection Act 2009); and
(ii) is required to give a credit guide to a consumer under that Act;
the person may combine the Financial Services Guide and credit guide in a single
document.
(5) If the person combines the Financial Services Guide and credit guide in a single
document, any statements or information to be included in the credit guide that
are identical to statements or information to be included in the Financial Services
Guide need only be included once.’
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Part 7.7 Financial service disclosure
Division 2B Record of small investment advice
Regulation 7.7.08C
Division 2B—Record of small investment advice
7.7.08C Record of small investment advice—content requirements
(1) For subsection 946AA(4) of the Act, a record of advice to a client must set out:
(a) the matters set out in subregulation (2); and
(b) the information that, if a Statement of Advice were to be given, would be
required in that statement by paragraphs 947B(2)(d) and (e) of the Act or
paragraphs 947C(2)(e) and (f) of the Act.
(2) For paragraph (1)(a), the matters that the record of advice must set out are:
(a) brief particulars of the recommendations made to the client and the basis
on which the recommendations are made; and
(b) brief particulars of the information that would be required by
subsection 947D(2) of the Act if a Statement of Advice were given to the
client; and
(c) the statement that would be required by subsection 947D(3) of the Act if a
Statement of Advice were given to the client.
Note: A client is entitled to ask the providing entity for a record of advice and the providing
entity must give a copy of the record of advice to the client—see
paragraph 946AA(5)(a) of the Act.
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Statement of Advice Division 3
Regulation 7.7.09
Division 3—Statement of Advice
7.7.09 Situations in which statement of advice is not required: further advice
(1) For subsection 946B(3A) of the Act, a record of advice must set out:
(a) the following:
(i) the advice given to the client by the providing entity;
(ii) if information or a statement required by subsections 947D(2) and (3)
is given—the information and statement; or
(b) the following:
(i) brief particulars of the recommendations made and the basis on which
the recommendations are made;
(ii) if information under subsection 947D(2) is given—brief particulars of
the information;
(iii) if a statement under subsection 947D(3) is given—an
acknowledgement that the statement has been given.
(2) The providing entity may keep the record in any form, for example, a tape
recording.
(3) The providing entity must keep the record for 7 years after the day on which the
further advice is provided.
7.7.09A Situations in which Statement of Advice is not required: small
investments threshold
(1) For subparagraph 946AA(1)(a)(i) of the Act, the threshold amount is $15 000.
(2) Subregulations (3) and (4) apply to each of the following financial products:
(a) shares;
(b) rights issues;
(c) options over unissued shares;
(d) partly paid shares;
(e) debentures;
(f) stapled securities.
(3) For small investment advice to a client that is related to the acquisition of one or
more of the financial products listed in paragraphs (2)(a) to (f), the threshold
amount in subregulation (1) must be calculated to include the total value of all
financial investments that would be committed to by the client if the advice were
accepted by the client.
Examples:
1 If the small investment advice related to the purchase of options over unissued shares
the total cost of the options would be both the cost to buy the options and the cost of
the exercise price on the face of the options.
2 If the small investment advice relates to the purchase of partly paid shares the total cost
of the shares must be calculated as if all calls had been made on the shares.
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Division 3 Statement of Advice
Regulation 7.7.09A
Note: The total value of all financial investments in relation to which small investment advice
is provided is calculated in accordance with subsection 946AA(2) of the Act.
(4) For small investment advice to a client that is related to the disposal of one or
more of the financial products listed in paragraphs (2)(a) to (f), the threshold
amount in subregulation (1) must be calculated to include the total value of all
financial investments that would be disposed of by the client if the advice were
accepted by the client.
Note: The total value of all financial investments in relation to which small investment advice
is provided is calculated in accordance with subsection 946AA(2) of the Act.
(5) Subregulations (6) and (7) apply to each of the following financial products:
(a) superannuation;
(b) managed investment schemes;
(c) non-derivative instalment warrants.
(6) For small investment advice to a client that is related to the acquisition of one or
more of the financial products listed in paragraphs (5)(a) to (c), the threshold
amount in subregulation (1) must be calculated to include:
(a) both:
(i) the cost to the client of the initial investment; and
(ii) other amounts that would be committed to by the client if the advice is
taken; and
(b) if the investment is not finite—the value of the investment is calculated for
the 12-month period beginning from the date that the record of advice is
required by subregulation (10), (11) or (12) to be given to the client.
Examples:
1 Advice given in relation to switching superannuation funds
A person earning $50 000 per annum is given advice to switch an existing
superannuation fund balance of $12 000 to another superannuation fund and direct all
future superannuation guarantee contributions to that same fund. In this event the total
of the superannuation guarantee contributions in the first 12-month period (ie $50 000
× 0.09 = $4 500) when added to the initial $12 000 transfer, would exceed the $15 000
threshold. In this example the exemption, in section 946AA of the Act, from the
requirement to provide a Statement of Advice would not apply.
2 Advice given to acquire non-derivative instalment warrants
The terms of the non-derivative instalment warrants are that $10 000 must be paid
initially, a second payment of $12 000 in 18 months time and a third and final payment
of $12 000 in 3 years time. The investment advice, assuming the client has committed
to implementing the advice, concerns a $34 000 investment and therefore the
exemption, in section 946AA of the Act, from the requirement to provide a Statement
of Advice would not apply.
Note: The total value of all financial investments in relation to which small investment advice
is provided is calculated in accordance with subsection 946AA(2) of the Act.
(7) For small investment advice to a client that is related to the disposal of one or
more of the financial products listed in paragraphs (5)(a) to (c), the threshold
amount in subregulation (1) must be calculated to include:
(a) the value to the client of the total divestment; and
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Regulation 7.7.09A
(b) other amounts reasonably related to the divestment that would be expended
if the advice is taken.
Note: The total value of all financial investments in relation to which small investment advice
is provided is calculated in accordance with subsection 946AA(2) of the Act.
(8) If the total value of an investment, to which investment advice to a client relates,
is not able to be ascertained under subsection 946AA(2) of the Act, the
investment advice is taken to exceed the threshold amount in subregulation (1).
(9) If an investment, to which investment advice relates, is jointly held by more than
1 client, the sum of the values of each client’s investment must be calculated to
determine whether the threshold amount in subregulation (1) is exceeded.
When record of advice is given
(10) For subsection 946AA(4) of the Act, a record of advice is required to be given to
a client when, or as soon as practicable after, investment advice is provided to
the client and, in any event, subject to subregulation (12), before the providing
entity provides the client with any further financial service that arises out of or in
connection with the investment advice.
Statement of certain information if record of advice not given when advice
provided
(11) If the record of advice is not given to the client when the investment advice is
provided, the providing entity must, at the time the investment advice is
provided, give the client a statement that contains the information that would be
required to be in a Statement of Advice by:
(a) paragraphs 947B(2)(d) and (e) of the Act; or
(b) paragraphs 947C(2)(e) and (f) of the Act;
as the case requires, and by section 947D of the Act, if applicable.
Time-critical cases
(12) If:
(a) a client expressly instructs that they require a further financial service to be
provided immediately, or by a specified time; and
(b) the further financial service arises out of, or in connection with, the
investment advice given to the client; and
(c) it is not reasonably practicable to give a record of advice to the client
before the further service is provided as so instructed;
the providing entity must give the client the record of advice:
(d) unless paragraph (e) applies—within 5 days after providing the further
service, or as soon as practicable; or
(e) if the further financial service is the provision to the client of a financial
product and section 1019B of the Act applies to the acquisition of the
product by the client—before the start of the period applicable under
subsection 1019B(3) of the Act, or sooner if practicable.
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Division 3 Statement of Advice
Regulation 7.7.09AA
7.7.09AA Statement of Advice from financial services licensee
(1) For paragraph 947B(2)(g) of the Act, a Statement of Advice given by a financial
services licensee in relation to a margin lending facility, or a margin lending
facility whose limit is proposed to be increased, within the meaning of
subsection 761EA(1) of the Act must include the following information:
(a) whether the client has taken out a loan to fund the secured property or
transferred securities contributed by the client for establishing the margin
lending facility;
Note: This is sometimes referred to as ‘double gearing’.
(b) if a loan to fund the secured property or transferred securities contributed
by the client for establishing the margin lending facility has been taken
out—whether the security for the loan includes the primary residential
property of the client;
(c) whether there is a guarantor for the margin lending facility, and, if so:
(i) if the financial services licensee has the necessary information—a
statement as to whether the guarantor has been appropriately informed
of, and warned about, the risks and possible consequences of
providing the guarantee; or
(ii) if the financial services licensee does not have the necessary
information—a statement that the financial services licensee does not
have the information;
(d) the amount of any other debt incurred by the client;
(e) any other matter that ASIC has specified in a legislative instrument for
subregulation (2).
(2) ASIC may specify in a legislative instrument any matter ASIC considers to be
relevant for the purpose of establishing whether the margin lending facility, or
the margin lending facility with the increased limit, is unsuitable for the client.
7.7.09AB Modification of subsection 947B(4) of the Act
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 947B(4) of the Act were modified by:
(a) substituting the full stop at the end of paragraph (c) with a semi-colon; and
(b) inserting after paragraph (c) the following paragraph:
‘(d) that ASIC may specify in a legislative instrument matters ASIC considers
to be relevant for the purposes of paragraph 947B(2)(g) of the Act.’
7.7.09B Statement of Advice from providing entity—information not included in
the Statement
(1) For paragraphs 947B(4)(b) and 947C(4)(b) of the Act, a providing entity is not
required to include a statement or information mentioned in Part 7.7 of the Act in
a Statement of Advice to the client if the Statement of Advice:
(a) refers to the statement or information; and
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Regulation 7.7.09BA
(b) provides sufficient details about the statement or information to enable the
client:
(i) to identify by a unique identifier the document, or part of the
document, that contains the statement or information; and
(ii) to decide whether or not to read the statement or information or obtain
a copy of the statement or information; and
(c) states that a copy of the statement or information may be obtained from the
providing entity on request, at no charge.
(2) Subject to subregulation (3), the providing entity must give the client the
document, or part of the document (whichever is applicable), unless the
providing entity has already given the document or part of the document to the
client.
(3) If the providing entity is an authorised representative of an Australian financial
services licensee, the document, or part of the document (whichever is
applicable), may be provided to the client:
(a) by another authorised representative appointed by and acting on behalf of
the licensee; or
(b) by the licensee.
(4) If the client requests a copy of a statement or information that the providing
entity is not required to include in accordance with subregulation (1), the
providing entity must provide the copy as soon as practicable, at no charge.
(5) If a statement or information is not required to be included in a Statement of
Advice because of subregulation (1), the statement or information is taken to be
included in the Statement of Advice.
(6) The exemption in subregulation (1) does not apply to a statement or information
that is required by section 947D or 961H of the Act.
7.7.09BA Statement of Advice from authorised representative
(1) For paragraph 947C(2)(h) of the Act, a Statement of Advice given by an
authorised representative in relation to a margin lending facility, or a margin
lending facility whose limit is proposed to be increased, within the meaning of
subsection 761EA(1) of the Act must include the following information:
(a) whether the client has taken out a loan to fund the secured property or
transferred securities contributed by the client for establishing the margin
lending facility;
Note: This is sometimes referred to as ‘double gearing’.
(b) if a loan to fund the secured property or transferred securities contributed
by the client for establishing the margin lending facility has been taken
out—whether the security for the loan includes the primary residential
property of the client;
(c) whether there is a guarantor for the margin lending facility, and, if so:
(i) if the authorised representative has the necessary information—a
statement as to whether the guarantor has been appropriately informed
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Division 3 Statement of Advice
Regulation 7.7.09BB
of, and warned about, the risks and possible consequences of
providing the guarantee; or
(ii) if the authorised representative does not have the necessary
information—a statement that the authorised representative does not
have the information;
(d) the amount of any other debt incurred by the client;
(e) any other matter that ASIC has specified in a legislative instrument for
subregulation (2).
(2) ASIC may specify in a legislative instrument any matter ASIC considers to be
relevant for the purpose of establishing whether the margin lending facility, or
the margin lending facility with the increased limit, is unsuitable for the client.
7.7.09BB Modification of subsection 947C(4) of the Act
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 947C(4) of the Act were modified by:
(a) substituting the full stop at the end of paragraph (c) with a semi-colon; and
(b) inserting after paragraph (c) the following paragraph:
‘(d) that ASIC may specify in a legislative instrument matters ASIC considers
to be relevant for the purposes of paragraph 947C(2)(h) of the Act.’
7.7.09BC Statement of Advice given by financial services licensee: non-monetary
benefit that is not conflicted remuneration
(1) This regulation is made for paragraph 947B(4)(b) of the Act.
(2) Information about a non-monetary benefit that, in accordance with
paragraph 963C(b) of the Act, is not conflicted remuneration is not required by
paragraph 947B(2)(d) of the Act.
Note: Under paragraph 963C(b) of the Act, if a non-monetary benefit is given to a financial
services licensee, or a representative of a financial services licensee, who provides
financial advice, is less than the prescribed amount and identical or similar benefits are
not given on a frequent or regular basis, the benefit is not conflicted remuneration.
7.7.09BD Statement of Advice given by authorised representative: non-monetary
benefit that is not conflicted remuneration
(1) This regulation is made for paragraph 947C(4)(b) of the Act.
(2) Information about a non-monetary benefit that, in accordance with
paragraph 963C(b) of the Act, is not conflicted remuneration is not required by
paragraph 947C(2)(e) of the Act.
Note: Under paragraph 963C(b) of the Act, if a non-monetary benefit is given to a financial
services licensee, or a representative of a financial services licensee, who provides
financial advice, is less than the prescribed amount and identical or similar benefits are
not given on a frequent or regular basis, the benefit is not conflicted remuneration.
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Regulation 7.7.09C
7.7.09C Requirement to keep Statement of Advice and other documents
A Statement of Advice and a document, or part of a document, mentioned in the
Statement, must be retained, by the providing entity that gave the Statement, for
7 years after the day on which the Statement is provided to the client.
7.7.10 Products for which a Statement of Advice is not required
For paragraph 946B(5)(c) of the Act, the following are prescribed:
(a) a deposit product that is a facility in relation to which:
(i) there is no minimum period before which funds cannot be withdrawn
or transferred from the facility without a reduction in the return
generated for the depositor; or
(ii) if there is such a period, it expires on or before the end of the period
of 2 years starting on the day on which funds were first deposited in
the facility;
(b) travellers’ cheques;
(c) a cash management trust interest;
(d) a motor vehicle insurance product (see regulation 7.1.11);
(e) a home building insurance product (see regulation 7.1.12);
(f) a home contents insurance product (see regulation 7.1.13);
(g) a travel insurance product (see regulation 7.1.16);
(h) a personal and domestic property insurance product (see regulation 7.1.17);
(i) a general insurance product prescribed by regulations made for the
purposes of subparagraph 761G(5)(b)(viii) (see regulation 7.1.17A).
7.7.10AA Obligation on authorised representative to give a financial services
guide
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 941B(2) were omitted and the following subsection were substituted:
“(2) A Financial Services Guide must not be given to the person by the providing
entity unless the authorising licensee, or each of the authorising licensees, on
whose behalf the providing entity provides the financial services, has authorised
its distribution by the providing entity.”
7.7.10AAA Record of advice without a recommendation to purchase or sell—
content requirements
For subsection 946B(9) of the Act, a record of advice must set out the following:
(a) the investment advice given to a client by the providing entity;
(b) brief particulars of the recommendations made to the client and the basis
on which the recommendations are made;
(c) if the providing entity is a financial services licensee—the information that,
if a Statement of Advice were to be given, would be required in that
Statement by paragraphs 947B(2)(d) and (e) of the Act;
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(d) if the providing entity is an authorised representative—the information
that, if a Statement of Advice were to be given, would be required in that
Statement by paragraphs 947C(2)(e) and (f) of the Act.
Note: A client is entitled to ask the providing entity for a record of advice under
subsections 942B(8) and 942C(8) of the Act.
7.7.10AB Financial services guide—contents of guide
Financial services guide given by financial services licensee
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 942B(2)(c) of the Act were omitted and the following paragraph were
substituted:
“(c) either:
(i) information about the financial services (the authorised services) that
the providing entity will be, or is likely to be, providing to the client,
and the kinds of financial products to which those services relate; or
(ii) information about the kinds of financial services (the authorised
services) that the providing entity is authorised by its licence to
provide, and the kinds of financial products to which those services
relate; and”.
Financial services guide given by authorised representative
(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraphs
942C(2)(c), (d) and (e) of the Act were omitted and the following paragraphs
were substituted:
“(c) either:
(i) information about the financial services (the authorised services) that
the providing entity will be, or is likely to be, providing to the client,
and the kinds of financial products to which those services relate; or
(ii) information, in relation to the authorising licensee or each of the
authorising licensees, about the kinds of financial services (the
authorised services) that the providing entity provides as
representative of the authorising licensee, and the kinds of financial
products to which those services relate; and
(d) information about who the authorising licensee, or each of the authorising
licensees, acts for when the authorised services are provided on their behalf
by the providing entity; and
(e) a statement:
(i) setting out the name and contact details of the authorising licensee, or
of each of the authorising licensees, mentioned in paragraph (d); and
(ii) stating that the providing entity is the authorised representative of that
licensee or those licensees; and”.
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7.7.10AC Financial services guide
Financial services guide given by financial services licensee—contents of guide
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 942B(2)(g) were omitted and the following paragraph were
substituted:
“(g) if the providing entity provides further advice—a statement in relation to
which the following requirements are satisfied:
(i) the statement must indicate that the client may request a record of
further advice that is provided to them, if they have not already been
provided with a record of that advice;
(ii) the statement must set out particulars of how the client may request
such a record;
(iii) any limitation in those particulars relating to the time within which the
client may request such a record must be consistent with any
applicable requirements in regulations made for the purposes of this
subparagraph or, if there are no such applicable requirements, must be
such as to allow the client a reasonable opportunity to request a record
of the advice; and”.
Financial services guide given by financial services licensee—compliance with
statement
(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 942B(8) were omitted and the following subsection were substituted:
“(8) If:
(a) the Financial Services Guide includes a statement to the effect that a client
may request a record of further advice; and
(b) the client is provided with further advice to which that statement applies;
and
(c) the client has not already been provided with a record of that advice;
the providing entity must comply with a request made in accordance with that
statement for a record of that advice.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).”
7.7.10AD Financial services guide
Financial services guide given by authorised representative—contents of guide
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 942C(2)(h) were omitted and the following paragraph were
substituted:
“(h) if the providing entity, when acting as representative of the authorising
licensee or any of the authorising licensees, provides further advice—a
statement in relation to which the following requirements are satisfied:
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(i) the statement must indicate that the client may request a record of
further advice that is provided to them, if they have not already been
provided with a record of that advice;
(ii) the statement must set out particulars of how the client may request
such a record;
(iii) any limitation in those particulars relating to the time within which the
client may request such a record must be consistent with any
applicable requirements in regulations made for the purposes of this
subparagraph or, if there are no such applicable requirements, must be
such as to allow the client a reasonable opportunity to request a record
of the advice; and”.
Financial services guide given by authorised representative—compliance with
statement
(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 942C(8) were omitted and the following subsection were substituted:
“(8) If:
(a) the Financial Services Guide includes a statement to the effect that a client
may request a record of further advice; and
(b) the client is provided with further advice to which that statement applies;
and
(c) the client has not already been provided with a record of that advice;
the providing entity must comply with a request made in accordance with that
statement for a record of that advice.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).”
7.7.10AE Situations in which Statement of Advice not required
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
section 946B of the Act were omitted and the following section were substituted:
“946B Situations in which a Statement of Advice is not required
First situation: further advice
(1) The providing entity does not have to give the client a Statement of Advice for
particular advice (the further advice) if subsection (2) or (2A) applies.
(2) This subsection applies if:
(a) the providing entity has previously given the client a Statement of Advice
that set out the client’s relevant personal circumstances in relation to the
advice (the previous advice) set out in that Statement; and
(b) the client’s relevant personal circumstances in relation to the further advice
(determined having regard to the client’s objectives, financial situation and
needs as currently known to the providing entity) are not significantly
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different from the client’s relevant personal circumstances in relation to the
previous advice; and
(c) so far as the basis on which advice is given relates to other matters—the
basis on which the further advice is given is not significantly different from
the basis on which the previous advice was given.
Note: Paragraphs 947B(2)(b) and 947C(2)(b) require a Statement of Advice to include
information about the basis on which the advice is or was given, which may include the
client's relevant personal circumstances, in which case paragraph (a) of this subsection
would be satisfied.
(2A) This subsection applies if:
(a) the client had a relationship with the providing entity before:
(i) if the providing entity is a licensee—the day on which the providing
entity obtained its Australian financial services Licence; or
(ii) if the providing entity is an authorised representative—the day on
which the licensee on whose behalf the advice is provided obtained its
Australian financial services Licence; and
(b) the providing entity gave the client advice (the earlier advice) of a kind
that if it were given after the day the Australian financial services Licence
was obtained would be considered to be personal advice; and
(c) the client’s relevant personal circumstances in relation to the further advice
are not significantly different from the client’s investment objectives,
financial situation and particular needs that were determined for the earlier
advice; and
(d) so far as the basis on which advice is given relates to other matters—the
basis on which the further advice is given is not significantly different from
the basis on which the earlier advice was given.
(3) At the same time or as soon as practicable after the further advice is given to the client, the client must be given a statement that contains the information that would, if a Statement of Advice were to be given, be required to be in the Statement by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires, and by section 947D, if applicable.
(3A) The providing entity must keep a record of the further advice and, in doing so,
must comply with any applicable requirements of regulations made for the
purposes of this subsection.
Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)).
Note 2: For the client’s right to a record of the advice, see subsections 942B(8) and 942C(8).
Note 3: Subsections 947D(2) and (3) require additional information to be included in the record
in certain circumstances.
Second situation: certain basic deposit and other products
(5) The providing entity does not have to give the client a Statement of Advice if the
advice relates to any or all of the following:
(a) a basic deposit product;
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(b) a facility for making non-cash payments (see section 763D) that is related
to a basic deposit product;
(c) a financial product of a kind prescribed by regulations made for the
purposes of this paragraph.
(6) However, if subsection (4) applies and the client is not given a Statement of
Advice, the client must instead, when, or as soon as practicable after, the advice
is provided, be given the information that would be required to be in the
Statement of Advice by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as
the case requires.”
7.7.10AF Various consequential amendments to Division 7 of Part 7.7
concerning situations where Financial Services Guides do not have to
be given
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
provision set out in column 2 of the following table were modified as set out in
columns 3 and 4:
Column 1 Column 2 Column 3 Column 4
Item provision of Act is modified by… and…
1 paragraph (a) of the definition
of defective in
subsection 952B(1)
omitting
“941D(2)”
substituting “941D(2) or
paragraph 941C(7A)(c) or”
2 subparagraph (a)(iv) of the
definition of defective in
subsection 952B(1)
omitting
“941D(2)”
substituting “941D(2) or
paragraph 941C(7A)(c) or”
3 paragraph (d) of the definition omitting substituting “946C(2) or
of disclosure document or “946C(2)” paragraph 941C(7A)(c),”
statement in
subsection 952B(1)
paragraph 952E(2)(a) omitting substituting “946C(2) or
“946C(2)” paragraph 941C(7A)(c),”
paragraph 952F(1)(b) omitting substituting “946C(2) or
“946C(2)” paragraph 941C(7A)(c),”
subparagraph 952F(1)(c)(i) omitting substituting “946C(2) or
“946C(2)” paragraph 941C(7A)(c),”
paragraph 952G(1)(b) omitting substituting “946C(2) or
“946C(2)” paragraph 941C(7A)(c),”
subparagraph 952G(1)(c)(i) omitting substituting “946C(2) or
“946C(2)” paragraph 941C(7A)(c),”
9 paragraph (a) of the definition
of defective in
subsection 953A(1)
omitting
“941D(2)”
substituting “941D(2) or
paragraph 941C(7A)(c) or”
10 subparagraph (a)(iv) of the
definition of defective in
subsection 953A(1)
omitting
“941D(2)”
substituting “941D(2) or
paragraph 941C(7A)(c) or”
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Item provision of Act is modified by… and…
11 paragraph (d) of the definition omitting substituting “946C(2) or
of disclosure document or “946C(2)” paragraph 941C(7A)(c),”
statement in
subsection 953A(1)
(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 940C(1) were modified by omitting “or a Statement of Advice” and
substituting “, a Statement of Advice or a statement referred to in
paragraph 941C(7A)(c)”.
(3) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 941D(4) were omitted and the following subsection were substituted:
“(4) The client must then be given:
(a) the statement referred to in paragraph 941C(7A)(c) together with a Product
Disclosure Statement as required by paragraph 941C(7A)(b)) in accordance
with the requirements of subsections 941C(7A) and (7B); or
(b) a Financial Services Guide;
within 5 business days after having given the statement referred to in subsection (3), or sooner if practicable.”
(4) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
following subsection were inserted at the end of section 941F:
“(2) If:
(a) a statement referred to in paragraph 941C(7A)(c) is given to the client
before the financial service is provided; and
(b) the following conditions are satisfied:
(i) there is a change in circumstances before the service is provided and
the statement does not contain the information it would be required to
contain if it were given to a person immediately after that change;
(ii) the fact that the statement does not contain the up to date information
is materially adverse from the point of view of a reasonable person
deciding, as a retail client, whether to proceed to be provided with the
financial service;
the providing entity must, before the service is provided, give the client another
statement of the kind referred to in paragraph 941C(7A)(c) that contains the up to
date information before the service is provided.”
7.7.10AG Various consequential amendments to Division 7 of Part 7.7
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
provisions set out in column 2 of the following table were modified as set out in
columns 3 and 4:
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Column 1 Column 2 Column 3 Column 4
Item provision of Act is modified by… and…
1 paragraph (b) of the definition of
defective in subsection 952B(1)
omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
2 paragraph 952E(2)(a) omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
3 paragraph 952F(1)(b) omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
4 subparagraph 952F(1)(c)(i) omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
5 paragraph 952G(1)(b) omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
6 subparagraph 952G(1)(c)(i) omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
7 paragraph (b) of the definition of
defective in subsection 953A(1)
omitting “Statement
of Advice”
substituting “Statement of
Advice, a record of advice
required by
subsection 946B(3A),”
(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
provisions set out in column 2 of the following table were modified as set out in
column 3:
Column 1 Column 2 Column 3
Item provision of Act is modified by…
1 the definition of defective
in subsection 952B(1)
inserting after subparagraph 952B(1)(b)(ii):
(iiA) if it is a record of advice required by
subsection 946B(3A)—there is an omission
from the record of advice of material required
by subsection 946B(3A) or section 947D; or
2 the definition of
disclosure document or
statement in
subsection 952B(1)
inserting after paragraph (c) of the definition the
following paragraph:
(ca) a record of advice required by subsection 946B(3A);
or
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Column 1 Column 2 Column 3
Item provision of Act is modified by…
3 the definition of defective
in subsection 953A(1)
inserting after subparagraph 952B(1)(b)(ii) the following
paragraph:
(iiA) if it is a record of advice required by
subsection 946B(3A)—there is an omission
from the record of advice of material required
by subsection 946B(3A) or section 947D; or
4 the definition of
disclosure document or
statement in
subsection 953A(1)
inserting after paragraph (c) of the definition the
following paragraph:
(ca) a record of advice required by subsection 946B(3A);
or
7.7.10AH Business days
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 946C(3)(c) was modified by omitting “5 days” and substituting “5
business days”.
7.7.10AI Obligation to warn client that advice does not take account of client’s
objectives, financial situation or needs—carbon units, Australian
carbon credit units and eligible international emissions units
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies in relation to a
carbon unit, an Australian carbon credit unit or an eligible international
emissions unit as if paragraph 949A(2)(c) read as follows:
“(c) if the advice relates to the acquisition, or possible acquisition, of a carbon
unit, the providing entity must:
(i) provide the client with the address of the website of the Clean Energy
Regulator mentioned in section 202 of the Clean Energy Act 2011;
and
(ii) inform the client that the client should consider each statement
mentioned in section 202 of the Clean Energy Act 2011 before
making any decision about whether to acquire the financial product;
and
(d) if the advice relates to the acquisition, or possible acquisition, of an
Australian carbon credit unit, the providing entity must:
(i) provide the client with the address of the website of the Clean Energy
Regulator mentioned in section 162 of the Carbon Credits (Carbon
Farming Initiative) Act 2011; and
(ii) inform the client that the client should consider each statement
mentioned in section 162 of that Act before making any decision
about whether to acquire the financial product; and
(e) if the advice relates to the acquisition, or possible acquisition, of an eligible
international emissions unit, the providing entity must:
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(i) provide the client with the address of the website of the Clean Energy
Regulator mentioned in section 61 of the Australian National Registry
of Emissions Units Act 2011; and
(ii) inform the client that the client should consider each statement
mentioned in section 61 of the Australian National Registry of
Emissions Units Act 2011 before making any decision about whether
to acquire the financial product.”.
7.7.10A Statements of Advice—requirement to state information as amounts in
dollars
(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 947B(2)(h) of the Act were modified to read as follows:
‘(h) unless in accordance with the regulations and a determination by
ASIC, information to be disclosed in accordance with paragraph (d)
and subparagraph (e)(i) must be stated as amounts in dollars.’.
(2) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide
the information mentioned in paragraph 947B(2)(h) of the Act, in the form
required by that paragraph, in a Statement of Advice prepared before 1 January
2005.
(3) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 947C(2)(i) of the Act were modified to read as follows:
‘(i) unless in accordance with the regulations and a determination by
ASIC, information to be disclosed in accordance with paragraph (e)
and subparagraph (f)(i) must be stated as amounts in dollars.’.
(4) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide
the information mentioned in paragraph 947C(2)(i) of the Act, in the form
required by that paragraph, in a Statement of Advice prepared before 1 January
2005.
(5) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
paragraph 947D(2)(d) of the Act were modified to read as follows:
‘(d) unless in accordance with the regulations and a determination by
ASIC, information to be disclosed in accordance with paragraph (a)
must be stated as amounts in dollars.’.
(6) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide
the information mentioned in paragraph 947D(2)(d) of the Act, in the form
required by that paragraph, in a Statement of Advice prepared before 1 January
2005.
7.7.10B Insertion of definition—further advice
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
following definition were inserted in section 761A:
“further advice means advice to which subsection 946B(2) or (2A) applies.”
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7.7.10C Omission of definition—further market-related advice
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the
definition of “further market-related advice” were omitted from section 761A.
7.7.10D Additional information in Statement of Advice
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 947D(2) of the Act were modified by omitting “Statement of Advice”
and substituting “Statement of Advice or the record of advice under
subsection 946B(3A), as the case requires,”.
7.7.10E Additional information in Statement of Advice
For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if
subsection 947D(3) of the Act were modified by omitting “Statement of Advice”
and substituting “Statement of Advice or the record of advice under
subsection 946B(3A), as the case requires”.
7.7.11 Statement of Advice given by financial services licensee
(1) For paragraph 947B(2)(g) of the Act, a Statement of Advice given by a financial
services licensee must include information about all remuneration (including
commission) and other benefits that a person (person 1) has received, or is to
receive, for referring another person to the financial services licensee.
(2) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947B(2)(d) or subparagraph 947B(2)(e)(i) as an amount in dollars, the
information may be set out as a description of the amount as a percentage of a
specified matter (including worked dollar examples, unless that is inappropriate).
(3) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947B(2)(d) or subparagraph 947B(2)(e)(i) as an amount in dollars, or
to describe the amount as a percentage, the information may be set out as a
description of the method of calculating the remuneration, benefits or interests
(including worked dollar examples, unless that is inappropriate).
(4) A determination under subregulation (2) or (3) must be:
(a) in writing; and
(b) published in the Gazette.
(5) The statements and descriptions must be presented in a manner that is easy for
the client to understand.
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7.7.11A Statement of Advice given by authorised representative of financial
services licensee—licence number
For paragraph 947C(2)(h) of the Act, a providing entity that is an authorised
representative of a financial services licensee must include the licensee’s licence
number in a Statement of Advice given to a client.
7.7.11B Statement of Advice—disclosure of dollar amounts
(1) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling
reason based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(2) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling
reason, based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars, or to describe the
amount as a percentage:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the method of calculating the
remuneration, benefits or interests (including worked dollar examples, unless that
is inappropriate).
(3) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
7.7.12 Statement of Advice given by authorised representative of financial
services licensee
(1) For paragraph 947C(2)(h) of the Act, a Statement of Advice given by an
authorised representative of a financial services licensee must include
information about all remuneration (including commission) and other benefits
that a person (person 1) has received, or is to receive, for referring another
person to the authorised representative or the financial services licensee.
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Statement of Advice Division 3
Regulation 7.7.13
(2) For paragraph 947C(2)(i) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947C(2)(e) or subparagraph 947C(2)(f)(i) as an amount in dollars, the
information may be set out as a description of the amount as a percentage of a
specified matter (including worked dollar examples, unless that is inappropriate).
(3) For paragraph 947C(2)(i) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947C(2)(e) or subparagraph 947C(2)(f)(i) as an amount in dollars, or
to describe the amount as a percentage, the information may be set out as a
description of the method of calculating the remuneration, benefits or interests
(including worked dollar examples, unless that is inappropriate).
(4) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
(5) The statements and descriptions must be presented in a manner that is easy for
the client to understand.
7.7.13 Statement of Advice provided by authorised representative—disclosure of
dollar amounts
(1) For paragraph 947C(2)(i) of the Act, if ASIC determines that, for a compelling
reason based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(2) For paragraph 947C(2)(i) of the Act, if ASIC determines that, for a compelling
reason, based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars, or to describe the
amount as a percentage:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the method of calculating the
remuneration, benefits or interests (including worked dollar examples, unless that
is inappropriate).
(3) A determination under subregulation (1) or (2) must be:
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Part 7.7 Financial service disclosure
Division 3 Statement of Advice
Regulation 7.7.13A
(a) in writing; and
(b) published in the Gazette.
7.7.13A Additional information about charges or benefits—disclosure of dollar
amounts
(1) For paragraph 947D(2)(d) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947D(2)(a) as an amount in dollars, the information may be set out as
a description of the amount as a percentage of a specified matter (including
worked dollar examples, unless that is inappropriate).
(2) For paragraph 947D(2)(d) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 947D(2)(a) as an amount in dollars, or to describe the amount as a
percentage, the information may be set out as a description of the method of
calculating the charge or benefit (including worked dollar examples, unless that
is inappropriate).
(3) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
7.7.13B Additional information about charges or benefits—disclosure of dollar
amounts
(1) For paragraph 947D(2)(d) of the Act, if ASIC determines that, for a compelling
reason based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(2) For paragraph 947D(2)(d) of the Act, if ASIC determines that, for a compelling
reason, based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars, or to describe the
amount as a percentage:
(a) would impose an unreasonable burden on a providing entity, or a class of
providing entities; or
(b) would impose an unreasonable burden on a providing entity, or a class of
providing entities, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
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Statement of Advice Division 3
Regulation 7.7.13B
the information may be set out as a description of the method of calculating the
charge or benefit (including worked dollar examples, unless that is
inappropriate).
(3) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
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Chapter 7 Financial services and markets
Part 7.7 Financial service disclosure
Division 4 General advice provided to a retail client
Regulation 7.7.14
Division 4—General advice provided to a retail client
7.7.14 Product Disclosure Statement not required
For paragraph 926B(1)(a) of the Act, a providing entity that is giving general
advice in relation to a financial product for which, under Part 7.9 of the Act, a
Product Disclosure Statement is not required, does not have to give the warning
in paragraph 949A(2)(c) of the Act.
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Financial service disclosure Part 7.7
Other disclosure requirements Division 5
Regulation 7.7.20
Division 5—Other disclosure requirements
7.7.20 General advice to retail client—no obligation to warn client
For paragraph 949A(1)(c) of the Act, the provision of general advice in the
circumstances set out in subregulation 7.7.02(5A) is specified.
7.7.20A Extension of disclosure requirements to wholesale clients dealing with
certain unauthorised insurers
(1) For paragraph 949B(1)(e) of the Act, a person must give a wholesale client the
information set out in subregulation (3) for a financial service provided by that
person to the wholesale client if:
(a) the service relates to an insurance contract specified in regulation 4C or 4D
of the Insurance Regulations 2002 that may be offered or issued by an
unauthorised foreign insurer (within the meaning of those Regulations) (the
insurer); and
(b) either:
(i) the person would be required to give a Statement of Advice if the
service were provided to a retail client; or
(ii) the contract is offered or issued to the wholesale client.
(2) For paragraph 949B(1)(e) of the Act, a person must give a wholesale client the
information set out in subregulation (3) for a financial service provided by that
person to the wholesale client if:
(a) the service relates to the wholesale client dealing with an entity (the
insurer) specified in regulation 12 of the Insurance Regulations 2002; and
(b) either:
(i) the person would be required to give a Statement of Advice if the
service were provided to a retail client; or
(ii) the insurer offers or issues a financial product to the wholesale client.
(3) The information is:
(a) a statement that the insurer is not authorised under the Insurance Act 1973
to conduct insurance business in Australia; and
(b) a statement that the insurer is not subject to the provisions of the Insurance
Act 1973, which establishes a system of financial supervision of general
insurers in Australia; and
(c) a statement that the wholesale client should consider whether to obtain
further information, including:
(i) the country in which the insurer is incorporated, and whether the
country has a system of financial supervision of insurers; and
(ii) the paid up capital of the insurer; and
(iii) which country’s laws will determine disputes in relation to the
financial product; and
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Part 7.7 Financial service disclosure
Division 5 Other disclosure requirements
Regulation 7.7.20A
(d) a statement that the insurer cannot be a declared general insurer for the
purpose of Part VC of the Insurance Act 1973, and, if the insurer becomes
insolvent, the wholesale client will not be covered by the financial claims
scheme provided under Part VC of that Act.
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Financial service disclosure Part 7.7
Exemptions from application of Part 7.7 of the Act Division 6
Regulation 7.7.21
Division 6—Exemptions from application of Part 7.7 of the Act
7.7.21 Exemption from application of Part 7.7 of the Act
For paragraph 951C(1)(a) of the Act, Part 7.7 of the Act does not apply to a
financial services licensee or an authorised representative in respect of financial
services provided to retail clients who are not in this jurisdiction.
Note: Regulation 7.9.98 also contains exemptions from the operation of Part 7.7 of the Act.
Corporations Regulations 2001
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Chapter 7 Financial services and markets
Part 7.7A Best interests obligations and remuneration
Division 2 Best interests obligations
Regulation 7.7A.05
Part 7.7A—Best interests obligations and remuneration
Note: Regulations 7.7A.01 to 7.7A.04 are reserved for future use.
Division 2—Best interests obligations
7.7A.05 Best interests duty—basic banking products etc.
(1) This regulation:
(a) is made for paragraph 961B(5)(b) of the Act; and
(b) prescribes a circumstance in which the provider is not required to prove
that he or she has taken the steps mentioned in paragraphs 961B(2)(d), (e),
(f) and (g) of the Act in relation to advice that relates to a basic banking
product or general insurance product.
(2) The provider is not required to prove that he or she has taken the steps if:
(a) the provider is:
(i) an agent or employee of an Australian ADI; or
(ii) otherwise acting by arrangement with an Australian ADI under the
name of the Australian ADI; and
(b) the subject matter of the advice sought by the client relates only to the
following:
(i) a basic banking product;
(ii) a general insurance product;
(iii) consumer credit insurance;
(iv) a combination of any of those products.
7.7A.06 Best interests duty—general insurance products
(1) This regulation:
(a) is made for paragraph 961B(5)(b) of the Act; and
(b) prescribes a circumstance in which the provider is not required to prove
that he or she has taken the steps mentioned in paragraphs 961B(2)(d), (e),
(f) and (g) of the Act.
(2) The provider is not required to prove that he or she has taken the steps to the
extent that the subject matter of the advice sought by the client is a general
insurance product.
7.7A.07 Best interests duty—basic banking products
For paragraph 961F(e) of the Act, a facility for making non-cash payments (see
section 763D of the Act) that is not related to a basic deposit product is a basic
banking product.
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Best interests obligations and remuneration Part 7.7A
Charging ongoing fees to clients Division 3
Regulation 7.7A.10
Division 3—Charging ongoing fees to clients
7.7A.10 Arrangements that are not ongoing fee arrangements
(1) This regulation is made for subsection 962A(5) of the Act.
(2) An arrangement of a kind mentioned in subsection 962A(1) or (2) of the Act is
not an ongoing fee arrangement to the extent that the arrangement relates to a
product fee mentioned in subregulation (3).
(3) Each of the following is a product fee:
(a) a fee for the administration, management or operation of a financial
product that is charged to a retail client to which the product is issued by
the issuer of the product;
Example 1: A monthly account keeping fee charged by the provider of a basic deposit product.
Example 2: A monthly administration or investment fee charged by a trustee of a superannuation
fund or a responsible entity of a registered scheme.
(b) a fee that:
(i) is a cost of providing financial product advice; and
(ii) under section 99F of the Superannuation Industry (Supervision) Act
1993, is not prohibited or prevented from being passed on to a
member of a regulated superannuation fund.
7.7A.11 Fee disclosure statements: product fee
(1) This regulation is made for paragraph 962H(3)(a) of the Act.
(2) Information about a product fee mentioned in subregulation 7.7A.10(3) is not
required by subsection 962H(2) of the Act.
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Chapter 7 Financial services and markets
Part 7.7A Best interests obligations and remuneration
Division 4 Conflicted remuneration
Regulation 7.7A.11A
Division 4—Conflicted remuneration
Subdivision 1—Benefits in relation to life risk insurance products that are
conflicted remuneration
7.7A.11A What this Subdivision is about
This Subdivision:
(a) is made for the purposes of section 963AA of the Act; and
(b) prescribes circumstances, in addition to those set out in section 963A, in
which a benefit given to a financial services licensee, or a representative of
a financial services licensee, in relation to a life risk insurance product, or
life risk insurance products, is conflicted remuneration.
7.7A.11B Circumstances in which benefits in relation to life risk insurance
products are conflicted remuneration
Giving information in relation to life risk insurance products
(1) A benefit given to a financial services licensee, or a representative of a financial
services licensee, is conflicted remuneration if:
(a) the benefit is given to the licensee or representative in relation to
information given to a person, or persons, in relation to a life risk insurance
product, or life risk insurance products; and
(b) access to the benefit, or the value of the benefit, is dependent on:
(i) the value of a life risk insurance product, or life risk insurance
products, subsequently acquired by a person or persons to whom, or in
relation to whom, the information is given; or
(ii) the value of a life risk insurance product, or life risk insurance
products, subsequently varied that are held by a person or persons to
whom, or in relation to whom, the information is given; or
(iii) the number of life risk insurance products subsequently acquired by a
person or persons to whom, or in relation to whom, the information is
given; or
(iv) the number of life risk insurance products subsequently varied that are
held by a person or persons to whom, or in relation to whom, the
information is given; and
(c) the information is not given in the course of, or as a result of, the licensee
or representative, or an associate of the licensee or representative,
providing financial product advice; and
(d) if the information is given in the course of providing a financial product—
the information is not given in the course of providing that product to a
person as a wholesale client, or to persons as wholesale clients.
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Conflicted remuneration Division 4
Regulation 7.7A.11C
Dealing in life risk insurance products
(2) A benefit given to a financial services licensee, or a representative of a financial
services licensee, is conflicted remuneration if:
(a) the benefit is given to the licensee or representative in relation to a dealing
in a life risk insurance product with a person as a retail client, or dealings
in life risk insurance products with persons as retail clients; and
(b) access to the benefit, or the value of the benefit, is dependent on:
(i) the value of the life risk insurance product to which the dealing
relates, or the life risk insurance products to which the dealings relate;
or
(ii) the number of life risk insurance products to which the dealings relate;
and
(c) the dealing, or dealings, do not occur in the course of, or as a result of, the
licensee or representative, or an associate of the licensee or representative:
(i) providing financial product advice; or
(ii) giving information in circumstances in which the benefit would be
conflicted remuneration under subregulation (1).
7.7A.11C Circumstances in which benefits in relation to information about life
risk insurance products are not conflicted remuneration
Monetary benefits
(1) Despite subregulation 7.7A.11B(1), a monetary benefit given to a financial
services licensee, or a representative of a financial services licensee, in relation
to information given to a person, or persons, in relation to a life risk insurance
product, or life risk insurance products, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is
given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative gives the information to the
person or persons; or
(ii) the way in which the licensee or representative presents the
information in giving it to the person or persons; or
(b) none of the products is a group life policy for members of a superannuation
entity (as defined in subsection 963B(2) of the Act) or a life policy for a
member of a default superannuation fund (as defined in subsection 963B(3)
of the Act) and either:
(i) the benefit ratio for the benefit is the same for the year in which the
product or products are issued as it is for each year in which the
product or products are continued; or
(ii) the benefit ratio requirements and clawback requirements in
section 963BA of the Act are satisfied in relation to the benefit; or
(c) the benefit is given to the licensee or representative in relation to consumer
credit insurance; or
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Part 7.7A Best interests obligations and remuneration
Division 4 Conflicted remuneration
Regulation 7.7A.11C
(d) if the information is given in the course of providing a financial product to
a person as a retail client or to persons as retail clients—the benefit is given
by that person, or those persons; or
(e) the benefit is given to the licensee as part of the purchase or sale of all or
part of the licensee’s business, or to the representative as part of the
purchase or sale of all or part of the representative’s business.
Non-monetary benefits
(2) Despite subregulation 7.7A.11B(1), a non-monetary benefit given to a financial
services licensee, or a representative of a financial services licensee, in relation
to information given to a person, or persons, in relation to a life risk insurance
product, or life risk insurance products, is not conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is
given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative gives the information to the
person or persons; or
(ii) the way in which the licensee or representative presents the
information in giving it to the person or persons; or
(b) each of the following is satisfied:
(i) the licensee or representative is the final recipient of the benefit, or all
or part of the benefit passes through the licensee or representative to
another financial services licensee, or representative of a financial
services licensee, who is the final recipient of the benefit;
(ii) the value of the benefit in the hands of each final recipient is less than
$300;
(iii) identical or similar benefits are not given on a frequent or regular
basis; or
(c) each of the following is satisfied:
(i) the benefit has a genuine education or training purpose;
(ii) the benefit is relevant to giving information in relation to life risk
insurance products;
(iii) if education or training is provided through an education or training
course (within the meaning of regulation 7.7A.14)—subregulations
7.7A.14(3) and (4) are satisfied in relation to the education or training;
(iv) if education or training is provided other than through an education or
training course—the dominant purpose of the benefit is education and
training; or
(d) each of the following is satisfied:
(i) the benefit is the provision of information technology software or
support;
(ii) the benefit is relevant to giving information in relation to a life risk
insurance product, or life risk insurance products; or
(e) if the information is given in the course of providing a financial product to
a person as a retail client or to persons as retail clients—the benefit is given
by that person, or those persons.
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Best interests obligations and remuneration Part 7.7A
Conflicted remuneration Division 4
Regulation 7.7A.11D
7.7A.11D Circumstances in which benefits in relation to dealings in life risk
insurance products are not conflicted remuneration
Monetary benefits
(1) Despite subregulation 7.7A.11B(2), a monetary benefit given to a financial
services licensee, or a representative of a financial services licensee, in relation
to a dealing in a life risk insurance product with a person as a retail client, or
dealings in life risk insurance products with persons as retail clients, is not
conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is
given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative deals in the life risk insurance
product, or life risk insurance products; or
(ii) the way in which the licensee or representative deals in the life risk
insurance product, or life risk insurance products; or
(b) none of the products is a group life policy for members of a superannuation
entity (as defined in subsection 963B(2) of the Act) or a life policy for a
member of a default superannuation fund (as defined in subsection 963B(3)
of the Act) and either:
(i) the benefit ratio for the benefit is the same for the year in which the
product or products are issued as it is for each year in which the
product or products are continued; or
(ii) the benefit ratio requirements and clawback requirements in
section 963BA of the Act are satisfied in relation to the benefit; or
(c) the benefit is given to the licensee or representative in relation to consumer
credit insurance; or
(d) the benefit is given to the licensee or representative by the retail client, or
retail clients; or
(e) the benefit is paid to the licensee as part of the purchase or sale of all or
part of the licensee’s business, or to the representative as part of the
purchase or sale of all or part of the representative’s business.
Non-monetary benefits
(2) Despite subregulation 7.7A.11B(2), a non-monetary benefit given to a financial
services licensee, or a representative of a financial services licensee, in relation
to a dealing in a life risk insurance product with a person as a retail client, or
dealings in life risk insurance products with persons as retail clients, is not
conflicted remuneration if:
(a) because of the nature of the benefit or the circumstances in which it is
given, the benefit could not reasonably be expected to influence:
(i) whether the licensee or representative deals in the life risk insurance
product, or life risk insurance products; or
(ii) the way in which the licensee or representative deals in the life risk
insurance product, or life risk insurance products; or
(b) each of the following is satisfied:
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Part 7.7A Best interests obligations and remuneration
Division 4 Conflicted remuneration
Regulation 7.7A.12
(i) the licensee or representative is the final recipient of the benefit, or all
or part of the benefit passes through the licensee or representative to
another financial services licensee, or representative of a financial
services licensee, who is the final recipient of the benefit;
(ii) the value of the benefit in the hands of each final recipient is less than
$300;
(iii) identical or similar benefits are not given on a frequent or regular
basis; or
(c) each of the following is satisfied:
(i) the benefit has a genuine education or training purpose;
(ii) the benefit is relevant to dealing in life risk insurance products;
(iii) if the education or training is provided through an education or
training course (within the meaning of regulation 7.7A.14)—
subregulations 7.7A.14(3) and (4) are satisfied in relation to the
education or training;
(iv) if the education or training is provided other than through an
education or training course—the dominant purpose of the benefit is
education and training; or
(d) each of the following is satisfied:
(i) the benefit is the provision of information technology software or
support;
(ii) the benefit is relevant to dealing in life risk insurance products; or
(e) the benefit is given to the licensee or representative by the retail client, or
retail clients.
Subdivision 2—Monetary benefits that are not conflicted remuneration
7.7A.12 What subdivision is about
This subdivision:
(a) is made for paragraph 963B(1)(e) of the Act; and
(b) prescribes the circumstances in which a monetary benefit given to a
financial services licensee, or representative of a financial services
licensee, (the provider) who provides financial product advice to persons as
retail clients is not conflicted remuneration.
Note 1: The definition of financial product advice is in subsection 766B(1) of the Act.
Note 2: A reference in this Division to giving a benefit includes a reference to causing or
authorising it to be given (see section 52 of the Act).
Note 3: Under the governing rules of some regulated superannuation funds, a member may
seek advice on the basis that the trustee of the fund will pay the licensee or
representative for the advice and then recover the amount paid from the assets of the
fund attributed to that member. In that case, the member has caused or authorised the
amount to be paid to the licensee or representative. If the operation of section 52 of the
Act and these regulations means that the payment is not conflicted remuneration, the
trustee’s obligations under section 62 of the Superannuation Industry (Supervision) Act
1993 (which deals with the purposes for which a trustee may act in maintaining a
regulated superannuation fund) will not be affected.
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Conflicted remuneration Division 4
Regulation 7.7A.12B
7.7A.12B Stamping fees
(1) A monetary benefit is not conflicted remuneration if it is a stamping fee given to
facilitate an approved capital raising.
(2) In this regulation:
approved capital raising means:
(a) an offer to issue an approved financial product; or
(b) an offer to sell an approved financial product;
where the purpose of the offer is to raise funds for the person issuing or selling
the approved financial product.
approved financial product means:
(a) debentures, stocks or bonds that are, or are proposed to be, issued by a
government; or
(b) shares in, or debentures of, a body that are, or are proposed to be, quoted
on a prescribed financial market; or
(c) interests in a managed investment scheme that are, or are proposed to be,
quoted on a prescribed financial market; or
(d) a right to acquire, by way of issue, shares, debentures or interests
mentioned in paragraph (b) or (c).
stamping fee means a fee, or a part of a fee:
(a) that a person, including an issuer of a financial product, or a person acting
on behalf of the issuer, pays either directly or indirectly to a provider in
connection with:
(i) an offer by the issuer to issue the financial product; or
(ii) an invitation by the issuer for an application to issue the financial
product; or
(b) that a person, including a holder of a financial product, or person acting on
behalf of the holder, pays either directly or indirectly to a provider in
connection with:
(i) an offer by the holder to sell the financial product; or
(ii) an invitation by the holder for an application to sell the financial
product.
7.7A.12C Time-sharing schemes
A monetary benefit is not conflicted remuneration if the benefit is given for
advice that relates to an interest in a time-sharing scheme.
7.7A.12D Brokerage fees
(1) A monetary benefit is not conflicted remuneration if:
(a) the benefit consists of a percentage, of no more than 100%, of a brokerage
fee that is given to a provider who is a trading participant of a prescribed
financial market or the market known as the ASX24; and
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(b) the provider, directly or indirectly, gives the benefit to a representative of
the provider.
Note 1: For prescribed financial market, see regulation 1.0.02A.
Note 2: The ASX24 is the financial market operated by Australian Securities Exchange Limited
that was formerly known as the Sydney Futures Exchange.
(1A) A monetary benefit is not conflicted remuneration if:
(a) the benefit is a fee paid between a financial services licensee that is a
trading participant of a prescribed financial market and a financial services
licensee that is not a trading participant in respect of dealings undertaken
by a retail client through a specified service; and
(b) each of those trades is executed by the trading participant on behalf of the
retail client; and
(c) the fee is a percentage, not exceeding 100%, of a brokerage fee paid
directly or indirectly by the retail client; and
(d) no portion of the benefit is paid to a person other than the trading
participant or the licensee that is not a trading participant.
(2) In this regulation:
brokerage fee means a fee that a retail client pays to a provider in relation to a
transaction in which the provider, on behalf of the retail client, deals in a
financial product that is traded on:
(a) a prescribed financial market; or
(aa) the market known as the ASX24; or
(b) a prescribed foreign financial market.
Note 1: Regulations 7.7A.17 and 7.7A.18 relate to exemptions in relation to the charging of
asset-based fees on borrowed amounts.
Note 2: The ASX24 is the financial market operated by Australian Securities Exchange Limited
that was formerly known as the Sydney Futures Exchange.
prescribed foreign financial market means a financial market that:
(a) has its principal place of business in a foreign country; and
(b) has been authorised by an authority in that country that is a signatory to the
International Organization of Securities Commissions’ Multilateral
Memorandum of Understanding Concerning Consultation and Cooperation
and the Exchange of Information of May 2002.
specified service means a service which:
(a) is provided for retail clients under the name or brand name of:
(i) the financial services licensee that is not a trading participant; or
(ii) the trading participant and the financial services licensee that is not a
trading participant; and
(b) relates to the dealing, on behalf of the retail client, in a financial product
traded on:
(i) a prescribed financial market; or
(ii) a prescribed foreign financial market; and
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(c) is provided in either or both of the following ways:
(i) by direct electronic access;
(ii) by telephone, but only if:
(A) direct electronic access is not available for a temporary
period, or the retail client expresses a preference that the
service be provided by telephone; and
(B) neither the trading participant nor the financial services
licensee that is not a trading participant is to provide financial
product advice to the retail client by telephone in relation to
the dealing undertaken on the retail client’s behalf; and
(d) is provided in circumstances in which neither the trading participant nor the
financial services licensee that is not a trading participant provides personal
advice to the retail client in relation to the dealing undertaken on the retail
client’s behalf.
trading participant of a prescribed financial market or the market known as the
ASX24 means a person who:
(a) is a participant of the market admitted under the market’s operating rules;
and
(b) is allowed, under the market’s operating rules, to deal in one or more of the
financial products that are able to be traded on the market.
Note: The ASX24 is the financial market operated by Australian Securities Exchange Limited
that was formerly known as the Sydney Futures Exchange.
7.7A.12E Fees paid by clients for dealing services
A monetary benefit is not conflicted remuneration if the benefit is given to the
provider by a retail client in relation to the provider dealing in a financial product
on behalf of the client.
7.7A.12EA Application of ban on conflicted remuneration—purchase or sale of
financial advice business
A monetary benefit is not conflicted remuneration to the extent that:
(a) the benefit is given to a financial services licensee or a representative of the
licensee; and
(b) the benefit is paid as part of:
(i) the purchase or sale of all or part of the licensee’s financial advice
business; or
(ii) the purchase or sale of all or part of the representative’s financial
advice business; and
(c) the price is calculated using a formula:
(i) which is based, in whole or in part, on the number or value of all or
part of the financial products held by the licensee’s clients or the
representative’s clients; and
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(ii) in which the weighting attributed to the financial products issued by
the licensee or a related body corporate or other person is the same as
the weighting attributed to other similar financial products.
Subdivision 3—Monetary benefits that relate to life risk insurance
products
7.7A.12EB Life risk insurance products—clawback requirements related to
cancellation etc.
For the purposes of subparagraph 963BA(3)(a)(i) of the Act, the prescribed
circumstances are that the life risk insurance product, or the relevant one of the
life risk insurance products, is cancelled or is not continued because:
(a) the person insured dies; or
(b) the person insured commits an act of self-harm; or
(c) the person insured reaches an age that, under the terms of the life risk
insurance product under which the person is insured, has the result that the
product is cancelled or is not continued; or
(d) an administrative error has been made.
7.7A.12EC Life risk insurance products—clawback requirements related to
reduction of policy cost
For the purposes of subparagraph 963BA(3)(a)(ii) of the Act, the prescribed
circumstances are that the policy cost for the life risk insurance product, or the
relevant one of the life risk insurance products, is reduced because:
(a) the person who issued the product and the person to whom the product is
issued agree that there is a reduction in a risk in relation to a person insured
under the product; or
(b) the person who issued the product reduces the premium for the product
without changing the risks covered, or the benefits available, in relation to
any person insured under the product; or
(c) each of the following is satisfied:
(i) a rebate is paid or a discount applied;
(ii) it is reasonable in all the circumstances to conclude that the rebate is
paid or discount applied to induce the person to whom the product is
issued to acquire, or to continue to hold, the product; or
(d) a benefit payable in relation to a person insured under the product has been,
or is being, paid; or
(e) an administrative error has been made.
Subdivision 4—Other monetary and non-monetary benefits that are not
conflicted remuneration
7.7A.12F What subdivision is about
This subdivision:
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(a) is made for paragraphs 963B(1)(e) and 963C(f) of the Act; and
(b) prescribes the circumstances in which a monetary or non-monetary benefit
given to a financial services licensee, or representative of a financial
services licensee, (the provider) who provides financial product advice to
persons as retail clients is not conflicted remuneration.
Note: The definition of financial product advice is in subsection 766B(1) of the Act.
7.7A.12G General insurance
A benefit is not conflicted remuneration if the benefit is given in relation to a
general insurance product.
Note: If a benefit is given in relation to a financial product that consists of both general
insurance and life risk insurance, the benefit is to be treated as relating to a general
insurance product and a life risk insurance product.
7.7A.12H Basic banking and general insurance products
A benefit is not conflicted remuneration if:
(a) to the extent that the benefit is given in relation to financial product advice,
the benefit only relates to the following financial products:
(i) a basic banking product;
(ii) a general insurance product;
(iii) consumer credit insurance;
(iv) a combination of any of those products; and
(b) the provider does not, at the same time, provide advice about any other
financial products; and
(c) the provider is:
(i) an agent or an employee of an Australian ADI; or
(ii) otherwise acting by arrangement with an Australian ADI under the
name of the Australian ADI.
7.7A.12I Mixed benefits
(1) A benefit that is given in one or more of the circumstances set out in the
prescribed provisions is not conflicted remuneration even if:
(a) the benefit also relates to other activities, but only to the extent that the part
of the benefit that relates to the other activities is not conflicted
remuneration; or
(b) the provider, at the same time, provides other services (whether or not
financial services).
(2) However, subregulation (1) does not apply to the extent that the prescribed
provisions under which the benefit is given provide that:
(a) the benefit may only relate to particular financial products or services; or
(b) the provider must not receive the benefit if the provider is, at the same
time, providing other specified financial services.
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(3) In this regulation:
prescribed provision means:
(a) paragraph 963B(1)(a), (b), (c) or (d) of the Act, or a regulation made under
paragraph 963B(1)(e) of the Act; or
(b) paragraph 963C(a), (b), (c), (d) or (e) of the Act, or a regulation made
under paragraph 963C(f) of the Act.
7.7A.13 Non-monetary benefit given in certain circumstances not conflicted
remuneration: prescribed amount
For subparagraph 963C(b)(i) of the Act, the amount is $300 for each financial
services licensee, or each representative of a financial services licensee, who is
the final recipient of a non-monetary benefit.
Note: Under paragraph 963C(b) of the Act, if a non-monetary benefit is given to a financial
services licensee, or a representative of a financial services licensee, who provides
financial advice, is less than the prescribed amount and identical or similar benefits are
not given on a frequent or regular basis, the benefit is not conflicted remuneration.
7.7A.14 Non-monetary benefit given in certain circumstances not conflicted
remuneration: education or training course
(1) This regulation is made for subparagraph 963C(c)(iii) of the Act.
(2) This regulation sets out requirements if a non-monetary benefit to which
subparagraphs 963C(c)(i) and (ii) of the Act apply is the provision of an
education or training course to a financial services licensee, or a representative of
a financial services licensee.
Note: Under paragraph 963C(c) of the Act, if certain non-monetary benefits have a genuine
education or training purpose, are relevant to the provision of financial product advice
to retail clients and comply with the regulations, the benefits are not conflicted
remuneration.
(3) Education or training activities for the professional development of the
participants in the course must take up at least:
(a) 75% of the time spent on the course; or
(b) 6 hours a day;
whichever is the lesser.
(4) The participant, or the participant’s employer or licensee, must pay for the costs
of:
(a) travel and accommodation relating to the course; and
(b) events and functions held in conjunction with the course.
Example: The cost of day trips or dinners.
(5) In this regulation:
education or training course includes a conference or seminar.
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7.7A.15 Non-monetary benefit given in certain circumstances not conflicted
remuneration: other education and training benefit
(1) This regulation is made for subparagraph 963C(c)(iii) of the Act.
(2) This regulation sets out a requirement if a non-monetary benefit to which
subparagraphs 963C(c)(i) and (ii) of the Act apply is not the provision of an
education or training course to which regulation 7.7A.13 applies.
Note: Under paragraph 963C(c) of the Act, if certain non-monetary benefits have a genuine
education or training purpose, are relevant to the provision of financial product advice
to retail clients and comply with the regulations, the benefits are not conflicted
remuneration.
(3) The dominant purpose of the non-monetary benefit must be education and
training.
7.7A.15A Non-monetary benefit given in certain circumstances not conflicted
remuneration—education and training in conducting a financial
services business
(1) This regulation:
(a) is made for paragraph 963C(f) of the Act; and
(b) prescribes the circumstances in which a non-monetary benefit given to a
financial services licensee, or representative of a financial services
licensee, who provides financial product advice to persons as retail clients
is not conflicted remuneration.
Note: For financial product advice, see subsection 766B(1) of the Act.
(2) The benefit is not conflicted remuneration if the benefit:
(a) has a genuine education or training purpose; and
(b) is relevant to the carrying on of a financial services business; and
(c) complies with regulations made for the purposes of
subparagraph 963C(c)(iii) of the Act.
Subdivision 5—Application provisions relating to the Corporations
Amendment (Further Future of Financial Advice Measures) Act
2012
7.7A.15B Application of ban on conflicted remuneration—non-platform
operator (Division 4 of Part 7.7A of Chapter 7 of the Act does not
apply)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes a circumstance in which Division 4 of Part 7.7A of Chapter 7 of
the Act does not apply to a benefit.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
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or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that the benefit would have been given as mentioned in
subsection 1528(1) of the Act had it not been redirected under one or more later
arrangements.
(3) For subregulation (2), if a party to an arrangement changes, the arrangement is
taken to have continued in effect, after the change, as the same arrangement.
7.7A.16 Application of ban on conflicted remuneration—platform operator
(Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes a circumstance in which Division 4 of Part 7.7A of Chapter 7 of
the Act does not apply to a benefit.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that:
(a) the benefit is given by a platform operator; and
(b) either:
(i) the benefit is given under an arrangement that was entered into before
the application day, within the meaning of subsection 1528(4) of the
Act; or
(ii) the benefit would have been given as mentioned in subparagraph (i)
had it not been redirected under one or more later arrangements.
(3) For subregulation (2), if a party to an arrangement changes, the arrangement is
taken to have continued in effect, after the change, as the same arrangement.
(4) If this regulation and regulation 7.7A.16A or 7.7A.16B are able to apply in
relation to the benefit, disregard this regulation.
7.7A.16A Application of ban on conflicted remuneration—platform operator
(Division 4 of Part 7.7A of Chapter 7 of the Act applies)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes circumstances in which Division 4 of Part 7.7A of Chapter 7 of
the Act applies to a benefit; and
(c) does not apply in relation to a benefit to which regulation 7.7A.16C
applies.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
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or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that:
(a) the benefit is given by a person acting in the capacity as a platform
operator; and
(b) the benefit is given under an arrangement that was entered into before the
application day, within the meaning of subsection 1528(4) of the Act; and
(c) the benefit:
(i) relates to an acquisition (including a regulated acquisition, within the
meaning of subsection 1012IA(1) of the Act) of a financial product on
the instructions of a person who had not given an instruction to the
person acting in the capacity of a platform operator to open an
account on the platform before 1 July 2014; or
(ii) does not relate to a person who opened an account on the platform
before 1 July 2014.
(3) For subregulation (2), treat a benefit as having been given by a person acting in
the capacity as a platform operator if it:
(a) is given by a platform operator; and
(b) relates to activities undertaken in connection with the platform as a result
of instructions to the platform operator from a client who has set up, or is
setting up, an account on the platform.
(4) For subregulation (2), if a retail client has an interest in a financial product before
1 July 2014, treat a benefit as relating to an acquisition of the financial product
whether it is paid in relation to the initial acquisition of the financial product or
the subsequent holding of the financial product.
(5) For subregulation (2), if a party to an arrangement changes, the arrangement is
taken to have continued in effect, after the change, as the same arrangement.
(6) If this regulation and regulation 7.7A.16 are able to apply in relation to the
benefit, disregard regulation 7.7A.16.
7.7A.16B Application of ban on conflicted remuneration—person other than
platform operator (Division 4 of Part 7.7A of Chapter 7 of the Act
applies)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes a circumstance in which Division 4 of Part 7.7A of Chapter 7 of
Chapter 7 of the Act applies to a benefit; and
(c) does not apply in relation to a benefit to which regulation 7.7A.16C
applies.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
or a representative of a financial services licensee. Subsection 1528(2) of the Act
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permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that:
(a) the benefit is given by a person who is not acting in the capacity of a
platform operator; and
(b) the benefit is given under an arrangement that was entered into before the
application day, within the meaning of subsection 1528(4) of the Act; and
(c) the benefit:
(i) is given in relation to the acquisition, on or after 1 July 2014, of a
financial product, for the benefit of a retail client; or
(ii) does not relate to a financial service provided, before 1 July 2014, for
the benefit of a retail client; and
(d) the client did not have an interest in the product before 1 July 2014.
Note: For the definition of platform operator, see subsection 1526(1) of the Act.
(3) For subregulation (2), treat a benefit as having been given by a person acting in
the capacity as a platform operator if it:
(a) is given by a platform operator; and
(b) relates to activities undertaken in connection with the platform as a result
of instructions to the platform operator from a client who has set up, or is
setting up, an account on the platform.
Continuity of arrangement
(4) For subregulation (2):
(a) if a party to an arrangement changes, treat the arrangement as having
continued in effect, after the change, as the same arrangement; and
(b) if a retail client has an interest in a financial product before 1 July 2014,
treat a benefit as relating to an acquisition of the financial product whether
it is paid in relation to the initial acquisition of the financial product or the
subsequent holding of the financial product.
Managed investment schemes
(5) For subregulation (2), if a retail client:
(a) had an interest in a managed investment scheme before 1 July 2014; and
(b) acquires a further interest in the managed investment scheme on or after
1 July 2014;
do not treat the acquisition of the further interest as having occurred on or after
1 July 2014.
Multi product offerings
(6) For subregulation (2), if:
(a) more than one financial product is marketed and offered together under one
product disclosure statement (a multi-product offering) in a way in which:
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(i) a retail client receives a consolidated report on a periodic basis listing
the client’s holdings in all of those financial products; and
(ii) there is a facility which allows a retail client to choose between,
acquire, switch or transfer an interest in one or more of those financial
products; and
(b) the benefit is to be paid by the issuer of the product disclosure statement;
and
(c) a retail client opened an account on the multi-product offering before
1 July 2014; and
(d) the retail client acquires an interest or a further interest in any one or more
of the financial products available in the multi-product offering on or after
1 July 2014;
do not treat the acquisition of the interest, or further interest, mentioned in
paragraph (d) as having occurred on or after 1 July 2014.
Relationship with regulation 7.7A.16
(7) If this regulation and regulation 7.7A.16 are able to apply in relation to the
benefit, disregard regulation 7.7A.16.
7.7A.16BA Sale of business
The application of regulation 7.7A.16, 7.7A.16A or 7.7A.16B in relation to a
benefit is not affected only because the benefit, or the right to the benefit, is
transferred as part of the sale of a business, or a part of a business.
Note: This means that the buyer of a business will have the same protection for benefits that
the seller of the business had.
7.7A.16C Application of ban on conflicted remuneration—employer and
employee (Division 4 of Part 7.7A of Chapter 7 of the Act does not
apply)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes circumstances in which Division 4 of Part 7.7A of Chapter 7 of
the Act does not apply to a benefit.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
Remuneration arrangement relating to enterprise agreement or collective
agreement-based transitional instrument
(2) A circumstance is that:
(a) the benefit is paid under a remuneration arrangement between an employer
and an employee; and
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(b) the benefit is paid in accordance with an enterprise agreement (including its
associated documents), or a collective agreement-based transitional
instrument (including its associated documents), that was entered into
before the application day, within the meaning of subsection 1528(4) of the
Act.
When subregulation (2) ceases to apply
(3) If:
(a) an enterprise agreement referred to in paragraph (2)(b) was in force
immediately before the application day; and
(b) the nominal expiry date of the agreement had not passed immediately
before the application day;
the circumstance in subregulation (2) ceases to apply at the end of 18 months
after the nominal expiry date of the agreement.
(4) If:
(a) an enterprise agreement referred to in paragraph (2)(b) was in force
immediately before the application day; and
(b) the nominal expiry date of the agreement passed before the application day;
the circumstance in subregulation (2) ceases to apply on 1 July 2015.
Remuneration arrangement not relating to enterprise agreement or collective
agreement-based transitional instrument
(5) A circumstance is that:
(a) the benefit is paid under a remuneration arrangement between an employer
and an employee; and
(b) the benefit is not paid in accordance with an enterprise agreement
(including its associated documents) or a collective agreement-based
transitional instrument (including its associated documents); and
(c) the benefit is payable in relation to a period that ends before 1 July 2015.
Definitions
(6) In this regulation:
collective agreement-based transitional instrument has the meaning given by
subitem 2(5) of Schedule 3 to the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009.
enterprise agreement has the same meaning as in the Fair Work Act 2009.
7.7A.16D Application of ban on conflicted remuneration—new arrangement
entered into on or after application day (Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
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Conflicted remuneration Division 4
Regulation 7.7A.16E
(b) prescribes a circumstance in which Division 4 of Part 7.7A of Chapter 7 of
the Act does not apply to a benefit.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that:
(a) the benefit is paid under an arrangement (the new arrangement) that was
entered into on or after the application day, within the meaning of
subsection 1528(4) of the Act; and
(b) the new arrangement is on the same terms as an arrangement (the previous
arrangement) that was in place immediately before the application day,
except that the new arrangement does not provide for the giving of
remuneration that would not be permissible under section 1528 of the Act
or regulations made for that section; and
(c) the previous arrangement was terminated as a result of the application of
Division 4 of Part 7.7A of Chapter 7 of the Act.
7.7A.16E Application of ban on conflicted remuneration—change of party to an
arrangement (Division 4 of Part 7.7A of Chapter 7 of the Act does not
apply)
(1) This regulation:
(a) is made for subsection 1528(2) of the Act; and
(b) prescribes a circumstance in which Division 4 of Part 7.7A of Chapter 7 of
the Act does not apply to a benefit.
Note: Subsection 1528(1) of the Act sets out a rule about when Division 4 of Part 7.7A of
Chapter 7 of the Act does not apply to a benefit given to a financial services licensee,
or a representative of a financial services licensee. Subsection 1528(2) of the Act
permits regulations to prescribe circumstances in which that Division applies, or does
not apply, to a benefit.
(2) The circumstance is that:
(a) the benefit is given under an arrangement that was entered into before the
application day, within the meaning of subsection 1528(4) of the Act; and
(b) a party to the arrangement changes.
7.7A.16F Application of ban on conflicted remuneration—benefit is a pass
through of a grandfathered benefit (benefit is not conflicted
remuneration)
A benefit is not conflicted remuneration to the extent that:
(a) the benefit is a pass through of a benefit (a grandfathered benefit) to which
Division 4 of Part 7.7A of Chapter 7 of the Act does not apply because of
subsection 1528(1) or (3) of the Act or a regulation made for
subsection 1528(2) of the Act; and
(b) the benefit, as passed through, was given under an arrangement:
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Regulation 7.7A.16G
(i) that was entered into before the application day, within the meaning
of subsection 1528(4) of the Act; or
(ii) by which an authorised representative of a financial services licensee
became an authorised representative of another financial services
licensee; or
(iii) by which a representative of a financial services licensee, or an
employee of an authorised representative of a financial services
licensee, became an authorised representative of the licensee or a
related body corporate of the licensee; and
(c) the benefit, as passed through, is consistent with purposes of the
arrangement under which the grandfathered benefit was paid; and
(d) the total amount of the benefit, as passed through, does not exceed 100 per
cent of the grandfathered benefit.
Subdivision 6—Application provisions relating to the Corporations
Amendment (Life Insurance Remuneration Arrangements) Act
2017
7.7A.16G Definitions
In this Subdivision:
amending Act means the Corporations Amendment (Life Insurance
Remuneration Arrangements) Act 2017.
commencement day means the day on which Schedule 1 to the Corporations
Amendment (Life Insurance Remuneration Arrangements) Act 2017 commences.
7.7A.16H Life risk insurance products substantially related to existing products
(1) This regulation is made for the purposes of subsection 1549B(3) of the Act.
(2) The amendments made by Schedule 1 to the amending Act do not apply to a
benefit given to a financial services licensee, or a representative of a financial
services licensee, in relation to a life risk insurance product issued to a person on
or after the commencement day (the post-commencement product) if:
(a) the person held another life risk insurance product immediately before the
commencement day (the pre-commencement product); and
(b) either:
(i) the person acquires the post-commencement product by exercising an
option given to the person under the pre-commencement product; or
(ii) the person acquires the post-commencement product because the
pre-commencement product was cancelled due to an administrative
error.
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Regulation 7.7A.17
Subdivision 7—Asset-based fees on borrowed amounts
7.7A.17 Financial services licensees
For subsection 964D(4) of the Act, a circumstance in which subsections 964D(1)
and (2) of the Act do not apply is that the asset-based fee being charged is a
brokerage fee within the meaning of regulation 7.7A.12D.
7.7A.18 Authorised representatives
For subsection 964E(3) of the Act, a circumstance in which subsection 964E(1)
of the Act does not apply is that the asset-based fee being charged is a brokerage
fee within the meaning of regulation 7.7A.12D.
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Division 6 Exemptions from application of Part 7.7A of the Act
Regulation 7.7A.40
Division 6—Exemptions from application of Part 7.7A of the Act
7.7A.40 Exemption from application of Part 7.7A of the Act
For paragraph 1368(d) of the Act, Part 7.7A of the Act does not have effect in
relation to a financial services licensee or an authorised representative in respect
of financial services provided to retail clients who are not in this jurisdiction.
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than financial product disclosure Part 7.8
Dealing with clients’ money Division 2
Regulation 7.8.01A
Part 7.8—Other provisions relating to conduct etc connected
with financial products and financial services, other
than financial product disclosure
Division 2—Dealing with clients’ money
Subdivision A—Money other than loans
7.8.01A Wholesale client money
For the purposes of paragraph 981A(4)(a) of the Act, money paid as mentioned
in subsection 981A(1) of the Act is exempt from Subdivision A of Division 2 of
Part 7.8 of the Act at a time if:
(a) at that time the licensee has the client’s written agreement to the money
being dealt with other than in accordance with that Subdivision; and
Note 1: It is not necessary for the agreement to mention that Subdivision explicitly.
Note 2: If the licensee obtains the agreement after the money is paid, that Subdivision ceases to apply to the money when the licensee obtains the agreement.
(b) either:
(i) the financial service referred to in subparagraph 981A(1)(a)(i) of the
Act is or relates to a dealing in a derivative; or
(ii) the financial product referred to in subparagraph 981A(1)(a)(ii) of the
Act is a derivative; and
(c) the entry into of the derivative was not or will not be cleared through a
clearing and settlement facility; and
(d) the financial service or product would have been provided to the client as a
wholesale client if:
(i) the service or product were provided to the client when the money
was paid; and
(ii) section 761GA of the Act (about sophisticated investors) did not
apply.
7.8.01 Obligation to pay money into an account
(1) For subparagraph 981B(1)(a)(i) of the Act, the reference in that subparagraph to
an account with an Australian ADI does not prevent a financial services licensee
that is an ADI from paying money into an account held by itself.
(2) For subparagraph 981B(1)(a)(ii) of the Act, the following accounts are
prescribed:
(a) an account with an approved foreign bank;
(b) a cash management trust.
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Division 2 Dealing with clients’ money
Regulation 7.8.01
(3) For subparagraph 981B(1)(b)(iv) of the Act, if, in accordance with an agreement
mentioned in paragraph 7.8.02(3)(a), a financial services licensee is required to
pay an amount mentioned in subparagraph 7.8.02(3)(a)(iv), that amount is money
which must be paid into an account to which that subparagraph applies.
(4) For subparagraph 981B(1)(b)(iv) of the Act:
(a) money paid to a financial services licensee:
(i) from or on behalf or an insured or intending insured for or on account
of an insurer; and
(ii) in connection with a contract of insurance or proposed contract of
insurance;
is money which may be paid into an account to which that subparagraph
applies; and
(b) money paid to a financial services licensee from or on behalf of an insurer
for or on account of an insured or intending insured is money which may
be paid into an account to which that subparagraph applies.
(4A) For subparagraph 981B(1)(b)(iv) of the Act, if a financial services licensee is
required, by the market integrity rules or the operating rules of a licensed market,
to pay an amount into an account to which section 981B relates, the amount is
money which may be paid into that account.
(5) For paragraph 981B(1)(c) of the Act, a financial services licensee must:
(a) operate an account to which that paragraph applies as a trust account; and
(b) designate the account to be a trust account; and
(c) hold all moneys paid into the account (other than moneys paid to the
financial services licensee under the financial services licensee’s obligation
to call margins from clients under the market integrity rules, the operating
rules of a licensed market or the operating rules of a licensed CS facility)
on trust for the benefit of the person who is entitled to the moneys.
(6) For subparagraph 981B(1)(b)(iv) of the Act, money received under
section 1017E of the Act is money which may be paid into:
(a) an account to which section 981B relates; or
(b) an insurance broking account maintained under section 26 of the Insurance
(Agents and Brokers) Act 1984.
(7) For paragraph 981B(1)(c) of the Act, if money received under section 1017E of
the Act is paid into an account under subregulation (6), Part 7.8 of the Act
applies to the money.
Note: See also subregulation 7.9.08(3).
(8) For paragraph 981B(1)(c) of the Act, if a financial services licensee is required to
call margins from a client under the market integrity rules, the operating rules of
a licensed market or the operating rules of a licensed CS facility:
(a) the financial services licensee may operate an account to which that
paragraph applies as:
(i) a clients’ segregated account; or
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(ii) a trust account;
in accordance with the operating rules or market integrity rules; and
(b) if:
(i) the account is operated outside Australia; and
(ii) the law in force in the jurisdiction where it is maintained requires the
account to be designated in a particular way;
the financial services licensee must designate the account in that way.
Note: The operating rules or market integrity rules may require client moneys, including
moneys used for margining, to be held in either a clients’ segregated account or a trust
account.
(9) For subparagraph 981B(1)(b)(iv) of the Act, if an account is operated in
accordance with subregulation (8), all money received by the financial services
licensee under Subdivision A of Division 2 of Part 7.8 of the Act is money that
may be paid into that account.
(10) Subregulation (8) does not affect the operation of section 981E of the Act.
(11) For subparagraph 981B(1)(b)(iv) of the Act, each of the following is money that
may be paid into an account:
(a) mixed money;
(b) unidentified money.
(12) For paragraph 981B(1)(c) of the Act, if mixed money is paid into an account
under subregulation (11), the licensee must, as soon as practicable, but within 1
month after the mixed money is paid into the account, remove from the account
the part of the money that is not section 981B money.
(13) For paragraph 981B(1)(c) of the Act, if unidentified money is paid into an
account under subregulation (11), the licensee must, as soon as practicable after
the unidentified money is paid into the account:
(a) identify any part of the money that is section 981B money; and
(b) remove from the account any part of the money that is not section 981B
money.
(14) For subregulations (11) to (13):
mixed money means money that:
(a) is received by the licensee as a single payment; and
(b) is not wholly section 981B money, but includes section 981B money.
section 981B money means:
(a) money to which Subdivision A of Division 2 of Part 7.8 of the Act applies;
or
(b) money that is allowed to remain in the account because of the operation of
subparagraphs 981B(1)(b)(ii) and (iii) of the Act; or
(c) money mentioned in subregulation (4).
unidentified money means money that:
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Regulation 7.8.02
(a) is received by the licensee as a single payment; and
(b) at the time of receipt, is unable to be identified as section 981B money or
mixed money; and
(c) might include section 981B money.
7.8.02 Accounts maintained for section 981B of the Act
Withdrawals from account
(1) For paragraph 981C(1)(a) of the Act, payments may be made out of an account
maintained for section 981B of the Act in any of the following circumstances:
(a) making a payment to, or in accordance with the written direction of, a
person entitled to the money (subject to regulation 7.8.02A);
(b) defraying brokerage and other proper charges;
(c) paying to the financial services licensee money to which the financial
services licensee is entitled (subject to regulation 7.8.02A);
(d) making a payment of moneys due to an insurer in connection with a
contract of insurance;
(e) making a payment that is otherwise authorised by law;
(f) paying to the financial services licensee money to which the financial
services licensee is entitled pursuant to the market integrity rules or the
operating rules of a licensed market.
(1A) For paragraph 981C(1)(a) and subparagraph 981B(1)(b)(iv) of the Act, if, under
paragraph (1)(a), a financial services licensee (the paying licensee) withdraws
money from an account maintained for section 981B of the Act and pays it to
another financial services licensee (the receiving licensee):
(a) the paying licensee must ensure that the receiving licensee is notified, at
the same time as the payment is made or as soon as practicable, that the
money:
(i) has been withdrawn from an account of the paying licensee
maintained for section 981B of the Act; and
(ii) should be paid into an account of the receiving licensee maintained
for section 981B of the Act; and
(b) not later than the day after the receiving licensee receives the payment, the
receiving licensee must pay the money into an account of the receiving
licensee maintained for section 981B of the Act.
Permissible investments
(2) For paragraph 981C(1)(a) of the Act, and subject to subregulations (3), (4) and
(5), the following kinds of investment may be made in relation to an account
maintained for section 981B of the Act:
(a) investment in any manner in which trustees are for the time being
authorised by law to invest trust funds;
(b) investment on deposit with an eligible money market dealer;
(c) investment on deposit at interest with an Australian ADI;
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(d) the acquisition of cash management trust interests;
(e) investment in a security issued or guaranteed by the Commonwealth or a
State or Territory;
(f) investment on deposit with a licensed CS facility.
(3) A financial services licensee must not invest an amount in a way permitted by
subregulation (2) unless:
(a) the financial services licensee has obtained the client’s written agreement
to the following matters:
(i) the making of the investment;
(ii) how earnings on the investment are to be dealt with (including
whether or not the earnings are to be shared, and whether or not the
earnings are to be paid into the account);
(iii) how the realisation of the investment is to be dealt with (including
whether or not the capital invested, and the proceeds of the
investment, are to be deposited into the account);
(iv) how any losses made on the investment are to be dealt with (including
the circumstances in which the financial services licensee is required
to pay an amount equal to the difference between the amount invested
and the amount received, into the account or otherwise);
(v) the fee (if any) that the financial services licensee proposes to charge
for the investment; and
(b) the money is money to which the client is entitled.
Note: The investment arrangement may be a managed investment scheme.
(4) For paragraph 981A(4)(a) of the Act, subregulation (3) does not apply to money
to which subregulation 7.8.01(4) applies.
(5) In subregulation (2):
investment does not include the making of an investment in accordance with the
specific direction of a client.
Note: Paragraph (1)(a) deals with the withdrawal of money from an account in accordance
with the written direction of a person entitled to the money.
(6) For paragraph 981C(1)(b) of the Act, in relation to moneys received in relation to
insurance products, the financial services licensee must ensure that:
(a) the balance of moneys in an account maintained by the financial services
licensee under section 981B of the Act; and
(b) the total amount previously withdrawn from the account and currently
invested under subregulation (2);
is at least the sum of:
(c) any amounts that an insurer is entitled to receive from the account; and
(d) any amounts that an insured or intending insured is entitled to receive from
the account.
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Regulation 7.8.02
(6A) For paragraph (6)(c), if, at a particular time, money received by a financial
services licensee for or on account of an insurer as mentioned in
paragraph 7.8.01(4)(a) is paid into the account, the insurer is taken to be entitled
to receive payment of:
(a) the amount; or
(b) if any deductions from the amount are authorised by a written agreement
between the insurer and the broker—the amount less the deductions;
throughout the period:
(c) beginning at that time; and
(d) ending when the payment is actually made to the insurer;
whether or not the amount has been invested under subregulation (2).
(6B) For paragraph (6)(d), if, at a particular time, money received by a financial
services licensee for or on account of an insured or intending insured as
mentioned in paragraph 7.8.01(4)(b) is paid into an account, the insured or
intending insured is taken to be entitled to receive payment of the amount
throughout the period:
(a) beginning at that time; and
(b) ending when the payment is actually made to the insured or intending
insured;
whether or not the amount has been invested under subregulation (2).
(6C) On application by a financial services licensee in the prescribed form, ASIC may
consent in writing to the minimum balance of monies received in relation to
insurance products being less than the level specified in subregulation (6).
(7) For paragraph 981C(1)(c) of the Act, if money is held in an account maintained
for section 981B of the Act:
(a) the financial services licensee is entitled to the interest on the account; and
(b) the interest on the account is not required to be paid into the account;
only if the financial services licensee discloses to the client that the financial
services licensee is keeping the interest (if any) earned on the account.
Interest and other earnings on investments
(8) For paragraph 981C(1)(d) of the Act, interest or other earnings on:
(a) an investment of money withdrawn from an account maintained for
section 981B of the Act; or
(b) the proceeds of the realisation of such an investment;
must be dealt with in accordance with the written agreement between the
financial services licensee and the client under subregulation (3).
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Regulation 7.8.02A
7.8.02A Accounts maintained for the purposes of section 981B of the Act—
special rules for retail clients
(1) Paragraph 7.8.02(1)(a) does not apply to a written direction to the extent the
direction allows the financial services licensee to use derivative retail client
money as mentioned in subregulation (3) of this regulation.
(2) Paragraph 7.8.02(1)(c) does not apply to an entitlement of the financial services
licensee to use derivative retail client money as mentioned in subregulation (3) of
this regulation.
(3) Subregulations (1) and (2) apply to using the money:
(a) as the licensee’s capital, including working capital; or
(b) for the purpose of meeting obligations incurred by the licensee other than
on behalf of the client; or
(c) for the purpose of entering into, or meeting obligations under, transactions
that the licensee enters into to hedge, counteract or offset the risk to the
licensee associated with a transaction between the licensee and the client.
7.8.03 How money to be dealt with if licensee ceases to be licensed etc
(1) For paragraph 981F(a) of the Act, this regulation applies if a financial services
licensee ceases to be licensed (including a cessation because the financial
services licensee’s licence has been suspended or cancelled).
(2) For paragraph 981F(b) of the Act, this regulation applies if a financial services
licensee:
(a) becomes insolvent under an administration; or
(b) is the subject of any of the following arrangements:
(i) the appointment of an administrator under section 436A, 436B or
436C of the Act;
(ii) the commencement of winding up;
(iii) the appointment of a receiver of property of the financial services
licensee, whether by a court or otherwise;
(iv) the appointment of a receiver and manager of property of the financial
services licensee, whether by a court or otherwise;
(v) entry into a compromise or arrangement with creditors of the financial
services licensee, or a class of creditors;
(vi) if the financial services licensee is deceased—administration of the
estate of the financial services licensee under Part XI of the
Bankruptcy Act 1966;
(vii) if the financial services licensee is deceased—administration of the
estate of the financial services licensee under the law of an external
Territory that provides for the administration of the insolvent estate of
a deceased person;
(viii) an arrangement under the law of a foreign country that provides for a
matter mentioned in subparagraphs (i) to (vii).
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Regulation 7.8.04
(3) For paragraph 981F(d) of the Act, this regulation applies if:
(a) a financial services licensee ceases to carry on a particular activity
authorised by the financial services licence; and
(b) money is paid in connection with that activity.
(4) For each person who is entitled to be paid money from an account of the
financial services licensee maintained for section 981B of the Act, the account is
taken to be subject to a trust in favour of the person.
(5) If money in an account of the financial services licensee maintained for
section 981B of the Act has been invested, for each person who is entitled to be
paid money from the account, the investment is taken to be subject to a trust in
favour of the person.
(6) Money in the account of the financial services licensee maintained for
section 981B of the Act is to be paid as follows:
(a) the first payment is of money that has been paid into the account in error;
(b) if money has been received on behalf of insureds in accordance with a
contract of insurance, the second payment is payment to each insured
person who is entitled to be paid money from the account, in the following
order:
(i) the amounts that the insured persons are entitled to receive from the
moneys in the account in respect of claims that have been made;
(ii) the amounts that the insured persons are entitled to receive from the
moneys in the account in respect of other matters;
(c) if:
(i) paragraph (b) has been complied with; or
(ii) paragraph (b) does not apply;
the next payment is payment to each person who is entitled to be paid
money from the account;
(d) if the money in the account is not sufficient to be paid in accordance with
paragraph (a), (b) or (c), the money in the account must be paid in
proportion to the amount of each person’s entitlement;
(e) if there is money remaining in the account after payments made in
accordance with paragraphs (a), (b) and (c), the remaining money is taken
to be money payable to the financial services licensee.
(7) This regulation applies despite anything to the contrary in the Bankruptcy Act
1966 or a law relating to companies.
7.8.04 Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies
taken to be held in trust: breach of financial services law
For paragraph 981H(3)(b) of the Act, if client money is held by an investment
mentioned in subregulation 7.8.02(5) following a breach of a financial services
law:
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(a) the money is subject to a trust in favour of the client to the extent that the
client is entitled to the money; and
(b) any investment of the money is subject to a trust in favour of the client to
the extent that the client is entitled to the investment; and
(c) the proceeds of a realisation of an investment of the money are subject to a
trust in favour of the client to the extent that the client is entitled to the
proceeds.
7.8.05 Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies
taken to be held in trust: risk accepted by insurer
(1) For paragraph 981H(3)(b) of the Act, this regulation applies if, in relation to an
insurance product:
(a) a financial services licensee is holding money to which Subdivision A of
Division 2 of Part 7.8 of the Act applies; and
(b) the risk in relation to the insurance product has been accepted by an
insurer.
(2) The financial services licensee holds the money on trust for the insurer in
accordance with Division 2 of Part 7.8 of the Act, subject to the agreement of the
insurer.
(3) This regulation does not affect the operation of regulations 7.8.03 and 7.8.08.
(4) For paragraph 981C(1)(c) of the Act, if money to which this regulation applies is
held in an account maintained for section 981B of the Act:
(a) the financial services licensee is entitled to the interest on the account; and
(b) the interest on the account is not required to be paid into the account.
Subdivision AA—Client money reporting rules
7.8.05A Definitions for Subdivision AA of Division 2
In this Subdivision:
client money reporting infringement notice means an infringement notice given
under regulation 7.8.05C.
client money reporting infringement notice period has the meaning given by
subregulation 7.8.05H(2).
recipient, in relation to a client money reporting infringement notice, means the
person to whom ASIC gives the infringement notice, or intends to give the
infringement notice, under regulation 7.8.05C.
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Regulation 7.8.05B
7.8.05B Enforceable undertakings
(1) For the purposes of paragraph 981N(1)(d) of the Act, ASIC may accept a written
undertaking, given by a person who is alleged to have contravened
subsection 981M(1) of the Act, as an alternative to civil proceedings.
(2) Without limiting subregulation (1), ASIC may accept an undertaking that
includes any of the following:
(a) an undertaking to take specified action within a specified period;
(b) an undertaking to refrain from taking specified action;
(c) an undertaking to pay a specified amount within a specified period to the
Commonwealth or to some other specified person.
Note: An undertaking may relate to a client money reporting infringement notice given in
relation to the alleged contravention. For example, an infringement notice may require
a person to give an undertaking, a person may give an undertaking to comply with an
infringement notice or a person may give an undertaking if the person does not comply
with an infringement notice or if the infringement notice is withdrawn.
(3) If ASIC agrees, in writing, to the withdrawal or variation of the undertaking, the
person who gave the undertaking may withdraw or vary the undertaking.
(4) If ASIC is satisfied that the person who gave the undertaking has breached a
term of the undertaking, ASIC may apply to a Court for an order under
subregulation (5).
(5) If the Court is satisfied that the person has breached a term of the undertaking,
the Court may make one or more of the following orders:
(a) an order directing the person to comply with the term of the undertaking;
(b) an order directing the person to pay to the Commonwealth an amount not
exceeding the amount of any financial benefit that the person has obtained
directly or indirectly and that is reasonably attributable to the breach;
(c) an order directing the person to compensate another person who has
suffered loss or damage as a result of the breach;
(d) any other order that the Court considers appropriate.
(6) This regulation does not affect the liability of a person to civil proceedings if
ASIC does not accept an undertaking in relation to the alleged contravention
referred to in subregulation (1).
7.8.05C Client money reporting infringement notices
(1) This regulation is made for the purposes of subsection 981N(1) of the Act.
(2) If ASIC has reasonable grounds to believe that a person has contravened
subsection 981M(1) of the Act, ASIC may give the person an infringement
notice (a client money reporting infringement notice) in relation to the alleged
contravention.
(3) A client money reporting infringement notice may relate to one or more alleged
contraventions of a client money reporting rule.
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Regulation 7.8.05D
(4) If ASIC withdraws a client money reporting infringement notice given to a
person in relation to an alleged contravention of a client money reporting rule,
ASIC may give the person a new infringement notice in relation to the alleged
contravention.
Example: A client money reporting infringement notice given to a person in relation to an alleged
contravention of a client money reporting rule may be withdrawn, and a new
infringement notice given to the person in relation to that alleged contravention, if the
original infringement notice contained an error.
7.8.05D Effect of client money reporting infringement notice provisions
(1) Regulations 7.8.05C to 7.8.05Q do not require ASIC to give a client money
reporting infringement notice to a person in relation to an alleged contravention
of a client money reporting rule.
(2) Regulations 7.8.05C to 7.8.05Q do not affect the liability of a person to civil
proceedings if ASIC does not give a client money reporting infringement notice
to the person in relation to an alleged contravention of a client money reporting
rule.
(3) Regulations 7.8.05C to 7.8.05Q do not affect the liability of a person to civil
proceedings if:
(a) ASIC gives a client money reporting infringement notice to the person in
relation to an alleged contravention of a client money reporting rule; and
(b) either:
(i) the infringement notice is withdrawn; or
(ii) the person does not comply with the infringement notice in
accordance with regulation 7.8.05H.
(4) Regulations 7.8.05C to 7.8.05Q do not limit or otherwise affect the penalty that a
Court could impose on the person for a contravention of a client money reporting
rule.
7.8.05E Statement of reasons must be given
(1) Before giving a recipient a client money reporting infringement notice, ASIC
must:
(a) give the recipient a written statement that sets out ASIC’s reasons for
believing that the recipient has contravened a client money reporting rule;
and
(b) give the recipient, or a representative of the recipient, an opportunity to:
(i) appear at a private hearing before ASIC; and
(ii) give evidence to ASIC; and
(iii) make submissions to ASIC;
in relation to the alleged contravention of the client money reporting rule.
(2) If a recipient, or a representative of a recipient, gives ASIC evidence or
information under paragraph (1)(b) in relation to the alleged contravention of a
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Regulation 7.8.05F
client money reporting rule, the evidence or information is not admissible in
evidence in any proceedings against the recipient, other than proceedings relating
to the evidence or information being false or misleading.
7.8.05F Contents of client money reporting infringement notice
A client money reporting infringement notice:
(a) must state the date on which it is given; and
(b) must be identified by a unique code; and
(c) must state the name and address of the recipient; and
(d) must state that it is being given by ASIC under regulation 7.8.05C; and
(e) must specify details of each alleged contravention of a client money
reporting rule to which the infringement notice relates, including:
(i) the conduct that made up each alleged contravention (including, to the
extent known, the date on which it occurred and the place at which it
occurred); and
(ii) each client money reporting rule that ASIC alleges the recipient has
contravened; and
(f) must, in relation to each client money reporting rule to which the
infringement notice relates, state the maximum pecuniary penalty that a
Court could order the recipient to pay for contravening the rule; and
(g) must, in relation to each alleged contravention of a client money reporting
rule to which the infringement notice relates:
(i) specify the penalty (if any) payable for the alleged contravention; and
(ii) specify the remedial measures (if any) that the recipient must
undertake or institute; and
(iii) specify the sanctions (if any) that the recipient must accept; and
(iv) specify the terms of an undertaking (if any) that the recipient must
give under regulation 7.8.05B; and
(h) if one or more penalties are specified in the infringement notice—must:
(i) specify the total penalty that the recipient must pay to the
Commonwealth; and
(ii) state that the penalty is payable to ASIC on behalf of the
Commonwealth; and
(iii) explain how the penalty can be paid; and
(i) must state that the recipient may choose not to comply with the
infringement notice, but that if the recipient does not comply, civil
proceedings may be brought against the recipient in relation to the alleged
contravention; and
(j) must explain what the recipient must do to comply with the infringement
notice and the effect of compliance with the infringement notice; and
(k) must state that the recipient may apply to ASIC:
(i) for withdrawal of the notice under regulation 7.8.05L; or
(ii) for an extension of time under regulation 7.8.05J; and
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(l) must state that ASIC may publish details of the infringement notice under
regulation 7.8.05Q; and
(m) may include any other information that ASIC considers necessary.
Note: For the purposes of subparagraph (h)(i), the total penalty is the sum of the penalties
payable under subparagraph (g)(i).
7.8.05G Amount of penalty payable to the Commonwealth
(1) The penalty payable for an alleged contravention of a client money reporting rule
is the amount determined by ASIC (which may be nil), subject to
subsection 981N(2) of the Act.
Note: See subsection 981N(2) of the Act for the maximum penalty payable.
(2) If a client money reporting infringement notice relates to more than one alleged
contravention, the total penalty payable under the infringement notice is the sum
of the penalties (if any) payable for the alleged contraventions.
7.8.05H Compliance with client money reporting infringement notice
(1) A recipient complies with a client money reporting infringement notice if, during
the client money reporting infringement notice period, the recipient does all of
the following:
(a) pays the total penalty specified in the infringement notice under
subparagraph 7.8.05F(h)(i) (if any);
(b) undertakes or institutes the remedial measures specified in the infringement
notice under subparagraph 7.8.05F(g)(ii) (if any);
(c) accepts the sanctions specified in the infringement notice under
subparagraph 7.8.05F(g)(iii) (if any);
(d) gives an undertaking (including an undertaking to comply with the
infringement notice) with the terms specified in the infringement notice
under subparagraph 7.8.05F(g)(iv) (if any).
(2) The client money reporting infringement notice period for a client money
reporting infringement notice:
(a) starts on the day on which the infringement notice is given to the recipient;
and
(b) ends:
(i) 27 days after the day on which the infringement notice is given to the
recipient; or
(ii) on another day permitted by this regulation.
(3) If the recipient applies for a further period of time in which to comply with the
client money reporting infringement notice, and the application is granted, the
client money reporting infringement notice period ends at the end of the further
period allowed.
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(4) If the recipient applies for a further period of time in which to comply with the
client money reporting infringement notice, and the application is refused, the
client money reporting infringement notice period ends on the later of:
(a) 28 days after the day on which the infringement notice was given to the
recipient; and
(b) 7 days after the notice of refusal is given to the recipient.
(5) If the recipient applies for the client money reporting infringement notice to be
withdrawn, and the application is refused, the client money reporting
infringement notice period ends 28 days after the notice of refusal is given to the
recipient.
7.8.05J Extension of client money reporting infringement notice period
(1) During the client money reporting infringement notice period, a recipient may
apply, in writing, to ASIC for a further period of no more than 28 days in which
to comply with the client money reporting infringement notice.
(2) The application must:
(a) specify the client money reporting infringement notice’s unique
identification code; and
(b) set out the reasons for the application.
(3) Within 14 days after receiving the application, ASIC must:
(a) grant or refuse a further period no longer than the period sought (and no
longer than 28 days); and
(b) notify the recipient in writing of the decision and, if the decision is a
refusal, the reasons for the decision.
(4) If ASIC refuses a further period under paragraph (3)(a), the recipient may not
make a further application under subregulation (1) in relation to that client
money reporting infringement notice.
(5) If ASIC does not grant or refuse a further period under paragraph (3)(a) within
14 days after receiving the application, ASIC is taken to have refused a further
period.
7.8.05K Effect of compliance with client money reporting infringement notice
(1) Subject to subregulation (3), if:
(a) a client money reporting infringement notice is given to a recipient in
relation to an alleged contravention of a client money reporting rule; and
(b) the infringement notice is not withdrawn; and
(c) the recipient complies with the infringement notice;
the effects in subregulation (2) apply.
(2) The effects are:
(a) any liability of the recipient to the Commonwealth for the alleged
contravention of the client money reporting rule is discharged; and
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(b) no civil or criminal proceedings may be brought or continued by the
Commonwealth against the recipient for the conduct specified in the client
money reporting infringement notice as being the conduct that made up the
alleged contravention of the client money reporting rule or rules; and
(c) no administrative action may be taken by ASIC under section 914A, 915B,
915C or 920A of the Act against the recipient for the conduct specified in
the infringement notice as being the conduct that made up the alleged
contravention of the client money reporting rule; and
(d) the recipient is not taken to have admitted guilt or liability in relation to the
alleged contravention; and
(e) the recipient is not taken to have contravened the client money reporting
rule.
Note: Third parties are not prevented from commencing civil proceedings against the
recipient, including under section 1101B of the Act. ASIC is not prevented from
applying for an order on behalf of a plaintiff in accordance with the Act.
(3) Subregulation (2) does not apply if the recipient has knowingly:
(a) provided false or misleading information to ASIC; or
(b) withheld evidence or information from ASIC;
in relation to the alleged contravention of the client money reporting rule.
7.8.05L Application to withdraw client money reporting infringement notice
(1) During the client money reporting infringement notice period, a recipient of a
client money reporting infringement notice may apply, in writing, to ASIC for
the infringement notice to be withdrawn.
(2) The application must:
(a) specify the client money reporting infringement notice’s unique
identification code; and
(b) set out the reasons for the application.
(3) Within 14 days after receiving the application, ASIC must:
(a) withdraw or refuse to withdraw the client money reporting infringement
notice; and
(b) notify the recipient in writing of the decision and, if the decision is a
refusal, the reasons for the decision.
(4) In deciding whether to withdraw the client money reporting infringement notice,
ASIC may take the following matters into account:
(a) whether the recipient has previously been found to have contravened
subsection 981M(1) of the Act;
(b) the circumstances in which the contravention set out in the infringement
notice is alleged to have occurred;
(c) whether an infringement notice has previously been given to the recipient
in relation to an alleged contravention of subsection 981M(1) of the Act,
and whether the recipient complied with the infringement notice;
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(d) any other relevant matters.
(5) If ASIC refuses to withdraw the client money reporting infringement notice, the
recipient may not make a further application under subregulation (1) in relation
to that infringement notice.
(6) If ASIC has not withdrawn, or refused to withdraw, the client money reporting
infringement notice within 14 days after receiving the application, ASIC is taken
to have refused to withdraw the infringement notice.
7.8.05M Withdrawal of client money reporting infringement notice by ASIC
(1) ASIC may withdraw a client money reporting infringement notice given by
ASIC without an application under regulation 7.8.05L having been made.
(2) In deciding whether to withdraw a client money reporting infringement notice
under this regulation, ASIC may take the matters referred to in
subregulation 7.8.05L(4) into account.
7.8.05N Notice of withdrawal of client money reporting infringement notice
(1) A notice withdrawing a client money reporting infringement notice must include
the following information:
(a) the name and address of the recipient;
(b) the date the infringement notice was given;
(c) the infringement notice’s unique identification code.
(2) The notice must also state that the client money reporting infringement notice is
withdrawn.
7.8.05P Withdrawal of notice after compliance
(1) ASIC may withdraw a client money reporting infringement notice after the
recipient has complied with the infringement notice only if the recipient agrees,
in writing, to the withdrawal.
(2) If a client money reporting infringement notice is withdrawn after the penalty
specified in it (if any) has been paid, the Commonwealth must refund the amount
of the penalty to the person who paid it.
(3) If a client money reporting infringement notice is withdrawn after the recipient
has complied with a requirement specified in the infringement notice:
(a) to undertake or institute remedial measures; or
(b) to accept sanctions other than a payment of a penalty to the
Commonwealth; or
(c) to give an undertaking;
the remedial measures, sanctions or undertaking are taken to no longer be
enforceable by ASIC.
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7.8.05Q Publication of details of client money reporting infringement notice
(1) If ASIC gives a client money reporting infringement notice to a recipient, ASIC
may, at the end of the client money reporting infringement notice period, publish
details of the infringement notice.
(2) If ASIC decides to publish details of the client money reporting infringement
notice, ASIC must publish the details in accordance with either or both of
subregulations (3) and (4).
(3) ASIC may publish details of a client money reporting infringement notice by
publishing in the Gazette:
(a) a copy of the infringement notice; and
(b) a statement as to whether the recipient has complied with the infringement
notice; and
(c) if the recipient has complied with the infringement notice—a statement
that:
(i) compliance is not an admission of guilt or liability; and
(ii) the recipient is not regarded as having contravened a client money
reporting rule; and
(d) if the recipient has not complied with the infringement notice—a statement
that:
(i) the giving of an infringement notice to a recipient is only an allegation
that the recipient has contravened a client money reporting rule; and
(ii) the recipient is not regarded as having contravened the client money
reporting rule or rules specified in the infringement notice.
(4) ASIC may publish details of a client money reporting infringement notice by
issuing a written or oral statement that includes:
(a) an accurate summary of the details of the infringement notice, including:
(i) the name of the recipient; and
(ii) the amount of the penalty specified in the infringement notice (if any);
and
(iii) the remedial measures specified in the infringement notice (if any);
and
(iv) the sanctions specified in the infringement notice (if any); and
(v) the terms of an undertaking specified in the infringement notice (if
any); and
(vi) the conduct specified in the infringement notice as being the conduct
that made up the alleged contravention; and
(b) a statement as to whether the recipient has complied with the infringement
notice; and
(c) if the recipient has complied with the infringement notice—a statement
that:
(i) compliance is not an admission of guilt or liability; and
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(ii) the recipient is not regarded as having contravened a client money
reporting rule; and
(d) if the recipient has not complied with the infringement notice—a statement
that:
(i) the giving of an infringement notice to a recipient is only an allegation
that the recipient has contravened a client money reporting rule; and
(ii) the recipient is not regarded as having contravened the client money
reporting rule or rules specified in the infringement notice.
Subdivision B—Loan money
7.8.06 Statement setting out terms of loan etc
For subsection 982C(1) of the Act, the financial services licensee must give a
client a disclosure document that contains, as far as practicable, the matters
required for Division 2 of Part 7.9 of the Act.
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Regulation 7.8.06A
Division 3—Dealing with other property of clients
7.8.06A Property exempt from Division 3 of Part 7.8 of the Act
For paragraph 984A(2)(a) of the Act, property given as security for a standard
margin lending facility is exempt from Division 3 of Part 7.8 of the Act.
Note: Paragraph 984A(2)(a) of the Act provides that the regulations may exempt property
given in specified circumstances from some or all of the provisions of Division 3 of
Part 7.8 of the Act.
7.8.06B Wholesale client property
For the purposes of paragraph 984A(2)(a) of the Act, property given as
mentioned in subsection 984A(1) of the Act is exempt from Division 3 of
Part 7.8 of the Act at a time if:
(a) at that time the licensee has the client’s written agreement to the property
being dealt with other than in accordance with that Division; and
Note 1: It is not necessary for the agreement to mention that Division explicitly.
Note 2: If the licensee obtains the agreement after the property is given, that Division ceases to apply to the property when the licensee obtains the agreement.
(b) either:
(i) the financial service referred to in subparagraph 984A(1)(a)(i) of the
Act is or relates to a dealing in a derivative; or
(ii) the financial product referred to in subparagraph 984A(1)(a)(ii) of the
Act is a derivative; and
(c) the entry into of the derivative was not or will not be cleared through a
clearing and settlement facility; and
(d) the financial service or product would have been provided to the client as a
wholesale client if:
(i) the service or product were provided to the client when the property
was given; and
(ii) section 761GA of the Act (about sophisticated investors) did not
apply.
7.8.07 How property to which Division 3 of Part 7.8 of the Act to be dealt with
(1) For paragraph 984B(1)(a) of the Act, this regulation sets out requirements in
relation to property to which Division 3 of Part 7.8 of the Act applies.
(2) The financial services licensee must hold the property on trust for the benefit of
the person who is entitled to it.
(3) If the client requests the financial services licensee, in writing, to deposit the
property in safe custody with an ADI:
(a) the licensee must deposit the property; or
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(b) if the licensee does not comply with the request for any reason, the licensee
must notify the client, as soon as practicable, of the failure to comply with
the request.
(4) If the client requests the financial services licensee, in writing, to deposit the
property in safe custody with a financial services licensee that provides a
custodial or depositary service for section 766E of the Act:
(a) the licensee must deposit the property; or
(b) if the licensee does not comply with the request for any reason, the licensee
must notify the client, as soon as practicable, of the failure to comply with
the request.
(5) If the client requests the financial services licensee, in writing, to deposit the
property in safe custody in the place where the property was deposited with, or
received by, the licensee:
(a) the licensee must deposit the property in accordance with the request; and
(b) if the licensee does not comply with the request for any reason, the licensee
must notify the client, as soon as practicable, of the failure to comply with
the request.
(6) If the client requests that the body corporate that issued or made available the
securities, managed investment products or foreign passport fund products
underlying the property register the property in the name of a nominee controlled
by the financial services licensee, the financial services licensee must arrange for
the body corporate to register the securities, managed investment products or
foreign passport fund products in that way.
(7) If:
(a) none of subsections (3) to (6) applies; and
(b) the property is not registered in the client’s name by the body corporate
that issued or made available the securities, managed investment products
or foreign passport fund products underlying the property;
the financial services licensee must arrange to have the property registered in the
client’s name.
(8) A financial services licensee must not deposit property as security for a loan or
advance to the financial services licensee unless:
(a) the client owes the financial services licensee an amount in connection with
a transaction entered into by the financial services licensee on the client’s
behalf; and
(b) the financial services licensee gives the client a written notice that
identifies the property and states that the dealer proposes to deposit it as
security for a loan or advance to the financial services licensee; and
(c) the amount, or total of the amounts, that the client owes on the day of the
deposit is at least the amount of the loan or advance.
(9) If a financial services licensee deposits property as security for a loan or advance
to the financial services licensee, in accordance with subregulation (8):
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(a) the financial services licensee must, not later than 1 business day after the
amount, or total of the amounts, that the client owes on the day of the
deposit are repaid, withdraw the property from that deposit; and
(b) if, at the end of 3 months after the day of that deposit, or at the end of any
subsequent interval of 3 months, the property has not been withdrawn from
that deposit—the financial services licensee must give the client written
notice of that fact.
(10) In this regulation:
property includes scrip, but does not include money.
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Division 4 Special provisions relating to insurance
Regulation 7.8.08
Division 4—Special provisions relating to insurance
7.8.08 Debts of financial services licensee in relation to premiums etc
(1) Subregulations (2) to (4) apply if:
(a) money is received by a financial services licensee:
(i) from, or on behalf of, an insured or intending insured, or from another
financial services licensee on behalf of an insured or intending
insured; and
(ii) as a premium or an instalment of a premium in connection with a
contract of insurance or a proposed contract of insurance; and
(b) the risk, or a part of the risk, to which the contract or proposed contract
relates is accepted by or on behalf of an insurer; and
(c) the financial services licensee who so received the money is informed of,
or otherwise ascertains, the amount of the premium or instalment to be
paid.
(2) The financial services licensee who received the money must pay to the insurer
an amount equal to the amount of the premium or instalment to be paid:
(a) in the period of 90 days (the relevant period) after:
(i) the day on which the cover provided by the insurer under the contract
starts to have effect; or
(ii) the first day of the period to which the instalment relates; or
(b) if it is not practicable for the financial services licensee to pay the amount
in the relevant period—as soon as practicable after the end of that period.
(3) If the financial services licensee has not received the amount of the premium, or
of an instalment of the premium, payable in respect of a contract of insurance at
the end of the relevant period, the financial services licensee must notify the
insurer in writing, not later than 7 days after the end of the relevant period, that
the financial services licensee has not received the amount.
(4) Subregulation (3) does not apply if the financial services licensee receives the
amount:
(a) in the period of 7 days mentioned in subregulation (3); and
(b) before notifying the insurer in accordance with subregulation (3).
(5) Subregulations (6) and (7) apply if:
(a) a financial services licensee receives money from, or on behalf of:
(i) an insured or intending insured; or
(ii) another financial services licensee on behalf of an insured or
intending insured;
as a premium or an instalment of a premium in connection with a contract
of insurance or a proposed contract of insurance; and
(b) the risk, or a part of the risk, to which the contract or proposed contract
relates is accepted by or on behalf of an insurer; and
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(c) the financial services licensee who received the money has not been
informed of, and has not otherwise ascertained, the amount of the premium
or instalment to be paid.
(6) The financial services licensee who received the money must pay the amount
mentioned in subregulation (7) to the insurer:
(a) in the period of 90 days (the relevant period) after:
(i) the day on which the cover provided by the insurer under the contract
starts to have effect; or
(ii) the first day of the period to which the instalment relates; or
(b) if it is not practicable for the financial services licensee to pay the amount
in the relevant period—as soon as practicable after the end of that period.
(7) For subregulation (6), the amount is:
(a) for a new contract of insurance, an amount not less than the lesser of:
(i) the amount of the money received; or
(ii) 75% of the amount fairly estimated by the financial services licensee
to be the premium or instalment that is to be paid; and
(b) for a renewal of a contract of insurance, an amount not less than the lesser
of:
(i) the amount of the money so received; or
(ii) 75% of the previous year’s premium for the risk, or of the last
instalment of that years premium.
(8) Subregulation (9) applies if:
(a) the risk, or a part of the risk, to which a contract of insurance or a proposed
contract of insurance relates is accepted by or on behalf of an insurer; and
(b) the contract of insurance or proposed contract of insurance has been, or is
being, arranged or effected by a financial services licensee (licensee 1),
either directly or through another financial services licensee; and
(c) licensee 1 has not been informed of, and has not otherwise ascertained, the
amount of a premium or of an instalment of a premium to be paid in
connection with the contract or proposed contract.
(9) Licensee 1 must, notify the insurer in writing, within 10 days after the day on
which the risk, or that part of the risk, was accepted, that:
(a) the risk, or that part of the risk, has been accepted; and
(b) licensee 1 does not know the amount of the premium or instalment to be
paid;
unless licensee 1 is informed of, or otherwise ascertains, the amount of the
premium or instalment to be paid before notifying the insurer.
(10) Nothing in this regulation prevents:
(a) an insurer from making a contract or arrangement with a financial services
licensee providing for the financial services licensee to pay an amount to
the insurer before the time by which the financial services licensee is
required by the provision concerned to pay that amount to the insurer; or
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Regulation 7.8.08
(b) an insurer from authorising a financial services licensee in writing to pay
on behalf of the insurer, out of the money received by the financial services
licensee as a premium or instalment of a premium in respect of a contract
of insurance arranged with the insurer, any charges required by law to be
paid by the insurer in respect of the contract; or
(c) a financial services licensee from exercising any legal right available to the
financial services licensee to deduct from any moneys payable by the
financial services licensee to the insurer any remuneration payable by the
insurer to the financial services licensee in relation to a contract of
insurance.
(11) For subregulation (1) or (5), if the risk, or a part of the risk, to which a contract
or proposed contract mentioned in that subregulation is accepted on behalf of an
insurer by an insurance intermediary other than the insurance financial services
licensee who received the moneys from or on behalf of the insured or intending
insured, the payment of the premium, or part of the premium, by the financial
services licensee to the intermediary is taken to be a payment of the premium or
part of the premium by the financial services licensee to the insurer.
(12) For subregulation (3) or (8), if:
(a) a financial services licensee is required to notify an insurer in accordance
with that subregulation; and
(b) an insurance intermediary other than the financial services licensee has
accepted the risk, or a part of the risk, to which the contract or proposed
contract relates on behalf of the insurer;
a notification by the financial services licensee to the intermediary is taken to be
a notification by the financial services licensee to the insurer.
(13) Subregulations (14) and (15) apply if:
(a) a financial services licensee receives money from, or on behalf of, an
insured or intending insured in connection with a contract of insurance or
proposed contract of insurance; and
(b) at the end of 30 days after the day on which the money was received, the
risk, or a part of the risk, to which the contract or proposed contract relates
has not been accepted.
(14) If the risk has not been accepted, the financial services licensee must, within 7
days after the end of the 30 day period:
(a) give notice to the insured or intending insured, in a form (if any) approved
by ASIC for this paragraph, that the risk has not been accepted; and
(b) return the money to the insured or intending insured.
(15) If a part of the risk to which the contract or proposed contract relates has not
been accepted, the financial services licensee must, within 7 days after the end of
the 30 day period:
(a) give notice to the insured or intending insured, in a form (if any) approved
by ASIC for this paragraph, of the extent to which the risk has not been
accepted; and
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(b) return that part of the money that relates to the part of the risk that has not
been accepted to the insured or intending insured.
(16) If a financial services licensee receives money from, or on behalf of, an insurer
for payment to, or on behalf of, an insured, the financial services licensee must
pay an amount equal to the money to, or on behalf of, the insured:
(a) within 7 days after the day on which the financial services licensee
received the money; or
(b) if it is not practicable for the financial services licensee to pay the amount
in that period—as soon as practicable after the end of the period.
(17) Nothing in subregulation (16) prevents:
(a) an insured from making a contract or arrangement with an insurance
financial services licensee providing for the financial services licensee to
pay an amount mentioned in that subregulation to or on behalf of the
insured before the time by which the financial services licensee is required
by that subregulation to pay that amount to or on behalf of the insured; or
(b) a financial services licensee from exercising any legal right available to the
financial services licensee to deduct from an amount payable by the
financial services licensee to the insured any money payable by the insured
to the financial services licensee in connection with a contract of insurance.
(18) A person is guilty of an offence if the person contravenes subregulation (2), (3),
(6), (9), (14) or (16), whether or not it was done with the consent of the insurer or
of the insured or intending insured.
Penalty:
(a) for an individual—20 penalty units; and
(b) for a body corporate—200 penalty units.
(19) Subregulation (18) does not apply if the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subregulation (18)
(see subsection 13.3(3) of the Criminal Code).
(20) Strict liability applies to subregulation (18).
Note: For strict liability, see section 6.1 of the Criminal Code.
(21) If:
(a) under subregulation (2), (3), (6) or (9), a financial services licensee is
required to pay an amount to, or to notify, an insurer; and
(b) under the contract or proposed contract of insurance concerned the insurer
is an underwriting member of Lloyd’s;
it is sufficient compliance with the subregulation if the financial services licensee
pays the amount to, or notifies, as the case may be, the Lloyd’s broker
concerned.
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Division 4A Special provisions relating to margin lending facilities
Regulation 7.8.08A
Division 4A—Special provisions relating to margin lending facilities
Subdivision A—Responsible lending conduct for margin lending facilities
7.8.08A Limit of margin lending facility taken to be increased
(1) For paragraph 985E(3)(a) of the Act, the limit of a margin lending facility is
taken to be increased, despite subsection 985E(2) of the Act, if:
(a) the increase is a result of a contribution of further secured property or
transferred securities that occurs without the prior knowledge or agreement
of the provider; and
(b) the provider permits the increase to continue; and
(c) the increase is no more than 5% of the current limit of the margin lending
facility (within the meaning given by subsection 761EA(11) of the Act).
(2) If the limit of a margin lending facility is taken to be increased in the
circumstances mentioned in subregulation (1), subsection 985E(1) of the Act is
modified by omitting ‘before the critical day:’ and inserting ‘after the critical
day:’.
Note: Paragraph 992C(1)(c) of the Act provides that the regulations may provide that Part 7.8
of the Act applies as if specified provisions were omitted, modified or varied as
specified in the regulations.
(3) For subregulation (1), if:
(a) more than one contribution of further secured property or transferred
securities under the margin lending facility occurs on a day; and
(b) each of the contributions is taken to increase the limit of the facility; and
(c) either:
(i) the cumulative increase is no more than 5% of the current limit of the
margin lending facility; or
(ii) if the cumulative increase is more than 5% of the current limit of the
margin lending facility, the provider ensures that the increases are
reduced so that the cumulative increase becomes no more than 5% of
the current limit of the margin lending facility;
the increases are taken to be one increase for this regulation.
Increase prior to assessment only to occur once
(4) Subregulation (5) applies if:
(a) the limit of a margin lending facility is taken to be increased in the
circumstances mentioned in subregulation (1); and
(b) an assessment has not yet been made in accordance with section 985F of
the Act.
(5) If the limit of the margin lending facility would be taken to increase further in
accordance with subregulation (1):
(a) the limit is taken not to be further increased until:
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(i) an assessment has been made in accordance with section 985F of the
Act; and
(ii) it is assessed that the facility will not be unsuitable for the client if the
limit is increased; and
(b) the provider must ensure that the increase does not continue unless
paragraph (a) permits it.
If facility assessed as unsuitable
(6) If:
(a) the limit of a margin lending facility is taken to be increased in the
circumstances mentioned in subregulation (1); and
(b) the assessment made in accordance with section 985F of the Act assesses
that the facility is unsuitable for the client because of the increased limit;
the limit is taken to be reduced to the limit of the margin lending facility before
the increase, and the provider must ensure that the limit is reduced within 90
days of the day the assessment is made.
Facility not unsuitable for subsection 985K(4) of the Act
(7) For subsection 985K(4) of the Act, a margin lending facility is taken not to be
unsuitable if:
(a) the limit of the margin lending facility is taken to be increased in the
circumstances mentioned in subregulation (1); and
(b) the assessment made in accordance with section 985F of the Act assesses
that the facility:
(i) is not unsuitable for the client; or
(ii) is unsuitable for the client because of the increased limit; and
(c) in the case of subparagraph (b)(ii), the provider ensures that the limit is
reduced, within 90 days of the day the assessment is made, to the limit of
the margin lending facility before the increase.
7.8.08B Exemption from requirement to make unsuitability assessment
(1) For paragraph 992C(1)(a) of the Act, a person is exempt from the requirement in
paragraph 985E(1)(c) of the Act to make an assessment if the margin lending
facility mentioned in paragraph 985E(1)(a) or (b) of the Act is a facility
mentioned in subregulation (2):
(a) in respect of the full amount of the loan, including any interest, fees and
charges; and
(b) in relation to which the client has not taken out a loan to fund the secured
property contributed by the client for establishing the margin lending
facility.
(2) For subregulation (1), the facility is a standard margin lending facility (within the
meaning given by subsection 761EA(2) of the Act) under the terms of which:
(a) the credit provided must be applied wholly:
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Division 4A Special provisions relating to margin lending facilities
Regulation 7.8.09
(i) to acquire one or more marketable securities, or a beneficial interest in
one or more marketable securities; or
(ii) to repay another credit facility, under the terms of which the credit
provided was applied wholly to acquire one or more marketable
securities, or a beneficial interest in one or more marketable
securities; and
(b) the secured property mentioned in paragraphs (c) and (d) of that
subsection:
(i) consists wholly of one or more marketable securities, or a beneficial
interest in one or more marketable securities; or
(ii) consists:
(A) partly of one or more marketable securities, or a beneficial
interest in one or more marketable securities; and
(B) partly of cash given to the provider and held in trust for the
client for the sole purpose of servicing obligations under the
facility; and
(c) the liability of the client to the provider is limited to the rights relating to
the secured property.
7.8.09 Reasonable inquiries etc about retail client: inquiries
(1) For paragraph 985G(1)(c) of the Act, the following inquiries about a client are
prescribed in relation to a margin lending facility, or a margin lending facility
whose limit is proposed to be increased, within the meaning of
subsection 761EA(1) of the Act:
(a) reasonable inquiries as to whether the client has taken out a loan to fund
the secured property or transferred securities contributed by the client for
establishing the margin lending facility;
Note: This is sometimes referred to as ‘double gearing’.
(b) if a loan to fund the secured property or transferred securities contributed
by the client for establishing the margin lending facility has been taken
out—reasonable inquiries as to whether the security for the loan includes
the primary residential property of the client;
(c) if there is a guarantor for the margin lending facility—reasonable inquiries
as to whether the guarantor has been appropriately informed of, and
warned about, the risks and possible consequences of providing the
guarantee;
(d) reasonable inquiries as to the amount of any other debt incurred by the
client;
(e) any other matter that ASIC has specified in a legislative instrument for
subregulation (2).
(2) ASIC may specify in a legislative instrument any matter ASIC considers to be
relevant for the purpose of establishing whether the margin lending facility, or
the margin lending facility with the increased limit, is unsuitable for the client.
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Regulation 7.8.09A
7.8.09A Modification of section 985G of the Act
For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
section 985G of the Act were modified by inserting after subsection (2) the
following subsection:
‘(2A) The regulations may provide that ASIC may specify in a legislative
instrument matters ASIC considers to be relevant for the purposes of
paragraph 985G(1)(c) of the Act.’
7.8.10 Circumstances in which margin lending facility is unsuitable
For paragraph 985H(2)(b) of the Act, a margin lending facility, or a margin
lending facility whose limit is proposed to be increased, within the meaning of
subsection 761EA(1) of the Act is unsuitable for a retail client if the client:
(a) is, on an ongoing basis, unable to be contacted by any of the usual means
of communication; and
(b) has not appointed an agent to act on the client’s behalf.
7.8.10A Margin lending facility taken not to be unsuitable
For subsection 985K(4) of the Act, a margin lending facility is taken not to be
unsuitable:
(a) if:
(i) an assessment of unsuitability was undertaken in accordance with the
Act; and
(ii) the assessment reasonably concluded that the margin lending facility
is not unsuitable; or
(b) if a person is exempt under regulation 7.8.08B from the requirement to
make an assessment of unsuitability in relation to the margin lending
facility.
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Division 6 Financial records, statements and audit
Regulation 7.8.11
Division 6—Financial records, statements and audit
Subdivision B—Financial records of financial services licensees
7.8.11 Particular categories of information to be shown in records
For paragraph 988E(g) of the Act, the following matters are specified:
(a) all underwriting transactions entered into by the financial services licensee;
(b) all financial products dealt with by the licensee under instructions from
another person;
(c) each person who gave instructions to deal with financial products;
(d) all property:
(i) that is not the property of the financial services licensee; and
(ii) for which the financial services licensee, or a nominee controlled by
the financial services licensee, is accountable;
(e) each person by whom, or for whom, property mentioned in paragraph (d) is
held;
(f) the extent to which property mentioned in paragraph (d) is:
(i) held in safe custody; or
(ii) deposited with a third party as security for a loan or advance made to
the financial services licensee;
(g) all transactions in relation to insurance products entered into with, or on
behalf of, foreign insurers.
7.8.11A Particular categories of information to be shown in records: records of
non-monetary benefit that is not conflicted remuneration
(1) This regulation is made for paragraph 988E(g) and section 988F of the Act.
(2) The following table sets out matters in relation to a non-monetary benefit that:
(a) is given to a financial services licensee or a representative of a financial
services licensee; and
(b) either:
(i) is not conflicted remuneration in accordance with paragraph 963C(b)
of the Act, and is over $100; or
(ii) is not conflicted remuneration in accordance with paragraph 963C(c)
or (d) of the Act; or
Note: Particulars of the matters must be shown in the records kept by the financial services
licensee.
Item Matter
A description of the benefit
Either:
(a) the value of the benefit; or
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Item Matter
(b) if the value is not known, the estimated value of the benefit;
expressed as a dollar amount or as a range of dollars
The date on which the benefit was given
The name of the person who gave the benefit and, if relevant, the number of the person’s
financial services licence
Whether the benefit was given to the licensee or to a representative of the licensee
If the benefit was given to an authorised representative of the licensee, the name and
contact details of the authorised representative
If the benefit was given to another representative of the licensee, the name and contact
details of the other representative
(3) At the request of a person, a financial services licensee must give the person the
particulars in its records relating to the matters in items 1 to 4 of the table for the
last financial year.
(4) The licensee may require the person making the request to pay a charge for
obtaining the particulars.
(5) The amount of the charge must not exceed the reasonable costs that the licensee
incurs that are reasonably related to giving the particulars (including any costs
incurred in photocopying the document containing the particulars).
Note: This would include the costs of collating the information.
(6) The licensee must give the particulars to the person as soon as practicable, and
no later than one month after the person makes the request to the licensee.
7.8.12 Requirements in relation to financial records of financial services licensees
(1) For section 988F of the Act, the financial records of a financial services licensee
must be kept in sufficient detail as to show or include, for basic deposit products:
(a) separate particulars of every transaction by the financial services licensee;
and
(b) the day on which, or the period during which, each transaction by the
financial services licensee took place.
(2) For section 988F of the Act, the financial records of a financial services licensee
must be kept in sufficient detail as to show or include, for all financial products
other than basic deposit products:
(a) the information mentioned in subregulation (1); and
(b) if the financial services licensee is not a partner in a firm—separate
particulars of each transaction by the financial services licensee with, or for
the account of:
(i) clients of the financial services licensee; or
(ii) the financial services licensee’s own account; or
(iii) other financial services licensees; or
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Regulation 7.8.12A
(iv) representatives of the financial services licensee; or
(v) employees of the financial services licensee; and
(c) if the financial services licensee is a partner in a firm—separate particulars
of each transaction by the financial services licensee with, or for the
account of:
(i) clients of the financial services licensee other than the partners in the
firm; or
(ii) the partners in the firm; or
(iii) the financial services licensee’s own account; or
(iv) other financial services licensees; or
(v) representatives of the financial services licensee; or
(vi) employees of the financial services licensee; and
(d) copies of acknowledgments of the receipt of financial products or
documents of title to financial products.
Subdivision C—Financial statements of financial services licensees
7.8.12A Modification of section 989B of the Act
(1) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
subsection 989B(3) were modified to read as follows:
“(3) The licensee must, with the statement and balance sheet, lodge with ASIC:
(a) for a licensee who is a limited licensee for the whole of a financial year—a
compliance certificate containing the information and matters required by
the regulations; or
(b) for a licensee who is a limited licensee for part of a financial year:
(i) a compliance certificate containing the information and matters
required by the regulations for the part of the financial year that the
licensee was a limited licensee; and
(ii) an auditor’s reporting containing the information and matters required
by the regulations for the part of the financial year that the licensee
was not a limited licensee; or
(c) for all other licensees—an auditor’s report containing the information and
matters required by the regulations.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).”.
(2) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
section 989B of the Act were modified by inserting after subsection 989B(3) the
following subsection:
“(4) In this section:
class of product advice means financial product advice about a class of products
but does not include a recommendation about a specific product in the class.
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Regulation 7.8.13
Example: A financial services licensee may give a recommendation about term deposit products
but must not make a specific recommendation that a person deposit their money into a
term deposit product offered by a particular bank or building society.
limited financial service means the following financial services:
(a) financial product advice on self-managed superannuation funds;
(b) financial product advice on superannuation products in relation to a
person’s existing holding in a superannuation product but only to the extent
required for:
(i) making a recommendation that the person establish a self-managed
superannuation fund; or
(ii) providing advice to the person on contributions or pensions under a
superannuation product;
(c) class of product advice on the following:
(i) superannuation products;
(ii) securities;
(iii) simple managed investment schemes;
(iv) general insurance products;
(v) life risk insurance products;
(vi) basic deposit products;
(d) arrange to deal in an interest in a self-managed superannuation fund.
Note 1: See section 761A for the meaning of basic deposit product, financial product advice,
general insurance product, life risk insurance product, self-managed
superannuation fund and superannuation product.
Note 2: Financial product advice on self-managed superannuation funds includes advice about
acquiring or disposing of an interest in a self-managed superannuation fund.
limited licensee means a financial services licensee that:
(a) does not deal with money to which Division 2 of Part 7.8 of the Act
applies; and
(b) is only licensed to provide one or more limited financial services.
simple managed investment scheme has the same meaning as in the
regulations.”.
7.8.13 Auditor’s report with annual profit and loss statement and balance sheet
(1) For subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act, an auditor’s
report lodged with a true and fair profit and loss statement and balance sheet in
respect of a financial year must be lodged with ASIC in the prescribed form.
(2) For subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act, an auditor’s
report lodged with a true and fair profit and loss statement and balance sheet in
respect of a financial year must contain a statement of the auditor’s opinion on
the following matters:
(a) the effectiveness of internal controls used by a financial services licensee to
comply with:
(i) Divisions 2, 3, 4, 5 and 6 of Part 7.8 of the Act; and
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Division 6 Financial records, statements and audit
Regulation 7.8.13A
(ii) Division 7 of Part 7.8 of the Act other than section 991A;
(b) whether each account required by sections 981B and 982B of the Act to be
maintained by the financial services licensee has been operated and
controlled in accordance with those sections;
(c) whether all necessary records, information and explanations were received
from the financial services licensee.
7.8.13A Compliance certificate with profit and loss statement and balance sheet
For paragraph 989B(3)(a) and subparagraph 989B(3)(b)(i) of the Act, a
compliance certificate lodged by a licensee with a true and fair profit and loss
statement and balance sheet in respect of a financial year must:
(a) be lodged with ASIC in the prescribed form; and
(b) be signed by:
(i) if the licensee is an individual—the licensee; or
(ii) if the licensee is a corporation—an officer of the corporation; or
(iii) if the licensee is a partnership or the trustees of a trust—a partner or
trustee who performs duties in relation to financial services.
7.8.14 Contents of annual profit and loss statement and balance sheet and
applicable accounting procedures
For paragraph 989C(a) of the Act, a true and fair profit and loss statement and
balance sheet in respect of a financial year must contain a declaration by the
financial services licensee that:
(a) the profit and loss statement and balance sheet give a true and fair view of
the matters stated in it; and
(b) if the licensee is required to lodge an auditor’s report under
subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act—the
auditor’s report lodged with the profit and loss statement and balance sheet
is a true copy of the report on the profit and loss statement and balance
sheet of the financial services licensee; and
(c) if the licensee is required to lodge a compliance certificate under
paragraph 989B(3)(a) or subparagraph 989B(3)(b)(i) of the Act—the
information in the compliance certificate lodged with the profit and loss
statement and balance sheet is complete and accurate.
7.8.14A Lodgement of annual profit and loss statement and balance sheet
For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
paragraph 989D(1)(b) were modified to read as follows:
‘(b) if the licensee is:
(i) a body corporate that is a disclosing entity or a registered
scheme—the day that is 3 months after the end of that
financial year; or
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(ii) a body corporate that is not a disclosing entity or a registered
scheme—the day that is 4 months after the end of that
financial year.’.
Subdivision D—Appointment etc. of auditors
7.8.14B Modification of section 990B of the Act
(1) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
subsection 990B(1) of the Act were modified by:
(a) omitting “must, within 1 month after beginning to hold the licence,” and
substituting “who is not a limited licensee must”; and
(b) omitting “(4) and (5)” and substituting “(4), (5) and (5A)”.
(2) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
section 990B of the Act were modified by inserting after subsection 990B(5) the
following subsection:
“(5A) The licensee must appoint an auditor or auditors within:
(a) if the licensee was a limited licensee—one month after the licensee ceased
to be a limited licensee; or
(b) for all other licensees—one month after beginning to hold the licence.”.
(3) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
subsection 990B(9) of the Act were modified to read as follows:
“(9) In this section:
class of product advice means financial product advice about a class of products
but does not include a recommendation about a specific product in the class.
Example: A financial services licensee may give a recommendation about term deposit products
but must not make a specific recommendation that a person deposit their money into a
term deposit product offered by a particular bank or building society.
limited financial services means the following financial services:
(a) financial product advice on self-managed superannuation funds;
(b) financial product advice on superannuation products in relation to a
person’s existing holding in a superannuation product but only to the extent
required for:
(i) making a recommendation that the person establish a self-managed
superannuation fund; or
(ii) providing advice to the person on contributions or pensions under a
superannuation product;
(c) class of product advice on the following:
(i) superannuation products;
(ii) securities;
(iii) simple managed investment schemes;
(iv) general insurance products;
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(v) life risk insurance products;
(vi) basic deposit products;
(d) arrange to deal in an interest in a self-managed superannuation fund.
Note 1: See section 761A for the meaning of basic deposit product, financial product advice,
general insurance product, life risk insurance product, self-managed
superannuation fund and superannuation product.
Note 2: Financial product advice on self-managed superannuation funds includes advice about
acquiring or disposing of an interest in a self-managed superannuation fund.
limited licensee means a financial services licensee that:
(a) does not deal with money to which Division 2 of Part 7.8 of the Act
applies; and
(b) is only licensed to provide one or more limited financial services.
person means:
(a) an individual auditor; or
(b) an authorised audit company.
simple managed investment scheme has the same meaning as in the
regulations.”.
7.8.15 Appointment of auditor by financial services licensee
(1) For subsections 990B(7) and (8) of the Act, this regulation:
(a) sets out matters related to the appointment of a firm as auditor of the
financial statements of a financial service licensee; and
(b) modifies the effect of section 990E of the Act.
(1A) If an applicant for a financial services licence:
(a) specifies, in the application for the licence, the name of a person or firm
that is to be, or has been, appointed to audit the applicant’s financial
statements; and
(b) the auditor or auditors specified are appointed before the end of 1 month
after the licence takes effect;
the applicant is taken to have lodged a notice under subsection 990B(6) of the
Act.
(2) The appointment is taken to be an appointment of each person who is:
(a) a member of the firm; and
(b) a registered company auditor;
whether the person is resident in Australia or not at the date of the appointment.
(3) Unless subregulation (4) applies, the appointment of the members of a firm as
auditors that is taken by subregulation (2) to have been made because of the
appointment of the firm as auditor of the holder is not affected by the dissolution
of the firm.
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(4) If a firm that has been appointed as auditor is reconstituted because of the death,
retirement or withdrawal of a member or members, or because of the admission
of a new member or new members, or both:
(a) a person who:
(i) was taken under subregulation (2) to be an auditor of the financial
services licensee; and
(ii) has retired or withdrawn from the firm as previously constituted;
is taken to have resigned as auditor as from the day of the retirement or
withdrawal; and
(b) a person who:
(i) is a registered company auditor; and
(ii) is admitted to the firm;
is taken to have been appointed as an auditor of the holder as from the date
of the admission; and
(c) the reconstitution of the firm does not affect the appointment of the
continuing members of the firm who are registered company auditors as
auditors; and
(d) nothing in paragraphs (a) to (c) affects the operation of section 990C of the
Act.
(5) Sections 990F to 990H of the Act do not apply to a resignation mentioned in
paragraph (4)(a) unless:
(a) the person who is taken to have resigned was the only member of the firm
who was a registered company auditor; and
(b) there is no member of the firm who is a registered company auditor after
the retirement or withdrawal of that person.
(6) A report or notice that purports to be made or given by a firm appointed as
auditor is taken not to have been duly made or given unless it is signed by a
member of the firm who is a registered company auditor:
(a) in the firm’s name; and
(b) in his or her own name.
(7) If a vacancy in the office of an auditor continues, the surviving or continuing
auditor or auditors (if any) may act as auditor while the vacancy continues.
(8) If a vacancy occurs in the office of an auditor, and there is no surviving or
continuing auditor of the financial services licensee, the financial services
licensee must, within 14 days after the vacancy occurs appoint as auditor:
(a) a person who is eligible to act as auditor; or
(b) 2 or more persons each of whom is eligible to act as auditor; or
(c) a firm that is eligible to act as auditor; or
(d) 2 or more firms each of which is eligible to act as auditor; or
(e) a combination of persons and firms each of which is eligible to act as
auditor.
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(9) If an auditor ceases to hold office in accordance with paragraph 990E(a) or (d) of
the Act, the financial services licensee for which the auditor acted must lodge
with ASIC a notice in the prescribed form stating that the auditor has ceased to
hold the office.
7.8.16 When person is ineligible to act as auditor of financial services licensee
(1) For section 990C of the Act, a person is ineligible to act as auditor of a financial
services licensee in any of the following circumstances:
(a) the person is not a registered company auditor;
(b) the person is indebted in an amount exceeding $5 000 to:
(i) the financial services licensee; or
(ii) if the financial services licensee is a body corporate—to a body
corporate related to the financial services licensee;
(c) a body corporate in which the person has a substantial holding is indebted
in an amount exceeding $5 000 to:
(i) the financial services licensee; or
(ii) if the financial services licensee is a body corporate—to a body
corporate related to the financial services licensee;
(d) the person is a partner or employee of the financial services licensee;
(e) if the financial services licensee is a body corporate—the person is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body; or
(iii) a partner or employee of an employee of an officer of the body.
(2) For section 990C of the Act, a firm is ineligible to act as auditor of a financial
services licensee at a particular time unless:
(a) at least 1 member of the firm is a registered company auditor who is
ordinarily resident in Australia; and
(b) if the business name under which the firm is carrying on business is not
registered under a law of a State or Territory—a return has been lodged in
the prescribed form showing, in relation to each member of the firm:
(i) the member’s full name; and
(ii) the member’s address at that time; and
(c) no member of the firm is indebted in an amount exceeding $5 000 to:
(i) the financial services licensee; or
(ii) if the financial services licensee is a body corporate—to a body
corporate related to the financial services licensee; and
(d) no body corporate in which any member of the firm has a substantial
holding is indebted in an amount exceeding $5 000 to:
(i) the financial services licensee; or
(ii) if the financial services licensee is a body corporate—to a body
corporate related to the financial services licensee; and
(e) no member of the firm is a partner or employee of the financial services
licensee; and
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(f) if the financial services licensee is a body corporate—no member of the
firm is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body; or
(iii) a partner or employee of an employee of an officer of the body; and
(g) if the financial services licensee is a body corporate—no officer of the
financial services licensee receives any remuneration from the firm for
acting as a consultant to it on accounting or auditing matters.
(3) For paragraphs (1)(b), (1)(c), (2)(c) and (2)(d), a debt owed by a natural person
to a body corporate is to be disregarded if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act 1995; and
(b) the debt arose because of a loan that the body corporate or entity made to
the person in the ordinary course of its ordinary business; and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(4) For subregulations (1) and (2), a person is taken to be an officer of a body
corporate if:
(a) the person is an officer of a related body corporate; or
(b) unless ASIC directs that this paragraph not apply in relation to the
person—the person has, at any time within the immediately preceding
period of 12 months, been an officer or promoter of the body corporate or
of a related body corporate.
(5) For this regulation, a person is not taken to be an officer of a body corporate by
reason only of being or having been the liquidator of the body corporate or of a
related body corporate.
(6) For this regulation, a person is not taken to be an officer of a body corporate:
(a) by reason only of having been appointed as an auditor of that body
corporate or of a related body corporate; or
(b) for any purpose relating to taxation, a public officer of a body corporate; or
(c) by reason only of being or having been authorised to accept on behalf of
the body corporate or a related body corporate:
(i) service of process; or
(ii) any notices required to be served on the body corporate or related
body corporate.
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Regulation 7.8.17
Division 7—Other rules about conduct
7.8.17 Priority to clients’ orders
(1) For paragraph 991B(3)(b) of the Act, if a participant in a licensed market:
(a) enters into a transaction; and
(b) complies with all of the participant’s obligations in relation to the
transaction under the market integrity rules and the operating rules of the
licensed market;
subsection 991B(2) of the Act does not apply in relation to the transaction.
(2) Subject to subregulation (3), for paragraph 991B(3)(b) of the Act,
subsection 991B(2) of the Act does not apply to a transaction if, at the time that
the instruction is issued, the financial services licensee is not a participant in the
licensed market on which the particular financial product is being traded.
(3) Subregulation (2) does not apply if:
(a) the financial services licensee deals, or has dealt, in a financial product
traded on that market:
(i) on the licencee’s own behalf (whether directly or through an agent or
other representative); or
(ii) on behalf of a client; or
(b) an associate of the financial services licensee is a participant in the market
mentioned in that subregulation.
7.8.18 Instructions to deal through licensed markets
(1) For section 991C of the Act, this regulation applies in relation to all instructions
received by a financial services licensee to deal in financial products through
licensed markets, except to the extent that the market integrity rules, or the
operating rules of a licensed market in relation to which the financial services
licensee is a participant, otherwise provide.
(2) Subject to subregulation (3), the financial services licensee must transmit, in the
sequence in which they are received, all instructions to deal in a class of financial
products at or near the market price for financial products of that class prevailing
immediately before execution of the instructions.
(3) If:
(a) a financial services licensee proposes to deal in a class of financial
products on the financial services licensee’s own account; and
(b) the person by whom or on whose instructions the instructions for the
dealing are to be transmitted is aware of instructions of a client of the
financial services licensee to deal in that class of financial products at or
near the market price for a financial product of that class prevailing at that
time (being instructions that have not been transmitted);
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that person must not transmit, and must not give instructions to any other person
to transmit, the instructions to give effect to the proposal of the financial services
licensee to deal in that class of financial products before the instructions of the
client are transmitted.
(4) If:
(a) during a particular period, a financial services licensee transmits
instructions (whether or not those instructions consist of, or include,
instructions giving effect to a proposal of the financial services licensee to
deal in the class of financial products concerned on the financial services
licensee’s own account) to deal in a class of financial products at or near
the market price for a financial product of that class prevailing immediately
before execution of the instructions; and
(b) dealings in that class of financial products are effected pursuant to those
instructions;
the financial services licensee must allocate the dealings to those instructions:
(c) in the sequence in which the dealings were effected; and
(d) in the sequence in which the financial services licensee transmitted the
instructions.
(5) A financial services licensee (licensee 1), or a director, partner, officer or
employee of a financial services licensee, must not disclose to any other financial
services licensee, or to a person engaged or employed in the business of licensee
1 or any other financial services licensee, instructions of a client to deal in a class
of financial products, except:
(a) to the extent necessary to execute the instructions; or
(b) as required by this Act or any other law.
(6) In this regulation, a reference to the transmission by a financial services licensee
of instructions to deal in a class of financial products is a reference:
(a) if the financial services licensee has direct access to the licensed market on
which the instructions are to be executed—to the transmission of the
instructions to that licensed market; or
(b) if the financial services licensee has access to the licensed market on which
the instructions are to be executed only through another financial services
licensee—to the transmission of the instructions to that other financial
services licensee.
7.8.19 Records of instructions to deal on licensed markets and foreign markets
(1) For section 991D of the Act, this regulation applies in relation to:
(a) instructions received by a financial services licensee to deal in financial
products, on behalf of a client, through licensed markets or through other
financial markets (whether inside or outside Australia); and
(b) instructions received by a financial services licensee to deal in financial
products, on the financial service licensee’s own account, through licensed
markets or through other financial markets (whether inside or outside
Australia).
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(2) The financial services licensee must keep records setting out brief particulars of
the following matters:
(a) the instructions;
(b) if the instructions were received on behalf of a client—the client;
(c) the person who gave the instructions to the financial services licensee;
(d) the date and time of receipt of the instructions, and the person who
received the instructions;
(e) the date and time of transmission of the instructions, and the person who
transmitted the instructions;
(f) the date and time of execution of the instructions.
(3) For subregulation (2), if:
(a) a financial services licensee transmits for execution on a financial market
outside Australia and the external Territories instructions to deal in
financial products; and
(b) it is not reasonably practicable for the financial services licensee to set out
the date and time of execution of those instructions in its records;
the financial services licensee must set out the date and time as precisely as is
reasonably practicable.
(4) The financial services licensee must keep records relating to instructions given
by a client to deal in financial products in a manner that makes the records
identifiable separately from records relating to instructions to deal in financial
products on the financial services licensee’s own account.
(5) The financial services licensee must keep the records mentioned in
subregulation (2) for at least 5 years after the particulars are created.
7.8.20 Dealings with non-licensees
(1) For subsection 991E(1) of the Act:
(a) section 991E of the Act does not apply in relation to the sale or purchase of
financial products mentioned in paragraph 764A(1)(a) of the Act by the
body corporate by which the financial products were made available if the
financial products are made available in accordance with Chapters 5C and
6D of the Act; and
(b) section 991E of the Act does not apply to the sale or purchase of financial
products mentioned in paragraph 764A(1)(b) of the Act by the body
corporate by which the financial products were made available if the
financial products are made available in accordance with Chapters 5C, 7
and 8A of the Act; and
(c) section 991E of the Act does not apply to the sale or purchase of financial
products mentioned in paragraph 764A(1)(bb) of the Act by the body
corporate by which the financial products were made available if the
financial products are made available in accordance with Chapters 7 and
8A of the Act.
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Note: Paragraph 764A(1)(a) of the Act covers securities (within the meaning of Part 7.1 of
the Act). Paragraph 764A(1)(b) of the Act covers managed investment products.
Paragraph 764A(1)(bb) of the Act covers foreign passport fund products.
(1A) Subject to subregulation (1B), for subsection 991E(1) of the Act, the subsection
does not apply to a transaction if, at the time of the transaction, the financial
services licensee is not a participant in the licensed market on which the
particular financial product is being traded.
(1B) Subregulation (1A) does not apply if:
(a) the financial services licensee deals, or has dealt, in a financial product
traded on that market:
(i) on the licensee’s own behalf (whether directly or through an agent or
other representative); or
(ii) on behalf of a client; or
(b) an associate of the financial services licensee is a participant in the market
mentioned in that subregulation.
(2) For subsection 991E(2) of the Act:
(a) a disclosure referred to in paragraph 991E(1)(c) of the Act must be given
by the financial services licensee to the non-licensee:
(i) in writing; and
(ii) if the transaction is an on-market transaction—in relation to the
particular transaction, a class of on-market transactions which
includes the transaction, or all on-market transactions; and
(b) a consent referred to in paragraph 991E(1)(d) of the Act:
(i) may be given orally, or in writing, by the non-licensee; and
(ii) is effective until it is revoked, either orally or in writing, by the
non-licensee; and
(c) if the non-licensee gives an oral consent to the financial services licensee,
or revokes a consent orally, the financial services licensee must:
(i) make a written record of the consent or revocation; and
(ii) provide a copy of the written record to the non-licensee within 10
business days after the day on which the consent is given or revoked.
(3) For subsection 991E(3) of the Act, a brokerage, commission or other fee is
permitted in respect of a transaction between a financial services licensee and a
non-licensee only if:
(a) the financial services licensee is a participant in a licensed market; and
(b) the financial services licensee has complied with all of the financial
services licensee’s obligations in relation to the transaction under the
market integrity rules and the operating rules of the relevant licensed
market; and
(c) the market integrity rules or the operating rules permit a brokerage,
commission or fee to be charged to non-licensees of the same kind as the
non-licensee; and
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(d) the non-licensee has authorised the financial services licensee to charge the
non-licensee in respect of the transaction; and
(e) the financial services licensee discloses to the non-licensee the amount of
the brokerage, commission or fee, or the basis on which it will be
calculated, before the non-licensee gives the authorisation mentioned in
paragraph (d); and
(f) the amount of the brokerage, commission or fee is reasonable having
regard to the amount that would have been charged by the financial
services licensee to the non-licensee if the financial services licensee had
entered the transaction with the non-licensee as agent and not on its own
behalf.
(4) For subregulation (3):
(a) an authorisation given to the financial services licensee by the
non-licensee:
(i) may be given orally, or in writing, by the non-licensee; and
(ii) is effective until it is revoked, either orally or in writing, by the
non-licensee; and
(b) if the non-licensee gives an oral authorisation to the financial services
licensee, or revokes an authorisation orally, the financial services licensee
must:
(i) make a written record of the authorisation or revocation; and
(ii) provide a copy of the written record to the non-licensee within 10
business days after the day on which the authorisation is given or
revoked; and
(c) a disclosure of the amount of the brokerage, commission or fee, or the basis
on which it will be calculated must be given by the financial services
licensee to the non-licensee:
(i) in writing: and
(ii) if the transaction is an on-market transaction—in relation to the
particular transaction, a class of on-market transactions that includes
the transaction, or all on-market transactions.
(5) For subsection 991E(7) of the Act, a financial services licensee must:
(a) keep records of the following matters relating to each financial products
transaction entered into by the financial services licensee on the financial
service licensee’s own behalf:
(i) a description of the financial products transaction;
(ii) the date and time of receipt of the instructions for the financial
products transaction;
(iii) the date and time of transmission of the instructions to the licensed
market concerned;
(iv) the date and time of execution of the instructions;
(v) the source of the funds, or financial products, used to effect the
financial products transaction; and
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(b) keep the records in a manner that makes the records identifiable separately
from records of the financial services licensee.
Note: Other requirements for record-keeping are in Division 6 of Part 7.8 of the Act.
7.8.20A Dealings involving employees of financial service licensees—risk
insurance products
For subsection 991F(1) of the Act, a financial services licensee and one or more
employees of the financial services licensee may, on their own behalves, jointly
acquire a financial product if it is a risk insurance product as defined in
section 761A of the Act.
7.8.21 Dealings involving employees of financial services licensees
(1) For subsection 991F(2) of the Act, that subsection does not have effect in
relation to:
(a) a bank; or
(b) a body corporate that gives credit in good faith to a person (not being a
director of the body corporate) employed by the body corporate, or by
another body corporate that is related to the first body corporate, to enable
the person to acquire financial products that are:
(i) fully paid shares in the body corporate; and
(ii) to be held in beneficial ownership by the person.
(1A) For subsection 991F(2) of the Act, that subsection does not have effect in
relation to a financial services licensee that gives credit in good faith to a person
employed by:
(a) the financial services licensee; or
(b) a person related to the financial services licensee;
to enable the person to acquire an insurance product in relation to a credit facility
provided by the financial services licensee to the person.
Example: Mortgage insurance is an insurance product in relation to a credit facility.
(2) For subsection 991F(3) of the Act, a body corporate that is related to a financial
services licensee may act as the agent of an employee of the financial services
licensee, in respect of the acquisition mentioned in that subsection, only if:
(a) before the acquisition, the employee has informed the related body
corporate that the employee is acquiring, or agreeing to acquire, the
financial product on the employee’s own behalf; and
(b) the financial services licensee has in place arrangements with the related
body corporate to allow the licensee to be informed of, and to gain access
to records relating to, the acquisition.
(3) For subsection 991F(3) of the Act, a body corporate may act as the agent of a
person who is an employee of a financial services licensee that is a participant in
a licensed market and is so employed in connection with a business of dealing in
financial products, in respect of an acquisition mentioned in that subsection, if:
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Regulation 7.8.21
(a) the body corporate holds an Australian financial services licence; and
(b) the body corporate is a participant in the same licensed market as the
licensee; and
(c) the employer has given consent in writing to the particular acquisition
before the acquisition takes place; and
(d) the employee gives the employer a copy of the confirmation of the
transaction.
(4) For subsection 991F(3) of the Act, a person who is:
(a) an employee of a financial services licensee that is a participant in a
licensed market; and
(b) employed in connection with a business of dealing in financial products;
may, on the person’s own behalf, acquire, or agree to acquire, a financial product
that is able to be traded on that licensed market, without the licensee’s acting as
an agent in respect of the transaction, if the person’s employment is not directly
connected with the licensee’s business of dealing in financial products on that
licensed market.
(5) Subject to subregulation (6), for subsection 991F(3) of the Act, the subsection
does not apply unless:
(a) the particular financial product that is acquired or proposed to be acquired
is a financial product traded on a market in which the financial services
licensee is not a participant at the time of the acquisition or the proposed
acquisition; or
(b) the particular financial product is a derivative the value of which is derived
from a financial product mentioned in paragraph (a).
(6) Subregulation (5) does not apply if:
(a) the financial services licensee deals, or has dealt, in a financial product
traded on that market:
(i) on the licensee’s own behalf (whether directly or through an agent or
other representative); or
(ii) on behalf of a client; or
(b) an associate of the financial services licensee is a participant in the market
mentioned in that subregulation.
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Miscellaneous Division 8
Regulation 7.8.21A
Division 8—Miscellaneous
7.8.21A Anti-hawking provisions if no Product Disclosure Statement is required
For paragraph 992C(1)(c), Part 7.8 of the Act applies as if the following
subsection was inserted after subsection 992A(3):
“(3AA) Paragraphs 992A(3)(c), (d) and (e) do not apply to a person that offers a financial
product mentioned in paragraph 1012D(7A)(a) if the regulated person complies
with the requirements of paragraphs 1012D(7A)(b) to (e) in respect of the
product.”
7.8.21B Anti-hawking provisions if no Product Disclosure Statement is
required—carbon units, Australian carbon credit units and eligible
international emissions units
For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies in relation to a
carbon unit, an Australian carbon credit unit or an eligible international
emissions unit as if paragraphs 992A(3)(c), (d) and (e) (including the note) read
as follows:
“(c) informed that:
“(i) for a carbon unit, the person should consider all information about the
financial product that is published on the website of the Clean Energy
Regulator as mentioned in section 202 of the Clean Energy Act 2011
before becoming bound to acquire a financial product; and
(ii) for an Australian carbon credit unit, the person should consider all
information about the financial product that is published on the
website of the Clean Energy Regulator as mentioned in section 162 of
the Carbon Credits (Carbon Farming Initiative) Act 2011 before
becoming bound to acquire a financial product; and
(iii) for an eligible international emissions unit, the person should consider
all information about the financial product that is published on the
website of the Clean Energy Regulator as mentioned in section 61 of
the Australian National Registry of Emissions Units Act 2011 before
becoming bound to acquire a financial product; and
(d) clearly informed of the importance of using that information when making
a decision to acquire a financial product; and
(e) given the option of having the information on that website read out to that
person.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).”.
7.8.22 Hours for hawking certain financial products
For paragraph 992A(3)(a) of the Act, the prescribed hours are from 8 am to 9 pm
on a day in the State or Territory in which the person to whom the offer is made
is located, excluding:
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Regulation 7.8.22A
(a) any Sunday; and
(b) New Year’s Day; and
(c) Australia Day; and
(d) Good Friday; and
(e) the Monday following Good Friday (Easter Monday); and
(f) Anzac Day; and
(g) Christmas Day; and
(h) 26 December (Boxing Day).
7.8.22A Modification of Part 7.8
(1) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if
paragraph 992A(3)(e) of the Act were modified so as to read:
‘(e) given:
(i) the name and contact details of the product issuer; and
(ii) an indication of the nature of the information contained in the
Product Disclosure Statement relating to the product; and
(iii) the option of receiving, by way of oral communication, any
information that is required to be included in a Product
Disclosure Statement for the product.’.
(2) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if the
following subsection were added after subsection 992A(3A) of the Act:
‘(3B) A regulated person must not influence a client’s decision to elect not to
receive the information mentioned in paragraph (3)(e) (other than by
asking the client if he or she wishes to do so).’.
7.8.23 Return of financial product: transfer between superannuation entities or
RSAs
(1) For paragraph 992A(4)(b) of the Act, this regulation applies in relation to a
superannuation product or an RSA product that has been issued to the holder of
the product as a result of a transfer between superannuation entities or RSAs.
(2) It is a requirement of the exercise of the right to return the superannuation
product or RSA product that, if the money to be repaid includes:
(a) restricted non-preserved benefits; or
(b) preserved benefits;
the holder of the superannuation product, or the RSA holder, must nominate a
superannuation fund, approved deposit fund or RSA into which the money
representing restricted non-preserved benefits or preserved benefits is to be
repaid.
(3) For paragraph 992A(4)(b) of the Act, if the right of return is exercised, the
responsible person must return the money as directed.
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Miscellaneous Division 8
Regulation 7.8.24
7.8.24 Right of return not to apply
For subparagraph 992A(4)(c)(i) of the Act, the following subclasses of financial
products are excluded from subsection 992A(4) of the Act:
(a) a financial product offered or issued under a distribution reinvestment plan
or switching facility;
(b) a financial product the acquisition of which is an additional contribution
required by an existing agreement or contract;
(c) a financial product issued as consideration for an offer made under a
takeover bid under Chapter 6 of the Act;
(d) an interim contract of insurance within the meaning of subsection 11(2) of
the Insurance Contracts Act 1984;
(e) a superannuation product that is issued in relation to:
(i) a non-public offer superannuation entity; or
(ii) a public offer superannuation entity mentioned in
paragraph 7.6.01(1)(b), (c) or (d);
(f) a risk insurance product that is:
(i) of less than 12 months duration; and
(ii) a renewal of an existing product on the terms and conditions to which
the product is currently subject.
7.8.25 Variation of amount to be repaid
For paragraph 992A(4)(b) of the Act, if a financial product is subject to a
distribution, the amount that would otherwise be repaid on the exercise of the
right to return the financial product may be reduced by the amount of that
distribution.
7.8.26 Exemption from application of section 992A of the Act
For paragraph 992C(1)(a) of the Act, section 992A of the Act does not apply to a
person to the extent that the person is offering a financial product for issue or
sale in relation to:
(a) a litigation funding scheme mentioned in regulation 5C.11.01; or
(b) a litigation funding arrangement mentioned in regulation 5C.11.01.
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Division 1 Preliminary
Regulation 7.9.01
Part 7.9—Financial product disclosure and other provisions
relating to issue and sale of financial products
Division 1—Preliminary
7.9.01 Interpretation
(1) In this Part:
amount includes a nil amount.
annuity has the same meaning as in regulation 1.05 of the SIS Regulations.
contact details, in relation to a superannuation entity, means:
(a) the name of the superannuation entity and, if relevant, of the sub-plan; and
(b) a contact address for the superannuation entity; and
(c) a contact person and telephone number for the contact person.
contact person, in relation to a superannuation entity, means a named individual,
or a person holding a designated office or position, who is available to receive
and deal with inquiries or complaints by product holders (as the case may be).
contribution includes a benefit that is rolled over or transferred to a fund.
exit charge means a charge that:
(a) is made against:
(i) a product holder’s benefits in a fund or financial product; or
(ii) a product holder or another person on the product holder’s behalf; and
(b) is only made when a payment is:
(i) made in respect of a product holder; or
(ii) transferred.
fund information:
(a) in relation to a superannuation product, means information:
(i) relating to the management, financial condition and investment
performance of either or both of a superannuation entity and any
relevant sub-plan (within the meaning of section 1017DA of the Act);
and
(ii) required to be given under this Division; and
(b) in relation to an RSA product, means information:
(i) relating to the management, financial condition and investment
performance of an RSA; and
(ii) required to be given under this Division.
fund reporting period means a reporting period for fund information.
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7.9
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Regulation 7.9.01
Government co-contribution means a Government co-contribution payable
under the Superannuation (Government Co-contribution for Low Income
Earners) Act 2003.
legal personal representative has the meaning given by section 10 of the SIS
Act.
lost member has the meaning given by the SIS regulations.
lost RSA holder has the meaning given by the RSA regulations.
net amount of Government co-contribution received means all amounts of
Government co-contributions credited to the member of a superannuation fund
(other than a self-managed superannuation fund) or an RSA holder, less any
amounts deducted by the superannuation provider or providers to reimburse it or
them for repaying a co-contribution amount to the Commissioner of Taxation,
during the reporting period.
net earnings means the investment return on the assets of a fund after payment
of transaction costs, government charges, taxes and duties and charges relating to
the management of investment of fund assets.
prescribed net earnings rate, in relation to a fixed-rate option offered by a
capital guaranteed fund for a period, means the net earnings rate declared, in
advance, by the fund.
remuneration, for an Australian financial services licensee or an authorised
representative, means a payment that:
(a) is made to the Australian financial services licensee or authorised
representative because a superannuation interest is issued to a member; and
(b) is not made under an agreement by which the member, or another person
on the member’s behalf, has retained the Australian financial services
licensee or authorised representative on a fee-for-service basis.
Note: Also see subregulation (5).
RSA has the meaning given by section 8 of the Retirement Savings Accounts Act
1997.
sub-fund, in relation to a capital guaranteed fund, means a segment of a public
offer superannuation fund that has the following characteristics:
(a) the sub-fund has separately identifiable assets and separately identifiable
beneficiaries;
(b) the interest of each beneficiary of the sub-fund is determined by reference
only to the conditions governing that sub-fund;
(c) there is no transfer of assets, benefits or money between the sub-fund and
another sub-fund without a transfer of a corresponding beneficial interest;
(d) the insurance and administration costs of the sub-fund are attributable only
to that sub-fund.
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Regulation 7.9.02
superannuation provider means any of the following:
(a) the trustee of a complying superannuation fund, within the meaning of
subsection 995-1(1) of the Income Tax Assessment Act 1997;
(b) the provider of an RSA, within the meaning of section 12 of the Retirement
Savings Accounts Act 1997;
(c) the trustee of a constitutionally protected fund, within the meaning of
subsection 995-1(1) of the Income Tax Assessment Act 1997.
transaction cost means:
(a) brokerage paid because of an investment transaction; or
(b) a cost arising from maintenance of a property investment; or
(c) stamp duty on an investment transaction.
unfunded defined benefits fund means a defined benefits fund under which all
or some of the amounts that will be required for the payment of a benefit are not
paid into the fund until the member concerned becomes entitled to receive the
benefit.
withdrawal benefit has the same meaning as in the SIS Regulations.
(2) In this Part, unless the contrary intention appears, a reference to a member is
taken to mean:
(a) in relation to a superannuation entity—a person who:
(i) is a member of the entity; or
(ii) receives a pension from the entity; or
(iii) has deferred his or her entitlement to receive a benefit from the entity;
and
(b) in relation to an approved deposit fund—a depositor in the fund; and
(c) in relation to a pooled superannuation trust—a unit-holder.
(3) In a Division of this Part, a reference to a fund is a reference to a fund of the kind
to which the Division applies.
(5) For the definition of remuneration, payment is taken to have been given to an
Australian financial services licensee or an authorised representative for issuing
an interest to a member if:
(a) issuing the interest is taken into account to increase the payment given to
the Australian financial services licensee or authorised representative for
other matters (for example, bonus commission); or
(b) the payment is given after the interest is issued and only if the member
remains a member of the fund (for example, trailing commission).
7.9.02 Sub-plans
(1) This regulation applies if the trustee of a regulated superannuation fund proposes
to make a determination as to whether a sub-plan should be made.
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Regulation 7.9.02A
(2) In making a determination, the trustee must have regard to all relevant matters,
including each of the following:
(a) whether there is a common factor in a segment of the fund (for example,
whether a group of members of the fund have the same employer);
(b) whether the governing rules of the fund provide for a particular segment to
be a sub-plan.
(3) For subsection 1017C(9) of the Act, the sub-plan is a relevant sub-plan.
(4) For paragraph 761E(7)(a) of the Act, if:
(a) a person is a member of a superannuation fund in relation to a sub-plan;
and
(b) either:
(i) the person’s membership changes to membership in relation to
another sub-plan; or
(ii) the person holds interests in 2 or more sub-plans at the same time;
the change to membership in relation to the other sub-plan is taken to be the issue
of a new interest in the superannuation fund.
(5) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to the fund (including a sub-plan) as set out in Part 1 of
Schedule 10A.
7.9.02A Alternative ways of giving Statement
(1) For subsection 1015C(4) of the Act, the following are alternative ways of giving
a Statement to a person:
(a) making the Statement available to the person in any way that:
(i) is agreed to by the person; and
(ii) allows the regulated person to be satisfied, on reasonable grounds,
that the person has received the Statement;
(b) making the Statement available to the person’s agent in any way that:
(i) is agreed to by the agent; and
(ii) allows the regulated person to be satisfied, on reasonable grounds,
that the agent has received the Statement.
(2) If a provision of the Act or these Regulations imposes additional requirements in
relation to a matter in subregulation (1), the alternative way of giving a
Statement is subject to the requirements.
Note: Regulation 7.9.02B is an example of an additional requirement.
7.9.02B Product Disclosure Statement in electronic form
(1) For paragraph 1015C(5)(b) of the Act, a statement that is to be given in
electronic form must, as far as practicable, be presented in a way that will allow
the person to whom it is given to keep a copy of it so that the person can have
ready access to it in the future.
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Division 1 Preliminary
Regulation 7.9.02B
(2) A statement that is to be given in electronic form must be presented in a way that
clearly identifies the information that is part of the statement.
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7.9
Arrangements for Product Disclosure Statements in relation to superannuation products and RSA
products Division 2
Regulation 7.9.03
Division 2—Arrangements for Product Disclosure Statements in
relation to superannuation products and RSA products
Subdivision 2.1—Preliminary
7.9.03 Application of Division 2
This Division applies in relation to superannuation products and RSA products.
Note: See paragraphs 764A(1)(g) and (h) of the Act.
Subdivision 2.2—Late provision of Product Disclosure Statement for
certain members of regulated superannuation fund, public offer
superannuation fund or successor fund
7.9.04 Product Disclosure Statement to be provided later
(1) For section 1012F of the Act, the following superannuation products are
specified:
(a) a superannuation interest issued by the trustee of a regulated
superannuation fund that is not a public offer superannuation fund, other
than:
(ii) a financial product taken to be issued because of regulation 7.1.04E;
or
(iii) an annuity or pension taken to be issued because of
subregulation 7.9.02(4); or
(iv) an interest in a self-managed superannuation fund that is not acquired
at the time that the fund is established;
(b) a pension issued by a superannuation fund the rules of which do not allow
a member to receive accumulated benefits in a form other than a pension
from that fund;
(c) a superannuation interest issued by the trustee of a successor fund in
relation to the transfer of benefits in the fund;
(d) a superannuation interest issued by the trustee of a regulated
superannuation fund as a result of complying with a commutation authority
issued to the trustee under Subdivision 136-B in Schedule 1 to the Taxation
Administration Act 1953.
(2) For paragraph 1020G(1)(c) of the Act:
(a) section 1012B of the Act is modified in its application in relation to the
specified superannuation product as set out in Part 17 of Schedule 10A;
and
(b) section 1012I of the Act is modified in its application in relation to the
specified superannuation product as set out in Part 17 of Schedule 10A.
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Division 2 Arrangements for Product Disclosure Statements in relation to superannuation products and
RSA products
Regulation 7.9.05
Subdivision 2.3—Product Disclosure Statement for retirement savings
account
7.9.05 Situation in which Product Disclosure Statement is not required
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to an RSA product as set out in Part 2 of Schedule 10A.
Subdivision 2.4—Additional obligations for eligible rollover funds
7.9.06A Relevant superannuation entities
For the definition of relevant superannuation entity in subsection 1016A(1) of
the Act, a public offer superannuation entity is specified.
7.9.06B Application forms
(1) For paragraph 1016A(2)(f) of the Act, the following situation in which a
restricted issue occurs is prescribed:
(a) the financial product is a superannuation product;
(b) the interest is issued by the trustee of a public offer superannuation entity
in relation to the payment of benefits to the entity:
(i) from an EPSSS; and
(ii) in accordance with an application made under the provisions of
section 243 of the SIS Act, as applied by subregulation (2) (the
applied provisions);
(c) if the application is the first application under the applied provisions made
to the trustee of the public offer superannuation entity by the trustee of the
EPSSS on behalf of any person—the application is an eligible application.
(2) For paragraph (1)(b), section 243 of the SIS Act applies in relation to the
payment of benefits from the EPSSS to a public offer superannuation entity as if:
(a) a reference in that section to a transferor fund were a reference to the
EPSSS; and
(b) a reference in that section to an eligible rollover fund were a reference to
the public offer superannuation entity.
Subdivision 2.5—Product Disclosure Statement for insurance options
7.9.07 Modification of Act: Product Disclosure Statement in relation to
insurance options
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to a superannuation entity or an RSA as set out in Part 3 of
Schedule 10A.
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7.9
Product Disclosure Statement for warrants Division 2A
Regulation 7.9.07A
Division 2A—Product Disclosure Statement for warrants
7.9.07A Warrants
(1) This regulation applies in relation to warrants.
(2) For paragraph 1020G(2)(a) of the Act, section 1010A of the Act is modified by
adding after subsection 1010A(1):
‘(1A) Despite subsection (1), this Part applies in relation to a financial product to
which regulation 7.9.07A of the Corporations Regulations 2001 applies.’.
(3) For paragraph 761E(7)(a) of the Act, if the financial product is entered into, or
acquired, on a financial market through an arrangement made by a financial
services licensee acting on behalf of another person:
(a) the financial services licensee is not taken to be the issuer of the financial
product; and
(b) the warrant issuer is taken to be the issuer of the financial product.
(4) For paragraph 761E(7)(a) of the Act, if the financial product is entered into, or
acquired, on a financial market through an arrangement made by an authorised
representative of a financial services licensee acting on behalf of another person
(not being the licensee):
(a) the financial services licensee is not taken to be the issuer of the financial
product; and
(b) the warrant issuer is taken to be the issuer of the financial product.
(5) For paragraph 1013F(2)(f) of the Act:
(a) information that is, or is required to be, disclosed to the market in relation
to the underlying thing from which a warrant derives its value, including
information published by a market operator in relation to financial products
(including warrants and types of warrants) in the form of market data or
educational material which is generally made available to the public by the
market operator is a matter that may be taken into account for
section 1013F of the Act; and
(b) other information that a market operator is required to disclose to the
market, in accordance with the Act, including:
(i) information that was required to be disclosed to the market operator;
and
(ii) information that the operator was required to disclose in order to meet
its obligations under the Act;
is a matter that may be taken into account for section 1013F of the Act; and
(c) information that is generally made available to the public by a market
operator in relation to financial products, including information published
about a warrant that is entered into or acquired on a financial market in the
form of market data or educational material, is a matter that may be taken
into account for section 1013F of the Act.
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Division 2A Product Disclosure Statement for warrants
Regulation 7.9.07A
(6) For paragraph 1017B(3)(c) of the Act, a way in which the warrant issuer may
notify a holder of a matter to which that paragraph applies is by giving the
relevant information to the operator of the financial market on which the warrant
was entered into or acquired.
(7) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to a
warrant as if the words ‘but not more than 3 months after, the change or event
occurs’ in item 1 of the table in subsection 1017B(5) of the Act were omitted.
(8) In this regulation:
warrant issuer, in relation to a warrant, means the person who:
(a) determines the terms of the warrant, including the rights and conditions of
the warrant; and
(b) is responsible for obligations owed under the terms of the warrant.
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7.9
Product Disclosure Statement for market-traded derivatives Division 2B
Regulation 7.9.07B
Division 2B—Product Disclosure Statement for market-traded
derivatives
7.9.07B Product Disclosure Statements for certain market-traded derivatives
(1) For paragraph 1020G(1)(c) of the Act, subregulations (2) and (3) apply if:
(a) the standard terms and conditions relating to a type of derivative are:
(i) specified by the market operator; and
(ii) made generally available to the public; and
(b) the financial services licensee in relation to the derivative is taken to be the
issuer of the derivative under subsection 761E(6) of the Act; and
(c) a retail client for the derivative has agreed to the terms and conditions as
applicable to the financial product or products that are the subject of the
transaction.
(2) Subsection 1013D(1) of the Act is modified in its application to the derivative as
if the information required by paragraphs 1013D(1)(b), (c), (d) and (f) were
required to be included as general information about the type of derivative,
including, for example:
(a) general information about exercise prices for the type of derivative; and
(b) general information about expiry dates for the type of derivative; and
(c) general information about exercise styles for the type of derivative.
(3) For paragraph 1013F(2)(f) of the Act:
(a) information that is, or is required to be, disclosed to the market in relation
to the underlying thing from which a derivative derives its value, including
information published by a market operator in relation to financial products
(including derivatives and types of derivatives) in the form of market data
or educational material which is generally made available to the public by
the market operator is a matter that may be taken into account for
section 1013F of the Act; and
(b) other information that a market operator is required to disclose to the
market, in accordance with the Act, including:
(i) information that was required to be disclosed to the market operator;
and
(ii) information that the operator was required to disclose in order to meet
its obligations under the Act;
is a matter that may be taken into account for section 1013F of the Act; and
(c) information that is generally made available to the public by a market
operator in relation to financial products, including information published
about derivatives and types of derivatives in the form of market data or
educational material, is a matter that may be taken into account for
section 1013F of the Act.
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products
Division 2B Product Disclosure Statement for market-traded derivatives
Regulation 7.9.07C
7.9.07C Remedies for Product Disclosure Statements for certain market-traded
derivatives
For paragraph 1016F(7)(a) of the Act, financial products that are derivatives are
excluded from section 1016F if the operating rules of a licensed market or a
licensed CS facility permit the closing out of the derivatives by the matching up
of the arrangement with another arrangement of the same kind under which a
person has assumed an offsetting position.
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7.9
Product Disclosure Statement for discretionary mutual funds Division 2BA
Regulation 7.9.07CA
Division 2BA—Product Disclosure Statement for discretionary
mutual funds
7.9.07CA Extension of Product Disclosure Statement requirements to wholesale
clients
(1) For paragraph 949B(1)(e) of the Act, a regulated person must give a wholesale
client a Product Disclosure Statement or a Supplementary Product Disclosure
Statement for a financial product if:
(a) the financial product is offered or issued by a discretionary mutual fund
(within the meaning given by subsections 5(5) and (6) of the Financial
Sector (Collection of Data) Act 2001); and
(b) the regulated person would be required to give the Statement if the product
were offered or issued to a retail client.
(2) The Product Disclosure Statement or Supplementary Product Disclosure
Statement required to be given under this regulation must be the same as that
which would be given to a retail client.
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products
Division 2C Situations where a Product Disclosure Statement is not required
Regulation 7.9.07D
Division 2C—Situations where a Product Disclosure Statement is not
required
7.9.07D Product Disclosure Statement not required for offers of bundled
contracts of insurance
For paragraph 1020G(1)(c) of the Act, section 1012D of the Act is modified by
adding before subsection 1012D(10):
‘(9G) In an issue situation or a sale situation, the regulated person does not have
to give the client a Product Disclosure Statement for a financial product if:
(a) the financial product is a general insurance product; and
(b) the product would be provided to the person as a retail client; and
(c) the financial product would be provided as part of a contract of
insurance that offers more than one kind of insurance cover; and
(d) the regulated person reasonably believes that the client does not
intend to acquire the product.
7.9.07E Product Disclosure Statement not required if offer of financial product
is declined
For paragraph 1020G(1)(c) of the Act, section 1012D of the Act is modified by
adding before subsection 1012D(10):
‘(9J) In an issue situation or sale situation, the regulated person does not have to
give the client a Product Disclosure Statement for a financial product if:
(a) the situation is an offer to issue or sell the financial product; and
(b) the client informs the regulated person, in the course of the contact
during which the offer is made, that the client does not intend to
acquire the financial product; and
(c) no issue or sale results from the offer.
(9K) For paragraph (9J)(c), the client must inform the regulated person explicitly
but may inform the regulated person orally or in any other way.’.
7.9.07F Product Disclosure Statement not required if the client is not
contactable
For paragraph 1020G(1)(c) of the Act, section 1012D of the Act is modified by
adding before subsection 1012D(10):
‘(9L) In an issue situation, the regulated person does not have to give the client a
Product Disclosure Statement, if:
(a) the regulated person has not given the client a Product Disclosure
Statement because the regulated person did not need to give a Product
Disclosure Statement at or before the time when it would otherwise be
required to be given because of the operation of section 1012F or
1012G of the Act, regulation 7.9.04 or Part 17 of Schedule 10A; and
(b) either:
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Situations where a Product Disclosure Statement is not required Division 2C
Regulation 7.9.07FA
(i) the regulated person:
(A) has an address for the client; and
(B) is satisfied, on reasonable grounds that the address is
incorrect; and
(C) has taken reasonable steps to locate the client but is
unable to do so; or
(ii) the regulated person:
(A) does not have an address for the client; and
(B) is unable to obtain an address for the client; and
(C) has taken reasonable steps to locate the client but has
been unable to do so.
(9M) If a regulated person does not give a client a Product Disclosure Statement
in reliance on subsection (9L), and the regulated person becomes aware of
the address or location of the client, the regulated person must give the
client a Product Disclosure Statement as soon as practicable.’.
7.9.07FA Product Disclosure Statement not required for certain specified
products
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1012D of the Act were modified by inserting the following subsection
after subsection 1012D(7):
‘Recommendation, issue or sale situation—when Product Disclosure Statement
not required
(7A) In a recommendation situation, an issue situation or a sale situation, the regulated
person does not have to give the client a Product Disclosure Statement for the
financial product if:
(a) the product is:
(i) a basic deposit product; or
(ii) a facility for making non-cash payments (see section 763D) that is
related to a basic deposit product; or
(iii) a traveller’s cheque; and
(b) the regulated person has provided information about the cost of the product
(if any) to the client; and
(c) the regulated person has informed the client as to whether or not any
amounts will or may be payable by the holder of the product, in respect of
the product, after its acquisition; and
(ca) if the product is a protected account under the Banking Act 1959—the
regulated person has informed the client that:
(i) the account-holder may be entitled to payment under the financial
claims scheme; and
(ii) payments under the scheme are subject to a limit for each depositor;
and
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Division 2C Situations where a Product Disclosure Statement is not required
Regulation 7.9.07FB
(iii) information about the financial claims scheme can be obtained from
the APRA website at http://www.apra.gov.au and the APRA hotline
on 1300 13 10 60; and
(d) the regulated person has asked the client whether or not the client would
like further information about the amounts mentioned in paragraph (c); and
(e) if the client indicates that the client would like the further information
about the amounts mentioned in paragraph (c)—the regulated person has
provided that information.’.
7.9.07FB Product Disclosure Statement not required if client not in this
jurisdiction
For paragraph 1020G(1)(c) of the Act, section 1012D of the Act is modified by
inserting after subsection 1012D(8):
“(8A) In a recommendation situation, an issue situation or a sale situation, the regulated
person does not have to give the client a Product Disclosure Statement for the
financial product if the client is not in this jurisdiction.”
7.9.07FC Product Disclosure Statement not required general insurance situation
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified by adding
after section 1014E of the Act the following section:
“1014EA General insurance product situation in which only a supplementary
product disclosure statement need be given
(1) This section applies if:
(a) a person (the client) acquires a general insurance product (the original
product) from another person (the regulated person); and
(b) the client received a Product Disclosure Statement (the original PDS)
relating to the product as required by the Act; and
(c) the contract of insurance provides a renewable insurance cover (within the
meaning of subsection 58(1) of the Insurance Contracts Act 1984); and
(d) the regulated person offers to renew the client’s contract of insurance (the
new product); and
(e) the regulated person is required to give the client a Product Disclosure
Statement (the new PDS) relating to the new product; and
(f) the original PDS contains some but not all of the information that the new
PDS is required to contain.
(2) The regulated person may give the client a new PDS.
(3) If the regulated person does not give the client a new PDS, the regulated person
must give the client a supplementary Product Disclosure Statement that contains
the additional information.
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Regulation 7.9.07FC
(4) If the regulated person gives the client a supplementary Product Disclosure
Statement under subsection (3), for the purposes of this Act:
(a) the original PDS is taken to be the new PDS; and
(b) the new PDS is taken to have been given to the client as required by this
Act.”
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products
Division 2D Preparation and content of Product Disclosure Statements
Regulation 7.9.07J
Division 2D—Preparation and content of Product Disclosure
Statements
7.9.07J Only 1 responsible person for a Product Disclosure Statement
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1013A of the Act were modified by adding after subsection 1013A(3):
‘(3A) A Product Disclosure Statement for a product that is not a jointly issued
product may be prepared by, or on behalf of, only 1 responsible person.’.
7.9.07K Definition of defective: Product Disclosure Statement, Short-Form PDS
or Replacement Product Disclosure Statement
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1022A of the Act were varied by omitting paragraph (b) of the definition
of defective in subsection (1) and the following paragraph were inserted:
‘(b) if it is a Product Disclosure Statement, a Short-Form PDS or a
Replacement Product Disclosure Statement—either:
(i) it is not prepared in accordance with section 1013A; or
(ii) there is an omission from the Product Disclosure Statement,
Short-Form PDS or Replacement Product Disclosure Statement of
material required by section 1013C, other than material required by
section 1013B or 1013G; or’.
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7.9
Obligation to make information publicly available: registrable superannuation entities Division 2E
Regulation 7.9.07L
Division 2E—Obligation to make information publicly available:
registrable superannuation entities
Subdivision 2E.1—Obligation to make product dashboard publicly
available
7.9.07L Modification of Act
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1017BA of the Act were modified as set out in Part 6A of Schedule 10A.
7.9.07M Source of power for this Subdivision
This Subdivision is made for paragraphs 1017BA(1)(c) and (e) and
subsection 1017BA(2) of the Act.
7.9.07N Definitions
In this Subdivision:
lifecycle exception has the meaning given by subsection 29TC(2) of the SIS Act.
lifecycle MySuper product means a MySuper product to which a lifecycle
exception applies.
lifecycle stage, of a MySuper product offered by a regulated superannuation
fund, means a subclass of members of the fund who hold the MySuper product,
determined on the basis of:
(a) age; or
(b) age and the factors mentioned in regulation 9.47 of the SIS Regulations.
offering period means:
(a) for a MySuper product other than a lifecycle MySuper product:
(i) if the MySuper product has been offered for less than 10 financial
years and there is no predecessor product—the number of whole
financial years for which the product has been offered; or
(ii) if the MySuper product and a predecessor product have been offered
for a total of less than 10 financial years—the number of whole
financial years for which the products have been offered; or
(b) for a lifecycle stage of a lifecycle MySuper product:
(i) if the lifecycle stage of the MySuper product has been offered for less
than 10 financial years and there is no equivalent lifecycle stage of a
predecessor product—the number of whole financial years for which
the lifecycle stage has been offered; or
(ii) if the lifecycle stage of the MySuper product and an equivalent
lifecycle stage of a predecessor product have been offered for a total
of less than 10 financial years—the number of whole financial years
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Division 2E Obligation to make information publicly available: registrable superannuation entities
Regulation 7.9.07P
for which the lifecycle stage of the MySuper product and the
predecessor product have been offered.
predecessor product, in relation to a MySuper product, means a default
investment option in existence on 30 June 2013 in relation to which, if a
member’s accrued default amount were attributed to the MySuper product, the
RSE licensee would be exempted from disclosure requirements under
subregulation 9.46(2) of the SIS Regulations.
reporting standard means a reporting standard determined by APRA under
subsection 13(1) of the Financial Sector (Collection of Data) Act 2001, as in
force from time to time.
7.9.07P Meaning of MySuper product dashboard reporting standards
For this Subdivision, a reporting standard is a MySuper product dashboard
reporting standard if the reporting standard contains a clause stating that it
relates to information that will be included in a product dashboard for a MySuper
product.
7.9.07Q Product dashboard—how information must be set out
(1) Information for a MySuper product must be set out in a product dashboard as
follows (including the headings):
PRODUCT DASHBOARD
Return target
Return
Comparison between return target and return
Level of investment risk
Statement of fees and other costs
(2) For a lifecycle MySuper product, the information mentioned in each item of the
table must be set out in relation to each lifecycle stage of the product.
7.9.07R Product dashboard—return target
(1) The return target for a MySuper product other than a lifecycle MySuper product
must be worked out in accordance with the MySuper product dashboard
reporting standards.
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Regulation 7.9.07S
(2) The return target for a lifecycle MySuper product must be worked out in relation
to each lifecycle stage of the product in accordance with the MySuper product
dashboard reporting standards.
(3) The period in relation to which the return target must be worked out is the period
of 10 years starting at the beginning of the current financial year.
7.9.07S Product dashboard—return
MySuper product other than lifecycle MySuper product
(1) The return for a MySuper product other than a lifecycle MySuper product must
be worked out in accordance with the MySuper product dashboard reporting
standards.
(2) The period in relation to which the return must be worked out is:
(a) the last 10 whole financial years, if:
(i) the MySuper product has been offered for at least 10 financial years;
or
(ii) the MySuper product and a predecessor product have been offered for
a total of at least 10 financial years; or
(b) the offering period.
Lifecycle MySuper product
(3) The return for a lifecycle MySuper product must be worked out in relation to
each lifecycle stage of the product in accordance with the MySuper product
dashboard reporting standards.
(4) The period in relation to which the return in relation to a lifecycle stage of a
lifecycle MySuper product must be worked out is:
(a) the last 10 whole financial years, if:
(i) the lifecycle stage of the MySuper product has been offered for at
least 10 financial years; or
(ii) the lifecycle stage of the MySuper product and an equivalent stage of
a predecessor product have been offered for a total of at least 10
financial years; or
(b) the offering period.
7.9.07T Product dashboard—comparison between return target and return
MySuper product other than lifecycle MySuper product
(1) The comparison between the return target and the return for a MySuper product
other than a lifecycle MySuper product must be worked out in accordance with
the MySuper product dashboard reporting standards.
(2) The period in relation to which the comparison must be worked out is:
(a) the last 10 whole financial years, if:
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Regulation 7.9.07U
(i) the MySuper product has been offered for at least 10 financial years;
or
(ii) the MySuper product and a predecessor product, or a lifecycle stage
have been offered for a total of at least 10 financial years; or
(b) the offering period.
Lifecycle MySuper product
(3) The comparison between the return target and the return for a lifecycle MySuper
product must be worked out in relation to each lifecycle stage of the product in
accordance with the MySuper product dashboard reporting standards.
(4) The period in relation to which the comparison in relation to a lifecycle stage of a
MySuper product must be worked out is:
(a) the last 10 whole financial years, if:
(i) the lifecycle stage of the MySuper product has been offered for at
least 10 financial years; or
(ii) the lifecycle stage of the MySuper product and an equivalent stage of
a predecessor product have been offered for a total of at least 10
financial years; or
(b) the offering period.
7.9.07U Comparison to be set out as a graph
(1) A product dashboard must set out a comparison mentioned in regulation 7.9.07T
as a graph.
(2) The graph must contain:
(a) a column representing the return for each year in the comparison period;
and
(b) a line representing the moving average return target for the comparison
period; and
(c) a line representing the moving average return for the comparison period.
(3) The column and the lines mentioned in subregulation (2) must be identified in
accordance with the MySuper product dashboard reporting standards.
(4) In this regulation:
comparison period means the period mentioned in subregulation 7.9.07S(3) that
is applicable in the circumstances.
moving average return has the meaning given by the MySuper product
dashboard reporting standards.
moving average return target has the meaning given by the MySuper product
dashboard reporting standards.
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Regulation 7.9.07V
7.9.07V Product dashboard—level of investment risk
(1) The level of investment risk for a MySuper product other than a lifecycle
MySuper product must be worked out in accordance with the MySuper product
dashboard reporting standards.
(2) The level of investment risk for a lifecycle MySuper product must be worked out
in relation to each lifecycle stage of the product in accordance with the MySuper
product dashboard reporting standards.
(3) The level of investment risk must be expressed using the relevant risk label set
out in the MySuper product dashboard reporting standards.
(4) The period in relation to which the level of investment risk must be worked out
is the current financial year.
7.9.07W Product dashboard—statement of fees and other costs
(1) The statement of fees and other costs for a MySuper product other than a
lifecycle MySuper product must be worked out in accordance with the MySuper
product dashboard reporting standards.
(2) The statement of fees and other costs for a lifecycle MySuper product must be
worked out in relation to each lifecycle stage of the product in accordance with
the MySuper product dashboard reporting standards.
(3) The period in relation to which the statement of fees and other costs must be
worked out is the current financial year.
(4) For paragraph 1017BA(1)(c) of the Act, the period is 14 days after a change to
the fees or other costs.
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Part 7.9 Financial product disclosure and other provisions relating to issue and sale of financial
products
Division 3 Dealing with money received for financial product before the product is issued
Regulation 7.9.08
Division 3—Dealing with money received for financial product before
the product is issued
7.9.08 Accounts
(1) For subparagraph 1017E(2)(a)(ii) of the Act, the following accounts are
prescribed:
(a) an account with a foreign deposit taking institution that is regulated by a
foreign regulatory body that ASIC has approved in writing for this
paragraph;
(b) an account with a cash management trust;
(c) a statutory fund under section 29 of the Life Insurance Act 1995.
(2) For paragraph 1017E(2)(c) of the Act, a product provider to which
subsection 1017E(2) of the Act applies must:
(a) operate an account to which paragraph 1017E(2)(a) of the Act applies as a
trust account; and
(b) designate the account to be a trust account; and
(c) hold all moneys paid into the account on trust for the benefit of the person
who is entitled to the moneys.
(3) For paragraph 1020G(1)(c) of the Act, if money received under section 1017E of
the Act is paid into an account under subregulation 7.8.01(6), Part 7.8 of the Act
applies to the money.
Note: See also subregulation 7.8.01(7).
(4) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1017E of the Act were modified by omitting paragraph 1017E(2)(b) and
inserting the following paragraph:
‘(b) any money may be paid into the account, provided that:
(i) money to which this section applies; and
(ii) interest on the amount from time to time standing to the credit of the
account;
is identified and held in accordance with all other provisions of this
section; and’.
7.9.08A Dealing with interest
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1017E of the Act were modified by adding after subsection 1017E(2C):
‘(2D) In relation to money to which this section applies:
(a) the product provider is entitled to the interest on the account; and
(b) the interest on the account is not required to be paid into the account;
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Dealing with money received for financial product before the product is issued Division 3
Regulation 7.9.08B
only if the product provider discloses to the person who paid the money
that the product provider is keeping the interest (if any) earned on the
account.’.
7.9.08B Crediting of payments before money is received
(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1017E of the Act were modified by adding after subsection 1017E(1):
‘(1A) This section also applies to money paid by a product provider in the
following circumstances:
(a) the product provider knows, or believes on reasonable grounds, that
money (the client’s money) will be paid to the product provider to
acquire, or acquire an increased interest in, one or more of the
financial products mentioned in paragraph (1)(a) or (b) from the
product provider (whether or not the acquisition would be by a person
as a retail client);
(b) either:
(i) the financial product or increased interest was offered in this
jurisdiction; or
(ii) the application for the financial product or increased interest
was made in this jurisdiction; or
(iii) the money will be received in this jurisdiction;
(c) before receiving the client’s money, the product provider pays an
equivalent amount of money (the product provider’s money) into an
account described in subsection (2).’.
(2) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1017E of the Act were modified by adding after subsection 1017E(5):
‘(5A) If subsection (1A) applies:
(a) the product provider is not required to comply with this section in
relation to the client’s money; and
(b) subsections (2A), (2B), (2C), (2D), (3), (4), (5) and (6) apply to the
product provider’s money as if the money had been paid by the person
who paid, or is expected to pay, the client’s money.’.
(3) For paragraph 1017E(3)(d) of the Act, money may be taken out of an account if:
(a) the circumstances described in the modified subsection 1017E(1A) of the
Act exist; and
(b) after paying the product provider’s money, the product provider becomes
aware, or has reasonable grounds to believe, that the client’s money will
not be paid.
7.9.08C Money held in trust for a superannuation product or RSA product
For subsection 1017E(2C) of the Act, if money is paid to a product provider for a
financial product that is a superannuation product or an RSA product, as defined
in section 761A of the Act:
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Regulation 7.9.08D
(a) subsection 1017E(2A) of the Act does not apply in relation to the money;
and
(b) the money is taken to be held in trust by the product provider for the
benefit of the person who is entitled to the money.
7.9.08D Statutory funds under the Life Insurance Act 1995
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to an
account mentioned in paragraph 7.9.08(1)(c) of these Regulations as if
paragraph 1017E(2)(b) were omitted.
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Content of Product Disclosure Statements Division 4
Regulation 7.9.09
Division 4—Content of Product Disclosure Statements
Subdivision 4.1—Preliminary
7.9.09 Application of Division 4
(1) This Division applies in relation to:
(a) superannuation products; and
(b) RSA products; and
(c) annuity products; and
(e) a margin loan; and
(f) a superannuation product to which Subdivision 4.2B of Division 4 of
Part 7.9 applies; and
(g) a simple managed investment scheme to which Subdivision 4.2C of
Division 4 of Part 7.9 applies.
(2) Each of the Subdivisions of this Division has an application provision:
(a) stating the types of entity in relation to which the Subdivision applies; and
(b) referring to any provisions that limit or restrict the application of the
Subdivision or a particular provision.
Note: Information content requirements are set out in the main provisions of section 1013D
of the Act. These Regulations set out a more detailed statement of the information
required under subsection 1013D(1) that the retail clients of superannuation products
and RSA products would reasonably require for the purpose of making a decision
whether to acquire the financial product.
Subdivision 4.1A—No Product Disclosure Statement for carbon units,
Australian carbon credit units and eligible international
emissions units
7.9.09A Application of Subdivision
This Subdivision applies:
(a) to a person who, apart from this Subdivision, would be required to give a
Product Disclosure Statement for a carbon unit, an Australian carbon credit
unit or an eligible international emissions unit; and
(b) in relation to a carbon unit, an Australian carbon credit unit or an eligible
international emissions unit.
7.9.09B Provisions of Part 7.9 of Act that do not apply in relation to carbon
units, Australian carbon credit units and eligible international
emissions units
For paragraph 1020G(1)(b) of the Act, the following provisions of Part 7.9 of the
Act do not apply in relation to a carbon unit, an Australian carbon credit unit or
an eligible international emissions unit:
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Regulation 7.9.09C
(a) subparagraph 1012A(3)(b)(i);
(b) subparagraph 1012A(3)(b)(ii);
(c) subparagraph 1012B(3)(a)(ii);
(d) paragraph 1012C(3)(b);
(e) paragraph 1012C(4)(c);
(f) subsection 1012C(6);
(g) section 1013A;
(h) section 1013B;
(i) section 1013C;
(j) section 1013D;
(k) section 1013E;
(l) section 1013F;
(m) section 1013G.
7.9.09C Modification of Act
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application to a carbon unit, an Australian carbon credit unit or an eligible
international emissions unit as set out in Part 19 of Schedule 10A.
Subdivision 4.2A—Form and content of Product Disclosure Statement for
margin loan
7.9.11 Application of Subdivision 4.2A
This Subdivision applies to:
(a) a person who is required to prepare a Product Disclosure Statement for a
margin loan; and
(b) a Product Disclosure Statement for a margin loan.
7.9.11A Provisions of Part 7.7 of Act that do not apply in relation to margin loan
For paragraph 951C(1)(b) of the Act, section 942DA of the Act does not apply in
relation to a margin loan.
7.9.11B Definitions for Subdivision 4.2A
(1) In this Subdivision and in Schedule 10C:
Approved Securities List means the list of secured properties that are acceptable
for the provider or potential provider of a margin loan as security for the margin
loan and includes the amount of credit the provider will give for each of the
properties.
(2) In this Subdivision and in Schedule 10C, a provision of the Act that is modified
in accordance with regulation 7.9.11C is referred to as modified.
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Regulation 7.9.11C
Example: Paragraphs 1013C(1)(a) and (b) of the Act as modified by subitem 5A.2(1) of Part 5A
of Schedule 10A are referred to in this Subdivision as ‘modified paragraphs
1013C(1)(a) and (b)’.
7.9.11C Modification of Act—margin loan
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application to a margin loan as set out in Part 5A of Schedule 10A.
7.9.11D Form and content of Product Disclosure Statement for margin loan
(1) For modified paragraph 1013C(1)(a) of the Act, a Product Disclosure Statement
for a margin loan must include the information and statements mentioned in
Schedule 10C.
(2) For modified paragraph 1013C(1)(b) of the Act, a Product Disclosure Statement
for a margin loan must be in the form mentioned in Schedule 10C.
7.9.11E Requirements for references to incorporated information for margin
loan
(1) For subsection 1013C(1D) of the Act, as modified by Part 5A of Schedule 10A,
this regulation prescribes requirements for applying, adopting or incorporating,
in a Product Disclosure Statement for a margin loan, a matter contained in
writing.
(2) A Product Disclosure Statement may apply, adopt or incorporate a matter only if
a provision of these Regulations requires or permits the matter to be applied,
adopted or incorporated by the Statement.
(3) If a Product Disclosure Statement applies, adopts or incorporates a matter:
(a) the matter must be:
(i) in writing; and
(ii) clearly distinguishable from any other matters that are not applied,
adopted or incorporated; and
(iii) publicly available in a document other than the Statement; and
(b) the responsible person for the Statement must identify the matter by:
(i) including in the Statement a concise description of the matter; and
(ii) ensuring that the reference to the matter is clearly distinguishable
from the other contents of the Statement; and
(c) the responsible person for the Statement must:
(i) identify each version of the matter (by including the date on which the
version was prepared) so that a person who, at a particular time, is
considering a margin loan can identify the version that is relevant to
the margin loan at that time; and
(ii) state the date on which the version was prepared in a prominent
position at or near the front of the version; and
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Regulation 7.9.11F
(d) the responsible person for the Statement must ensure that a person who is
relying on the Statement is able to have access to:
(i) the matter; or
(ii) if there is more than 1 version of the matter—each version;
reasonably easily and reasonably quickly.
(4) The responsible person for the Product Disclosure Statement must also ensure
that the Statement includes the statements in the following table relating to the
matter, and sets them out in each place at which the matter has been applied,
adopted or incorporated.
Item Statement
You should read the important information about [the subject] before making a decision. Go
to [location of the matter that has been applied, adopted or incorporated]
The material relating to [matter] may change between the time when you read this Statement
and the day when you sign the application form
(5) The responsible person for the Product Disclosure Statement must also ensure
that each document mentioned in subregulation (3) includes the statement in the
following table relating to the matter.
Item Statement
The information in this document forms part of the Product Disclosure Statement
[identification by name, date and version (if applicable) of each Statement]
(6) For the avoidance of doubt:
(a) the giving of a Product Disclosure Statement to which this Subdivision
applies is taken to be the giving of every matter that is applied, adopted or
incorporated in accordance with subregulations (1) to (5); and
(b) if a document mentioned in subparagraph (3)(a)(iii) refers to more than one
PDS, the document:
(i) must include a statement to the effect that the information in the
document forms part of the Product Disclosure Statement offered by
the responsible entity; but
(ii) is not required to name each Product Disclosure Statement of which it
forms part.
(7) If the Product Disclosure Statement applies, adopts or incorporates a matter, the
information dealing with the matter is taken to have been given to a person on
the day on which the person signs the application form accompanying the
Statement.
7.9.11F Retention of copies of Product Disclosure Statement for margin loan
(1) The responsible person for a Product Disclosure Statement for a margin loan
must retain a copy of each version of the Statement that the responsible person
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Regulation 7.9.11G
issues for a period of 7 years starting on the day on which the version is
prepared.
(2) The responsible person for the Product Disclosure Statement must retain a copy
of the document from which a matter is applied, adopted or incorporated by the
Statement as mentioned in paragraph 7.9.11E(3)(c) for a period of 7 years
commencing on the day on which the Statement is prepared.
(3) If a document from which a matter is adopted, applied or incorporated by the
Product Disclosure Statement as mentioned in paragraph 7.9.11E(3)(c) is
changed in a way that changes the description of, or reference to, the matter, the
responsible person for the Statement must retain a copy of the document for a
period of 7 years commencing on the day on which the document is changed.
7.9.11G Requirement to provide copy of Product Disclosure Statement for
margin loan free of charge
(1) For paragraph 1015C(5)(a) of the Act, this regulation specifies requirements as
to the manner in which a Product Disclosure Statement for a margin loan must be
given to a person if the person requests a copy of the Statement.
(2) The responsible person for the Product Disclosure Statement must give the
person, free of charge:
(a) a copy of the Statement within 8 business days; and
(b) a copy of a matter in writing that is applied, adopted or incorporated by the
Statement within 8 business days.
7.9.11H Notification about change to Approved Securities List or current
interest rate for margin loan
(1) For paragraph 1017B(1A)(b) of the Act, a change to the Approved Securities List
or current interest rate for a margin loan is specified.
(2) For paragraph 1017B(3)(c) of the Act, the issuer of the margin loan must notify
the holder of the change by:
(a) sending notice of the change to the holder:
(i) by pre-paid post to a postal address nominated by the holder; or
(ii) to an email address nominated by the holder; or
(b) placing a notice on a webpage that is likely to come to the holder’s
attention if the holder is monitoring the holder’s margin loan.
Subdivision 4.2B—Content of Product Disclosure Statement for
superannuation product
7.9.11K Application of Subdivision 4.2B
(1) This Subdivision applies to:
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Regulation 7.9.11L
(a) a superannuation trustee that is required to prepare a Product Disclosure
Statement for a superannuation product; and
(b) a Product Disclosure Statement for a superannuation product.
(2) However, this Subdivision does not apply to the following financial products:
(a) an interest in a superannuation product that is solely a defined benefit
interest;
(b) a superannuation product that is solely a pension product;
(c) a superannuation product that has no investment component (also known as
a risk-only superannuation product).
7.9.11L Provisions of Part 7.7 of Act that do not apply in relation to
superannuation product
For paragraph 951C(1)(b) of the Act, section 942DA of the Act does not apply in
relation to a superannuation product.
7.9.11LA Attribution of accrued default amount to MySuper product—
exemption from significant event notice requirements
For paragraph 1020G(1)(a) of the Act, a person is exempt from section 1017B of
the Act in relation to the attribution or transfer of an accrued default amount if
the person:
(a) is an RSE licensee within the meaning of the Superannuation Industry
(Supervision) Act 1993; and
(b) must comply with a requirement under regulation 9.46 of the
Superannuation Industry (Supervision) Regulations 1994 in relation to the
attribution or transfer.
7.9.11LB Attribution of accrued default amount to MySuper product—
modification of significant event notice requirements
If a person:
(a) is an RSE licensee within the meaning of the Superannuation Industry
(Supervision) Act 1993; and
(b) is exempted under subregulation 9.46(2) of the Superannuation Industry
(Supervision) Regulations 1994 from notice requirements in relation to the
attribution or transfer of an accrued default amount;
then, for paragraph 1020G(1)(c) of the Act, section 1017B of the Act applies to
the person as if subsection 1017B(4) were omitted and the following subsection
were substituted:
(4) The notice must mention the following:
(a) the accrued default amount that was attributed or transferred;
(b) the name of the MySuper product to which the amount was attributed or
transferred;
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Regulation 7.9.11M
(c) how the member may obtain a product disclosure statement for the
MySuper product;
(d) any other information that the member needs to understand the attribution
or transfer.
7.9.11M Provisions of Part 7.9 of Act that do not apply in relation to
superannuation product
(1) For paragraph 1020G(1)(b) of the Act, Subdivision D of Division 2 of Part 7.9 of
the Act does not apply in relation to a superannuation product.
(2) If a person:
(a) proposes to prepare a Product Disclosure Statement or a supplementary
Product Disclosure Statement for a superannuation product during the
period commencing on the day on which this subregulation commences
and ending on 22 June 2012; and
(b) is permitted to decide, in accordance with regulation 4 of the Corporations
Amendment Regulations 2010 (No. 5), to prepare the Product Disclosure
Statement or supplementary Product Disclosure Statement in accordance
with Subdivision D of Division 2 of Part 7.9 of the Act; and
(c) prepares the Product Disclosure Statement or supplementary Product
Disclosure Statement in accordance with that Subdivision;
the preparation of the Product Disclosure Statement or supplementary Product
Disclosure Statement is taken to be full compliance with all requirements of
Part 7.9 of the Act and these Regulations relating to how the Product Disclosure
Statement or supplementary Product Disclosure Statement is to be prepared.
Note: The Corporations Amendment Regulations 2010 (No. 5) amended these Regulations to
make new arrangements for the preparation of Product Disclosure Statements for
superannuation products, including identifying that Subdivision D of Division 2 of
Part 7.9 of the Act would no longer apply. However, the transitional arrangements in
subregulations 4(1) to (7) of the Amendment Regulations allowed certain persons to
decide to rely on Subdivision D of Division 2 of Part 7.9 of the Act for the purpose of
preparing the Product Disclosure Statement.
7.9.11N Modification of Act—superannuation product
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application to a superannuation product to which this Subdivision applies as set
out in Part 5B of Schedule 10A.
7.9.11O Form and content of Product Disclosure Statement for superannuation
product
(1) For modified paragraph 1013C(1)(a) of the Act, a Product Disclosure Statement
for a superannuation product to which this Subdivision applies must include the
information and statements mentioned in Schedule 10D.
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Regulation 7.9.11P
(2) For modified paragraph 1013C(1)(b) of the Act, a Product Disclosure Statement
for a superannuation product to which this Subdivision applies must be in the
form mentioned in Schedule 10D.
7.9.11P Requirements for references to incorporated information for
superannuation product
(1) For subsection 1013C(1D) of the Act, as modified by Part 5B of Schedule 10A,
this regulation prescribes requirements for applying, adopting or incorporating,
in a Product Disclosure Statement for a superannuation product to which this
Subdivision applies, a matter contained in writing.
(2) A Product Disclosure Statement may apply, adopt or incorporate a matter only if
a provision of these Regulations requires or permits the matter to be applied,
adopted or incorporated by the Statement.
(3) If a Product Disclosure Statement applies, adopts or incorporates a matter:
(a) the matter must be:
(i) in writing; and
(ii) clearly distinguishable from any other matters that are not to be
applied, adopted or incorporated; and
(iii) if the superannuation product is not issued to a standard
employer-sponsored member within the meaning of the
Superannuation Industry (Supervision) Act 1993—publicly available
in a document other than the Statement; and
(b) the responsible person for the Statement must identify the matter by:
(i) including in the Statement a concise description of the matter; and
(ii) ensuring that the reference to the matter is clearly distinguishable
from the other contents of the Statement; and
(c) the responsible person for the Statement must:
(i) identify each version of the matter (by including the date on which the
version was prepared) so that a person who, at a particular time, is
considering a superannuation product can identify the version that is
relevant to the superannuation product at that time; and
(ii) state the date on which a version was prepared in a prominent position
at or near the front of the version; and
(d) the responsible person for the Statement must ensure that a person who is
relying on the Statement is able to have access to:
(i) the document containing the matter; or
(ii) if there is more than 1 version of the document containing the
matter—each version;
reasonably easily and reasonably quickly.
(4) The responsible person for the Product Disclosure Statement must also ensure
that the Statement includes the statements in the following table relating to the
matter, and sets them out in each place at which the matter has been applied,
adopted or incorporated.
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Item Statement
You should read the important information about [the subject] before making a decision. Go
to [location of the matter that has been applied, adopted or incorporated]
The material relating to [matter] may change between the time when you read this Statement
and the day when you acquire the product
(5) The responsible person for the Product Disclosure Statement must also ensure
that each document mentioned in subregulation (3) includes the statement in the
following table relating to the matter.
Item Statement
The information in this document forms part of the Product Disclosure Statement
[identification by name, date and version (if applicable) of each Statement]
(6) For the avoidance of doubt, the giving of a Product Disclosure Statement to
which this Subdivision applies is taken to be the giving of every matter that is
applied, adopted or incorporated in accordance with subregulations (1) to (5).
(7) If the Product Disclosure Statement applies, adopts or incorporates a matter, the
information dealing with the matter is taken to have been given to a person on
the day on which the product is acquired.
7.9.11Q Retention of copies of Product Disclosure Statement for superannuation
product
(1) This regulation applies if:
(a) section 1015B of the Act does not apply to require a Product Disclosure
Statement to be lodged with ASIC; and
(b) the Statement is for a superannuation product to which this Subdivision
applies.
(2) The responsible person for the Product Disclosure Statement must retain a copy
of each version of the Statement that the responsible person issues for a period of
7 years starting on the day on which the version is prepared.
(3) The responsible person for the Product Disclosure Statement must retain a copy
of the document from which a matter is applied, adopted or incorporated by the
Statement as mentioned in paragraph 7.9.11P(3)(c) for a period of 7 years
commencing on the day on which the Statement is prepared.
(4) If a document from which a matter is adopted, applied or incorporated by the
Product Disclosure Statement as mentioned in paragraph 7.9.11P(3)(c) is
changed in a way that changes the description of, or reference to, the matter, the
responsible person for the Statement must retain a copy of the document for a
period of 7 years commencing on the day on which the document is changed.
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Regulation 7.9.11R
7.9.11R Requirement to provide copy of Product Disclosure Statement for
superannuation product free of charge
(1) For paragraph 1015C(5)(a) of the Act, this regulation specifies requirements as
to the manner in which a Product Disclosure Statement for a superannuation
product to which this Subdivision applies must be given to a person if the person
requests a copy of the Statement.
(2) The responsible person for the Product Disclosure Statement must give the
person, free of charge:
(a) a copy of the Statement within 8 business days; and
(b) a copy of a matter in writing that is applied, adopted or incorporated by the
Statement within 8 business days.
Subdivision 4.2C—Content of Product Disclosure Statement for simple
managed investment scheme
7.9.11S Application of Subdivision 4.2C
(1) This Subdivision applies to:
(a) a person that is required to prepare a Product Disclosure Statement for a
simple managed investment scheme; and
(b) a Product Disclosure Statement for a simple managed investment scheme.
(2) This Subdivision does not apply to the extent that the simple managed
investment scheme relates to a financial product (known as a “quoted product”)
which is, or is intended to be, traded on a prescribed financial market.
(3) This Subdivision does not apply to the extent that the simple managed
investment scheme relates to a financial product (known as a “stapled security”)
to which the following requirements apply:
(a) the product consists of interests in 2 or more financial products;
(b) the interests include at least 1 interest in a registered scheme;
(c) under the terms on which each of the interests is to be traded, the interests
must be transferred together;
(d) there are no financial products in the same class as the interests which may
be transferred separately.
(4) This Subdivision does not apply to the extent that the simple managed
investment scheme is a managed investment scheme that has a constitution that
provides that:
(a) a member may direct that an amount of money corresponding to part or all
of the amount invested by the member in the scheme be invested in
accessible investments; and
(b) the distributions of capital and income from the scheme to the member in
relation to the member’s interests in the scheme will be determined by
reference to amounts received by the responsible entity or a custodian in
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Regulation 7.9.11T
relation to the accessible investments acquired in accordance with the
direction.
7.9.11T Provisions of Part 7.7 of Act that do not apply in relation to simple
managed investment scheme
For paragraph 951C(1)(b) of the Act, section 942DA of the Act does not apply in
relation to a simple managed investment scheme to which this Subdivision
applies.
7.9.11U Provisions of Part 7.9 of Act that do not apply in relation to simple
managed investment scheme
(1) For paragraph 1020G(1)(b) of the Act, Subdivision D of Division 2 of Part 7.9 of
the Act does not apply in relation to a simple managed investment scheme to
which this Subdivision applies.
(2) If a person:
(a) proposes to prepare a Product Disclosure Statement or a supplementary
Product Disclosure Statement for a simple managed investment scheme to
which this Subdivision applies during the period commencing on the day
on which this subregulation commences and ending on 22 June 2012; and
(b) is permitted to decide, in accordance with regulation 4 of the Corporations
Amendment Regulations 2010 (No. 5), to prepare the Product Disclosure
Statement or supplementary Product Disclosure Statement in accordance
with Subdivision D of Division 2 of Part 7.9 of the Act; and
(c) prepares the Product Disclosure Statement or supplementary Product
Disclosure Statement in accordance with that Subdivision;
the preparation of the Product Disclosure Statement or supplementary Product
Disclosure Statement is taken to be full compliance with all requirements of
Part 7.9 of the Act and these Regulations relating to how the Product Disclosure
Statement or supplementary Product Disclosure Statement is to be prepared.
Note: The Corporations Amendment Regulations 2010 (No. 5) amended these Regulations to
make new arrangements for the preparation of Product Disclosure Statements for
simple managed investment schemes, including identifying that Subdivision D of
Division 2 of Part 7.9 of the Act would no longer apply. However, the transitional
arrangements in subregulations 4(1) to (7) of the Amendment Regulations allowed
certain persons to decide to rely on Subdivision D of Division 2 of Part 7.9 of the Act
for the purpose of preparing the Product Disclosure Statement.
7.9.11V Modification of Act—simple managed investment scheme
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application to a simple managed investment scheme to which this Subdivision
applies as set out in Part 5C of Schedule 10A.
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Division 4 Content of Product Disclosure Statements
Regulation 7.9.11W
7.9.11W Form and content of Product Disclosure Statement for simple managed
investment scheme
(1) For modified paragraph 1013C(1)(a) of the Act, a Product Disclosure Statement
for a simple managed investment scheme to which this Subdivision applies must
include the information and statements mentioned in Schedule 10E.
(2) For modified paragraph 1013C(1)(b) of the Act, a Product Disclosure Statement
for a simple managed investment scheme to which this Subdivision applies must
be in the form mentioned in Schedule 10E.
7.9.11X Requirements for references to incorporated information for simple
managed investment scheme
(1) For subsection 1013C(1D) of the Act, as modified by Part 5C of Schedule 10A,
this regulation prescribes requirements for applying, adopting or incorporating,
in a Product Disclosure Statement for a simple managed investment scheme to
which this Subdivision applies, a matter contained in writing.
(2) A Statement may apply, adopt or incorporate a matter only if a provision of these
Regulations requires or permits the matter to be applied, adopted or incorporated
by the Statement.
(3) If a Product Disclosure Statement applies, adopts or incorporates a matter:
(a) the matter must be:
(i) in writing; and
(ii) clearly distinguishable from any other matters that are not applied,
adopted or incorporated; and
(iii) publicly available in a document other than the Statement; and
(b) the responsible person for the Statement must identify the matter by:
(i) including in the Statement a concise description of the matter; and
(ii) ensuring that the reference to the matter is clearly distinguishable
from the other contents of the Statement; and
(c) the responsible person for the Statement must:
(i) identify each version of the matter (by including the date on which the
version was prepared) so that a person who, at a particular time, is
considering a simple managed investment scheme to which this
Subdivision applies can identify the version that is relevant to the
simple managed investment scheme at that time; and
(ii) state the date on which the version was prepared in a prominent
position at or near the front of the version; and
(d) the responsible person for the Statement must ensure that a person who is
relying on the Statement is able to have access to:
(i) the matter; or
(ii) if there is more than 1 version of the matter—each version;
reasonably easily and reasonably quickly.
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(4) The responsible person for the Product Disclosure Statement must also ensure
that the Statement includes the statements in the following table relating to the
matter, and sets them out in each place at which the matter has been applied,
adopted or incorporated.
Item Statement
You should read the important information about [the subject] before making a decision. Go
to [location of the matter that has been applied, adopted or incorporated]
The material relating to [matter] may change between the time when you read this Statement
and the day when you acquire the product
(5) The responsible person for the Product Disclosure Statement must also ensure
that each document mentioned in subregulation (3) includes the statement in the
following table relating to the matter.
Item Statement
The information in this document forms part of the Product Disclosure Statement
[identification by name, date and version (if applicable) of each Statement]
(6) For the avoidance of doubt:
(a) the giving of a Product Disclosure Statement to which this Subdivision
applies is taken to be the giving of every matter that is applied, adopted or
incorporated in accordance with subregulations (1) to (5); and
(b) if a document mentioned in subparagraph (3)(a)(iii) refers to more than one
PDS, the document:
(i) must include a statement to the effect that the information in the
document forms part of the Product Disclosure Statement offered by
the responsible entity; but
(ii) is not required to name each Product Disclosure Statement of which it
forms part.
(7) If the Product Disclosure Statement applies, adopts or incorporates a matter, the
information dealing with the matter is taken to have been given to a person on
the day on which the product is acquired.
7.9.11Y Retention of copies of Product Disclosure Statement for simple managed
investment scheme
(1) The responsible person for a Product Disclosure Statement for a simple managed
investment scheme to which this Subdivision applies must retain a copy of each
version of the Statement that the responsible person issues for a period of 7 years
starting on the day on which the version is prepared.
(2) The responsible person for the Product Disclosure Statement must retain a copy
of the document from which a matter is applied, adopted or incorporated by the
Statement as mentioned in paragraph 7.9.11X(3)(c) for a period of 7 years
commencing on the day on which the Statement is prepared.
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(3) If a document from which a matter is adopted, applied or incorporated by the
Product Disclosure Statement as mentioned in paragraph 7.9.11X(3)(c) is
changed in a way that changes the description of, or reference to, the matter, the
responsible person for the Statement must retain a copy of the document for a
period of 7 years commencing on the day on which the document is changed.
7.9.11Z Requirement to provide copy of Product Disclosure Statement for
simple managed investment scheme free of charge
(1) For paragraph 1015C(5)(a) of the Act, this regulation specifies requirements as
to the manner in which a Product Disclosure Statement for a simple managed
investment scheme to which this Subdivision applies must be given to a person if
the person requests a copy of the Statement.
(2) The responsible person for the Product Disclosure Statement must give the
person, free of charge:
(a) a copy of the Statement within 8 business days; and
(b) a copy of a matter in writing that is applied, adopted or incorporated by the
Statement within 8 business days.
Subdivision 4.3—Other arrangements for Product Disclosure Statements
and application forms
7.9.12 Modification of Act: Product Disclosure Statements and application forms
for standard employer-sponsors and successor funds
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to superannuation products and RSA products as set out in
Part 6 of Schedule 10A.
7.9.13 Offer of superannuation interest without application or eligible
application
(1) For paragraph 1016A(4)(a) of the Act, if a trustee of a public offer entity issues a
superannuation interest in the entity to a person without first receiving an
application, or an eligible application, the trustee is taken not to have
contravened section 1016A of the Act if:
(a) the entity is a standard employer-sponsored fund; and
(b) the person holds the interest as a standard employer-sponsored member of
the entity; and
(c) after issuing the interest, the trustee makes reasonable efforts:
(i) to obtain an application or eligible application (as the case requires
under paragraph 1016A(2)(b) or (c) of the Act) from the person’s
standard employer-sponsor; or
(ii) to obtain an eligible application mentioned in paragraph 1016A(2)(a)
of the Act from the person; and
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(d) if the trustee has not obtained the application or eligible application within
90 days after issuing the interest, the trustee does not accept any more
contributions from the standard employer-sponsor in respect of the person
until the trustee receives the application or eligible application.
(2) For paragraph 1016A(4)(b) of the Act, if a trustee has not obtained the
application or eligible application under subregulation (1) within 90 days after
issuing the interest, the trustee must not intentionally or recklessly accept any
more contributions from the standard employer-sponsor in respect of the person
until the trustee receives the application or eligible application.
Penalty:
(a) for an individual—50 penalty units; and
(b) for a body corporate—500 penalty units.
(3) Subregulation (2) does not apply if the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subregulation (2)
(see subsection 13.3(3) of the Criminal Code).
(4) Strict liability applies to subregulation (2).
Note: For strict liability, see section 6.1 of the Criminal Code.
7.9.14 Remedies for person acquiring financial product under defective Product
Disclosure Statement: superannuation and RSAs
(1) This regulation applies to a financial product:
(a) that is:
(i) a superannuation product to which requirements of the SIS Act
relating to preservation rules and cashing restrictions apply; or
(ii) an RSA product to which requirements of the RSA Regulations
relating to preservation rules and cashing restrictions apply; and
(b) that has been issued or sold in contravention of section 1016E of the Act.
(2) For subsection 1016F(3) of the Act, to exercise a right of return for the financial
product in circumstances in which the moneys paid to acquire the financial
product are subject to the preservation rules and cashing restrictions, the client
must:
(a) nominate a superannuation entity or RSA into which the monies subject to
the preservation rules and cashing restrictions, and to which preservation
conditions apply, are to be repaid; and
(b) make the nomination not later than 1 month after notifying the responsible
person of the right to exercise the right of return.
(2A) The right of return is taken to have been exercised only on receipt by the
responsible person of the nomination.
(3) The client must notify the responsible person in writing or by electronic means.
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(4) For subsection 1016F(6) of the Act, the responsible person must repay the
monies as directed.
(5) For subsection 1019B(7) of the Act, if:
(a) a financial product mentioned in this regulation is subject to the nomination
of a further superannuation entity or RSA; and
(b) the application in relation to the financial product is not accepted by the
nominated superannuation entity or RSA;
the responsible person may rollover or transfer the client’s benefits to an eligible
rollover fund.
7.9.14A Treatment of arrangements under which a person can instruct another
person to acquire a financial product
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if the
definition of instruction in subsection 1012IA(1) of the Act were modified by
adding at the end ‘, including a direction to follow an investment strategy
mentioned in paragraph 52(4)(a) of the Superannuation Industry (Supervision)
Act 1993’.
Subdivision 4.4—Product information for certain insurance products
7.9.14B Product information
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to financial products as if:
(a) that Part applied to a financial product mentioned in
paragraph 7.1.14(2)(d); and
(b) the following section were inserted after section 1019B of the Act:
‘1019C Information about certain vehicle insurance
(1) This section applies in relation to the issue of a financial product
mentioned in paragraph 7.1.14(2)(d) of the Corporations Regulations 2001.
(2) The product issuer of the financial product must, as soon as practicable
after issuing the financial product, give the holder of the financial product a
statement that contains the information mentioned in paragraphs
1013D(1)(a) and (b) unless:
(a) the product holder already has a statement containing that
information; or
(b) the product issuer believes on reasonable grounds that the product
holder has already received a statement containing that information.
(3) The product issuer must give the statement in the same way as a Product
Disclosure Statement is to be given under subsection 1015C.
(4) The product issuer is not required to comply with any other requirements in
Divisions 2 to 6 (inclusive) in relation to the issue of the financial product.
(5) The product issuer must not refuse, or intentionally or recklessly fail, to
comply with subsections (2) and (3).
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Penalty:
(a) for an individual—50 penalty units; and
(b) for a body corporate—500 penalty units.
(6) Subsection (5) does not apply to the extent that the product issuer has a
reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subsection (6A), see subsection 13.3(3) of the Criminal Code.
(7) Divisions 1 and 7 do not apply in relation to the product issuer in relation
to the financial product mentioned in paragraph 7.1.14(2)(d) of the
Corporations Regulations 2001.’.
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Regulation 7.9.14C
Division 4A—General
7.9.14C Labour standards and environmental, social and ethical considerations
For paragraph 1013D(4)(c) of the Act, the more detailed information to be
included in a Product Disclosure Statement about the extent to which labour
standards or environmental, social or ethical considerations are taken into
account in the selection, retention or realisation of an investment is:
(a) a statement that the product issuer does, or does not, take into account
labour standards for the purpose of selecting, retaining or realising the
investment; and
(b) a statement that the product issuer does, or does not, take into account
environmental, social or ethical considerations for the purpose of selecting,
retaining or realising the investment; and
(c) if the Product Disclosure Statement includes a statement that the product
issuer does take into account labour standards for the purpose of selecting,
retaining or realising the investment—a statement outlining:
(i) the standards that the product issuer considers to be labour standards
for that purpose; and
(ii) the extent to which the product issuer takes those standards into
account in the selection, retention or realisation of the investment; and
(d) if the Product Disclosure Statement includes a statement that the product
issuer does take into account environmental, social or ethical
considerations for the purpose of selecting, retaining or realising the
investment—a statement outlining:
(i) the considerations that the product issuer regards as environmental,
social or ethical considerations for that purpose; and
(ii) the extent to which the product issuer takes those considerations into
account in the selection, retention or realisation of the investment.
7.9.14D Further statements required in Product Disclosure Statement—
financial claims scheme
(1) For paragraph 1013D(1)(k) of the Act, the following further statements must be
included in a Product Disclosure Statement that relates to a protected policy
issued by a general insurer or a protected account issued by an authorised
deposit-taking institution:
(a) if the Product Disclosure Statement relates to a protected policy—a
statement that:
(i) the person entitled to claim under insurance cover under a protected
policy may be entitled to payment under the financial claims scheme;
and
(ii) access to the scheme is subject to eligibility criteria;
(b) if the Product Disclosure Statement relates to a protected account—a
statement that:
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(i) the account-holder may be entitled to payment under the financial
claims scheme; and
(ii) payments under the scheme are subject to a limit for each depositor;
(c) a statement that information about the scheme can be obtained from the
APRA website at http://www.apra.gov.au and the APRA hotline on
1300 13 10 60.
(2) In this regulation:
authorised deposit-taking institution has the meaning given by subsection 5(1)
of the Banking Act 1959.
financial claims scheme means:
(a) the scheme provided for in Division 2AA of Part II of the Banking Act
1959; and
(b) the scheme provided for in Part VC of the Insurance Act 1973.
general insurer has the meaning given by section 11 of the Insurance Act 1973.
protected account has the meaning given by subsections 5(4) to (7) of the
Banking Act 1959.
protected policy has the meaning given by subsection 3(1) of the Insurance Act
1973.
7.9.15 More detailed information in Product Disclosure Statement: unauthorised
foreign insurer
(1) For paragraph 1013D(4)(c) of the Act, the more detailed information that must
be included in a Product Disclosure Statement that relates to a financial product
issued by an unauthorised foreign insurer is:
(a) a statement that the product issuer is:
(i) an unauthorised foreign insurer; and
(ii) not authorised under the Insurance Act 1973 to conduct insurance
business in Australia; and
(b) a statement that an insurer of that kind is not subject to the provisions of
the Insurance Act 1973, which establishes a system of financial supervision
of general insurers in Australia; and
(c) a statement that the person should consider whether to obtain further
information, including:
(i) the country in which the product issuer is incorporated, and whether
the country has a system of financial supervision of insurers; and
(ii) the paid up capital of the product issuer; and
(iii) which country’s laws will determine disputes in relation to the
financial product; and
(d) a statement that an insurer of that kind cannot be a declared general insurer
for the purpose of Part VC of the Insurance Act 1973, and, if the insurer
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becomes insolvent, the person will not be covered by the financial claims
scheme provided under Part VC of that Act.
(2) In this regulation:
unauthorised foreign insurer means:
(a) an insurer that:
(i) does not have an authority under the Insurance Act 1973 to carry on
insurance business; and
(ii) is not a person who, because of section 5 of that Act, is not required to
have such an authority; and
(iii) carries on insurance business outside Australia and the external
Territories to which the Insurance Act 1973 extends; or
(b) if a direction is in force under section 74 of the Insurance Act 1973—a
Lloyd’s underwriter.
7.9.15A Product Disclosure Statements—requirement to state information as
amounts in dollars
(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
paragraph 1013D(1)(m) of the Act were modified to read as follows:
‘(m) unless, in accordance with the regulations and a determination by
ASIC, information to be disclosed in accordance with paragraphs (b),
(d) and (e) must be stated as amounts in dollars.’.
(2) For paragraph 1020G(1)(a) of the Act, an issuer of a financial product does not
have to provide the information mentioned in paragraph 1013D(1)(m) of the Act
in the form required by that paragraph, in a Product Disclosure Statement
prepared before 1 January 2005.
7.9.15B Product Disclosure Statements—disclosure of dollar amounts
(1) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 1013D(1)(b), (d) or (e) as an amount in dollars, the information may
be set out as a description of the benefit, cost, amount or payment as a percentage
of a specified matter (including worked dollar examples, unless that is
inappropriate).
(2) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling
reason, it is not possible to state information to be disclosed in accordance with
paragraph 1013D(1)(b), (d) or (e) as an amount in dollars, or to describe the
amount as a percentage, the information may be set out as a description of the
method of calculating the benefit, cost, amount or payment (including worked
dollar examples, unless that is inappropriate).
(3) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
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7.9.15C Product Disclosure Statements—disclosure of dollar amounts
(1) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling
reason based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(2) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling
reason, based on the nature of a financial product or service, or the nature of the
information, to state the information as an amount in dollars, or to describe the
amount as a percentage:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the method of calculating the
charge or benefit (including worked dollar examples, unless that is
inappropriate).
(3) A determination under subregulation (1) or (2) must be:
(a) in writing; and
(b) published in the Gazette.
(4) For paragraph 1013D(1)(m) of the Act, for a Product Disclosure Statement that is
required in relation to a general insurance product, if:
(a) information is required to be stated in dollars; and
(b) the amount can only be determined:
(i) after the responsible person assesses the risk of the insured; or
(ii) after the insured has nominated desired levels of insurance cover;
the responsible person may comply with the requirement to state the information
by either of the ways mentioned in subregulation (5).
(5) For subregulation (4), the responsible person may state the information by:
(a) stating an amount in dollars in the Product Disclosure Statement; or
(b) giving to the insured:
(i) a document containing the information, as soon as practicable (but in
any case, not later than 5 business days after the responsible person
issues the general insurance product); and
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(ii) a statement in the Product Disclosure Statement that sets out the
information in at least 1 of the following formats:
(A) as a range of amounts in dollars;
(B) as a percentage of a matter that is mentioned in the statement;
(C) as a description.
7.9.15CA Less information in Product Disclosure Statement—financial claims
scheme
(1) This regulation applies from 18 April 2010 to 11 October 2011.
(2) For paragraph 1013D(4)(b) of the Act, paragraphs 1013D(1)(b) and (f) of the Act
do not require a Product Disclosure Statement to contain information relating to
Division 2AA of Part II of the Banking Act 1959 or Part VC of the Insurance Act
1973.
7.9.15D Less information in product disclosure statement: general insurance
product
For paragraph 1013D(4)(a) of the Act, the following provisions do not apply to a
Product Disclosure Statement that relates to a general insurance product:
(a) paragraph 1013D(1)(c);
(b) subparagraph 1013D(1)(d)(iii);
(c) paragraph 1013D(1)(e);
(d) paragraph 1013D(1)(h);
(e) paragraph 1013D(1)(j);
(f) paragraph 1013D(1)(l).
7.9.15DA Statement or information not included in a Product Disclosure
Statement
(1) For paragraph 1020G(1)(c) of the Act, and subject to subregulation (1A) and (4),
a responsible person is not required to include a statement or information
mentioned in Part 7.9 of the Act in a Product Disclosure Statement if:
(a) the statement or information is in writing and is publicly available in a
document other than the Product Disclosure Statement; and
(b) the Product Disclosure Statement:
(i) refers to the statement or information; and
(ii) provides sufficient details about the statement or information to
enable a person:
(A) to identify by a unique identifier the document, or part of the
document, that contains the statement or information; and
(B) to locate the statement or information; and
(C) to decide whether or not to read the statement or information
or obtain a copy of the statement or information; and
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(iii) states that a copy of the statement or information may be obtained
from the responsible person on request, at no charge; and
(c) the statement or information is not a statement or information that is in a
Short-Form Product Disclosure Statement.
(1A) This regulation does not apply if the Product Disclosure Statement is for:
(a) a margin loan; or
(b) a superannuation product to which Subdivision 4.2B of Division 4 of
Part 7.9 applies; or
(c) a simple managed investment scheme to which Subdivision 4.2C of
Division 4 of Part 7.9 applies.
(2) If the client requests a copy of the statement or information that the responsible
person is not required to include in accordance with subregulation (1), the
responsible person must provide the copy as soon as practicable, at no charge.
(3) If a statement or information is not included in a Product Disclosure Statement
because of subregulation (1), the statement or information is taken to be included
in the Product Disclosure Statement.
(4) Despite subregulation (3), if a responsible person does not include a statement or
information in a Product Disclosure Statement in accordance with
subregulation (1), the responsible person must include the following information
in the Product Disclosure Statement:
(a) for information required by paragraph 1013D(1)(b) or (f) of the Act—a
description, in summary, of the purpose and key features of the product;
(b) for information required by paragraph 1013D(1)(c) of the Act—a
description, in summary, of the key risks of the product;
(c) the information required by:
(i) paragraphs 1013D(1)(a), (g) and (i) of the Act; and
(ii) Divisions 1 and 2 of Part 2 of Schedule 10; and
(iii) paragraphs 209(e) and (h) of Division 4 of Part 2 of Schedule 10; and
(iv) Divisions 5 and 6 of Part 2 of Schedule 10;
(d) the Consumer Advisory Warning in Division 7 of Part 2 of Schedule 10.
7.9.15DB Requirement to keep record of Product Disclosure Statement and
other documents
(1) If section 1015B of the Act does not require a copy of a Product Disclosure
Statement to be lodged with ASIC, the Statement and a document, or part of a
document, mentioned in the Statement must be retained by the responsible
person for that Statement for 7 years after the date of the Statement.
Note: Responsible person has the same meaning as in section 1011B of the Act.
(2) This regulation does not apply if the Product Disclosure Statement is for:
(a) a margin loan; or
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(b) a superannuation product to which Subdivision 4.2B of Division 4 of
Part 7.9 applies; or
(c) a simple managed investment scheme to which Subdivision 4.2C of
Division 4 of Part 7.9 applies.
7.9.15DC Requirement to lodge documents mentioned in a Product Disclosure
Statement with ASIC
(1) A document, or part of a document, mentioned in a Product Disclosure Statement
that was required to be lodged with ASIC under section 1015B of the Act must
be lodged with ASIC as if the document, or part of the document, were a
Statement within the meaning of section 1015B of the Act.
(2) This regulation does not apply if the Product Disclosure Statement is for:
(a) a margin loan; or
(b) a superannuation product to which Subdivision 4.2B of Division 4 of
Part 7.9 applies; or
(c) a simple managed investment scheme to which Subdivision 4.2C of
Division 4 of Part 7.9 applies.
7.9.15E More detailed information in product disclosure statement: general
insurance product
For paragraph 1013D(4)(c) of the Act, the more detailed statement of the
information, for paragraph 1013D(1)(f), that must be included in a Product
Disclosure Statement that relates to a general insurance product is:
(a) the terms and conditions of the policy document (within the meaning of the
Insurance Contracts Act 1984) being terms and conditions that are not
provided in a Schedule to the policy document; and
(b) information that, if the issuer were seeking to rely on subsection 35(2) and
section 37 of the Insurance Contracts Act 1984, the issuer would have had
to provide to the insured before the contract of insurance was entered into.
7.9.15F Product disclosure statement: general insurance product
For paragraph 1020G(1)(b) of the Act, Part 7.9 of the Act applies to general
insurance products as if subparagraph 1013C(1)(a)(ii) and section 1013E were
omitted.
7.9.15FA Transitional arrangements for regulations 7.9.15D, 7.9.15E and
7.9.15F
(1) If, at any time during the transition period, a Product Disclosure Statement for a
general insurance product complies with the requirements of old sections 1013C
and 1013D, the Product Disclosure Statement is taken to comply with the
requirements of:
(a) sections 1013C and 1013D of the Act; and
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Regulation 7.9.15G
(b) the provisions of any regulations made for the purposes of, or modifying,
sections 1013C and 1013D of the Act;
as in force at that time.
(2) In this regulation:
commencing day means the day on which this regulation commences.
old sections 1013C and 1013D means:
(a) sections 1013C and 1013D of the Act; and
(b) the provisions of any regulations made for the purposes of, or modifying,
those sections;
as in force immediately before the commencing day.
transition period means the period starting on the commencing day and ending
at the end of 30 June 2008.
Note: Before the commencement of this regulation, transitional arrangements in similar terms
were provided for regulations 7.9.15D, 7.9.15E and 7.9.15F by item 2 of Schedule 5 to
the Corporations Amendment Regulations 2005 (No. 5) (SLI 2005 No. 324).
7.9.15G Business days
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
paragraph 1019B(3)(b) were modified by omitting “5th day” and substituting
“fifth business day”.
7.9.15H New section 1012G: product disclosure statement may sometimes be
provided later
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
section 1012G were omitted and the following section were substituted:
“1012G Product disclosure statement may sometimes be provided later:
financial products subject to a cooling off period
Application of section
(1) The regulated person may deal with a financial product under this section only if
the financial product is one for which an application form is not required under
section 1016A and section 1019B (cooling off period) will apply if the client
enters into a legal obligation to acquire the product pursuant to the
recommendation or offer that constitutes the relevant conduct.
No need to give Product Disclosure Statement in certain circumstances
(2) In a recommendation situation or an issue situation, the regulated person need
not give the client a Product Disclosure Statement for the financial product at or
before the time when it would otherwise be required to be given if:
(a) the client expressly instructs the regulated person that they require:
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Regulation 7.9.15H
(i) in a recommendation situation—the advice constituting the
recommendation; or
(ii) in an issue situation—the financial product;
to be provided or issued immediately, or by a specified time; and
(b) it is not reasonably practicable, while complying with the client’s
instructions, to give the client the Product Disclosure Statement at or
before the time when it would otherwise be required to be given.
The regulated person must comply instead with subsection (3).
Requirements to be complied with to be able to give Product Disclosure
statement later
(3) The regulated person must:
(a) at or before the time referred to in paragraph (2)(b), orally communicate
the following information to the client:
(i) the name and contact details of the issuer of the financial product;
(ii) information about the cooling off regime that applies in respect of
acquisitions of the product (whether this regime is provided for by law
or otherwise);
(iii) that the client should consider the information in the Product Disclosure Statement that will be provided to the client;
(iv) the further information (if any) requested by the client in response to a
question under paragraph (b); and
(b) at or before the time referred to in paragraph (2)(b), ask the client whether
the client would like further information about the financial product; and
(c) give the client the Product Disclosure Statement as soon as practicable after
that time, and in any event not later than:
(i) the time when the confirmation requirement (if applicable) is
complied with; or
(ii) the end of the fifth business day after the day on which the financial
product was issued or sold to the client.
How information to be communicated
(4) The information referred to in paragraph (3)(a) must be communicated in a clear,
concise and effective manner.
How confirmation requirement to be complied with
(5) For the purposes of subparagraph (3)(c)(i), the confirmation requirement is
complied with when:
(a) the client receives confirmation, as mentioned in paragraph 1017F(5)(a), of
the transaction by which they acquired the financial product; or
(b) confirmation of that transaction is available to the client by a facility as
mentioned in paragraph 1017F(5)(b).”
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Regulation 7.9.15I
7.9.15I Modification of section 1012IA
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
subparagraph 1012IA(4)(b)(ii) were omitted and the following subparagraph was
inserted:
“(ii) subsection 1012G(3) applies in relation to the provider, the client and the regulated acquisition as if the reference to the regulated person were instead a reference to the provider, as if subparagraph 1012G(3)(c)(i) were omitted and as if the reference in subparagraph 1012G(3)(c)(ii) to the day on which the financial product was issued or sold to the client were instead a reference to the day on which the regulated acquisition occurs.”
7.9.16 More detailed information in Product Disclosure Statement: consumer
credit insurance product
(1) For paragraph 1013D(4)(c) of the Act, the more detailed information that must
be included in a Product Disclosure Statement that relates to a consumer credit
insurance product is:
(a) a brief explanation of the purposes of consumer credit insurance; and
(b) an outline statement of general areas covered by the consumer credit
insurance product, or the kind of consumer credit insurance product; and
(c) a statement that it is important that the insured read the Product Disclosure
Statement carefully to understand the extent of cover provided by the
consumer credit insurance product, and its limitations; and
(d) if all of the following matters apply under the consumer credit insurance
product:
(i) a person who applies for, or obtains, consumer credit insurance is not
obliged to buy the consumer credit insurance;
(ii) cover is provided under the consumer credit insurance product in
respect of losses caused by certain contingencies;
(iii) the extent of loss to the consumer credit insurance product applies is
measured by reference to the liability of the insured under the credit
agreement to which the consumer credit insurance applies;
a statement to that effect, accompanied by examples of the contingencies;
and
(e) a table of the benefit limits applicable under the consumer credit insurance
product; and
(f) a statement that the insured:
(i) is required to be truthful; and
(ii) is able to arrange consumer credit insurance through a different
insurer; and
(g) a statement of the commission paid or payable in relation to the provision
of the consumer credit insurance product.
(2) In this regulation:
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Division 4A General
Regulation 7.9.16A
consumer credit insurance product means a general insurance product provided
by a class of contracts of insurance that is:
(a) declared, in accordance with the Insurance Contracts Act 1984 to be a class
of contracts to which Division 1 of Part V of that Act applies; and
(b) identified as consumer credit insurance as part of that declaration.
7.9.16A Small scale offerings of managed investment and other prescribed
financial products (20 issues or sales in 12 months)
For paragraph 1012E(1)(b) of the Act, interests in financial products covered by
paragraph 764A(1)(ba) of the Act (which deals with financial products in relation
to certain managed investment schemes that are not registered schemes) are
prescribed.
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Ongoing disclosure Division 4B
Regulation 7.9.16G
Division 4B—Ongoing disclosure
7.9.16G Ongoing disclosure of material changes and significant events
(1) For paragraph 1017B(1)(d) of the Act, the circumstances in subregulation (2) are
specified.
(2) The circumstances are that the product issuer issued a financial product that was
acquired by a holder as a retail client:
(a) in a sale situation in which the issuer is not required to give a Product
Disclosure Statement for the product under section 1012C of the Act; or
(b) in a situation in which a Product Disclosure Statement is not required
because of the operation of section 1012D of the Act other than
subsection (1), (2), (2A) or (2B) of that section; or
(c) in an offer situation in which a Product Disclosure Statement is not
required under section 1012E of the Act.
(3) For paragraph 1017B(1A)(c) of the Act, the attribution, on the recommendation
of the trustee, of an amount in relation to a member in a MySuper product to
another class of beneficial interest in the fund is specified.
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Division 4C Fee Disclosure for certain financial products
Regulation 7.9.16J
Division 4C—Fee Disclosure for certain financial products
Subdivision 4C.1—Application
7.9.16J Application of Division 4C to financial products
This Division applies to:
(a) superannuation products other than:
(i) self-managed superannuation funds; and
(ii) superannuation products that have no investment component (also
known as risk-only superannuation products); and
(iii) annuities (except market-linked annuities); and
(iv) non-investment or accumulation life insurance policies offered
through a superannuation fund; and
(b) managed investment products; and
(c) foreign passport fund products.
7.9.16JA Application of Division 4C to financial products—temporary
arrangements
For paragraph 1020G(1)(a) of the Act:
(a) an issuer of a superannuation product to which this Division applies does
not have to provide the information mentioned in
subparagraph 1013D(1)(d)(iii) of the Act in a Product Disclosure Statement
issued before 1 July 2005; and
(b) an issuer of a financial product, other than a superannuation product to
which this Division applies, does not have to provide the information
mentioned in subparagraph 1013D(1)(d)(iii) of the Act in a Product
Disclosure Statement issued before 1 July 2006.
7.9.16K Application of Division 4C to periodic statements and Product
Disclosure Statements
This Division applies:
(a) in relation to superannuation products:
(i) to periodic statements (other than exit statements) in relation to a
reporting period commencing on or after 1 July 2005; and
(ii) to periodic statements that are exit statements issued on or after 1 July
2006; and
(iii) to Product Disclosure Statements issued on or after 1 July 2005; and
(b) in relation to managed investment products:
(i) to periodic statements (other than exit statements) in relation to a
reporting period commencing on or after 1 July 2006; and
(ii) to periodic statements that are exit statements issued on or after 1 July
2007; and
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Regulation 7.9.16L
(iii) to Product Disclosure Statements issued on or after 1 July 2006.
Subdivision 4C.2—Product Disclosure Statements
7.9.16L More detailed information about fees and costs
(1) For paragraph 1013D(4)(c) of the Act, a Product Disclosure Statement must
include the details of fees and costs set out in Part 2 of Schedule 10.
(2) This regulation does not apply if the Product Disclosure Statement is for:
(a) a margin loan; or
(b) a superannuation product to which Subdivision 4.2B of Division 4 of
Part 7.9 applies; or
(c) a simple managed investment scheme to which Subdivision 4.2C of
Division 4 of Part 7.9 applies.
7.9.16M Modification of section 1015C of the Act
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to a
product mentioned in regulation 7.9.16J as if paragraph 1015C(5)(b) of the Act
were modified to omit the words ‘that is to be given in electronic form’.
7.9.16N Presentation, structure and format of fees and costs in Product
Disclosure Statements
(1) For paragraph 1015C(5)(b) of the Act, the information required by paragraphs
1013D(1)(d) and (e) of the Act must be set out in a single section of the Product
Disclosure Statement (fees section) with the heading ‘Fees and other costs’.
(2) The fees section of a Product Disclosure Statement must include:
(a) the Fees and Costs Template, comprising the template and the additional
explanation of fees and costs set out in Part 2 of Schedule 10; and
(b) an example of annual fees and costs and associated notes as set out in
Part 2 of Schedule 10; and
(c) the boxed Consumer Advisory Warning Statement set out in Part 2 of
Schedule 10.
Subdivision 4C.3—Periodic statements
7.9.16O Presentation, structure and format of fees and charges in periodic
statements
(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to a
product mentioned in regulation 7.9.16J as if section 1017D of the Act were
modified to add, after subsection (7):
‘(8) The regulations may specify requirements as to the presentation, structure
and format of a periodic statement.’.
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Division 4C Fee Disclosure for certain financial products
Regulation 7.9.16O
(2) For subsection 1017D(8) of the Act, the information required by
paragraph 1017D(5)(c) of the Act must be set out in the periodic statement:
(a) in the manner specified in Part 3 of Schedule 10; and
(b) using the terminology used in Part 3 of Schedule 10.
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Other requirements relating to Product Disclosure Statements and Supplementary Product Disclosure
Statements Division 4D
Regulation 7.9.16T
Division 4D—Other requirements relating to Product Disclosure
Statements and Supplementary Product Disclosure
Statements
Subdivision 4D.1—Requirement to lodge a notice with ASIC
7.9.16T Variation of paragraph 1015D(2)(b) of the Act
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
paragraph 1015D(2)(b) of the Act were omitted and the following paragraph and
note were inserted:
‘(b) a change is made to the fees and charges set out in the enhanced fee
disclosure table in the Statement;
Note: The templates for the enhanced fee disclosure table are set out in items 201 and 202 of
Schedule 10 to the Corporations Regulations 2001.’.
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Division 5 Ongoing requirements for product disclosure after person becomes a member
Regulation 7.9.17
Division 5—Ongoing requirements for product disclosure after
person becomes a member
Subdivision 5.1—Preliminary
7.9.17 Application of Division 5
This Division applies in relation to the following entities:
(a) a regulated superannuation fund;
(b) an approved deposit fund;
(c) a pooled superannuation trust;
(d) an RSA.
Subdivision 5.2—Periodic statements for retail clients for financial
products that have an investment component: regulated
superannuation funds, ADFs and RSAs
7.9.18 Application of Subdivision 5.2
This Subdivision applies in relation to:
(a) a regulated superannuation fund; and
(b) an approved deposit fund; and
(c) an RSA.
7.9.19 Specific requirements for periodic statements: superannuation funds
(other than self managed superannuation funds) and RSAs
For paragraph 1017D(5)(g) of the Act, a periodic statement for a superannuation
product, given to a member of a superannuation fund (other than a self-managed
superannuation fund) or an RSA product given to an RSA holder must include
the following details:
(a) the contact details of the fund or the RSA provider;
(b) the amount of withdrawal benefit for the member or RSA holder at the start
of the reporting period;
(c) the amount of the withdrawal benefit for the member or RSA holder at the
end of the reporting period, and the method by which that amount was
worked out;
(d) the amount (if any) of the withdrawal benefit for the member or RSA
holder, at the end of the reporting period, that consists of preserved
benefits;
(e) the amount (if any) of the withdrawal benefit for the member or RSA
holder, at the end of the reporting period, that consists of restricted
non-preserved benefits;
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(f) the amount (if any) of the withdrawal benefit for the member or RSA
holder, at the end of the reporting period, that consists of unrestricted
non-preserved benefits;
(g) if, in providing details of the amount of the withdrawal benefit at the end of
the reporting period, a deduction for fees, charges or expenses has been
made or might be made—details of the deduction;
(h) if relevant, a statement informing the product holder that:
(i) the information about the withdrawal benefit for the product holder at
the end of the reporting period is based on notional amounts that
would have been attributable to the product holder if the product
holder had disposed of his or her interest in the product on the date
shown in the statement; and
(ii) the amounts on which that information is based might change; and
(iii) before disposing of that product, the product holder should seek
information from the product issuer on the withdrawal benefit at that
time;
(i) a statement informing the product holder that the product issuer is obliged
to provide a member with any information that he or she reasonably
requires to understand his or her benefit entitlements;
(j) a statement of the way in which a product holder is able to gain access to
information in relation to his or her investment in the financial product.
7.9.19A Withdrawal benefit—fees, charges or expenses
(1) For subsection 1017D(5A) of the Act, in providing details of a deduction for
fees, charges or expenses in accordance with paragraph 7.9.19(g), the amount
must be stated in dollars.
(2) If ASIC determines that, for a compelling reason, it is not possible to state the
amount of a deduction in dollars the amount of the deduction may be set out as a
description of the fees, charges or expenses as a percentage of a specified matter
(including worked dollar examples, unless that is inappropriate).
(3) If ASIC determines that, for a compelling reason, it is not possible to state the
amount of a deduction in dollars, or to set out the amount as a percentage, the
product issuer may provide:
(a) a statement informing the holder of the product that amounts for fees,
charges or expenses are applicable; and
(b) if information about access to the information about the amount of the
deduction is not provided in the statement mentioned in
paragraph 7.9.19(h)—details of the means by which a product holder can
gain access to information relating to the amount of the deduction.
(4) A determination under subregulation (2) or (3) must be:
(a) in writing; and
(b) published in the Gazette.
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Regulation 7.9.19B
7.9.19B Withdrawal benefit—fees, charges and expenses
(1) For subsection 1017D(5A) of the Act, this regulation applies to details of a
deduction for fees, charges or expenses in accordance with paragraph 7.9.19(g).
(2) If ASIC determines that, for a compelling reason based on the nature of a
financial product or service, or the nature of the information, to state the
information as an amount in dollars:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(3) If ASIC determines that, for a compelling reason, based on the nature of a
financial product or service, or the nature of the information, to state the
information as an amount in dollars, or to describe the amount as a percentage:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the product issuer must provide the information in subregulation (4).
(4) If subregulation (3) applies, the product issuer must provide:
(a) a statement informing the product holder that amounts for fees, charges or
expenses are applicable; and
(b) if information about access to the information is not provided in the
statement mentioned in paragraph 7.9.19(i)—details of the means by which
a product holder can gain access to information relating to the amount of
the deduction.
(5) A determination under subregulation (2) or (3) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.20 Specific requirements for certain periodic statements: superannuation
funds (other than self managed superannuation funds)
(1) For paragraph 1017D(5)(g) of the Act, a periodic statement for a member of a
fund (other than a self managed superannuation fund) must include the following
details:
(a) the amount of the member’s contributions during the reporting period;
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(b) the amount of benefits rolled-over or otherwise transferred into the fund
during the reporting period;
(c) the amount of withdrawals during the reporting period;
(d) the information about costs of transactions mentioned in regulation 7.9.75;
(e) the amount of any allotment of employer contributions during the reporting
period;
(f) the amount of any allotment of net earnings during the reporting period
(including, for a unitised product, the presentation of changes in price as
amounts in dollars);
(g) the rate of any allotment of net earnings during the reporting period;
(h) the amount of bonuses that have accrued at the end of the reporting period;
(i) the amount of the sum assured;
(j) the amount payable in the event of the member’s death:
(i) at the end of the reporting period; or
(ii) on the first day of the next reporting period;
or the method by which that amount is worked out;
(k) for a reporting period (within the meaning of subsection 1017D(2) of the
Act) commencing before 1 July 2004—details, including the amount or
method of working out, of other significant benefits, including, in
particular, disability benefits;
(ka) for a reporting period (within the meaning of subsection 1017D(2) of the
Act) commencing on or after 1 July 2004:
(i) details of other significant benefits, including disability benefits, and
the amount of the benefits at the end of the reporting period, or the
method of working out the amount of the benefits; and
(ii) if the periodic statement includes an amount mentioned in
subparagraph (i)—a statement informing the holder of the product
that:
(A) the details of the significant benefit reflects the situation for
the member on the date shown in the statement and the
amount might change; and
(B) the issuer is obliged to provide product holders with any
information they reasonably require for the purpose of
understanding their benefit entitlements; and
(iii) details of the means by which a product holder is able to gain access
to information relating to the amount of a significant benefit;
(kb) if, in providing details of other significant benefits for a reporting period, a
deduction for fees, charges or expenses has been made or might be made—
details of the deduction;
(l) if the trustee is aware, or ought reasonably to be aware, of contributions
that are due and payable during the reporting period but have not been paid
to the fund at, or shortly before, the date of issue of the report, details of the
amount of those contributions and of action that the trustee has taken, or
proposes to take, to have the contributions paid;
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Regulation 7.9.20AA
(m) the net amount of Government co-contribution received during the
reporting period;
(n) for a regulated superannuation fund—a statement of long-term returns, in
accordance with regulation 7.9.20AA, of:
(i) the MySuper product or investment option within a choice product in
which a member is invested; or
(ii) the sub-plan, or, if none, the fund in which the member holds an
interest;
(o) for a regulated superannuation fund, if the trustee is required to make
publicly available a product dashboard for the investment option, under
section 1017BA of the Act—the latest product dashboard for the
investment option.
(2) For paragraph (1)(g), if the earnings rate for members of the fund is reflected in
the price of units of the fund, rather than being credited or debited against the
accounts of members, an earnings rate allotted to members in respect of a period
is taken to be a change in the value of the members’ units being determined by
the trustee in respect of that period.
(2A) For paragraph (1)(m), the periodic statement may state separately:
(a) the amount of Government co-contributions received; and
(b) the amount of low income superannuation contributions received; and
(c) the amount of low income superannuation tax offsets received.
Note: See section 12B of the Superannuation (Government Co-contribution for Low Income
Earners) Act 2003 for the way in which a law that applies in relation to a Government
co-contribution applies in relation to a low income superannuation tax offset.
(3) A nil amount need not be disclosed.
7.9.20AA Specific requirements for certain periodic statements: superannuation
funds (other than self managed superannuation funds)—long-term
returns
(1) For paragraph 7.9.20(1)(n), this regulation sets out requirements that apply to a
trustee of a regulated superannuation fund (other than a self managed fund).
Requirements from 1 July 2009 until 30 June 2010
(2) The trustee must provide to each member of the regulated superannuation fund,
in or with the periodic statement for a reporting period that is provided during the
period starting on 1 July 2009 and ending at the end of 30 June 2010:
(a) a statement of the long-term returns of the investment option in which the
member is invested at the end of the reporting period, if the member is
invested in an investment option; or
(b) a statement of the long-term returns of the sub-plan, or, if none, the fund in
which the member holds an interest at the end of the reporting period.
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Regulation 7.9.20AA
(3) For paragraph (2)(a), the long-term returns must be stated as the compound
average effective rate of net earnings of the investment option for the period of 5
years ending at the end of the last financial year or reporting period before the
provision of the periodic statement.
(4) For paragraph (2)(b), the long-term returns must be stated as the compound
average effective rate of net earnings of the sub-plan or fund for the period of 5
years ending at the end of the last financial year or reporting period before the
provision of the periodic statement.
(5) If:
(a) the trustee provides the statement of long-term returns on an insert to the
periodic statement; and
(b) the insert includes the long-term returns of investment options in which the
member is not invested, as well as the long term returns of the investment
option in which the member is invested;
the periodic statement must include a statement of which investment option the
member is invested in.
(6) If the trustee provides the long-term returns in the periodic statement, the trustee
must include in the periodic statement, near to the statement of long-term returns,
a statement to the effect that the returns are not the returns of the member’s
investment in the investment option, sub-plan or fund.
(7) If the trustee provides the long-term returns on an insert to the periodic
statement, the trustee must include in the periodic statement, and on the insert
near to the statement of long-term returns, a statement to the effect that the
returns are not the returns of the member’s investment in the investment option,
sub-plan or fund.
Requirements from 1 July 2010
(8) The trustee must provide the following, in the periodic statement for a reporting
period that is provided from 1 July 2010, to each member of the regulated
superannuation fund:
(a) if the member is invested in an investment option at the end of the
reporting period—a statement of the long-term returns of the investment
option;
(b) if the member is not invested in an investment option at the end of the
reporting period—a statement of the long term returns of the sub-plan, or,
if none, the fund in which the member holds an interest at the end of the
reporting period.
(9) For paragraph (8)(a), the long-term returns must be stated as:
(a) the compound average effective rate of net earnings of the investment
option for the period of 5 years ending at the end of the last financial year
or reporting period before the provision of the periodic statement; and
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(b) the compound average effective rate of net earnings of the investment
option for the period of 10 years ending at the end of that financial year or
reporting period.
(10) For paragraph (8)(b), the long-term returns must be stated as:
(a) the compound average effective rate of net earnings of the sub-plan or fund
for the period of 5 years ending at the end of the last financial year or
reporting period before the provision of the periodic statement; and
(b) the compound average effective rate of net earnings of the sub-plan or fund
for the period of 10 years ending at the end of that financial year or
reporting period.
(11) The trustee must include in the periodic statement, near to the statement of
long-term returns, a statement to the effect that the returns are not the returns of
the member’s investment in the investment option, sub-plan or fund.
General requirements
(12) For subregulations (3), (4), (9) and (10), if the investment option, sub-plan or
fund has been in operation for less than the 5-year or 10-year period to be
reported on, the trustee must provide:
(a) the long-term return for the period in which the investment option,
sub-plan or fund has been in operation; and
(b) the date on which the investment option, sub-plan or fund came into
operation.
(13) If the long-term returns are provided in the periodic statement, they must be
positioned near to the statement of the rate of any allotment of earnings during
the reporting period.
(14) The long-term returns must be presented in a clear, concise and effective manner.
7.9.20A Details of other significant benefits—disclosure of fees, charges or
expenses
(1) For subsection 1017D(5A) of the Act, in providing details of a deduction for
fees, charges or expenses in accordance with paragraph 7.9.20(1)(kb):
(a) the amount must be stated in dollars; or
(b) if ASIC determines that, for a compelling reason, it is not possible to state
the amount of a deduction in dollars the amount of the deduction may be
set out as a description of the fees, charges or expenses as a percentage of a
specified matter (including worked dollar examples, unless that is
inappropriate); or
(c) if ASIC determines that, for a compelling reason, it is not possible to state
the amount of a deduction in dollars, or to set out the amount as a
percentage, the product issuer may provide:
(i) a statement informing the holder of the product that amounts for fees,
charges or expenses are applicable; and
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(ii) if information about the deduction is not provided in the statement
mentioned in sub-subparagraph 7.9.20(1)(ka)(ii)(B)—details of the
means by which a product holder can gain access to information
relating to the amount.
(2) A determination under paragraph (1)(b) or (c) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.20B Other significant benefits—disclosure of fees, charges or expenses
(1) For subsection 1017D(5A) of the Act, this regulation applies to details of a
deduction for fees, charges or expenses mentioned in paragraph 7.9.20(1)(kb).
(2) If ASIC determines that, for a compelling reason based on the nature of a
financial product or service, or the nature of the information, to state the amount
of the deduction in dollars:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(3) If ASIC determines that, for a compelling reason, based on the nature of a
financial product or service, or the nature of the information, to state the amount
of a deduction in dollars, or, to describe the amount as a percentage:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the product issuer must provide the information in subregulation (4).
(4) If subregulation (3) applies, the product issuer must provide:
(a) a statement informing the product holder that amounts for fees, charges or
expenses are applicable; and
(b) if information about the deduction is not provided in the statement
mentioned in sub-subparagraph 7.9.20(1)(ka)(ii)(B)—details of the means
by which a product holder can gain access to information relating to the
amount of the deduction.
(5) A determination under subregulation (2) or (3) must be:
(a) in writing; and
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Regulation 7.9.21
(b) published in the Gazette.
7.9.21 Specific requirements in particular cases: member (other than capital
guaranteed member) of fund other than a self managed
superannuation fund
(1) For paragraph 1017D(5)(g) of the Act, and in addition to regulations 7.9.19 and
7.9.20, a periodic statement for a member (other than a capital guaranteed
member) of a fund (other than a self managed superannuation fund) must include
the following details:
(a) if the fund is an unfunded defined benefits fund—details of the surcharge
debt account kept by the trustee, under subsection 16(2) of the
Superannuation Contributions Tax (Assessment and Collection) Act 1997,
for the member, including:
(i) the balance of the account at the start of the reporting period; and
(ii) the amount debited to the account for superannuation contributions
surcharge assessed, by the Commissioner of Taxation, to be payable
on the member’s surchargeable contributions; and
(iii) the amount of interest debited, under subsection 16(4) of that Act, to
the account during the reporting period; and
(iv) the balance of the account at the end of the reporting period;
(b) if the trustee reduced the member’s benefits in connection with payment of
a superannuation contributions surcharge or an advance instalment of
surcharge:
(i) the amount deducted; and
(ii) if there is a difference between the amount deducted and the amount
assessed under subsection 15(1) of the Superannuation Contributions
Tax (Assessment and Collection) Act 1997 or between the amount
deducted and the amount determined under subsection 15(2) of that
Act—a statement explaining the difference;
(c) a description of the nature, effect and significant features of surcharge debt
accounts.
(2) A nil amount need not be disclosed.
7.9.22 Specific requirements: capital guaranteed funds and RSAs
(1) For paragraph 1017D(5)(g) of the Act, and in addition to regulations 7.9.19 and
7.9.20, a periodic statement for a member of a capital guaranteed fund must
include the following details:
(a) a statement that outlines the means by which the fund is to be maintained
as a capital guaranteed fund and sets out the name of the institution
providing the investments that back the fund;
(b) a statement that outlines the effect of the lower-risk/lower-return nature of
the product on possible benefits in the long term;
(c) a statement that the member may wish to consider:
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(i) other superannuation arrangements that may provide a greater return
over the long term; and
(ii) seeking advice on alternative investment arrangements that may be
more suitable.
(2) For paragraph 1017D(5)(g) of the Act, and in addition to regulation 7.9.19, a
periodic statement for an RSA holder must include the following details:
(a) a statement that outlines the effect of the lower-risk/lower-return nature of
the product on possible benefits in the long term;
(b) a suggestion that the RSA holder may wish to consider:
(i) other superannuation arrangements that may provide a greater return
over the long term; and
(ii) seeking advice on alternative investment strategies that may be more
suitable.
7.9.23 Information for capital guaranteed fund: benefits reach $10 000
For paragraph 1017D(5)(g) of the Act, and in addition to regulations 7.9.19 and
7.9.22, if the amount of the benefits of a member in a capital guaranteed fund at
the end of a reporting period is at least $10 000, the periodic statement for that
reporting period must include the following details:
(a) a statement of that fact;
(b) a statement that the information contained in the periodic statement is
important and that the notice must be read carefully;
(c) a statement that outlines the effect of the lower-risk/lower-return nature of
the product on possible benefits in the long term;
(d) a statement that the member may wish to consider:
(i) other superannuation arrangements that may provide a greater return
over the long term; and
(ii) seeking advice on alternative investment arrangements that may be
more suitable.
7.9.24 Modification of Act: pensioners, members subject to compulsory
protection of small amounts and members with small amounts that
are expected to grow quickly
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to a superannuation entity or an RSA to which this
Subdivision applies as set out in Part 7 of Schedule 10A.
Subdivision 5.3—Periodic statements for retail clients for financial
products that have an investment component: information for
RSAs
7.9.25 Application of Subdivision 5.3
This Subdivision applies in relation to an RSA provider.
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Regulation 7.9.26
7.9.26 Specific requirements where applicable: RSAs
(1) For paragraph 1017D(5)(g) of the Act, and in addition to regulation 7.9.19, a
periodic statement for an RSA holder must include details of the following
matters in respect of the RSA holder so far as they are applicable:
(a) the amount of the RSA holder’s contributions during the reporting period;
(b) the amount of employer contributions during the reporting period;
(c) the amount of benefits rolled-over or transferred into the RSA during the
reporting period;
(d) the amount of withdrawals during the reporting period;
(e) information about the cost of transactions mentioned in Division 8;
(f) the amount of interest credited to the RSA during the reporting period;
(g) the annual effective rate of net interest applied to the RSA during the
reporting period;
(h) a statement of:
(i) the annual effective rate of net earnings in each of the most recent
reporting periods that, in total, constitute a period of at least 5 years;
and
(ii) the compound average effective rate of net earnings for the period of
5 years ending at the end of the reporting period;
(i) the effect of the RSA holder-protection standards under the RSA
Regulations;
(j) the amount of bonuses that have accrued at the end of the reporting period;
(k) if a risk insurance product is held by the RSA provider—the amount of the
sum assured;
(l) the circumstances when benefits may be paid to an eligible rollover fund,
the effect of that payment and the contact details of the eligible rollover
fund;
(m) the amount payable in the event of the RSA holder’s death:
(i) at the end of the reporting period; or
(ii) on the first day of the next reporting period;
or the method by which that amount is worked out;
(n) the amount, or method of working out, of other benefits including, in
particular, disability benefits;
(o) if the RSA provider reduced the RSA holder’s benefits in connection with
payment of a superannuation contributions surcharge or an advance
instalment of surcharge:
(i) the amount deducted; and
(ii) if there is a difference between the amount deducted and the amount
assessed under subsection 15(1) of the Superannuation Contributions
Tax (Assessment and Collection) Act 1997 or between the amount
deducted and the amount determined under subsection 15(2) of that
Act—a statement explaining the difference;
(p) the net amount of Government co-contribution received during the
reporting period.
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(2) A nil amount need not be disclosed.
(3) If, at the end of a reporting period, an RSA has not been in existence for 5 years,
the references in paragraph (1)(h) to 5 years are taken to be references to the
whole period of existence of the RSA.
7.9.27 Modification of Act: periodic statements for RSA holders
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to an RSA to which this Subdivision applies as set out in
Part 8 of Schedule 10A.
7.9.28 Information for RSA: amount reaches $10 000
For paragraph 1017D(5)(g) of the Act, if the amount of an RSA at the end of a
reporting period is at least $10 000, the periodic statement for that reporting
period must include the following, in addition to the details mentioned in
regulations 7.9.19 and 7.9.22:
(a) a statement of that fact;
(b) a statement that the information contained in the periodic statement is
important and that the notice must be read carefully;
(c) a statement that outlines the effect of the lower-risk/ lower-return nature of
the RSA on possible benefits in the long term;
(d) a suggestion that the RSA holder may wish to consider:
(i) other superannuation arrangements that may provide a greater return
over the long term; and
(ii) seeking advice on alternative investment strategies that may be more
suitable.
Subdivision 5.4—Periodic statements for retail clients for financial
products that have an investment component: additional
information for superannuation entities and RSA providers
7.9.29 Application of Subdivision 5.4
This Subdivision applies in relation to a superannuation entity and an RSA
provider.
7.9.30 Additional information for change to choices
(1) For paragraph 1017D(5)(g) of the Act, a periodic statement for a holder of a
financial product must include, if relevant, either of the following details (in
addition to the details mentioned in regulation 7.9.20 or 7.9.26, as appropriate):
(a) details of:
(i) other investment strategies available to the holder (if applicable); and
(ii) other contribution levels available to the holder; and
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Regulation 7.9.30A
(iii) other insurance coverage available to the holder in relation to the
financial product;
(b) a statement:
(i) that the details in paragraph (a) are available on request from the
responsible person; and
(ii) about how to ask for the details.
(2) The details or statement must relate to:
(a) an interest in the same sub-plan; or
(b) if there is no sub-plan—an interest in the same superannuation entity or an
RSA.
(3) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to a superannuation entity and an RSA provider as set out
in Part 9 of Schedule 10A.
Subdivision 5.4A—Periodic statements for retail clients for financial
products that have an investment component: additional
information for margin lending facilities
7.9.30A Application of Subdivision 5.4A
(1) This Subdivision applies in relation to the provider of a margin lending facility
within the meaning of subsection 761EA(1) of the Act.
(2) For the purposes of this Subdivision, subsection 1017D(5) of the Act is modified
to omit paragraphs (a) to (f).
Note: Paragraph 1020G(1)(c) of the Act provides that the regulations may provide that
Part 7.9 of the Act applies as if specified provisions were omitted, modified or varied
as specified in the regulations.
7.9.30B Details to be included in periodic statements for margin lending facilities
For paragraph 1017D(5)(g) of the Act, a periodic statement for a holder of a
financial product must include the following details about the margin lending
facility:
(a) the outstanding loan amount;
(b) the loan credit limit;
(c) the current interest rate, and any changes to the interest rate since the last
statement was provided;
(d) an itemised list of the property by which the credit is secured, including:
(i) the value of each item used for calculating the current LVR; and
(ii) the loan to value ratio (if any) of each property item listed;
(e) a summary of the loan to security ratios, showing separately:
(i) the allowable loan to security ratio; and
(ii) the maximum loan to security ratio, including any buffer allowed
under the terms of the facility; and
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(iii) the current LVR;
(f) a summary of all transactions affecting the margin lending facility during
the reporting period.
Subdivision 5.5—Fund information for retail clients for financial products
that have an investment component: superannuation
7.9.31 Application of Subdivision 5.5
This Subdivision applies in relation to:
(a) a regulated superannuation fund; and
(b) an approved deposit fund; and
(c) a pooled superannuation trust.
7.9.32 Reporting periods: general
(1) For subsection 1017DA(2) of the Act, fund information as mentioned in
Subdivisions 5.6 and 5.7 must be provided, in accordance with this regulation, to
the product holder in a periodic statement for each fund reporting period during
which the holder holds the product.
(2) The following provisions apply in relation to fund reporting periods:
(a) each reporting period lasts for:
(i) a period not exceeding 1 year, fixed by the issuer; or
(ii) a longer period fixed by ASIC on the application of the issuer to
which the period relates;
(b) the first reporting period starts when the holder acquired the product;
(c) each subsequent reporting period starts at the end of the preceding
reporting period.
(3) The periodic fund statement must be given as soon as practicable after, and in
any event within 6 months after the end of the reporting period to which it
relates.
(4) In relation to a fund reporting period, information required to be given under
Subdivisions 5.5 to 5.7 need only be given to persons who are product holders on
the day on which the fund report containing the information is completed.
(5) For subsection 1017DA(2) of the Act, fund information in relation to a particular
product holder that is provided in accordance with an obligation under
section 1017DA of the Act to provide fund information in accordance with
Subdivisions 5.5 to 5.7 need not be given in respect of the same fund reporting
period.
Example: A superannuation fund may choose to report:
(a) some fund information in respect of a 6-month period; and
(b) further fund information, and a periodic report, in respect of a 9-month period; and
(c) the remaining fund information in respect of a 12-month period.
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Regulation 7.9.33
7.9.33 Use of more than 1 document
For subsection 1017DA(2) of the Act, a reference in Subdivisions 5.5 to 5.7 to a
periodic fund report, or fund information:
(a) includes 2 or more documents that include all of the information required
by those Subdivisions; and
(b) is to be read as if subsections 1013L(1), (2), (3), (5) and (7) of the Act were
included in those Subdivisions, and referred to a periodic statement instead
of a Product Disclosure Statement.
Subdivision 5.6—Fund information for retail clients for financial products
that have an investment component: fund information for
regulated superannuation funds and ADFs
7.9.34 Application of Subdivision 5.6
This Subdivision applies in relation to:
(a) a regulated superannuation fund; and
(b) an approved deposit fund.
7.9.35 General requirement
For paragraph 1017DA(1)(a) of the Act, fund information must include all
information that the responsible person reasonably believes a product holder
would reasonably need for the purpose of:
(a) understanding the management and financial condition of the fund and of
the relevant sub-plan (if any); and
(b) understanding the investment performance of the relevant sub-plan or, if
none, of the fund.
7.9.36 Specific requirements in all cases
For paragraph 1017DA(1)(a) of the Act, fund information must include all of the
following items of information:
(a) the contact details of the fund;
(b) in respect of the relevant sub-plan or, if none, of the fund—a description
of:
(i) the investment strategy of the fund trustee, having regard to the
requirements of paragraph 52(2)(f) of the SIS Act; and
(ii) the investment objectives.
7.9.37 Specific requirements in particular cases
(1) For paragraph 1017DA(1)(a) of the Act, fund information must include all of the
following, so far as they are applicable:
(a) in respect of the relevant sub-plan or, if none, of the fund—the names of
investment managers appointed by the trustee;
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(b) in the case of a standard employer-sponsored fund that is not a public offer
superannuation fund and does not have a trustee approved under
subsection 92(10) of the SIS Act:
(i) if the trustee of the fund is a body corporate, the name of that body
corporate and the names of all its directors during the whole or any
part of the reporting period and, in respect of each of those directors,
details of how and by whom they were appointed;
(ii) if the trustees of the fund are individuals, the names of the trustees of
the fund during the whole or any part of the relevant reporting period
and, in respect of each of those trustees, details of how and by whom
they were appointed;
(c) in the case of a fund other than a fund mentioned in paragraph (b):
(i) the name of each corporate trustee of the fund during the relevant
reporting period; and
(ii) in respect of the relevant policy committee (if any), details of the
committee (including the names of the committee members as at the
end of that reporting period and, in respect of each of the members,
details of how and by whom they were appointed);
(d) a statement as to whether or not any indemnity insurance has been taken
out by the trustee;
(e) either:
(i) the audited fund accounts, the auditor’s report and, if there is a
relevant sub-plan, abridged financial information relating to that
sub-plan; or
(ii) each of the following:
(A) abridged financial information relating to the relevant
sub-plan or, if none, to the fund;
(B) information as to when the audited fund accounts and the
auditor’s report will be sent to members or will be available
to members on request, as the case may be;
(f) in respect of the relevant sub-plan or, if none, of the fund—a statement of
assets as at the end of:
(i) the relevant reporting period; and
(ii) the immediately preceding reporting period;
that includes all information that the responsible person reasonably
believes a member would reasonably need to understand the asset
allocation at those times;
(g) details of:
(i) each investment that has a value in excess of 5% of the total assets of
the relevant sub-plan or, if none, of the fund; and
(ii) each combination of investments that the trustee knows or ought
reasonably to know are invested in, directly or indirectly, a single
enterprise or single group of associated enterprises and that have a
combined value in excess of 5% of the total assets of the relevant
sub-plan or, if none, of the fund;
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(h) a statement regarding the funds policy toward the use of derivative
securities;
(i) if the derivatives charge ratio of the fund (as defined in the SIS
Regulations) exceeded 5% at any time during the reporting period:
(i) the derivatives charge ratio as at the end of the reporting period; and
(ii) the highest derivatives charge ratio attained during the reporting
period; and
(iii) an explanation of why the derivatives charge ratio exceeded 5%; and
(iv) an explanation of the meaning of derivatives charge ratio in, or to the
effect of the following:
‘The derivatives charge ratio is the percentage of the total market
value of the assets of the fund (other than cash) that the trustee has
charged as security for derivatives investments made by the trustee.’;
(k) if the fund maintains reserves—in respect of the relevant sub-plan or, if
none, of the fund, details of movements of reserves during the most recent
reporting periods that, in total, constitute at least 3 years;
(l) if the net earnings of the fund are allotted to members’ accounts—in
respect of the relevant sub-plan or, if none, of the fund, the manner in
which the allotment is made;
(m) if the fund maintains reserves—in respect of the relevant sub-plan or, if
none, of the fund, a description of the management strategy of the fund
trustee in relation to the reserves, having regard to the requirements of
paragraph 52(2)(g) of the SIS Act;
(n) details of any penalties imposed on the responsible person under:
(i) section 38A of the SIS Act; or
(ii) section 182 of the RSA Act;
(o) if the fund is:
(i) a defined benefit fund; and
(ii) the contributions paid by the employer-sponsor in the reporting period
are less than the amount that an actuary has approved as sufficient
contributions in that period; and
(iii) the difference is material;
in respect of the relevant sub-plan or, if none, of the fund—a statement to
the effect that the matters stated in subparagraphs (ii) and (iii) apply, and
statements of:
(iv) the consequences for the fund of the shortfall; and
(v) any action that the trustee has taken, or proposes to take, in relation to
the matter;
(p) the ultimate source (including, for example, the fund’s reserves, the
members’ accounts or the employer) from which payments in connection
with superannuation contributions surcharges or advance instalments of
surcharge will be drawn;
(q) if there are circumstances in which the trustee would pay the member’s
benefit to an eligible rollover fund:
(i) details of those circumstances; and
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(ii) the contact details of the eligible rollover fund; and
(iii) a statement of the effect of the payment of benefits to the eligible
rollover fund.
(2) A nil amount need not be disclosed.
(3) For subparagraph (1)(g)(ii), investments in a trust are taken not to be invested in
the trustee of the trust.
(5) In this regulation:
abridged financial information, in relation to a reporting period of a fund or a
sub-plan, means information derived from the fund’s accounts or records that
gives a reasonable summary of either:
(a) both:
(i) changes in the financial position of the fund or sub-plan during the
reporting period; and
(ii) the financial position of the fund or sub-plan at the end of the
reporting period; or
(b) both:
(i) changes in the net assets of the fund or sub-plan during the reporting
period; and
(ii) the net assets of the fund or the sub-plan at the end of the reporting
period.
7.9.38 Specific information in particular case: self managed superannuation
fund
For subsection 1017DA(1) of the Act, fund information for a self managed
superannuation fund must include only the information mentioned in
paragraph 7.9.37(1)(p).
7.9.39 Benefits determined by life insurance products
(1) Paragraphs 7.9.37(1)(e), (f) and (g) do not apply to funds from which the benefits
paid to each member are wholly determined by reference to life insurance
products.
(2) If:
(a) subregulation (1) does not apply only because shares in the life insurance
company issuing the life insurance products were acquired because the
company was demutualised; and
(b) the shares have been held for not more than 18 months after the date of
acquisition;
paragraphs 7.9.37(1)(e), (f) and (g) do not apply to funds from which the benefits
paid to each individual member would otherwise be wholly determined by
reference to life insurance products.
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Regulation 7.9.40
(3) If subregulation (1) or (2) applies, the fund information must include the reason
why the information for paragraphs 7.9.37(1)(e), (f) and (g) has not been given.
Subdivision 5.7—Fund information for retail clients for financial products
that have an investment component: fund information for
pooled superannuation trusts
7.9.40 Application of Subdivision 5.7
This Subdivision applies in relation to a pooled superannuation trust.
7.9.41 Specific requirements in all cases
For subsection 1017DA(1) of the Act, fund information must include the
following:
(a) in respect of the pooled superannuation trust—a description of the
investment strategy of the pooled superannuation trust trustee, having
regard to:
(i) the requirements of paragraph 52(2)(f) of the SIS Act; and
(ii) the investment objectives of the pooled superannuation trust;
(b) a statement to the effect that other information is available on request.
7.9.42 Specific requirements in particular cases
(1) For subsection 1017DA(1) of the Act, and subject to subregulations (2) and (3),
fund information must include the following, so far as they are applicable:
(a) in respect of the pooled superannuation trust—the names of investment
managers appointed by the trustee;
(b) the name of each approved trustee of the pooled superannuation trust
during the relevant reporting period;
(c) either:
(i) the audited accounts of the pooled superannuation trust and the
auditor’s report; or
(ii) each of the following:
(A) abridged financial information relating to the pooled
superannuation trust;
(B) information as to when the audited accounts of the pooled
superannuation trust and the auditor’s report will be sent to
unit-holders or will be available to unit-holders on request, as
the case may be;
(d) in respect of the pooled superannuation trust—a statement of assets as at
the end of:
(i) the relevant reporting period; and
(ii) the immediately preceding reporting period;
that includes sufficient information to enable unit-holders to understand the
asset allocation at those times;
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(e) details of:
(i) each investment that has a value in excess of 5% of the total assets of
the pooled superannuation trust; and
(ii) details of each combination of investments that the trustee knows or
ought reasonably to know are invested, directly or indirectly, in a
single enterprise or single group of associated enterprises and that
have a combined value in excess of 5% of the total assets of the
pooled superannuation trust;
(f) in respect of the pooled superannuation trust—the effective rate of net
earnings of the pooled superannuation trust in the most recent reporting
periods that, in total, constitute a period of at least 3 years;
(g) the information about costs of transactions mentioned in regulation 7.9.75;
(h) details of any penalties imposed on the trustee under:
(i) section 38A of the SIS Act; or
(ii) section 182 of the RSA Act.
(2) A nil amount need not be disclosed.
(3) For subparagraph (1)(e)(ii), investments in a trust are taken not to be invested in
the trustee of the trust.
(4) In this regulation:
abridged financial information, in relation to a reporting period of a pooled
superannuation trust, means information derived from the pooled superannuation
trust’s accounts that gives a reasonable summary of:
(a) changes in the pooled superannuation trust’s financial position during the
reporting period; and
(b) the pooled superannuation trust’s financial position at the end of the
reporting period.
Subdivision 5.8—Ongoing disclosure of material changes and significant
events
7.9.43 Modification of Act: disclosure of material changes and significant events
in relation to superannuation products and RSA products
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to:
(a) a regulated superannuation fund (other than a self managed superannuation
fund); and
(b) an approved deposit fund (other than an excluded approved deposit fund);
and
(c) a pooled superannuation trust; and
(d) an RSA;
as set out in Part 10 of Schedule 10A.
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Division 5 Ongoing requirements for product disclosure after person becomes a member
Regulation 7.9.44
7.9.44 Benefits to be paid to eligible rollover fund
(1) For subsection 1017DA(1) of the Act, if the benefits of a superannuation product
holder or RSA product holder will be paid (otherwise than under a payment split)
to an eligible rollover fund unless the holder chooses, within a specified period,
another superannuation entity, an EPSSS or an RSA to which those benefits will
be paid, the responsible person must give a notice to the product holder within a
reasonable period to allow a decision to be made.
(2) The notice must include:
(a) information about the payment to the eligible rollover fund that will assist
the product holder to decide between having the benefits paid to that other
superannuation entity, the EPSSS, the RSA or the eligible rollover fund;
and
(b) so much of the following information as is relevant:
(i) an explanation why the product issuer (the transferor) intends to pay
the product holder’s benefits to the eligible rollover fund if the
product holder does not make the choice within the period;
(ii) a statement of the effect of the payment of benefits to the eligible
rollover fund;
(iii) the contact details of the eligible rollover fund;
(iv) subject to subregulation (3), the amount, of the product holder’s
benefits that will be paid from the transferor;
(v) a statement to the effect that, if the product holder chooses a
superannuation entity, EPSSS or RSA that refuses to accept the
payment of the product holder’s benefit, or the product holder makes
no choice within the specified period, the responsible person will pay
the product holder’s benefits to the eligible rollover fund.
(3) For subparagraph (2)(b)(iv), the product issuer may inform a product holder of
the approximate amount of the product holder’s benefits if, at the time the
information is to be given, the responsible person cannot determine the exact
amount of the product holder’s benefits that will be paid from the superannuation
entity or RSA.
(4) This regulation does not require the responsible person of the transferor to
provide information about RSAs, EPSSSs or superannuation entities other than
the eligible rollover fund.
(5) The notice may be given in writing or electronic form.
(6) In this regulation:
responsible person means:
(a) a trustee of a superannuation entity; or
(b) an RSA provider.
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Regulation 7.9.44A
Subdivision 5.8A—Information in relation to inactive superannuation
accounts
7.9.44A Meaning of inactive
In this Subdivision, a member of a regulated superannuation fund has an account
that is inactive in relation to a choice product or a MySuper product for a period
if the member has an account that is inactive in relation to the product for the
period within the meaning of subsection 68AAA(3) of the SIS Act.
7.9.44B Notices about insurance—inactivity
(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.
Application
(2) This regulation applies if:
(a) a member of a regulated superannuation fund holds a choice product or a
MySuper product offered by the fund; and
(b) the fund provides a benefit to, or in respect of, the member under the
product by taking out or maintaining insurance; and
(c) the member has not made an election, under subsection 68AAA(2) of the
SIS Act, that the benefit will be provided to, or in respect of, the member
under the product by taking out or maintaining insurance even if the
member’s account is inactive in relation to the product for a continuous
period of 16 months; and
(d) if under the governing rules of the fund the benefit will not be provided to,
or in respect of, the member under the product by taking out or maintaining
insurance if the member’s account is inactive for a period of less than 16
months—the member has not made an election under the governing rules
of the fund that the benefit will be provided in that way even if the
member’s account is inactive in relation to the product for that lesser
period.
(3) However, this regulation does not apply in relation to:
(a) a defined benefit member; or
(b) an ADF Super member (within the meaning of the Australian Defence
Force Superannuation Act 2015); or
(c) a person who would be an ADF Super member apart from the fact that the
regulated superannuation fund is or was, for the purposes of Part 3A of the
Superannuation Guarantee (Administration) Act 1992, a chosen fund for
contributions for the person’s superannuation by the Commonwealth; or
(d) a member to whom the employer-sponsor contribution exception applies
under section 68AAE of the SIS Act.
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Regulation 7.9.44B
Insurance inactivity notices
(4) Each trustee of the regulated superannuation fund must ensure that the member is
given an insurance inactivity notice in relation to the benefit for each occasion on
which one of the following paragraphs is satisfied:
(a) the member’s account has been continuously inactive in relation to the
product under which the benefit is provided for a period and, were the
member’s account to continue to be inactive in relation to the product for a
further period of 7 months, the fund would cease to provide the benefit by
taking out or maintaining insurance either under the governing rules of the
fund or because of the application of section 68AAA of the SIS Act;
(b) the member’s account has been continuously inactive in relation to the
product under which the benefit is provided for a period and, were the
member’s account to continue to be inactive in relation to the product for a
further period of 4 months, the fund would cease to provide the benefit by
taking out or maintaining insurance either under the governing rules of the
fund or because of the application of section 68AAA of the SIS Act;
(c) the member’s account has been continuously inactive in relation to the
product under which the benefit is provided for a period and, were the
member’s account to continue to be inactive in relation to the product for a
further period of 1 month, the fund would cease to provide the benefit by
taking out or maintaining insurance either under the governing rules of the
fund or because of the application of section 68AAA of the SIS Act.
(5) For the purposes of subregulation (4), an insurance inactivity notice in relation
to the benefit is a notice in writing given to the member:
(a) stating the length of the continuous period for which the member’s account
has been inactive in relation to the product under which the benefit is
provided; and
(b) explaining that the member’s account will be active in relation to the
product if an amount, such as a contribution, is paid into the account; and
(c) stating the date on which, if there is no activity, the benefit will cease to be
provided; and
(d) stating:
(i) the amount of insurance fee charged in relation to the product for the
fund’s most recent completed year of income; and
(ii) the amount of insurance fee likely to be charged in relation to the
product for the fund’s current year of income; and
(e) explaining whether the benefit will cease to be provided:
(i) under the governing rules of the fund; or
(ii) because of the application of section 68AAA of the SIS Act; and
(f) setting out:
(i) whether or not it is possible for the member to elect to continue to be
provided the benefit; and
(ii) if it is possible for the member to do so—the method by which the
member can make the election.
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Regulation 7.9.44C
Time for giving notice
(6) If a trustee of a regulated superannuation fund is required under subregulation (4)
to ensure that a member of the fund is given a notice in relation to a benefit
provided to the member under a product offered by the fund, the notice must be
given:
(a) if paragraph (4)(a) is satisfied—within the period of 2 weeks after the day
on which that paragraph is satisfied; and
(b) if paragraph (4)(b) is satisfied—within the period of 2 weeks after the day
on which that paragraph is satisfied; and
(c) if paragraph (4)(c) is satisfied—within the period of 2 weeks after the day
on which that paragraph is satisfied.
7.9.44C Notices about insurance—right to cease insurance cover
(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.
Application
(2) This regulation applies if:
(a) a member of a regulated superannuation fund holds a choice product or a
MySuper product offered by the fund; and
(b) the fund provides a benefit to, or in respect of, the member under the
product by taking out or maintaining insurance; and
(c) either:
(i) the member has made an election, under subsection 68AAA(2) of the
SIS Act, that the benefit will be provided to, or in respect of, the
member under the product by taking out or maintaining insurance
even if the member’s account is inactive in relation to the product for
a continuous period of 16 months; or
(ii) if under the governing rules of the fund the benefit will not be
provided to, or in respect of, the member under the product by taking
out or maintaining insurance if the member’s account is inactive for a
period of less than 16 months—the member has made an election
under the governing rules of the fund that the benefit will be provided
in that way even if the member’s account is inactive in relation to the
product for that lesser period.
(3) However, this regulation does not apply in relation to:
(a) a defined benefit member; or
(b) an ADF Super member (within the meaning of the Australian Defence
Force Superannuation Act 2015); or
(c) a person who would be an ADF Super member apart from the fact that the
regulated superannuation fund is or was, for the purposes of Part 3A of the
Superannuation Guarantee (Administration) Act 1992, a chosen fund for
contributions for the person’s superannuation by the Commonwealth; or
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Regulation 7.9.45
(d) a member to whom the employer-sponsor contribution exception applies
under section 68AAE of the SIS Act.
(4) Each trustee of the regulated superannuation fund must ensure that the member is
given a notice about rights to cease insurance in relation to the benefit:
(a) within 2 weeks after the day on which the member makes the election
mentioned in subparagraph (2)(c)(i) or (ii) in relation to the benefit; and
(b) after the first notice about rights to cease insurance in relation to the benefit
is given, at regular intervals of no more than 15 months.
(5) For the purposes of subregulation (4), a notice about rights to cease insurance
in relation to a benefit is a notice in writing given to the member:
(a) explaining that the member has elected for the benefit to continue to be
provided:
(i) under the governing rules of the fund; or
(ii) because of the application of section 68AAA of the SIS Act; and
(b) stating the date on which, and the manner in which, the member made that
election; and
(c) explaining what the member needs to do if the member wishes to cease to
obtain the benefit.
Subdivision 5.9—Information on request: members
7.9.45 Regulated superannuation funds, ADFs and pooled superannuation trusts
(1) This regulation applies in relation to:
(a) a regulated superannuation fund (other than a self managed superannuation
fund); and
(b) an approved deposit fund (other than an excluded approved deposit fund);
and
(c) a pooled superannuation trust.
(2) For paragraph 1017C(5)(a) of the Act, the following are prescribed documents:
(a) the governing rules of the fund or pooled superannuation trust;
(b) audited accounts of the fund or pooled superannuation trust, together with
(whether or not specifically requested) the auditor’s report in relation to the
accounts;
(c) for a fund—the most recent actuarial report (as referred to in
regulation 9.30 of the SIS Regulations) on the fund, and any subsequent
written advice by an actuary to the trustee, to the extent that those
documents are relevant to:
(i) the overall financial condition of the fund; or
(ii) the entitlements of a person;
(d) a copy of the fund information given under section 1017DA of the Act, or
Subdivision 2.4.3 of the SIS Regulations, that was most recently given to
the members;
(f) if, for a pooled superannuation trust:
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Regulation 7.9.46
(i) fund information prepared for Subdivision 5.7 of Division 5; or
(ii) information similar to fund information prepared for the SIS
Regulations;
is relevant to the pooled superannuation trust, the fund information.
(3) If the person requesting the information is not a concerned person or an
employer-sponsor, the documents mentioned in paragraphs (1)(a) and (c) are not
prescribed documents.
7.9.46 RSAs
(1) This regulation applies in relation to an RSA.
(2) For paragraph 1017C(5)(a) of the Act, the terms and conditions of the RSA are a
prescribed document.
Subdivision 5.10—Information on request: payments
7.9.47 Modification of Act: charges for information requested
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to a superannuation entity or an RSA provider as set out in
Part 11 of Schedule 10A.
Subdivision 5.12—Periodic report when product holder ceases to hold
product: superannuation products and RSA products
7.9.49 Application of Subdivision 5.12
For paragraph 1017D(5)(g) of the Act, this Subdivision applies in relation to:
(a) superannuation products; and
(b) RSA products.
7.9.50 Exit reporting period
In this Subdivision, exit reporting period, in relation to a person who ceases to
hold a product to which this Subdivision applies, means the reporting period
mentioned in paragraph 1017D(2)(d) of the Act.
7.9.51 Time for compliance
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to a fund as set out in Part 12 of Schedule 10A.
7.9.52 General requirement
For paragraph 1020G(2)(b) of the Act, subsections 1017D(2) and (4) of the Act
are modified, in its application in relation to a person who ceases to hold a
superannuation product or an RSA product (other than a product issued by a
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Regulation 7.9.53
capital guaranteed fund) by requiring the issuer of the product to give all
information to:
(a) if the person is alive—the person; or
(b) if the person is deceased—each person receiving a benefit as a result of the
person’s death;
that the trustee reasonably believes such a person would reasonably need for the
purpose of understanding his or her investment in the financial product.
7.9.53 Information on death of product holder
For paragraph 1017D(5)(g) of the Act, if a person ceases by death to hold a
superannuation product (other than an interest in a pooled superannuation trust)
or an RSA product, the periodic report given to each person receiving a benefit
from the issuer of the product as a result of the person’s death must include:
(a) a statement setting out details (in summary form) of arrangements that the
issuer has made to deal with inquiries and information about the dispute
resolution system that covers complaints; or
(b) a statement that the details are available on request.
7.9.54 Specific requirements in all cases
For paragraph 1017D(5)(g) of the Act, if a reporting period is the exit reporting
period, the issuer of a superannuation product (other than the trustee of a self
managed superannuation fund or pooled superannuation trust) must include in
the periodic report given to a person who ceases, otherwise than by death to hold
the product:
(a) the information mentioned in regulation 7.9.19; and
(b) in relation to a death or disability benefit that ceases or reduces, because
the person has ceased to hold the product:
(i) either:
(A) the amount of the death or disability benefit immediately
before the person ceased to hold the product or at the end of
the last reporting period; or
(B) the method of working out the death or disability benefit; and
(ii) whether a continuation option is available to the person and, if it is,
details of the option, a contact person who is available to discuss the
option and a telephone number for the contact person.
7.9.55 Specific requirements in particular cases
(1) For paragraph 1017D(5)(g) of the Act, if a reporting period is the exit reporting
period, the issuer of a superannuation product (other than the trustee of a self
managed superannuation fund or pooled superannuation trust) must include in
the periodic report given to a person who ceases, otherwise than by death to hold
the product, the information mentioned in regulation 7.9.20.
(2) A nil amount need not be disclosed.
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Regulation 7.9.56
7.9.56 Exceptions to exit reporting period provisions: superannuation products
and RSA products
This Subdivision does not apply in relation to a superannuation product holder
who has been provided with the relevant information in the circumstances
described in Part 13 of Schedule 10A.
7.9.57 Exception—members subject to compulsory protection of small amounts
For paragraph 1017D(5)(g) of the Act, if a protected holder of a superannuation
product or RSA product ceases to hold the product, a periodic statement must
include the following information for the exit reporting period:
(a) the contact details of the product provider;
(b) the amount of the product holder’s withdrawal benefit;
(c) the amount of any deduction, from the product holder’s benefits, in
connection with payment of a superannuation contributions surcharge, or
an advance instalment of surcharge, during the exit reporting period;
(d) if there is a difference between the amount deducted and the amount
assessed under subsection 15(1) of the Superannuation Contributions Tax
(Assessment and Collection) Act 1997, or between the amount deducted
and the amount determined under subsection 15(2) of that Act—a
statement explaining the difference;
(e) for a superannuation product provided by an unfunded defined benefits
fund—details of the surcharge debt account kept by the issuer, under
subsection 16(2) of the Superannuation Contributions Tax (Assessment and
Collection) Act 1997, for the holder including:
(i) the balance of the account at the start of the exit reporting period; and
(ii) the amount debited to the account during the exit reporting period for
superannuation contributions surcharge that is assessed, by the
Commissioner of Taxation, to be payable on the member’s
surchargeable contributions; and
(iii) the amount of interest debited to the account, under subsection 16(4)
of that Act, during the exit reporting period; and
(iv) the balance of the account at the end of the exit reporting period.
7.9.58 Information to be given in cases other than death of RSA holder
(1) For paragraph 1017D(5)(g) of the Act, if a reporting period for an RSA is the
exit reporting period to which paragraph 1017D(2)(d) of the Act applies for an
RSA holder who ceases to be an RSA holder, otherwise than by death:
(a) the RSA provider must give the RSA holder the information mentioned in
regulation 7.9.19; and
(b) regulation 7.9.22 does not apply.
(2) A nil amount need not be disclosed.
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Division 5 Ongoing requirements for product disclosure after person becomes a member
Regulation 7.9.59
7.9.59 Information to be given where applicable
(1) For paragraph 1017D(5)(g) of the Act, if a reporting period for an RSA is the
exit reporting period to which paragraph 1017D(2)(d) of the Act applies for an
RSA holder who ceases to be an RSA holder, otherwise than by death, the RSA
provider must give the RSA holder:
(a) the information mentioned in regulation 7.9.26 (other than paragraphs
7.9.26(1)(h), (i), (l) and (m); and
(b) in the case of a death benefit that ceases or reduces, or will cease or reduce,
because the person has closed the RSA:
(i) either:
(A) the amount of the death benefit immediately before the
person closed the RSA or at the end of the last RSA holder
reporting period; or
(B) the method of working out the death benefit; and
(ii) whether a continuation option for insurance cover is available to the
person and, if it is, details of the option, a contact person who is
available to discuss the option and a telephone number for the contact
person.
(2) A nil amount need not be disclosed.
7.9.60 Modification of Act: exceptions to exit reporting period provisions
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to an RSA as set out in Part 13 of Schedule 10A.
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General requirements for financial disclosure Division 5AA
Regulation 7.9.60A
Division 5AA—General requirements for financial disclosure
7.9.60A Modification of Act: disclosure
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to the obligation to give information about financial
products as set out in Part 14 of Schedule 10A.
7.9.60B Disclosure of transactions in periodic statements
(1) This regulation applies to the following periodic statements:
(a) for a financial product other than a superannuation product, a managed
investment product, a foreign passport fund product or an investment life
insurance product—a periodic statement in relation to a reporting period
commencing on or after 1 July 2005;
(b) for a superannuation product:
(i) if the periodic statement is not an exit statement—a periodic statement
in relation to a reporting period commencing on or after 1 July 2005;
and
(ii) if the periodic statement is an exit statement—a periodic statement
issued on or after 1 July 2006;
(c) for a managed investment product:
(i) if the periodic statement is not an exit statement—a periodic statement
in relation to a reporting period commencing on or after 1 July 2006;
and
(ii) if the periodic statement is an exit statement—a periodic statement
issued on or after 1 July 2007;
(d) for an investment life insurance product:
(i) if the periodic statement is not an exit statement—a periodic statement
in relation to a reporting period commencing on or after 1 July 2005;
and
(ii) if the periodic statement is an exit statement—a periodic statement
issued on or after 1 July 2006.
(2) For paragraph 1017D(5)(c) of the Act, the periodic statement must include a
brief description of each transaction in relation to the product during the
reporting period.
(3) The amount of a transaction must include, if applicable:
(a) GST; and
(b) stamp duty; and
(c) income tax, after deductions have been taken into account.
(4) The description of a contribution paid into a superannuation account must be
sufficient to identify the source of the contribution, if that information has been
recorded by the fund.
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Division 5AA General requirements for financial disclosure
Regulation 7.9.60B
(5) A transaction (other than a contribution) of the same kind as another transaction
may be described with the other transaction in a single item in the periodic
statement if:
(a) it is practicable to do so; and
(b) the items are described together on a consistent basis in the periodic
statement.
Example: If a member incurs a weekly management cost, the transactions may be grouped
consistently on a monthly basis in the member’s periodic statement.
(6) For a superannuation product, a managed investment product or a foreign
passport fund product, the only fees and costs that need to be itemised in a
periodic statement are the fees and costs shown in the fees and costs template for
a Product Disclosure Statement in Part 2 of Schedule 10.
(7) The fees and costs mentioned in subsection (6) must be described using the terms
used in the template.
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Short-Form Product Disclosure Statements Division 5AB
Regulation 7.9.61AA
Division 5AB—Short-Form Product Disclosure Statements
7.9.61AA Modification of the Act: Short-Form Product Disclosure Statements
Definition of Short-Form Product Disclosure Statement
(1) For the provisions of the Act set out in column 2 of the following table, the Parts
of the Act specified in column 3 apply as if section 761A of the Act were
modified by inserting after the definition of self-managed superannuation fund
the following definition:
“Short-Form Product Disclosure Statement, or Short-Form PDS, means a
short-form Product Disclosure Statement that complies with the requirements of
Division 3A of Part 7.9.”
Column 1 Column 2 Column 3
Item Provisions of Act
paragraph 951C(1)(c) Part 7.7
paragraph 992C(1)(c) Part 7.8
paragraph 1020G(1)(c) Part 7.9
Definition of Supplementary Short-Form Product Disclosure Statement
(2) For the provisions of the Act set out in column 2 of the following table, the Parts
of the Act specified in column 3 apply as if section 761A of the Act were
modified by inserting after the definition of Supplementary Product Disclosure
Statement the following definition:
“Supplementary Short-Form Product Disclosure Statement, or Supplementary
Short-Form PDS, has the meaning given by section 1017L.”
Column 1 Column 2 Column 3
Item Provisions of Act
paragraph 951C(1)(c) Part 7.7
paragraph 992C(1)(c) Part 7.8
paragraph 1020G(1)(c) Part 7.9
Further modifications in Schedule 10BA
(3) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act is modified in its
application in relation to Short-Form Product Disclosure Statements as set out in
Schedule 10BA.
(4) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act is modified in its
application to Short-Form Product Disclosure Statements as set out in
Schedule 10BA.
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Division 5AB Short-Form Product Disclosure Statements
Regulation 7.9.61AA
(5) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application to Short-Form Product Disclosure Statements as set out in
Schedule 10BA.
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7.9
Dealing with money received for financial product before the product is issued Division 5A
Regulation 7.9.61A
Division 5A—Dealing with money received for financial product
before the product is issued
7.9.61A Lost application money
(1) This regulation applies if:
(a) a product provider is not able to return money in compliance with
subsection 1017E(4) of the Act; and
(b) the product provider is not able to issue or transfer a financial product to, or
in accordance with the instructions of, the person who paid that money in
compliance with subsection 1017E(4); and
(c) the money is to be transferred to ASIC to be dealt with under Part 9.7 of
the Act.
(2) This regulation also applies if:
(a) money is taken out of an account mentioned in subsection 1017E(2) of the
Act by a product provider for the purpose of returning it to the person by
whom it was paid in compliance with paragraph 1017E(3)(a); and
(b) the product provider is not able to return the money in compliance with
subsection 1017E(4).
(3) For paragraph 1017E(3)(d) of the Act, the situations mentioned in subregulations
(1) and (2) are situations in which money may be taken out of an account
mentioned in section 1017E.
(4) For paragraph 1017E(4)(c) of the Act, the product provider must, after taking the
money out of the account:
(a) transfer the money to ASIC to be dealt with under Part 9.7 of the Act; and
(b) give ASIC any information in the possession of the product provider that
could reasonably assist ASIC to assess a claim by a person that the person
is entitled to the money.
7.9.61B Issue of substitute insurance product
(1) This regulation applies if:
(a) money is paid to acquire an insurance product (the new product); and
(b) the product provider issues another product (the other product) which is
the same as the new product except for the date on which it ceases to have
effect; and
(c) the product provider has not issued the new product.
(2) For paragraph 1017E(3)(d) of the Act, the situation mentioned in
subregulation (1) is a situation in which money may be taken out of an account
mentioned in section 1017E.
(3) For paragraph 1017E(4)(c) of the Act, the product provider must, after taking the
money out of the account:
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Division 5A Dealing with money received for financial product before the product is issued
Regulation 7.9.61C
(a) issue the new product before the date on which the other product ceases to
have effect; or
(b) return the money to the person by whom it was paid before the date on
which the other product ceases to have effect.
7.9.61C Cheques
For paragraph 1020G(1)(c) of the Act, Part 7.9 applies as if section 1017E of the
Act were modified by adding, after subsection 1017E(6):
‘(7) For this section, if a payment is made by cheque, the payment is taken to
have been paid to, and received by, the product provider when the cheque
is honoured.’.
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7.9
Confirming transactions Division 5B
Regulation 7.9.61D
Division 5B—Confirming transactions
7.9.61D Transactions involving superannuation products
(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to the
following financial products:
(a) an interest in a regulated superannuation fund that is not a public offer
superannuation fund;
(b) an RSA product that has been issued to the product holder because of the
operation of subsection 52(4) of the RSA Act;
(c) an interest in an eligible rollover fund of which the product holder became
a member under section 243 of the SIS Act;
(d) an interest in an eligible rollover fund of which the product holder became
a member in the circumstances mentioned in section 89 of the RSA Act;
(e) an interest in a public offer superannuation fund that is not a successor fund
if:
(i) the product holder is a standard employer-sponsored member of the
fund; or
(ii) the product holder is a person who became a member of the fund in
the circumstances mentioned in regulation 7.9.06B.
(2) Part 7.9 of the Act applies in relation to the financial products as if the following
subsection were inserted after subsection 1017F(5A) of the Act:
‘(5B) For a financial product mentioned in regulation 7.9.61D of the
Corporations Regulations 2001:
(a) subsection (5A) does not apply if the responsible person in relation to
a transaction involving the financial product provides the holder of the
financial product with a facility that is able to be accessed by the
holder:
(i) by phone; or
(ii) by writing; or
(iii) by another method that the responsible person knows, or
reasonably believes, that the product holder is able to use; and
(b) confirmation may be provided by means of the facility mentioned in
paragraph (a).’.
(3) Part 7.9 of the Act applies in relation to the financial products as if
paragraph 1017F(6)(a) of the Act were replaced by the following paragraph:
‘(a) must be:
(i) by telephone; or
(ii) by writing; or
(iii) by another method that the responsible person knows, or
reasonably believes, that the product holder is able to use;
and’.
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Division 5C CGS depository interests
Regulation 7.9.61E
Division 5C—CGS depository interests
7.9.61E CGS depository interest information website
(1) This regulation is made for section 1020AH of the Act.
(2) The CGS depository interest information website is the website at
www.australiangovernmentbonds.gov.au.
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Confirmation of transactions Division 6
Regulation 7.9.62
Division 6—Confirmation of transactions
7.9.62 Confirmation of transactions not required
(1) For paragraph 1017F(4)(e) of the Act, a transaction is not required to be
confirmed by the trustee of a superannuation fund, an ADF or pooled
superannuation trust if:
(a) the transaction relates to the termination of a superannuation product; and
(b) the trustee has provided information in accordance with section 1017D of
the Act and Subdivision 5.12 of these Regulations about having left the
superannuation fund, ADF or pooled superannuation trust.
(1A) For paragraph 1017F(4)(e) of the Act, a transaction is not required to be
confirmed by the trustee of a superannuation fund if the transaction relates to a
superannuation product provided by a self managed superannuation fund.
(2) For paragraph 1017F(4)(e) of the Act, a transaction is not required to be
confirmed to the product holder by an RSA provider if:
(a) the transaction relates to an RSA; and
(b) the trustee has provided information in accordance with section 1017D of
the Act and Subdivision 5.12 of these Regulations about closing the RSA.
(3) For paragraph 1017F(4)(e) of the Act, the following transactions in relation to a
financial product are not required to be confirmed:
(a) debiting for fees, taxes or charges in respect of the financial product or
other transactions involving the financial product;
(b) debiting for charges or duties on deposits into, or withdrawals from, the
financial product that are payable under a law of the Commonwealth or of
a State or Territory;
(c) debiting an amount from a basic deposit product if:
(i) the holder of the product has been given a periodic statement under
section 1017D of the Act not later than 6 months after the transaction
occurs; and
(ii) the periodic statement contains the information about the transaction
that is required by that section;
(d) crediting an amount to a basic deposit product if:
(i) the holder of the product has been given a periodic statement under
section 1017D of the Act not later than 6 months after the transaction
occurs; and
(ii) the periodic statement contains the information about the transaction
that is required by that section.
(4) For paragraph 1017F(4)(e) of the Act, the following transactions in relation to a
financial product are not required to be confirmed:
(a) a transaction that is required or authorised by a law of the Commonwealth
or of a State or Territory;
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Division 6 Confirmation of transactions
Regulation 7.9.62
(b) a transaction:
(i) consisting solely of an additional contribution towards the financial
product; and
(ii) in relation to which the holder has agreed to the timing and amount, or
method of calculating the amount, of the additional contribution;
(c) a transaction:
(i) consisting solely of a withdrawal from the financial product; and
(ii) in relation to which the holder has agreed to the timing and amount, or
method of calculating the amount, of the withdrawal;
(d) a transaction:
(i) consisting solely of the acquisition of managed investment products;
and
(ii) in relation to which the holder has agreed to the timing and amount, or
method of calculating the amount, of the acquisition; and
(iii) in relation to which the holder of the managed investment products,
before agreeing to the acquisition, already held or had agreed to
acquire managed investment products that were interests in the same
registered scheme as the managed investment products that are to be
acquired under the agreement;
(da) a transaction:
(i) consisting solely of the acquisition of foreign passport fund products;
and
(ii) in relation to which the holder has agreed to the timing and amount, or
method of calculating the amount, of the acquisition; and
(iii) in relation to which the holder of the foreign passport fund products,
before agreeing to the acquisition, already held or had agreed to
acquire foreign passport fund products that were interests in the same
notified foreign passport fund as the foreign passport fund products
that are to be acquired under the agreement;
(e) a transaction that relates to:
(i) a superannuation product or an RSA product; and
(ii) a superannuation surcharge liability for a product holder arising under
section 10 of the Superannuation Contribution Tax (Assessment and
Collections) Act 1997;
(f) the acceptance or settlement of a claim relating to an insurance product;
(g) a transaction consisting of:
(i) the generating by a financial product of a financial return or other
benefit for the holder of the product; or
(ii) the payment to that holder of that return or other benefit, if the holder
has agreed to the method by which the payment will be made; or
(iii) crediting negative interest to a member’s notional account in a
superannuation fund, ADF or pooled superannuation trust account;
(h) a transaction that relates to:
(i) a superannuation product or an RSA product; and
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Regulation 7.9.63
(ii) a Government co-contribution arising under section 6 of the
Superannuation (Government Co-contribution for Low Income
Earners) Act 2003.
(5) For paragraph 1017F(4)(e) of the Act, a transaction in relation to a financial
product is not required to be confirmed if:
(a) the transaction is debiting an amount from a basic deposit product in the
circumstances in paragraph (3)(c); and
(b) the transaction involves the use of a facility for making non-cash payments
that is linked to the basic deposit product; and
(c) the amount is debited from the basic deposit product for the purpose of
making a payment.
(6) For paragraph 1017F(4)(e) of the Act, a transaction in relation to a financial
product is not required to be confirmed if:
(a) the transaction is crediting an amount to a credit facility; and
(b) the transaction involves the use of a facility for making non-cash payments
that is linked to the credit facility; and
(c) the amount is credited to the credit facility for the purpose of making a
payment.
7.9.63 Confirmation of transactions: precise costs of transaction not known
(1) For subparagraph 1017F(8)(c)(iii) of the Act, the confirmation of a transaction of
a financial product is not required to include details of the amount payable by the
holder of the financial product if the amount is not known at the time of the
confirmation.
(2) For subparagraph 1017F(8)(c)(iv) of the Act, the confirmation of a transaction of
a financial product is not required to give details of the taxes and stamp duties
payable in relation to the transaction if the amount of the taxes and stamp duties
is not known at the time of the confirmation.
(3) For paragraph 1017F(9)(c) of the Act, section 1017F of the Act is modified in
relation to its application to a transaction of a financial product as set out in
Part 15 of Schedule 10A.
7.9.63A Persons who must confirm transactions
(1) For paragraph 1017F(9)(a) of the Act, this regulation modifies
subsection 1017F(2) of the Act to change the person required to provide
confirmation of a transaction.
(2) A transaction:
(a) that is not the issue of a financial product (other than a derivative that is not
a warrant); and
(b) in which a financial services licensee deals in the financial product on
behalf of the holder of the financial product; and
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Division 6 Confirmation of transactions
Regulation 7.9.63B
(c) by which the holder acquires or disposes of all or part of the financial
product;
must be confirmed by the financial services licensee.
(3) A transaction:
(a) to which subregulation (2) does not apply; and
(b) by which a financial product is issued to a holder;
must be confirmed by the issuer of the financial product.
(4) A transaction:
(a) that is a sale pursuant to an offer to which section 1012C of the Act
applies; and
(b) to which subregulation (2) does not apply; and
(c) by which a holder acquires a financial product;
must be confirmed by the seller of the financial product.
(5) A transaction:
(a) to which subregulation (2) does not apply; and
(b) by which the holder of the financial product disposes of all or part of the
financial product to the issuer of the financial product;
must be confirmed by the issuer of the financial product.
(6) A transaction that:
(a) relates to a financial product held by a particular holder; and
(b) occurs while that holder holds the financial product; and
(c) is not the acquisition or a disposal of all or part of the financial product;
must be confirmed by the issuer of the financial product.
7.9.63B Content of confirmation of transactions—general
(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to a
transaction that is the acquisition or disposal of a financial product.
(2) The confirmation of the transaction must identify:
(a) the financial product; and
(b) the number or amount of financial products that are the subject of the
transaction.
(3) If the transaction takes place in the ordinary course of business on a licensed
market, the confirmation of the transaction must also identify each licensed
market of which the responsible person is a participant.
(4) If the responsible person is dealing on their own behalf with a person who is not
a financial services licensee, the confirmation of the transaction must also state
that the responsible person is dealing in that way.
(5) Subregulation (4) does not apply if:
(a) the transaction is the issue of a product; and
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Regulation 7.9.63C
(b) the responsible person is the product issuer.
(6) If:
(a) the financial product is able to be traded on a market in which the
responsible person is a participant; and
(b) the transaction did not take place in the ordinary course of business on a
licensed market in which the responsible person is a participant;
the confirmation of the transaction must also include a statement to that effect.
(7) If the transaction took place on-market, the confirmation of the transaction must
also include the name by which that market is generally known.
(8) If the transaction involves more than one financial product, the confirmation of
the transaction must also include the price per unit of the financial products.
(9) For paragraph 1017F(9)(c) of the Act, paragraph 1017F(8)(a) of the Act is
modified in its application to a transaction involving a basic deposit product
(other than an acquisition or disposal of the product) by omitting ‘and the
holder’.
7.9.63C Confirmation of transaction—multiple transactions
(1) For paragraph 1017F(9)(b) of the Act, subregulation (2) applies in relation to a
transaction if:
(a) the responsible person is a participant of a licensed market; and
(b) the participant has complied with all of the participant’s obligations in
relation to the transaction under the market integrity rules and the operating
rules of the licensed market; and
(c) the transaction forms part of a series of transactions made to complete an
order placed with a financial services licensee; and
(d) the holder of the product has given to the financial services licensee, in
relation to that order or all orders (or all orders included in a class in which
that order is included) placed with the financial services licensee by the
holder, prior authorisation to give to the client a single confirmation in
respect of a series of transactions carried out under the order instead of an
individual confirmation in respect of each transaction in the series.
(2) Subsection 1017F(5) of the Act is taken to be satisfied if, in respect of the
transaction:
(a) the financial services licensee gives to the holder a single confirmation in
respect of the series of transactions in which the transaction is included
that:
(i) is in accordance with the authorisation; and
(ii) subject to subregulation (4), complies with the Act; and
(b) the confirmation is given:
(i) as soon as practicable; or
(ii) otherwise as permitted by the market integrity rules or the operating
rules of that licensed market.
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Division 6 Confirmation of transactions
Regulation 7.9.63D
(3) For paragraph 1017F(9)(c) of the Act, subregulation (4) applies in relation to a
transaction if:
(a) the responsible person is a participant of a licensed market; and
(b) the participant has complied with all of the participant’s obligations in
relation to the transaction under the market integrity rules and the operating
rules of the licensed market; and
(c) the transaction forms part of a series of transactions made to complete an
order placed with a financial services licensee; and
(d) the holder of the product has given to the financial services licensee, in
relation to that order or all orders (or all orders included in a class in which
that order is included) placed with the financial services licensee by the
holder, prior authorisation to give to the client a single confirmation in
respect of the series of transactions that specifies the average price per unit
of financial products acquired or disposed of in the series of transactions,
instead of an individual confirmation in respect of each transaction in the
series, that specifies the price per unit of the financial products acquired or
disposed of in the transaction to which each confirmation relates.
(4) Subregulation 7.9.63B(7) is taken to be satisfied if, in respect of the transaction:
(a) the financial services licensee gives the confirmation to the holder in
accordance with the authorisation; and
(b) unless otherwise provided by the market integrity rules or the operating
rules of the licensed market, the financial services licensee, if requested to
do so by the client, also gives to the holder a document that specifies the
price per unit of the financial products sold or bought in each transaction in
the series.
(5) For this regulation, an authorisation given by a person to a financial services
licensee:
(a) must be given orally, or in writing, by the person; and
(b) is effective until it is revoked, either orally or in writing, by the person.
(6) If a person gives an oral authorisation to a financial services licensee, or revokes
an authorisation orally, the financial services licensee must:
(a) make a written record of the authorisation or revocation; and
(b) send a copy of the written record to the person.
(7) In this regulation:
order means an instruction, or a series of instructions, to acquire or dispose of
financial products.
7.9.63D Confirmation of transaction—information about cooling-off period
(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to a
transaction:
(a) that is the acquisition of a financial product to which:
(i) regulation 7.9.14, 7.9.66 or 7.9.68 applies; and
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Confirmation of transactions Division 6
Regulation 7.9.63E
(ii) to which regulation 7.9.64 does not apply; or
(b) relating to an RSA product to which subsection 1012I(2) of the Act applies,
other than:
(i) an acquisition to which subsection 52(5) of the RSA Act applies; or
(ii) a transaction in which the product holder disposes of the holder’s
interest in the product before the time that confirmation of the
acquisition is required under section 1017F of the Act.
(2) The confirmation of the transaction must identify information about any
cooling-off regime that applies in respect of acquisitions of the product (whether
the regime is provided for by a law or otherwise).
7.9.63E Confirmation of transaction—facility that provides written
confirmation
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies to all financial
products and transactions as if subsection 1017F(5) of the Act were modified by
omitting:
‘An arrangement under which the holder may request or require another
person to provide a confirmation does not count as a facility that satisfies
paragraph (b).’
and inserting:
‘An arrangement under which the holder may request or require another
person (other than the responsible person or a person acting on behalf of
the responsible person) to provide a confirmation does not count as a
facility that satisfies paragraph (b).’.
7.9.63F Confirmation of transaction—acquisition of financial product
(1) For subparagraph 1017F(8)(c)(iii) of the Act, this regulation applies in relation to
the confirmation of a transaction that is the acquisition of a financial product.
(2) The details of the transaction relating to the amount paid or payable by the holder
in relation to the transaction need include only the amount the holder is required
to pay to acquire the product.
7.9.63G Confirmation of transaction—disposal of financial product
(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to the
confirmation of a transaction that is the disposal of a financial product.
(2) The confirmation must include the amount paid or payable to the holder as a
result of the disposal.
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Regulation 7.9.63H
7.9.63H Certain product issuers and regulated persons must meet appropriate
dispute resolution requirements—self managed superannuation funds
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to a
self managed superannuation fund as if section 1017G of the Act were omitted.
7.9.63I Confirmation of transaction in electronic form
(1) For subparagraph 1017F(6)(a)(ii) of the Act, a confirmation of a transaction that
is to be given in electronic form must, as far as practicable, be presented in a way
that will allow the person to whom it is given to keep a copy of it so that the
person can have ready access to it in the future.
(2) A confirmation of a transaction that is to be given in electronic form must be
presented in a way that clearly identifies the information that is part of the
confirmation.
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Division 7—Cooling-off periods
7.9.64 Cooling-off periods not to apply
(1) For paragraph 1019A(2)(a) of the Act, the following subclasses of financial
products are excluded from paragraph 1019A(1)(a) of the Act:
(a) a financial product offered or issued under a distribution reinvestment plan
or switching facility;
(b) a financial product the acquisition of which is an additional contribution
made under an existing agreement or contract;
(c) a financial product issued as consideration for an offer made under a
takeover bid under Chapter 6 of the Act;
(d) an interim contract of insurance within the meaning of subsection 11(2) of
the Insurance Contracts Act 1984;
(e) a managed investment product that is not liquid in accordance with
section 601KA of the Act at the time the managed investment product is
issued;
(f) a superannuation product that is issued in relation to a superannuation
entity that is not a public offer superannuation entity, other than;
(i) a superannuation product taken to be issued because of
regulation 7.1.04E; or
(ii) an annuity or pension taken to be issued because of
subregulation 7.9.02(4);
(fa) a superannuation product that is issued in relation to:
(i) a public offer superannuation entity mentioned in
paragraph 7.6.01(1)(b), (c) or (d); or
(ii) a public offer superannuation entity that is a successor fund in relation
to the transfer of benefits to that fund; or
(iii) a public offer superannuation entity that is an eligible rollover fund
and in relation to which the superannuation product is issued pursuant
to Part 24 of the SIS Act or Part 9 of the RSA Act;
(fb) a superannuation product that is a pension issued by a superannuation fund
the rules of which do not allow a member to receive accumulated benefits
in a form other than a pension from that fund;
(g) a risk insurance product that is:
(i) of less than 12 months duration; and
(ii) a renewal of an existing product on the terms and conditions to which
the product is currently subject;
(h) a managed investment product in relation to which subsection 1016D(1) of
the Act applies;
(ha) a foreign passport fund product in relation to which subsection 1016D(1) of
the Act applies;
(i) a managed investment product:
(i) to which Chapter 6D of the old Corporations Act applied; and
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(ii) that was listed before the FSR commencement.
(2) For paragraph 1020G(1)(a) of the Act, a reference in paragraph 1019A(3)(a) of
the Act to a client does not include a person who holds a superannuation product
as a standard employer-sponsor member.
7.9.64A Notification of exercise of right of return—risk insurance products
For paragraph 1019B(2)(c) of the Act, a right of return may be exercised in
relation to a risk insurance product by notifying the responsible person in a way
permitted by the responsible person.
7.9.65 Return of financial product: general
(1) For subsection 1019B(5A) of the Act, the right to return the risk insurance
product for an event that will start and end within the 14 day period mentioned in
subsection 1019B(3) of the Act (and to have money paid to acquire the risk
insurance product repaid) cannot be exercised at any time after the end of the
period starting when the risk insurance product was provided and ending on the
earlier of:
(a) the 14-day period mentioned in subsection 1019B(3) of the Act; and
(b) the start of the event.
Example: Short-term travel insurance.
(1A) For subsection 1019B(5A) of the Act, if:
(a) a person acquires an interest in a managed investment scheme; and
(b) the interest is a managed investment product or a foreign passport fund
product; and
(c) the person acquires one or more other interests in that managed investment
scheme in the course of the same transaction;
the person cannot exercise a right to return the product otherwise than by
returning all of those interests.
Note: For the purposes of the Act and these Regulations, managed investment schemes
include notified foreign passport funds: see section 1213E of the Act.
(2) In this regulation:
event means the commencement of the process in relation to which the risk
insurance product was entered into.
Examples:
1 For insurance on household goods during removal, the commencement of loading a
transportation vehicle is the event.
2 For travel insurance, the commencement of the journey is the event.
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7.9.66 Return of financial product: superannuation and RSAs
(2) For subsection 1019B(2) of the Act, it is a requirement of the exercise of the
right to return a superannuation product or RSA product that, if the money to be
repaid includes:
(a) restricted non-preserved benefits within the meaning of the SIS
Regulations; or
(b) preserved benefits within the meaning of the SIS Regulations;
the holder of the product must nominate a superannuation entity or RSA into
which the money representing restricted non-preserved benefits or preserved
benefits is to be repaid.
(3) The right of return is taken to have been exercised only on receipt by the
responsible person of the nomination.
(4) The holder must make the nomination not later than 1 month after notifying the
responsible person of the right to exercise the right of return.
(5) The holder must notify the responsible person in writing or by electronic means.
(6) For subsection 1019B(7) of the Act, if:
(a) a holder nominates a superannuation entity or RSA; and
(b) the superannuation entity or RSA does not accept the nomination;
the responsible person may rollover or transfer the holder’s benefits to an eligible
rollover fund.
(7) For subsection 1019B(7) of the Act, if the right of return is exercised, the
responsible person must return the money as directed.
7.9.67 Variation of amount to be repaid
(1) For subsection 1019B(8) of the Act, the amount to be repaid on an exercise of
the right to return a financial product is to be varied in accordance with this
regulation.
Investment-linked product
(2) If:
(a) the financial product is:
(i) an investment-linked product within the meaning of the Insurance
Contracts Act 1984; or
(ii) a managed investment product; or
(iia) a foreign passport fund product; or
(iii) a superannuation product (subject to the governing rules of the issuer
of the superannuation product relevant to the redemption of
superannuation interests); and
(b) on the day on which the responsible person receives notification from the
product holder exercising the holder’s right to return, the amount that
would have been the price at which the product was acquired (the
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allocation price) if the product had been acquired on that day is less than
the allocation price on the day on which the product was acquired;
the amount that would otherwise be repaid may be reduced by the adjustment
amount.
(3) If:
(a) the financial product is:
(i) an investment-linked product within the meaning given by the
Insurance Contracts Act 1984; or
(ii) a managed investment product; or
(iia) a foreign passport fund product; or
(iii) a superannuation product; and
(b) on the day on which the responsible person receives notification from the
product holder exercising the holder’s right to return, the amount that
would have been the price at which the product was acquired (the
allocation price) if the product had been acquired on that day is greater
than the allocation price on the day on which the product was acquired;
the amount that would otherwise be repaid is increased by the adjustment
amount.
(4) For subregulations (2) and (3), the adjustment amount is the difference between:
(a) the price at which the product was acquired; and
(b) the price at which the product could be acquired on the day on which the
responsible person receives notification from the product holder exercising
the holder’s right to return.
(5) If the price referred to in paragraph (4)(b) is not determined under the relevant
contract or legal relationship on the day on which the responsible person receives
notification from the product holder exercising the holder’s right to return, the
amount to be repaid and the adjustment amount is to be determined:
(a) on the basis of the most recent day on which a price was calculated under
the contract or legal relationship; or
(b) if there is no day of that kind, as soon as practicable after the product issuer
receives the notification.
Tax
(6) If:
(a) tax or duty of any kind has been paid, or is payable, by the responsible
person because of the issue of the financial product; and
(b) either:
(i) if the tax or duty has been paid, the responsible person is unable to
obtain a refund of the tax or duty; or
(ii) if the tax or duty has not been paid, the tax or duty does not cease to
be payable as a result of the exercise of the right to return the financial
product;
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the amount that would otherwise be repaid is reduced by the amount of the tax or
duty.
Certain financial products
(7) The amount that would otherwise be repaid in relation to the return of a financial
product (other than an RSA product) may be reduced to account for reasonable
administrative and transaction costs (other than the payment of commissions or
similar benefits) incurred by the responsible person that:
(a) are reasonably related to the acquisition of the financial product and the
subsequent termination of the contract or legal relationship; and
(b) do not exceed the true cost of an arms’ length transaction.
Financial product issued for specific period
(8) If:
(a) the financial product is:
(i) a risk insurance product; or
(ii) that part of a financial product that is a risk insurance product; and
(b) either:
(i) the financial product has been issued for a specific period; or
(ii) the premium for the financial product has been paid in relation to
cover for a specific period; and
(c) a proportion of that period has already passed when the right to return the
risk insurance product is exercised;
the amount that would otherwise be repaid may be reduced by a proportion equal
to the proportion of the period that has passed.
General
(9) If the financial product is subject to a distribution to which
subregulation 7.9.70(2) applies, the amount that would otherwise be repaid may
be reduced by the amount of that distribution.
7.9.68 Modification of section 1019B of the Act: client includes standard
employer-sponsor
(1) For paragraph 1020G(1)(c) of the Act, subsection 1019A(1) and
paragraph 1019A(3)(a) of the Act are modified so that a reference in those
provisions to a client includes a standard employer-sponsor in respect of the
issue of a superannuation product to an employee of the standard
employer-sponsor as a standard employer-sponsored member in accordance with
subparagraph 1016A(2)(b)(iii) of the Act.
(2) For paragraph 1020G(1)(c) of the Act, subsection 1019B(1) of the Act is
modified in its application to the issue of a superannuation product mentioned in
subregulation (1) as if a reference in subsection 1019B(1) to money paid to
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acquire a financial product were a reference to all monies paid in relation to the
superannuation product.
(3) For subsection 1019B(2) of the Act, it is a requirement of the exercise of the
right to return a superannuation product mentioned in subregulation (1) that, if
the monies to be repaid include employer contributions (whether or not they are
mandated employer contributions), the standard employer-sponsor must
nominate a superannuation fund, approved deposit fund or RSA into which the
employer contributions are to be repaid.
(4) The right of return is taken to have been exercised only on receipt by the
responsible person of the nomination.
(5) The standard employer-sponsor must make the nomination not later than 1
month after notifying the responsible person of the right to exercise the right of
return.
(6) The standard employer-sponsor must notify the responsible person in writing or
by electronic means.
(7) For subsection 1019B(7) of the Act, if the right of return is exercised by a
standard employer-sponsor under this regulation, the responsible person must
return the money as directed.
(8) For subsection 1019B(7) of the Act, if the right of return is exercised by a
standard employer-sponsor under this regulation, and if the monies to be repaid
include monies paid in relation to the superannuation product by the standard
employer-sponsored member (including monies rolled over or transferred from
another superannuation entity or RSA) (the relevant monies) the relevant monies
are to be paid by the responsible person:
(a) in respect of benefits defined under the SIS Regulations as a restricted
non-preserved benefits or preserved benefits (restricted monies)—to a
superannuation entity or RSA as directed by the standard
employer-sponsored member; or
(b) in respect of any other relevant monies paid by the standard
employer-sponsored member—as directed by the standard
employer-sponsored member.
(9) For subsection 1019B(7) of the Act, if:
(a) a financial product mentioned in this regulation is subject to the nomination
of a further superannuation entity or RSA; and
(b) the application in relation to the issue of a financial product is not accepted
by the nominated superannuation entity or RSA;
the responsible person may rollover or transfer the holder’s benefits to an eligible
rollover fund.
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7.9.69 Modification of provisions of Division 5 of Part 7.9 of the Act: terms of
contract
(1) For paragraph 1020G(2)(a) of the Act, this regulation applies in relation to the
following financial products:
(a) an investment-linked product within the meaning of the Insurance
Contracts Act 1984;
(b) a managed investment product;
(ba) a foreign passport fund product;
(c) a superannuation product.
(2) Division 5 of Part 7.9 of the Act is modified to the extent necessary to provide
that a contract or legal relationship governing the issue and redemption of the
financial product is taken to include a provision that:
(a) a product holder may have the right to return a financial product under the
Act; and
(b) the product issuer does not contravene any terms of the contract or legal
relationship by complying with a request to return a financial product made
in accordance with the Act; and
(c) the amount to be repaid following the exercise of the right to return a
financial product is the amount calculated in accordance with the Act.
(3) Division 5 of Part 7.9 of the Act, and the regulations made for, or relating to,
provisions of that Division, are also modified to the extent necessary to give
effect to the modification set out in subregulation (2).
7.9.70 Modification of provisions of Division 5 of Part 7.9 of the Act:
distributions
(1) For paragraph 1020G(2)(a) of the Act, this regulation applies in relation to the
holder of:
(a) an investment-linked product within the meaning of the Insurance
Contracts Act 1984; or
(b) a managed investment product; or
(ba) a foreign passport fund product; or
(c) a superannuation product.
(2) A reference in paragraph 1019B(5)(a) of the Act to a right or power does not
include the making of a distribution to the holder.
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Regulation 7.9.71
Division 8—Other requirements
7.9.71 Modification of section 1017D of the Act: use of more than 1 document
For paragraph 1020G(1)(c) of the Act, section 1017D of the Act is modified:
(a) so that a reference in those sections to a periodic statement includes 2 or
more documents that include all of the information required by those
sections; and
(b) as if subsections 1013L(1), (2), (3), (5) and (7) of the Act were included in
that section, and referred to a periodic statement instead of a Product
Disclosure Statement.
7.9.71A Periodic statements—exemption for passbook accounts
For paragraph 1020G(1)(b) of the Act, a basic deposit product (an account) for
which the holder of the product is provided with, and keeps, a document
commonly referred to as a ‘passbook’ is exempt from section 1017D of the Act
if, under the terms of the operation of the account:
(a) the client has a right to a reasonable opportunity to present the passbook to
the issuer; and
(b) the issuer enters particulars of each transaction involving the account
including the amount of the transaction and the current balance of the
account; and
(c) there is no fee associated with the passbook or the entry of particulars into
the passbook.
7.9.72 Modification of section 1017D of the Act: information already given
For paragraph 1020G(1)(c) of the Act section 1017D of the Act is modified so
that if:
(a) a financial product is a superannuation product or an RSA product; and
(b) the issuer has provided information in accordance with Subdivisions 5.2
and 5.3; and
(c) that information has also been provided in accordance with
subsection 1017D(5A) of the Act;
paragraphs 1017D(5)(a), (b), (d) and (e) are omitted.
7.9.73 Reporting periods: general
For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its
application in relation to financial products as set out in Part 16 of Schedule 10A.
7.9.74 Form of application
(1) For paragraph (c) of the definition of eligible application in subsection 1016A(1)
of the Act, an application form for a financial product, for use by a client, that is
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attached to, accompanying or derived from a Product Disclosure Statement must
require the following information:
(a) the applicant’s name;
(b) the applicant’s date of birth;
(c) the applicant’s address.
(2) An application form for a financial product, for use by an employer that is
applying as a prospective standard employer-sponsor, that is attached to,
accompanying or derived from a Product Disclosure Statement must require the
employer’s name and address.
7.9.74A Periodic statements—requirement to state information as amounts in
dollars
(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if
subsection 1017D(5A) were modified to read as follows:
‘(5A) Unless in accordance with the regulations and a determination by ASIC:
(a) information to be disclosed in accordance with paragraphs (5)(a), (b),
(c), (d) and (e) must be stated as amounts in dollars; and
(b) any other information in relation to amounts paid by the holder of the
financial product during the period must be stated as amounts in
dollars.’.
(2) For paragraph 1020G(1)(a) of the Act, the issuer of a financial product does not
have to provide the information mentioned in subsection 1017D(5A) of the Act
in the form required by that subsection, in a periodic statement prepared before
1 January 2005.
(3) For subsection 1017D(5A) of the Act, as modified in accordance with
subregulation (1), if ASIC determines that, for a compelling reason based on the
nature of a financial product or service, or the nature of the information, to state
information to be disclosed in accordance with paragraphs 1017D(5)(a), (b), (c),
(d) and (e) of the Act as an amount in dollars:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(4) For subsection 1017D(5A) of the Act, as modified in accordance with
subregulation (1), if ASIC determines that, for a compelling reason, based on the
nature of a financial product or service, or the nature of the information, to state
information to be disclosed in accordance with paragraphs 1017D(5)(a), (b), (c),
(d) and (e) of the Act as an amount in dollars, or to describe the amount as a
percentage:
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(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a client, or a class of clients;
the information may be set out as a description of the method of calculating the
charge or benefit (including worked dollar examples, unless that is
inappropriate).
(5) A determination under subregulation (3) or (4) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.75 Content of periodic statements: costs of transactions
(1) For paragraph 1017D(5)(g) of the Act, the prescribed details in relation to a
financial product include:
(a) the amounts paid by the holder of the financial product in respect of the
financial product during the period; and
(b) if the amounts paid in respect of the financial product, and the amounts
paid in respect of other financial products, are paid into a common fund,
and amounts are deducted from the common fund by way of expenses, fees
and charges:
(i) a proportion of the amount deducted that is actually or notionally
attributable to the product holder’s interest; and
(ii) if applicable—a statement informing the product holder that the
notional proportion of the amount may not give an accurate estimate
of the effect of the deduction on the product holder’s interest; and
(c) a statement informing the product holder:
(i) that there is a dispute resolution mechanism that covers complaints by
holders of the product; and
(ii) of the means by which a product holder is able to gain access to that
mechanism; and
(d) a statement that further information in relation to the financial product is
available on request, and the means by which the product holder can gain
access to that information; and
(e) in relation to a superannuation product (other than a self-managed
superannuation fund), a managed investment product or a foreign passport
fund product—the details set out in Part 3 of Schedule 10.
(1A) However, for a periodic statement mentioned in an item of the table that is issued
for the financial product mentioned in the item, and issued at a time described in
the item, the prescribed details set out in paragraph (1)(b) are not required to be
included if the statement includes, or is accompanied by, statements to the effect
that:
(a) amounts for fees, expenses or charges have been deducted from a common
fund to which the product relates in relation to the reporting period; and
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(b) those deductions are borne indirectly by the holders of the product, and
may affect the return to the holders; and
(c) further information about the deductions can be obtained by contacting the
issuer of the product.
Item Kind of statement Product Statement issued
1 Periodic statement Superannuation product to which in relation to a reporting
other than exit Division 4C of this Part applies period commencing
statement before 1 July 2005
Exit statement Superannuation product to which before 1 July 2006
Division 4C of this Part applies
3 Periodic statement Financial product other than in relation to a reporting
other than exit superannuation product to which period commencing
statement Division 4C of this Part applies before 1 July 2006
Exit statement Financial product other than before 1 July 2007
superannuation product to which
Division 4C of this Part applies
(2) For paragraph (1)(a), an amount has been paid in respect of a financial product if:
(a) the product holder has paid an amount in respect of the product; or
(b) an amount has been deducted from:
(i) a payment made by the product holder; or
(ii) a payment made to the product holder; or
(c) the product holder has paid an amount or an amount has been deducted or
debited as a fee, expense or charge in relation to the financial product; or
(d) an amount is held on the product holder’s behalf under the financial
product (excluding any amounts referred to in paragraph (1)(b) deducted
from a common fund).
(3) For paragraph 1017D(5A)(a) of the Act, subregulations (4) and (5) apply in
relation to a financial product that has:
(a) an opening or closing balance mentioned in paragraph 1017D(5)(a) of the
Act; or
(b) the termination value mentioned in paragraph 1017D(5)(b) of the Act; or
(c) an increase in contributions mentioned in paragraph 1017D(5)(d) of the
Act; or
(d) a return on investment mentioned in paragraph 1017D(5)(e) of the Act.
(4) If ASIC determines that, for a compelling reason, it is not possible to state the
amount in dollars, the amount may be described as a percentage of a specified
matter (including worked dollar examples, unless that is inappropriate).
(5) If ASIC determines that, for a compelling reason, it is not possible to state the
amount in dollars, or to describe the amount as a percentage, the periodic
statement must include:
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Regulation 7.9.75A
(a) a statement informing the holder of the product that the amount is
applicable; and
(b) details of the means by which a product holder is able to gain access to
information relating to the amount.
(6) A determination under subregulation (4) or (5) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.75A Ways of giving information
(1) For paragraph 1017B(3)(c) of the Act, the following are ways in which a
responsible person may notify a holder:
(a) notifying the holder in any way agreed to by the holder;
(b) notifying the holder’s agent in any way agreed to by the agent.
(2) For paragraph 1017D(6)(c) of the Act, the following are ways of giving a
periodic statement to a holder:
(a) making the periodic statement available to the holder in any way agreed to
by the holder;
(b) making the periodic statement available to the holder’s agent in any way
agreed to by the agent.
(3) For paragraph 1017DA(2)(c) of the Act, the following are ways in which
information mentioned in subsection 1017DA(1) of the Act may be provided to a
person:
(a) in writing;
(b) electronically;
(c) providing the information to the person in any way agreed to by the person;
(d) making the information available to the person’s agent in any way agreed
to by the agent.
(4) If a provision of the Act or these Regulations imposes additional requirements in
relation to a matter in subregulation (1), (2) or (3), the ways of notifying a
holder, giving a periodic statement and providing information are subject to the
requirements.
Note: Regulation 7.9.75B is an example of an additional requirement.
(5) For this regulation, a notification, a periodic statement or information may be
given or sent to a person’s agent only if the agent is not acting as the person’s
agent in one of the capacities mentioned in subsection 1015C(3) of the Act.
7.9.75B Information in electronic form
(1) For:
(a) paragraph 1017B(3)(b) of the Act; and
(b) paragraph 1017D(6)(b) of the Act; and
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Regulation 7.9.75BA
(c) paragraph 1017DA(2)(c) of the Act;
a notification, statement or information that is to be given in electronic form
must, as far as practicable, be presented in a way that will allow the person to
whom it is given to keep a copy of it so that the person can have ready access to
it in the future.
(2) A notification or statement that is to be given in electronic form must be
presented in a way that clearly identifies the information that is part of the
notification or statement.
7.9.75BA Fund information made available on a website
(1) For paragraph 1017DA(1)(a) of the Act, the trustee of a regulated superannuation
fund (other than a self managed superannuation fund) may provide fund
information for the fund, mentioned in Subdivision 5.6 of this Part, to a holder
by making it available on a website that is maintained by or on behalf of the
trustee.
(2) The trustee must ensure that the fund information is readily accessible from the
website.
(3) For the first financial year or reporting period in which the trustee makes the
fund information available on the website under this regulation, the trustee must:
(a) notify each holder that the fund information is available on the website;
and
(b) explain how to access the website; and
(c) notify the holder that the holder may elect to have a hard copy, or
electronic copy if it is available, of the fund information sent to him or her
free of charge.
(4) The information in subregulation (3) must be provided to the holder in one
document.
(5) If a holder elects to have a hard copy or electronic copy of the fund information
sent to him or her, the trustee must, for each subsequent financial year or
reporting period, send the fund information for the financial year or reporting
period to the holder, in that form, until the holder notifies the trustee that a hard
copy is no longer required.
(6) If a holder does not elect to have a hard copy or electronic copy sent to him or
her, the trustee must comply with paragraphs (3)(a) and (b) each year.
(7) The notification mentioned in subregulations (3) and (6) may be included in
other information or materials sent to the holder.
7.9.75C Periodic statements—disclosure of amounts
(1) For paragraph 1017D(5A)(b) of the Act, this regulation applies to a periodic
statement prepared on or after 1 January 2005 in relation to an amount mentioned
in paragraph 7.9.75(1)(a) or (b) of these Regulations.
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Regulation 7.9.75D
(2) If ASIC determines that, for a compelling reason, it is not possible to state the
amount in dollars the amount may be described as a percentage of a specified
matter (including worked dollar examples, unless that is inappropriate).
(3) If ASIC determines that, for a compelling reason, it is not possible to state the
amount in dollars, or to describe the amount as a percentage, the periodic
statement must include:
(a) a statement informing the holder of the product that the amount is
applicable; and
(b) details of the means by which a product holder is able to gain access to
information relating to the amount.
(4) A determination under subregulation (2) or (3) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.75D Periodic statements—disclosure of amounts
(1) For paragraph 1017D(5A)(b) of the Act, this regulation applies to a periodic
statement prepared on or after 1 January 2005 in relation to an amount mentioned
in paragraph 7.9.75(1)(a) or (b) of these Regulations.
(2) If ASIC determines that, for a compelling reason based on the nature of a
financial product or service, or the nature of the information, to state the amount
of the deduction in dollars:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the information may be set out as a description of the amount as a percentage of
a specified matter (including worked dollar examples, unless that is
inappropriate).
(3) If ASIC determines that, for a compelling reason, based on the nature of a
financial product or service, or the nature of the information, to state the amount
of a deduction in dollars, or to describe the amount as a percentage:
(a) would impose an unreasonable burden on a product issuer, or a class of
product issuers; or
(b) would impose an unreasonable burden on a product issuer, or a class of
product issuers, within a period specified in the determination; or
(c) would not be in the interests of a product holder, or a class of product
holders;
the periodic statement must include the information in subregulation (4).
(4) If subregulation (3) applies, the periodic statement must include:
(a) a statement informing the product holder that the amount is applicable; and
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Regulation 7.9.76
(b) details of the means by which a product holder is able to gain access to
information relating to the amount.
(5) A determination under subregulation (2) or (3) must be:
(a) in writing; and
(b) published in the Gazette.
7.9.76 Consents to certain statements
(1) For subsection 1013K(2) of the Act, the period for which a person must keep a
consent or a copy of a consent is 7 years from the date of the consent.
(2) The copy of the consent may be kept:
(a) in its physical form; or
(b) in an electronic form that is capable of being reproduced in physical form.
7.9.77 Alternative dispute resolution requirements—product issuer that is not a
financial services licensee
(1) For subparagraph 1017G(2)(a)(i) of the Act, ASIC must take the following
matters into account when considering whether to make or approve standards or
requirements relating to internal dispute resolution:
(a) Australian/New Zealand Standard AS/NZS 10002:2014 Guidelines for
complaint management in organizations published jointly by, or on behalf
of, Standards Australia and Standards New Zealand, as in force or existing
on 29 October 2014;
(b) any other matter ASIC considers relevant.
(2) ASIC may:
(a) vary or revoke a standard or requirement that it has made in relation to an
internal dispute resolution procedure; and
(b) vary or revoke the operation of a standard or requirement that it has
approved in its application to an internal dispute resolution procedure.
7.9.77A Dispute resolution requirement—obligation to cooperate with AFCA
For the purposes of paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies
as if subsection 1017G(1) of the Act were modified by inserting the following
paragraph after paragraph 1017G(1)(d):
; and (e) take reasonable steps to cooperate with AFCA in resolving any complaint
(other than a superannuation complaint) under the AFCA scheme to which
the issuer or regulated person is a party, including by:
(i) giving reasonable assistance to AFCA in resolving the complaint; and
(ii) identifying, locating and providing to AFCA any documents and
information that AFCA reasonably requires for the purposes of
resolving the complaint; and
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Regulation 7.9.78
(iii) giving effect to any determination made by AFCA in relation to the
complaint.
7.9.78 Additional statement: trustee required to provide benefits
(1) For paragraph 1017D(5)(g) of the Act, the prescribed details in relation to a
superannuation product for which there is in force a notice under
subregulation 6.17A(4) of the SIS Regulations, are:
(a) the person, persons or class, or classes, of persons mentioned in the notice;
and
(b) the fact that, in accordance with the notice, the trustee will pay a benefit in
respect of the member, on or after the death of the member, to the person,
persons or class, or classes, of persons mentioned in the notice if:
(i) the person, or each person, mentioned in the notice is the legal
personal representative or a dependant of the member; and
(ii) the proportion of the benefit that will be paid to that person, or to each
of those persons, is certain or readily ascertainable from the notice or
a statement under regulation 6.17B of the SIS Regulations; and
(iii) the notice is in effect; and
(c) the statement of the member about:
(i) the proportion of the benefit that will be paid to the person, or to each
person, mentioned in the notice; or
(ii) how that proportion is to be determined; and
(d) the fact that the member may confirm, amend or revoke the notice in
accordance with subregulation 6.17A(5) of the SIS Regulations; and
(e) the date when the notice ceases to have effect under paragraph 6.17A(7)(a)
or (b) of the SIS Regulations.
(2) The periodic statement must also include information that the member may use
to confirm, amend or revoke the notice.
(3) In this regulation, a reference to a notice includes a reference to the notice as
confirmed, or amended, under subregulation 6.17A(5) of the SIS Regulations.
7.9.80B Short selling of certain warrants
For paragraph 1020B(1)(d) of the Act, a financial product that is transferable and
is:
(a) a derivative under section 761D of the Act; or
(b) a financial product that would, apart from the effect of
paragraph 761D(3)(c) of the Act, be a derivative for section 761D of the
Act and is excluded from that paragraph only because it is a security under
paragraph (c) of the definition of security in section 761A of the Act; or
(c) a legal or equitable right or interest in an interest in a managed investment
scheme of the kind mentioned in paragraph 764A(1)(ba) of the Act;
is prescribed.
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Regulation 7.9.80B
Note: Paragraph 764A(1)(ba) of the Act refers to a managed investment scheme that is not a
registered scheme, other than a scheme (whether or not operated in this jurisdiction) in
relation to which none of paragraphs 601ED(1)(a), (b) and (c) of the Act are satisfied.
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products
Division 9 Additional requirements for transfer of lost members and lost RSA holders
Regulation 7.9.81
Division 9—Additional requirements for transfer of lost members
and lost RSA holders
7.9.81 Lost members
(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to a
restricted issue of a relevant financial product if:
(a) the issue is mentioned in paragraph 1016A(2)(c) of the Act; and
(b) the recipient is a lost member.
(2) Part 7.9 of the Act applies in relation to the restricted issue as if
paragraph 1016A(2)(c) of the Act included an obligation on the trustee of the
fund that is applying for the issue on behalf of the recipient to give to the trustee
that is to issue the financial product:
(a) a statement that the recipient is a lost member; and
(b) if the recipient has specifically asked the trustee making the application not
to disclose information of a specified kind—a statement to that effect; and
(c) all information in the possession of the trustee making the application that
could reasonably help the other trustee to locate or identify the recipient,
other than information of a kind that the recipient has specifically asked the
trustee not to disclose.
7.9.82 Lost RSA holders
(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to a
restricted issue of a relevant financial product if:
(a) the issue is mentioned in paragraph 1016A(2)(d) of the Act; and
(b) the recipient is a lost RSA holder.
(2) Part 7.9 of the Act applies in relation to the restricted issue as if
paragraph 1016A(2)(d) of the Act included an obligation on the RSA provider
that is applying for the issue on behalf of the recipient to give to the trustee that
is to issue the financial product:
(a) a statement that the recipient is a lost RSA holder; and
(b) if the recipient has specifically asked the RSA holder not to disclose
information of a specified kind—a statement to that effect; and
(c) all information in the possession of the RSA holder that could reasonably
help the trustee to locate or identify the recipient, other than information of
a kind that the recipient has specifically asked the RSA holder not to
disclose.
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7.9
Superannuation to which arrangements apply under the Family Law Act 1975 Division 11
Regulation 7.9.84
Division 11—Superannuation to which arrangements apply under the
Family Law Act 1975
7.9.84 Definitions for Division 11
In this Division:
adjusted base amount, in relation to a non-member spouse on a day, means the
adjusted base amount applicable to the non-member spouse on that day worked
out under regulation 47 of the Family Law (Superannuation) Regulations 2001.
base amount, in relation to a non-member spouse means the amount mentioned
in regulation 45 of the Family Law (Superannuation) Regulations 2001.
base amount payment split, in relation to a superannuation interest, means a
payment split under which a base amount is allocated to the non-member spouse
in relation to the superannuation interest under Part VIIIB of the Family Law Act
1975.
flag lifting agreement means a flag lifting agreement under Part VIIIB of the
Family Law Act 1975.
member spouse, in relation to a superannuation interest that is subject to a
payment split, means the person who is the member spouse in relation to the
interest under Part VIIIB of the Family Law Act 1975.
non-member spouse, in relation to a superannuation interest that is subject to a
payment split, means the person who is the non-member spouse in relation to the
interest under Part VIIIB of the Family Law Act 1975.
payment split means a payment split under Part VIIIB of the Family Law Act
1975.
payment split notice means a notice given by a product issuer under:
(a) regulation 7A.03 of the SIS Regulations; or
(b) regulation 4A.03 of the RSA Regulations.
percentage-only interest has the meaning given by Part VIIIB of the Family Law
Act 1975.
percentage payment split, in relation to a superannuation interest, means a
payment split under a superannuation agreement, flag lifting agreement or
splitting order that specifies a percentage that is to apply to all splittable
payments in respect of the superannuation interest.
splitting order means a splitting order under Part VIIIB of the Family Law Act
1975.
superannuation agreement means a superannuation agreement under Part VIIIB
of the Family Law Act 1975.
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Division 11 Superannuation to which arrangements apply under the Family Law Act 1975
Regulation 7.9.85
superannuation interest means a superannuation interest to which Part VIIIB of
the Family Law Act 1975 applies.
7.9.85 Application of Division 11
This Division applies in relation to a superannuation interest.
7.9.86 Acquisition of financial product
For paragraph 761E(7)(a) of the Act, if:
(a) a person is a non-member spouse; and
(b) an entitlement to a benefit in relation to a superannuation interest under a
payment split is first issued, granted or otherwise made available to that
person;
the person is taken to have been issued with a superannuation product or an RSA
product as appropriate.
7.9.87 Modification of Act: Product Disclosure Statement in relation to
superannuation interest under Family Law Act
(1) Subject to subregulation (4), for paragraph 1020G(1)(c) of the Act,
paragraph 1012F(b) of the Act is modified in its application in relation to:
(a) a superannuation interest; and
(b) the non-member spouse who acquires the superannuation interest;
in accordance with subregulation (2).
(2) Paragraph 1012F(b) is taken to require a regulated person to give the
non-member spouse a Product Disclosure Statement when the regulated person
gives a payment split notice to the non-member spouse.
(3) If paragraph 1012F(b), as modified in accordance with subregulation (2), applies
in relation to a superannuation interest, regulation 7.9.04 does not apply in
relation to the interest and the non-member spouse.
(4) For paragraph 1020G(1)(a) of the Act, if the governing rules of a superannuation
entity do not provide for a non-member spouse to become a member of a
superannuation fund in relation to the superannuation entity, section 1012B is
modified by adding, after subsection 1012B(1):
‘(1A) This section does not apply in relation to:
(a) a superannuation interest; and
(b) the non-member spouse who acquires the superannuation interest;
if the governing rules of a superannuation entity do not provide for a
non-member spouse to become a member of a superannuation fund in
relation to the superannuation entity.’.
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Regulation 7.9.88
7.9.88 Statement content in relation to superannuation interest under Family
Law Act: superannuation fund
(1) For subparagraphs 1017DA(1)(a)(ii) and (iii), and paragraph 1017DA(1)(b), of
the Act, a trustee of a superannuation entity that is a product issuer must give to a
non-member spouse in relation to a superannuation product issued under a
payment split a statement providing the following information:
(a) the contact details for the product issuer;
(b) if the interest is not a percentage-only interest and the payment split is a
base amount payment split:
(i) the base amount allocated to the non-member spouse under the
relevant agreement, flag lifting agreement or splitting order; and
(ii) the method by which the base amount will be adjusted on an ongoing
basis; and
(iii) whether the governing rules of the fund would allow the non-member
spouse to become a member of the superannuation entity; and
(iv) information about the options available to the non-member spouse in
relation to the interest under Part 7A of the SIS Regulations;
(c) if the interest is not a percentage-only interest and the payment split is a
percentage payment split:
(i) the percentage that is to apply to all splittable payments in respect of
the interest; and
(ii) whether the governing rules of the fund would allow the non-member
spouse to become a member of the superannuation entity; and
(iii) information about the options available to the non-member spouse in
relation to the interest under Part 7A of the SIS Regulations;
(d) if the interest is a percentage-only interest:
(i) the percentage specified in the relevant superannuation agreement,
flag lifting agreement or splitting order; and
(ii) if the payment is under a superannuation agreement or flag lifting
agreement, whether the percentage is to apply for the purposes of
subparagraph 90MJ(1)(b)(i) of the Family Law Act 1975; and
(iii) if the payment split is under a splitting order, whether the order is
made under paragraph 90MT(1)(c) of the Family law Act 1975;
(e) the circumstances in which the entitlement of the non-member spouse will
become payable;
(g) information about the dispute resolution system that covers complaints by
holders of the product and about how that system may be accessed;
(h) details of any amounts payable by the non-member spouse in respect of the
payment split, and arrangements for the payment of any such amounts.
(2) For paragraph 1017DA(2)(b) of the Act, the statement mentioned in
subregulation (1) is to be provided by a regulated person when the regulated
person gives a payment split notice to the non-member spouse.
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Division 11 Superannuation to which arrangements apply under the Family Law Act 1975
Regulation 7.9.89
7.9.89 Statement content in relation to superannuation interest under Family
Law Act: RSA
(1) For subparagraphs 1017DA(1)(a)(ii) and (iii), and paragraph 1017DA(1)(b), of
the Act, an RSA provider that is a product issuer must give to a non-member
spouse in relation to an RSA product issued under a payment split a statement
providing the following information:
(a) the contact details for the product issuer;
(b) if the payment split is a base amount payment split:
(i) the base amount allocated to the non-member spouse under the
relevant superannuation agreement, flag lifting agreement or splitting
order; and
(ii) the method by which the base amount will be adjusted on an ongoing
basis;
(c) if the payment split is a percentage payment split, the percentage that is to
apply to all splittable payments in respect of the interest;
(d) the circumstances in which the entitlement of the non-member spouse will
become payable;
(e) the options available under Part 4A of the RSA Regulations in relation to
the non-member spouse’s entitlement in respect of the interest;
(g) information about the dispute resolution system that covers complaints by
holders of the product and about how that system may be accessed;
(h) details of any amounts payable by the non-member spouse in respect of the
payment split, and arrangements for the payment of any such amounts.
(2) For paragraph 1017DA(2)(b) of the Act, the statement mentioned in
subregulation (1) is to be provided by a regulated person when the regulated
person gives a payment split notice to the non-member spouse.
7.9.90 Information for existing holders of superannuation products and RSA
products in relation to superannuation interest
(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to a
non-member spouse.
(2) The definition of concerned person in subsection 1017C(9) of the Act is
modified by adding after paragraph (a) of the definition:
‘(aa) is a non-member spouse in relation to a superannuation product or an RSA
product that is issued in relation to a payment split; or’.
7.9.91 Periodic statements for retail clients for financial products that have an
investment component—general
(1) For paragraph 1020G(1)(a) of the Act, this regulation applies in relation to a
non-member spouse who holds a superannuation or RSA product by way of a
payment split.
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Regulation 7.9.92
(2) The product issuer in relation to the superannuation product or RSA product is
not required to comply with:
(a) paragraphs 1017D(5)(a) to (f) of the Act; and
(b) regulation 7.9.72 and subregulation 7.9.75(1).
7.9.92 Periodic statements for retail clients for financial products that have an
investment component—superannuation interest other than
percentage-only interest
(1) For paragraph 1017D(5)(g) of the Act, this regulation applies if:
(a) an interest in a superannuation product is subject to a base amount payment
split; and
(b) the interest is not a percentage-only interest; and
(c) the interest is in the growth phase; and
(d) none of the following has occurred under Part 7A of the SIS Regulations:
(i) a new membership interest has been created for the non-member
spouse in relation to the payment split;
(ii) the transferable benefits of the non-member spouse have been
transferred or rolled out of the superannuation fund;
(iii) the amount to which the non-member spouse is entitled under the
payment split has been paid, as a lump sum, to the non-member
spouse.
(2) This regulation also applies if:
(a) an interest in an RSA product is subject to a base amount payment split;
and
(b) the interest is in the growth phase; and
(c) none of the following has occurred under Part 4A of the RSA Regulations:
(i) a new RSA has been opened for the non-member spouse;
(ii) the transferable benefits of the non-member spouse have been
transferred or rolled out of the RSA;
(iii) the amount to which the non-member spouse is entitled under the
payment split has been paid, as a lump sum, to the non-member
spouse.
(3) The periodic statement for the member spouse and the non-member spouse must
include the following information:
(a) the value of the adjusted base amount applicable to the non-member spouse
at the end of the reporting period;
(b) the amount of the adjustment in the reporting period;
(c) the method used to calculate the adjustment, including the applicable
interest rate required under regulation 48 of the Family Law
(Superannuation) Regulations 2001.
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Part 7.9 Financial product disclosure and other provisions relating to issue and sale of financial
products
Division 11 Superannuation to which arrangements apply under the Family Law Act 1975
Regulation 7.9.93
7.9.93 Trustees of superannuation entities—additional obligation to provide
information in relation to superannuation interest
(1) For paragraph 1017DA(2)(a) of the Act, no information is to be provided to a
non-member spouse under section 1017DA of the Act if the governing rules of a
superannuation entity do not provide for the non-member spouse to become a
member of a superannuation fund in relation to the superannuation entity.
(2) For paragraph 1017DA(2)(b) of the Act, if the governing rules of a
superannuation entity provide for a non-member spouse to become a member of
a superannuation fund in relation to the superannuation entity:
(a) information is to be provided to the non-member spouse under
section 1017DA of the Act (and Subdivisions 5.5 to 5.7 of Part 7.9 of these
Regulations) when the payment split notice is given to the non-member
spouse; and
(b) the information is to be provided with the payment split notice.
7.9.94 Division 5 of Part 7.9 of the Act not to apply in relation to non-member
spouse
For paragraph 1019A(2)(c) of the Act, Division 5 of Part 7.9 of the Act does not
apply in relation to the issue of a superannuation product or RSA product to a
non-member spouse who acquires the superannuation interest by means of a
payment split.
Note: The non-member spouse may also wish to acquire an interest in the superannuation
fund, or become an RSA holder, by making an application. In that case,
regulation 7.9.94 would not apply and Division 5 of Part 7.9 of the Act would apply to
the extent that that Division provides.
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7.9
Medical indemnity insurance Division 12
Regulation 7.9.95
Division 12—Medical indemnity insurance
7.9.95 Medical indemnity insurance—exemption from product disclosure
provisions
For paragraph 1020G(1)(b) of the Act, a medical indemnity insurance product is
exempt from the provisions of Part 7.9 of the Act, until the earlier of:
(a) the date specified in a notice, lodged with ASIC by the issuer of the
product, that indicates that the issuer of the product wants the provisions of
Part 7.9 of the Act to apply in relation to the product from that date; and
(b) 11 March 2004.
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products
Division 13 Unsolicited offers to purchase financial products off market
Regulation 7.9.95A
Division 13—Unsolicited offers to purchase financial products off
market
Subdivision A—Modifying provisions of Part 7.9 of the Act: offers to
purchase securities in certain proprietary companies
7.9.95A Offers to which this Subdivision applies
For the purposes of paragraph 1020G(1)(c) of the Act, this Subdivision applies in
relation to an offer for the purchase of securities of a proprietary company if:
(a) at the time the offer is made, the company:
(i) has one or more CSF shareholders; and
(ii) is an eligible CSF company; and
(b) Division 5A of Part 7.9 of the Act applies to the offer.
7.9.95B Duration and withdrawal of the offer
Part 7.9 of the Act applies in relation to the offer as if subsections 1019G(1) and
(2) of the Act were modified by omitting “1 month” and inserting “14 days”.
7.9.95C Varying the terms of the offer
Part 7.9 of the Act applies in relation to the offer as if section 1019H of the Act
were modified by replacing that section with the following:
1019H Varying terms of offer
(1) An offeror may vary the terms of an offer to which this Division applies for the
purchase of securities in a proprietary company if:
(a) the variation is:
(i) to improve the consideration offered under the offer; or
(ii) to extend the period that the offer remains open at any time before the
end of that period; and
(b) the variation will apply to each offeree that has not accepted the offer
before the variation is made.
(2) The variation may only be made by sending a supplementary offer document in
printed or electronic form to:
(a) if the variation is to improve the consideration offered under the offer—
each offeree in accordance with paragraphs 1019E(1)(a) and (b); or
(b) if the variation is to extend the period that the offer remains open—each
offeree that has not accepted the offer in accordance with paragraphs
1019E(1)(a) and (b).
(3) The supplementary offer document must:
(a) identify the offer to which it relates; and
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Regulation 7.9.95D
(b) describe the variation; and
(c) be worded and presented in a clear, concise and effective manner.
(4) The terms of the offer cannot be varied otherwise than under this section.
(5) This section does not:
(a) affect the offeror’s obligation under section 1019J to update the market
value of the financial product to which the offer relates; or
(b) prevent the offeror from withdrawing the offer in accordance with
section 1019G or paragraph 1019J(2)(a) and making another offer on
different terms; or
(c) prevent the offeree from making a counter-offer on different terms.
7.9.95D Rights if requirements not complied with
Part 7.9 of the Act applies in relation to the offer as if subsection 1019K(1) of the
Act were modified by inserting after paragraph 1019K(1)(b) of the Act:
(ba) in a situation where section 1019H applies:
(i) subsection 1019H(2) was not complied with; or
(ii) the supplementary offer document did not comply with
subsection 1019H(3); or
(iii) there was a misleading or deceptive statement in the supplementary
offer document;
Subdivision B—Other matters
7.9.96 Percentage increase or decrease in the market value of a product
For paragraph 1019J(1)(c) of the Act, 50% is specified.
7.9.97 Off-market trading by professional investors etc
(1) For subparagraph 1019D(1)(d)(viii) of the Act, the following circumstances are
specified:
(a) the offer mentioned in subsection 1019D(1) of the Act is to:
(i) a professional investor; or
(ii) a person who has net assets of at least the amount specified in
regulations made for the purposes of subparagraph 761G(7)(c)(i) of
the Act; or
(iii) a person who has gross income for each of the last 2 financial years of
at least the amount specified in regulations made for the purposes of
subparagraph 761G(7)(c)(ii) of the Act; or
(iv) a business that is not a small business within the meaning of
subsection 761G(12) of the Act;
(b) the minimum amount payable for securities on acceptance of the offer by
the person to whom the offer is made is at least $500 000;
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Division 13 Unsolicited offers to purchase financial products off market
Regulation 7.9.97A
(c) for a financial product other than securities, the offer for the financial
product is for an amount that equals or exceeds the amount specified in
regulations made for the purposes of paragraph 761G(7)(a) of the Act.
(2) For paragraph (b), in calculating the amount payable for securities, disregard any
amount payable or paid to the extent to which it is to be paid, or was paid, out of
money lent by the person offering the securities or an associate of the person
offering the securities.
7.9.97A Information in offer document if payment is to be made in instalments
(1) For paragraph 1019I(2)(f) of the Act, the following information is specified for
an offer document if payment for the financial products mentioned in the
document is to be made in instalments:
(a) the amount of each instalment;
(b) when each instalment will be paid;
(c) how many instalments will be paid;
(d) how each instalment will be paid;
(e) the following text, replacing X with the total present value of the
instalments and Y with the total current value of the financial products:
‘Money loses value over time. In this case, the value of the total instalment
payments being offered to you is approximately the same as being paid a single
amount of $X today. $X represents the ‘present day value’ of the instalment
payments. Commonwealth legislation sets out a method for calculating the
present value of the offer, using the rate of interest of 1.1% per month. You can
assess this offer by comparing the present day value of the instalment payments
($X) with the total market price of your shares or other financial products ($Y).
‘In general, if the present day value of the instalment payments being offered is
less than the market price of your shares or other financial products, then this
offer may not be fair to you.’
(2) For this regulation, the total present value of a series of instalment payments is
the amount:
n
1
R
1.011 p p
t p
where:
n is the number of instalment payments to be made.
Rp is the amount of instalment payment number p, where each instalment
payment is assigned a number from l to n.
tp is the number of whole months between the date of offer and the date that the
instalment number p is due.
(3) For this regulation, the total current value of a financial product is the market
value for the product on the date of offer as mentioned in paragraph 1019I(2)(b)
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Regulation 7.9.97A
of the Act or the fair estimate of the value of the product on the date of offer as
mentioned in paragraph 1019I(2)(c) of the Act, as applicable.
(4) For this regulation, all money amounts must be represented in Australian
currency.
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Part 7.9 Financial product disclosure and other provisions relating to issue and sale of financial
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Division 14 Exemptions from Parts 7.7, 7.8 and 7.9 of the Act
Regulation 7.9.98
Division 14—Exemptions from Parts 7.7, 7.8 and 7.9 of the Act
7.9.98 Certain providers of financial services exempted from the requirements of
Parts 7.7, 7.8 and 7.9 of the Act
For the provisions of the Act set out in column 2 of the following table, a person
who is providing a financial service in the circumstances set out
subsections 911A(2A) to (2E) is exempt from the operation of the Parts of the
Act specified in column 3 in relation to the provision of that service.
Column 1 Column 2 Column 3
Item Provisions of Act
paragraph 951C(1)(a) Part 7.7
paragraph 992C(1)(a) Part 7.8
paragraph 1020G(1)(a) Part 7.9
7.9.98A Exemption from application of Part 7.9 of the Act
For paragraph 1020G(1)(a) of the Act, Part 7.9 of the Act does not apply to a
person to the extent that the person is:
(a) issuing or selling:
(i) a litigation funding scheme mentioned in regulation 5C.11.01; or
(ii) a litigation funding arrangement mentioned in regulation 5C.11.01; or
(b) making a recommendation to acquire:
(i) a litigation funding scheme mentioned in regulation 5C.11.01; or
(ii) a litigation funding arrangement mentioned in regulation 5C.11.01; or
(c) making an offer relating to the issue or sale of:
(i) a litigation funding scheme mentioned in regulation 5C.11.01; or
(ii) a litigation funding arrangement mentioned in regulation 5C.11.01; or
(d) advertising:
(i) a litigation funding scheme mentioned in regulation 5C.11.01; or
(ii) a litigation funding arrangement mentioned in regulation 5C.11.01.
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Disclosure in relation to short sales covered by securities lending arrangement of listed section 1020B
products Division 15
Regulation 7.9.99
Division 15—Disclosure in relation to short sales covered by
securities lending arrangement of listed section 1020B
products
7.9.99 Interpretation
(1) In this Division:
reporting day, in relation to a short position, means a day on which the Sydney
office of ASIC is open for business.
Meaning of short position
(2) In this Division, a short position is a position in relation to a section 1020B
product in a listed entity where the quantity of the product which a person has is
less than the quantity of the product which the person has an obligation to
deliver.
(3) In subregulation (2), the person has the product if:
(a) the person is holding the product on the person’s own behalf; or
(b) another person is holding the product on the person’s behalf; or
(c) the person has entered into an agreement to buy the product but has not
received it; or
(d) the person has vested title in the product in a borrower, or in an entity
nominated by the borrower, under a securities lending arrangement.
(4) In subregulation (2), the product which the person has an obligation to deliver is
the product which the person:
(a) has an obligation to deliver under a sale agreement where the product has
not been delivered; or
(b) has an obligation to vest title in a lender under a securities lending
arrangement; or
(c) has any other non-contingent legal obligation to deliver.
References to time
(5) A reference in this Division to a time is a reference to the legal time in Sydney,
New South Wales.
7.9.100 Seller disclosure
(1) For paragraph 1020AB(3)(a) of the Act, the particulars that a seller must give in
relation to a sale of a listed section 1020B product where the seller has a
presently exercisable and unconditional right to vest the product in a buyer under
a securities lending arrangement are as follows:
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products
Division 15 Disclosure in relation to short sales covered by securities lending arrangement of listed
section 1020B products
Regulation 7.9.100
(a) the number of section 1020B products that the seller will vest in the buyer
under the arrangement;
(b) a description of the product;
(c) the name of the entity that issued the product;
(d) the seller’s short position as at the close of business 3 reporting days before
the day the particulars must be given under subregulation (4).
(2) For subparagraph 1020AB(3)(b)(i) of the Act, in relation to particulars
mentioned in paragraphs (1)(a), (b), and (c):
(a) the seller mentioned in subparagraph 1020AB(1)(a)(i) of the Act must give
the particulars at the time of entering into an agreement to sell; and
(b) the seller mentioned in subparagraph 1020AB(1)(a)(ii) of the Act must
give the particulars on or before 9 am:
(i) if the sale occurs after the start of the trading day but before 7 pm—on
the next trading day after entering into an agreement to sell; and
(ii) if the sale occurs after 7 pm but before the start of the next trading
day—on the second trading day after entering into an agreement to
sell.
(3) A reference to trading day in subregulation (2) is to a trading day of the market
where the sale is executed or reported.
(4) For subparagraph 1020AB(3)(b)(i) of the Act, in relation to particulars
mentioned in paragraph (1)(d), the seller must give the particulars:
(a) on or before 9 am on the third reporting day after entering into the
agreement to sell that causes the short position to occur; and
(b) on or before 9 am on each subsequent reporting day as long as the seller
has a short position.
(5) Paragraph (4)(b) applies whether or not the particulars about the short position
have changed from that given on the previous day.
(6) For subparagraph 1020AB(3)(b)(ii) of the Act, in relation to particulars
mentioned in paragraph (1)(d), the seller must give the particulars in the form
required by ASIC.
(7) For subparagraphs 1020AB(4)(a)(ii) and (b)(ii) of the Act, in relation to the
particulars mentioned in paragraph (1)(d), the entity is ASIC.
(8) For subparagraph 1020AB(4)(b)(ii) of the Act, and in relation to the particulars
other than the particulars mentioned in paragraph (1)(d), if the operator of the
licensed market mentioned in subparagraph 1020AB(1)(a)(ii) of the Act
(operator 1) appoints the operator of another licensed market (operator 2), in
writing, as operator 1’s agent for the purpose of receiving any of those
particulars, operator 2 is the entity for those particulars.
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Regulation 7.9.100A
7.9.100A Seller disclosure of existing short position
(1) If a seller has a short position which arises from an agreement to sell, entered
into before commencement of this regulation, the seller must give particulars
about the short position as at the close of business on the day this regulation
commences:
(a) on or before 9 am on the third reporting day after commencement of this
regulation; and
(b) on or before 9 am on each subsequent reporting day as long as the seller
has a short position.
(2) The particulars must be given to ASIC in the form required by ASIC.
7.9.101 Licensee disclosure
(1) For paragraph 1020AC(2)(a) of the Act, the particulars that a financial services
licensee must give in relation to information given to the licensee under
section 1020AB of the Act in relation to a sale of a listed section 1020B product
is the information specified in paragraphs 7.9.100(1)(a), (b) and (c).
(2) For paragraph 1020AC(2)(b) of the Act:
(a) the time for disclosure of the information is on or before 9 am:
(i) if the information is given to the licensee after the start of the trading
day but before 7 pm—on the next trading day after the licensee is
given the information under section 1020AB of the Act; and
(ii) if the information is given to the licensee after 7 pm but before the
start of the next trading day—on the second trading day after the
licensee is given the information under section 1020AB of the Act;
and
(b) the manner for disclosure of the information is by electronic transmission
to the operator.
(3) A reference to trading day in subregulation (2) is to a trading day of the market
where the information is given.
(4) For paragraph 1020AC(3)(b) of the Act, and in relation to the particulars
mentioned in paragraph 1020AC(3)(a) of the Act, if the operator of the licensed
market mentioned in paragraph 1020AC(1)(a) of the Act (operator 1) appoints
the operator of another licensed market (operator 2), in writing, as operator 1’s
agent for the purpose of receiving any of those, operator 2 is the entity for those
particulars.
7.9.102 Public disclosure of information
(1) For paragraph 1020AD(2)(a) of the Act, the particulars which the operator of a
licensed market must publicly disclose in relation to information given to the
operator under section 1020AB or 1020AC of the Act in relation to a sale of a
listed section 1020B product are the total number of each kind of section 1020B
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section 1020B products
Regulation 7.9.102
product that has been sold on a particular day and disclosed to the operator under
section 1020AB or 1020AC of the Act.
(1A) For paragraph 1020AD(2)(a) of the Act, the particulars which ASIC must
publicly disclose in relation to information given to it under section 1020AB of
the Act in relation to a sale of a listed section 1020B product are the total of all
short positions in a product issued by a listed entity that have been disclosed to
ASIC under section 1020AB of the Act on the previous reporting day.
(2) For subparagraph 1020AD(2)(b)(i) of the Act, the time for the disclosure of the
information mentioned in subregulation (1) is:
(a) if the information is given to the licensee after the start of the trading day
but before 7 pm—on the next trading day after the day the agreements to
sell were entered into; and
(b) if the information is given to the licensee after 7 pm but before the start of
the next trading day—on the second trading day after the day the
agreements to sell were entered into.
(3) A reference to trading day in subregulation (2) is to a trading day of the market
in relation to which the operator is responsible for disclosure of the information.
(3A) For subparagraph 1020AD(2)(b)(i) of the Act, the time for the disclosure of the
information mentioned in subregulation (1A) is the first reporting day after the
day the information is received.
(4) For subparagraph 1020AD(2)(b)(ii) of the Act, the manner of public disclosure
of the information mentioned in subregulation (1) is by publication:
(a) on the operator’s website; or
(b) in any other form that is easily accessible by the public.
(5) For subparagraph 1020AD(2)(b)(ii) of the Act, the manner of public disclosure
of the information mentioned in subregulation (1A) is by publication:
(a) on ASIC’s website; or
(b) in any other form that is readily accessible by the public.
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Part 7.10
Regulation 7.10.01
Part 7.10—Market misconduct and other prohibited
conduct relating to financial products and financial
services
7.10.01 Division 3 financial products
For paragraph (d) of the definition of Division 3 financial products in
section 1042A of the Act, superannuation products provided by a superannuation
entity that is not a public offer entity are prescribed.
7.10.02 Professional standards schemes
For subsection 1044B(2) of the Act, a scheme and any modifications to the
scheme set out in the following table are prescribed.
Note: Column 2 of the table below is included for information only.
Prescribed professional standards schemes
Item Column 1 Column 2
Scheme Date prescribed
The CPA Australia Ltd Professional Standards (Accountants) 3 October 2018
Scheme, published in the New South Wales Government
Gazette No. 138, 22 December 2017
Note: This Scheme was formerly the CPA Australia Limited Professional Standards Scheme, published in the New South Wales Government Gazette No. 124, 4 October 2013, as modified by the amendments made by instruments published in the New South Wales Government Gazette No. 13, 31 January 2014 and the New South Wales Government Gazette No. 116, 5 December 2014.
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (NSW), including as modified
by amendments published in the New South Wales
Government Gazette No. 72, 28 August 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (NSW) published in the New South Wales Government Gazette No. 70, 22 August 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Law Society of New South Wales Professional Standards
Scheme, published in the New South Wales Government
Gazette No. 87 on 7 September 2018
Note: This Scheme was formerly the Law Society of New South Wales Scheme, published in the New South Wales Government Gazette No. 78, 27 July 2012, including as modified by the extension published in the New South Wales Government Gazette No. 72, 30 June 2017.
The day the Treasury Laws
Amendment (Professional
Standards Schemes)
Regulations 2019 commence
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Prescribed professional standards schemes
Item Column 1 Column 2
Scheme Date prescribed
4 The New South Wales Bar Association Scheme, published in The scheme—13 August
the New South Wales Government Gazette No. 17, 5 March 2015
2015, including as modified by the amendments published in The amendments— the New South Wales Government Gazette No. 123, 3 October 2018 10 November 2017
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (Victoria), including as
modified by amendments published in the Victoria
Government Gazette No. S 246, 28 August 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (Victoria) published in the Victoria Government Gazette No. S 264, 5 August 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Law Institute of Victoria Limited Scheme, published in 25 May 2017
the Victoria Government Gazette No. G 16, 21 April 2016
Note: This Scheme was formerly the Law Institute of Victoria Limited Scheme, published in the Victoria Government Gazette No. G 10, 11 March 2010.
The Victorian Bar Professional Standards Scheme, published 14 June 2014
in the Victoria Government Gazette No. S 134, 24 April 2014
The Bar Association of Queensland Professional Standards
Scheme, approved as described in the Professional Standards
(Bar Association of Queensland Professional Standards
Scheme) Notice 2019 (Qld), 18 February 2019
Note: This Scheme was formerly the Bar Association of Queensland Scheme, published in the Queensland Government Gazette No. 40, 24 June 2013, including as modified by the extension published in the Queensland Government Gazette No. 60, 23 March 2018.
The day the Treasury Laws
Amendment (Professional
Standards Schemes)
Regulations 2019 commence
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (Queensland), including as
modified by amendments notified by the Queensland
Government on 11 December 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (Queensland) notified by the Queensland Government on, 29 August 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Queensland Law Society Professional Standards Scheme, 25 May 2017
approved as described in the Professional Standards
(Queensland Law Society Professional Standards Scheme)
Notice 2016 (Qld), 30 June 2016
Note: This Scheme was formerly the Queensland Law Society Scheme, published in the Queensland Government Gazette No. 64, 25 June 2010.
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Prescribed professional standards schemes
Item Column 1 Column 2
Scheme Date prescribed
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (WA), including as modified
by amendments published in the Western Australian
Government Gazette No. 135, 1 September 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (WA) published in the Western Australian Government Gazette No. 122, 8 August 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Law Society of Western Australia Scheme, published in 14 June 2014
the Western Australian Government Gazette No. 54, 11 April
2014
The Western Australian Bar Association Scheme, published
in the Western Australian Government Gazette No. 57,
17 April 2014, including as modified by the extension
published in the Western Australian Government Gazette
No. 196, 21 December 2018
The scheme—14 June 2014
The extension—the day the
Treasury Laws Amendment
(Professional Standards
Schemes) Regulations 2019
commence
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (SA), including as modified
by amendments published in the South Australian
Government Gazette No. 59, 22 October 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (SA) published in the South Australian Government Gazette No. 63, 21 August 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Law Society of South Australia Professional Standards
Scheme, published in the South Australian Government
Gazette No. 21, 5 April 2017, including as modified by the
amendments published in the South Australian Government
Gazette No. 77, 21 November 2017
Note: This Scheme was formerly the Law Society of South Australia Professional Standards Scheme, published in the South Australian Government Gazette No. 76, 3 November 2011.
The scheme—10 February
2018
The amendments—
3 October 2018
The South Australian Bar Association Inc Professional 10 February 2018
Standards Scheme, published in the South Australian
Government Gazette No. 35, 30 May 2017
Note: This Scheme was formerly the South Australian Bar Association Inc Scheme, published in the South Australian Government Gazette No. 76, 3 November 2011.
17 Chartered Accountants Australia and New Zealand The scheme—1 December
Professional Standards Scheme (ACT), including as modified 2014
by amendments notified by the ACT Government on The amendments— 25 August 2015 27 February 2016
Note: This Scheme was formerly the Institute of Chartered
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services
Regulation 7.10.03
Prescribed professional standards schemes
Item Column 1 Column 2
Scheme Date prescribed
Accountants in Australia Professional Standards Scheme (ACT) approved on 14 July 2014.
Chartered Accountants Australia and New Zealand
Professional Standards Scheme (NT), including as modified
by amendments published in the Northern Territory
Government Gazette No. S109, 30 November 2015
Note: This Scheme was formerly the Institute of Chartered Accountants in Australia Professional Standards Scheme (NT) published in the Northern Territory Government Gazette No. S84, 17 September 2014.
The scheme—1 December
2014
The amendments—
27 February 2016
The Institute of Public Accountants Professional Standards
Scheme, published in the Victoria Government Gazette No. G
42, 18 October 2018
Note: This Scheme was formerly the Institute of Public Accountants Professional Standards Scheme, published in the New South Wales Government Gazette No. 135, 28 December 2012, including as modified by the extension and amendments made by instrument published in the New South Wales Government Gazettes No. 72, 30 June 2017 and No. 118, 20 October 2017.
The day the Treasury Laws
Amendment (Professional
Standards Schemes)
Regulations 2019 commence
7.10.03 Exemption for market participants of qualifying gas trading exchange
For paragraph 1045A(1)(a) of the Act, a person is exempt from Part 7.10 of the
Act if the person:
(a) is a participant in relation to a qualifying gas trading exchange; and
(b) is engaging in trading activities in relation to qualifying gas exchange
products on a qualifying gas trading exchange.
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Regulation 7.11.01
Part 7.11—Title and transfer
Division 1—Preliminary
7.11.01 Definitions
In this Part:
associate, in relation to a broker or participant, means:
(a) if the broker or participant:
(i) is a member of a firm of brokers or participants; and
(ii) is not a broker’s agent or a participant’s agent;
any other member of the firm; or
(b) if:
(i) the broker or participant is the agent or employee of another broker or
participant; and
(ii) the other broker or participant is not a member of a firm of brokers or
participants;
the other broker or participant; or
(c) if:
(i) the broker or participant is the agent or employee of another broker or
participant; and
(ii) the other broker or participant is a member of a firm of brokers or
participants;
any member of that firm.
ASTC subregister means a subregister of Division 4 financial products
maintained in accordance with the ASTC operating rules.
beneficial owner, in relation to Division 3 securities, means a person for whom a
licensed trustee company, within the meaning of Chapter 5D of the Act, a Public
Trustee of a State or Territory, or a company listed in Schedule 9 holds (whether
alone or together with any other person or persons) the Division 3 securities in
trust in the ordinary course of its business.
broker means an Australian financial services licensee who is a participant of a
financial market.
broker’s agent means:
(a) the agent of a broker; or
(b) the employee of a broker.
company includes a body mentioned in regulation 7.11.07.
duly completed, in relation to a transfer document, includes the requirements set
out in regulation 7.11.05.
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duly completed Part 1 means a transfer document that has been duly completed
in accordance with Part 1 of Form 1, 2, 3, 5, 6 or 7.
execution time, in relation to a transfer document, means:
(a) for a sufficient transfer under regulation 7.11.11—the time when the
transfer document was stamped with a stamp purporting to be that of the
transferee’s broker; and
(b) for a sufficient transfer under regulation 7.11.12 or 7.11.13—the time when
the transfer document was executed by the transferor.
identification code, in relation to a participant, means a code that, for the
purposes of the ASTC operating rules, is:
(a) the participant’s identification code; or
(b) one of its identification codes.
in accordance with includes to the effect of.
issuer of a Division 4 financial product means:
(a) an issuer under section 761E of the Act; and
(b) any other person identified as an issuer, or treated as an issuer, under the
ASTC operating rules.
market licensee, in relation to securities specified in a transfer document, means
the market licensee that operates the market for the securities.
7.11.03 Arrangements about Division 4 financial products
(1) A financial product is a Division 4 financial product if the financial product is:
(a) a Division 3 security other than a security mentioned in
paragraph 1073A(1)(e) of the Act; or
(b) declared by ASIC, under section 1075A of the Act, to be a financial
product the transfer of which will be effected through ASTC under these
Regulations.
(2) Subregulations (3) to (8) apply in relation to a class of Division 4 financial
products that is admitted to quotation.
(3) A Division 4 financial product in the class of Division 4 financial products is not
taken to have stopped being quoted merely because of a temporary suspension of
quotation of the class.
(4) If:
(a) there is a suspension of the quotation of a Division 4 financial product in
the class; and
(b) during the suspension, the issuer in relation to the Division 4 financial
product ceases to be included in the official list of the market licensee on
which the Division 4 financial product is traded;
the Division 4 financial product is taken to stop being quoted when the issuer
ceases to be included in the official list.
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(5) Subregulation (4) does not limit the circumstances in which a Division 4
financial product in the class may be taken to have stopped being quoted on a
financial market of a market licensee.
(6) For the provisions mentioned in subregulation (8), if:
(a) a Division 4 financial product stops being quoted on a financial market of a
market licensee; and
(b) the ASTC operating rules provide that the Division 4 financial product is to
be taken to continue to be quoted for a specified period;
the Division 4 financial product is taken to be quoted during the period.
(7) For the provisions mentioned in subregulation (8), if:
(a) a Division 4 financial product has been issued; and
(b) the Division 4 financial product:
(i) is approved, by a market licensee, to be admitted to quotation on a
financial market of the market licensee; and
(ii) has not yet been quoted; and
(c) the ASTC operating rules provide that the Division 4 financial product is
taken to be quoted for a specified period;
the Division 4 financial product is taken to be quoted during the period.
(8) The provisions are:
(a) the definitions of:
(i) ASTC certificate cancellation provisions; and
(ii) ASTC-regulated transfer; and
(iii) ASTC subregister; and
(iv) proper ASTC transfer; and
(b) section 653A of the Act; and
(c) Part 7.11 of the Act; and
(d) regulations made for the purposes of Part 7.11 of the Act.
7.11.04 Arrangements for forms
(1) A reference in this Part to a form by number is a reference to:
(a) the form numbered in that way in Schedule 2A; or
(b) a form that has the same effect.
(2) If a form in Schedule 2A refers to the full name of the transferor of Division 3
securities, the reference includes a reference to the name of the person shown in
the records of the issuer in relation to those securities as the holder of those
securities.
7.11.05 Document duly completed in accordance with a particular form
(1) Subject to subregulation (2), a document is not duly completed in accordance
with one of Forms 1, 2, 3, 4, 5, 6, 7 and 8, or a part of one of those forms, unless
the following requirements are met:
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Regulation 7.11.06
(a) the document must purport to state the transferee’s name and address
where the form or part requires that information;
(b) the document must bear a stamp that purports to be the transferor’s
broker’s stamp where the form or part requires that information;
(c) the document must bear a stamp that purports to be the transferee’s
broker’s stamp where the form or part requires that information;
(d) the document must bear a stamp that purports to be a market licensee’s
stamp where the form or part requires that information.
(2) If a document (the first document) relates to particular Division 3 securities, the
following paragraphs apply for the purposes of determining whether the first
document and another document (the second document) are, together or with 1
or more other documents, a sufficient transfer of the Division 3 securities:
(a) the first document is not duly completed in accordance with Part 3 of Form
1, 2, 3, 5, 6 or 7 unless it:
(i) bears a stamp that purports to be the transferee’s broker’s stamp
where that part refers to the transferee’s broker’s stamp; and
(ii) sets out a string of characters that purports to be the transfer
consolidation number of the first document where that part refers to
the transferee’s broker’s stamp;
(b) the second document is not duly completed in accordance with Part 1 of
Form 4 or 8 unless it sets out a string of characters that purports to be the
transfer consolidation number of the first document where that part refers
to a transfer consolidation number or transfer consolidation numbers
(whether or not it sets out 1 or more strings of characters that do not
purport to be the transfer consolidation number);
(c) the second document can be duly completed in accordance with Part 1 of
Form 4 or 8 even if it does not set out correctly the number of Division 3
securities to which it relates.
Note: If the document mentioned in subregulation (1), or the documents mentioned in
subregulation (2), are a sufficient transfer of the Division 3 securities, the document or
documents become transfer documents for this Part.
7.11.06 Stamping of documents
(1) In this Part (other than regulation 7.11.40):
(a) a reference to the stamping of a document is a reference to stamping in ink;
and
(b) a reference to a stamp on a document, or to a stamp borne by a document,
is a reference to a stamp stamped on the document in ink.
(2) A reference in regulation 7.11.40 to the stamping of a document is a reference to
stamping the document in any manner.
Examples:
1 Stamping in ink.
2 Affixing a stamp.
3 Impressing a stamp.
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Regulation 7.11.07
7.11.07 Application of Division 3 of Part 7.11 of the Act to certain bodies
(1) For subparagraph 1073C(a)(ii) of the Act, the Westpac Banking Corporation is
prescribed.
(2) For subparagraph 1073C(b)(iii) of the Act, the Australian Gas Light Company is
prescribed.
Note: The effect of section 1073C of the Act is that Division 3 of Part 7.11 of the Act applies
to bodies prescribed for that section as if they were companies.
7.11.08 Interests in registered schemes
For paragraph 1073A(1)(c) of the Act, an interest in a registered scheme is an
interest in a registered scheme if the interest:
(a) is an interest in a managed investment scheme that is registered under
section 601EB of the Act; and
(b) is quoted on the financial market of the Australian Stock Exchange
Limited.
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Division 2 Application of Part 7.11
Regulation 7.11.09
Division 2—Application of Part 7.11
7.11.09 Application
This Part applies to conduct engaged in in this jurisdiction or otherwise.
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Regulation 7.11.10
Division 3—Transfer of Division 3 securities effected otherwise than
through a prescribed CS facility
7.11.10 Application of Division 3
This Division is made under section 1073D of the Act, and applies to transfers of
Division 3 securities effected otherwise than through a prescribed CS facility.
7.11.11 Sufficient transfer: general
(1) A document is a sufficient transfer of Division 3 assets if it:
(a) relates to those assets; and
(b) is duly completed in accordance with the documentation in any of the
following subparagraphs:
(i) Parts 1 and 2 of Form 1;
(ii) Part 1 of Form 1 and Parts 1 and 2 of Form 2 or Form 3;
(iii) Parts 1 and 3 of Form 1 and both parts of Form 4;
(iv) Part 1 of Form 1, Parts 1 and 3 of Form 2 or Form 3 and both parts of
Form 4.
(2) A document is a sufficient transfer of Division 3 rights if it:
(a) relates to those rights; and
(b) is duly completed in accordance with the documentation in any of the
following subparagraphs:
(i) Parts 1 and 2 of Form 5;
(ii) Part 1 of Form 5 and Parts 1 and 2 of Form 6 or Form 7;
(iii) Parts 1 and 3 of Form 5 and both parts of Form 8;
(iv) Part 1 of Form 5, Parts 1 and 3 of Form 6 or Form 7 and both parts of
Form 8.
7.11.12 Sufficient transfer of Division 3 assets: licensed trustee company or
Public Trustee of a State or Territory
(1) This regulation applies to the transfer of Division 3 assets, otherwise than by way
of sale, gift or exchange, by:
(a) a licensed trustee company, within the meaning of Chapter 5D of the Act;
or
(b) a Public Trustee of a State or Territory; or
(c) a company mentioned in Schedule 9;
whether alone or together with any other person or persons, to the beneficial
owner of the Division 3 assets.
(2) A document is a sufficient transfer of the Division 3 assets if it:
(a) relates to those assets; and
(b) is completed in accordance with Form 9.
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Regulation 7.11.13
7.11.13 Sufficient transfer of Division 3 rights: licensed trustee company or
Public Trustee of a State or Territory
(1) This regulation applies to the transfer of Division 3 rights, otherwise than by way
of sale, gift or exchange, by:
(a) a licensed trustee company, within the meaning of Chapter 5D of the Act;
or
(b) a Public Trustee of a State or Territory; or
(c) a company mentioned in Schedule 9;
whether alone or together with any other person or persons, in favour of the
beneficial owner of those rights.
(2) A document is a sufficient transfer of the Division 3 rights if it:
(a) relates to those rights; and
(b) is completed in accordance with Form 10.
7.11.14 Sufficient transfer
(1) A document that is a sufficient transfer of Division 3 assets may be used:
(a) as a proper instrument of transfer for section 1071B of the Act; and
(b) as an instrument of transfer for the purposes of any other law or instrument
governing or relating to those assets.
(2) A document that is a sufficient transfer of Division 3 rights may be used as an
instrument of transfer of those rights for the purposes of any law or instrument
governing or relating to those rights.
7.11.15 Transferee’s execution of transfer of Division 3 assets
(1) If Division 3 assets are transferred by means of a sufficient transfer:
(a) the transferee is taken to have agreed at the execution time to accept the
Division 3 assets subject to the terms and conditions on which the
transferor held them at that time; and
(b) the terms and conditions are the terms and conditions applicable as
between:
(i) the issuer in relation to the Division 3 assets; and
(ii) the holder for the time being of the Division 3 assets.
(2) If the Division 3 assets are shares, the transferee is also taken to have agreed, at
the execution time:
(a) to become a member of the issuer; and
(b) to be bound, on being registered as the holder of the shares, by the issuer’s
constitution.
7.11.16 Transferee’s execution of transfer of Division 3 rights
(1) If Division 3 rights relating to Division 3 assets are transferred by means of a
sufficient transfer, the transferee is taken:
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(a) to have applied at the execution time to the issuer in relation to the
Division 3 assets for the issue to the transferee of the Division 3 assets; and
(b) to have agreed at the execution time to accept the Division 3 assets subject
to the terms and conditions on which the issuer offers them for
subscription.
(2) If the Division 3 assets are shares, the transferee is also taken to have agreed, at
the execution time:
(a) to become a member of the issuer; and
(b) to be bound, on being registered as the holder of the shares, by the issuer’s
constitution.
7.11.17 Transfer document that purports to bear stamp of transferor's broker
(1) This regulation applies if a transfer document relating to Division 3 assets or
Division 3 rights:
(a) is a duly completed Part 1; and
(b) bears a stamp that purports to be a stamp of the transferor’s broker (the
designated broker).
(2) Each associate (if any) of the designated broker is taken to have warranted:
(a) that the statements in the transfer document that purport to be certified by
the designated broker are accurate; and
(b) that the transferor is:
(i) the registered holder of, or entitled to be registered as the holder of,
the Division 3 assets; or
(ii) is entitled to the Division 3 rights;
and is legally entitled or authorised to sell or dispose of the Division 3
assets or Division 3 rights.
(3) If the designated broker is not a broker’s agent, the designated broker is taken to
have warranted:
(a) that the statements in the transfer document that purport to be certified by
the designated broker are accurate; and
(b) that the transferor is:
(i) the registered holder of, or entitled to be registered as the holder of,
the Division 3 assets; or
(ii) is entitled to the Division 3 rights;
and is legally entitled or authorised to sell or dispose of the Division 3
assets or Division 3 rights.
(4) The following additional arrangements apply if the transfer document has been
duly completed in accordance with Part 1 of Form 1 or Form 5:
(a) if, when the transfer document was stamped with the stamp mentioned in
paragraph (1)(b), the designated broker had authority to sell the Division 3
assets or Division 3 rights, on the transferor’s behalf, to:
(i) the transferee; or
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(ii) particular persons who include, or particular classes of persons at least
one of which includes, the transferee; or
(iii) any person at all;
the designated broker is taken to have been authorised to execute, and to
have executed, the transfer document on the transferor’s behalf;
(b) each associate (if any) of the designated broker is liable to indemnify:
(i) the issuer in relation to the Division 3 assets or Division 3 rights; and
(ii) the transferor; and
(iii) the transferee; and
(iv) the transferee’s broker;
against any loss or damage arising if:
(v) the stamp mentioned in paragraph (1)(b) is not the designated broker’s
stamp; or
(vi) apart from paragraph (a), the designated broker was not authorised to
execute the transfer document on the transferor’s behalf;
(c) if the designated broker is not a broker’s agent, the designated broker is
liable to indemnify:
(i) the issuer in relation to the Division 3 assets or Division 3 rights; and
(ii) the transferor; and
(iii) the transferee; and
(iv) the transferee’s broker;
against any loss or damage arising if:
(v) the stamp mentioned in paragraph (1)(b) is not the designated broker’s
stamp; or
(vi) apart from paragraph (a), the designated broker was not authorised to
execute the transfer document on the transferor’s behalf.
7.11.18 Warranties by market licensee if transfer document purports to bear its
stamp
(1) This regulation applies if a transfer document:
(a) has been duly completed in accordance with Part 1 of Form 3 or Form 7;
and
(b) bears a stamp that purports to be a stamp of a market licensee.
(2) The market licensee is taken to have warranted that:
(a) the statements in the transfer document that purport to be certified by a
market licensee are accurate; and
(b) the transferor is:
(i) the registered holder of, or entitled to be registered as the holder of,
the Division 3 assets; or
(ii) entitled to the Division 3 rights;
and is legally entitled or authorised to sell or dispose of the Division 3
assets or Division 3 rights.
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Regulation 7.11.19
7.11.19 Indemnities by market licensee and broker if transfer document
purports to bear their stamps
(1) This regulation applies if:
(a) a transfer document (the first document) relating to Division 3 assets or
Division 3 rights:
(i) has been duly completed in accordance with Part 1 of Form 1 or Form
5; and
(ii) bears a stamp that purports to be the stamp of the transferor’s broker;
and
(b) another transfer document:
(i) relates to any or all of the Division 3 assets or Division 3 rights; and
(ii) has been duly completed in accordance with Part 1 of Form 3 or Form
7; and
(iii) bears a stamp that purports to be the stamp of a market licensee.
(2) The market licensee is liable to indemnify:
(a) the issuer in relation to the Division 3 assets or Division 3 rights; and
(b) the transferor in relation to the other document; and
(c) the transferee in relation to the other document; and
(d) the broker of the transferee in relation to the other document;
against any loss or damage arising if:
(e) the stamp mentioned in subparagraph (1)(a)(ii) is not the stamp of the
transferor’s broker; or
(f) apart from paragraph 7.11.17(4)(a), the designated broker was not
authorised to execute the first document on behalf of the transferor in
relation to the first document.
(3) Each associate (if any) of the transferor’s broker is liable to indemnify the market
licensee against any loss or damage arising as mentioned in subregulation (2).
(4) If the transferor’s broker is not a broker’s agent, the transferor’s broker is liable
to indemnify the market licensee against any loss or damage arising as
mentioned in subregulation (2).
(5) Nothing in this regulation limits the operation of anything in regulation 7.11.17
or 7.11.18 or of anything else in this regulation.
7.11.20 Joint and several warranties and liabilities
(1) If 2 or more persons are taken to have warranted in the terms mentioned in
paragraphs 7.11.17(2)(a) and (b) or 7.11.17(3)(a) and (b), the persons are taken
to have warranted jointly and severally.
(2) If 2 or more persons are liable as mentioned in paragraph 7.11.17(4)(b) or (c), or
subregulation 7.11.19(3) or (4), the persons are liable jointly and severally.
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Regulation 7.11.21
7.11.21 Registration of certain instruments
(1) This regulation applies if a sufficient transfer under this Part is lodged with a
company for the purpose of:
(a) registering a transfer of Division 3 assets; or
(b) obtaining the issue of Division 3 assets.
(2) If the sufficient transfer is a transfer under regulation 7.11.11, the company and
its officers are, in the absence of knowledge to the contrary, entitled to assume
without inquiry that:
(a) a stamp on the transfer document that purports to be the transferor’s
broker’s stamp is the stamp of that broker; and
(b) a stamp on the transfer document that purports to be the transferee’s
broker’s stamp is the stamp of that broker; and
(c) a stamp on the transfer document that purports to be the stamp of a market
licensee is the stamp of that market licensee.
(3) If the sufficient transfer is a transfer under regulation 7.11.12 or 7.11.13, the
company and its officers are, in the absence of knowledge to the contrary,
entitled to assume without inquiry that:
(a) at the execution time, the licensed trustee company, within the meaning of
Chapter 5D of the Act, a Public Trustee of a State or Territory, or a
company listed in Schedule 9 named in the instrument held (whether alone
or together with any other person or persons) in the ordinary course of its
business, in trust for or on behalf of the transferee, the Division 3 assets or
Division 3 rights to which the sufficient transfer relates; and
(b) the transfer was not made by way of a sale, gift or exchange of the
Division 3 assets or Division 3 rights.
7.11.22 Details to be included in instrument of transfer
(1) For subsection 1071B(3) of the Act, for a transfer of unquoted securities, the
State or Territory in this jurisdiction in which the company is taken to be
registered is a prescribed detail.
(2) In this regulation:
unquoted securities means securities (within the meaning of
subsection 1071A(1) of the Act) that are not admitted to quotation on any of the
financial markets operated by the Australian Stock Exchange Limited, Bendigo
Stock Exchange Limited or National Stock Exchange of Australia Limited.
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Regulation 7.11.23
Division 4—Transfer of Division 4 financial products effected
through prescribed CS facility
7.11.23 Application of Division 4
This Division is made under sections 1074A and 1074E of the Act, and applies
to transfers of Division 4 financial products effected through ASTC.
Note: ASTC—the ASX Settlement and Transfer Corporation Pty Limited—is a prescribed
CS facility for the Act.
7.11.24 Application of ASTC operating rules
If the ASTC operating rules include provisions determining:
(a) which participant effected a proper ASTC transfer; or
(b) when a proper ASTC transfer takes effect;
those provisions have effect for this Division.
7.11.25 Participant’s authority to enter into transaction continues despite
client’s death
(1) This regulation applies if:
(a) a person authorises a participant to enter into a transaction involving the
disposal of a Division 4 financial product (for example, a sale); and
(b) the person dies before the participant enters into the transaction; and
(c) the authority is still in force immediately before the person dies.
(2) The authority continues, despite the person’s death, as if the person were still
alive.
(3) If the participant enters into the transaction while the authority so continues, the
transaction is binding on the person’s legal representative.
(4) The authority can be revoked by the person’s legal representative in any way that
the person could have revoked it while the person was alive.
7.11.26 Authority to enter into transaction gives authority to transfer
(1) This regulation applies if a person authorises a participant to enter into a
transaction involving the disposal of a Division 4 financial product (for example,
a sale).
(2) The person is taken to have authorised the participant to effect any proper ASTC
transfer of the Division 4 financial product that the participant effects, whether or
not the transfer has any connection with the transaction.
Note: The transfer may have no connection with the transaction because of the operation of
the provisions of the ASTC operating rules mentioned in subregulation 7.5.41(1).
(3) The authority that the person is taken by subregulation (2) to have given:
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(a) is revoked if, before the transaction is entered into, the authority to enter
into the transaction is revoked or otherwise ceases to have effect; and
(b) cannot otherwise be revoked.
(4) If the person dies after the transaction is entered into, the authority:
(a) continues in force, despite the person’s death, as if the person were still
alive; and
(b) cannot be revoked.
(5) If:
(a) the authority mentioned in subregulations (1) and (2) is given to a
participant mentioned in paragraph (b) of the definition of participant in
section 761A of the Act (the transacting participant); and
(b) under the market licensee’s operating rules, a participant mentioned in
paragraph (a) of the definition of participant in section 761A of the Act
(the clearing participant) has the function of completing the relevant
transaction;
the clearing participant has the same authority as the transacting participant has
under subregulations (1) and (2).
7.11.27 Effect of proper ASTC transfer on transferee: Division 4 financial
products other than rights
(1) If a proper ASTC transfer of a Division 4 financial product (other than rights)
takes effect at a particular time:
(a) the transferee is taken to have agreed at that time to accept the Division 4
financial product subject to the terms and conditions on which the
transferor held them immediately before that time; and
(b) the terms and conditions are the terms and conditions applicable as
between the issuer in relation to, and the holder for the time being of, the
Division 4 financial product.
(2) If the Division 4 financial product is shares, the transferee is also taken to have
agreed at that time:
(a) to become a member of the issuer; and
(b) to be bound by the issuer’s constitution.
(3) If the Division 4 financial product is an interest in a managed investment
scheme, the transferee is also taken to have agreed at that time:
(a) to become a member of the managed investment scheme; and
(b) to be bound by the constitution of the managed investment scheme to the
extent that:
(i) the transferee will comply with any requirement imposed on the
transferee by the constitution; and
(ii) the transferee will not impede compliance by another person with any
requirement imposed on the other person by the constitution.
(4) In this regulation:
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right means a right, whether existing or future, and whether contingent or not, of
a person to have any of the following issued to the person, whether or not on
payment of any money or for any other consideration:
(a) a share in a company (including a body to which section 1073C of the Act
applies);
(b) a debenture of a company (including a body to which section 1073C of the
Act applies);
(c) an interest in a registered scheme mentioned in regulations made under
paragraph 1073A(1)(c) of the Act.
7.11.28 Effect of proper ASTC transfer on transferee: rights
(1) If a proper ASTC transfer of a Division 4 financial product that is rights (other
than rights that relate to an interest in a managed investment scheme) takes effect
at a particular time, the transferee is taken:
(a) to have applied at that time to the issuer in relation to the rights for the
issue to the transferee of the Division 4 financial product to which the
rights relate; and
(b) to have agreed at that time to accept the Division 4 financial product to
which the rights relate subject to the terms and conditions on which the
issuer offers them for subscription.
(2) If the Division 4 financial product to which the rights (other than rights that
relate to an interest in a managed investment scheme) relate is shares, the
transferee is also taken to have agreed, at that time:
(a) to become a member of the issuer; and
(b) to be bound, on being registered as the holder of the shares, by the issuer’s
constitution.
(3) If the Division 4 financial product is a right to an interest in a managed
investment scheme, the transferee is also taken to have agreed at that time:
(a) to have applied at that time to the responsible entity in relation to the rights
for the issue to the transferee of the interest in a managed investment
scheme to which the rights relate; and
(b) to have agreed at that time to accept the interest in a managed investment
scheme to which the rights relate subject to the terms and conditions on
which they are offered by the responsible entity; and
(c) to become a member of the managed investment scheme; and
(d) to be bound by the constitution of the managed investment scheme to the
extent that:
(i) the transferee will comply with any requirement imposed on the
transferee by the constitution; and
(ii) the transferee will not impede compliance by another person with any
requirement imposed on the other person by the constitution.
(4) In this regulation:
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right means a right, whether existing or future, and whether contingent or not, of
a person to have any of the following issued to the person, whether or not on
payment of any money or for any other consideration:
(a) a share in a company (including a body to which section 1073C of the Act
applies);
(b) a debenture of a company (including a body to which section 1073C of the
Act applies);
(c) an interest in a registered scheme mentioned in regulations made under
paragraph 1073A(1)(c) of the Act.
7.11.29 Warranties by participant if identification code is included in transfer
document
(1) This regulation applies if the transfer document for a proper ASTC transfer of a
Division 4 financial product includes a participant’s identification code as the
identification code of the participant effecting the transfer.
(2) If the participant is the transferor, the participant is taken to have warranted that:
(a) the transfer was effected by the participant; and
(b) the transferor was legally entitled or authorised to transfer the Division 4
financial product.
(3) Subregulation (4) applies if:
(a) the participant is not the transferor; and
(b) the transfer is pursuant to a transaction in relation to which, or to
transactions in relation to each of which, one of the following conditions is
satisfied:
(i) the transaction was entered into in the ordinary course of trading on a
financial market;
(ii) the transaction is, under the operating rules of a market licensee,
described, or to be described, as ‘special’ when it is reported to the
market licensee.
(4) The participant is taken to have warranted that:
(a) the transferor was legally entitled or authorised to transfer the Division 4
financial product; and
(b) the transfer was effected by the participant; and
(c) the participant was authorised by the transferor to effect the transfer.
(5) Subregulation (6) applies if:
(a) the participant is not the transferor; and
(b) the transfer is not pursuant to a transaction in relation to which, or to
transactions in relation to each of which, one of the following conditions is
satisfied:
(i) the transaction was entered into in the ordinary course of trading on a
financial market;
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(ii) the transaction is, under the operating rules of a market licensee,
described, or to be described, as ‘special’ when it is reported to the
market licensee.
(6) The participant is taken to have warranted that:
(a) the transfer was effected by the participant; and
(b) the participant was authorised by the transferor to effect the transfer.
7.11.30 Indemnities in respect of warranted matters: transfer not effected by the
participant
(1) This regulation applies if:
(a) a participant is taken by regulation 7.11.29 to have warranted, in relation to
a proper ASTC transfer of a Division 4 financial product, that the transfer
was effected by the participant; and
(b) the transfer was not effected by the participant.
(2) The participant is liable to indemnify each of the following against any loss or
damage arising from the transfer not having been effected by the participant:
(a) the issuer in relation to the Division 4 financial product;
(b) the transferor;
(c) the transferee;
(d) if a participant acted as the transferee’s agent in the transfer—that
participant;
(e) the prescribed CS facility operated by ASTC;
(f) if TNS Clearing Pty Limited is the counter-party in the transaction—TNS
Clearing Pty Limited;
(g) if Options Clearing House Pty Limited is the counter-party in the
transaction—Options Clearing House Pty Limited.
(3) For this regulation, the effect of regulation 7.11.26 is to be disregarded in
determining whether a person:
(a) was legally entitled or authorised to transfer Division 4 financial products;
or
(b) was authorised by another person to effect a transfer of Division 4 financial
products.
7.11.31 Indemnities in respect of warranted matters: transferor not legally
entitled or authorised to transfer Division 4 financial products
(1) This regulation applies if:
(a) a participant is taken by regulation 7.11.29 to have warranted, in relation to
a proper ASTC transfer of a Division 4 financial product, that the transferor
was legally entitled or authorised to transfer the Division 4 financial
product; and
(b) the transferor was not legally entitled or authorised to transfer the
Division 4 financial product.
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(2) The participant is liable to indemnify each of the following against any loss or
damage arising from the transferor not having been legally entitled or authorised
to transfer the Division 4 financial product:
(a) the issuer in relation to the Division 4 financial product;
(b) the transferee;
(c) if a participant acted as the transferee’s agent in the transfer—that
participant;
(d) the prescribed CS facility operated by ASTC;
(e) if TNS Clearing Pty Limited is the counter-party in the transaction—TNS
Clearing Pty Limited;
(f) if Options Clearing House Pty Limited is the counter-party in the
transaction—Options Clearing House Pty Limited.
(3) For this regulation, the effect of regulation 7.11.26 is to be disregarded in
determining whether a person:
(a) was legally entitled or authorised to transfer Division 4 financial products;
or
(b) was authorised by another person to effect a transfer of Division 4 financial
products.
7.11.32 Indemnities in respect of warranted matters: participant not authorised
to effect transfer
(1) This regulation applies if:
(a) a participant is taken by regulation 7.11.29 to have warranted, in relation to
a proper ASTC transfer of a Division 4 financial product, that the
participant was authorised by the transferor to effect the transfer; and
(b) the participant was not authorised by the transferor to effect the transfer.
(2) The participant is liable to indemnify each of the following against any loss or
damage arising from the participant not having been authorised by the transferor
to effect the transfer:
(a) the issuer in relation to the Division 4 financial product;
(b) the transferor;
(c) the transferee;
(d) if a participant acted as the transferee’s agent in the transfer—that
participant;
(e) the prescribed CS facility operated by ASTC;
(f) if TNS Clearing Pty Limited is the counter-party in the transaction—TNS
Clearing Pty Limited;
(g) if Options Clearing House Pty Limited is the counter-party in the
transaction—Options Clearing House Pty Limited.
(3) For this regulation, the effect of regulation 7.11.26 is to be disregarded in
determining whether a person:
(a) was legally entitled or authorised to transfer Division 4 financial products;
or
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(b) was authorised by another person to effect a transfer of Division 4 financial
products.
7.11.33 Joint and several warranties and liabilities
(1) If 2 or more persons are taken to have warranted in the terms mentioned in
subregulation 7.11.29(2), (4) or (6), the persons are taken to have warranted
jointly and severally.
(2) If 2 or more persons are liable as mentioned in regulation 7.11.30, 7.11.31 or
7.11.32, the persons are liable jointly and severally.
7.11.34 ASTC entitled to assume its operating rules complied with
(1) This regulation applies if the prescribed CS facility operated by ASTC assumes
without inquiry, in the absence of knowledge to the contrary, that anything
purporting to be done under the ASTC operating rules in connection with a
transfer of a Division 4 financial product has been done in accordance with those
rules.
(2) If the prescribed CS facility operated by ASTC assumes, in reliance on
subregulation (1), that a thing was done in accordance with the ASTC operating
rules, the thing is taken to have been done in accordance with those rules.
(3) If the prescribed CS facility operated by ASTC:
(a) acts on behalf of the issuer in relation to a Division 4 financial product; and
(b) as part of that function assumes, in reliance on subregulation (1), that a
thing was done in accordance with the ASTC operating rules;
the issuer is also taken to assume, and to be entitled to assume, that the thing was
done in accordance with the ASTC operating rules.
7.11.35 ASTC-regulated transfer not to be registered unless proper ASTC
transfer
(1) The issuer in relation to a Division 4 financial product must not register, or
otherwise give effect to, an ASTC-regulated transfer of the Division 4 financial
product unless the transfer is a proper ASTC transfer.
(2) Subregulation (1) has effect despite anything in:
(a) the issuer’s constitution; or
(b) a deed relating to debentures; or
(c) the constitution of a registered scheme; or
(d) a deed relating to interests.
7.11.36 Issuer not to refuse to register proper ASTC transfer
The issuer in relation to a Division 4 financial product must not:
(a) refuse or fail to register a proper ASTC transfer of the Division 4 financial
product; or
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(b) refuse or fail to give effect to a proper ASTC transfer of the Division 4
financial product.
7.11.37 Determination of who holds Division 4 financial products for the
purposes of meeting
(1) This regulation applies to a meeting of the holders of securities of a body
corporate if some or all of the securities are Division 4 financial products.
(2) The convener of the meeting may determine that all the securities of the body
corporate that are Division 4 financial products at a specified time before the
meeting are taken, for the purposes of the meeting, to be held by the persons who
held them at the specified time.
(3) The specified time:
(a) must satisfy any applicable requirements of the ASTC operating rules; but
(b) in any case, must not be more than 48 hours before the meeting.
(4) The convenor must make a determination:
(a) in accordance with any applicable requirements of the ASTC operating
rules as to the way in which it must be made; but
(b) in any case, before notice of the meeting is given.
(5) The convenor must include particulars of the determination in the notice of the
meeting.
(6) However, a failure to include particulars of the determination in the notice of the
meeting does not invalidate the determination.
(7) The convenor’s determination has effect accordingly despite anything in:
(a) the Act; and
(b) these Regulations; and
(c) any other law (written or unwritten) that applies to the meeting; and
(d) any document that applies to the meeting (for example, the body
corporate’s constitution or any relevant trust deed).
7.11.38 Determination of who holds Division 4 financial products in class of
Division 4 financial products for the purposes of meeting
(1) This regulation applies to a meeting of the holders of a class of securities of a
body corporate if some or all of the securities in that class are Division 4
financial products.
(2) The convener of the meeting may determine that all the securities of the body
corporate in the relevant class that are Division 4 financial products at a specified
time before the meeting are taken, for the purposes of the meeting, to be held by
the persons who held them at the specified time.
(3) The specified time:
(a) must satisfy any applicable requirements of the ASTC operating rules; but
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(b) in any case, must not be more than 48 hours before the meeting.
(4) The convenor must make a determination:
(a) in accordance with any applicable requirements of the ASTC operating
rules as to the way in which it must be made; but
(b) in any case, before notice of the meeting is given.
(5) The convenor must include particulars of the determination in the notice of the
meeting.
(6) However, a failure to include particulars of the determination in the notice of the
meeting does not invalidate the determination.
(7) The convenor’s determination has effect accordingly despite anything in:
(a) the Act; and
(b) these Regulations; and
(c) any other law (written or unwritten) that applies to the meeting; and
(d) any document that applies to the meeting (for example, the body
corporate’s constitution or a relevant trust deed).
7.11.39 Determination of who holds Division 4 financial products for the
purposes of conferring security benefits
(1) If the ASTC operating rules include provisions relating to the determination, for
the purposes of conferring security benefits, of who holds or is taken to hold
Division 4 financial products at a particular time, those provisions have effect
accordingly despite anything in:
(a) the Act; and
(b) these Regulations; and
(c) any other law (written or unwritten) that applies to the conferral; and
(d) any document that applies to the conferral (for example, the body
corporate’s constitution or a relevant trust deed).
(2) In subregulation (1), conferring a security benefit means:
(a) paying or transferring money or property to a person because the person
holds or held a Division 4 financial product; or
(b) issuing securities to a person because the person holds or held a Division 4
financial product; or
(c) conferring a right on a person because the person holds or held a Division 4
financial product.
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Part 7.11 Title and transfer
Division 5 Offences
Regulation 7.11.40
Division 5—Offences
7.11.40 Stamping of broker’s stamp on sufficient transfer
(1) A broker must not stamp with a broker’s stamp a document (a transfer
document) that:
(a) relates to Division 3 securities; and
(b) may be used as a sufficient transfer under this Part;
unless the transfer document relates to a sale or purchase of the Division 3
securities, in the ordinary course of the broker’s business, for a consideration of
not less than their unencumbered market value at the time of the sale or purchase.
(2) A person must not stamp a transfer document with a stamp that purports to be
that of the transferor’s broker unless:
(a) the stamp is the stamp of the transferor’s broker; and
(b) apart from paragraph 7.11.17(4)(a), the transferor’s broker is authorised to
execute the document on the transferor’s behalf; and
(c) the person is:
(i) the transferor’s broker; or
(ii) authorised to stamp the document on the transferor’s broker’s behalf.
(3) A market licensee must not stamp with a stamp of the market licensee a
document that may be used as a sufficient transfer under this Part of Division 3
securities unless:
(a) a duly completed Part 1, relating to the Division 3 securities, has been
lodged with the issuer in relation to the Division 3 securities; or
(b) the market licensee holds a duly completed Part 1 that:
(i) bears a certificate that purports to be that of the transferor’s broker;
and
(ii) states that a duly completed Part 1, relating to the Division 3
securities, has been lodged or will be lodged with the issuer in relation
to the Division 3 securities.
(4) A person must not execute a document that:
(a) may be used as a sufficient transfer under regulation 7.11.12 or 7.11.13;
and
(b) relates to a transfer of Division 3 securities:
(i) made by way of a sale, gift or exchange of the Division 3 securities;
or
(ii) to or in favour of a person who is not the beneficial owner of the
Division 3 securities.
(5) A person who is not a licensed trustee company, within the meaning of
Chapter 5D of the Act, a Public Trustee of a State or Territory, or a company
listed in Schedule 9 must not knowingly cause, authorise or permit to be
executed a document that:
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(a) relates to Division 3 securities; and
(b) may be used as a sufficient transfer under regulation 7.11.12 or 7.11.13;
but is not a sufficient transfer under that regulation.
(6) A person must not knowingly lodge or cause to be lodged with a company a
document that has been:
(a) stamped in contravention of subregulation (1), (2) or (3); or
(b) executed in contravention of subregulation (4);
for the purpose of securing the registration of the transfer of, or the issue of,
Division 3 securities to the transferee named in the document.
7.11.41 Inclusion of identification codes in proper ASTC transfers
A person must not include a participant’s identification code in a document that
may be used to effect a proper ASTC transfer unless:
(a) the person:
(i) is the participant; or
(ii) is authorised so to include the identification code by the participant;
and
(b) if:
(i) the identification code is so included as the identification code of the
participant effecting the transfer; and
(ii) the participant is not the transferor;
the participant is, apart from the effect of regulation 7.11.26, authorised by
the transferor to effect the transfer.
7.11.42 Contravention by participant of the ASTC certificate cancellation
provisions relating to use of cancellation stamps
A participant must not, intentionally or recklessly, contravene the ASTC
certificate cancellation provisions by affixing, or failing to affix, a cancellation
stamp to a certificate or other document of title to a Division 4 financial product.
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Part 7.11 Title and transfer
Division 6 Civil liability
Regulation 7.11.43
Division 6—Civil liability
7.11.43 Contravention by participant of the ASTC certificate cancellation
provisions
(1) This regulation applies to a person who suffers loss or damage because of
conduct of a participant that was engaged in a contravention of the ASTC
certificate cancellation provisions.
(2) The person may, unless the person was involved in the contravention, recover the
amount of the loss or damage by action against the participant, whether or not the
participant has been convicted of an offence in respect of the contravention.
(3) An action under subregulation (2) must be begun within 6 years after the day on
which the cause of action arose.
(4) This regulation does not affect a liability that a person has under any other law.
(5) For section 1310B of the Act, an action under subregulation (2) is taken to be a
proceeding in respect of loss or damage arising out of a contravention of the Act.
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Miscellaneous Part 7.12
Regulation 7.12.01
Part 7.12—Miscellaneous
7.12.01 Destruction of records by ASIC
For paragraph 1101D(b) of the Act, the period of possession is 7 years.
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Chapter 8 Mutual recognition of securities offers
Part 8.1 Preliminary
Regulation 8.1.01
Chapter 8—Mutual recognition of securities offers
Part 8.1—Preliminary
8.1.01 Prescribed foreign recognition scheme (Act s 1200A(1))
For the definition of foreign recognition scheme in subsection 1200A(1) of the
Act, the provisions of Subpart 6 of Part 9 of the Financial Markets Conduct Act
2013 of New Zealand and the Financial Markets Conduct Regulations 2014 of
New Zealand comprise a foreign recognition scheme.
8.1.02 Prescribed offeror (Act s 1200A(1))
For the definition of offeror of securities in subsection 1200A(1) of the Act:
(a) an offer of an interest in a managed investment scheme governed by the
laws of New Zealand is prescribed as a kind of offer; and
(b) for that offer, if the scheme is a managed investment scheme within the
meaning of the Financial Markets Conduct Act 2013 of New Zealand—the
offeror is the manager of the managed investment scheme as defined in that
Act.
8.1.03 Prescribed recognised jurisdiction (Act s 1200A(1))
For the definition of recognised jurisdiction in subsection 1200A(1) of the Act,
New Zealand is prescribed.
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Foreign offers that are recognised in this jurisdiction Part 8.2
Recognised offers Division 1
Regulation 8.2.01
Part 8.2—Foreign offers that are recognised in this
jurisdiction
Division 1—Recognised offers
8.2.01 Prescribed offer (Act s 1200C(4))
For subsection 1200C(4) of the Act an offer of a security is a prescribed offer in
relation to New Zealand if a disclosure document (as defined in the Financial
Markets Conduct Act 2013 of New Zealand) must be prepared in accordance
with:
(a) the Financial Markets Conduct Act 2013 of New Zealand; or
(b) the Financial Markets Conduct Regulations 2014 of New Zealand.
Note: For the purpose of Chapter 8 of the Act and Chapter 8 of these regulations, a security
does not include all of the financial products defined as securities in the Financial
Markets Conduct Act 2013 of New Zealand—see the definition of securities in
section 1200A(1) of the Act. For example, a security does not include an interest in a
superannuation scheme or a life insurance policy.
8.2.02 Prescribed warning statements (Act s 1200E)
(1) For paragraph 1200E(a) of the Act, the following statements are prescribed:
(a) this offer to Australian investors is a recognised offer made under
Australian and New Zealand law. In Australia, this is Chapter 8 of the
Corporations Act 2001 and Regulations. In New Zealand, this is Subpart 6
of Part 9 of the Financial Markets Conduct Act 2013 of New Zealand and
the Financial Markets Conduct Regulations 2014 of New Zealand;
(b) this offer and the content of the offer document are principally governed by
New Zealand, rather than Australian, law. In the main, the Financial
Markets Conduct Act 2013 of New Zealand and the Financial Markets
Conduct Regulations 2014 of New Zealand set out how the offer must be
made;
(c) there are differences in how securities and financial products are regulated
under New Zealand, as opposed to Australian, law. For example, the
disclosure of fees for managed investment schemes is different under New
Zealand law;
(d) the rights, remedies and compensation arrangements available to Australian
investors in New Zealand securities and financial products may differ from
the rights, remedies and compensation arrangements for Australian
securities and financial products;
(e) both the Australian and New Zealand securities regulators have
enforcement responsibilities in relation to this offer. If you need to make a
complaint about this offer, please contact the Australian Securities and
Investments Commission (ASIC). The Australian and New Zealand
regulators will work together to settle your complaint;
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 1 Recognised offers
Regulation 8.2.03
(f) the taxation treatment of New Zealand securities and financial products is
not the same as that for Australian securities and products;
(g) if you are uncertain about whether this investment is appropriate for you,
you should seek the advice of an appropriately qualified financial advisor.
(2) For paragraph 1200E(a) of the Act, the following additional warning statements
are prescribed for offers involving the payment of proceeds, from securities or
financial products, that are not Australian dollars:
(a) The offer may involve a currency exchange risk. The currency for the
security or financial product is in dollars that are not Australian dollars.
The value of the security or financial product will go up and down
according to changes in the exchange rate between those dollars and
Australian dollars. These changes may be significant;
(b) If you receive any payments in relation to the security or financial product
that are not in Australian dollars, you may incur significant fees in having
the funds credited to a bank account in Australia in Australian dollars.
(3) For paragraph 1200E(a) of the Act, the following additional warning statement is
prescribed for offers involving securities and financial products, able to be traded
on a financial market:
If the security or financial product is able to be traded on a financial market and
you wish to trade the security or financial product through that market, you will
have to make arrangements for a participant in that market to sell the security or
financial product on your behalf. If the financial market is a foreign market that
is not licensed in Australia (such as a securities market operated by the New
Zealand Exchange Limited (NZX)) the way in which the market operates, the
regulation of participants in that market and the information available to you
about the security or financial product and trading may differ from Australian
licensed markets.
8.2.03 Prescribed details to be given in warning statements (Act s 1200E(b))
For paragraph 1200E(b) of the Act, if a matter is referred to in an item of the
Table, the details in the item are prescribed for the matter.
Item Matter Details to be provided
1 An offer to invest in a managed Details of the dispute resolution process
investment scheme is subject to an available in relation to that offer
obligation to provide for a dispute
resolution process
An offer is subject to continuous Details of the availability of the continuous
disclosure obligations disclosure notices that relate to that offer
3 An offer of a product that is currently Details of the financial market on which the
listed or is to be listed on a financial product is listed, or on which it is proposed to
market be listed
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Mutual recognition of securities offers Chapter 8
Foreign offers that are recognised in this jurisdiction Part 8.2
Recognised offers Division 1
Regulation 8.2.04
8.2.04 Prescribed home regulators (Act s 1200G(13) and (14))
For subsections 1200G(13) and (14) of the Act:
(a) an authority referred to in an item of the Table is prescribed as a home
regulator for New Zealand; and
(b) each matter listed in the item in relation to the authority is prescribed as a
matter in relation to which the authority is to be regarded as the home
regulator.
Item Authority Matter(s) in relation to which the authority
is to be regarded as the home regulator
1 Registrar of Financial Service Providers Each matter mentioned in:
of New Zealand (a) items 1 to 4 of the Table at
subsection 1200G(9) of the Act; or
(b) item 4 of the Table at subsection 1200N(1)
of the Act
Financial Markets Authority of New Each matter mentioned in items 5 to 7 of the
Zealand Table at subsection 1200G(9) of the Act
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 4 Modification of the Act in relation to its application to recognised offers for interests in
New Zealand managed investment schemes (Act s 1020G, 1200M)
Regulation 8.4.01
Division 4—Modification of the Act in relation to its application to
recognised offers for interests in New Zealand managed
investment schemes (Act s 1020G, 1200M)
8.4.01 Modification of Part 7.9 of the Act—New Zealand offer documents
replace Product Disclosure Statements
For section 1020G of the Act, Part 7.9 of the Act is modified in its application in
relation to managed investment schemes as set out in Part 18 of Schedule 10A.
8.4.02 Modification of Part 6D.2 of the Act and Part 7.9 of the Act—certain
disclosure obligations not to apply
For section 1200M of the Act, Part 6D.2 of the Act and Part 7.9 of the Act are
modified in relation to their application in respect of a recognised offer or a
proposed offer of securities that may become a recognised offer as set out in
Part 1 of Schedule 10AA.
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Asia Region Funds Passport Chapter 8A
Notified foreign passport funds Part 8A.4
Becoming a notified foreign passport fund Division 1
Regulation 8A.4.10
Chapter 8A—Asia Region Funds Passport
Part 8A.4—Notified foreign passport funds
Division 1—Becoming a notified foreign passport fund
8A.4.10 Rejecting a notice of intention—name of fund identical to another or
unacceptable
(1) For the purposes of subparagraphs 1213B(5)(a)(i), (ii), (iii) and (iv) of the Act,
the rules for ascertaining whether a name is identical with another name are the
rules set out in Part 1 of Schedule 6.
(2) For the purposes of subparagraph 1213B(5)(a)(v) of the Act, a name is
unacceptable for registration under the regulations if it is unacceptable under the
rules set out in Part 2 of Schedule 6.
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Chapter 8A Asia Region Funds Passport
Part 8A.4 Notified foreign passport funds
Division 4 Providing key information in relation to notified foreign passport funds
Regulation 8A.4.40
Division 4—Providing key information in relation to notified foreign
passport funds
8A.4.40 Register of members—purposes for which a person may obtain and use
a copy
For the purposes of paragraph 1213K(2)(c) (and paragraph 1213L(3)(a)) of the
Act, the following purposes are prescribed:
(a) soliciting a donation from a member of a notified foreign passport fund;
(b) soliciting a member of a notified foreign passport fund by a person who is
authorised to assume or use the word stockbroker or sharebroker in
accordance with section 923B of the Act;
(c) gathering information about the personal wealth of a member of a notified
foreign passport fund;
(d) making an offer that satisfies paragraphs 1019D(1)(a) to (d) of the Act;
(e) making an invitation that, were it an offer to purchase a financial product,
would be an offer that satisfies paragraphs 1019D(1)(a) to (d) of the Act.
Note: Section 1019D of the Act deals with unsolicited offers to purchase financial products
off-market.
8A.4.45 Destruction of records by ASIC—period before documents may be
destroyed
For the purposes of paragraph 1213Q(b) of the Act, the period of possession is 7
years.
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Asia Region Funds Passport Chapter 8A
Register of passport funds Part 8A.5
Regulation 8A.5.10
Part 8A.5—Register of passport funds
8A.5.10 Prescribed details for the Register of Passport Funds
Prescribed details of Australian passport funds
(1) For the purposes of paragraph 1214(3)(a) of the Act, the following details are
prescribed for each Australian passport fund:
(a) the APFRN for the fund;
(b) the name of the fund;
(c) the ARSN of the registered scheme that constitutes the fund;
(d) a statement that the fund is registered as an Australian passport fund;
(e) the date on which the fund was registered as an Australian passport fund;
(f) if the fund has or had a name in a participating economy (including
Australia) that is different from its current name in Australia, then for each
name that the fund has or had in a participating economy:
(i) that name; and
(ii) the name of each participating economy in which the fund has or had
that name; and
(iii) for each such economy—the start date and (if applicable) the end date
of each period during which the fund has or had that name in that
economy;
(g) the name, ACN and ABN (if any) of the operator of the fund;
(h) if the fund has at any time had an operator with a name, ACN or ABN that
is different from the name, ACN or ABN (as the case requires) mentioned
in paragraph (g):
(i) that other name, ACN or ABN; and
(ii) the start date and the end date of each period during which an operator
of the fund has had that other name, ACN or ABN;
(i) the review date for the fund;
(j) for each financial year for the fund—the name of each auditor of a
financial report for the fund for that year;
(k) for each review period for the fund for which the fund is required under
section 15 of the Passport Rules for this jurisdiction to conduct an
implementation review—the name of the implementation reviewer.
(2) For the purposes of paragraph 1214(3)(b) of the Act, the following details are
prescribed for each fund that has been deregistered as an Australian passport
fund:
(a) the details that were prescribed for the fund under subregulation (1)
immediately before the fund was deregistered, except for the details that
were prescribed under paragraph (1)(d);
(b) a statement that the fund has been deregistered;
(c) the date on which the fund was deregistered;
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Part 8A.5 Register of passport funds
Regulation 8A.5.10
(d) a statement indicating which of the following the fund was deregistered
under:
(i) Division 2 of Part 5C.10 of the Act (deregistration as an Australian
passport fund as a result of deregistration as a registration scheme);
(ii) Subdivision A of Division 1 of Part 8A.7 of the Act (voluntary
deregistration);
(iii) Subdivision B of Division 1 of Part 8A.7 of the Act (deregistration
initiated by ASIC).
Prescribed details of notified foreign passport funds
(3) For the purposes of paragraph 1214(3)(a) of the Act, the following details are
prescribed for each notified foreign passport fund:
(a) the NFPFRN for the fund and any other unique number for the fund
allocated to the fund by ASIC;
(b) the name of the fund;
(c) a statement that the fund is a notified foreign passport fund;
(d) the name of the home economy for the fund;
(e) the date on which the fund became a notified foreign passport fund;
(f) if the fund has or had a name in a participating economy (including
Australia) that is different from its current name in Australia, then for each
name that the fund has or had in a participating economy:
(i) that name; and
(ii) the name of each participating economy in which the fund has or had
that name; and
(iii) for each such economy—the start date and (if applicable) the end date
of each period during which the fund has or had that name in that
economy;
(g) the name and ARBN of the operator of the fund;
(h) if the fund has at any time had an operator with a name or ARBN that is
different from the name or ARBN (as the case requires) mentioned in
paragraph (g):
(i) that other name or ARBN; and
(ii) the start date and the end date of each period during which an operator
of the fund has had that other name or ARBN;
(i) the review date for the fund;
(j) for each financial year for the fund—the name of each auditor of a report
for the fund for that year that is prepared in accordance with the financial
reporting requirements applying to the fund under the Passport Rules for
the home economy of the fund;
(k) for each review period for the fund for which the fund is required under
section 15 of the Passport Rules for this jurisdiction to conduct an
implementation review—the name of the implementation reviewer.
(4) For the purposes of paragraph 1214(3)(b) of the Act, the following details are
prescribed for each fund that has been removed as a notified foreign passport
fund:
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Register of passport funds Part 8A.5
Regulation 8A.5.10
(a) the details that were prescribed for the fund under subregulation (3)
immediately before the fund was removed, except for the details that were
prescribed under paragraph (3)(c);
(b) a statement that the fund has been removed;
(c) the date on which the fund was removed;
(d) a statement indicating which of the following the fund was removed under:
(i) Subdivision A of Division 2 of Part 8A.7 of the Act (voluntarily
denotification);
(ii) Subdivision B of Division 2 of Part 8A.7 of the Act (denotification as
a result of deregistration as a passport fund in the home economy for
the fund).
Definitions
(5) In this regulation:
implementation reviewer, for a passport fund, has the same meaning as in the
Passport Rules for this jurisdiction.
participating economy has the same meaning as in Chapter 8A of the Act.
review period, for a passport fund, has the meaning given by subsection 15(1) of
the Passport Rules for this jurisdiction.
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Chapter 8A Asia Region Funds Passport
Part 8A.7 Deregistration and denotification
Regulation 8A.7.10
Part 8A.7—Deregistration and denotification
8A.7.10 Authority
This Part is made under section 1216L of the Act.
8A.7.15 Continued application of Corporations legislation to deregistered
Australian passport funds
(1) During the transition period for a fund that has been deregistered as an Australian
passport fund, each of the following continues to apply in relation to the fund as
if it were an Australian passport fund:
(a) Part 1.2A and any provisions of the Act dealing with disclosing entities;
(b) Chapters 2C, 2D, 2F, 2G, 2M, 2N and 2P;
(c) Chapters 6, 6A, 6B, 6C and 6CA;
(d) Chapter 7;
(e) Part 8A.1, Part 8A.2, section 1212B, Part 8A.5, Part 8A.6, Part 8A.7 and
Part 8A.8;
(f) Chapter 9;
(g) the remaining provisions of the Corporations legislation, to the extent that
they apply:
(i) in relation to a provision mentioned in paragraphs (a) to (f); or
(ii) in relation to compliance with or enforcement of a provision
mentioned in paragraphs (a) to (f).
Note: A fund may be deregistered as an Australian passport fund under Division 1 of
Part 8A.7 of the Act or under Division 2 of Part 5C.10 of the Act.
(2) In this regulation, the transition period for a fund that has been deregistered as
an Australian passport fund is the period:
(a) beginning on the day on which the fund is deregistered as an Australian
passport fund (see subsection 1216D(3) of the Act); and
(b) ending on the last day on which there are any protected members of the
fund.
(3) A person is a protected member of a fund that has been deregistered as an
Australian passport fund if the person became a member of the fund (whether in
this jurisdiction or any host economy for the fund):
(a) after the fund became an Australian passport fund; or
(b) on the expectation that the fund would become an Australian passport fund.
(4) For the purposes of the definition of protected member in subregulation (3),
ignore any member of the fund that:
(a) is, or has at any time been, the operator of the fund; or
(b) is a related party of an entity that is, or has at any time been, the operator of
the fund.
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Asia Region Funds Passport Chapter 8A
Deregistration and denotification Part 8A.7
Regulation 8A.7.20
(5) If a fund has been deregistered as an Australian passport fund, a reference to the
operator in relation to the fund in:
(a) this regulation; or
(b) any provision of the Corporations legislation the application of which is
continued under subregulation (1);
is a reference to the responsible entity for the registered scheme that constitutes
the fund or, if the fund has ceased to be a registered scheme, the entity or entities
that control the fund.
8A.7.20 Continued application of Corporations legislation to funds that have
been removed as notified foreign passport funds
(1) During the transition period for a fund that has been removed as a notified
foreign passport fund, each of the following continues to apply in relation to the
fund as if it were a notified foreign passport fund:
(a) Part 1.2A and any provisions of the Act dealing with disclosing entities;
(b) Chapters 2C, 2D, 2F, 2G, 2M, 2N and 2P;
(c) Chapters 6, 6A, 6B, 6C and 6CA;
(d) Chapter 7;
(e) Part 8A.1, Part 8A.2, Divisions 2, 3 and 4 of Part 8A.4, Part 8A.5,
Part 8A.6, Part 8A.7 and Part 8A.8;
(f) Chapter 9;
(g) the remaining provisions of the Corporations legislation, to the extent that
they apply:
(i) in relation to a provision mentioned in paragraphs (a) to (f); or
(ii) in relation to compliance with or enforcement of a provision
mentioned in paragraphs (a) to (f).
Note: A fund may be removed as a notified foreign passport fund under Division 2 of
Part 8A.7 of the Act.
(2) In this regulation, the transition period for a fund that has been removed as a
notified foreign passport fund is the period:
(a) beginning on the day on which the fund is removed as a notified foreign
passport fund (see subsection 1216J(3)); and
(b) ending on the last day on which there are any protected members of the
fund.
(3) A person is a protected member of a fund that has been removed as a notified
foreign passport fund if the person became a member of the fund (whether in this
jurisdiction or any other participating economy for the fund):
(a) after the fund became a notified foreign passport fund; or
(b) on the expectation that the fund would become a notified foreign passport
fund.
(4) For the purposes of the definition of protected member in subregulation (3),
ignore any member of the fund that:
(a) is, or has at any time been, the operator of the fund; or
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Chapter 8A Asia Region Funds Passport
Part 8A.7 Deregistration and denotification
Regulation 8A.7.20
(b) is a related party of an entity that is, or has at any time been, the operator of
the fund.
(5) If a fund has been removed as a notified foreign passport fund, a reference to the
operator in relation to the fund in:
(a) this regulation; or
(b) any provision of the Corporations legislation the application of which is
continued under subregulation (1);
is a reference to the operator of the regulated CIS that constitutes the fund or, if
the fund has ceased to be a regulated CIS, the entity or entities that control the
fund.
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