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Corporations Regulations 2001 (consolidated as of March 31, 2015)

 Corporations Regulations 2001

Prepared by the Office of Parliamentary Counsel, Canberra

Corporations Regulations 2001

Statutory Rules No. 193, 2001

made under the

Corporations Act 2001

Compilation No. 113

Compilation date: 31 March 2015

Includes amendments up to: SLI No. 39, 2015

Registered: 9 April 2015

This compilation is in 7 volumes

Volume 1: regulations 1.0.01–6D.5.02

Volume 2: regulations 7.1.02–7.6.08E

Volume 3: regulations 7.7.01–8.4.02

Volume 4: regulations 9.1.01–12.9.03

Volume 5: Schedules 1, 2 and 2A

Volume 6: Schedules 3–12

Volume 7: Endnotes

Each volume has its own contents

Federal Register of Legislative Instruments F2015C00303

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 31 March 2015 (the compilation date).

This compilation was prepared on 31 March 2015.

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 ComLaw (www.comlaw.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

ComLaw 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.

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 ComLaw 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If a provision of the compiled law has been repealed in accordance with a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.

Federal Register of Legislative Instruments F2015C00303

Corporations Regulations 2001 i

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 3

7.7.02 Situations in which Financial Services Guide is not

required .............................................................................3

7.7.02A Situations when Financial Services Guide is not

required .............................................................................7

7.7.03 Financial Services Guide given by financial

services licensee: description of documents ......................9

7.7.03A Financial Services Guide given by financial

services licensee: compensation arrangements ................10

7.7.04 Financial Services Guide given by financial

services licensee: remuneration, commission and

benefits ............................................................................10

7.7.04A Financial services guide given by financial

services licensee: more detailed information about

remuneration etc..............................................................13

7.7.04AA Financial Services Guide given by financial

services licensee: non-monetary benefit that is not

conflicted remuneration...................................................14

7.7.04AB Financial Services Guide given by authorised

representative: non-monetary benefit that is not

conflicted remuneration...................................................14

7.7.05 Record of advice given by financial services

licensee............................................................................14

7.7.05A Financial Services Guide given by authorised

representative of financial services licensee:

authorised representative number ....................................15

7.7.05B Personalised Financial Services Guide............................15

7.7.05C Exemption from providing certain information in a

Financial Services Guide.................................................17

7.7.06 Financial Services Guide given by authorised

representative of financial services licensee:

description of documents.................................................18

Federal Register of Legislative Instruments F2015C00303

ii Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.7.06A Financial Services Guide given by authorised

representative of financial services licensee—

licence number ................................................................19

7.7.06B Financial Services Guide given by authorised

representative of financial services licensee:

compensation arrangements ............................................19

7.7.07 Financial Services Guide given by authorised

representative of financial services licensee:

remuneration, commission and benefits ..........................20

7.7.07A Financial services guide given by authorised

representative: more detailed information about

remuneration etc..............................................................22

7.7.08 Record of advice given by authorised

representative of financial services licensee ....................23

Division 2A—Combined Financial Services Guide and Product

Disclosure Statement 24

7.7.08A Combined Financial Services Guide and Product

Disclosure Statement .......................................................24

Division 2AA—Combined Financial Services Guide and credit

guide 27

7.7.08B Modification of section 942DA of the Act ......................27

Division 2B—Record of small investment advice 29

7.7.08C Record of small investment advice—content

requirements ....................................................................29

Division 3—Statement of Advice 30

7.7.09 Situations in which statement of advice is not

required: further advice ...................................................30

7.7.09A Situations in which Statement of Advice is not

required: small investments threshold .............................30

7.7.09AA Statement of Advice from financial services

licensee............................................................................34

7.7.09AB Modification of subsection 947B(4) of the Act ...............35

7.7.09B Statement of Advice from providing entity—

information not included in the Statement.......................35

7.7.09BA Statement of Advice from authorised

representative ..................................................................36

7.7.09BB Modification of subsection 947C(4) of the Act ...............37

7.7.09BC Statement of Advice given by financial services

licensee: non-monetary benefit that is not

conflicted remuneration...................................................38

Federal Register of Legislative Instruments F2015C00303

Corporations Regulations 2001 iii

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.7.09BD Statement of Advice given by authorised

representative: non-monetary benefit that is not

conflicted remuneration...................................................38

7.7.09C Requirement to keep Statement of Advice and

other documents ..............................................................38

7.7.10 Products for which a Statement of Advice is not

required ...........................................................................39

7.7.10AA Obligation on authorised representative to give a

financial services guide ...................................................39

7.7.10AAA Record of advice without a recommendation to

purchase or sell—content requirements...........................40

7.7.10AB Financial services guide—contents of guide ...................40

7.7.10AC Financial services guide ..................................................41

7.7.10AD Financial services guide ..................................................43

7.7.10AE Situations in which Statement of Advice not

required ...........................................................................44

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 .........................46

7.7.10AG Various consequential amendments to Division 7

of Part 7.7 ........................................................................49

7.7.10AH Business days ..................................................................51

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 ...............51

7.7.10A Statements of Advice—requirement to state

information as amounts in dollars ...................................52

7.7.10B Insertion of definition—further advice ............................53

7.7.10C Omission of definition—further market-related

advice ..............................................................................54

7.7.10D Additional information in Statement of Advice...............54

7.7.10E Additional information in Statement of Advice...............54

7.7.11 Statement of Advice given by financial services

licensee............................................................................54

7.7.11A Statement of Advice given by authorised

representative of financial services licensee—

licence number ................................................................55

7.7.11B Statement of Advice—disclosure of dollar

amounts ...........................................................................55

7.7.12 Statement of Advice given by authorised

representative of financial services licensee ....................56

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iv Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.7.13 Statement of Advice provided by authorised

representative—disclosure of dollar amounts..................57

7.7.13A Additional information about charges or

benefits—disclosure of dollar amounts ...........................58

7.7.13B Additional information about charges or

benefits—disclosure of dollar amounts ...........................59

Division 4—General advice provided to a retail client 60

7.7.14 Product Disclosure Statement not required .....................60

Division 5—Other disclosure requirements 61

7.7.20 General advice to retail client—no obligation to

warn client .......................................................................61

7.7.20A Extension of disclosure requirements to wholesale

clients dealing with certain unauthorised insurers ...........61

Division 6—Exemptions from application of Part 7.7 of the Act 63

7.7.21 Exemption from application of Part 7.7 of the Act..........63

Part 7.7A—Best interests obligations and remuneration 64

Division 2—Best interests obligations 64

Subdivision 1—Duty to act in client’s best interests 64

7.7A.1 Duty if advising on combination of products ..................64

Division 3—Charging ongoing fees to clients 66

7.7A.10 Arrangements that are not ongoing fee

arrangements ...................................................................66

7.7A.11 Fee disclosure statements: product fee ............................66

Division 4—Conflicted remuneration 67

Subdivision 1—Monetary benefits 67

7.7A.12 What subdivision is about ...............................................67

7.7A.12A Life risk insurance products ............................................67

7.7A.12B Stamping fees ..................................................................67

7.7A.12C Time-sharing schemes .....................................................68

7.7A.12D Brokerage fees.................................................................69

7.7A.12E Fees paid by clients for dealing services .........................71

7.7A.12EA Application of ban on conflicted remuneration—

purchase or sale of financial advice business ..................71

Subdivision 2—Monetary or non-monetary benefits 72

7.7A.12F What subdivision is about ...............................................72

7.7A.12G General insurance............................................................72

7.7A.12H Basic banking and general insurance products ................72

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Corporations Regulations 2001 v

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.7A.12I Mixed benefits.................................................................73

7.7A.13 Non-monetary benefit given in certain

circumstances not conflicted remuneration:

prescribed amount ...........................................................74

7.7A.14 Non-monetary benefit given in certain

circumstances not conflicted remuneration:

education or training course ............................................74

7.7A.15 Non-monetary benefit given in certain

circumstances not conflicted remuneration: other

education and training benefit .........................................75

7.7A.15A Non-monetary benefit given in certain

circumstances not conflicted remuneration—

education and training in conducting a financial

services business .............................................................75

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) ...............................76

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) ...............................76

7.7A.16A Application of ban on conflicted remuneration—

platform operator (Division 4 of Part 7.7A of

Chapter 7 of the Act applies)...........................................77

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) ......................79

7.7A.16BA Sale of business ...............................................................81

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)...........................81

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) ...............................83

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)...........84

7.7A.16F Application of ban on conflicted remuneration—

benefit is a pass through of a grandfathered benefit

(benefit is not conflicted remuneration) ..........................85

Subdivision 3—Asset-based fees on borrowed amounts 85

7.7A.17 Financial services licensees .............................................85

7.7A.18 Authorised representatives ..............................................86

Federal Register of Legislative Instruments F2015C00303

vi Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 6—Exemptions from application of Part 7.7A of the Act 87

7.7A.40 Exemption from application of Part 7.7A of the

Act...................................................................................87

Part 7.8—Other provisions relating to conduct etc connected

with financial products and financial services, other

than financial product disclosure 88 7.8.01 Obligation to pay money into an account ........................88

7.8.02 Accounts maintained for section 981B of the Act ...........91

7.8.03 How money to be dealt with if licensee ceases to

be licensed etc .................................................................95

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.......................................98

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 ...................................................98

7.8.06 Statement setting out terms of loan etc............................99

7.8.06A Property exempt from Division 3 of Part 7.8 of the

Act...................................................................................99

7.8.07 How property to which Division 3 of Part 7.8 of

the Act to be dealt with....................................................99

7.8.08 Debts of financial services licensee in relation to

premiums etc .................................................................101

7.8.08A Limit of margin lending facility taken to be

increased........................................................................107

7.8.08B Exemption from requirement to make unsuitability

assessment .....................................................................109

7.8.09 Reasonable inquiries etc about retail client:

inquiries.........................................................................111

7.8.09A Modification of section 985G of the Act .......................111

7.8.10 Circumstances in which margin lending facility is

unsuitable ......................................................................112

7.8.10A Margin lending facility taken not to be unsuitable ........112

7.8.11 Particular categories of information to be shown in

records...........................................................................112

7.8.11A Particular categories of information to be shown in

records: records of non-monetary benefit that is

not conflicted remuneration...........................................113

7.8.12 Requirements in relation to financial records of

financial services licensees............................................115

7.8.12A Modification of section 989B of the Act .......................116

Federal Register of Legislative Instruments F2015C00303

Corporations Regulations 2001 vii

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.8.13 Auditor’s report with annual profit and loss

statement and balance sheet...........................................118

7.8.13A Compliance certificate with profit and loss

statement and balance sheet...........................................118

7.8.14 Contents of annual profit and loss statement and

balance sheet and applicable accounting

procedures .....................................................................119

7.8.14A Lodgement of annual profit and loss statement and

balance sheet .................................................................119

7.8.14B Modification of section 990B of the Act .......................120

7.8.15 Appointment of auditor by financial services

licensee..........................................................................121

7.8.16 When person is ineligible to act as auditor of

financial services licensee .............................................124

7.8.17 Priority to clients’ orders ...............................................127

7.8.18 Instructions to deal through licensed markets................127

7.8.19 Records of instructions to deal on licensed markets

and foreign markets .......................................................129

7.8.20 Dealings with non-licensees ..........................................131

7.8.20A Dealings involving employees of financial service

licensees—risk insurance products................................134

7.8.21 Dealings involving employees of financial services

licensees ........................................................................134

7.8.21A Anti-hawking provisions if no Product Disclosure

Statement is required .....................................................136

7.8.21B Anti-hawking provisions if no Product Disclosure

Statement is required—carbon units, Australian

carbon credit units and eligible international

emissions units ..............................................................137

7.8.22 Hours for hawking certain financial products................138

7.8.22A Modification of Part 7.8 ................................................138

7.8.22B Return of financial product: first home saver

accounts.........................................................................139

7.8.23 Return of financial product: transfer between

superannuation entities or RSAs....................................140

7.8.24 Right of return not to apply ...........................................140

7.8.25 Variation of amount to be repaid ...................................141

7.8.26 Exemption from application of section 992A of the

Act.................................................................................141

Federal Register of Legislative Instruments F2015C00303

viii Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Part 7.9—Financial product disclosure and other provisions

relating to issue and sale of financial products 142

Division 1—Preliminary 142

7.9.01 Interpretation .................................................................142

7.9.02 Sub-plans.......................................................................146

7.9.02A Alternative ways of giving Statement............................147

7.9.02B Product Disclosure Statement in electronic form ..........147

Division 2—Arrangements for Product Disclosure Statements in

relation to superannuation products and RSA

products 149

Subdivision 2.1—Preliminary 149

7.9.03 Application of Division 2 ..............................................149

Subdivision 2.2—Late provision of Product Disclosure Statement

for certain members of regulated superannuation

fund, public offer superannuation fund or

successor fund 149

7.9.04 Product Disclosure Statement to be provided later........149

Subdivision 2.3—Product Disclosure Statement for retirement

savings account 150

7.9.05 Situation in which Product Disclosure Statement is

not required ...................................................................150

Subdivision 2.4—Additional obligations for eligible rollover funds 150

7.9.06A Relevant superannuation entities ...................................150

7.9.06B Application forms..........................................................150

Subdivision 2.5—Product Disclosure Statement for insurance

options 151

7.9.07 Modification of Act: Product Disclosure Statement

in relation to insurance options......................................151

Division 2A—Product Disclosure Statement for warrants 152

7.9.07A Warrants ........................................................................152

Division 2B—Product Disclosure Statement for market-traded

derivatives 154

7.9.07B Product Disclosure Statements for certain

market-traded derivatives ..............................................154

7.9.07C Remedies for Product Disclosure Statements for

certain market-traded derivatives ..................................155

Federal Register of Legislative Instruments F2015C00303

Corporations Regulations 2001 ix

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 2BA—Product Disclosure Statement for discretionary

mutual funds 156

7.9.07CA Extension of Product Disclosure Statement

requirements to wholesale clients..................................156

Division 2C—Situations where a Product Disclosure Statement

is not required 157

7.9.07D Product Disclosure Statement not required for

offers of bundled contracts of insurance........................157

7.9.07E Product Disclosure Statement not required if offer

of financial product is declined .....................................157

7.9.07F Product Disclosure Statement not required if the

client is not contactable .................................................158

7.9.07FA Product Disclosure Statement not required for

certain specified products ..............................................159

7.9.07FB Product Disclosure Statement not required if client

not in this jurisdiction....................................................160

7.9.07FC Product Disclosure Statement not required general

insurance situation.........................................................160

Division 2D—Preparation and content of Product Disclosure

Statements 162

7.9.07J Only 1 responsible person for a Product Disclosure

Statement.......................................................................162

7.9.07K Definition of defective: Product Disclosure

Statement, Short-Form PDS or Replacement

Product Disclosure Statement........................................162

Division 2E—Obligation to make information publicly available:

registrable superannuation entities 163

Subdivision 2E.1—Obligation to make product dashboard

publicly available 163

7.9.07L Modification of Act .......................................................163

7.9.07M Source of power for this Subdivision ............................163

7.9.07N Definitions.....................................................................163

7.9.07P Meaning of MySuper product dashboard reporting

standards .......................................................................165

7.9.07Q Product dashboard—how information must be set

out .................................................................................165

7.9.07R Product dashboard—return target..................................165

7.9.07S Product dashboard—return............................................166

7.9.07T Product dashboard—comparison between return

target and return ............................................................167

Federal Register of Legislative Instruments F2015C00303

x Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.07U Comparison to be set out as a graph ..............................168

7.9.07V Product dashboard—level of investment risk ................168

7.9.07W Product dashboard—statement of fees and other

costs...............................................................................169

Division 3—Dealing with money received for financial product

before the product is issued 170

7.9.08 Accounts........................................................................170

7.9.08A Dealing with interest .....................................................171

7.9.08B Crediting of payments before money is received ..........171

7.9.08C Money held in trust for a superannuation product

or RSA product..............................................................172

7.9.08D Statutory funds under the Life Insurance Act 1995 .......173

Division 3A—Rights and obligations related to Product

Disclosure Statement—first home saver accounts 174

7.9.08E Application forms..........................................................174

Division 4—Content of Product Disclosure Statements 175

Subdivision 4.1—Preliminary 175

7.9.09 Application of Division 4 ..............................................175

Subdivision 4.1A—No Product Disclosure Statement for carbon

units, Australian carbon credit units and eligible

international emissions units 176

7.9.09A Application of Subdivision............................................176

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 .............176

7.9.09C Modification of Act .......................................................177

Subdivision 4.2—Content of Product Disclosure Statements for

First Home Saver Accounts 177

7.9.10 Application of Subdivision............................................177

7.9.10A Definitions.....................................................................177

7.9.10B Modification of Act .......................................................178

7.9.10C Product Disclosure Statement consisting of 2 or

more documents ............................................................178

7.9.10D Manner of giving Product Disclosure Statement

for first home saver accounts.........................................179

7.9.10E Form and content of Product Disclosure Statement ......180

Subdivision 4.2A—Form and content of Product Disclosure

Statement for margin loan 180

Federal Register of Legislative Instruments F2015C00303

Corporations Regulations 2001 xi

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.11 Application of Subdivision 4.2A...................................180

7.9.11A Provisions of Part 7.7 of Act that do not apply in

relation to margin loan ..................................................181

7.9.11B Definitions for Subdivision 4.2A...................................181

7.9.11C Modification of Act—margin loan ................................181

7.9.11D Form and content of Product Disclosure Statement

for margin loan ..............................................................181

7.9.11E Requirements for references to incorporated

information for margin loan ..........................................182

7.9.11F Retention of copies of Product Disclosure

Statement for margin loan .............................................184

7.9.11G Requirement to provide copy of Product

Disclosure Statement for margin loan free of

charge ............................................................................185

7.9.11H Notification about change to Approved Securities

List or current interest rate for margin loan...................185

Subdivision 4.2B—Content of Product Disclosure Statement for

superannuation product 185

7.9.11K Application of Subdivision 4.2B ...................................185

7.9.11L Provisions of Part 7.7 of Act that do not apply in

relation to superannuation product ................................186

7.9.11LA Attribution of accrued default amount to MySuper

product—exemption from significant event notice

requirements ..................................................................186

7.9.11LB Attribution of accrued default amount to MySuper

product—modification of significant event notice

requirements ..................................................................186

7.9.11M Provisions of Part 7.9 of Act that do not apply in

relation to superannuation product ................................187

7.9.11N Modification of Act—superannuation product ..............188

7.9.11O Form and content of Product Disclosure Statement

for superannuation product............................................188

7.9.11P Requirements for references to incorporated

information for superannuation product ........................189

7.9.11Q Retention of copies of Product Disclosure

Statement for superannuation product ...........................191

7.9.11R Requirement to provide copy of Product

Disclosure Statement for superannuation product

free of charge.................................................................192

Subdivision 4.2C—Content of Product Disclosure Statement for

simple managed investment scheme 192

7.9.11S Application of Subdivision 4.2C ...................................192

Federal Register of Legislative Instruments F2015C00303

xii Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.11T Provisions of Part 7.7 of Act that do not apply in

relation to simple managed investment scheme.............193

7.9.11U Provisions of Part 7.9 of Act that do not apply in

relation to simple managed investment scheme.............193

7.9.11V Modification of Act—simple managed investment

scheme...........................................................................194

7.9.11W Form and content of Product Disclosure Statement

for simple managed investment scheme ........................194

7.9.11X Requirements for references to incorporated

information for simple managed investment

scheme...........................................................................195

7.9.11Y Retention of copies of Product Disclosure

Statement for simple managed investment scheme .......197

7.9.11Z Requirement to provide copy of Product

Disclosure Statement for simple managed

investment scheme free of charge .................................198

Subdivision 4.3—Other arrangements for Product Disclosure

Statements and application forms 198

7.9.12 Modification of Act: Product Disclosure

Statements and application forms for standard

employer-sponsors and successor funds........................198

7.9.13 Offer of superannuation interest without

application or eligible application .................................199

7.9.13A Remedies for person acquiring financial product

under defective Product Disclosure Statement: first

home saver accounts......................................................200

7.9.14 Remedies for person acquiring financial product

under defective Product Disclosure Statement:

superannuation and RSAs..............................................201

7.9.14A Treatment of arrangements under which a person

can instruct another person to acquire a financial

product ..........................................................................202

Subdivision 4.4—Product information for certain insurance

products 202

7.9.14B Product information.......................................................202

Division 4A—General 204

7.9.14C Labour standards and environmental, social and

ethical considerations ....................................................204

7.9.14D Further statements required in Product Disclosure

Statement—financial claims scheme.............................205

7.9.15 More detailed information in Product Disclosure

Statement: unauthorised foreign insurer ........................206

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Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.15A Product Disclosure Statements—requirement to

state information as amounts in dollars .........................207

7.9.15B Product Disclosure Statements—disclosure of

dollar amounts ...............................................................208

7.9.15C Product Disclosure Statements—disclosure of

dollar amounts ...............................................................208

7.9.15CA Less information in Product Disclosure

Statement—financial claims scheme.............................210

7.9.15D Less information in product disclosure statement:

general insurance product..............................................210

7.9.15DA Statement or information not included in a Product

Disclosure Statement .....................................................211

7.9.15DB Requirement to keep record of Product Disclosure

Statement and other documents .....................................212

7.9.15DC Requirement to lodge documents mentioned in a

Product Disclosure Statement with ASIC......................213

7.9.15E More detailed information in product disclosure

statement: general insurance product.............................213

7.9.15F Product disclosure statement: general insurance

product ..........................................................................214

7.9.15FA Transitional arrangements for regulations 7.9.15D,

7.9.15E and 7.9.15F.......................................................214

7.9.15G Business days ................................................................215

7.9.15H New section 1012G: product disclosure statement

may sometimes be provided later ..................................215

7.9.15I Modification of section 1012IA ....................................217

7.9.16 More detailed information in Product Disclosure

Statement: consumer credit insurance product ..............218

7.9.16A Small scale offerings of managed investment and

other prescribed financial products (20 issues or

sales in 12 months) ........................................................219

Division 4B—Ongoing disclosure 220

7.9.16G Ongoing disclosure of material changes and

significant events...........................................................220

Division 4C—Fee Disclosure for certain financial products 221

Subdivision 4C.1—Application 221

7.9.16J Application of Division 4C to financial products ..........221

7.9.16JA Application of Division 4C to financial products—

temporary arrangements ................................................221

7.9.16K Application of Division 4C to periodic statements

and Product Disclosure Statements ...............................221

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Subdivision 4C.2—Product Disclosure Statements 222

7.9.16L More detailed information about fees and costs ............222

7.9.16M Modification of section 1015C of the Act .....................222

7.9.16N Presentation, structure and format of fees and costs

in Product Disclosure Statements ..................................223

Subdivision 4C.3—Periodic statements 223

7.9.16O Presentation, structure and format of fees and

charges in periodic statements .......................................223

Division 4D—Other requirements relating to Product Disclosure

Statements and Supplementary Product Disclosure

Statements 224

Subdivision 4D.1—Requirement to lodge a notice with ASIC 224

7.9.16T Variation of paragraph 1015D(2)(b) of the Act .............224

Division 5—Ongoing requirements for product disclosure after

person becomes a member 225

Subdivision 5.1—Preliminary 225

7.9.17 Application of Division 5 ..............................................225

Subdivision 5.2—Periodic statements for retail clients for

financial products that have an investment

component: regulated superannuation funds,

ADFs and RSAs 225

7.9.18 Application of Subdivision 5.2......................................225

7.9.19 Specific requirements for periodic statements:

superannuation funds (other than self managed

superannuation funds) and RSAs ..................................225

7.9.19A Withdrawal benefit—fees, charges or expenses ............227

7.9.19B Withdrawal benefit—fees, charges and expenses..........227

7.9.20 Specific requirements for certain periodic

statements: superannuation funds (other than self

managed superannuation funds) ....................................229

7.9.20AA Specific requirements for certain periodic

statements: superannuation funds (other than self

managed superannuation funds)—long-term

returns............................................................................231

7.9.20A Details of other significant benefits—disclosure of

fees, charges or expenses...............................................234

7.9.20B Other significant benefits—disclosure of fees,

charges or expenses .......................................................235

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Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.21 Specific requirements in particular cases: member

(other than capital guaranteed member) of fund

other than a self managed superannuation fund.............237

7.9.22 Specific requirements: capital guaranteed funds

and RSAs.......................................................................238

7.9.23 Information for capital guaranteed fund: benefits

reach $10 000 ................................................................239

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..................................................................239

Subdivision 5.3—Periodic statements for retail clients for

financial products that have an investment

component: information for RSAs 240

7.9.25 Application of Subdivision 5.3......................................240

7.9.26 Specific requirements where applicable: RSAs.............240

7.9.27 Modification of Act: periodic statements for RSA

holders...........................................................................242

7.9.28 Information for RSA: amount reaches $10 000.............242

Subdivision 5.4—Periodic statements for retail clients for

financial products that have an investment

component: additional information for

superannuation entities and RSA providers 242

7.9.29 Application of Subdivision 5.4......................................242

7.9.30 Additional information for change to choices ...............243

Subdivision 5.4A—Periodic statements for retail clients for

financial products that have an investment

component: additional information for margin

lending facilities 243

7.9.30A Application of Subdivision 5.4A...................................243

7.9.30B Details to be included in periodic statements for

margin lending facilities ................................................244

Subdivision 5.5—Fund information for retail clients for financial

products that have an investment component:

superannuation 245

7.9.31 Application of Subdivision 5.5......................................245

7.9.32 Reporting periods: general ............................................245

7.9.33 Use of more than 1 document........................................246

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Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Subdivision 5.6—Fund information for retail clients for financial

products that have an investment component:

fund information for regulated superannuation

funds and ADFs 246

7.9.34 Application of Subdivision 5.6......................................246

7.9.35 General requirement ......................................................247

7.9.36 Specific requirements in all cases..................................247

7.9.37 Specific requirements in particular cases.......................247

7.9.38 Specific information in particular case: self

managed superannuation fund .......................................251

7.9.39 Benefits determined by life insurance products.............251

Subdivision 5.7—Fund information for retail clients for financial

products that have an investment component:

fund information for pooled superannuation trusts 252

7.9.40 Application of Subdivision 5.7......................................252

7.9.41 Specific requirements in all cases..................................252

7.9.42 Specific requirements in particular cases.......................253

Subdivision 5.8—Ongoing disclosure of material changes and

significant events 255

7.9.43 Modification of Act: disclosure of material

changes and significant events in relation to

superannuation products and RSA products ..................255

7.9.44 Benefits to be paid to eligible rollover fund ..................255

Subdivision 5.9—Information on request: members 257

7.9.45 Regulated superannuation funds, ADFs and pooled

superannuation trusts.....................................................257

7.9.46 RSAs .............................................................................258

Subdivision 5.10—Information on request: payments 258

7.9.47 Modification of Act: charges for information

requested .......................................................................258

Subdivision 5.11—Information about complaints 258

7.9.48 Source of power for this Subdivision ............................258

7.9.48A Definitions.....................................................................258

7.9.48B Complaints—general.....................................................259

7.9.48C Complaints about benefits other than death

benefits—decision made ...............................................259

7.9.48D Complaints about benefits other than death

benefits—no decision made ..........................................260

7.9.48A Definitions.....................................................................261

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Corporations Regulations 2001 xvii

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.48B Complaints—general.....................................................261

Subdivision 5.12—Periodic report when product holder ceases to

hold product: superannuation products and RSA

products 262

7.9.49 Application of Subdivision 5.12....................................262

7.9.50 Exit reporting period .....................................................262

7.9.51 Time for compliance .....................................................262

7.9.52 General requirement ......................................................262

7.9.53 Information on death of product holder.........................263

7.9.54 Specific requirements in all cases..................................263

7.9.55 Specific requirements in particular cases.......................264

7.9.56 Exceptions to exit reporting period provisions:

superannuation products and RSA products ..................264

7.9.57 Exception—members subject to compulsory

protection of small amounts ..........................................264

7.9.58 Information to be given in cases other than death

of RSA holder ...............................................................265

7.9.59 Information to be given where applicable .....................266

7.9.60 Modification of Act: exceptions to exit reporting

period provisions ...........................................................267

Division 5AA—General requirements for financial disclosure 268

7.9.60A Modification of Act: disclosure.....................................268

7.9.60B Disclosure of transactions in periodic statements ..........268

Division 5AB—Short-Form Product Disclosure Statements 270

7.9.61AA Modification of the Act: Short-Form Product

Disclosure Statements ...................................................270

Division 5A—Dealing with money received for financial product

before the product is issued 272

7.9.61A Lost application money .................................................272

7.9.61B Issue of substitute insurance product .............................273

7.9.61C Cheques.........................................................................273

Division 5B—Confirming transactions 274

7.9.61D Transactions involving superannuation products...........274

Division 5C—CGS depository interests 276

7.9.61E CGS depository interest information website ................276

Division 6—Confirmation of transactions 277

7.9.62 Confirmation of transaction: superannuation

products and RSAs ........................................................277

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xviii Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.63 Confirmation of transactions: precise costs of

transaction not known ...................................................280

7.9.63A Persons who must confirm transactions ........................280

7.9.63B Content of confirmation of transactions—general.........282

7.9.63C Confirmation of transaction—multiple transactions......283

7.9.63D Confirmation of transaction—information about

cooling-off period..........................................................285

7.9.63E Confirmation of transaction—facility that provides

written confirmation ......................................................286

7.9.63F Confirmation of transaction—acquisition of

financial product............................................................286

7.9.63G Confirmation of transaction—disposal of financial

product ..........................................................................287

7.9.63H Certain product issuers and regulated persons must

meet appropriate dispute resolution

requirements—self managed superannuation funds ......287

7.9.63I Confirmation of transaction in electronic form .............287

Division 7—Cooling-off periods 288

7.9.64 Cooling-off periods not to apply ...................................288

7.9.64A Notification of exercise of right of return—risk

insurance products.........................................................289

7.9.65 Return of financial product: general ..............................289

7.9.65A Return of financial product: first home saver

accounts.........................................................................290

7.9.66 Return of financial product: superannuation and

RSAs .............................................................................291

7.9.67 Variation of amount to be repaid ...................................292

7.9.68 Modification of section 1019B of the Act: client

includes standard employer-sponsor..............................295

7.9.69 Modification of provisions of Division 5 of

Part 7.9 of the Act: terms of contract.............................297

7.9.70 Modification of provisions of Division 5 of

Part 7.9 of the Act: distributions....................................298

Division 8—Other requirements 299

7.9.71 Modification of section 1017D of the Act: use of

more than 1 document ...................................................299

7.9.71A Periodic statements—exemption for passbook

accounts.........................................................................299

7.9.72 Modification of section 1017D of the Act:

information already given..............................................299

7.9.73 Reporting periods: general ............................................300

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Corporations Regulations 2001 xix

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.74 Form of application .......................................................300

7.9.74A Periodic statements—requirement to state

information as amounts in dollars .................................300

7.9.74B Periodic statements—additional details for First

Home Saver Accounts ...................................................302

7.9.75 Content of periodic statements: costs of

transactions....................................................................303

7.9.75A Ways of giving information...........................................306

7.9.75B Information in electronic form ......................................307

7.9.75BA Fund information made available on a website .............307

7.9.75C Periodic statements—disclosure of amounts .................308

7.9.75D Periodic statements—disclosure of amounts .................309

7.9.76 Consents to certain statements.......................................310

7.9.77 Alternative dispute resolution requirements—

product issuer that is not a financial services

licensee..........................................................................310

7.9.78 Additional statement: trustee required to provide

benefits ..........................................................................311

7.9.80B Short selling of certain warrants ....................................312

Division 9—Additional requirements for transfer of lost

members and lost RSA holders 314

7.9.81 Lost members ................................................................314

7.9.82 Lost RSA holders ..........................................................314

Division 11—Superannuation to which arrangements apply

under the Family Law Act 1975 316

7.9.84 Definitions for Division 11............................................316

7.9.85 Application of Division 11 ............................................317

7.9.86 Acquisition of financial product ....................................317

7.9.87 Modification of Act: Product Disclosure Statement

in relation to superannuation interest under Family

Law Act.........................................................................318

7.9.88 Statement content in relation to superannuation

interest under Family Law Act: superannuation

fund ...............................................................................319

7.9.89 Statement content in relation to superannuation

interest under Family Law Act: RSA ............................320

7.9.90 Information for existing holders of superannuation

products and RSA products in relation to

superannuation interest..................................................321

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Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.91 Periodic statements for retail clients for financial

products that have an investment component—

general ...........................................................................322

7.9.92 Periodic statements for retail clients for financial

products that have an investment component—

superannuation interest other than percentage-only

interest ...........................................................................322

7.9.93 Trustees of superannuation entities—additional

obligation to provide information in relation to

superannuation interest..................................................323

7.9.94 Division 5 of Part 7.9 of the Act not to apply in

relation to non-member spouse......................................324

Division 12—Medical indemnity insurance 325

7.9.95 Medical indemnity insurance—exemption from

product disclosure provisions ........................................325

Division 13—Unsolicited offers to purchase financial products

off market 326

7.9.96 Percentage increase or decrease in the market

value of a product ..........................................................326

7.9.97 Off-market trading by professional investors etc...........326

7.9.97A Information in offer document if payment is to be

made in instalments .......................................................327

Division 14—Exemptions from Parts 7.7, 7.8 and 7.9 of the Act 329

7.9.98 Certain providers of financial services exempted

from the requirements of Parts 7.7, 7.8 and 7.9 of

the Act ...........................................................................329

7.9.98A Exemption from application of Part 7.9 of the Act........329

Division 15—Disclosure in relation to short sales covered by

securities lending arrangement of listed

section 1020B products 331

7.9.99 Interpretation .................................................................331

7.9.100 Seller disclosure ............................................................332

7.9.100A Seller disclosure of existing short position ....................333

7.9.101 Licensee disclosure........................................................334

7.9.102 Public disclosure of information....................................335

Part 7.10—Market misconduct and other prohibited conduct

relating to financial products and financial services 337 7.10.01 Division 3 financial products.........................................337

7.10.02 Professional standards schemes.....................................337

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Corporations Regulations 2001 xxi

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.10.03 Exemption for market participants of qualifying

gas trading exchange .....................................................339

Part 7.11—Title and transfer 340

Division 1—Preliminary 340

7.11.01 Definitions.....................................................................340

7.11.03 Arrangements about Division 4 financial products .......342

7.11.04 Arrangements for forms ................................................343

7.11.05 Document duly completed in accordance with a

particular form...............................................................344

7.11.06 Stamping of documents .................................................345

7.11.07 Application of Division 3 of Part 7.11 of the Act to

certain bodies ................................................................345

7.11.08 Interests in registered schemes ......................................346

Division 2—Application of Part 7.11 347

7.11.09 Application....................................................................347

Division 3—Transfer of Division 3 securities effected otherwise

than through a prescribed CS facility 348

7.11.10 Application of Division 3 ..............................................348

7.11.11 Sufficient transfer: general ............................................348

7.11.12 Sufficient transfer of Division 3 assets: licensed

trustee company or Public Trustee of a State or

Territory ........................................................................349

7.11.13 Sufficient transfer of Division 3 rights: licensed

trustee company or Public Trustee of a State or

Territory ........................................................................349

7.11.14 Sufficient transfer ..........................................................349

7.11.15 Transferee’s execution of transfer of Division 3

assets .............................................................................350

7.11.16 Transferee’s execution of transfer of Division 3

rights..............................................................................350

7.11.17 Transfer document that purports to bear stamp of

transferor's broker..........................................................351

7.11.18 Warranties by market licensee if transfer

document purports to bear its stamp..............................353

7.11.19 Indemnities by market licensee and broker if

transfer document purports to bear their stamps............353

7.11.20 Joint and several warranties and liabilities ....................354

7.11.21 Registration of certain instruments................................355

7.11.22 Details to be included in instrument of transfer.............356

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xxii Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 4—Transfer of Division 4 financial products effected

through prescribed CS facility 357

7.11.23 Application of Division 4 ..............................................357

7.11.24 Application of ASTC operating rules ............................357

7.11.25 Participant’s authority to enter into transaction

continues despite client’s death .....................................357

7.11.26 Authority to enter into transaction gives authority

to transfer ......................................................................358

7.11.27 Effect of proper ASTC transfer on transferee:

Division 4 financial products other than rights..............359

7.11.28 Effect of proper ASTC transfer on transferee:

rights..............................................................................360

7.11.29 Warranties by participant if identification code is

included in transfer document .......................................361

7.11.30 Indemnities in respect of warranted matters:

transfer not effected by the participant ..........................363

7.11.31 Indemnities in respect of warranted matters:

transferor not legally entitled or authorised to

transfer Division 4 financial products............................364

7.11.32 Indemnities in respect of warranted matters:

participant not authorised to effect transfer ...................365

7.11.33 Joint and several warranties and liabilities ....................365

7.11.34 ASTC entitled to assume its operating rules

complied with................................................................366

7.11.35 ASTC-regulated transfer not to be registered

unless proper ASTC transfer .........................................366

7.11.36 Issuer not to refuse to register proper ASTC

transfer ..........................................................................367

7.11.37 Determination of who holds Division 4 financial

products for the purposes of meeting.............................367

7.11.38 Determination of who holds Division 4 financial

products in class of Division 4 financial products

for the purposes of meeting ...........................................368

7.11.39 Determination of who holds Division 4 financial

products for the purposes of conferring security

benefits ..........................................................................369

Division 5—Offences 370

7.11.40 Stamping of broker’s stamp on sufficient transfer .........370

7.11.41 Inclusion of identification codes in proper ASTC

transfers .........................................................................371

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Corporations Regulations 2001 xxiii

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.11.42 Contravention by participant of the ASTC

certificate cancellation provisions relating to use

of cancellation stamps ...................................................372

Division 6—Civil liability 373

7.11.43 Contravention by participant of the ASTC

certificate cancellation provisions .................................373

Part 7.12—Miscellaneous 374 7.12.01 Destruction of records by ASIC ....................................374

Chapter 8—Mutual recognition of securities offers 375

Part 8.1—Preliminary 375 8.1.01 Prescribed foreign recognition scheme (Act s

1200A(1))......................................................................375

8.1.02 Prescribed offeror (Act s 1200A(1))..............................375

8.1.03 Prescribed recognised jurisdiction (Act s

1200A(1))......................................................................376

Part 8.2—Foreign offers that are recognised in this jurisdiction 377

Division 1—Recognised offers 377

8.2.01 Prescribed offer (Act s 1200C(4)) .................................377

8.2.02 Prescribed warning statements (Act s 1200E) ...............377

8.2.03 Prescribed details to be given in warning

statements (Act s 1200E(b)) ..........................................380

8.2.04 Prescribed home regulators (Act s 1200G(13) and

(14))...............................................................................380

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) 382

8.4.01 Modification of Part 7.9 of the Act—New Zealand

offer documents replace Product Disclosure

Statements .....................................................................382

8.4.02 Modification of Part 6D.2 of the Act and Part 7.9

of the Act—certain disclosure obligations not to

apply..............................................................................382

Federal Register of Legislative Instruments F2015C00303

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Preliminary Division 1

Regulation 7.7.01

Corporations Regulations 2001 1

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 1 Preliminary

Regulation 7.7.01

2 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Financial Services Guide Division 2

Regulation 7.7.02

Corporations Regulations 2001 3

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(d) a capital guaranteed FHSA product.

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 2 Financial Services Guide

Regulation 7.7.02

4 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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

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(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.

(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

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(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:

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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

(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:

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“(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

(c) meet the requirements of subsections 942B(3) and (6A) or

subsections 942C(3) and (6A) (as the case may be).”

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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.

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(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.

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.

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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

(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

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(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

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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.

7.7.04A 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%.

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(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.

(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.

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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

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(ii) a statement setting out, in general terms, the individual’s

role and capacity in providing the financial service.

(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

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(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.

(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.

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Chapter 7 Financial services and markets

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Regulation 7.7.06

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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

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(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.

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.

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Regulation 7.7.07

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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:

(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.

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Financial Services Guide Division 2

Regulation 7.7.07

Corporations Regulations 2001 21

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 2 Financial Services Guide

Regulation 7.7.07A

22 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Financial Services Guide Division 2

Regulation 7.7.08

Corporations Regulations 2001 23

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 2A Combined Financial Services Guide and Product Disclosure Statement

Regulation 7.7.08A

24 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(1A) This regulation does not apply if the Product Disclosure Statement

is for an FHSA product.

(1A) This regulation does not apply if the Product Disclosure Statement

is for an FHSA product.

(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

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Combined Financial Services Guide and Product Disclosure Statement Division 2A

Regulation 7.7.08A

Corporations Regulations 2001 25

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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

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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 2A Combined Financial Services Guide and Product Disclosure Statement

Regulation 7.7.08A

26 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 services and markets Chapter 7

Financial service disclosure Part 7.7

Combined Financial Services Guide and credit guide Division 2AA

Regulation 7.7.08B

Corporations Regulations 2001 27

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 2AA Combined Financial Services Guide and credit guide

Regulation 7.7.08B

28 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.’

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Record of small investment advice Division 2B

Regulation 7.7.08C

Corporations Regulations 2001 29

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.09

30 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

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Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.09A

Corporations Regulations 2001 31

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.09A

32 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

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Statement of Advice Division 3

Regulation 7.7.09A

Corporations Regulations 2001 33

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(a) the value to the client of the total divestment; and

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.09AA

34 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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:

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Financial services and markets Chapter 7

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Statement of Advice Division 3

Regulation 7.7.09AB

Corporations Regulations 2001 35

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.09BA

36 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.09BB

Corporations Regulations 2001 37

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.09BC

38 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

‘(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.

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10

Corporations Regulations 2001 39

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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);

(j) a capital guaranteed FHSA product.

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.”

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AAA

40 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(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”.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AC

Corporations Regulations 2001 41

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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”.

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AC

42 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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)).”

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AD

Corporations Regulations 2001 43

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AE

44 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 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

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AE

Corporations Regulations 2001 45

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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)).

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AF

46 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(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”

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AF

Corporations Regulations 2001 47

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Column 1 Column 2 Column 3 Column 4

Item provision of Act is modified

by…

and…

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 of disclosure

document or statement

in subsection 952B(1)

omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

4 paragraph 952E(3)(a) omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

5 paragraph 952F(1)(b) omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

6 subparagraph 952F(1)(c)

(i)

omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

7 paragraph 952G(1)(b) omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

8 subparagraph 952G(1)(c)

(i)

omitting

“946C(2)”

substituting “946C(2) or

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”

11 paragraph (d) of the

definition of disclosure

document or statement

in subsection 953A(1)

omitting

“946C(2)”

substituting “946C(2) or

paragraph 941C(7A)(c),”

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AF

48 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.”

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AG

Corporations Regulations 2001 49

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

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(3)(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),”

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10AG

50 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Column 1 Column 2 Column 3 Column 4

Item provision of Act is modified

by…

and…

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

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10AH

Corporations Regulations 2001 51

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Column 1 Column 2 Column 3

Item provision of Act is modified by…

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

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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10A

52 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.10B

Corporations Regulations 2001 53

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.10C

54 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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).

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.11A

Corporations Regulations 2001 55

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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;

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.12

56 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.13

Corporations Regulations 2001 57

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 3 Statement of Advice

Regulation 7.7.13A

58 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

7.7.13A 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.

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Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Statement of Advice Division 3

Regulation 7.7.13B

Corporations Regulations 2001 59

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

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.

Federal Register of Legislative Instruments F2015C00303

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

60 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Other disclosure requirements Division 5

Regulation 7.7.20

Corporations Regulations 2001 61

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Note: Failure to comply with this subregulation is an offence punishable by

a fine of up to 50 penalty units or imprisonment for 1 year, or both—

see section 1311 and item 272A of Schedule 3 to the Corporations Act

2001.

(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

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Chapter 7 Financial services and markets

Part 7.7 Financial service disclosure

Division 5 Other disclosure requirements

Regulation 7.7.20A

62 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(ii) the insurer offers or issues a financial product to the

wholesale client.

Note: Failure to comply with this subregulation is an offence punishable by

a fine of up to 50 penalty units or imprisonment for 1 year, or both—

see section 1311 and item 272A of Schedule 3 to the Corporations Act

2001.

(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

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial service disclosure Part 7.7

Exemptions from application of Part 7.7 of the Act Division 6

Regulation 7.7.21

Corporations Regulations 2001 63

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 2 Best interests obligations

Regulation 7.7A.1

64 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Part 7.7A—Best interests obligations and

remuneration Note: Regulations 7.7A.01 to 7.7A.09 are reserved for future use.

Division 2—Best interests obligations

Subdivision 1—Duty to act in client’s best interests

7.7A.1 Duty if advising on combination of products

(1) This regulation:

(a) is made for paragraph 961B(5)(b) of the Act; and

(b) prescribes the circumstances in which a provider is not

required to prove he or she has taken the steps mentioned in

paragraphs 961B(2)(d) to (g) of the Act to satisfy the duty to

act in the best interests of the client, in relation to advice

about the following products:

(i) a basic banking product;

(ii) a general insurance product.

(2) A provider is not required to prove it has taken those steps if:

(a) 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; and

(b) any personal advice that is provided relates only to:

(i) a basic banking product; or

(ii) a general insurance product; or

(iii) a combination of those products.

Note: The definition of personal advice is in subsection 766B(3) of the Act.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Best interests obligations Division 2

Regulation 7.7A.1

Corporations Regulations 2001 65

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(3) A provider is not required to prove the provider has taken those

steps in relation to advice about a general insurance product, even

if the provider, at the same time, provides other advice (whether or

not personal advice).

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 3 Charging ongoing fees to clients

Regulation 7.7A.10

66 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 managed investment

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.12

Corporations Regulations 2001 67

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 4—Conflicted remuneration

Subdivision 1—Monetary benefits

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: The definition of financial product advice is in subsection 766B(1) of

the Act.

7.7A.12A Life risk insurance products

A monetary benefit is not conflicted remuneration if the benefit is

given in relation to a life risk insurance product, other than:

(a) a group life policy for members of a superannuation entity; or

(b) a life policy for a member of a default superannuation fund.

Note 1: The definitions of group life policy for members of a superannuation

entity and life policy for a member of a default superannuation fund

are in section 963B of the Act.

Note 2: 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.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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.12C

68 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.12D

Corporations Regulations 2001 69

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.12D

70 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.12E

Corporations Regulations 2001 71

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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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.12F

72 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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 2—Monetary or non-monetary benefits

7.7A.12F What subdivision is about

This subdivision:

(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:

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Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.12I

Corporations Regulations 2001 73

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(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) a combination of those financial 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.

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.13

74 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.15

Corporations Regulations 2001 75

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(5) In this regulation:

education or training course includes a conference or seminar.

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

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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.15B

76 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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, 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

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Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.16A

Corporations Regulations 2001 77

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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, 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.16A

78 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.16B

Corporations Regulations 2001 79

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 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

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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.16B

80 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(i) a retail client receives a consolidated report on a

periodic basis listing the client’s holdings in all of those

financial products; and

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.16BA

Corporations Regulations 2001 81

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.16C

82 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.16D

Corporations Regulations 2001 83

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.16E

84 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Conflicted remuneration Division 4

Regulation 7.7A.16F

Corporations Regulations 2001 85

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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 3—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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.7A Best interests obligations and remuneration

Division 4 Conflicted remuneration

Regulation 7.7A.18

86 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Best interests obligations and remuneration Part 7.7A

Exemptions from application of Part 7.7A of the Act Division 6

Regulation 7.7A.40

Corporations Regulations 2001 87

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.01

88 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Part 7.8—Other provisions relating to conduct etc

connected with financial products and

financial services, other than financial

product disclosure

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.

(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

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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:

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(a) the financial services licensee may operate an account to

which that paragraph applies as:

(i) a clients’ segregated account; or

(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.

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(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:

(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(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:

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(a) making a payment to, or in accordance with the written

direction of, a person entitled to the money;

(b) defraying brokerage and other proper charges;

(c) paying to the financial services licensee money to which the

financial services licensee is entitled;

(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(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(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;

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(c) investment on deposit at interest with an Australian ADI;

(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.

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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(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.

(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

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(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(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(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).

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).

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Regulation 7.8.03

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(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).

(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.

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(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.

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Regulation 7.8.04

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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:

(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(c) of the Act, if money to which this

regulation applies is held in an account maintained for

section 981B of the Act:

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(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.

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.

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.

7.8.07 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

(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.

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(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 or managed investment 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 or managed investment 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 or

managed investment 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

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(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):

(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.

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

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(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;

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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 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:

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(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

(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

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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

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(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

(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 a

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

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done with the consent of the insurer or of the insured or intending

insured.

Penalty: 10 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.

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),

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Regulation 7.8.08A

108 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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

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Regulation 7.8.08B

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(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

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Regulation 7.8.08B

110 Corporations Regulations 2001

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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:

(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.

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Regulation 7.8.09

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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.

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:

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Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.10

112 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

‘(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.

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;

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(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.

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Regulation 7.8.11A

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Item Matter

1 A description of the benefit

2 Either:

(a) the value of the benefit; or

(b) if the value is not known, the estimated value of the

benefit;

expressed as a dollar amount or as a range of dollars

3 The date on which the benefit was given

4 The name of the person who gave the benefit and, if

relevant, the number of the person’s financial services

licence

5 Whether the benefit was given to the licensee or to a

representative of the licensee

6 If the benefit was given to an authorised representative of

the licensee, the name and contact details of the authorised

representative

7 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.

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Regulation 7.8.12

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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

(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.

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Chapter 7 Financial services and markets

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financial services, other than financial product disclosure

Regulation 7.8.12A

116 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

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services, other than financial product disclosure Part 7.8

Regulation 7.8.12A

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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.”.

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Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.13

118 Corporations Regulations 2001

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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

(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

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Regulation 7.8.14

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(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

(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.’.

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Regulation 7.8.14B

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Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

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(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.

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:

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(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.

(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

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(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

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(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.

(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

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(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

(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

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(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

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Regulation 7.8.17

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(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.

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

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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);

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;

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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

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(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).

(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.

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7.8.20 Dealings with non-licensees

(1) For subsection 991E(1) of the Act:

(a) section 991E 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 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 and 7 of the Act.

(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

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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

(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

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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;

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(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

(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

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Financial services and markets Chapter 7

Other provisions relating to conduct etc connected with financial products and financial

services, other than financial product disclosure Part 7.8

Regulation 7.8.21

Corporations Regulations 2001 135

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.21A

136 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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):

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Other provisions relating to conduct etc connected with financial products and financial

services, other than financial product disclosure Part 7.8

Regulation 7.8.21B

Corporations Regulations 2001 137

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

“(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.22

138 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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:

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Other provisions relating to conduct etc connected with financial products and financial

services, other than financial product disclosure Part 7.8

Regulation 7.8.22B

Corporations Regulations 2001 139

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

‘(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).’.

7.8.22B Return of financial product: first home saver accounts

(1) For paragraph 992A(4)(b) of the Act, this regulation applies in

relation to an FHSA.

(2) If the FHSA holder has never held another FHSA, it is a

requirement of the exercise of the right to return the FHSA in

circumstances in which the moneys paid to acquire the FHSA are

subject to payment restrictions that:

(a) the FHSA holder must:

(i) notify the FHSA provider, in writing or electronically,

that the FHSA holder wishes to exercise the right to

return the FHSA; and

(ii) ask the FHSA provider to pay the entire balance of the

FHSA to the FHSA holder; and

(iii) give the FHSA provider a written declaration that the

FHSA holder has never previously held an FHSA; or

(b) the FHSA holder must:

(i) notify the FHSA provider, in writing or electronically,

that the FHSA holder wishes to exercise the right to

return the FHSA; and

(ii) no later than 1 month after notifying the FHSA

provider, ask the FHSA provider to pay the entire

balance of the FHSA to another FHSA nominated in the

request.

(3) If the FHSA holder has held another FHSA, it is a requirement of

the exercise of the right to return the FHSA in circumstances in

which the moneys paid to acquire the FHSA are subject to payment

restrictions that the FHSA holder must:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.8 Other provisions relating to conduct etc connected with financial products and

financial services, other than financial product disclosure

Regulation 7.8.23

140 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(a) notify the FHSA provider, in writing or electronically, that

the FHSA holder wishes to exercise the right to return the

FHSA; and

(b) no later than 1 month after notifying the FHSA provider, ask

the FHSA provider to pay the entire balance of the FHSA to

another FHSA nominated in the request.

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.

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Other provisions relating to conduct etc connected with financial products and financial

services, other than financial product disclosure Part 7.8

Regulation 7.8.25

Corporations Regulations 2001 141

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 1 Preliminary

Regulation 7.9.01

142 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Preliminary Division 1

Regulation 7.9.01

Corporations Regulations 2001 143

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 1 Preliminary

Regulation 7.9.01

144 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

superannuation provider means any of the following:

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Preliminary Division 1

Regulation 7.9.01

Corporations Regulations 2001 145

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 1 Preliminary

Regulation 7.9.02

146 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Preliminary Division 1

Regulation 7.9.02A

Corporations Regulations 2001 147

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 1 Preliminary

Regulation 7.9.02B

148 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Arrangements for Product Disclosure Statements in relation to superannuation products

and RSA products Division 2

Regulation 7.9.03

Corporations Regulations 2001 149

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2 Arrangements for Product Disclosure Statements in relation to

superannuation products and RSA products

Regulation 7.9.05

150 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(c) a superannuation interest issued by the trustee of a successor

fund in relation to the transfer of benefits in the fund.

(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.

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Arrangements for Product Disclosure Statements in relation to superannuation products

and RSA products Division 2

Regulation 7.9.07

Corporations Regulations 2001 151

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2A Product Disclosure Statement for warrants

Regulation 7.9.07A

152 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Product Disclosure Statement for warrants Division 2A

Regulation 7.9.07A

Corporations Regulations 2001 153

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2B Product Disclosure Statement for market-traded derivatives

Regulation 7.9.07B

154 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Product Disclosure Statement for market-traded derivatives Division 2B

Regulation 7.9.07C

Corporations Regulations 2001 155

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2BA Product Disclosure Statement for discretionary mutual funds

Regulation 7.9.07CA

156 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Note: Failure to comply with this regulation is an offence punishable by a

fine of up to 50 penalty units or imprisonment for 1 year, or both—see

section 1311 and item 272A of Schedule 3 to the Corporations Act

2001.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Situations where a Product Disclosure Statement is not required Division 2C

Regulation 7.9.07D

Corporations Regulations 2001 157

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2C Situations where a Product Disclosure Statement is not required

Regulation 7.9.07F

158 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Situations where a Product Disclosure Statement is not required Division 2C

Regulation 7.9.07FA

Corporations Regulations 2001 159

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(iii) information about the financial claims scheme can be

obtained from the APRA website at

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2C Situations where a Product Disclosure Statement is not required

Regulation 7.9.07FB

160 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Situations where a Product Disclosure Statement is not required Division 2C

Regulation 7.9.07FC

Corporations Regulations 2001 161

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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.”

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2D Preparation and content of Product Disclosure Statements

Regulation 7.9.07J

162 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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’.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Obligation to make information publicly available: registrable superannuation entities

Division 2E

Regulation 7.9.07L

Corporations Regulations 2001 163

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2E Obligation to make information publicly available: registrable

superannuation entities

Regulation 7.9.07N

164 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Obligation to make information publicly available: registrable superannuation entities

Division 2E

Regulation 7.9.07P

Corporations Regulations 2001 165

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2E Obligation to make information publicly available: registrable

superannuation entities

Regulation 7.9.07S

166 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Obligation to make information publicly available: registrable superannuation entities

Division 2E

Regulation 7.9.07T

Corporations Regulations 2001 167

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 2E Obligation to make information publicly available: registrable

superannuation entities

Regulation 7.9.07U

168 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Obligation to make information publicly available: registrable superannuation entities

Division 2E

Regulation 7.9.07W

Corporations Regulations 2001 169

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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

170 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Dealing with money received for financial product before the product is issued

Division 3

Regulation 7.9.08A

Corporations Regulations 2001 171

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.08C

172 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(a) subsection 1017E(2A) of the Act does not apply in relation to

the money; and

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Dealing with money received for financial product before the product is issued

Division 3

Regulation 7.9.08D

Corporations Regulations 2001 173

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 3A Rights and obligations related to Product Disclosure Statement—first

home saver accounts

Regulation 7.9.08E

174 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 3A—Rights and obligations related to Product

Disclosure Statement—first home saver accounts

7.9.08E Application forms

For paragraph 1016A(2)(f) of the Act, the following situation in

which a restricted issue occurs is prescribed:

(a) an FHSA has become inactive as described in

subsection 22(1) of the First Home Saver Accounts Act 2008;

(b) the FHSA provider has sought to pay the entire balance of

the FHSA to the superannuation interest mentioned in

subsection 22(3) of that Act.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.09

Corporations Regulations 2001 175

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(d) FHSA 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.09A

176 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.09C

Corporations Regulations 2001 177

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 4.2—Content of Product Disclosure Statements for

First Home Saver Accounts

7.9.10 Application of Subdivision

(1) This Subdivision applies to:

(a) a person required to give a Product Disclosure Statement for

an FHSA product; and

(b) a Product Disclosure Statement for an FHSA product.

(2) However, if a Product Disclosure Statement consists of 2 or more

documents, this Subdivision (other than regulation 7.9.10C) applies

only to the document describing the default investment option for

the product.

7.9.10A Definitions

(1) In this Subdivision and in Schedule 10B:

default investment option, for a multiple investment option FHSA

product, is the investment option which is applied to the product if

the person who acquires the product does not choose an investment

option.

multiple investment option FHSA product means an FHSA

product that has 2 or more investment options.

(2) If a term used in this Subdivision or in Schedule 10B is used in the

First Home Saver Accounts Act 2008, the term has the same

meaning in this Subdivision or in Schedule 10B as it does in that

Act.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.10B

178 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Note: The following terms used in this Subdivision or in Schedule 10B are

defined in the First Home Saver Accounts Act 2008:

 contribution

 FHSA eligibility requirements

 FHSA holder

 FHSA mortgage payment

 FHSA payment conditions

 FHSA provider

 FHSA trust

 genuine mortgage

 Government FHSA contribution

 personal FHSA contribution

 qualifying interest.

(3) In this Subdivision and in Schedule 10B, a provision of the Act

modified in accordance with regulation 7.9.10B is referred to as

modified.

Example: Subparagraph 1013C(1)(a)(i) of the Act as modified by item 5.4 of

Part 5 of Schedule 10A is referred to in this Subdivision as ‘modified

subparagraph 1013C(1)(a)(i)’.

7.9.10B Modification of Act

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is

modified in its application to FHSA products as set out in Part 5 of

Schedule 10A.

7.9.10C Product Disclosure Statement consisting of 2 or more

documents

(1) For modified subsection 1013L(7) of the Act, a Product Disclosure

Statement for an FHSA product must not consist of 2 or more

documents.

(2) However, the Product Disclosure Statement for a multiple

investment option FHSA product may consist of 2 or more

documents if:

(a) the document describing the default investment option

complies with this Subdivision; and

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.10D

Corporations Regulations 2001 179

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(b) the other documents comply with the provisions of:

(i) the Act; and

(ii) regulations; and

(iii) any instruments made under the Act and the regulations;

that would apply to those documents but for the operation of

this Subdivision.

7.9.10D Manner of giving Product Disclosure Statement for first

home saver accounts

(1) For paragraph 1015C(5)(a) of the Act:

(a) if a Product Disclosure Statement:

(i) relates only to 1 or more FHSA products; and

(ii) is given to a person or the person’s agent personally;

the Statement for the FHSA product or products must be the

first document about FHSA products that is given to the

person or agent at that time, other than a covering letter of no

more than 1 page; but

(b) paragraph (a) does not require the Statement for the FHSA

product or products to be given to the person or agent at that

time before other documents that do not relate to the FHSA

product or products.

(2) For paragraph 1015C(5)(a) of the Act:

(a) if a Product Disclosure Statement:

(i) relates only to 1 or more FHSA products; and

(ii) is given by sending it to the address or fax number of a

person or the person’s agent;

the Statement for the FHSA product or products must be the

first document about FHSA products that is given to the

person or agent at that time, other than a covering letter or

fax coversheet of no more than 1 page; but

(b) paragraph (a) does not require the Statement for the FHSA

product or products to be given to the person or agent at that

time before other documents that do not relate to the FHSA

product or products.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.10E

180 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

7.9.10E Form and content of Product Disclosure Statement

(1) For modified subparagraphs 1013C(1)(a)(i) and (ii) of the Act, a

Product Disclosure Statement must:

(a) include the information and statements mentioned in

Schedule 10B; and

(b) be in the form mentioned in Schedule 10B.

(2) However, if strict compliance with subregulation (1) would result

in the Statement being misleading, the Statement must contain

explanations or qualifications so as to make the Statement no

longer misleading.

(3) Subregulation (2) does not require explanation or qualification of a

statement the text of which is specified in subitem 4(1), 5(1) or

6(1) of Schedule 10B.

(4) Also, ASIC may determine, in writing, that a provision of this

Subdivision or of Schedule 10B:

(a) does not apply to a Product Disclosure Statement for an

FHSA product; or

(b) applies to a Product Disclosure Statement for an FHSA

product as if specified provisions were omitted or modified

as set out in the determination.

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11A

Corporations Regulations 2001 181

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11E

182 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11E

Corporations Regulations 2001 183

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

1 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]

2 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

1 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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11F

184 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11G

Corporations Regulations 2001 185

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11L

186 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

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products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11M

Corporations Regulations 2001 187

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(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

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11N

188 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11P

Corporations Regulations 2001 189

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11P

190 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Item Statement

1 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]

2 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

1 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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11Q

Corporations Regulations 2001 191

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11R

192 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

managed investment scheme;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11T

Corporations Regulations 2001 193

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11V

194 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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

Federal Register of Legislative Instruments F2015C00303

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products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11X

Corporations Regulations 2001 195

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11X

196 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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

1 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]

2 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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.11Y

Corporations Regulations 2001 197

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Item Statement

1 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.11Z

198 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.13

Corporations Regulations 2001 199

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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: 50 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).

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.13A

200 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(4) Strict liability applies to subregulation (2).

Note: For strict liability, see section 6.1 of the Criminal Code.

7.9.13A Remedies for person acquiring financial product under

defective Product Disclosure Statement: first home saver

accounts

(1) For subsection 1016F(3) of the Act, this regulation applies in

relation to an FHSA.

(2) If the FHSA holder has never held another FHSA, to exercise a

right of return for the financial product in circumstances in which

the moneys paid to acquire the FHSA are subject to payment

restrictions:

(a) the FHSA holder must:

(i) notify the FHSA provider, in writing, that the FHSA

holder wishes to exercise the right to return the FHSA;

and

(ii) ask the FHSA provider to pay the entire balance of the

FHSA to the FHSA holder; and

(iii) give the FHSA provider a written declaration that the

FHSA holder has never previously held an FHSA; or

(b) the FHSA holder must:

(i) notify the FHSA provider, in writing, that the FHSA

holder wishes to exercise the right to return the FHSA;

and

(ii) no later than 1 month after notifying the FHSA

provider, ask the FHSA provider to pay the entire

balance of the FHSA to another FHSA nominated in the

request.

(3) If the FHSA holder has held another FHSA, to exercise a right of

return for the financial product in circumstances in which the

moneys paid to acquire the FHSA are subject to payment

restrictions, the FHSA holder must:

(a) notify the FHSA provider, in writing, that the FHSA holder

wishes to exercise the right to return the FHSA; and

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.14

Corporations Regulations 2001 201

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(b) no later than 1 month after notifying the FHSA provider, ask

the FHSA provider to pay the entire balance of the FHSA to

another FHSA nominated in the request.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4 Content of Product Disclosure Statements

Regulation 7.9.14A

202 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Content of Product Disclosure Statements Division 4

Regulation 7.9.14B

Corporations Regulations 2001 203

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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).

Penalty: 50 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.’.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.14C

204 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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products Part 7.9

General Division 4A

Regulation 7.9.14D

Corporations Regulations 2001 205

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 4A General

Regulation 7.9.15

206 Corporations Regulations 2001

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(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

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Financial services and markets Chapter 7

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products Part 7.9

General Division 4A

Regulation 7.9.15A

Corporations Regulations 2001 207

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Act 1973, and, if the insurer 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.15B

208 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

General Division 4A

Regulation 7.9.15C

Corporations Regulations 2001 209

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.15CA

210 Corporations Regulations 2001

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(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

(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);

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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

General Division 4A

Regulation 7.9.15DA

Corporations Regulations 2001 211

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.15DB

212 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

General Division 4A

Regulation 7.9.15DC

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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

(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:

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 4A General

Regulation 7.9.15F

214 Corporations Regulations 2001

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(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

(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.

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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

General Division 4A

Regulation 7.9.15G

Corporations Regulations 2001 215

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.15H

216 Corporations Regulations 2001

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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:

(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:

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Financial services and markets Chapter 7

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products Part 7.9

General Division 4A

Regulation 7.9.15I

Corporations Regulations 2001 217

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(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).”

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.”

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4A General

Regulation 7.9.16

218 Corporations Regulations 2001

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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

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products Part 7.9

General Division 4A

Regulation 7.9.16A

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(g) a statement of the commission paid or payable in relation to

the provision of the consumer credit insurance product.

(2) In this regulation:

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 unregistered

managed investment schemes are prescribed.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 4B Ongoing disclosure

Regulation 7.9.16G

220 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Fee Disclosure for certain financial products Division 4C

Regulation 7.9.16J

Corporations Regulations 2001 221

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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.

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:

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Division 4C Fee Disclosure for certain financial products

Regulation 7.9.16L

222 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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

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Fee Disclosure for certain financial products Division 4C

Regulation 7.9.16N

Corporations Regulations 2001 223

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.’.

(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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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 4D Other requirements relating to Product Disclosure Statements and

Supplementary Product Disclosure Statements

Regulation 7.9.16T

224 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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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Regulation 7.9.17

Corporations Regulations 2001 225

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

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Regulation 7.9.19

226 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(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;

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Regulation 7.9.19A

Corporations Regulations 2001 227

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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).

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 5 Ongoing requirements for product disclosure after person becomes a

member

Regulation 7.9.19B

228 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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Regulation 7.9.20

Corporations Regulations 2001 229

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(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

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Regulation 7.9.20

230 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(m) the net amount of Government co-contribution received

during the reporting period;

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Regulation 7.9.20AA

Corporations Regulations 2001 231

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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 contribution.

(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).

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member

Regulation 7.9.20AA

232 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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

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Regulation 7.9.20AA

Corporations Regulations 2001 233

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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

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Regulation 7.9.20A

234 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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Regulation 7.9.20B

Corporations Regulations 2001 235

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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

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Regulation 7.9.20B

236 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(b) published in the Gazette.

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Regulation 7.9.21

Corporations Regulations 2001 237

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

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Regulation 7.9.22

238 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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.

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Regulation 7.9.23

Corporations Regulations 2001 239

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 5 Ongoing requirements for product disclosure after person becomes a

member

Regulation 7.9.25

240 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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;

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Regulation 7.9.26

Corporations Regulations 2001 241

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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.

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Division 5 Ongoing requirements for product disclosure after person becomes a

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Regulation 7.9.27

242 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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Regulation 7.9.30

Corporations Regulations 2001 243

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

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Regulation 7.9.30B

244 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(iii) the current LVR;

(f) a summary of all transactions affecting the margin lending

facility during the reporting period.

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Regulation 7.9.31

Corporations Regulations 2001 245

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

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Regulation 7.9.33

246 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

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Regulation 7.9.35

Corporations Regulations 2001 247

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(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,

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Regulation 7.9.37

248 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

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Regulation 7.9.37

Corporations Regulations 2001 249

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

(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;

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Regulation 7.9.37

250 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(ii) the contact details of the eligible rollover fund; and

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Regulation 7.9.38

Corporations Regulations 2001 251

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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Regulation 7.9.40

252 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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;

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Regulation 7.9.42

Corporations Regulations 2001 253

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(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

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Regulation 7.9.42

254 Corporations Regulations 2001

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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.

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Regulation 7.9.43

Corporations Regulations 2001 255

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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:

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Chapter 7 Financial services and markets

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Regulation 7.9.44

256 Corporations Regulations 2001

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(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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products Part 7.9

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5

Regulation 7.9.45

Corporations Regulations 2001 257

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

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Regulation 7.9.46

258 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 5.11—Information about complaints

7.9.48 Source of power for this Subdivision

This Subdivision is made for section 1017DA of the Act.

7.9.48A Definitions

In this Subdivision:

decision-maker means:

(a) the trustee of a regulated superannuation fund or approved

deposit fund; or

(b) an RSA provider.

eligible person means any of the following:

(a) a beneficiary of a relevant entity;

(b) a former beneficiary of a relevant entity;

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Regulation 7.9.48B

Corporations Regulations 2001 259

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(c) the executor or administrator of the estate of a former

beneficiary of a relevant entity;

(d) for a complaint that relates to the payment of a death

benefit—a person who:

(i) has an interest in the death benefit; or

(ii) claims to be, or to be entitled to death benefits through,

a person mentioned in subparagraph (i).

relevant entity means any of the following:

(a) a regulated superannuation fund;

(b) an approved deposit fund;

(c) an RSA.

7.9.48B Complaints—general

(1) This regulation applies to a decision-maker if:

(a) an eligible person makes a complaint; and

(b) the decision-maker makes a decision in relation to the

complaint in accordance with the relevant entity’s internal

dispute resolution mechanism.

(2) The decision-maker must, within 30 days of making the decision,

inform the eligible person:

(a) of the date of the decision; and

(b) about the external dispute resolution system that covers

complaints by eligible persons; and

(c) about how that system may be accessed.

Example: Information about the Superannuation Complaints Tribunal.

7.9.48C Complaints about benefits other than death benefits—

decision made

(1) This regulation applies to a decision-maker if:

(a) an eligible person makes a complaint; and

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Regulation 7.9.48D

260 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(b) the complaint is not a complaint that relates to the payment

of a death benefit; and

(c) the decision-maker makes a decision in relation to the

complaint in accordance with the relevant entity’s internal

dispute resolution mechanism.

(2) The decision-maker must, within 30 days of making the decision,

inform the eligible person:

(a) that the eligible person may, in writing, request written

reasons for the decision; and

(b) that the reasons mentioned in paragraph (a) must be given:

(i) within 28 days of the eligible person’s request under

paragraph (a); or

(ii) if the Regulator gives the decision-maker an

extension—within the extended period.

7.9.48D Complaints about benefits other than death benefits—no

decision made

(1) This regulation applies to a decision-maker if:

(a) an eligible person makes a complaint; and

(b) the complaint is not a complaint that relates to the payment

of a death benefit; and

(c) the decision-maker has not made a decision in relation to the

complaint.

(2) The decision-maker must, within 45 days of the complaint, inform

the eligible person:

(a) that if the decision is not made within 90 days of the

complaint, the eligible person may, in writing, request

written reasons for the failure to make the decision; and

(b) that the reasons mentioned in paragraph (a) must be given:

(i) within 28 days of the eligible person’s request under

paragraph (a); or

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Regulation 7.9.48A

Corporations Regulations 2001 261

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(ii) if the Regulator gives the decision-maker an

extension—within the extended period.

7.9.48A Definitions

In this Subdivision:

decision-maker means:

(a) the trustee of a regulated superannuation fund or approved

deposit fund; or

(b) an RSA provider.

eligible person means any of the following:

(a) a beneficiary of a relevant entity;

(b) a former beneficiary of a relevant entity;

(c) the executor or administrator of the estate of a former

beneficiary of a relevant entity;

(d) for a complaint that relates to the payment of a death

benefit—a person who:

(i) has an interest in the death benefit; or

(ii) claims to be, or to be entitled to death benefits through,

a person mentioned in subparagraph (i).

relevant entity means any of the following:

(a) a regulated superannuation fund;

(b) an approved deposit fund;

(c) an RSA.

7.9.48B Complaints—general

(1) This regulation applies to a decision-maker if:

(a) an eligible person makes a complaint; and

(b) the decision-maker makes a decision in relation to the

complaint in accordance with the relevant entity’s internal

dispute resolution mechanism.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

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Division 5 Ongoing requirements for product disclosure after person becomes a

member

Regulation 7.9.49

262 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(2) The decision-maker must, within 30 days of making the decision,

inform the eligible person:

(a) of the date of the decision; and

(b) about the external dispute resolution system that covers

complaints by eligible persons; and

(c) about how that system may be accessed.

Example: Information about the Superannuation Complaints Tribunal.

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

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Regulation 7.9.53

Corporations Regulations 2001 263

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

who ceases to hold a superannuation product or an RSA product

(other than a product issued by a 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:

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Regulation 7.9.55

264 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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:

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Regulation 7.9.58

Corporations Regulations 2001 265

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(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)

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Regulation 7.9.59

266 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

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Regulation 7.9.60

Corporations Regulations 2001 267

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 5AA General requirements for financial disclosure

Regulation 7.9.60A

268 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 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.

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General requirements for financial disclosure Division 5AA

Regulation 7.9.60B

Corporations Regulations 2001 269

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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 or a managed investment 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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financial products

Division 5AB Short-Form Product Disclosure Statements

Regulation 7.9.61AA

270 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

1 paragraph 951C(1)(c) Part 7.7

2 paragraph 992C(1)(c) Part 7.8

3 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.”

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products Part 7.9

Short-Form Product Disclosure Statements Division 5AB

Regulation 7.9.61AA

Corporations Regulations 2001 271

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Column 1 Column 2 Column 3

Item Provisions of Act

1 paragraph 951C(1)(c) Part 7.7

2 paragraph 992C(1)(c) Part 7.8

3 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.

(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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financial products

Division 5A Dealing with money received for financial product before the product is

issued

Regulation 7.9.61A

272 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Dealing with money received for financial product before the product is issued

Division 5A

Regulation 7.9.61B

Corporations Regulations 2001 273

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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.’.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 5B Confirming transactions

Regulation 7.9.61D

274 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirming transactions Division 5B

Regulation 7.9.61D

Corporations Regulations 2001 275

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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’.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 5C CGS depository interests

Regulation 7.9.61E

276 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.62

Corporations Regulations 2001 277

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 6—Confirmation of transactions

7.9.62 Confirmation of transaction: superannuation products and

RSAs

(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 or an FHSA

product if:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 6 Confirmation of transactions

Regulation 7.9.62

278 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 or an FHSA

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;

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.62

Corporations Regulations 2001 279

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 managed investment scheme as the managed

investment 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

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 6 Confirmation of transactions

Regulation 7.9.63

280 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.63A

Corporations Regulations 2001 281

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 6 Confirmation of transactions

Regulation 7.9.63B

282 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.63C

Corporations Regulations 2001 283

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 6 Confirmation of transactions

Regulation 7.9.63C

284 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.63D

Corporations Regulations 2001 285

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 6 Confirmation of transactions

Regulation 7.9.63E

286 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Confirmation of transactions Division 6

Regulation 7.9.63G

Corporations Regulations 2001 287

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 7 Cooling-off periods

Regulation 7.9.64

288 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Cooling-off periods Division 7

Regulation 7.9.64A

Corporations Regulations 2001 289

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(i) a managed investment product:

(i) to which Chapter 6D of the old Corporations Act

applied; and

(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:

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290 Corporations Regulations 2001

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(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; 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.

(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.

7.9.65A Return of financial product: first home saver accounts

(1) For subsection 1019B(2) of the Act, this regulation applies in

relation to an FHSA.

(2) If the FHSA holder has never held another FHSA, it is a

requirement of the exercise of the right to return the FHSA in

circumstances in which the moneys paid to acquire the FHSA are

subject to payment restrictions that:

(a) the FHSA holder must:

(i) notify the FHSA provider, in writing, that the FHSA

holder wishes to exercise the right to return the FHSA;

and

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(ii) ask the FHSA provider to pay the entire balance of the

FHSA to the FHSA holder; and

(iii) give the FHSA provider a written declaration that the

FHSA holder has never previously held an FHSA; or

(b) the FHSA holder must:

(i) notify the FHSA provider, in writing, that the FHSA

holder wishes to exercise the right to return the FHSA;

and

(ii) no later than 1 month after notifying the FHSA

provider, ask the FHSA provider to pay the entire

balance of the FHSA to another FHSA nominated in the

request.

(3) If the FHSA holder has held another FHSA, it is a requirement of

the exercise of the right to return the FHSA in circumstances in

which the moneys paid to acquire the FHSA are subject to payment

restrictions that the FHSA holder must:

(a) notify the FHSA provider, in writing, that the FHSA holder

wishes to exercise the right to return the FHSA; and

(b) no later than 1 month after notifying the FHSA provider, ask

the FHSA provider to pay the entire balance of the FHSA to

another FHSA nominated in the request.

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.

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Regulation 7.9.67

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(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

(iii) a superannuation product (subject to the governing rules

of the issuer of the superannuation product relevant to

the redemption of superannuation interests); and

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(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 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

(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

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Regulation 7.9.67

294 Corporations Regulations 2001

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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;

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:

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(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 acquire a financial product

were a reference to all monies paid in relation to the

superannuation product.

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Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 7 Cooling-off periods

Regulation 7.9.68

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(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:

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products Part 7.9

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Regulation 7.9.69

Corporations Regulations 2001 297

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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;

(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).

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financial products

Division 7 Cooling-off periods

Regulation 7.9.70

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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

(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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products Part 7.9

Other requirements Division 8

Regulation 7.9.71

Corporations Regulations 2001 299

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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

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Chapter 7 Financial services and markets

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(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 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:

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Regulation 7.9.74A

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(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:

(a) would impose an unreasonable burden on a product issuer, or

a class of product issuers; or

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Chapter 7 Financial services and markets

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(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.

7.9.74B Periodic statements—additional details for First Home

Saver Accounts

(1) For paragraph 1017D(5)(g) of the Act, a periodic statement for an

FHSA product must include the following words:

The First Home Saver Account is an Australian Government

initiative to help Australians save for their first home.

(2) For paragraph 1017D(5)(g) of the Act, if the holder of an FHSA

product has not acquired a qualifying interest in a dwelling at the

time when a periodic statement is to be provided in relation to the

FHSA product, the periodic statement must include:

(a) the number of financial years after the end of the reporting

period for the statement during which the holder of the

product must make personal FHSA contributions as required

by the First Home Saver Accounts Act 2008 before payment

may be made out of the FHSA product under section 32 of

that Act; or

(b) if the number of financial years is 0—a statement that the

holder may, subject to the First Home Saver Accounts Act

2008, apply for payment out of the FHSA product to acquire

a qualifying interest in a dwelling under that Act.

(3) For paragraph 1017D(5)(g) of the Act, if the holder of an FHSA

product has acquired a qualifying interest in a dwelling at the time

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when a periodic statement is to be provided in relation to the FHSA

product, the periodic statement must include the number of

financial years after the end of the reporting period during which

the holder of the FHSA product will be taken to be making

personal FHSA contributions under the First Home Saver Accounts

Act 2008.

(4) In this regulation:

personal FHSA contribution has the meaning given in section 11

of the First Home Saver Accounts Act 2008.

qualifying interest, in a dwelling, has the meaning given by

section 12 of the First Home Saver Accounts Act 2008.

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

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(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) or a managed investment

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

(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

other than exit

statement

Superannuation product to which

Division 4C of this Part applies

in relation to a

reporting period

commencing before

1 July 2005

2 Exit statement Superannuation product to which

Division 4C of this Part applies

before 1 July 2006

3 Periodic statement

other than exit

statement

Financial product other than

superannuation product to which

Division 4C of this Part applies

in relation to a

reporting period

commencing before

1 July 2006

4 Exit statement Financial product other than

superannuation product to which

Division 4C of this Part applies

before 1 July 2007

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(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:

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 8 Other requirements

Regulation 7.9.75A

306 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

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Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Other requirements Division 8

Regulation 7.9.75B

Corporations Regulations 2001 307

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 8 Other requirements

Regulation 7.9.75C

308 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Other requirements Division 8

Regulation 7.9.75D

Corporations Regulations 2001 309

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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).

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 8 Other requirements

Regulation 7.9.76

310 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(4) If subregulation (3) applies, the periodic statement must include:

(a) a statement informing the product holder 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.

(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 Standard AS ISO 10002-2006 Customer

satisfaction—Guidelines for complaints handling in

organizations (ISO 10002:2004 MOD) published by SAI

Global Limited on 5 April 2006;

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Other requirements Division 8

Regulation 7.9.78

Corporations Regulations 2001 311

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(b) vary or revoke the operation of a standard or requirement that

it has approved in its application to an internal dispute

resolution procedure.

(3) For subparagraph 1017G(2)(b)(i) of the Act, ASIC must take the

following matters into account when considering whether to

approve an external dispute resolution scheme:

(a) the accessibility of the dispute resolution scheme;

(b) the independence of the dispute resolution scheme;

(c) the fairness of the dispute resolution scheme;

(d) the accountability of the dispute resolution scheme;

(e) the efficiency of the dispute resolution scheme;

(f) the effectiveness of the dispute resolution scheme;

(g) any other matter ASIC considers relevant.

(4) ASIC may:

(a) specify a period for which an approval of an external dispute

resolution scheme is in force; and

(b) make an approval of an external dispute resolution scheme

subject to conditions specified in the approval, including

conditions relating to the conduct of an independent review

of the operation of the scheme; and

(c) vary or revoke:

(i) an approval of an external dispute resolution scheme; or

(ii) the specification of a period for which an approval is in

force; or

(iii) a condition to which an approval of an external dispute

resolution scheme is subject.

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 8 Other requirements

Regulation 7.9.80B

312 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Other requirements Division 8

Regulation 7.9.80B

Corporations Regulations 2001 313

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 9 Additional requirements for transfer of lost members and lost RSA holders

Regulation 7.9.81

314 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Additional requirements for transfer of lost members and lost RSA holders Division 9

Regulation 7.9.82

Corporations Regulations 2001 315

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.84

316 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Superannuation to which arrangements apply under the Family Law Act 1975 Division

11

Regulation 7.9.85

Corporations Regulations 2001 317

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.87

318 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.’.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Superannuation to which arrangements apply under the Family Law Act 1975 Division

11

Regulation 7.9.88

Corporations Regulations 2001 319

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.89

320 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Superannuation to which arrangements apply under the Family Law Act 1975 Division

11

Regulation 7.9.90

Corporations Regulations 2001 321

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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’.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.91

322 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Superannuation to which arrangements apply under the Family Law Act 1975 Division

11

Regulation 7.9.93

Corporations Regulations 2001 323

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

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 7.9.94

324 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Medical indemnity insurance Division 12

Regulation 7.9.95

Corporations Regulations 2001 325

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 13 Unsolicited offers to purchase financial products off market

Regulation 7.9.96

326 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 13—Unsolicited offers to purchase financial

products off market

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;

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Unsolicited offers to purchase financial products off market Division 13

Regulation 7.9.97A

Corporations Regulations 2001 327

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 13 Unsolicited offers to purchase financial products off market

Regulation 7.9.97A

328 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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) 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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Exemptions from Parts 7.7, 7.8 and 7.9 of the Act Division 14

Regulation 7.9.98

Corporations Regulations 2001 329

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

1 paragraph 951C(1)(a) Part 7.7

2 paragraph 992C(1)(a) Part 7.8

3 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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 14 Exemptions from Parts 7.7, 7.8 and 7.9 of the Act

Regulation 7.9.98A

330 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Disclosure in relation to short sales covered by securities lending arrangement of listed

section 1020B products Division 15

Regulation 7.9.99

Corporations Regulations 2001 331

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 15 Disclosure in relation to short sales covered by securities lending

arrangement of listed section 1020B products

Regulation 7.9.100

332 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Disclosure in relation to short sales covered by securities lending arrangement of listed

section 1020B products Division 15

Regulation 7.9.100A

Corporations Regulations 2001 333

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 15 Disclosure in relation to short sales covered by securities lending

arrangement of listed section 1020B products

Regulation 7.9.101

334 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Financial product disclosure and other provisions relating to issue and sale of financial

products Part 7.9

Disclosure in relation to short sales covered by securities lending arrangement of listed

section 1020B products Division 15

Regulation 7.9.102

Corporations Regulations 2001 335

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.9 Financial product disclosure and other provisions relating to issue and sale of

financial products

Division 15 Disclosure in relation to short sales covered by securities lending

arrangement of listed section 1020B products

Regulation 7.9.102

336 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Market misconduct and other prohibited conduct relating to financial products and

financial services Part 7.10

Regulation 7.10.01

Corporations Regulations 2001 337

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Scheme

Column 2

Date prescribed

1 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (NSW), published in

the New South Wales Government Gazette No. 70,

22 August 2014

1 December 2014

2 The Law Society of New South Wales Scheme,

published in the New South Wales Government

Gazette No. 78, 27 July 2012

1 March 2013

3 The New South Wales Bar Association Scheme,

published in the New South Wales Government

Gazette No. 84, 25 June 2010

1 March 2013

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.10 Market misconduct and other prohibited conduct relating to financial

products and financial services

Regulation 7.10.02

338 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Prescribed professional standards schemes

Item Column 1

Scheme

Column 2

Date prescribed

4 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (Victoria), published

in the Victoria Government Gazette No. S 264,

5 August 2014

1 December 2014

5 The Law Institute of Victoria Limited Scheme,

published in the Victoria Government Gazette No. G

10, 11 March 2010, and the following modifications:

(a) the amendments made by instrument published in

the Victoria Government Gazette No. S 164,

1 May 2013;

(b) the amendments made by instrument published in

the Victoria Government Gazette No. G 36,

5 September 2013

The scheme—

1 November 2012

The amendments

mentioned in:

(a) paragraph (a) of

column 1 of this

item—15 March

2014; and

(b) paragraph (b) of

column 1 of this

item—15 March

2014

6 The Victorian Bar Professional Standards Scheme,

published in the Victoria Government Gazette No. S

134, 24 April 2014

14 June 2014

7 The Bar Association of Queensland Scheme,

published in the Queensland Government Gazette

No. 40, 24 June 2013

15 March 2014

8 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (Queensland),

notified by the Queensland Government on

29 August 2014

1 December 2014

9 The Queensland Law Society Scheme, published in

the Queensland Government Gazette No. 64, 25 June

2010

1 March 2013

10 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (WA), published in

the Western Australian Government Gazette No. 122,

8 August 2014

1 December 2014

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Market misconduct and other prohibited conduct relating to financial products and

financial services Part 7.10

Regulation 7.10.03

Corporations Regulations 2001 339

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Prescribed professional standards schemes

Item Column 1

Scheme

Column 2

Date prescribed

11 The Law Society of Western Australia Scheme,

published in the Western Australian Government

Gazette No. 54, 11 April 2014

14 June 2014

12 The Western Australian Bar Association Scheme,

published in the Western Australian Government

Gazette No. 57, 17 April 2014

14 June 2014

13 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (SA), published in

the South Australian Government Gazette No. 63,

21 August 2014

1 December 2014

14 The Law Society of South Australia Professional

Standards Scheme, published in the South Australian

Government Gazette No. 76, 3 November 2011

1 March 2013

15 The South Australian Bar Association Inc Scheme,

published in the South Australian Government

Gazette No. 76, 3 November 2011

1 March 2013

16 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (ACT), approved on

14 July 2014

1 December 2014

17 The Institute of Chartered Accountants in Australia

Professional Standards Scheme (NT), published in

the Northern Territory Government Gazette No. S84,

17 September 2014

1 December 2014

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 1 Preliminary

Regulation 7.11.01

340 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Preliminary Division 1

Regulation 7.11.01

Corporations Regulations 2001 341

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 1 Preliminary

Regulation 7.11.03

342 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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;

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Preliminary Division 1

Regulation 7.11.04

Corporations Regulations 2001 343

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 1 Preliminary

Regulation 7.11.05

344 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Preliminary Division 1

Regulation 7.11.06

Corporations Regulations 2001 345

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 1 Preliminary

Regulation 7.11.08

346 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Application of Part 7.11 Division 2

Regulation 7.11.09

Corporations Regulations 2001 347

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Division 2—Application of Part 7.11

7.11.09 Application

This Part applies to conduct engaged in in this jurisdiction or

otherwise.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 3 Transfer of Division 3 securities effected otherwise than through a

prescribed CS facility

Regulation 7.11.10

348 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 3 securities effected otherwise than through a prescribed CS

facility Division 3

Regulation 7.11.12

Corporations Regulations 2001 349

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 3 Transfer of Division 3 securities effected otherwise than through a

prescribed CS facility

Regulation 7.11.15

350 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 3 securities effected otherwise than through a prescribed CS

facility Division 3

Regulation 7.11.17

Corporations Regulations 2001 351

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 3 Transfer of Division 3 securities effected otherwise than through a

prescribed CS facility

Regulation 7.11.17

352 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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:

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 3 securities effected otherwise than through a prescribed CS

facility Division 3

Regulation 7.11.18

Corporations Regulations 2001 353

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 3 Transfer of Division 3 securities effected otherwise than through a

prescribed CS facility

Regulation 7.11.20

354 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 3 securities effected otherwise than through a prescribed CS

facility Division 3

Regulation 7.11.21

Corporations Regulations 2001 355

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 3 Transfer of Division 3 securities effected otherwise than through a

prescribed CS facility

Regulation 7.11.22

356 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.23

Corporations Regulations 2001 357

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.26

358 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.27

Corporations Regulations 2001 359

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.28

360 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.29

Corporations Regulations 2001 361

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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:

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.29

362 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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;

(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

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.30

Corporations Regulations 2001 363

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.31

364 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.32

Corporations Regulations 2001 365

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.34

366 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.36

Corporations Regulations 2001 367

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 4 Transfer of Division 4 financial products effected through prescribed CS

facility

Regulation 7.11.38

368 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Transfer of Division 4 financial products effected through prescribed CS facility

Division 4

Regulation 7.11.39

Corporations Regulations 2001 369

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 5 Offences

Regulation 7.11.40

370 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Offences Division 5

Regulation 7.11.41

Corporations Regulations 2001 371

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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:

(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

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.11 Title and transfer

Division 5 Offences

Regulation 7.11.42

372 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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.

Federal Register of Legislative Instruments F2015C00303

Financial services and markets Chapter 7

Title and transfer Part 7.11

Civil liability Division 6

Regulation 7.11.43

Corporations Regulations 2001 373

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Chapter 7 Financial services and markets

Part 7.12 Miscellaneous

Regulation 7.12.01

374 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Mutual recognition of securities offers Chapter 8

Preliminary Part 8.1

Regulation 8.1.01

Corporations Regulations 2001 375

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 each of the

following comprises a foreign recognition scheme:

(a) Part 5 of the Securities Act 1978 of New Zealand and the

Securities (Mutual Recognition of Securities Offerings—

Australia) Regulations 2008 of New Zealand;

(b) 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.

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:

(i) if the scheme is a unit trust established under the Unit

Trusts Act 1960 of New Zealand—the offeror is the

manager of the scheme as defined in that Act; or

(ii) if the scheme is a scheme within the meaning of the

Securities Act 1978 of New Zealand—the offeror is the

manager of the scheme as defined in that Act; or

(iii) 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.

Federal Register of Legislative Instruments F2015C00303

Chapter 8 Mutual recognition of securities offers

Part 8.1 Preliminary

Regulation 8.1.03

376 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303

Mutual recognition of securities offers Chapter 8

Foreign offers that are recognised in this jurisdiction Part 8.2

Recognised offers Division 1

Regulation 8.2.01

Corporations Regulations 2001 377

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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, each of the following is a

prescribed offer in relation to New Zealand:

(a) an offer of a security to which Part 2 of the Securities Act

1978 of New Zealand (in accordance with Schedule 4 to the

Financial Markets Conduct Act 2013 of New Zealand)

applies;

(b) an offer of a security for which a disclosure document (as

defined in the Financial Markets Conduct Act 2013 of New

Zealand) must be prepared in accordance with the Financial

Markets Conduct Act 2013 of New Zealand or 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 Part 2 of the Securities Act 1978 of New

Zealand or 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 section 1200E of the Act, the statements set out in

subregulation (1A) are prescribed for a recognised offer made

under the Securities Act 1978 of New Zealand and the Securities

(Mutual Recognition of Securities Offerings—Australia)

Regulations 2008 of New Zealand.

(1A) For subregulation (1) the statements are:

(a) this offer to Australian investors is a recognised offer made

under Australian and New Zealand law. In Australia, this is

Federal Register of Legislative Instruments F2015C00303

Chapter 8 Mutual recognition of securities offers

Part 8.2 Foreign offers that are recognised in this jurisdiction

Division 1 Recognised offers

Regulation 8.2.02

378 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

Chapter 8 of the Corporations Act 2001 and Regulations. In

New Zealand, this is Part 5 of the Securities Act 1978 of

New Zealand and the Securities (Mutual Recognition of

Securities Offerings—Australia) Regulations 2008 of New

Zealand; and

(b) this offer and the content of the offer document are

principally governed by New Zealand, rather than Australian,

law. In the main, the Securities Act 1978 of New Zealand

and the Securities Regulations 2009 of New Zealand set out

how the offer must be made.

(1B) For section 1200E of the Act, the statements set out in

subregulation (1C) are prescribed for a recognised offer made

under the Financial Markets Conduct Act 2013 of New Zealand

and the Financial Markets Conduct Regulations 2014 of New

Zealand.

(1C) For subregulation (1B) the statements are:

(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; and

(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.

(1D) For section 1200E of the Act, the following statements are

prescribed for a recognised offer made under the New Zealand

legislation mentioned in subregulation (1) or (1B):

(a) 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;

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Mutual recognition of securities offers Chapter 8

Foreign offers that are recognised in this jurisdiction Part 8.2

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Regulation 8.2.02

Corporations Regulations 2001 379

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(b) 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;

(c) 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;

(d) the taxation treatment of New Zealand securities and

financial products is not the same as that for Australian

securities and products;

(e) 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

Federal Register of Legislative Instruments F2015C00303

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

380 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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 investment scheme

is subject to an obligation to

provide for a dispute

resolution process

Details of the dispute resolution

process available in relation to

that offer

2 An offer is subject to

continuous disclosure

obligations

Details of the availability of the

continuous disclosure notices

that relate to that offer

3 An offer of a product that is

currently listed or is to be

listed on a financial market

Details of the financial market

on which the product is listed, or

on which it is proposed to be

listed

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

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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

Corporations Regulations 2001 381

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

(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 of New

Zealand

Each matter mentioned in:

(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

2 Financial Markets Authority

of New Zealand

Each matter mentioned in

items 5 to 7 of the Table at

subsection 1200G(9) of the Act

Federal Register of Legislative Instruments F2015C00303

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

382 Corporations Regulations 2001

Compilation No. 113 Compilation date: 31/3/15 Registered: 9/4/15

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.

Federal Register of Legislative Instruments F2015C00303